EURUSD is moving in the Descending channel and the market has reached lower high area of the channel
EURUSD – Edges Up on Monday, but Technical Factors Loom Ahead of US Inflation Updates
The Germany CPI data is scheduled today and Euro Q1 GDP data is scheduled tomorrow. The Euro pairs mostly in down trend due to Rate cuts expected in June and July month from ECB Policy makers speech in the media. The Euro zone weakness data shows Enough rate hikes for controlled this economic activity pressure, Now releasing the rate cuts in the markets will smooth the Eurozone recovery from its downtrend.
During the European market session, investors await the release of the final Harmonized Index of Consumer Prices (HICP) inflation figures from Germany. However, market volatility stemming from this mid-tier final inflation print is expected to be limited unless there are significant adjustments compared to the preliminary figures.
Meanwhile, attention turns to European Gross Domestic Product (GDP) growth data for the first quarter, which is scheduled for release on Wednesday. Market analysts anticipate that the quarter-on-quarter GDP growth will remain stable at 0.3%.
In the United States, consumer inflation expectations for April increased, as indicated by a survey conducted by the Federal Reserve (Fed) Bank of New York. According to the NY Fed’s consumer sentiment survey, US consumers anticipate inflation to accelerate over the next year, with one-year inflation expectations rising to 3.3% from 3.0% in March.
Furthermore, Tuesday’s US market session will see the release of the US Producer Price Index (PPI) inflation numbers. Investors are anticipating a slight uptick in producer-level inflation for April, with expectations set at 0.3% month-on-month, compared to the previous month’s figure of 0.2%.
XAUUSD – Gold Price Rises Ahead of US PPI Data, Fed’s Powell Speech
The Gold prices are moving down ahead of US PPI Data scheduled today and US PPI is forecasted to 2.2% in the April month and Core PPI data is expected to 2.4% in the April month. US CPI Data is forecasted to 3.4% in the April month from 3.5% printed in the previous month. Israel entered into Northern Gaza parts and acquired the area from Hamas rebels and Palestinians sent to flee of Israel after the acquisition.
XAUUSD Gold price is moving in an Ascending channel and the market has reached the higher low area of the channel
Despite the consolidation of the US Dollar (USD) on Tuesday, the gold price (XAU/USD) rebounded. However, the upside of the yellow metal might be limited as traders await key US inflation data this week. The recent “higher-for-longer” US rate mantra has put some selling pressure on XAU/USD. Nonetheless, safe-haven flows stemming from escalating tensions in the Middle East could support the gold price in the near term.
Investors are closely monitoring key US economic data this week. On Tuesday, the US Producer Price Index (PPI) for April is scheduled for release, along with a speech from Fed Chair Jerome Powell. Attention will then shift to the US Consumer Price Index (CPI) on Wednesday. These reports could provide insights into the timing of the Fed’s initial rate adjustment. If inflation figures surpass expectations, it may dampen the prospect of a Fed rate cut, which could weigh on the precious metal. Moreover, higher interest rates could reduce overall investment demand for gold as they increase the opportunity cost associated with holding gold.
USDJPY – Japan’s Suzuki emphasizes stability in FX based on fundamentals
The Japanese Finance Minister Shunuchi Suzuki said FX prices has to move in stable manner by Fundamentals not by speculative moves. We are closely monitor the JPY moves against counter pairs. BoJ and Government of Japan must able to coordinate and apply the changes to policy settings makes JPY to stabilise in the market.
USDJPY is moving in an Ascending channel and the market has rebounded from the higher low area of the channel
On Tuesday, Japanese Finance Minister Shunichi Suzuki emphasized the significance of stable currency movements that accurately reflect economic fundamentals. Suzuki highlighted the importance of coordinating policies between the government and the Bank of Japan (BoJ) and pledged to closely monitor foreign exchange (FX) developments. He stressed the need for a comprehensive response to FX fluctuations, underscoring the government’s commitment to ensuring stability in the currency markets.
USDCHF – nears 0.9100 as gains extend before US PPI
The SECO climate change came at -38.1 in the April month from -38.0 printed in the March month. Today Import and export prices are due , this reading is useful for Consumer inflation prediction in the market. The SNB is more focussing on the controlling inflation point instead of Bolstering Swiss Franc in the market.
USDCHF is moving in an Ascending channel and the market has reached the higher low area of the channel
The US Dollar is advancing against the Swiss Franc (CHF) amidst cautious remarks from Federal Reserve (Fed) officials, who emphasize the need to maintain higher interest rates for an extended period due to elevated inflation concerns. Fed Vice Chair Philip Jefferson reiterated this stance on Monday, advocating for maintaining current interest rates until signs of inflation easing become apparent.
Traders are closely monitoring the US Producer Price Index (PPI), a key economic indicator, which could have a significant impact on the US market. The PPI report is expected to provide insights into potential outcomes for the Consumer Price Index (CPI). A higher-than-expected PPI reading could further bolster the US Dollar.
In Switzerland, the SECO Consumer Climate (YoY) experienced a slight decline in April, registering a reading of -38.1, significantly below the long-term average. Additionally, Producer and Import Prices data for April, released by the Federal Statistical Office of Switzerland, will provide further insights into consumer price inflation trends.
