Gold Forecast: Middle-East tensions keep bids high ========== Gold (XAU/USD) price fluctuated in a relatively narrow range this week following the record-setting rally. Gold benefited from safe-haven flows and gathered bullish momentum at the beginning of the week as markets reacted to news of Iran launching an assault over the weekend, with dozens of drones and missiles in retaliation to the suspected Israeli attack on Iran’s consulate in Damascus on April 1. Gold gained more than 1.5% on Monday and registered its highest daily close on record. Meanwhile, the data from the US showed that [something] rose 0.7% on a monthly basis in March. This reading came in better than the market expectation for an increase of 0.3% but XAU/USD ignored the renewed US Dollar (USD) strength. Market participants will stay focused on geopolitics next week. A de-escalation of the Iran-Israel crisis could trigger a downward correction in XAU/USD and cause the market focus to shift to the US data. On the other hand, another retaliatory response by Iran could revive fears over a deepening crisis in the Middle East and allow Gold to continue to capitalize on safe-haven demand. On Thursday, the US Bureau of Economic Analysis (BEA) will release the Advanced Gross Domestic Product (GDP) data for the first quarter. In case the US economy posts a stronger-than-forecast annualized growth, the USD could hold its ground and weigh on XAU/USD. Since the beginning of April, Gold has been ignoring rising US yields and the broad USD strength. If geopolitics finally move to the back burner, Gold could come under bearish pressure, with investors adjusting their positions to growing expectations for a Fed policy hold in June. According to the CME FedWatch Tool, there is a less than 20% chance the Fed will lower the policy rate by 25 basis points in June. On Friday, the BEA will publish the Personal Consumption Expenditures (PCE) Price Index data, the Fed’s preferred gauge of inflation, for March. Thursday’s GDP report will include the PCE Price Index data for the first quarter. Hence, Friday’s PCE reading will not offer any surprises and is unlikely to trigger a market reaction. Moreover, Fed Chairman Powell said that the annual core PCE inflation was little changed in March, according to their estimates. #Gold #Xau/usd #Geopolitics #IranisraelConflict #UsData https://www.fxstreet.com/analysis/gold-weekly-forecast-will-geopolitics-continue-to-drive-xau-usd-202404191409

Polymarket traders see 32% chance of no Fed rate cuts this year ========== Traders on Polymarket now put the probability of the Fed holding rates steady in 2024 at 32%, compared to 7% in March. Traditional markets have scaled back expectations to two 25 basis points rate cuts from six in early January. Betters on blockchain-based betting site Polymarket now see a 32% chance of the Fed keeping the benchmark interest rate steady between 5.25% and 5.5% by the end of the year. Meanwhile, punters see a 27% probability of a 25 basis points (bps) rate cut. The hawkish shift in the could dampen the demand for risk assets, including . According to some analysts, (BTC) surge to record highs above $73,000 in the first quarter was primarily fueled by the anticipation of swift interest rate cuts. Hawkish pricing on Polymarket is consistent with traditional markets, where traders now see just two 25 basis points rate cuts in 2024 versus six in early January. Bank of America recently pushed out the timing of the first Fed rate cut to December from June, while Societe Generale said the central bank would not cut rates until 2025. #Fed #RateCuts #Polymarket #InterestRates #Probability https://www.fxstreet.com/cryptocurrencies/news/polymarket-traders-see-32-chance-of-no-fed-rate-cuts-this-year-202404191236

Markets hit by tech and geopolitics, weekend risk if Iran retaliates ========== The article discusses the impact of technology and geopolitical tensions on the markets. Reports of explosions in Iran, Iraq, and Syria, including near a major nuclear facility in Iran, led to a spike in tensions. However, tensions gradually eased as no major damage or fatalities were reported. The WTI Crude oil price and gold price surged, while the yen and Swiss franc strengthened against the USD. The Nikkei lost over 3% and all equity markets were down heavily. Taiwan Semiconductor reported strong quarterly revenue growth, but its stock fell due to concerns about lower chip demand in certain sectors. Japan's national CPI for March decelerated more than expected. The article also mentions potential trouble with Vietnam's currency and the US equity futures being down due to the Middle East hostilities. The UK Retail Sales data came in mixed, adding to the weakness of GBP/USD. The article concludes by mentioning the fear of escalation between Israel and Iran and the shift of investors into safe-haven assets. #Technology #Geopolitics #Iran #Tensions #Oil #Gold #EquityMarkets #ChipDemand #Cpi #Currency #MiddleEast #UkRetailSales #SafehavenAssets https://www.fxstreet.com/analysis/markets-hit-by-tech-and-geopolitics-weekend-risk-if-iran-retaliates-202404190544

