Gold Price Forecast: XAU/USD stalls at upper borderline of triangle after rising on PCE data miss,

Gold Price Forecast: XAU/USD stalls at upper borderline of triangle after rising on PCE data miss,

302729   March 31, 2023 23:49   FXStreet   Market News  


  • Gold price pulls back after spiking higher following lower-than-forecast US Personal Consumption Expenditure price data.
  • Three Federal Reserve officials say more work needs to be done to bring down inflation.
  • Never mind deposits, what about bank’s assets? Questions economist who sees crisis reviving and Gold exceeding $2,000.
  • Gold may be forming a triangle in an uptrend. If ‘the trend is your friend’, bulls may be right.

Gold price (XAU/USD) pulls back from its highs on Friday, exchanging hands in the $1,970s at time of writing, as the dust settles after the release of lower-than-expected Core Personal Consumption Expenditure – Price Index (PCE) data from the US. At its high for the day Gold price has touched a critical resistance from a triangle pattern unfolding on the charts, which is keeping traders guessing as the precious metal’s next move.  

Inflation eases in March, could Fed pause?

The preliminary PCE price index data out on Friday showed a slight decline to 4.6% YoY in February when 4.7% had been expected, the same as January. On a monthly basis inflation rose 0.3% versus 0.4% forecast from 0.5% previously. The market response has been for US Treasury yields to pull back, the US Dollar to edge down, with the redult that Gold price popped higher. 

The lower-than-expected inflation data raises the chances the Fed will do nothing at its May meeting and perhaps even that it may actually cut rates later in the year. Lower interest rates favor Gold because they reduce the opportunity cost of holding the precious metal vis-a-vis cash or cash equivalents.  

A gift to Gold bulls from lower-than-expected US data

The PCE data follows the trend of macroeconomic data out on Thursday which was overall poorer than expected. Initial Jobless Claims showed an unexpected rise in the number of out-of-work people claiming unemployment support in the US from 191K to 198K – higher than the 196K forecast by economists. US Gross Domestic Product (GDP) for the fourth quarter also moderated down to 2.6% from 2.7% in Q3, when 2.7% had been forecast.

Friday’s reaction to the data is similar to the overall reaction to the data on Thursday when Gold gained as the US Dollar also sold-off and US Treasury yields pulled back, reflecting investors’ view that the probabilities had slightly decreased for the US Federal Reserve to raise interest rates at their May meeting. 

Fed members say more work needs to be done to bring down inflation

Despite lacklustre US data seemingly painting a more subdued picture of the US economy that suggests rates won’t rise, comments from Fed members seem to signal the opposite. Over the last 24-hours no less than three members of the Federal Reserve Open Market Committee (FOMC) – two of them voting members – have come out at said they think more should be done to combat persistent inflation. 

“Inflation remains too high, and recent indicators reinforce my view that there is more work to do to bring inflation down to the 2% target associated with price stability,” Federal Reserve Bank of Boston leader Susan Collins said in remarks to a gathering of the National Association for Business Economics. It should be noted that Collins is not a voting member of the FOMC. 

Next, Neel Kashkari, head of the Minneapolis Fed said the institution has “more work to do,” but he did not state what form that would take. Kashakari does have a vote on the FOMC.

Finally, Federal Reserve of Richmond President Tom Barkin said in a speech to the Virginia council of CEOs on Thursday that, “If inflation persists, we can react by raising rates further. It was only a few weeks ago that some were calling for a 50-basis-point increase.”

At the time of writing, the Fed Funds Future Curve, a highly considered market gauge of future Fed policy moves was showing an increased 51% chance of a 0.25% hike in May versus a 49% probability of no-change.

This shows a substantial shift from the reading a day ago, when the same indicator was showing ther chances of a Fed hike at only 44%.

Some analysts still expect the Fed to raise rates by more than just one 0.25% hike, before it ends its tightening cycle. Analysts at ANZ Bank, for example, forecast the Gold price to remain capped at current levels as the Fed will continue raising interest rates, possibly to 5.5% (from a current 5.0% level). 

“Further upside in the Gold price looks limited in the short term, as we see the federal fund rate at 5.5%,” says the bank.

“Gold is well supported by US recession fears, easing inflationary pressure and more dovish monetary policy. Nevertheless, the upside looks limited in the near term amid easing banking risks and further Fed rate hikes,” adds ANZ.

