Global Markets:

•  Asian Stock Markets : Nikkei up 0.10%, Shanghai Composite down 0.26%, Hang Seng up 1.48% ASX up 0.55%
• Commodities : Gold at $2307.5 (-0.15%), Silver at $26.73 (-0.26%), Brent Oil at $83.80 (0.18%), WTI Oil at $79.06 (0.16%)
• Rates : US 10-year yield at 4.58, UK 10-year yield at 4.32, Germany 10-year yield at 2.53

News & Data:

• (USD) Unemployment Claims 208K vs 212K expected
• (USD) Trade Balance -69.4B vs -69.5B expected
• (CAD) Trade Balance -2.3B vs 1.1B expected

Markets Update:

Asia’s markets surged on Friday, led by Hong Kong, bolstered by Wall Street’s gains ahead of key U.S. employment data. Apple’s strong earnings report prompted a focus on its suppliers, with Taiwan Semiconductor Manufacturing Company rising by 1% and Foxconn by 1.3%. Apple’s announcement of a $110 billion stock buyback program boosted its shares by 6% in after-hours trading, drawing attention to Taiwanese and South Korean suppliers.

In Australia, the S&P/ASX 200 closed 0.55% higher at 7,629, while Japanese and Chinese markets were closed for public holidays. The Japanese yen strengthened against the U.S. dollar, reaching 153.13, marking its strongest week in over a year. U.S. markets closed positively, with the Dow Jones Industrial Average rising by 0.85%, the S&P 500 by 0.91%, and the Nasdaq Composite by 1.51%.

Economists anticipate approximately 240,000 job gains in the April nonfarm payrolls report, following March’s 303,000 additions. Investors await this data after the U.S. Federal Reserve opted to maintain interest rates at its recent meeting.

Upcoming Events: 

• 12:30 PM GMT – USD Average Hourly Earnings m/m
• 12:30 PM GMT – USD Non-Farm Employment Change
• 12:30 PM GMT – USD Unemployment Rate
• 1:45 PM GMT – USD Final Services PMI
• 2:00 PM GMT – USD ISM Services PMI

The post Friday 3rd May 2024: Asian Markets Surge on Wall Street Momentum and Apple’s Strength first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 3 May 2024

What happened in the Asia session?

The dollar index (DXY) stabilized around 105.20 and could experience a narrow trading range until the Non-farm Payrolls (NFPs) drop during the US session. As always, the release of this data point is all but certain to inject extreme volatility into markets and wild swings are expected for the dollar, the major currency pairs and even gold.

What does it mean for the Europe & US sessions?

Non-farm Payrolls (NFPs) have grown strongly over the past four months to average a monthly gain of 280K over this period. The forecast of 238K highlights a potential slow down in the pace of job growth for the month of April, especially after a blowout figure of 303K in March. Should NFPs miss market expectations while the unemployment rate edges higher from 3.8%, the dollar could experience an intense sell-off during the US session.

The services sector has been pulling up overall economic activity in the US over the past 15 months – a period where the ISM Services PMI has expanded strongly to lead business activity output. The estimate of 52.0 points to another month of expansion in April, rising from 51.4 in March. The prices index – which has also increased over this same period – will be closely monitored as well. With higher prices for raw materials being reported in the equivalent report for the manufacturing sector, another sharp increase in prices for services is certainly going to raise further concerns on inflationary pressures re-accelerating for the Federal Reserve.

The Dollar Index (DXY)

Key news events today

Non-farm Payrolls (12:30 pm GMT)

Unemployment Rate (12:30 pm GMT)

ISM Services PMI (2:00 pm GMT)

What can we expect from DXY today?

Non-farm Payrolls (NFPs) have grown strongly over the past four months to average a monthly gain of 280K over this period. The forecast of 238K highlights a potential slow down in the pace of job growth for the month of April, especially after a blowout figure of 303K in March. Should NFPs miss market expectations while the unemployment rate edges higher from 3.8%, the dollar could experience an intense sell-off during the US session.

The services sector has been pulling up overall economic activity in the US over the past 15 months – a period where the ISM Services PMI has expanded strongly to lead business activity output. The estimate of 52.0 points to another month of expansion in April, rising from 51.4 in March. The prices index – which has also increased over this same period – will be closely monitored as well. With higher prices for raw materials being reported in the equivalent report for the manufacturing sector, another sharp increase in prices for services is certainly going to raise further concerns on inflationary pressures re-accelerating for the Federal Reserve.

Central Bank Notes:

• The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the sixth meeting in a row.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year.
• The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks. Inflation has eased over the past year but remains elevated and in recent months, there has been a lack of further progress toward the Committee’s 2% inflation objective.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while job gains have remained strong, and the unemployment rate has remained low.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• The Committee’s assessments will take into account a wide range of information, including readings on labour market conditions, inflation pressures and inflation expectations, and financial and international developments.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• Next meeting runs from 11 to 12 June 2024.

Next 24 Hours Bias

Medium Bearish

Gold (XAU)

Key news events today

Non-farm Payrolls (12:30 pm GMT)

Unemployment Rate (12:30 pm GMT)

ISM Services PMI (2:00 pm GMT)

What can we expect from Gold today?

Non-farm Payrolls (NFPs) have grown strongly over the past four months to average a monthly gain of 280K over this period. The forecast of 238K highlights a potential slow down in the pace of job growth for the month of April, especially after a blowout figure of 303K in March. Should NFPs miss market expectations while the unemployment rate edges higher from 3.8%, the dollar could experience an intense sell-off to potentially boost gold prices during the US session.

The services sector has been pulling up overall economic activity in the US over the past 15 months – a period where the ISM Services PMI has expanded strongly to lead business activity output. The estimate of 52.0 points to another month of expansion in April, rising from 51.4 in March. The prices index – which has also increased over this same period – will be closely monitored as well. With higher prices for raw materials being reported in the equivalent report for the manufacturing sector, another sharp increase in prices for services is certainly going to raise further concerns on inflationary pressures re-accelerating for the Federal Reserve.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

Despite the better-than-expected unemployment claims in the US, demand for the dollar was poor which caused the Aussie to hit an overnight high of 0.6573. AUD/USD pulled back towards 0.6560 by the end of the US session before rising strongly once again – this currency pair was trading around 0.6580 as Asian markets came online.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35%, marking the seventh pause out of the last eight board meetings.
• The headline monthly CPI indicator was steady at 3.4% over the year to January, with momentum easing over recent months, driven by moderating goods inflation. Services inflation remains elevated, and is moderating at a more gradual pace.
• The central forecasts are for inflation to return to the target range of 2–3% in 2025, and to the midpoint in 2026.
• While recent data indicate that inflation is easing, it remains high. The Board expects that it will be some time yet before inflation is sustainably in the target range.
• The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.
• Next meeting is on 7 May 2024.

Next 24 Hours Bias

Medium Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The Kiwi hit a high of 0.5967 overnight despite lower-than-anticipated unemployment claims in the US before dipping under 0.5950 by the end of the US session. NZD/USD rebounded at the beginning of the Asia session to climb towards 0.5970 and could remain elevated for the initial half of the final trading day of the week.

Central Bank Notes:

• The Monetary Policy Committee kept the OCR unchanged at 5.50% for the sixth meeting in a row.
• The Committee remains confident that the current level of the OCR is contributing to an easing in capacity pressures to ensure inflation returns to target.
• However, current consumer price inflation remains above the Committee’s 1 to 3% target range. A restrictive monetary policy stance remains necessary to further reduce capacity pressures and inflation.
• The Committee discussed upside risks to the inflation outlook: persistent services inflation remains a risk and goods price inflation remains elevated while anticipated near-term increases to local government rates, insurance, and utility costs, could also further slow the decline in headline inflation.
• The Committee discussed downside risks to the inflation outlook: ongoing restrictive monetary policy in an environment of weak global growth could lead to a more rapid decline in inflation than expected. Business and consumer confidence remain particularly weak which could lead to more unemployment and financial stress than expected while structural challenges facing the economy in China remain a concern given its importance for the global economy and for New Zealand’s trade.
• Next meeting is on 10 July 2024.

Next 24 Hours Bias

Medium Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

The recent intervention measures by the Bank of Japan (BoJ) on 29th April and 1st May appear to have made some progress in restraining the astronomical rise of USD/JPY. The BoJ is thought to have spent close to $59 billion this week as it attempts to prop up the yen. USD/JPY briefly climbed above the threshold of 160 on 29th April – a 34-year high – before the first round of intervention measures took place. This currency pair has dived nearly 4.5% to lose over 700 pips at its lowest point this week. With markets now wary about any future intervention actions, the yen could steadily strengthen further – USD/JPY was trading around 153.10 as Asian markets came online.

Central Bank Notes:

• The Bank considers that the policy framework of Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control and the negative interest rate policy to date have fulfilled their roles. With the price stability target of 2%, it will conduct monetary policy as appropriate, guiding the short-term interest rate as a primary policy tool.
• The Bank of Japan decided on the following measures:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0 to 0.1% while continuing its JGB purchases with broadly the same amount as before.
  2. In addition, the Bank will discontinue purchases of exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) and will also gradually reduce the amount of purchases of CP and corporate bonds and will discontinue the purchases in about one year.
• In a quarterly outlook, the committee revised higher CPI prints for FY 2024 to 2.8% from January’s projections of 2.4%, due to the waning effects of higher import prices and fewer government support measures.
• For 2025, the board expects core inflation to hit 1.9%, slightly higher than its earlier estimates of 1.8%, reflecting a recent rise in oil prices.
• Policymakers cut their 2023 GDP growth forecast to 1.3% from 1.8% and for FY 2024, the bank also slashed its GDP outlook to 0.8% from 1.2%, mainly reflecting lower private consumption.
• Next meeting is on 14 June 2024.

Next 24 Hours Bias

Medium Bearish

The Euro (EUR)

Key news events today

Unemployment Rate (9:00 am GMT)

What can we expect from EUR today?

Despite the better-than-expected unemployment claims in the US, demand for the dollar was weak which caused the Euro to hit an overnight high of 1.0730. EUR/USD dipped under 1.0720 by the end of the US session before rising strongly once again – this currency pair was trading around 1.0735 as Asian markets came online.

The unemployment rate in the Euro Area has remained relatively steady around 6.5% since December 2022 and the forecast for the month of March points to an unchanged reading of 6.5% once again – this would mark the fifth consecutive month of stable unemployment. If the result surprises markets to the upside, it could function as a near-term tailwind for the Euro during the European trading hours.

