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Bank of American now sees USD/JPY peaking this year in the 155-160 range

Mon, Apr 22, 2024 6:54 PM

<p class="text-align-start">Bank of America has revised its forecast for the USD/JPY exchange rate upwards, predicting that it will reach higher levels by the end of 2024 and 2025. The adjustment is based on several factors including sustained capital outflows from Japan, an accommodative monetary policy stance by the Bank of Japan (BoJ), and the dynamics of U.S. interest rates.</p><p>Key Points:</p><ul><li><p>Revision of Rate Projections: BofA has increased its forecast for the USD/JPY from 142 to 155 by the end of 2024, with a peak expected in the 155-160 range during the year. For the end of 2025, the forecast has been adjusted from 136 to 147. These revised forecasts are notably higher than current Bloomberg consensus and forward rates.</p></li><li><p>Capital Outflows from Japan: There is clear evidence of accelerated capital outflows from Japan, which is a significant driver of the yen's depreciation. These outflows are primarily directed towards the U.S., fueled by differences in return expectations and economic prospects between the two countries.</p></li><li><p>BoJ’s Accommodative Policy: The BoJ is likely to maintain an accommodative monetary policy with the policy rate remaining in negative territory. This stance contrasts with the U.S. Federal Reserve's policy trajectory, further influencing the USD/JPY exchange rate.</p></li><li><p>Impact of U.S. Rate Cuts on Repatriation Flows: BofA analysts argue that even if the Fed were to cut rates, which would generally support risk assets, it is unlikely to trigger significant repatriation flows back to Japan. This is due to the nature of equity investments driving the outflows, where Japanese investments in U.S. equities are likely to remain in place despite potential rate cuts.</p></li></ul><p>Conclusion: The upward revision in BofA’s USD/JPY forecasts reflects a combination of structural and policy-related factors that are expected to weaken the Japanese yen against the U.S. dollar over the next few years.</p><p class="text-align-start">For bank trade ideas, <a href="https://plus.efxdata.com/ad/track/4655172E54F06040571CD0AB083845AD" rel="nofollow" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://plus.efxdata.com/ad/track/4655172E54F06040571CD0AB083845AD&amp;source=gmail&amp;ust=1713898293852000&amp;usg=AOvVaw233UcdqL5lFoQS0e0zWFql">check out eFX Plus</a>. For a limited time, get a 7 day free trial, basic for $79 per month and premium at $109 per month. <a href="https://plus.efxdata.com/ad/track/4655172E54F06040571CD0AB083845AD" rel="nofollow" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://plus.efxdata.com/ad/track/4655172E54F06040571CD0AB083845AD&amp;source=gmail&amp;ust=1713898293852000&amp;usg=AOvVaw233UcdqL5lFoQS0e0zWFql">Get it here</a>.</p> This article was written by Adam Button at www.forexlive.com.

Oil bounces around before finishing lower by 29-cents

Mon, Apr 22, 2024 6:49 PM

<p>Iran-Israel geopolitical risk continued to come out of oil today but the decline wasn't as bad as feared. WTI finished the day down 29-cents to $82.82, well above the low of $81.85.</p><p>It was no-doubt helped by the broader improvement in risk appetite and US dollar selling that emerged halfway through US trading. That comes after a six-day rout in stocks that looks like it will end today (SPX up 1.4% currently). </p> This article was written by Adam Button at www.forexlive.com.

Another earthquake felt in Taiwan

Mon, Apr 22, 2024 6:40 PM

<p>The earthquake earlier this month led to some serious damage. It's not yet clear if this is an aftershock or something worse. It's currently very early in the morning in Taipei.</p><p>Earlier today a 5.5 magnitude earthquake hit just off the coast while the quake at the start of the month was 7.4 and one of the strongest earthquakes there on record.</p><p>Early reports peg the latest one at a magnitude of 6.1. With that, I wouldn't expect any damage but it will no doubt keep the people of Taiwan unnerved.</p> This article was written by Adam Button at www.forexlive.com.