Yet the Australian lender also sees more upside as possible on further banking risks, which would increase safe-haven flows to the yellow metal.

Gold to rise as banking crisis not over, says esteemed economist

The banking crisis is far from over and when it reignites the price of Gold will rise above $2,000 an ounce as people grope for safety, according to distinguished economist, David Rosenberg, the founder of Rosenberg Research.  

So far the analysis of the banking crisis has focused on deposit risk but people are ignoring equally disturbing risks from the assets banks hold, argues Rosenberg in an interview with 

“Everybody’s focused on deposit insurance, concentrated uninsured deposits on the liability side of the balance sheet. But you know, the other part of the story is going to be what do the assets look like?” The economist said.

The availability of credit is shrinking, inflation remains high and the US is on the brink of recession. When people tighten their belts the risk of rising default rates on many of the loans held by regional banks could push a fresh tranche of lenders over the edge.

“Nobody talks about the quality of the assets – these traditional loans, especially as they pertain to commercial real estate business loans, credit cards and auto loans. A lot of these loans are held at the regional bank level,” said Rosenberg.

Gold price technicals: Triangle almost complete in uptrend

Gold price continues its steady rise within a probable symmetrical triangle formation most clearly delineated on the 4-hour timeframe chart. XAU/USD has probably completed the fourth leg of the triangle after Gold price hit a high of $1,987 on Friday, peaking just shy of the upper broderline. It is possible it will now reverse at resistance from the borderline and start declining to the lower borderline at about $1,958 in a fifth wave. It could also go higher. Regardless, given the triangle is almost complete there is an increased chance now of a breakout at any time. 

Given the prior trend before its formation was bullish the odds favor an upside breakout, of the same length as the triangle at its widest part or a Fibonacci ratio thereof. This suggests a target of about $2,050 if higher, and $1,890 if the break is lower.

Gold price: 4-hour Chart

Looked at from a broader perspective Gold price continues to make higher highs and lows on the daily chart and the current symmetrical triangle pattern is more probably a continuation pattern than reversal. According to the market maxim, “The trend is your friend until the bend at the end,” the technical outlook thus favors bulls.

Gold price: Daily Chart

A break above the key $2,009 March top would provide confirmation of further upside. The next target for Gold price would then lie at the $2,070 March 2022 highs. 

The key $1,934 March 22 swing low must hold for Gold bulls to retain the advantage. Yet, a break and close on a daily basis below that level would introduce doubt into the overall bullish assessment of the trend. Such a move would probably see a sharp decline to support at $1,990 supplied by the 50-day Simple Moving Average (SMA). 

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Gold Price Weekly Forecast: XAU/USD could break out of range on NFP

Gold Price Weekly Forecast: XAU/USD could break out of range on NFP

302725   March 31, 2023 23:45   FXStreet   Market News  


  • Gold price struggled to make a decisive move following a correction from $2,000.
  • Technical outlook points to a bullish bias, but buyers are likely to remain hesitant in near term.
  • US Nonfarm Payrolls data will be watched closely by market participants next week.

Following the rejection from $2,000 in the previous week, Gold price stayed under bearish pressure and suffered heavy losses on Monday. After staging a rebound on Tuesday, XAU/USD struggled to keep its footing on Wednesday but regained its traction ahead of the weekend. As markets remain indecisive about the US Federal Reserve’s (Fed) next policy step, next week’s jobs report for March could trigger the next big action in the pair.

What happened last week?

Reports of First Citizens BancShares Inc buying all the loans and deposits of SVB and giving the Federal Deposit Insurance Corp equity rights in its stock worth as much as $500 million in return led markets to start the new week on a positive tone. Additionally, the decisive rebound witnessed in Deutsche Bank shares following the previous Friday’s scary sell-off helped global bond yields gain traction. In turn, XAU/USD turned south on Monday and dropped all the way to $1,950.

On Tuesday, the data published by the Conference Board showed that the Consumer Confidence Index in the US improved slightly to 104.2 in March from 103.4 in February. Moreover, the one-year consumer inflation expectation of the survey edged higher to 6.3% from 6.2%. This data, however, failed to provide a boost to the US Dollar and XAU/USD managed to erase a portion of Monday’s losses.

During the Asian trading hours, news of e-commerce giant Alibaba Group Holdings planning to split its business into six units and have them listed publicly allowed risk flows to continue to dominate the markets during the first half of the day on Wednesday. Nevertheless, in the absence of high-impact macroeconomic data releases, Gold price fluctuated in a narrow channel and struggled to make a decisive move in either direction.