Central Bank Notes:

• The ECB kept the three key interest rates unchanged for a fifth consecutive meeting, keeping the main refinancing rate on hold at 4.50%.
• Inflation has continued to fall, led by lower food and goods price inflation with most measures of underlying inflation easing, wage growth is gradually moderating, and firms are absorbing part of the rise in labour costs in their profits.
• Financing conditions remain restrictive and the past interest rate increases continue to weigh on demand, which is helping to push down inflation but domestic price pressures are strong and are keeping services price inflation high.
• The Governing Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and if the Council’s updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission were to further increase its confidence that inflation is converging to the target in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction.
• Next meeting is on 6 June 2024.

Next 24 Hours Bias

Medium Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Following yesterday’s hotter-than-anticipated CPI print in Switzerland, the franc strengthened significantly versus the dollar as USD/CHF dived from 0.9160 towards 0.9100 at the beginning of yesterday’s Europe session. This currency pair retraced higher to touch 0.9138 overnight before reversing sharply more.  It finally broke under the threshold of 0.9100 at the beginning of the Asia session and is likely to remain under pressure for most parts of today.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points, going from 1.75% to 1.50% in March.
• For some months now, inflation has been back below 2% and thus in the range the SNB equates with price stability.
• According to the new forecast, inflation is also likely to remain in this range over the next few years.
• The forecast puts average annual inflation at 1.4% for 2024, 1.2% for 2025 and 1.1% for 2026, based on the assumption that the SNB policy rate is 1.5% over the entire forecast horizon.
• Swiss GDP growth was moderate in the fourth quarter of last year and it is likely to remain modest in the coming quarters.
• Overall, Switzerland’s GDP is likely to grow by around 1% this year.
• Next meeting is on 20 June 2024.

Next 24 Hours Bias

Medium Bearish

The Pound (GBP)

Key news events today

Services PMI (8:30 am GMT)

What can we expect from GBP today?

Over the past six months, services activity has pulled up overall growth in the UK. The final reading for the month of April shows an unchanged figure from the flash reading – the report indicated companies noting rising business activity as well as higher consumer spending which were supported by a recovery in broader economic conditions. The Pound was trading around 1.2550 as Asian markets came online and could continue to climb higher today.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8-to-1 to maintain its Official Bank Rate at 5.25% for the fifth consecutive meeting.
• One member preferred to reduce the Bank Rate by 25 basis points to 5.0%.
• Twelve-month CPI inflation fell to 3.4% in February from 4.0% in January and December while Services consumer price inflation has declined but remains elevated, at 6.1% in February.
• CPI inflation is projected to fall to slightly below the 2% target in 2024 Q2, marginally weaker than previously expected owing to the freeze in fuel duty announced in the Budget.
• In the February Report projection, CPI inflation had been expected to fall temporarily to the 2% target in 2024 Q2 before increasing again in Q3 and Q4, to around 2.75%.
• Having declined through the second half of last year, UK GDP and market sector output are expected to start growing again during the first half of this year while the fiscal measures in Spring Budget 2024 are likely to increase the level of GDP by around 0.25% over coming years.
• Next meeting is on 9 May 2024.

Next 24 Hours Bias

Medium Bullish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Although unemployment claims in the US were lower than anticipated, demand for the dollar waned which drove USD/CAD under the threshold of 1.3700 overnight. This currency pair tumbled hard and was trading around 1.3660 at the beginning of the Asia session – strong headwinds remain and further downside action cannot be ruled out today.

Central Bank Notes:

• The Bank of Canada held its target for the overnight rate at 5.0% for the fifth meeting in a row while continuing its policy of quantitative tightening.
• Canada’s economy stalled in the second half of last year and the economy moved into excess supply but economic growth is forecasted to pick up in 2024. Overall, the Bank forecasts GDP growth of 1.5% in 2024, 2.2% in 2025, and 1.9% in 2026.
• CPI inflation slowed to 2.8% in February, with easing in price pressures becoming more broad-based across goods and services. However, shelter price inflation is still very elevated, driven by growth in rent and mortgage interest costs.
• Core measures of inflation, which had been running around 3.5%, slowed to just over 3% in February, and 3-month annualized rates are suggesting downward momentum. The Bank expects CPI inflation to be close to 3% during the first half of this year, move below 2.5% in the second half, and reach the 2% inflation target in 2025.
• The Governing Council is particularly watching the evolution of core inflation, and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour.
• While inflation is still too high and risks remain, CPI and core inflation have eased further in recent months and the Council will be looking for evidence that this downward momentum is sustained.
• Next meeting is on 5 June 2024.

Next 24 Hours Bias

Medium Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Crude oil has come under intense selling pressures this week with WTI oil tumbling more than 5.5% this week to mark the worst sell-off since the end of January. Prices for WTI oil fell under $79 per barrel overnight before stabilizing around $79.90 to reverse and edge higher as Asian markets came online. Combined with weaker global demand and a possible economic slowdown in the US, prices have taken a beating this week as the risk premium from the ongoing geopolitical tensions in the Middle East appear to be fading.

Next 24 Hours Bias

Weak Bearish

The post IC Markets Europe Fundamental Forecast | 3 May 2024 first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bullish

Overall momentum of the chart: Bearish

Price could potentially make a bullish reaction off pivot and rise towards the 1st resistance

PIvot: 105.08

Supporting reasons: Identified as an overlap support that aligns close to a 50% Fibonacci retracement level, indicating a significant level where buyers might step in to support the price, potentially providing a foundation for a bounce.

1st support: 104.41

Supporting reasons: Acts as a pullback support that aligns with a 78.6% Fibonacci retracement level, representing a level where buyers could potentially  intervene to support the price.

1st resistance: 105.52

Supporting reasons: Marked by an overlap resistance, acting as a potential barrier to further upside movement.

EUR/USD:

Potential Direction: Bearish

Overall momentum of the chart: Neutral

Price could rise towards the pivot and potentially make a bearish reaction off this level to drop towards the 1st support

Pivot: 1.0740

Supporting reasons: Acts a pullback resistance where selling pressures could potentially increase.

1st support: 1.0655

Supporting reasons: Identified as a pullback support that aligns with a 61.8% Fibonacci retracement level, indicating a level where buyers might step in to support the price.

1st resistance: 1.0776

Supporting reasons: Marked as a pullback resistance that aligns with a 61.8% Fibonacci retracement level, representing a level where selling pressures intensified in the past and could potentially act as a barrier to further upside movement.

EUR/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could fall towards the pivot and potentially make a bearish breakout through this level to drop towards the 1st support

Pivot: 164.11

Supporting reasons: Identified as a potential breakout level where the bearish momentum could drive price lower.

1st support: 162.61

Supporting reasons: Acts as a pullback support, suggesting another level where buyers have previously intervened to support the price.

1st resistance: 165.35

Supporting reasons: Marked by an overlap resistance, representing a level where selling pressures have intensified in the past and could potentially act as a barrier to further upside movement.

EUR/GBP:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could rise towards the pivot and potentially make a bearish reaction off this level to drop towards the 1st support

Pivot: 0.8565

Supporting reasons: Identified as an overlap support where selling pressures could intensify.

1st support: 0.8530

Supporting reasons: Acts as a multi-swing-low support where price has previously found strong support and could halt further downward movements.

1st resistance: 0.8589

Supporting reasons: Acts as a pullback resistance that aligns with a 50% Fibonacci retracement level, representing a level where selling pressures have increased in the past and could potentially act as a barrier to further upside movement.

GBP/USD:

Potential Direction: Bearish

Overall momentum of the chart: Neutral

Price could rise towards the pivot and potentially make a bearish reaction off this level to drop towards the 1st support

Pivot: 1.2595

Supporting reasons: Acts a pullback resistance that aligns with a 161.8% Fibonacci extension level where selling pressures could potentially increase.

1st support: 1.2482

Supporting reasons: Identified as an overlap support that aligns close to a 38.2% Fibonacci retracement level, indicating a level where buyers might step in to support the price.

1st resistance: 1.2696

Supporting reasons: Marked as a pullback resistance, representing a level where selling pressures intensified in the past and could potentially act as a barrier to further upside movement.

GBP/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could fall towards the pivot and potentially make a bearish breakout through this level to drop towards the 1st support

Pivot: 191.80

Supporting reasons:  Identified as a potential breakout level where the bearish momentum could drive price lower.

1st support: 190.17

Supporting reasons: Acts as a pullback support, indicating a level where buyers might step in to support the price.

1st resistance: 193.38

Supporting reasons: Marked by an overlap resistance, representing a level where selling pressures have increased recently to potentially act as a barrier to further upside movement.

USD/CHF:

Potential Direction: Bullish

Overall momentum of the chart: Neutral

Price could potentially make a bullish reaction off the pivot and rise towards the 1st resistance

Pivot: 0.9081

Supporting reasons: Acts as a pullback support that aligns close to a 61.8% Fibonacci retracement level where buying interests could pick up.

1st support: 0.8999

Supporting reasons: Acts as a pullback support, suggesting a level where buyers might step in to support the price to halt further downward movements.

1st resistance: 0.9147

Supporting reasons: Identified as a pullback resistance, representing a level where selling pressures have historically increased and could potentially act as a barrier to further upside movement.

USD/JPY:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

Price could fall towards the pivot and potentially make a bullish reaction off this level to rise towards the 1st resistance

Pivot: 151.94

Supporting reasons: Acts a pullback resistance that aligns with a 61.8% Fibonacci retracement level where buying interests could pick up.

1st support: 150.75

Supporting reasons: Acts as an overlap support, indicating a level where buyers might step in to support the price.

1st resistance: 154.37

Supporting reasons: Marked by a pullback resistance, representing a level where selling pressures could increase to potentially act as a barrier to further upside movement.

USD/CAD:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

Price could fall towards the pivot and potentially make a bullish reaction off this level to rise towards the 1st resistance

Pivot: 1.3628

Supporting reasons: Acts as an overlap support that aligns close to a confluence of Fibonacci levels i.e. the 61.8% retracement and the 78.6% projection levels, suggesting a significant area where buying interests could increase.

1st support: 1.3560

Supporting reasons: Identified as a pullback support that aligns close to a confluence of Fibonacci levels i.e. the 78.6% retracement and the 100% projection levels, suggesting an area where price has previously found strong buying interest to potentially halt any further downward movement.

1st resistance: 1.3715

Supporting reasons: Identified as an overlap resistance, marking a significant barrier that could cap further upward movements.