EUR/USD Forecast: Euro looks to extend recovery beyond 1.0700 ========== EUR/USD gained traction and closed in positive territory on Wednesday, snapping a six-day losing streak. The pair continues to inch higher toward 1.0700 in the European session on Thursday and the near-term technical outlook highlights a buildup of recovery momentum. The renewed US Dollar (USD) weakness helped EUR/USD stage a decisive rebound midweek. In the absence of high-tier data releases, retreating US Treasury bond yields weighed on the USD. The risk-positive market environment could help the pair push higher. The US economic docket will feature weekly Initial Jobless Claims data. Investors expect the number of first-time applications for unemployment benefits to rise to 215,000 in the week ending April 13 from 211,000. A reading close to 220,000 could put additional weight on the USD's shoulders. Markets remain optimistic about an avoidance of a deepening Iran-Israel conflict, with the UK, the EU and the US looking to widen sanctions against Iran. The Relative Strength Index (RSI) indicator on the 4-hour climbed above 50 for the first time in a week and closed the last five 4-hour candles about the 20-period Simple Moving Average (SMA), reflecting a buildup of recovery momentum. 1.0700 (psychological level, static level) aligns as immediate resistance before 1.0720-1.0730 (50-period SMA, static level) and 1.0760 (100-period SMA). On the downside, 1.0660 (static level, former resistance) could be seen as first support ahead of 1.0640 (20-period SMA) and 1.0600 (psychological level, static level). https://www.fxstreet.com/analysis/eur-usd-forecast-euro-looks-to-extend-recovery-beyond-10700-202404180815

USD/CHF finds some support above 0.9100 amid the cautious mood, geopolitical tensions eyed ========== The USD/CHF pair faces selling pressure to 0.9105 amid a decline in the US Dollar Index (DXY) and ongoing geopolitical tensions in the Middle East. National Security Advisor Jake Sullivan announced new sanctions targeting Iran and sanctions against entities supporting the Islamic Revolutionary Guard Corps and Iran's Defense Ministry. Western leaders have urged Israel to exercise restraint against escalation. Strong US economic data and hawkish comments from the US central bank support the Greenback. The Federal Reserve's Powell stated that monetary policy needs to be restrictive for longer, dampening hopes for rate cuts. The USD/CHF pair is supported above 0.9100, but geopolitical tensions and US economic data will be closely monitored. #Usd/chf #GeopoliticalTensions #MiddleEast #UsDollarIndex #SafehavenCurrency #InterestRateCuts #Iran #IslamicRevolutionaryGuardCorps #UsCentralBank #FederalReserve #UsEconomy #Inflation #SwissFranc #Greenback https://www.fxstreet.com/news/usd-chf-finds-some-support-above-09100-amid-the-cautious-mood-geopolitical-tensions-eyed-202404170707

Forex Today: UK inflation data support Pound Sterling, US Dollar consolidates before Fedspeak ========== The UK's Office for National Statistics reported that annual inflation, as measured by the change in the Consumer Price Index (CPI), edged lower to 3.2% in March from 3.4% in February. Additionally, core CPI rose 4.2% in the same period. Both of these readings came in above analysts' estimates and helped Pound Sterling gather strength. US Dollar consolidates before Federal Reserve (Fed) policymakers deliver speeches on Wednesday. The benchmark 10-year US Treasury bond yield moves sideways above 4.65% and US stock index futures trade marginally lower. The data from New Zealand showed that the CPI rose 4% on a yearly basis in the first quarter, down sharply from the 4.7% increase recorded in the previous quarter. The USD/JPY pair touched a multi-decade high near 154.80 on Tuesday and retreated slightly in the Asian session. #Forex #UkInflation #PoundSterling #UsDollar #Fedspeak https://www.fxstreet.com/news/forex-today-uk-inflation-data-support-pound-sterling-us-dollar-consolidates-before-fedspeak-202404170648