On Thursday, the US Bureau of Economic Analysis (BEA) announced that it revised the fourth-quarter Gross Domestic Product (GDP) growth down to 2.6% from 2.7% in the previous estimate. Furthermore, the weekly data published by the US Department of Labor showed a 7,000 increase in the Initial Jobless Claims in the week ending March 25. On top of these disappointing data releases, the risk-positive market atmosphere caused the USD to continue to weaken, helping XAU/USD to regain its traction.

The data from China showed that NBS Manufacturing PMI edged lower to 51.9 in March from 52.6 in February. On a positive note, the Non-Manufacturing PMI rose to 58.2 from 56.3 in the same period. Mixed PMI readings from China, the world’s biggest gold consumer, made it difficult for XAU/USD to find direction early Friday.

Finally, the BEA reported on Friday that the Core Personal Consumption Expenditures (PCE) Price Index declined to 4.6% on a yearly basis in February from 4.7% in January. Pressured by the soft PCE inflation data, the 10-year US T-bond yield turned south and helped XAU/USD hold its ground ahead of the weekend.

Next week

On Monday, the ISM Manufacturing PMI from the US will be watched closely by market participants. In February, the Prices Paid component of the survey climbed to 51.3 from 44.5 in January, revealing an increase in input inflation. Markets are yet to figure out whether the US Federal Reserve will raise its policy rate one more time by 25 basis points (bps) in May. If the PMI survey points to an acceleration in the manufacturing sector’s input inflation, hawkish Fed bets could return and help the USD find demand. Evidently, XAU/USD is likely to come under bearish pressure.

ADP’s private sector employment report and the ISM Services PMI will be featured in the US economic docket on Wednesday. ADP Employment Change is forecast to decline sharply to 10K in March from 242K in February. A negative print could weigh on the USD as it would likely cause markets to price in a dismal March jobs report. A noticeable decrease in the Prices Paid sub-index of ISM Services PMI could also hurt the USD and vice versa.  

Ahead of the weekend, the US Bureau of Labor Statistics will publish the labor market data for March, which is forecast to show a decline of 8,000 in Nonfarm Payrolls (NFP). Even if the NFP comes in higher than expected, any reading below 50,000 should be seen as a red flag and trigger a leg lower in the US yields and the USD. On the other hand, an increase of 100K or higher in NFP could weigh on XAU/USD by lifting yields.

In the meantime, wage inflation, as measured by the Average Hourly Earnings, is expected to tick down to 4.5% on a yearly basis from 4.6% in February. A bigger-than-anticipated decline in this reading could be seen as USD-negative, while an increase should have the opposite effect. Nevertheless, NFP is likely to be the main market driver this time around.

Market participants will also continue to pay attention to comments from Fed officials. Although policymakers are unlikely to try to steer the markets in a certain direction before seeing the jobs report and March inflation data, hawkish remarks could help the USD stay resilient against its rivals.

Gold price technical outlook

The price action witnessed in the second half of March confirmed the significance of $2,000 as a resistance. Although the Relative Strength Index (RSI) indicator on the daily chart holds near to suggest that the bullish bias stays intact, buyers could remain hesitant unless Gold price makes a daily close above that level.

On the downside, near-term support seems to have formed at $1,950 (static level) ahead of $1,930 (20-day Simple Moving Average (SMA)) and $1,900 (50-day SMA, psychological level).

In case XAU/USD claims $2,000 and starts using it as support, the next bullish target is located at $2,050 (static level) before $2,070 (March 2022 high).

Gold price forecast poll

FXStreet Forecast Poll points to a bearish bias in the short term, with the one-week average target aligning at $1,967. The one-month outlook remains overwhelmingly bearish, with only one expert expecting XAU/USD to be above $2,000 by the end of this time frame.

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EUR/USD Weekly Forecast: Calm before the next storm, Nonfarm Payrolls in the docket

EUR/USD Weekly Forecast: Calm before the next storm, Nonfarm Payrolls in the docket

302721   March 31, 2023 23:45   FXStreet   Market News  


  • Easing concerns related to a financial crisis fueled demand for high-yielding assets.
  • Receding inflationary pressures further fueled the buoyant market mood.
  • EUR/USD could regain the 1.1000 threshold next week if optimism persists.