Canadian dollar rallies for fourth day. What's next

Mon, Apr 22, 2024 6:28 PM

<p>The Canadian dollar has climbed for four straight days, which sounds impressive at the outset but it masks that it fell even harder in the four days before that, touching the worst levels since November.</p><p>In any case, it has climbed for four days in a tough tape for risk assets and oil. That's notable and it highlights a few things that have been driving it:</p><p>1) The Federal Budget</p><p>The government hiked capital gains taxes but there was fear about a corporate tax hike or windfall taxes. That might have weighed on the loonie previously and contributed to a stronger rebound.</p><p>2) The housing market is picking up</p><p>My #1 fear for CAD coming into the year was a bad spring housing market and some kind of disorderly breakdown in housing. Instead, it's increasingly clear that housing is bottoming or turning up (at least temporarily). Home sales have picked up and some bidding wars have even returned in a reflection of a country with too many people and not enough houses. With that, the tail risk that the BOC would have to slash rates to counter a housing crunch has faded.</p><p>Overall, I don't see the rebound as particularly meaningful. The BOC is still going to cut rates more than the Fed this year and terminal rates are also headed lower for a sustained period. The upshot might be an ongoing global soft landing and/or upside risks in China that could keep CAD in favor. I think it's too early for that trade though and buying USD/CAD close to 1.36 is a better trade from here.</p> This article was written by Adam Button at www.forexlive.com.

S&P 500 rebounds, adds to gains

Mon, Apr 22, 2024 5:19 PM

<p>The S&amp;P 500 has extended today's gain to 37 points, or 0.75% after briefly trading into negative territory.</p><p>Stocks opened higher today but slid in the first two hours of trading before finding a bottom near unchanged on the day. There are still nearly 3 hours of trading left and the bulls won't be declaring victory yet.</p><p>Today after the close, we get earnings from steel giants Nucor and Cleveland-Clffs, which could provide some feedback on the industrial economy and auto demand but the bigger numbers come tomorrow in the AM from UPS, GE, GM and Spotify, followed by Tesla and Visa after hours.</p> This article was written by Adam Button at www.forexlive.com.

TD: The most-important data print for the year

Mon, Apr 22, 2024 5:02 PM

<p class="text-align-start">TD Securities underscores the significance of Friday's core PCE data, considering it pivotal for shaping market expectations and movements in 2024. Amid fluctuating market sentiments and diverse economic indicators, this release is anticipated to be a crucial determinant of future monetary policy and currency valuations.</p><p>Key Points:</p><ul><li><p>Significance of Core PCE Data: TD Securities posits that this week’s core PCE print could be one of the year's most crucial data releases, potentially setting the stage for monetary policy direction and market movements for the remainder of the year.</p></li><li><p>Market Uncertainty and Sentiment: Recent discussions with clients across Europe reveal a general lack of conviction in current market directions, though there is a consensus that a significant pivot point may be near. This sentiment is mirrored by the market’s mixed reactions to various economic indicators such as growth divergence, risk correlations, and central bank policies.</p></li><li><p>Influence on USD and Risk Assets: The core PCE data is particularly critical as it directly influences perceptions of inflation and, consequently, the Fed's rate decisions. A result that aligns with expectations of cooling inflation could support a moderate reversal in USD strength through the third quarter, benefiting risk assets and potentially realigning Fed rate expectations with those of other G10 central banks.</p></li><li><p>Implications of an Unexpectedly High Inflation Print: Conversely, a higher-than-expected inflation figure could diminish prospects for Fed rate cuts this year, likely leading to further USD appreciation and adverse impacts on risk assets. This scenario would reinforce the dollar’s strength on the back of persistent inflation and diverging central bank policies.</p></li></ul><p>Conclusion:</p><p>The upcoming core PCE print is pivotal in determining short- to medium-term market dynamics and central bank actions. Investors and traders should prepare for potential volatility following this release, as it could significantly influence market sentiment and strategic positioning. The outcome could either affirm a trajectory toward easing monetary conditions or herald continued restrictive policies driven by persistent inflationary pressures.</p><p class="text-align-start">For bank trade ideas, <a href="https://plus.efxdata.com/ad/track/4655172E54F06040571CD0AB083845AD" rel="nofollow" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://plus.efxdata.com/ad/track/4655172E54F06040571CD0AB083845AD&amp;source=gmail&amp;ust=1713891563818000&amp;usg=AOvVaw0okwp2AzyLQ4UyCWSM24JI">check out eFX Plus</a>. For a limited time, get a 7 day free trial, basic for $79 per month and premium at $109 per month. <a href="https://plus.efxdata.com/ad/track/4655172E54F06040571CD0AB083845AD" rel="nofollow" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://plus.efxdata.com/ad/track/4655172E54F06040571CD0AB083845AD&amp;source=gmail&amp;ust=1713891563819000&amp;usg=AOvVaw2jqkrg_yUD049XcCeA6Lig">Get it here</a>.</p> This article was written by Adam Button at www.forexlive.com.