Fed's Powell: The performance of the US economy has been "quite strong" ========== Federal Reserve Chairman Jerome Powell participated in a fireside chat about economic trends in North America at the Wilson Center’s Washington Forum. Powell stated that the performance of the US economy has been "quite strong" and recent data indicates a lack of significant progress on inflation this year. Despite ongoing strength, Powell noted that the labor market is transitioning towards a better equilibrium. He also mentioned that broader wage pressures are moderating gradually and that if higher inflation persists, the Fed can maintain the current rate as long as needed. Powell emphasized that restrictive policy needs further time to work. #UsEconomy #FederalReserve #JeromePowell #Inflation #LaborMarket #WagePressures #RestrictivePolicy https://www.fxstreet.com/news/feds-powell-the-performance-of-the-us-economy-has-been-quite-strong-202404161738

US outperformance continues ========== The economic divergence between the US and the rest of the world has become increasingly pronounced. US inflation pressures remain stickier than in most other parts of the world. US rates have continued to rise, with markets now expecting less than 45bp worth of cuts for 2024. The global manufacturing cycle is softening, but it is seen as a temporary and mostly inventory-driven upturn. Oil prices have risen close to $90 USD/bbl, but further upside is limited. The USD has been the big winner, with EUR/USD breaking below 1.07. The JPY continues to perform poorly. In the near term, lower USD rates are expected, which could provide temporary support to EUR/USD. However, the long-term case is for a lower USD based on stronger US growth dynamics. EUR/NOK is expected to move higher over the year, and SEK is expected to weaken. Risks to the forecasts include a sharp drop in core inflation and a more resilient global economy. A much harder landing would require a sharp easing of global monetary conditions, leading to a weaker USD. #Us #Economy #Inflation #Usd #Eur/usd #Jpy #Eur/nok #Sek https://www.fxstreet.com/analysis/us-outperformance-continues-202404161137

Iran’s Foreign Minister: Iran willing to exercise restraint, has no intention of further escalation ========== Iran's Foreign Minister, Hossein Amir-Abdollahian, stated that Iran is willing to exercise restraint and has no intention of further escalating the situation. This statement came after a meeting with the Chinese counterpart, where China expressed confidence in Iran's ability to handle the situation while safeguarding its sovereignty and dignity. Despite the thaw in the Israel-Iran conflict, the US Dollar continues to find demand as a safe-haven currency. The article also provides an explanation of the terms 'risk-on' and 'risk-off' in financial markets, as well as the key assets and currencies that are influenced by these sentiments. https://www.fxstreet.com/news/irans-foreign-minister-iran-willing-to-exercise-restraint-has-no-intention-of-further-escalation-202404160153

The US economic engine is running too hot ========== The recent surge in the US economy indicates that the neutral rate may be higher than the current Fed policy suggests, especially after nominal spending significantly surpassed expectations in this week's primary release from the world's largest economy. The headline figure of 0.7% far exceeded the consensus estimate of 0.4%. Moreover, March marked the second consecutive month of MoM gains, with the previous month's increase revised substantially upward to reflect a 0.9% rise. Furthermore, the control group witnessed a remarkable 1.1% increase, nearly quadrupling the expected gain. This robust performance is poised to strengthen Q1 GDP estimates before next week's forthcoming advance read on overall economic growth. Notably, February's control group reading was also revised upward to reflect a 0.3% gain, contrary to the initially reported flat figure. Taken together with the overshoots on both payrolls and CPI for March, this release underscores the resilience of US consumers in the face of higher interest rates. It suggests that the Fed's policy stance may not be as restrictive as previously thought. And strongly hinting that the Federal Reserve will neither be inclined nor warranted to hasten rate cuts. In summary, the US economy is firing on all cylinders. Needless to say, this is not the stuff of rate cuts, and the market reacted accordingly with higher yields and lower stocks. #UsEconomy #InterestRates #Gdp #FederalReserve https://www.fxstreet.com/analysis/the-us-economic-engine-is-running-too-hot-202404152244