The EUR/USD pair marched higher for a second consecutive week, settling on Friday just ahead of 1.0900. The pair advanced for four days in a row, giving up some ground ahead of the weekly close amid profit-taking and a particular persistent caution after the latest banking turmoil.

Nevertheless, optimism reigned amid receding concerns of a widespread banking cataclysm. Eurozone and United States authorities rushed to pour cold water on the matter by announcing measures to prevent the situation from spreading. Financial markets welcomed the headlines and ran into high-yielding assets pushing EUR/USD to a weekly high of 1.0925.

Demand for the US Dollar remained subdued, helped by limited action among Treasury yields and encouraging inflation figures.

High inflation but no longer worrisome

On the one hand, Germany published the preliminary estimate of the March Harmonized Index of Consumer Prices (HICP), which rose by 7.8% YoY, easing from the previous 9.3%, although above the 7.5% expected. Spanish HICP in the same period was up by 3.3%, beating expectations, while France reported a 6.6% increase. Finally on Friday, the EU reported the regional HICP, which increased by 6.9% YoY.

On the other, the United States published the February Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s (Fed) favorite inflation measure. The core PCE Price Index rose at an annualized pace of 4.6%, easing from the previous 4.7%.

The figures also boosted the market’s optimism amid speculation central banks are pretty much done with monetary tightening. Just this week, the market knew the United States Federal Reserve was aiming for just one more rate hike, probably of  25 basis points (bps), before pausing. Once the pause is confirmed, the market focus will quickly shift to rate cuts and speculation about when the Fed will start trimming its benchmark rate. At this point, American policymakers foresee a first cut in 2024.

 The market can see inflation is on a downward path following central banks’ decisions to move forward with aggressive monetary tightening. The consequences of the latter, however, are still to be seen, partially explaining the certain caution that persists among speculative interest.

Monetary tightening cools down inflation but also economic growth. It would not have been such an issue if it weren’t that such measures had been adopted in the aftermath of the world stalling amid the coronavirus pandemic. Growth bloomed through the end of 2021 and the beginning of 2022, but only because economies came back from record bottoms.

The upcoming week will bring the final estimates of the S&P Global PMIs for the EU and the US, while the latter will publish the official ISM Manufacturing PMI on Monday, and the ISM Services PMI on Wednesday.  Mid-week, the focus will shift to US employment, as the country will publish the ADP survey on private job creation ahead of the Nonfarm Payrolls report to be out on Friday. Financial markets anticipate the US economy has lost 8,000 job positions in March and has an Unemployment Rate of 3.5%.

EUR/USD technical outlook

The weekly chart for the EUR/USD pair shows it halted in the 1.0920 price zone for a second consecutive week. However, the pair remains near its high, suggesting prevalent buying interest. Technical indicators in the mentioned time frame offer upward slopes, with the Momentum barely bouncing from its midline but the Relative Strength Index (RSI) heading firmly north near overbought readings, also supporting a bullish continuation. At the same time, the 20 Simple Moving Average (SMA) leads the way higher with a solid upward slope, providing intraday support throughout the week. Finally, the 100 SMA acts as dynamic resistance, heading south at around 1.0970.

The bullish potential is fading in the daily chart, but there are no signs of an upcoming decline. Technical indicators have lost their upward strength and turned lower but still, stand above their midlines. At the same time, moving averages keep advancing below the current level, reflecting bulls are in control.

As long as the pair holds above 1.0745, the 61.8% Fibonacci retracement of the 2022 yearly decline, the mid-term perspective will remain bullish. Another leg north would need EUR/USD to advance beyond 1.0970, with the next relevant resistance level afterwards at 1.1060. Further gains should result in a test of the 1.1120/40 price zone.

An immediate support level comes at 1.0810, while a slide below the aforementioned 1.0745 level could lead to a steep decline towards 1.0660.

EUR/USD sentiment poll

According to the FXStreet Forecast Poll, EUR/USD will extend its bullish route next week, as 58% of the polled experts are looking for higher highs, with an average target of 1.0910. Buying interest eases as time goes by, as, in the monthly perspective, bears stand at 53%, while bulls decrease to 33%. Still, the pair is seen holding above 1.0800. Finally, the quarterly view shows that most experts bet for an advance, with those looking for lower levels down to just 20%.

The Overview chart, however, indicates that the bullish case is alive and kicking. The three moving averages head firmly north and at fresh yearly highs, without signs of bullish exhaustion. Furthermore, the range of potential targets continues to increase. As of now, the pair is not seen below 1.0500 in the monthly view, while in the monthly perspective, the base has been lifted to 1.0700. 