Have we hit the point of maximum pain on bonds?

Mon, Apr 22, 2024 4:48 PM

<p>The US is selling 2-year yields this week and there are fears the Treasury could be paying 5%.</p><p>Right now, the on-the-run 2s are trading at 4.96% and sales haven't exactly gone swimmingly lately, especially with the massive auction sizes. </p><p>Here is how the chart looks on 2s:</p><p>I want to highlight a couple things:</p><ol><li>Two-year yields are the most-liquid expression of where investors think rates will be over that timeframe. There's a slight term premium but you're basically weighing rolling bills over against locking in rates. When we were down at 4.2% the market was pricing in substantial rate cuts, not anymore.</li><li>What happened last time 2s rose above 2%? It didn't take long for the Fed ans Treasury to both start freaking out. The Treasury cut auction sizes and lowered duration while the Fed pivoted. I don't think that was a coincidence.</li></ol><p>Most people got inflation wrong this year in the US as it's been stubbornly high for three months and now commodities are pressing. That said, inflation is falling elsewhere which makes me think it's more US-specific than global. That's in part due to huge US fiscal deficits, 30-year fixed mortgages and US business excellence -- particularly multinational tech.</p><p>However it's also due to some strange factors like high auto and health insurance rates that shouldn't be persistent. Most-notably it's because of rent inflation and how owners'-equivalent rent is calculated. Given that, consider this chart from<a href="https://twitter.com/boes_/status/1780632873306832951/photo/1" target="_blank" rel="nofollow"> Matthew Boesler</a>:</p><p>Rents have flattened out, it just hasn't appeared in the CPI yet. Perhaps this week we get some divergence with PCE, which is the Fed's preferred measure of inflation. If so, the market could quickly lean back towards rate cuts, weighing on the US dollar and boosting risk assets.</p> This article was written by Adam Button at www.forexlive.com.

USD/JPY creeps closer to a critical level

Mon, Apr 22, 2024 4:24 PM

<p>USD/JPY is in the intervention-danger zone. The pair is up 20 pips to 154.85, which is a fresh 34-year high.</p><p>The market is eagerly watching to see whether the Japanese Ministry of Finance intervenes to protect 155.00, which is just 15 pips away.</p> This article was written by Adam Button at www.forexlive.com.

Power demand will turn out to be the toughest problem of the 2020s

Mon, Apr 22, 2024 3:45 PM

<p>I wrote earlier this month about why <a href="https://www.forexlive.com/news/a-perfect-storm-is-about-to-hit-global-power-grids-20240410/" target="_blank" rel="follow">a perfect storm is about to hit</a> global power grids.</p><p>Investors and companies spend very little time thinking about electricity. For most companies and consumers -- at least outside of South Africa -- simply hook up to the grid and turn o the lights.</p><p>The same was true of the data centre business for much of its existence but that's changing quickly. The Xbox network in California alone already uses more electricity than entire African countries and things like generative AI will crunch grids further.</p><p>Here is a (slightly dated) chart showing the acceleration in power demand from tech companies.</p><p>Here was Sam Altman last month:</p><blockquote>“We still don’t appreciate the energy needs of this technology. There’s no way to get there without a breakthrough. We need fusion, or we need like radically cheaper solar plus storage or something at massive scale."</blockquote><p>On Friday, Mark Zuckerberg gave an interview where he made the same point.</p><p>One of the things he highlights is the slow pace of energy permitting, including generation and transmission lines. Add into that the difficulties of getting green metals like copper and lithium out of the ground and you have a problem. Then factor in the need to limit carbon dioxide emissions and it's compounded.</p><p>Right now, the market is turning to natural gas and coal to feed into new demand but that's not going to work in the long term.</p><p>Zuckerberg argues that it's a good idea to invest $10 billion or $100 billion into securing power supply but he also talks about the uncertainty around how much is needed and why it's a tough decision to commit that capital. That hesitancy and the long lead times will lead to an inevitable crunch.</p><p>Investing around that theme is tricky. If we're power-limited then perhaps there's a case for the utilities themselves but they're heavily regulated and that means that the payoff is moderate at best. There are companies building out transformers and the like but some have already moved and that's still a relatively small industry. </p><p>Natural gas is cheap right now and that may ultimately be the beneficiary even though many people would rather the demand go to green energy instead. What's happening is that places like Texas with abundant natural gas are courting data centres.</p><p>I'm sure there are other avenues I haven't considered but I think many roads lead to copper because there simply isn't enough supply and lead times for new mines are extraordinary. The risk is that China's demand for copper drops on a soft economy, creating some breathing room. However the risks run both ways as demand for power, EVs and robotics could supercharge the supply deficit.</p> This article was written by Adam Button at www.forexlive.com.

