CURRENCIES

Gold Price Technical Analysis:

• Recent Performance:
  • Gold (XAU/USD) dropped on Monday after failing to break trendline resistance at $2,375 on Friday.
  • Prices slipped back below $2,350 at the start of the new week.
• Potential Downside:
  • Support zone near May’s low and the 50-day simple moving average around $2,280.
  • If this support fails, attention shifts to $2,260.
• Potential Upside:
  • If bulls regain control, the first technical hurdle is $2,350.
  • Next resistance at the dynamic trendline, currently crossing $2,365.
  • Further upward movement could lead to a rally towards $2,420 and possibly $2,430.

EUR/USD Forecast:

• Recent Performance:
  • EUR/USD advanced on Monday, clearing its 50-day and 200-day simple moving averages near 1.0785.
• Potential Upside:
  • Sustaining the bullish breakout, overhead resistance stretches from 1.0805 to 1.0810.
  • A move beyond this barrier could lead to 1.0865, the 50% Fibonacci retracement of the 2023 selloff.
• Potential Downside:
  • If sellers drive the pair below the moving averages, sentiment could sour.
  • This may lead to a pullback towards 1.0725 and 1.0695.
  • Further losses could trigger a descent towards 1.0650, May’s trough.

USD/JPY Forecast:

• Recent Performance:
  • USD/JPY continued its upward trajectory on Monday, consolidating above 156.00.
• Potential Upside:
  • If momentum continues, resistance at 158.00 and then 160.00.
  • Exercise caution due to potential FX intervention by Japanese authorities, which could cause a rapid decline.
• Potential Downside:
  • Initial support at 154.65 during a pullback.
  • A breakdown could lead to a decline towards 153.15.
  • Persistent weakness may shift focus to trendline support and the 50-day simple moving average near 152.50.

STOCK MARKET

European and US Markets:

• European stocks and US equity futures remained within small ranges as investors awaited upcoming US inflation reports.
• Japanese bond yields climbed to decade highs.

Key Market Movements:

Europe:

• Stoxx Europe 600 index remained near a record high.
• Anglo American Plc: Edged higher following major company shake-up to counter BHP Group takeover approach.
• Delivery Hero SE: Soared up to 20% after selling its Taiwan business.
• Alcon Inc.: Jumped after an earnings beat.
• Rheinmetall AG: Dropped after missing earnings expectations.

US:

• S&P 500 and Nasdaq 100 futures showed little change.
• Regional Asian share gauge climbed, with Chinese tech shares among notable gainers.
• Earnings Reports: Tencent Holdings Ltd. and Alibaba Group Holding Ltd. to report later Tuesday.

Currencies and Bonds:

• Bloomberg dollar index remained flat.
• 10-year Treasury yields were little changed ahead of US producer prices report.
• Federal Reserve Chair Jerome Powell scheduled to speak.
• Consumer price index due Wednesday, expected to show moderation but still high.

Expert Insight:

• Oppenheimer & Co. Inc. Chief Strategist John Stoltzfus expects April CPI report to be central to market focus, with near-term volatility presenting investment opportunities.

Japan and Commodities:

Japan:

• 20-year government bond yield hit its highest level since 2013.
• Speculation of Bank of Japan reducing debt-buying to ease yen pressure.
• Japanese yen extended losses against the greenback to a two-week low.

Commodities:

• Oil: Held gains ahead of OPEC’s market outlook release.
• Iron Ore: Slumped after major Chinese developer defaulted, indicating ongoing debt crisis in China’s property sector.
• Industrial Metals: Nickel and copper climbed.
• Gold: Steady after a decline of more than 1% on Monday.

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