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European equity close: Another solid day wraps up a great week and great quarter
European equity close: Another solid day wraps up a great week and great quarter

European equity close: Another solid day wraps up a great week and great quarter

302720   March 31, 2023 23:41   Forexlive Latest News   Market News  

During the height of the banking rout, the market went from bank to bank and tested each one. Credit Suisse failed but all the eurozone and UK banks emerged, despite rumors of trouble. Maybe that’s only temporary but for now, you have to assume that they’re fine.

Closing changes for the day:

  • Stoxx 600 +0.8%
  • German DAX +0.8%
  • UK FTSE 100 +0.2%
  • French CAC +0.9%
  • Italy MIB +0.5%
  • Spain IBEX +0.5%

On the week:

  • Stoxx 600 +4.2%
  • German DAX+4.6%
  • UK FTSE 100 +3.2%
  • French CAC +4.6%
  • Italy MIB +4.9%
  • Spain IBEX +5.2%

On the quarter:

  • Stoxx 600 +7.9%
  • German DAX +12.4%
  • UK FTSE 100 +2.6%
  • French CAC +13.3%
  • Italy MIB +14.5%
  • Spain IBEX +9.5%

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USD/CHF hits weekly low below 0.9120 as US inflation data cools
USD/CHF hits weekly low below 0.9120 as US inflation data cools

USD/CHF hits weekly low below 0.9120 as US inflation data cools

302719   March 31, 2023 23:40   FXStreet   Market News  


  • USD/CHF drops as US core PCE rose by 4.6% YoY, below the previous month.
  • The University of Michigan’s Consumer Sentiment was below expected.
  • USD/CHF Price Analysis: Presses toward 0.9100, but sellers struggle to break that support below.

USD/CHF falls to a new weekly low below 0.9126, sponsored by economic data from the United States (US) showing that inflation is cooling down. Hence, bets that the US Federal Reserve (Fed) might pause its tightening cycle, increasing, meaning the greenback would be under pressure. At the time of writing, the USD/CHF is trading at 0.9127, below its opening price.

US core PCE edges lower, cementing the case for a Fed’s pause

The Federal Reserve’s preferred gauge for inflation, the core Personal Consumption Expenditure (PCE), rose by 4.6% YoY, below the previous month’s 4.7%. On a monthly basis, inflation that excludes food and energy rose by 0.3%, below estimates of 0.4%.

Of late, the University of Michigan’s (UoM) Consumer Sentiment was below estimates of 67 and came at 62. According to Joanne Hsu, director of the survey, said, “Overall, our data revealed multiple signs that consumers increasingly expect a recession ahead.” The same study showed that inflation expectations for one year stood at 3.6%, down from 3.8%, while for a 5-year horizon, consumers estimate inflation at 2.9%.

The USD/CHF extended its losses amidst positive news on the US front. Although the Boston Fed President Susan Collins welcomed the data, she said it hadn’t changed her outlook, adding that the Fed has more work to do.

On the Switzerland front, the Swiss National Bank (SNB) continued to tighten monetary conditions when it raised rates by 50 bps on March 23 toward the 1.50% area. Furthermore, Retail Sales in February rose by 0.3% compared with the previous year, giving a leg-down to the USD/CHF pair.

USD/CHF Technical analysis

Even though the USD/CHF continued to press towards the 0.9100 figure, the sellers could not register a decisive break below the latter. Technical indicators like the Relative Strength Index (RSI) and the Rate of Change (RoC) are flat, suggesting that sellers are jumping from the boat. However, if the USD/CHF dives below 0.9100, that would open the door to challenge the YTD low at 0.9059. On the flip side, buyers reclaiming 0.9150 could pave the way for a recovery to 0.9200 and beyond.

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GBP/USD Weekly Forecast: Bulls keep an eye on 1.2600 and US Nonfarm Payrolls

GBP/USD Weekly Forecast: Bulls keep an eye on 1.2600 and US Nonfarm Payrolls

302715   March 31, 2023 23:40   FXStreet   Market News  


  • GBP/USD booked the third straight weekly gain amid ebbing banking fears.
  • Hawkish BoE Governor Bailey and the extended US Dollar decline supported GBP/USD.
  • Bullish daily technical indicators point to further gains for Cable.