European equities score a win, led by the FTSE 100

Mon, Apr 22, 2024 3:37 PM

<p>FTSE 100 daily</p><p>Closing changes:</p><ul><li>Stoxx 600 +0.6%</li><li>German DAX +0.6%</li><li>UK FTSE 100 +1.7%</li><li>French CAC +0.2%</li><li>Italy MIB -0.7%</li><li>Spain IBEX +1.5%</li></ul><p>There haven't been many days of significant UK outperformance in the past year.</p> This article was written by Adam Button at www.forexlive.com.

Nasdaq gives up gains, threatens seventh consecutive day of declines

Mon, Apr 22, 2024 3:04 PM

<p>It's a huge week for the Nasdaq with earnings from Tesla, Meta, Microsoft, Alphabet, Intel and Snap. At the moment, the market is clearly worried and chipmakers are particularly soft.</p><p>The Nasdaq has fallen for six straight days and early gains today have evaporated with the index now trading flat.</p><p>Zooming out, there's a saying that 'bull markets go up the escalator and correct down the elevator'. That means that in bull markets, there are often steady gains interrupted by sharp corrections. That's the kind of thing we're seeing right now and it gives me confidence that we're still in a bull market, despite the dismal mood.</p><p>We've also seen a handful of times in recent years where tech stocks sell ahead of earnings and then rally when they're not as bad as feared. That said, the bar is high for some of these companies, particularly megacap tech and chipmakers. Last week, Netflix reported solid earnings but crumbled anyway and it's down another 0.7% today.</p><p>A big problem is rising Treasury yields. The catalyst for tech is likely to be a turn lower in US economic data, and inflation in particular. There's still plenty of reason to believe that will happen.</p><p>Here's the Bank of America CFO:</p><blockquote>“So you’re seeing the consumer hang there and continue to spend, but spend at a level that’s more consistent with a more trend type of economy and we will see all that play out over the sense of the next quarter…if you just extended that through from the fourth quarter of 2019 to today, given that the economy is 30% larger, we kind of feel like consumer is approaching that floor, so we’re still in this belief that Q2 is going to be--Q3 may be the turning point for consumer. You can see that slowing now."</blockquote><p>Here's the CFO of American Express:</p><blockquote>"Overall, while we do continue to see a softer spend environment</blockquote><p>Here's the Discover CFO:</p><blockquote>“Sales slowed across categories with the largest decline occurring in the everyday category, which includes supermarkets, gas and wholesale clubs. While we continue to add new accounts, in general, we are seeing card members spend less, particularly among lower-income households which are most impacted by the cumulative effects of inflation. Based on trends in the period, we expect sales to be flat to slightly negative this year</blockquote> This article was written by Adam Button at www.forexlive.com.

Eurozone April flash consumer confidence -14.7 vs -14.4 expected

Mon, Apr 22, 2024 2:00 PM

<ul><li>Prior was -14.9</li></ul><p>The long-term average for this indicator is -11 so there is work to do in order to get back to an area where you can price in modest growth.</p><p> Data released by the European Commission.</p> This article was written by Adam Button at www.forexlive.com.

Gold takes a beating, down $59

Mon, Apr 22, 2024 1:40 PM

<p>It's been one-way trading in gold since the start of March but the fever appears to have broken today, with prices down $59 to $2332.</p><p>There's some minor support from a vague trendline at $2310 but the bigger level is the old all-time high near $2200.</p><p>The driver for gold so far this year is Asian demand, likely from the PBOC. That's been supplemented more recently by retail buying and some financial buying. That appetite will be tested by this move as there have been few dips to buy in the past two months.</p><p>The problem right now is that rising bond yields are competing for capital. US 2-year notes pay nearly 5% and until that starts going down because of Fed rate cuts, it will remain a headwind for gold.</p> This article was written by Adam Button at www.forexlive.com.