AUD/USD:

Potential Direction: Bearish

Overall momentum of the chart: Neutral

Price has made a bearish reaction off the pivot and could potentially drop towards the 1st support

Pivot: 0.6578

Supporting reasons: Acts a pullback resistance that aligns close to a 78.6% Fibonacci retracement level where selling pressures have intensified in the past.

1st support: 0.6529

Supporting reasons: Acts as a pullback support that aligns close to a 50% Fibonacci retracement level, suggesting a significant area where price has previously found strong support and could provide a basis to halt further downward movement.

1st resistance: 0.6632

Supporting reasons: Identified as a swing-high resistance, marking a barrier that has previously capped upward movements.

NZD/USD

Potential Direction: Bearish

Overall momentum of the chart: Neutral

Price has made a bearish reaction off the pivot and could potentially drop towards the 1st support

Pivot: 0.5979

Supporting reasons: Acts a pullback resistance that aligns close to a 61.8% Fibonacci retracement level where selling pressures have intensified in the past.

1st support: 0.5938

Supporting reasons: Acts as an overlap support that aligns with a 38.2% Fibonacci retracement level, suggesting a potential area where price has previously found strong support and could provide a basis to halt further downward movement.

1st resistance: 0.6045

Supporting reasons: Identified as an overlap resistance, marking a barrier that has previously capped upward movements.

US30 (DJIA):

Potential Direction: Bearish

Overall momentum of the chart: Neutral

Price could rise towards the pivot and potentially make a bearish reaction off this level to drop towards the 1st support

Pivot: 38,563.21

Supporting reasons: Acts as an overlap resistance that aligns close to a 50% Fibonacci retracement level, suggesting a significant area where selling pressures have increased in recent weeks.

1st support: 37,696.44

Supporting reasons: Identified as a pullback support that aligns with a 61.8% Fibonacci retracement level, suggesting a significant area where price has previously found strong buying interest and could provide a solid foundation to halt further downward movement.

1st resistance: 39,000.73

Supporting reasons: Identified as a pullback resistance that aligns with a 61.8 Fibonacci retracement level, indicating a potential barrier that could cap any upward movements.

DE40 (DAX):

Potential Direction: Bullish

Overall momentum of the chart: Neutral

Price could fall towards the pivot and potentially make a bullish reaction to rise higher towards the 1st resistance

Pivot: 17,804.20

Supporting reasons: Acts as a pullback support that aligns with a 50% Fibonacci retracement level, suggesting a significant area where buying interests has increased recently.

1st support: 17,507.10

Supporting reasons: Acts as a swing-low support, suggesting a significant area where price has previously found strong buying interest and could provide a solid foundation to halt further downward movement.

1st resistance: 18,236.40

Supporting reasons: Identified as a pullback resistance, potentially functioning as a barrier that could cap any upward movements.

US500 (S&P 500): 

Potential Direction: Bearish

Overall momentum of the chart: Neutral

Price could rise towards the pivot and potentially make a bearish reaction off this level to drop towards the 1st support

Pivot: 5,119.91

Supporting reasons: Acts as an overlap resistance, suggesting a significant area where selling pressures  have intensified recently.

1st support: 5,014.00

Supporting reasons: Acts as a pullback support, suggesting a significant area where price has previously found strong buying interest and could halt further downward movements.

1st resistance: 5,167.12

Supporting reasons: Marked by a pullback resistance, which could function as a potential barrier and cap any upward movements.

BTC/USD (Bitcoin):

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could rise towards the pivot and potentially make a bearish reaction off this level to drop towards the 1st support

Pivot: 60,618.00

Supporting reasons: Acts as a pullback resistance that aligns with a 38.2% Fibonacci retracement level, suggesting an area where selling pressures could intensify.

1st support: 56,802.43

Supporting reasons: Acts as a pullback support, suggesting an area where buying interests could pick up to halt further downward movements.

1st resistance: 63,834.96

Supporting reasons: Marked by a pullback resistance, indicating a significant barrier that could cap further upward movements.

ETH/USD (Ethereum):

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could rise towards the pivot and potentially make a bearish reaction off this level to drop towards the 1st support

Pivot: 3,044.64

Supporting reasons: Acts as a pullback resistance that aligns close to a 38.2% Fibonacci retracement level, suggesting an area where selling pressures could intensify.

1st support: 2,863.34

Supporting reasons: Identified as a pullback support, suggesting a significant area where price has previously found support and could provide a strong foundation to halt further downward movements.

1st resistance: 3,214.73

Supporting reasons: Identified as a pullback resistance that aligns close to a 78.6% Fibonacci retracement level, marking a significant barrier that could cap further upward movements.

WTI/USD (Oil):

Potential Direction: Bullish

Overall momentum of the chart: Bearish

Price has made a bullish reaction off the pivot and could potentially retrace higher towards the 1st resistance

Pivot: 79.26

Supporting reasons: Acts as a pullback support that aligns with a 78.6% Fibonacci retracement level, suggesting a significant area where price has recently found support to provide a strong foundation for a potential rebound.

1st support: 77.21

Supporting reasons: Identified as a pullback support, suggesting a significant area where price has previously found strong buying interest and could provide a solid foundation to halt further downward movements.

1st resistance: 80.89

Supporting reasons: Identified as a pullback resistance that aligns close to a 38.2% Fibonacci retracement level, marking a significant barrier that could cap further upward movements.

XAU/USD (GOLD):

Potential Direction: Bullish

Overall momentum of the chart: Neutral

Price could fall towards the pivot and potentially make a bullish reaction off this level to rise towards the 1st resistance

Pivot: 2,285.17

Supporting reasons: Acts as a pullback support where buying interests have increased recently.

1st support: 2,272.11

Supporting reasons: Acts as a pullback support that aligns close to a 61.8% Fibonacci retracement level, indicating a level where buyers might step in to support the price.

1st resistance: 2,328.74

Supporting reasons: Identified as an overlap resistance that aligns with a 61.8% Fibonacci retracement level, suggesting a significant level where selling pressures might intensify.

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The post Friday 3rd May 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 3 May 2024

What happened in the US session?

Unemployment claims in the US came lower than its estimate for the fourth week in a row with a print of 208K versus 212K. Lower claims usually signal a robust labour market and typically provide strong near-term tailwinds for the dollar. However, the dollar index (DXY) initially fell slightly from 105.69 to 105.57 before reversing to climb towards 105.90. Demand for the dollar appears to be waning as the DXY reversed from under 106 to drop as low as 105.29 overnight.

What does it mean for the Asia Session?

Despite the better-than-expected claims data, the dollar remains under pressure as the DXY was edging lower this morning while prices for spot gold stabilized around the region of $2,300/oz before moving higher. Crude oil prices continue to face overhead pressures with WTI oil dipping under $79 per barrel before retracing higher towards the $80-mark.

The Dollar Index (DXY)

Key news events today

Non-farm Payrolls (12:30 pm GMT)

Unemployment Rate (12:30 pm GMT)

ISM Services PMI (2:00 pm GMT)

What can we expect from DXY today?

Non-farm Payrolls (NFPs) have grown strongly over the past four months to average a monthly gain of 280K over this period. The forecast of 238K highlights a potential slow down in the pace of job growth for the month of April, especially after a blowout figure of 303K in March. Should NFPs miss market expectations while the unemployment rate edges higher from 3.8%, the dollar could experience an intense sell-off during the US session.

The services sector has been pulling up overall economic activity in the US over the past 15 months – a period where the ISM Services PMI has expanded strongly to lead business activity output. The estimate of 52.0 points to another month of expansion in April, rising from 51.4 in March. The prices index – which has also increased over this same period – will be closely monitored as well. With higher prices for raw materials being reported in the equivalent report for the manufacturing sector, another sharp increase in prices for services is certainly going to raise further concerns on inflationary pressures re-accelerating for the Federal Reserve.

Central Bank Notes:

• The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the sixth meeting in a row.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year.
• The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks. Inflation has eased over the past year but remains elevated and in recent months, there has been a lack of further progress toward the Committee’s 2% inflation objective.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while job gains have remained strong, and the unemployment rate has remained low.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• The Committee’s assessments will take into account a wide range of information, including readings on labour market conditions, inflation pressures and inflation expectations, and financial and international developments.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• Next meeting runs from 11 to 12 June 2024.

Next 24 Hours Bias

Medium Bearish

Gold (XAU)

Key news events today

Non-farm Payrolls (12:30 pm GMT)

Unemployment Rate (12:30 pm GMT)

ISM Services PMI (2:00 pm GMT)

What can we expect from Gold today?

Non-farm Payrolls (NFPs) have grown strongly over the past four months to average a monthly gain of 280K over this period. The forecast of 238K highlights a potential slow down in the pace of job growth for the month of April, especially after a blowout figure of 303K in March. Should NFPs miss market expectations while the unemployment rate edges higher from 3.8%, the dollar could experience an intense sell-off to potentially boost gold prices during the US session.

The services sector has been pulling up overall economic activity in the US over the past 15 months – a period where the ISM Services PMI has expanded strongly to lead business activity output. The estimate of 52.0 points to another month of expansion in April, rising from 51.4 in March. The prices index – which has also increased over this same period – will be closely monitored as well. With higher prices for raw materials being reported in the equivalent report for the manufacturing sector, another sharp increase in prices for services is certainly going to raise further concerns on inflationary pressures re-accelerating for the Federal Reserve.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

Despite the better-than-expected unemployment claims in the US, demand for the dollar was poor which caused the Aussie to hit an overnight high of 0.6573. AUD/USD pulled back towards 0.6560 by the end of the US session before rising strongly once again – this currency pair was trading around 0.6580 as Asian markets came online.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35%, marking the seventh pause out of the last eight board meetings.
• The headline monthly CPI indicator was steady at 3.4% over the year to January, with momentum easing over recent months, driven by moderating goods inflation. Services inflation remains elevated and is moderating at a more gradual pace.
• The central forecasts are for inflation to return to the target range of 2–3% in 2025, and to the midpoint in 2026.
• While recent data indicate that inflation is easing, it remains high. The Board expects that it will be some time yet before inflation is sustainably in the target range.
• The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.
• Next meeting is on 7 May 2024.

Next 24 Hours Bias

Medium Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The Kiwi hit a high of 0.5967 overnight despite lower-than-anticipated unemployment claims in the US before dipping under 0.5950 by the end of the US session. NZD/USD rebounded at the beginning of the Asia session to climb towards 0.5970 and could remain elevated for the initial half of the final trading day of the week.