The Pound Sterling continued to hold its upper hand against the United States Dollar (USD) for the third straight week, ending the month of March with strong gains. Dovish repricing of the US Federal Reserve (Fed) rate hike outlook combined with risk-recovery helped extend the US Dollar downtrend. All eyes now turn toward the high-impact economic data from the United States in the week ahead for fresh direction in the GBP/USD pair.

GBP/USD: What happened last week?

Receding fears over a potential contagion following the recent global banking crisis revived risk appetite, propelling the US equities to their highest level in a week. The positive shift in the market sentiment weighed heavily on the safe-haven demand for the US Dollar in the early part of the week, lifting GBP/USD to fresh two-month highs above 1.2350.

News that First Citizens BancShares Inc was in advanced talks to acquire Silicon Valley Bank (SVB) from the Federal Deposit Insurance Corporation (FDIC) cheered investors at the start of the week. The North Carolina-based First Citizens has around $109 billion in assets and total deposits of $89.4 billion.

Risk flows extended into Tuesday after global policymakers came out to soothe the market concerns over a potential banking sector contagion, exerting additional downward pressure on safe havens such as the US Dollar and the US government bonds. Nellie Liang, the US Treasury Department’s undersecretary for domestic finance, said “if necessary, the government will employ tools to stop a banking contagion from happening again.” Meanwhile, Federal Reserve Vice Chair for Supervision, Michael Barr, noted on Monday, “we are prepared to use all of our tools for any size institution as needed to keep the system safe.”

Meanwhile, the Pound Sterling got a fresh boost from the hawkish comments from Bank of England (BoE) Governor Andrew Bailey. During his dual appearances in the past week, Bailey suggested that further monetary tightening would be required if signs of persistent inflationary pressure became evident. He also said there were “big strains” in the global banking sector but added that banks in Britain were resilient and able to support the economy. Additionally, the renewed Brexit optimism also supported the GBP/USD advance. On Wednesday, UK Treasury Minister, John Glen, noted that he is optimistic that the UK and European Union will soon formalize a pledge to work together on setting rules for banks and financial markets.

Heading into the second half of the week, GBP/USD’s uptrend paused as the US Dollar attempted a pullback on the back of a staggering recovery in the US Treasury bond yields across the curve. The Japanese fiscal year-end flows into the USD/JPY pair and its resultant rally toward the 133.00 threshold saved the day for the US Dollar bulls and triggered a corrective move lower in the GBP/USD pair.

The US Dollar held its renewed upside on Thursday, underpinned by increased odds of a 25 basis points (bps) US Federal Reserve rate hike for May, following upbeat US Pending Home Sales data and comments by the Republican Representative Kevin Hern. Representative Hern said, “Federal Reserve Chair Jerome Powell, asked in a private meeting with US lawmakers how much further the central bank will raise interest rates this year, pointed to policymakers’ latest forecasts showing they anticipate one more increase.” However, the Greenback flipped into the red after the US Jobless Claims and Q4 Gross Domestic Product (GDP) disappointed and raised worries over the Federal Reserve’s rate hike path. The US Treasury bond yields also tumbled alongside, with the benchmark 10-year Treasury bond yields having tested the 3.50% key support.

The GBP/USD pair regained the upside traction and jumped back above the 1.2400 barrier on Friday, reaching the highest level since January 18. The US Dollar licked its wounds amid a risk-on market profile, awaiting the Fed’s preferred inflation gauge, the Core Personal Consumption Expenditures – Price Index, for fresh trading directives.

On Friday, the US Bureau of Economic Analysis reported that the Core Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred gauge of inflation, declined to 4.6% on a yearly basis in February from 4.7% in January. This reading came in slightly below the market expectation of 4.7%. Although the initial reaction caused the US Dollar to lose some strength, GBP/USD stayed in its daily range below 1.2400.

United States Nonfarm Payrolls week ahead

Following a relatively data-light week, this Holy Friday holiday-shortened week kicks off with a bang. Despite China being on a holiday, the Caixin Manufacturing PMI will be reported on Monday, which could have a significant impact on the market sentiment. The next of note for the major remains the ISM Manufacturing PMI and its sub-components from the United States. Softer US ISM Manufacturing Prices Paid index could strengthen bets for a May Federal Reserve rate hike pause, rendering negative for the US Dollar.

On Tuesday, the US docket will feature the JOLTS Job Openings and Factory Orders data amid a data-empty United Kingdom calendar. Pound Sterling traders will then look forward to the US ADP Employment Change data and the ISM Services PMI readings on Wednesday. Ahead of that, the UK Final S&P Global Services PMI will entertain Cable traders.