The Swiss Franc may face challenges as the Swiss National Bank (SNB) shifts its focus away from deliberately strengthening the currency and intensifies efforts to combat inflation. The SNB’s foreign exchange reserves increased to CHF 720 billion in April, marking the fifth consecutive monthly rise.
USDCAD – Maintains Position Above 1.3650 Before US PPI Data
The Canadian Dollar moved higher against counter pairs after the Oil prices are moved higher in the market. The Canadian Job report makes robust last week and BoC now delay the rate cuts in the market. Wildfire attacks in the Western Canada makes Oil supply constraint this will add the Oil prices to higher in the market.
USDCAD is moving in the Descending triangle pattern and the market has rebounded from the support area of the pattern
With a relatively light week in terms of Canadian economic data, investors are focusing on key US economic indicators, particularly the Producer Price Index (PPI) scheduled for release on Tuesday and the Consumer Price Index (CPI) on Wednesday.
In recent weeks, several Federal Reserve (Fed) officials have emphasized the necessity of maintaining higher interest rates for an extended period to tackle inflation. Fed Chair Jerome Powell, during a press conference, indicated that an interest rate hike was unlikely but did not completely rule it out. Powell stressed the importance of taking more time to gain greater confidence that inflation is moving towards the Fed’s 2% target.
Dallas Fed President Lorie Logan echoed concerns about upside risks to inflation, suggesting that it’s premature to consider interest rate cuts. This narrative of higher interest rates in the US is expected to support the US Dollar, providing a favorable environment for the USD/CAD pair.
Meanwhile, the Canadian Dollar (CAD) is facing downward pressure due to the continued decline in crude oil prices. Canada, being a major exporter of oil to the United States, sees its currency influenced by oil market dynamics. However, the CAD’s downside may be limited by positive employment market data for April in Canada. This data could potentially convince the Bank of Canada (BoC) to maintain its current policy stance for a longer period to ensure sustained inflation, thereby capping the downside potential of the CAD.
USD INDEX – US Dollar Steadies Before Producer Inflation Data, Powell Speech
The US Dollar moving flat against counter pairs ahead of FED Powell speech today at Amsterdam. US PPI data is expected at 0.30% on MoM versus 0.20% printed in the previous month. War situation in Israel versus Gaza is still not over the invasion of Whole land of Palestanians. So US Dollar moved in higher against counter pairs.
USD INDEX is moving in an Ascending channel and the market has reached the higher low area of the channel
On Tuesday, May 14th, foreign exchange markets remained subdued following Monday’s lackluster trading. The US Dollar (USD) Index continued to hover within a tight range above 105.00 as traders awaited key events, including the release of producer inflation data for April and Federal Reserve Chairman Jerome Powell’s speech. Earlier in the day, the European economic calendar featured the release of the ZEW Survey results for Germany and the Euro area.
The benchmark 10-year US Treasury bond yield ended the previous trading session unchanged, while major equity indexes closed relatively unchanged as well. The upcoming Producer Price Index (PPI) report is expected to show a 0.3% increase on a monthly basis for April, following a 0.2% rise in March. Later in the American session, Fed Chair Powell is scheduled to participate in a moderated discussion with De Nederlandsche Bank (DNB) President Klaas Knot at the Foreign Bankers’ Association’s Annual General Meeting in Amsterdam.
Japanese Finance Minister Shunichi Suzuki reiterated on Tuesday the importance of stable currency movements reflecting fundamentals and pledged close monitoring of foreign exchange fluctuations. Earlier data from Japan revealed that the PPI increased by 0.9% year-on-year in April, in line with market expectations and matching March’s rise.
Meanwhile, the International Monetary Fund (IMF) emphasized Japan’s commitment to allowing the Japanese Yen (JPY) to move flexibly, enabling the Bank of Japan (BoJ) to focus on achieving price stability. The IMF cautioned against calls by certain experts to use monetary policy to limit the currency’s depreciation.
In the UK, the Office for National Statistics reported that the ILO Unemployment Rate inched higher to 4.3% in the three months to March from 4.2%, as anticipated. Additionally, the Claimant Count Change increased by 8.9K, while Employment Change declined by 177K in April. Average Earnings Excluding Bonus rose by 6% year-on-year in the three months to March, while Average Earnings Including Bonus increased by 5.7% year-on-year in the same period.
GBPUSD – UK Unemployment Rate Hits 4.3% in March as Predicted
The UK unemployment rate for Q1 2024 is up by 4.3% from 4.2% in the previous quarter. Claimant Count change rose to 8.9K and Employment change declined to 177K in the April month and Average earning excluding Bonus came at 6.0% when compared to including Bonus at 5.7% in the last quarter. So Average earning ratio stood higher when compared to previous quarter. This news staying Negative for GBP in the market.
GBPUSD is moving in the Descending channel and the market has reached the lower high area of the channel
According to the latest data released by the UK’s Office for National Statistics (ONS) on Tuesday, the International Labour Organization (ILO) Unemployment Rate for the three months leading up to March rose slightly to 4.3%, up from the previous rate of 4.2%. This figure aligned precisely with market expectations.