Central Bank Notes:

• The Monetary Policy Committee kept the OCR unchanged at 5.50% for the sixth meeting in a row.
• The Committee remains confident that the current level of the OCR is contributing to an easing in capacity pressures to ensure inflation returns to target.
• However, current consumer price inflation remains above the Committee’s 1 to 3% target range. A restrictive monetary policy stance remains necessary to further reduce capacity pressures and inflation.
• The Committee discussed upside risks to the inflation outlook: persistent services inflation remains a risk and goods price inflation remains elevated while anticipated near-term increases to local government rates, insurance, and utility costs, could also further slow the decline in headline inflation.
• The Committee discussed downside risks to the inflation outlook: ongoing restrictive monetary policy in an environment of weak global growth could lead to a more rapid decline in inflation than expected. Business and consumer confidence remain particularly weak which could lead to more unemployment and financial stress than expected while structural challenges facing the economy in China remain a concern given its importance for the global economy and for New Zealand’s trade.
• Next meeting is on 10 July 2024.

Next 24 Hours Bias

Medium Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

The recent intervention measures by the Bank of Japan (BoJ) on 29th April and 1st May appear to have made some progress in restraining the astronomical rise of USD/JPY. The BoJ is thought to have spent close to $59 billion this week as it attempts to prop up the yen. USD/JPY briefly climbed above the threshold of 160 on 29th April – a 34-year high – before the first round of intervention measures took place. This currency pair has dived nearly 4.5% to lose over 700 pips at its lowest point this week. With markets now wary about any future intervention actions, the yen could steadily strengthen further – USD/JPY was trading around 153.10 as Asian markets came online.

Central Bank Notes:

• The Bank considers that the policy framework of Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control and the negative interest rate policy to date have fulfilled their roles. With the price stability target of 2%, it will conduct monetary policy as appropriate, guiding the short-term interest rate as a primary policy tool.
• The Bank of Japan decided on the following measures:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0 to 0.1% while continuing its JGB purchases with broadly the same amount as before.
  2. In addition, the Bank will discontinue purchases of exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) and will also gradually reduce the amount of purchases of CP and corporate bonds and will discontinue the purchases in about one year.
• In a quarterly outlook, the committee revised higher CPI prints for FY 2024 to 2.8% from January’s projections of 2.4%, due to the waning effects of higher import prices and fewer government support measures.
• For 2025, the board expects core inflation to hit 1.9%, slightly higher than its earlier estimates of 1.8%, reflecting a recent rise in oil prices.
• Policymakers cut their 2023 GDP growth forecast to 1.3% from 1.8% and for FY 2024, the bank also slashed its GDP outlook to 0.8% from 1.2%, mainly reflecting lower private consumption.
• Next meeting is on 14 June 2024.

Next 24 Hours Bias

Medium Bearish

The Euro (EUR)

Key news events today

Unemployment Rate (9:00 am GMT)

What can we expect from EUR today?

Despite the better-than-expected unemployment claims in the US, demand for the dollar was weak which caused the Euro to hit an overnight high of 1.0730. EUR/USD dipped under 1.0720 by the end of the US session before rising strongly once again – this currency pair was trading around 1.0735 as Asian markets came online.

The unemployment rate in the Euro Area has remained relatively steady around 6.5% since December 2022 and the forecast for the month of March points to an unchanged reading of 6.5% once again – this would mark the fifth consecutive month of stable unemployment. If the result surprises markets to the upside, it could function as a near-term tailwind for the Euro during the European trading hours.

Central Bank Notes:

• The ECB kept the three key interest rates unchanged for a fifth consecutive meeting, keeping the main refinancing rate on hold at 4.50%.
• Inflation has continued to fall, led by lower food and goods price inflation with most measures of underlying inflation easing, wage growth is gradually moderating, and firms are absorbing part of the rise in labour costs in their profits.
• Financing conditions remain restrictive and the past interest rate increases continue to weigh on demand, which is helping to push down inflation but domestic price pressures are strong and are keeping services price inflation high.
• The Governing Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and if the Council’s updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission were to further increase its confidence that inflation is converging to the target in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction.
• Next meeting is on 6 June 2024.

Next 24 Hours Bias

Medium Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Following yesterday’s hotter-than-anticipated CPI print in Switzerland, the franc strengthened significantly versus the dollar as USD/CHF dived from 0.9160 towards 0.9100 at the beginning of yesterday’s Europe session. This currency pair retraced higher to touch 0.9138 overnight before reversing sharply more.  It finally broke under the threshold of 0.9100 at the beginning of the Asia session and is likely to remain under pressure for most parts of today.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points, going from 1.75% to 1.50% in March.
• For some months now, inflation has been back below 2% and thus in the range the SNB equates with price stability.
• According to the new forecast, inflation is also likely to remain in this range over the next few years.
• The forecast puts average annual inflation at 1.4% for 2024, 1.2% for 2025 and 1.1% for 2026, based on the assumption that the SNB policy rate is 1.5% over the entire forecast horizon.
• Swiss GDP growth was moderate in the fourth quarter of last year and it is likely to remain modest in the coming quarters.
• Overall, Switzerland’s GDP is likely to grow by around 1% this year.
• Next meeting is on 20 June 2024.

Next 24 Hours Bias

Medium Bearish

The Pound (GBP)

Key news events today

Services PMI (8:30 am GMT)

What can we expect from GBP today?

Over the past six months, services activity has pulled up overall growth in the UK. The final reading for the month of April shows an unchanged figure from the flash reading – the report indicated companies noting rising business activity as well as higher consumer spending which were supported by a recovery in broader economic conditions. The Pound was trading around 1.2550 as Asian markets came online and could continue to climb higher today.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8-to-1 to maintain its Official Bank Rate at 5.25% for the fifth consecutive meeting.
• One member preferred to reduce the Bank Rate by 25 basis points to 5.0%.
• Twelve-month CPI inflation fell to 3.4% in February from 4.0% in January and December while Services consumer price inflation has declined but remains elevated, at 6.1% in February.
• CPI inflation is projected to fall to slightly below the 2% target in 2024 Q2, marginally weaker than previously expected owing to the freeze in fuel duty announced in the Budget.
• In the February Report projection, CPI inflation had been expected to fall temporarily to the 2% target in 2024 Q2 before increasing again in Q3 and Q4, to around 2.75%.
• Having declined through the second half of last year, UK GDP and market sector output are expected to start growing again during the first half of this year while the fiscal measures in Spring Budget 2024 are likely to increase the level of GDP by around 0.25% over coming years.
• Next meeting is on 9 May 2024.

Next 24 Hours Bias

Medium Bullish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Although unemployment claims in the US were lower than anticipated, demand for the dollar waned which drove USD/CAD under the threshold of 1.3700 overnight. This currency pair tumbled hard and was trading around 1.3660 at the beginning of the Asia session – strong headwinds remain and further downside action cannot be ruled out today.

Central Bank Notes:

• The Bank of Canada held its target for the overnight rate at 5.0% for the fifth meeting in a row while continuing its policy of quantitative tightening.
• Canada’s economy stalled in the second half of last year and the economy moved into excess supply but economic growth is forecasted to pick up in 2024. Overall, the Bank forecasts GDP growth of 1.5% in 2024, 2.2% in 2025, and 1.9% in 2026.
• CPI inflation slowed to 2.8% in February, with easing in price pressures becoming more broad-based across goods and services. However, shelter price inflation is still very elevated, driven by growth in rent and mortgage interest costs.
• Core measures of inflation, which had been running around 3.5%, slowed to just over 3% in February, and 3-month annualized rates are suggesting downward momentum. The Bank expects CPI inflation to be close to 3% during the first half of this year, move below 2.5% in the second half, and reach the 2% inflation target in 2025.
• The Governing Council is particularly watching the evolution of core inflation, and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour.
• While inflation is still too high and risks remain, CPI and core inflation have eased further in recent months and the Council will be looking for evidence that this downward momentum is sustained.
• Next meeting is on 5 June 2024.

Next 24 Hours Bias

Medium Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Crude oil has come under intense selling pressures this week with WTI oil tumbling more than 5.5% this week to mark the worst sell-off since the end of January. Prices for WTI oil fell under $79 per barrel overnight before stabilizing around $79.90 to reverse and edge higher as Asian markets came online. Combined with weaker global demand and a possible economic slowdown in the US, prices have taken a beating this week as the risk premium from the ongoing geopolitical tensions in the Middle East appear to be fading.

Next 24 Hours Bias

Weak Bearish

The post IC Markets Asia Fundamental Forecast | 3 May 2024 first appeared on IC Markets | Official Blog.

US Stocks Rally After Fed – Nasdaq up 1.5% 

US Stock indices rallied strongly in the first full day of trading after the conclusion of the latest Fed meeting assisted by another good earnings result in the tech sector, this time from Apple. The Dow gained 0.85%, the S&P 0.91% and the Nasdaq took out the day’s honours rising 1.51%. The dollar fell against most of the majors, the Dxy losing 0.35%, once again with the Jpy seeing the biggest move. US treasury yields pulled back further, the rate-sensitive 2-year dropping 5.2 basis points to 4.887% and the 10-year drifting off 0.8 of a basis point to 4.583%. Oil prices remained steady near recent multi-week lows, with Brent trading around $83.67 and WTI at $78.95 on the NY close and Gold dipped lower, losing 0.8% on the day, closing at $2,303 per ounce. 

From the Fed to Non-Farms 

Investor focus will move swiftly in the sessions ahead from the reaction to the latest Fed meeting conclusion to the key update on the US job market. Jerome Powell’s message on Wednesday that despite recent higher data prints, the next move for rates will likely be lower and will be tested sooner rather than later. With the Fed clearly data-dependent, this NFP release will immediately test that guidance and a higher print could throw recent relief rallies back in investors’ faces. The market is currently pricing in just 35 basis points of cuts in for 2024 and if inflation remains relatively high in line with a strong job market then we could very quickly be looking at 2025 for the first cut – and of course, if it starts to push back higher, then the fears of a rate hike in the medium term could rise again from where they are still lurking just below the surface of investor confidence.  

Non-Farm Payrolls Day 

It really will be all about the Non-Farm Payrolls data for most of global market participants today with little else to distract investors from the event calendar. There is of course the continued chance of official action in the Jpy but most traders feel that the Japanese authorities will be happier with recent Yen appreciation – this of course could all change with a stronger US data print. There is nothing of note on the macroeconomic calendar in the first two sessions of the day and many are expecting them to be the calm before a storm of volatility that should occur on the US open with options pricing expecting over 1% swings for the major indices. The focus will be on the non-farms data soon after the New York opening and this will be followed by the ISM Services PMI number but expect big moves if the headline print is significantly off from the expected 238k increase.  