Thursday is calmer on the data front on both sides of the Atlantic, with the US only reporting the weekly Jobless Claims numbers. Amid a Good Friday holiday, thin liquidity will persist, triggering extreme volatility on the release of the United States labor market report.

The headline US Nonfarm Payrolls (NFP) combined with the Unemployment and Average Hourly Earnings data will hold the key in determining the next policy move by the US Federal Reserve. In February, the US economy added 311K jobs while the Unemployment Rate ticked higher to 3.6%. Average Hourly Earnings picked up by 0.2% in February.

Besides these economic releases, the speeches from the Bank of England and Federal Reserve policymakers will be closely scrutinized for revaluating the central banks’ expectations. Any fresh developments surrounding the global financial market stability will also influence the higher-yielding Britsh Pound.

GBP/USD: Technical outlook

GBP/USD is set for another bullish week, as suggested by the technical setup on the daily chart.

The 14-day Relative Strength Index (RSI) holds firmer above the midline, pointing toward the overbought territory. Thus, suggesting that the bullish potential remains intact.

Adding credence to the additional upside scenario in GBP/USD, the bullish 21-Daily Moving Average (DMA) cut the flattish 50 DMA from below on a daily closing basis, confirming a Bull Cross.

Therefore, acceptance above the static resistance at 1.2450 will initiate a fresh upswing toward the 1.2600 level. Fresh buying opportunities will emerge above the latter, calling for a retest of the high from May 27 2022 at 1.2669.

On the downside, any correction could meet initial demand around the 1.2300 region, below which the March 24 low at 1.2190 will be put to test.

Further down, Pound Sterling sellers could aim for the 1.2155 area, where the 21 and 50 DMAs coincide. The 100 DMA at 1.2130 could come to the immediate rescue of buyers if the selling momentum picks up pace.

The line in the sand for Pound Sterling optimists is seen at the 1.2050 psychological level. 

GBP/USD: Forecast poll

FXStreet Forecast Poll paints a mixed picture in the near term for GBP/USD, with the one-week target sitting at 1.2350. The bearish stance remains apparent over the one-month time frame while the one-quarter outlook fails to provide a directional bias. 

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Colombia National Jobless Rate meets expectations (12.7%) in February
Colombia National Jobless Rate meets expectations (12.7%) in February

Colombia National Jobless Rate meets expectations (12.7%) in February

302714   March 31, 2023 23:09   FXStreet   Market News  

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Gold Price Forecast: XAU/USD to hit $2,050 towards year-end – ANZ
Gold Price Forecast: XAU/USD to hit $2,050 towards year-end – ANZ

Gold Price Forecast: XAU/USD to hit $2,050 towards year-end – ANZ

302713   March 31, 2023 23:09   FXStreet   Market News  


Gold is supported by weaker USD and easing inflationary pressures. Economists at ANZ Bank forecast XAU/USD at $2,050 by the end of the year.

Silver to outperform Gold in a rising price environment

“We believe US recessionary fears, easing inflationary pressure and dovish monetary policy will drive Gold’s performance.”

“The macro backdrop will also remain supportive, so any price dips should be short lived, prompting opportunistic buying. We target gold at $2,050 towards year-end.”

“We expect Silver to outperform Gold in a rising price environment.”

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Canadian GDP on track for almost 3% growth in Q1 but it shouldn’t bother BOC hawks – CIBC
Canadian GDP on track for almost 3% growth in Q1 but it shouldn’t bother BOC hawks – CIBC

Canadian GDP on track for almost 3% growth in Q1 but it shouldn’t bother BOC hawks – CIBC

302712   March 31, 2023 22:45   Forexlive Latest News   Market News  

Canadian January GDP rose 0.5% m/m in today’s report compared to 0.3% expected. In addition, the advance February estimate was +0.3% in a sign of continued strong growth despite a rapid slowdown in housing and high interest rates.

CIBC notes that the Canadian economy has shown resilience in early 2023, with monthly GDP data indicating a nearly 3% annualized growth in Q1, crushing recession fears. They note that the 0.5% gain in January GDP was driven by increases in mining, oil & gas, transportation & warehousing, and accommodation & food services. The easing of previous supply constraints looks to be a catalyst as it has contributed to growth and also calmed inflation.