Forex Today: US Dollar consolidates gains at multi-month highs as focus remains on geopolitics ========== The US Dollar (USD) consolidated its gains at multi-month highs around 106.00 after a rally fueled by expectations for a delay in the Federal Reserve's policy pivot and escalating geopolitical tensions. Iran launched an assault with dozens of drones in retaliation to a suspected Israeli attack on Iran's consulate in Damascus. UN Secretary-General Antonio Guterres condemned Iran's drone attacks as a "serious escalation." US index futures traded modestly higher after a sharp decline in Wall Street. The USD was the strongest against the Euro in the last 7 days. Middle East tensions escalated over the weekend after Iran attacked Israel. Ethereum opened higher and advanced above $2,370 before retreating. EUR/USD clings to recovery gains above 1.0650 ahead of US Retail Sales data. USD/JPY closed the previous week higher and continued to push higher, trading at its highest level in over three decades near 154.00. The terms 'risk-on' and 'risk-off' refer to the level of risk that investors are willing to stomach. In a 'risk-on' market, investors are optimistic and more willing to buy risky assets, while in a 'risk-off' market, investors play it safe and buy less risky assets. The Australian Dollar (AUD), Canadian Dollar (CAD), New Zealand Dollar (NZD), Ruble (RUB), and South African Rand (ZAR) tend to rise in 'risk-on' markets. The US Dollar (USD), Japanese Yen (JPY), and Swiss Franc (CHF) tend to rise in 'risk-off' markets. Gold price jumped on a flight to safety after Iran attacked Israel. Ripple price recovered from a weekend low and surged past $0.50. Data from the US, UK, and Canada will be in focus this week. #UsDollar #Geopolitics #Iran #Israel #Forex https://www.fxstreet.com/news/forex-today-us-dollar-consolidates-gains-at-multi-month-highs-as-focus-remains-on-geopolitics-202404150717

Australian Dollar bounces back from eight-week lows amid a firmer US Dollar ========== The Australian Dollar (AUD) rebounds from an eight-week low of 0.6456 reached last Friday. However, the AUD/USD pair faces obstacles as traders seek refuge in the US Dollar (USD) due to heightened tensions in the Middle East. The ASX 200 Index declined, reflecting investor concerns about a possible retaliatory response from Israel to Iran's attack. The US Dollar receives support as traders express concerns about a potential reaction from Israel following Iran's attack. The Australian Dollar may face further challenges as the ASX 200 Index declined, reflecting investor concerns about a possible retaliatory response from Israel to Iran's attack. The US Dollar receives support as traders express concerns about a potential reaction from Israel following Iran's attack. The Australian Dollar (AUD) rebounds on Monday from the eight-week low of 0.6456 reached last Friday. However, the AUD/USD pair encountered obstacles as traders sought refuge in the US Dollar (USD) amidst heightened tensions in the Middle East. #AustralianDollar #UsDollar #MiddleEastTensions https://www.fxstreet.com/news/australian-dollar-bounces-back-from-eight-week-lows-amid-a-firmer-us-dollar-202404150315

Weekly column: Mercury in retrograde blaming the trickster for stock market plunge ========== The article discusses the recent stock market plunge and attributes it to the effects of Mercury in retrograde, a phenomenon associated with chaos, volatility, and uncertainty in financial markets. The author highlights the significant events that occurred during the week, including a solar eclipse conjunct Chiron in Aries and a Mars/Saturn conjunction. The price of gold and silver experienced significant volatility, with gold reaching an all-time high before dropping, and silver surging to its highest level in years before falling back. The article also mentions the U.S. rushing warships to protect Israel and American forces in response to a potential attack from Iran. The stock market also plummeted, with the DJIA falling to its lowest mark since January 25. The author suggests that the current geocosmic climate and the influence of Mercury retrograde may have contributed to these market movements. The article concludes by discussing the potential impact of upcoming astrological events on monetary policy and the economy. #StockMarket #MercuryInRetrograde #Volatility #Gold #Silver #Warships #Iran #Djia #Astrology #MonetaryPolicy https://www.fxstreet.com/analysis/weekly-column-mercury-in-retrograde-blaming-the-trickster-for-stock-market-plunge-202404142316