The post General Market Analysis 03/05/2024 first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 2 May 2024

What happened in the Asia session?

Weakness in the dollar gained further traction as the dollar index (DXY) continued to slide lower this morning. This index hit a low of 105.56 and should remain under pressure until the US markets come online.

What does it mean for the Europe & US sessions?

Inflation in Switzerland has remained well-anchored under the Swiss National Bank’s (SNB) target of 2% over the past one year which prompted policymakers to announce a surprise interest rate cut in March. The monthly estimate for April points to headline CPI rising just 0.1% and should there be no upwards surprises, the franc is likely to remain under pressure and potentially keep USD/CHF elevated.

Not only have unemployment claims edged lower over the past three weeks, but they have also printed lower than their respective estimates which is a sign of a robust labour market. The estimate for this week is 212K while claims have averaged around 213K over the past eight weeks. Should claims once again come in lower than anticipated, it could provide a boost for the dollar.

The Dollar Index (DXY)

Key news events today

Unemployment Claims (12:30 pm GMT)

What can we expect from DXY today?

Not only have unemployment claims edged lower over the past three weeks, but they have also printed lower than their respective estimates which is a sign of a robust labour market. The estimate for this week is 212K while claims have averaged around 213K over the past eight weeks. Should claims once again come in lower than anticipated, it could provide a boost for the dollar.

Central Bank Notes:

• The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the sixth meeting in a row.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year.
• The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks. Inflation has eased over the past year but remains elevated and in recent months, there has been a lack of further progress toward the Committee’s 2% inflation objective.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while job gains have remained strong, and the unemployment rate has remained low.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• The Committee’s assessments will take into account a wide range of information, including readings on labour market conditions, inflation pressures and inflation expectations, and financial and international developments.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• Next meeting runs from 11 to 12 June 2024.

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Key news events today

Unemployment Claims (12:30 pm GMT)

What can we expect from Gold today?

Not only have unemployment claims edged lower over the past three weeks, but they have also printed lower than their respective estimates which is a sign of a robust labour market. The estimate for this week is 212K while claims have averaged around 213K over the past eight weeks. Should claims once again come in lower than anticipated, it could provide a boost for the dollar and hold back any gains for gold.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The Aussie swung wildly during the period when the FOMC statement and press conference were released as it reversed sharply from 0.6540 to drop as low as 0.6500 before rebounding once again. This currency pair was trading around 0.6530 as Asian markets came online and was one of the stronger performing currencies this morning.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35%, marking the seventh pause out of the last eight board meetings.
• The headline monthly CPI indicator was steady at 3.4% over the year to January, with momentum easing over recent months, driven by moderating goods inflation. Services inflation remains elevated, and is moderating at a more gradual pace.
• The central forecasts are for inflation to return to the target range of 2–3% in 2025, and to the midpoint in 2026.
• While recent data indicate that inflation is easing, it remains high. The Board expects that it will be some time yet before inflation is sustainably in the target range.
• The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.
• Next meeting is on 7 May 2024.

Next 24 Hours Bias

Medium Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The Kiwi faced high volatility during the period when the FOMC statement and press conference were released – it reversed sharply from 0.5940 to drop as low as 0.5907 before rebounding to stabilize around 0.5925. This currency pair was trading around 0.5930 at the beginning of the Asia session and it could remain elevated today.

Central Bank Notes:

• The Monetary Policy Committee kept the OCR unchanged at 5.50% for the sixth meeting in a row.
• The Committee remains confident that the current level of the OCR is contributing to an easing in capacity pressures to ensure inflation returns to target.
• However, current consumer price inflation remains above the Committee’s 1 to 3% target range. A restrictive monetary policy stance remains necessary to further reduce capacity pressures and inflation.
• The Committee discussed upside risks to the inflation outlook: persistent services inflation remains a risk and goods price inflation remains elevated while anticipated near-term increases to local government rates, insurance, and utility costs, could also further slow the decline in headline inflation.
• The Committee discussed downside risks to the inflation outlook: ongoing restrictive monetary policy in an environment of weak global growth could lead to a more rapid decline in inflation than expected. Business and consumer confidence remain particularly weak which could lead to more unemployment and financial stress than expected while structural challenges facing the economy in China remain a concern given its importance for the global economy and for New Zealand’s trade.
• Next meeting is on 10 July 2024.

Next 24 Hours Bias

Medium Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

The yen surged 3% against the dollar overnight, fuelling speculation that the Bank of Japan and Ministry of Finance (MOF) authorities could be intervening to support the currency. The sudden strength of the yen caused USD/JPY to nosedive from 157.60 to around 153 in under 40 minutes. There is growing speculation that Japanese authorities intervened on 29th April when USD/JPY briefly climbed above 160 for the first time in 34 years. It is believed that authorities spent close to ¥5.5 trillion ($34.8 billion) to support the currency, based on Bloomberg analysis of commercial banks’ deposits held at the BOJ. This currency pair retraced higher to climb above 156 as Asian markets came online and it could edge higher before the next suspected intervention takes place.

Central Bank Notes:

• The Bank considers that the policy framework of Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control and the negative interest rate policy to date have fulfilled their roles. With the price stability target of 2%, it will conduct monetary policy as appropriate, guiding the short-term interest rate as a primary policy tool.
• The Bank of Japan decided on the following measures:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0 to 0.1% while continuing its JGB purchases with broadly the same amount as before.
  2. In addition, the Bank will discontinue purchases of exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) and will also gradually reduce the amount of purchases of CP and corporate bonds and will discontinue the purchases in about one year.
• In a quarterly outlook, the committee revised higher CPI prints for FY 2024 to 2.8% from January’s projections of 2.4%, due to the waning effects of higher import prices and fewer government support measures.
• For 2025, the board expects core inflation to hit 1.9%, slightly higher than its earlier estimates of 1.8%, reflecting a recent rise in oil prices.
• Policymakers cut their 2023 GDP growth forecast to 1.3% from 1.8% and for FY 2024, the bank also slashed its GDP outlook to 0.8% from 1.2%, mainly reflecting lower private consumption.
• Next meeting is on 14 June 2024.

Next 24 Hours Bias

Medium Bullish

The Euro (EUR)

Key news events today

Manufacturing PMI (9:00 am GMT)

What can we expect from EUR today?

The final reading for manufacturing PMI in the Euro area is expected to show manufacturing remaining in contraction with an unchanged figure of 45.6 which is a 4-month low. Activity for this sector remains sluggish and the final result is likely to add some downward pressure on the Euro at the beginning of the Europe session.

Central Bank Notes:

• The ECB kept the three key interest rates unchanged for a fifth consecutive meeting, keeping the main refinancing rate on hold at 4.50%.
• Inflation has continued to fall, led by lower food and goods price inflation with most measures of underlying inflation easing, wage growth is gradually moderating, and firms are absorbing part of the rise in labour costs in their profits.
• Financing conditions remain restrictive and the past interest rate increases continue to weigh on demand, which is helping to push down inflation but domestic price pressures are strong and are keeping services price inflation high.
• The Governing Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and if the Council’s updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission were to further increase its confidence that inflation is converging to the target in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction.
• Next meeting is on 6 June 2024.

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

CPI (6:30 am GMT)

What can we expect from CHF today?

Inflation in Switzerland has remained well-anchored under the Swiss National Bank’s (SNB) target of 2% over the past one year which prompted policymakers to announce a surprise interest rate cut in March. The monthly estimate for April points to headline CPI rising just 0.1% and should there be no upwards surprises, the franc is likely to remain under pressure and potentially keep USD/CHF elevated.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points, going from 1.75% to 1.50% in March.
• For some months now, inflation has been back below 2% and thus in the range the SNB equates with price stability.
• According to the new forecast, inflation is also likely to remain in this range over the next few years.
• The forecast puts average annual inflation at 1.4% for 2024, 1.2% for 2025 and 1.1% for 2026, based on the assumption that the SNB policy rate is 1.5% over the entire forecast horizon.
• Swiss GDP growth was moderate in the fourth quarter of last year and it is likely to remain modest in the coming quarters.
• Overall, Switzerland’s GDP is likely to grow by around 1% this year.
• Next meeting is on 20 June 2024.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

The Pound swung wildly during the period when the FOMC statement and press conference were released as it reversed sharply from 1.2550 to drop as low as 1.2490 before rebounding once again. GBP/USD was trading around 1.2530 as Asian markets came online and looks set to edge higher during the Asia and Europe sessions.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8-to-1 to maintain its Official Bank Rate at 5.25% for the fifth consecutive meeting.
• One member preferred to reduce the Bank Rate by 25 basis points to 5.0%.
• Twelve-month CPI inflation fell to 3.4% in February from 4.0% in January and December while Services consumer price inflation has declined but remains elevated, at 6.1% in February.
• CPI inflation is projected to fall to slightly below the 2% target in 2024 Q2, marginally weaker than previously expected owing to the freeze in fuel duty announced in the Budget.
• In the February Report projection, CPI inflation had been expected to fall temporarily to the 2% target in 2024 Q2 before increasing again in Q3 and Q4, to around 2.75%.
• Having declined through the second half of last year, UK GDP and market sector output are expected to start growing again during the first half of this year while the fiscal measures in Spring Budget 2024 are likely to increase the level of GDP by around 0.25% over coming years.
• Next meeting is on 9 May 2024.

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

BoC Governor Macklem Speaks (12:45 pm GMT)

What can we expect from CAD today?

Bank of Canada (BoC) Governor Tiff Macklem will be testifying before the House of Commons Standing Committee on Finance in Ottawa along with Senior Deputy Governor Carolyn Rogers. Traders will be paying close attention to this testimony and looking out for any clues on future monetary policy action. The Loonie strengthened quite significantly versus the dollar overnight as USD/CAD dipped under 1.3710 before rebounding as high as 1.3760 but then proceeded to fall once again. This currency pair was trading around 1.3730 at the beginning of the Asia session and it could break under the threshold of 1.3700 today.

Central Bank Notes:

• The Bank of Canada held its target for the overnight rate at 5.0% for the fifth meeting in a row while continuing its policy of quantitative tightening.
• Canada’s economy stalled in the second half of last year and the economy moved into excess supply but economic growth is forecasted to pick up in 2024. Overall, the Bank forecasts GDP growth of 1.5% in 2024, 2.2% in 2025, and 1.9% in 2026.
• CPI inflation slowed to 2.8% in February, with easing in price pressures becoming more broad-based across goods and services. However, shelter price inflation is still very elevated, driven by growth in rent and mortgage interest costs.
• Core measures of inflation, which had been running around 3.5%, slowed to just over 3% in February, and 3-month annualized rates are suggesting downward momentum. The Bank expects CPI inflation to be close to 3% during the first half of this year, move below 2.5% in the second half, and reach the 2% inflation target in 2025.
• The Governing Council is particularly watching the evolution of core inflation, and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour.
• While inflation is still too high and risks remain, CPI and core inflation have eased further in recent months and the Council will be looking for evidence that this downward momentum is sustained.
• Next meeting is on 5 June 2024.