Even better news is the stronger growth has demographic tailwinds. CIBC says it should be considered in the context of a surging working-age population, with the Canadian working age population growing at a 2.1% annualized pace, leaving per-capital growth not far ahead of population growth (and thus not necessarily inflationary).

The Bank of Canada was forecasting just 0.5% growth in Q1 forecasts released in January.

“The fact that inflation has also eased a little quicker than they previously thought suggests that much of the growth we are seeing is related to the unwinding of previous supply constraints, and as such the apparent strength in the economy to start 2023 may not be too concerning for policymakers. We still expect the impact of past interest rate hikes to show up in slower growth during the remainder of the year,” CIBC writes, adding that the bar for the BOC to leave the sidelines and hike again is very high.

The market is pricing in an 85% chance the BOC leaves rates unchanged at the next meeting on April 12, with the remainder positioned for a cut.

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US: UoM Consumer Confidence Index drops from 67.0 to 62.0 in March vs. 63.2 expected
US: UoM Consumer Confidence Index drops from 67.0 to 62.0 in March vs. 63.2 expected

US: UoM Consumer Confidence Index drops from 67.0 to 62.0 in March vs. 63.2 expected

302711   March 31, 2023 22:40   FXStreet   Market News  


  • March UoM Consumer Confidence Index revised lower to 62.0 from 63.4 flash estimate.
  • Limited impact from turmoil in the banking sector.
  • DXY up 0.09% for the day, off highs.

Consumer sentiment in the US weakened in March more than what was previously reported, according to the University of Michigan’s (UoM) Consumer Confidence report. The Consumer Sentiment Index was revised from the flash estimate of 63.4 to 62.0 in March, against the market expectation of 63.2.  Current Economic Conditions fell from 70.7 in February to 66.3 and the Index of Consumer Expectations declined from 64.7 to 59.2.

“This month’s turmoil in the banking sector had limited impact on consumer sentiment, which was already exhibiting downward momentum prior to the collapse of Silicon Valley Bank. Overall, our data revealed multiple signs that consumers increasingly expect a recession ahead”, said Joanne Hsu, Surveys of Consumers Director.

Regarding inflation, year-ahead expectations “receded from 4.1% in February to 3.6%, the lowest reading since April 2021, but remained well above the 2.3-3.0% range seen in the two years prior to the pandemic.” Five-year expectations came in at 2.9% for the fourth consecutive month.

Market reaction

The US Dollar Index is rising modestly on Friday. It started to move off highs after the US Core PCE March report and it has been trending lower afterwards. As of writing trades at 102.25.

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EUR/GBP to revisit 0.90 as China reopening favor Euro relative to its European peers – TDS
EUR/GBP to revisit 0.90 as China reopening favor Euro relative to its European peers – TDS

EUR/GBP to revisit 0.90 as China reopening favor Euro relative to its European peers – TDS

302710   March 31, 2023 22:35   FXStreet   Market News  


Economists at TD Securities discuss GBP outlook and expect the EUR/BP pair to hit the 0.90 level.

Data trends favor EUR/GBP higher

“We upgraded our GBP view, underscoring the lift from a weaker USD profile. That said, we still think EUR/GBP revisits 0.90, as China reopening and relative Asian growth outperformance favor EUR relative to its European peers.”

“Domestic fragilities should keep GBP anchored relative to EUR and CHF at least.”

“GBP’s growth and inflation mix is still poor relative to EUR, which gets a better terms of trade and China lift.”

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US President Biden: We are making progress in the fight against inflation
US President Biden: We are making progress in the fight against inflation

US President Biden: We are making progress in the fight against inflation

302709   March 31, 2023 22:35   FXStreet   Market News  


US President Joe Biden delivered a statement following the February PCE report, highlighting the progress in the “fight against inflation”. 

Quotes from the statement: 

“We are making progress in the fight against inflation. Today’s report shows annual inflation down by nearly 30 percent from this summer, against a backdrop of low unemployment and steady growth. The fight against inflation isn’t over, and every day my Administration is working to give families more breathing room.”

“In February we saw the lowest food inflation in nearly two years.”

“We should continue to invest in America from the middle out and the bottom up. This is not the time to turn back to trickle-down economics by cutting American manufacturing and other critical programs American families count on, just to pay for tax cuts for the wealthy, Big Pharma, and Big Oil. The last thing our economy needs right now is the reckless threat of a chaotic default. Those threats must be taken off the table.”

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