The big picture: A tale of three central banks ========== Unfavorable trends in US inflation, rising geopolitical tensions, and weak Chinese economic data have pushed equity prices lower and volatility higher. The market is in risk reduction mode and there is a bid in the Dollar. Inflation breakevens are rising and financial conditions are tightening. The US wants to normalize policy but is being held back by a strong economy and short-term inflationary trends. The ECB and the Bank of Canada have dovish rhetoric and want to ease policy. The US, Europe, and Canada have differing narratives among their central banks. The upcoming week is packed with economic data releases. AUD/USD is rising toward 0.6700 as traders look through Middle East escalation. Gold price rebounds above $2,350 on Middle East geopolitical risks. USD/JPY stays defensive below 153.50 amid Iran-Israel conflict. Solana price is nurturing a recovery rally. CPI numbers are due in the UK, Japan, Canada, and New Zealand. GBP/USD outlook is bearish. EUR/USD threatens to fall below parity. A trader hits $6M pay dirt after spending $8K on Ethereum memecoin. Cryptocurrencies look stronger than stocks. Forex seasonality shows best-worst performers in April. Elliott Wave analysis shows Nasdaq and top tech stocks. #CentralBanks #Inflation #GeopoliticalTensions #EconomicData #RiskReduction #CurrencyExchangeRates https://www.fxstreet.com/analysis/the-big-picture-a-tale-of-three-central-banks-202404142250

Australian Dollar struggles amid robust US economic data ========== The AUD/USD pair remains under pressure, hovering around 0.6528 on Friday. Efforts to stabilize the exchange rate have seen limited success. The stronger-than-expected economic data from the US has dampened hopes for extensive interest rate cuts by the Federal Reserve this year. The capital market currently anticipates only a 40-basis point reduction. The Reserve Bank of Australia (RBA) is considering initiating its monetary easing policies towards the end of 2024. Recent data indicates that the unemployment rate dropped to 3.7% in February, the lowest since September 2023, while inflation remained steady at 3.4% for the third consecutive month. A recent Westpac report highlights the RBA's need for greater confidence in the inflation outlook before seriously contemplating a rate cut. Technical analysis suggests a bearish outlook for the AUD/USD pair, with a potential continuation of the downward wave towards 0.6404. The MACD indicator supports this bearish outlook. The Stochastic oscillator suggests potential short-term corrections within a broader downward trend. #Aud/usd #ExchangeRate #InterestRateCuts #FederalReserve #MonetaryEasing #UnemploymentRate #Inflation #RateCut #TechnicalAnalysis #BearishOutlook https://www.fxstreet.com/analysis/australian-dollar-struggles-amid-robust-us-economic-data-202404120948

EUR/USD: New YTD lows for Euro as dust from hot US inflation hasn't settled ========== The Euro has reached new year-to-date lows against the US dollar as the dust from the hot US inflation announcement has not settled. The European Central Bank (ECB) meeting did not bring any surprises, with President Christine Lagarde avoiding questions about interest rate cuts. Bets on a possible June rate cut remain high. The US dollar maintains an advantage in relation to key interest rates, which could widen the gap if the ECB reduces rates in June without the Fed doing the same. International stock markets have reacted surprisingly and pared down some recent losses, but concerns about high inflation, high interest rates, and geopolitical issues create a dangerous cocktail for the global economy. The University of Michigan's index of consumer sentiment is the only notable event on today's agenda. The author remains loyal to their view of buying the Euro near 1.06 levels, expecting signs of fatigue in the US dollar's bullish trend and a reactionary behavior from the Euro. #Eur/usd #Euro #UsDollar #Inflation #EuropeanCentralBank #InterestRates #UsEconomy #InternationalStockMarkets https://www.fxstreet.com/analysis/eur-usd-new-ytd-lows-for-euro-as-dust-from-hot-us-inflation-hasnt-settled-202404120812

EUR/USD: New YTD lows for Euro as dust from hot US inflation hasn't settled ========== The Euro has reached new year-to-date lows against the US dollar as the dust from the hot US inflation announcement has not settled. The European Central Bank (ECB) meeting did not bring any surprises, with President Christine Lagarde avoiding questions about interest rate cuts. Bets on a possible June rate cut remain high. The US dollar maintains an advantage in relation to key interest rates, which could widen the gap if the ECB reduces rates in June without the Fed doing the same. International stock markets have reacted surprisingly and pared down some recent losses, but concerns about high inflation, high interest rates, and geopolitical issues create a dangerous cocktail for the global economy. The University of Michigan's index of consumer sentiment is the only notable event on today's agenda. The author remains loyal to their view of buying the Euro near 1.06 levels, expecting signs of fatigue in the US dollar's bullish trend and a reactionary behavior from the Euro. #Eur/usd #Euro #UsDollar #Inflation #EuropeanCentralBank #InterestRates #UsEconomy #InternationalStockMarkets https://www.fxstreet.com/analysis/eur-usd-new-ytd-lows-for-euro-as-dust-from-hot-us-inflation-hasnt-settled-202404120812