Further insights from the job report revealed that the Claimant Count Change increased by 8.9K, indicating a rise in the number of people claiming unemployment benefits in April. Concurrently, the Employment Change witnessed a decrease of 177K during the same month.
Additionally, the data highlighted positive trends in earnings. Average Earnings Excluding Bonus exhibited a 6% year-on-year increase for the three-month period ending in March. Meanwhile, Average Earnings Including Bonus demonstrated a slightly lower growth rate of 5.7% year-on-year during the same timeframe.
AUDUSD – AUD quiet before Australian Budget
The National Bank of Australia Business condition fell to 7 compared to the previous reading decline of 9. The Australian Budget has to present this week and predicted lower inflation in the Australian economy than RBA forecasted as per Treasurer Jim Chalmers said in the TV Media last Sunday. Forecasted inflation is 3.75% in the mid-2024 and 2.75% near to RBA target in the Mid -2025.
AUDUSD is moving in an Ascending channel and the market has reached the higher low area of the channel
The Australian Dollar (AUD) retraced its recent gains on Tuesday ahead of the Yearly Budget Release by the Australian Government scheduled later in the day. Treasurer Jim Chalmers hinted at positive developments during Sunday morning television interviews, suggesting that the upcoming budget could indicate a faster decline in inflation than the Reserve Bank of Australia (RBA) had predicted, as reported by The Guardian.
The Australian Dollar faced pressure following the RBA’s less hawkish stance after opting to maintain its interest rate at 4.35% last week. Speculation had been rife in the markets that the central bank might lean toward a more hawkish position, spurred by recent inflation data surpassing expectations.
The US Dollar Index (DXY), which gauges the performance of the US Dollar (USD) against six major currencies, gained ground due to cautious remarks from Federal Reserve (Fed) officials, highlighting the necessity of maintaining higher rates for an extended period as inflation remains elevated. Fed Vice Chair Philip Jefferson echoed this sentiment on Monday, advocating for the retention of current interest rates until signs of inflation easing become more apparent.
On Tuesday, investors are expected to closely monitor the crucial economic indicator, the Producer Price Index (PPI), which could serve as a significant market catalyst. Traders may utilize the PPI report to gauge the potential outcome of the Consumer Price Index (CPI), and if the data turns out to be higher than expected, it could further bolster the US Dollar.
NZDUSD – NZ Electronic Card Retail Sales -0.4% in April
The NZ Electronic Card sales data for the month of April contracted -0.40% versus -0.70% in the March month. Annualised sales data contracted -3.8% compared to -2.3% last month and expected -3.0%. This reading shows lowest since August 2022.The consumer durable goods spending falling to $11 million NZD in this March month.
NZDUSD is moving in the Descending channel and the market has reached the lower high area of the channel
In April, the electronic retail sales in New Zealand experienced a contraction, with a decrease of -0.4%. Although this decline marked a slower pace compared to the previous month’s -0.7% drop, the annualized figure further decelerated, showing a -3.8% decrease compared to the previous period’s -2.3% (revised from -3.0%).
The seasonally-adjusted retail card spending reached its lowest point since August 2022. Notably, spending on durable goods experienced the most significant decline, dropping by $11 million NZD.
CRUDE OIL – WTI Stays Near $79.50 Amid Canada Wildfire Concerns
The Wildfire affected Western Canada last day and more fire fighters in the British Columbia area where Oil field closer to the region. This Wildfire fears the Oil Supply of 3.3 Million barrels per day will be affected from Canada side. So Oil prices are rose to $79.50 last day.
XTIUSD Oil price is moving in the Ascending channel and the market has reached the higher low area of the channel
West Texas Intermediate (WTI) crude oil prices are hovering around $79.50 per barrel during the Asian trading session on Tuesday. These price movements are driven by concerns over potential disruptions in crude oil supply due to wildfires raging in remote western Canada. The fires have raised apprehensions about the country’s oil production capacity, which stands at 3.3 million barrels per day (bpd). Firefighters are racing against time to contain the blazes in British Columbia and Alberta, areas close to the heart of Canada’s oil sands industry.
Moreover, oil supply concerns are compounded by statements from Hayan Abdul Ghani, Iraq’s Deputy Prime Minister for Energy Affairs and Minister of Oil, reaffirming Iraq’s commitment to the voluntary oil production cuts agreed upon by the Organization of the Petroleum Exporting Countries (OPEC).
In the United States, Federal Reserve (Fed) officials have indicated that interest rates may remain elevated for an extended period. This stance, aimed at addressing inflationary pressures, could potentially impact economic growth and dampen oil demand in the world’s largest oil consumer, the US. Fed Vice Chair Philip Jefferson reiterated this position on Monday, advocating for maintaining current interest rates until signs of easing inflation become apparent.
Investor focus is also on the upcoming release of the OPEC Monthly Market Report (MOMR), which analyzes key factors influencing the global oil market and provides insights into crude oil market trends for the coming year. Additionally, attention will be on the API Weekly Crude Oil Stock report, offering detailed data on US and regional refinery operations, as well as the production of major petroleum products.
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