S&P 500 opens moderately higher. Eyes on NVDA stock

Mon, Apr 22, 2024 1:34 PM

<p>US equities are higher in the early going but there have been frequent bouts of strength in the latest six-day losing streak that have ultimately been overwhelmed by sellers.</p><p>In early trading, the index is up 20 points, or 0.45%, which is a tad softer than futures indicated.</p><p>Keep an eye on Nvidia in particular, which fell 10% on Friday.</p><p>Shares of NVDA are up 3.4% so far. I would peg support at $750, which was the opening gap in February.</p> This article was written by Adam Button at www.forexlive.com.

US equity futures point to a bounce after a six-day losing streak

Mon, Apr 22, 2024 1:06 PM

<p>Last week was the worst of the year for major US averages with the Nasdaq particularly soft. Today, index futures are higher with S&amp;P 500 futures up 29 points, or 0.6%. Nasdaq futures are up 0.7%.</p><p>Eyes are on Tesla with shares down 3% pre-market after more price cuts in the US and China.</p><p>UBS has downgraded the stocks of six major tech companies - Apple, Amazon, Alphabet, Meta, Microsoft, and Nvidia - from 'overweight' to 'neutral'. </p> This article was written by Adam Button at www.forexlive.com.

Canada March PPI -0.5% y/y vs -1.7% prior

Mon, Apr 22, 2024 12:30 PM

<ul><li>Prior was -1.7%</li><li>PPI +0.8% m/m vs +0.7% prior</li><li>Raw materials price index -0.5% y/y vs -4.7% prior</li><li>Raw materials price index +4.7% m/m vs +2.1% prior</li></ul><p>You can start to see some pressures building in this month's data, which isn't a surprise if you've been paying attention to commodity markets.</p> This article was written by Adam Button at www.forexlive.com.

Canada March new housing price index 0.0% vs +0.1% expected

Mon, Apr 22, 2024 12:30 PM

<p>The Canadian housing market has proven far more resilient than I feared but there are still cracks in new homes, and particularly among home flippers.</p> This article was written by Adam Button at www.forexlive.com.

What's coming up in Monday's North American trade? Not much on the calendar

Mon, Apr 22, 2024 12:17 PM

<p>Happy Monday.</p><p>Today's North American <a href="https://www.forexlive.com/EconomicCalendar" target="_blank" rel="follow">calendar </a>is a bit of a dud but there is a focus on equities after a six-day slide in the S&amp;P 500. Shares of Tesla aren't helping with a 3% pre-market drop but it's a huge week of earnings so that will be the guide.</p><p>As for economic data, we get PCE and GDP later in the week but it's a slow start. There is nothing market moving on the US data or Fedspeak calendar today.</p><p>For Canada, we get March PPI (shown above) and the new housing price index at the bottom of the hour. </p><p>At 10 am, we get eurozone consumer confidence for April.</p> This article was written by Adam Button at www.forexlive.com.