Next 24 Hours Bias

Weak Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

After a surprise fall of 3.2M barrels in API stocks, the EIA inventories bucked the trend by reporting an unexpected build of 7.3M barrels of crude oil. This was the largest increase since mid-February and sends out mixed signals with regards to the level of demand in the US. Prices for crude have been falling since Monday as WTI oil broke under $80 per barrel overnight. It was trading around $79.80 as Asian markets came online and should continue to face overhead pressures today.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Europe Fundamental Forecast | 2 May 2024 first appeared on IC Markets | Official Blog.

The post Ex-Dividend 03/05/2024 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei up 0.10%, Shanghai Composite down 0.26%, Hang Seng up 2.40% ASX up 0.23%
• Commodities : Gold at $2318.5 (0.35%), Silver at $26.73 (0.06%), Brent Oil at $84.00 (0.68%), WTI Oil at $79.31 (0.66%)
• Rates : US 10-year yield at 4.61, UK 10-year yield at 4.37, Germany 10-year yield at 2.56

News & Data:

• (USD) Final Manufacturing PMI 50.0 vs 49.9 expected
• (USD) ISM Manufacturing PMI 49.2 vs 50.0 expected
• (USD) Federal Funds Rate 5.50% vs 5.50% expected

Markets Update:

Asia-Pacific stock markets showed a mixed performance on Thursday after the U.S. Federal Reserve chose to maintain interest rates following its two-day meeting. Fed Chair Jerome Powell’s assurance of no rate hike eased concerns over inflation control. Hong Kong’s Hang Seng index led gains, rising 2.3%, with its tech index surging 4.3% on strong April delivery updates from Chinese EV makers. Meanwhile, Mainland China markets were closed for the Labor Day holiday.

In Japan, the yen experienced volatility earlier in the week due to suspected government intervention, ending trading at 155.23 against the U.S. dollar. The Nikkei 225 closed slightly lower at 38,236.07, while the broader Topix remained flat at 2,728.53. Australia’s S&P/ASX 200 edged up by 0.23% to close at 7,587.00.

South Korea’s Kospi slipped by 0.28%, with the smaller-cap Kosdaq down by 0.20%. Investors scrutinized consumer price data from South Korea, revealing a slower rise in April compared to March. On Wall Street, stocks closed with mixed results after the Fed meeting, with the Dow adding 87.37 points, or 0.23%, the S&P 500 declining by 0.34%, and the Nasdaq Composite sliding by 0.33%.

Upcoming Events: 

• 12:30 PM GMT – CAD Trade Balance
• 12:30 PM GMT – USD Unemployment Claims
• 12:30 PM GMT – USD Trade Balance

The post Thursday 2nd May 2024: Asian Markets Show Mixed Performance After Fed’s Rate Decision first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bullish

Overall momentum of the chart: Neutral

Price could potentially make a bullish reaction off pivot and rise towards the 1st resistance

PIvot: 105.52

Supporting reasons: Identified as an overlap support that aligns with a 38.2% Fibonacci retracement level, indicating a significant level where buyers might step in to support the price, potentially providing a foundation for a bounce.

1st support: 105.08

Supporting reasons: Acts as an overlap support, representing a level where buyers could potentially  intervene to support the price.

1st resistance: 106.11

Supporting reasons: Marked by a pullback resistance that aligns with a 61.8% Fibonacci retracement level, acting as a potential barrier to further upside movement.

EUR/USD:

Potential Direction: Bearish

Overall momentum of the chart: NEutral

Price could rise towards the pivot and potentially make a bearish reaction off this level to drop towards the 1st support

Pivot: 1.0740

Supporting reasons: Acts a pullback resistance where selling pressures could potentially increase.

1st support: 1.0655

Supporting reasons: Identified as a pullback support that aligns with a 61.8% Fibonacci retracement level, indicating a level where buyers might step in to support the price.

1st resistance: 1.0776

Supporting reasons: Marked as a pullback resistance that aligns with a 61.8% Fibonacci retracement level, representing a level where selling pressures intensified in the past and could potentially act as a barrier to further upside movement.

EUR/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Neutral

Price could fall towards the pivot and potentially make a bullish reaction off this level to rise towards the 1st resistance

Pivot: 165.25

Supporting reasons: Identified as an overlap support, indicating a level where buyers might step in to support the price.

1st support: 162.11

Supporting reasons: Acts as an overlap support, suggesting another level where buyers have previously intervened to support the price.

1st resistance: 169.36

Supporting reasons: Marked by a pullback resistance, representing a level where selling pressures have intensified in the past and could potentially act as a barrier to further upside movement.

EUR/GBP:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

Price has made a bullish reaction off the pivot and could potentially rise towards 1st resistance

Pivot: 0.8530

Supporting reasons: Identified as a pullback support where buying interest has historically been strong.

1st support: 0.8503

Supporting reasons: Acts as a pullback support where price has previously found strong support and could halt further downward movements.

1st resistance: 0.8589

Supporting reasons: Acts as a pullback resistance that aligns with a 50% Fibonacci retracement level, representing a level where selling pressures have increased in the past and could potentially act as a barrier to further upside movement.

GBP/USD:

Potential Direction: Bearish

Overall momentum of the chart: Neutral

Price could rise towards the pivot and potentially make a bearish reaction off this level to drop towards the 1st support

Pivot: 1.2595

Supporting reasons: Acts a pullback resistance that aligns with a 161.8% Fibonacci extension level where selling pressures could potentially increase.

1st support: 1.2482

Supporting reasons: Identified as an overlap support that aligns with a 38.2% Fibonacci retracement level, indicating a level where buyers might step in to support the price.

1st resistance: 1.2696

Supporting reasons: Marked as a pullback resistance, representing a level where selling pressures intensified in the past and could potentially act as a barrier to further upside movement.

GBP/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Neutral

Price could rise towards the pivot and potentially make a bearish reaction off this level to drop towards the 1st support

Pivot: 197.37

Supporting reasons: Acts a pullback resistance where selling pressures have intensified recently.

1st support: 193.43

Supporting reasons: Acts as a pullback support, indicating a level where buyers might step in to support the price.

1st resistance: 200.58

Supporting reasons: Marked by a swing-high resistance, representing a level where selling pressures have increased recently to potentially act as a barrier to further upside movement.

USD/CHF:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

Price could potentially make a bullish reactions off the pivot and rise towards the 1st resistance

Pivot: 0.9151

Supporting reasons: Acts as an overlap support that aligns with a 38.2% Fibonacci retracement level where buying interests could pick up.

1st support: 0.9081

Supporting reasons: Acts as a pullback support that aligns close to a 61.8% Fibonacci retracement level, suggesting a level where buyers might step in to support the price to halt further downward movements.

1st resistance: 0.9225

Supporting reasons: Identified as a swing-high resistance, representing a level where selling pressures have historically increased and could potentially act as a barrier to further upside movement.

USD/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Neutral

Price could rise towards the pivot and potentially make a bearish reaction off this level to drop towards the 1st support

Pivot: 158.29

Supporting reasons: Acts a pullback resistance where selling pressures have intensified recently.

1st support: 151.94

Supporting reasons: Acts as a pullback support that aligns with a 61.8% Fibonacci retracement level, indicating a level where buyers might step in to support the price.

1st resistance: 160.23

Supporting reasons: Marked by a swing-high resistance, representing a level where selling pressures have increased recently to potentially act as a barrier to further upside movement.

USD/CAD:

Potential Direction: Bullish

Overall momentum of the chart: Neutral

Price could fall towards the pivot and potentially make a bullish reaction off this level to rise towards the 1st resistance

Pivot: 1.3715

Supporting reasons: Acts as an overlap support that aligns close to a 50% Fibonacci retracement level, suggesting a significant area where buying interests could increase.

1st support: 1.3628

Supporting reasons: Identified as an overlap support that aligns close to a 61.8% Fibonacci retracement level, suggesting an area where price has previously found strong buying interest to potentially halt any further downward movement.

1st resistance: 1.3782

Supporting reasons: Identified as a pullback resistance that aligns close to a 78.6% Fibonacci retracement level, marking a significant barrier that could cap further upward movements.

AUD/USD:

Potential Direction: Bearish

Overall momentum of the chart: Neutral

Price could rise towards the pivot and potentially make a bearish reaction off this level to drop towards the 1st support

Pivot: 0.6548

Supporting reasons: Acts an overlap resistance that aligns close to a 61.8% Fibonacci retracement level where price could potential stall before reversing to drop lower

1st support: 0.6492

Supporting reasons: Acts as a pullback support, suggesting a significant area where price has previously found strong support and could provide a basis to halt further downward movement.

1st resistance: 0.6576

Supporting reasons: Identified as a pullback resistance that aligns close to a 78.6% Fibonacci retracement level, marking a barrier that has previously capped upward movements.

NZD/USD

Potential Direction: Bearish

Overall momentum of the chart: Neutral

Price could rise towards the pivot and potentially make a bearish reaction off this level to drop towards the 1st support

Pivot: 0.5938

Supporting reasons: Acts an overlap resistance that aligns close to a 61.8% Fibonacci retracement level where price could potential stall before reversing to drop lower.

1st support: 0.5883

Supporting reasons: Acts as a pullback support that aligns with a 78.6% Fibonacci retracement level, suggesting a potential area where price has previously found strong support and could provide a basis to halt further downward movement.

1st resistance: 0.5979

Supporting reasons: Identified as a pullback resistance that aligns close to a 61.8% Fibonacci retracement level, marking a barrier that has previously capped upward movements.

US30 (DJIA):

Potential Direction: Bearish

Overall momentum of the chart: Neutral

Price could rise towards the pivot and potentially make a bearish reaction off this level to drop towards the 1st support

Pivot: 38,563.21

Supporting reasons: Acts as an overlap resistance that aligns close to a 50% Fibonacci retracement level, suggesting a significant area where selling pressures have increased in recent weeks.

1st support: 37,696.44

Supporting reasons: Identified as a pullback support that aligns with a 61.8% Fibonacci retracement level, suggesting a significant area where price has previously found strong buying interest and could provide a solid foundation to halt further downward movement.