GBP/USD remains on backfoot below 1.2570, UK GDP data looms ========== GBP/USD remains on the defensive around 1.2550 in Friday’s early Asian session. The US Producer Price Index (PPI) increased by 2.1% YoY in March, missing the estimation of 2.2%. BoE’s Greene said the rate cuts in the UK should remain "a way off" amid the persistence of inflation pressure. The GBP/USD pair remains on the backfoot near 1.2550 during the early Asian session on Friday. The market expects that the Bank of England (BoE) will cut its interest rate sooner than the US Federal Reserve (Fed) weighs on the GBP and the major pair. Later on Friday, investors will monitor the UK monthly Gross Domestic Product (GDP) for February and the preliminary US Michigan Consumer Sentiment Index for April. The hotter-than-expected CPI inflation reading this week triggers speculation that the Fed will have to push back the number and timing of interest rate cuts this year. Fed officials believe the US central bank had reached the peak of the current rate-tightening cycle and monetary policy was well positioned to react to the economic outlook, including the possibility of keeping rates higher for longer if inflation declines gradually. The hawkish remarks from the Fed lift the Greenback and drag the GBP/USD pair lower. On Thursday, the US Producer Price Index (PPI) data for March increased by 2.1% YoY, missing the estimation of 2.2%. The core PPI, which excludes volatile food and energy prices, rose by 2.4% YoY, compared to the market consensus of 2.3%. On the other hand, the hawkish comments from policymaker Megan Greene failed to boost the GBP. Greene stated that the interest rate cuts in the UK should remain "a way off" due to the persistence of inflation pressure, which is still more of a threat than in the US. Greene added that markets were wrong to expect that the BoE to cut rates earlier than the Fed this year. The UK GDP numbers for February might offer some hints about the UK economy. If the report shows stronger-than-expected data, this could provide some support to the GBP and cap the downside of the GBP/USD pair. #Gbp/usd #UkGdp #InterestRates #Inflation #BankOfEngland #FederalReserve https://www.fxstreet.com/news/gbp-usd-remains-on-backfoot-below-12570-uk-gdp-data-looms-202404120054

Japan’s Suzuki: Weak Yen has pros and cons ========== Japanese Finance Minister Shunichi Suzuki stated that a weak Japanese Yen (JPY) could push up import prices and have a negative impact on consumers and firms. He emphasized the need to closely watch foreign exchange (FX) moves with a high sense of urgency and to take appropriate steps to minimize the impact of a weak yen on households. Suzuki also mentioned the desirability of stable FX movements reflecting fundamentals and the analysis of the background driving FX moves. He revealed that there is a chance FX will be discussed at the upcoming G20 meeting and that he is in close communication with top currency diplomat Kanda. At the time of writing, USD/JPY is trading 0.02% lower on the day at 153.25. #Japan #Suzuki #WeakYen #ImportPrices #Consumers #Firms #ForeignExchange #Fx #G20Meeting https://www.fxstreet.com/news/japans-suzuki-weak-yen-has-pros-and-cons-202404120011

What’s behind the US economy’s resilience? ========== The US economy has shown extraordinary resilience, outperforming other advanced economies despite high interest rates. Several factors contribute to this strength, including heavy public spending, immigration flows, fixed-rate mortgages, and energy independence. However, the US dollar has not experienced a significant rally due to developments in other financial markets and the collapse in natural gas prices. Looking ahead, the US economy's resilience may lead to persistently high inflationary pressures, potentially delaying rate cuts by the Federal Reserve. A full-blown rally of the US dollar may require a period of risk aversion in the markets and a correction in equity valuations. Foreign central bank rate cuts could also impact the dollar's performance. #UsEconomy #Resilience #PublicSpending #Immigration #Mortgages #EnergyIndependence #UsDollar #FinancialMarkets #Inflation #FederalReserve #RiskAversion #EquityValuations #ForeignCentralBanks https://www.fxstreet.com/analysis/whats-behind-the-us-economys-resilience-202404110901