ForexLive European FX news wrap: Risk bounces back as market fears ebb

Mon, Apr 22, 2024 12:03 PM

<p>Headlines:</p><ul><li><a href="https://www.forexlive.com/news/cable-extends-fall-to-lowest-in-five-months-20240422/">Cable extends fall to lowest in five months</a></li><li><a href="https://www.forexlive.com/centralbank/ecbs-patsalides-says-central-bank-decisions-are-reliant-on-data-20240422/">ECB's Patsalides says central bank decisions are reliant on data</a></li><li><a href="https://www.forexlive.com/centralbank/snb-raises-minimum-reserve-requirement-for-banks-20240422/">SNB raises minimum reserve requirement for banks</a></li><li><a href="https://www.forexlive.com/news/snb-total-sight-deposits-we-19-april-chf-4813-bn-vs-chf-4779-bn-prior-20240422/">SNB total sight deposits w.e. 19 April CHF 481.3 bn vs CHF 477.9 bn prior</a></li><li><a href="https://www.forexlive.com/news/germanys-industry-lobby-warns-of-production-slump-to-continue-this-year-20240422/">Germany's industry lobby warns of production slump to continue this year</a></li><li><a href="https://www.forexlive.com/news/north-korea-fires-ballistic-missile-appears-to-have-landed-outside-japans-eez-20240422/">North Korea fires ballistic missile, appears to have landed outside Japan's EEZ</a></li></ul><p>Markets:</p><ul><li>NZD leads, GBP lags on the day</li><li>European equities higher; S&amp;P 500 futures up 0.6%</li><li>US 10-year yields up 3.7 bps to 4.660%</li><li>Gold down 2.1% to $2,341.79</li><li>WTI crude down 0.7% to $81.47</li><li>Bitcoin up 1.5% to $65,915</li></ul><p class="text-align-justify">As geopolitical fears ebb, risk is looking to be back on the up again to start the new week. The likes of gold and oil are being pushed lower, while equities are hoping for a decent bounce after last week's slide. S&amp;P 500 futures were slightly optimistic early on, up around 0.2% as European traders entered. It is now up roughly 0.6% ahead of US trading.</p><p class="text-align-justify">Meanwhile, gold fell by quite a bit during the session in a drop from $2,370 to $2,341 currently. The <a href="https://www.forexlive.com/news/gold-sees-near-term-momentum-get-called-into-question-to-start-the-week-20240422/" target="_blank" rel="follow">near-term chart also isn't too promising</a> for gold at the moment.</p><p class="text-align-justify">In FX, the dollar is steady but trades more mixed on the day. It is up against the European currencies but now against the antipodeans amid the better risk mood.</p><p class="text-align-justify">EUR/USD is down 0.2% to 1.0633 while GBP/USD is down 0.4% to 1.2313 on the day. USD/JPY is keeping underpinned around 154.75, with higher bond yields also helping. Still, the 155.00 mark is a stretch too far for now. Then, we have AUD/USD up 0.3% to 0.6435 and NZD/USD up 0.4% to 0.5905 on the day.</p><p class="text-align-justify">There wasn't much other notable headlines to start the week but things are to pick up surely, if the <a href="https://www.forexlive.com/news/what-are-the-things-to-watch-out-for-in-the-economic-calendar-this-week-20240422/" target="_blank" rel="follow">economic calendar this week</a> is anything to go by.</p> This article was written by Justin Low at www.forexlive.com.

Cable extends fall to lowest in five months

Mon, Apr 22, 2024 11:32 AM

<p class="text-align-justify">It all started with the dollar making some headway two weeks back, before a drop below 1.2500 made things really tough for GBP/USD. There was a brief consolidation phase below the figure level but we're seeing sellers pick up the momentum again in the last two days. And now, the pair is down another 0.4% to 1.2315.</p><p class="text-align-justify">From a technical perspective, there is very little support in stopping the drop here. The next key support target will be the October low itself at 1.2037. That's still nearly 300 pips away from here.</p><p class="text-align-justify">Unless the mood music changes up for the dollar, it might be tough to argue otherwise. And that is despite the recent inflation data from the UK, as argued last week <a href="https://www.forexlive.com/news/sterling-climbs-on-slightly-stronger-uk-inflation-data-20240417/" target="_blank" rel="follow">here</a>.</p><p class="text-align-justify">While the BOE is still poised for a potential August rate cut, the Fed's timeline has readjusted quite significantly. We're looking at one potentially in September but even that isn't as much as a given as compared to the BOE for August. And that pretty much outlines the risk balance for both the dollar and pound currently.</p><p class="text-align-justify">I mean, if sterling can't even compose itself even with a better risk mood today, that's not a good sign in the short-term especially with the chart looking as it is above.</p> This article was written by Justin Low at www.forexlive.com.

Gold sees near-term momentum get called into question to start the week

Mon, Apr 22, 2024 10:32 AM

<p class="text-align-justify">The price action in gold lately has been one that has been hovering just under the $2,400 mark mostly. Buyers tried for a firm break of the key level but ultimately failed to hold a daily close above that. The mood music was also helped by recent geopolitical tensions between Israel and Iran. But as those fears ebb a little now, we're seeing gold slip back. But has that changed the recent momentum?</p><p class="text-align-justify">Well, if you go by the hourly chart, it might be suggestive of a change in fortunes. That at least in the near-term for gold price action. During the run higher this month, price was largely defended by the key hourly moving averages. If not at the 100-hour moving average (red line), then at least at the 200-hour moving average (blue line).</p><p class="text-align-justify">That helped to keep buyers poised but now we're seeing those key near-term levels falter in trading today.</p><p class="text-align-justify">Price is now down to $2,360 and trading below both key levels, suggesting that the near-term bias has shifted to being more bearish instead. I'd still put some emphasis on the minor support around $2,320-25 but if that gives way, we could be looking at a quick retracement to $2,200 for gold next.</p><p class="text-align-justify">The structural view still dictates that there is plenty of upside potential for gold though. I mean, this run higher comes despite markets having significantly pulled back on rate cut bets. So, if that starts to come back in again, there's certainly fuel to add to the fire for gold in the big picture.</p><p class="text-align-justify">But just as how equities have retraced slightly after the bustling gains since last November, gold might be overdue that as well at some point.</p> This article was written by Justin Low at www.forexlive.com.