1st resistance: 39,000.73

Supporting reasons: Identified as a pullback resistance that aligns with a 61.8 Fibonacci retracement level, indicating a potential barrier that could cap any upward movements.

DE40 (DAX):

Potential Direction: Bearish

Overall momentum of the chart: Neutral

Price has made a bullish reaction off the pivot and could potentially rise higher towards the 1st resistance

Pivot: 17,804.20

Supporting reasons: Acts as a pullback support, suggesting a significant area where buying interests has increased recently.

1st support: 17,507.10

Supporting reasons: Acts as a swing-low support, suggesting a significant area where price has previously found strong buying interest and could provide a solid foundation to halt further downward movement.

1st resistance: 18,236.40

Supporting reasons: Identified as a pullback resistance, potentially functioning as a barrier that could cap any upward movements.

US500 (S&P 500): 

Potential Direction: Bullish

Overall momentum of the chart: Neutral

Price has made a bullish reaction off the pivot and could potentially rise higher towards the 1st resistance

Pivot: 4,994.50

Supporting reasons: Acts as a pullback support, suggesting a significant area where buying interests has increased recently.

1st support: 4,946.22

Supporting reasons: Acts as a pullback support, suggesting a significant area where price has previously found strong buying interest and could halt further downward movements.

1st resistance: 5,119.91

Supporting reasons: Marked by an overlap resistance, which could function as a potential barrier and cap any upward movements.

BTC/USD (Bitcoin):

Potential Direction: Bullish

Overall momentum of the chart: Bearish

Price could fall towards the pivot and potentially make a bullish reaction off this level to rise towards the 1st resistance

Pivot: 56,855.14

Supporting reasons: Acts as a pullback support, suggesting an area where buying interests could pick up to provide a minor rebound in price.

1st support: 54,805.26

Supporting reasons: Acts as a support that aligns with a 161.8% Fibonacci extension level, suggesting an area where buying interests could pick up to halt further downward movements.

1st resistance: 61,163.87

Supporting reasons: Marked by a pullback resistance that aligns close to a 38.2% Fibonacci retracement level, indicating a significant barrier that could cap further upward movements.

ETH/USD (Ethereum):

Potential Direction: Bullish

Overall momentum of the chart: Bearish

Price could fall towards the pivot and potentially make a bullish reaction off this level to rise towards the 1st resistance

Pivot: 2,863.34

Supporting reasons: Acts as a pullback support, suggesting a significant area where price has recently found support to provide a strong foundation for a potential rebound.

1st support: 2,741.62

Supporting reasons: Identified as an overlap support, suggesting a significant area where price has previously found support and could provide a strong foundation to halt further downward movements.

1st resistance: 3,009.32

Supporting reasons: Identified as a pullback resistance that aligns with a 38.2% Fibonacci retracement level, marking a significant barrier that could cap further upward movements.

WTI/USD (Oil):

Potential Direction: Bullish

Overall momentum of the chart: Bearish

Price has made a bullish reaction off the pivot and could potentially retrace higher towards the 1st resistance

Pivot: 79.55

Supporting reasons: Acts as a pullback support that aligns close to a 78.6% Fibonacci retracement level, suggesting a significant area where price has recently found support to provide a strong foundation for a potential rebound.

1st support: 77.21

Supporting reasons: Identified as a pullback support, suggesting a significant area where price has previously found strong buying interest and could provide a solid foundation to halt further downward movements.

1st resistance: 80.89

Supporting reasons: Identified as a pullback resistance that aligns close to a 23.6% Fibonacci retracement level, marking a significant barrier that could cap further upward movements.

XAU/USD (GOLD):

Potential Direction: Bearish

Overall momentum of the chart: Neutral

Price has made a bearish reaction off the pivot and could potentially drop towards the 1st support.

Pivot: 2,328.74

Supporting reasons: Acts as an overlap resistance that aligns with a 61.8% Fibonacci retracement level.

1st support: 2,285.17

Supporting reasons: Acts as a pullback support, indicating a level where buyers might step in to support the price.

1st resistance: 2,349.39

Supporting reasons: Identified as a pullback resistance, suggesting a significant level where selling pressures might intensify.

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The post Thursday 2nd May 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 2 May 2024

What happened in the US session?

As widely expected, the Federal Reserve kept the Fed Funds rate on hold at 5.25 to 5.5% for the sixth meeting in a row. With US CPI and PPI both coming in hot in the first quarter of 2024, the Fed signalled fresh concerns about inflation while indicating it was likely to keep borrowing costs elevated for longer but noting that recent indicators suggest economic activity has continued to expand at a solid pace. Meanwhile, the Committee will slow the pace of reducing the Fed’s balance sheet by reducing the monthly redemption cap on Treasury securities from $60B to $25B – the redemption cap for agency debt and agency mortgage-backed securities remains unchanged at $35B.

During his press conference, Fed Chairman Jerome Powell stated it is “unlikely that the Fed would raise interest rates in the near future while saying FOMC officials would need to see persuasive evidence that policy is not tight enough to bring inflation back toward its target of 2%”. He also stopped short of signalling any rate cuts in 2024 and whether rates had peaked, points that he had mentioned at previous meetings and press conferences.

Meanwhile, the ADP employment report – which was released prior to the FOMC statement and press conference – showed job gains of 192K for the month of April. This reading was higher than the forecast of 179K while the figures for March were revised notably higher from 184K to 208K – signs of a robust labour market.

After returning to expansion in March, the ISM Manufacturing PMI report showed this sector slipping into contraction once again along with the new orders index. Worryingly, the prices index pointed to another strong month of increase as it rose from 55.8 to 60.9 to reflect higher costs for raw materials – this marked the highest reading since mid-2022.

The dollar index (DXY) initially hit a high of 106.49 yesterday before plunging as low as 105.44 following the press conference. The DXY experienced extreme volatility as it swung wildly from 106.25 to 105.70 before reversing sharply to touch 106.15 before finally diving under 105.50.

What does it mean for the Asia Session?

As Asian markets digest the latest comments by Fed Chairman Jerome Powell as well as the robust ADP data and high ISM prices for manufacturing, the DXY climbed higher after stabilizing around 105.60 – it was trading around 105.80 and could edge higher as the day progresses.

The Dollar Index (DXY)

Key news events today

Unemployment Claims (12:30 pm GMT)

What can we expect from DXY today?

Not only have unemployment claims edged lower over the past three weeks, they have also printed lower than their respective estimates which is a sign of a robust labour market. The estimate for this week is 212K while claims have averaged around 213K over the past eight weeks. Should claims once again come in lower than anticipated, it could provide a boost for the dollar.

Central Bank Notes:

• The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the sixth meeting in a row.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year.
• The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks. Inflation has eased over the past year but remains elevated and in recent months, there has been a lack of further progress toward the Committee’s 2% inflation objective.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while job gains have remained strong, and the unemployment rate has remained low.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• The Committee’s assessments will take into account a wide range of information, including readings on labour market conditions, inflation pressures and inflation expectations, and financial and international developments.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• Next meeting runs from 11 to 12 June 2024.

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

Unemployment Claims (12:30 pm GMT)

What can we expect from Gold today?

Not only have unemployment claims edged lower over the past three weeks, they have also printed lower than their respective estimates which is a sign of a robust labour market. The estimate for this week is 212K while claims have averaged around 213K over the past eight weeks. Should claims once again come in lower than anticipated, it could provide a boost for the dollar and hold back any gains for gold.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The Aussie swung wildly during the period when the FOMC statement and press conference were released as it reversed sharply from 0.6540 to drop as low as 0.6500 before rebounding once again. This currency pair was trading around 0.6530 as Asian markets came online and was one of the stronger performing currencies this morning.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35%, marking the seventh pause out of the last eight board meetings.
• The headline monthly CPI indicator was steady at 3.4% over the year to January, with momentum easing over recent months, driven by moderating goods inflation. Services inflation remains elevated and is moderating at a more gradual pace.
• The central forecasts are for inflation to return to the target range of 2–3% in 2025, and to the midpoint in 2026.
• While recent data indicate that inflation is easing, it remains high. The Board expects that it will be some time yet before inflation is sustainably in the target range.
• The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.
• Next meeting is on 7 May 2024.

Next 24 Hours Bias

Weak Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The Kiwi faced high volatility during the period when the FOMC statement and press conference were released – it reversed sharply from 0.5940 to drop as low as 0.5907 before rebounding to stabilize around 0.5925. This currency pair was trading around 0.5930 at the beginning of the Asia session and it could remain elevated today.

Central Bank Notes:

• The Monetary Policy Committee kept the OCR unchanged at 5.50% for the sixth meeting in a row.
• The Committee remains confident that the current level of the OCR is contributing to an easing in capacity pressures to ensure inflation returns to target.
• However, current consumer price inflation remains above the Committee’s 1 to 3% target range. A restrictive monetary policy stance remains necessary to further reduce capacity pressures and inflation.
• The Committee discussed upside risks to the inflation outlook: persistent services inflation remains a risk and goods price inflation remains elevated while anticipated near-term increases to local government rates, insurance, and utility costs, could also further slow the decline in headline inflation.
• The Committee discussed downside risks to the inflation outlook: ongoing restrictive monetary policy in an environment of weak global growth could lead to a more rapid decline in inflation than expected. Business and consumer confidence remain particularly weak which could lead to more unemployment and financial stress than expected while structural challenges facing the economy in China remain a concern given its importance for the global economy and for New Zealand’s trade.
• Next meeting is on 10 July 2024.

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

The yen surged 3% against the dollar overnight, fuelling speculation that the Bank of Japan and Ministry of Finance (MOF) authorities could be intervening to support the currency. The sudden strength of the yen caused USD/JPY to nosedive from 157.60 to around 153 in under 40 minutes. There is growing speculation that Japanese authorities intervened on 29th April when USD/JPY briefly climbed above 160 for the first time in 34 years. It is believed that authorities spent close to ¥5.5 trillion ($34.8 billion) to support the currency, based on Bloomberg analysis of commercial banks’ deposits held at the BOJ. This currency pair retraced higher to climb above 156 as Asian markets came online and it could edge higher before the next suspected intervention takes place.

Central Bank Notes:

• The Bank considers that the policy framework of Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control and the negative interest rate policy to date have fulfilled their roles. With the price stability target of 2%, it will conduct monetary policy as appropriate, guiding the short-term interest rate as a primary policy tool.
• The Bank of Japan decided on the following measures:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0 to 0.1% while continuing its JGB purchases with broadly the same amount as before.
  2. In addition, the Bank will discontinue purchases of exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) and will also gradually reduce the amount of purchases of CP and corporate bonds and will discontinue the purchases in about one year.
• In a quarterly outlook, the committee revised higher CPI prints for FY 2024 to 2.8% from January’s projections of 2.4%, due to the waning effects of higher import prices and fewer government support measures.
• For 2025, the board expects core inflation to hit 1.9%, slightly higher than its earlier estimates of 1.8%, reflecting a recent rise in oil prices.
• Policymakers cut their 2023 GDP growth forecast to 1.3% from 1.8% and for FY 2024, the bank also slashed its GDP outlook to 0.8% from 1.2%, mainly reflecting lower private consumption.
• Next meeting is on 14 June 2024.

Next 24 Hours Bias

Medium Bullish

The Euro (EUR)

Key news events today

Manufacturing PMI (9:00 am GMT)

What can we expect from EUR today?

The final reading for manufacturing PMI in the Euro area is expected to show manufacturing remaining in contraction with an unchanged figure of 45.6 which is a 4-month low. Activity for this sector remains sluggish and the final result is likely to add some downward pressure on the Euro at the beginning of the Europe session.

Central Bank Notes:

• The ECB kept the three key interest rates unchanged for a fifth consecutive meeting, keeping the main refinancing rate on hold at 4.50%.
• Inflation has continued to fall, led by lower food and goods price inflation with most measures of underlying inflation easing, wage growth is gradually moderating, and firms are absorbing part of the rise in labour costs in their profits.
• Financing conditions remain restrictive and the past interest rate increases continue to weigh on demand, which is helping to push down inflation but domestic price pressures are strong and are keeping services price inflation high.
• The Governing Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and if the Council’s updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission were to further increase its confidence that inflation is converging to the target in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction.
• Next meeting is on 6 June 2024.

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

CPI (6:30 am GMT)

What can we expect from CHF today?

Inflation in Switzerland has remained well-anchored under the Swiss National Bank’s (SNB) target of 2% over the past one year which prompted policymakers to announce a surprise interest rate cut in March. The monthly estimate for April points to headline CPI rising just 0.1% and should there be no upwards surprises, the franc is likely to remain under pressure and potentially keep USD/CHF elevated.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points, going from 1.75% to 1.50% in March.
• For some months now, inflation has been back below 2% and thus in the range the SNB equates with price stability.
• According to the new forecast, inflation is also likely to remain in this range over the next few years.
• The forecast puts average annual inflation at 1.4% for 2024, 1.2% for 2025 and 1.1% for 2026, based on the assumption that the SNB policy rate is 1.5% over the entire forecast horizon.
• Swiss GDP growth was moderate in the fourth quarter of last year and it is likely to remain modest in the coming quarters.
• Overall, Switzerland’s GDP is likely to grow by around 1% this year.
• Next meeting is on 20 June 2024.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

The Pound swung wildly during the period when the FOMC statement and press conference were released as it reversed sharply from 1.2550 to drop as low as 1.2490 before rebounding once again. GBP/USD was trading around 1.2530 as Asian markets came online and looks set to edge higher during the Asia and Europe sessions.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8-to-1 to maintain its Official Bank Rate at 5.25% for the fifth consecutive meeting.
• One member preferred to reduce the Bank Rate by 25 basis points to 5.0%.
• Twelve-month CPI inflation fell to 3.4% in February from 4.0% in January and December while Services consumer price inflation has declined but remains elevated, at 6.1% in February.
• CPI inflation is projected to fall to slightly below the 2% target in 2024 Q2, marginally weaker than previously expected owing to the freeze in fuel duty announced in the Budget.
• In the February Report projection, CPI inflation had been expected to fall temporarily to the 2% target in 2024 Q2 before increasing again in Q3 and Q4, to around 2.75%.
• Having declined through the second half of last year, UK GDP and market sector output are expected to start growing again during the first half of this year while the fiscal measures in Spring Budget 2024 are likely to increase the level of GDP by around 0.25% over coming years.
• Next meeting is on 9 May 2024.

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

BoC Governor Macklem Speaks (12:45 pm GMT)

What can we expect from CAD today?

Bank of Canada (BoC) Governor Tiff Macklem will be testifying before the House of Commons Standing Committee on Finance in Ottawa along with Senior Deputy Governor Carolyn Rogers. Traders will be paying close attention to this testimony and looking out for any clues on future monetary policy action. The Loonie strengthened quite significantly versus the dollar overnight as USD/CAD dipped under 1.3710 before rebounding as high as 1.3760 but then proceeded to fall once again. This currency pair was trading around 1.3730 at the beginning of the Asia session and it could break under the threshold of 1.3700 today.

Central Bank Notes:

• The Bank of Canada held its target for the overnight rate at 5.0% for the fifth meeting in a row while continuing its policy of quantitative tightening.
• Canada’s economy stalled in the second half of last year and the economy moved into excess supply but economic growth is forecasted to pick up in 2024. Overall, the Bank forecasts GDP growth of 1.5% in 2024, 2.2% in 2025, and 1.9% in 2026.
• CPI inflation slowed to 2.8% in February, with easing in price pressures becoming more broad-based across goods and services. However, shelter price inflation is still very elevated, driven by growth in rent and mortgage interest costs.
• Core measures of inflation, which had been running around 3.5%, slowed to just over 3% in February, and 3-month annualized rates are suggesting downward momentum. The Bank expects CPI inflation to be close to 3% during the first half of this year, move below 2.5% in the second half, and reach the 2% inflation target in 2025.
• The Governing Council is particularly watching the evolution of core inflation, and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour.
• While inflation is still too high and risks remain, CPI and core inflation have eased further in recent months and the Council will be looking for evidence that this downward momentum is sustained.
• Next meeting is on 5 June 2024.

Next 24 Hours Bias

Weak Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

After a surprise fall of 3.2M barrels in API stocks, the EIA inventories bucked the trend by reporting an unexpected build of 7.3M barrels of crude oil. This was the largest increase since mid-February and sends out mixed signals with regards to the level of demand in the US. Prices for crude have been falling since Monday as WTI oil broke under $80 per barrel overnight. It was trading around $79.80 as Asian markets came online and should continue to face overhead pressures today.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Asia Fundamental Forecast | 2 May 2024 first appeared on IC Markets | Official Blog.

Mixed Reaction to Cautious Fed – S&P off 0.34% 

US Stocks markets had a mixed end to the trading day and the UsdJpy was smashed as a more cautious than expected Jerome Powell updated markets at the end of this month’s FOMC meeting. The marginally more dovish than expected tone added further volatility to markets.  After an initial surge, the major indices closed mixed, the Dow gaining 0.23%, with the more tech-heavy S&P and Nasdaq finishing in the red, down 0.34% and 0.33% respectively. The most volatile reaction came yet again in FX markets as UsdJpy was smashed from 157.50 to near 153.00 in short order – still no confirmation of any official action again so far. The dollar index was lower on the day in line with the more dovish stance, down 0.44% to 105.85. US Treasury yields dropped hard after the Fed, the 2-year losing 8.2 basis points to 4.960% and the 10-year off 4.5 basis points to 4.638%. Oil prices took a big hit as US stock data surprised to the topside and hopes of a ceasefire continue to increase, Brent off 3.4% to $83.44 a barrel and WTI down 3.6% to $79.00 a barrel. Gold, however, jumped gaining 1.7% in line with the lower dollar to trade up to $2,323 on the close.  

Dollar Sinks on More Dovish Federal Reserve 

The dollar took a significant hit in late trading in New York yesterday as Jerome Powell and the FOMC gave a slightly more dovish update to markets than had been expected. There had even been some fears that the dreaded ‘hike’ word may even come into play after recent higher-than-expected inflation data prints in the states and investors were definitely concerned about the potential another pivot from the Fed. However, the guidance remained consistent with most of the recent comments from FOMC members that rates are likely to stay higher for longer but that the next move will most likely be a cut. The move for the greenback was exacerbated by a very strong drop in the UsdJpy where once again the market is left guessing as to whether there was any official action from Japanese authorities and now most traders are expecting to see more volatility ahead as the market focus moves swiftly to tomorrows Non-Farm Payrolls data release.  

More Volatility Ahead as Traders Return to Desks 

It was a strange trading day yesterday with a large section of the financial markets closed for May Day celebrations on the same day that the world’s most influential central bank gave the market its latest rate update. Traders are expecting more volatility in the days ahead as those centers get back to work and the market digests what the Fed had to say and prepares for more big data ahead. The Asian session has little on the agenda today, so we may see some smoother trading conditions as liquidity returns to normal levels. The London open sees some key CPI and Retail Sales data out of Switzerland but the focus will once again be on the US session and its full reaction to the Fed update. There is some data out in the form of the weekly unemployment claims numbers, and we are set to hear from the Bank of Canada’s Tiff Macklem again but expect the Fed update and preparations for tomorrow’s Non-Farms to dominate sentiment.  

The post General Market Analysis 02/05/2024 first appeared on IC Markets | Official Blog.

IC Markets Global, a leading online trading and investing provider, proudly announces its sponsorship as a “Participating Sponsor” of the Qatar Economic Forum 2024, to be held from 14 May to 16 May 2024, in Doha. QEF stands as the foremost advocate for global business and investment discussions in the Middle East.

Under the overarching theme of ‘A World Remade: Navigating the Year of Uncertainty’, this year’s gathering will bring together a diverse array of voices and perspectives to delve into critical issues shaping our global economy. The fourth edition promises to be a dynamic exchange of ideas and strategies including 50 plenary speakers, representing a spectrum of thought leaders and decision-makers taking the stage alongside more than 1,000 global attendees. Additionally, the Forum will feature over 50 breakout briefing speakers, ensuring a comprehensive exploration of key topics. 

From heads of state to CEOs of multinational corporations, the Forum, sponsored by IC Markets Global, will serve as a nexus of influence and innovation. The Qatar Economic Forum will unpack key pillars such as geopolitics, sports & entertainment, technology innovation, and more in 2024. 

A spokesperson of IC Markets Global said: “We are proud to support this significant global event, powered by Bloomberg. As a top forex and CFD provider, we recognize the intricacies of electoral campaigns and their impacts on national economies and are excited to be part of the conversation. We eagerly anticipate hearing the insights of international experts on the pressing questions facing the geopolitical environment to build a more sustainable economic future”.

The post IC Markets Global sponsors Qatar Economic Forum powered by Bloomberg first appeared on IC Markets | Official Blog.