What are the things to watch out for in the economic calendar this week?

Mon, Apr 22, 2024 8:21 AM

<p class="text-align-justify">The Fed will only be meeting next week but now we're in the FOMC blackout period. And that means there will be no Fed speakers until the rate decision. With that in mind, markets will have to work with the geopolitical risk mood and events on the economic calendar for the week. Let's dive straight into the latter, shall we?</p><ul><li>France, Germany, Eurozone April flash manufacturing, services PMIs (23/04)**</li><li>UK April flash manufacturing, services PMIs (23/04)**</li><li>US April flash manufacturing, services PMIs (23/04)***</li><li>US March new home sales (23/04)</li><li>Australia Q1 CPI figures (24/04)**</li><li>Germany April Ifo business climate index (24/04)</li><li>Canada February retail sales (24/04)</li><li>US March durable goods orders (24/04)</li><li>US Q1 advanced GDP figures (25/04)***</li><li>US weekly initial jobless claims (25/04)**</li><li>BOJ announces its April monetary policy decision (26/04)**</li><li>US March PCE price index (26/04)***</li></ul><p class="text-align-justify">Despite a slower start today, the calendar dictates that things could definitely pick up in the days ahead. And that will start with the barrage of PMI data from tomorrow.</p><p class="text-align-justify">The only notable major central bank meeting is the BOJ. However, they are expected to maintain the status quo after having already changed up policy last month. That being said, just be wary in case of any surprises - especially with USD/JPY continuing to keep closer to the 155.00 mark this week.</p> This article was written by Justin Low at www.forexlive.com.

SNB total sight deposits w.e. 19 April CHF 481.3 bn vs CHF 477.9 bn prior

Mon, Apr 22, 2024 8:03 AM

<ul><li>Domestic sight deposits CHF 472.9 bn vs CHF 469.4 bn prior</li></ul><p class="text-align-justify">A slight increase in overall sight deposits but nothing out of the ordinary.</p> This article was written by Justin Low at www.forexlive.com.

Risk steady but FX not up to a whole lot for now

Mon, Apr 22, 2024 7:41 AM

<p class="text-align-justify">The market mood is a better one compared to Friday last week. But this is just a slight breather as there were no significant escalation in geopolitical developments over the weekend. In FX, the changes among dollar pairs leave a lot to be desired:</p><p class="text-align-justify">The moves are less than 20 pips for each pair with a flattish mood being observed for some as well. In the bigger picture, the dollar continues to sit in a comfortable spot but further gains are being capped for now.</p><p class="text-align-justify">USD/JPY remains a key one to watch as the pair continues to consolidate close to the 155.00 mark. The figure level is a key threshold to take note of as it is a potential intervention trigger for the BOJ.</p><p class="text-align-justify">If risk trades are to gain further, I can see the dollar losing a bit more ground. But soon enough, we'll have some modest data releases to work with in the week ahead. And those perhaps might give traders more push in a call to action.</p> This article was written by Justin Low at www.forexlive.com.

European equities in a better mood to start the day

Mon, Apr 22, 2024 7:15 AM

<ul><li>Eurostoxx +0.6%</li><li>Germany DAX +0.6%</li><li>France CAC 40 +0.5%</li><li>UK FTSE +1.1%</li><li>Spain IBEX +1.0%</li><li>Italy FTSE MIB -0.6%</li></ul><p class="text-align-justify">This mirrors the more positive mood in US futures as well. S&amp;P 500 futures are up 0.4%, as stocks look to bounce back a little after a poor showing last week. The lack of escalation in the Middle East is helping the mood, at least for now.</p> This article was written by Justin Low at www.forexlive.com.