Last week started positively with Chinese manufacturing PMMI coming out of contraction, while the services activity which was already in expansion improved further. The data from the US was also positive, with employment figures showing that the labour market is in solid shape, as highlighted in the NFP report on Friday, but the USD couldn’t benefit from it.

The release of the non-farm payrolls report led to a significant spike in the US dollar initially, as the data and details were notably robust with 303K new jobs, exceeding expectations of 212k jobs. The unemployment rate ticked lower too, to 3.8% in March, despite an increase in the participation rate, while wages would have been even higher if not for rounding adjustments and modifications to previous figures.

Interestingly, despite the strong dollar reaction at first, equity futures remained in positive territory, signaling resilience in the stock market and weakness in the USD, which gave back gains pretty fast. However, there was a notable downturn in risk trades on late Friday due to concerns about potential conflict in the Middle East. Fortunately, the situation stabilized, and stock markets experienced a surge. Despite the hawkish tone of recent Fedspeak, market sentiment remains highly contingent on incoming US economic data, reflecting the ongoing uncertainty and cautiousness among investors.

This Week’s Market Expectations

This week starts low in the first two days, with the economic calendar being light, but then we should see the volatility pick up as the economic events start rolling in. We have three major central bank meetings, but there are no expectations for any policy change. However, there should be hints and comments about the start of the rate-cut policy soon, so the NZD, the CAD and the Euro are in danger. Although, the US CPI inflation might actually steal the show.

Monday:

• Japan Wage data: Provides insights into wage trends in Japan, which are crucial for assessing consumer spending and inflationary pressures.
• Swiss Unemployment Rate: Indicates the percentage of the labor force that is unemployed in Switzerland, reflecting the health of the Swiss economy.

Tuesday:

• US NFIB Small Business Optimism Index: Measures the sentiment of small business owners in the US, offering insights into economic conditions and business confidence.

Wednesday:

• RBNZ Policy Decision: The Reserve Bank of New Zealand’s monetary policy decision, including interest rate announcements and policy statements.
• US CPI: Consumer Price Index data for the US, measuring changes in the prices paid by consumers for a basket of goods and services.
• BoC Policy Decision: The Bank of Canada’s monetary policy decision, including interest rate announcements and policy statements.
• FOMC Minutes: Minutes from the Federal Open Market Committee meeting, offering insights into the Federal Reserve’s monetary policy discussions.

Thursday:

• ECB Policy Decision: The European Central Bank’s monetary policy decision, including interest rate announcements and policy statements.
• US PPI: Producer Price Index data for the US, measuring changes in the prices received by producers for goods and services.
• US Jobless Claims: Weekly data on the number of individuals filing for unemployment benefits in the US, reflecting labor market conditions.

Friday:

• New Zealand Retail Sales: Measures changes in the total value of retail sales in New Zealand, providing insights into consumer spending patterns.
• UK GDP: Gross Domestic Product data for the UK, indicating the overall economic performance and growth rate of the country.
• US University of Michigan Consumer Sentiment: Consumer sentiment index for the US, reflecting consumer confidence and attitudes towards the economy.

Forex Signals Update

Last week the US dollar remained mostly bearish while Gold continued to surge higher, making new highs above $2,300. However, there were quite a few strong reversals, especially in the second half of the week, which caught up on the wrong side. We opened 19 forex signals in total, with 16 of them reaching the targets. at the end of the week, we ended up in break even, with eight winning signals and eight losing ones.

Gold Closes the Week at the Top

The recent surge in gold prices has been remarkable, with the precious metal demonstrating strong bullish momentum. Breaking through the $2,300 mark and aiming for $2,500 reflects the confidence and resilience of buyers in the gold market. The willingness to intervene and support the market during downturns underscores the perception of gold as a safe-haven asset, particularly during times of economic uncertainty. The rise to a new high of $2,330 further reinforces the bullish sentiment in the gold market, signaling continued demand and investor interest. As geopolitical tensions and economic instability persist, GOLD remains an attractive option for investors seeking to hedge against potential risks and preserve wealth.

XAU/USD – 240 minute chart

EUR/JPY Remains Supported by MAs

EUR/JPY has exhibited a strong bullish trend since 2020. Starting from around 114 during the height of the epidemic, the pair has experienced steady upward momentum, punctuated by occasional pullbacks. During these pullbacks, buyers have consistently stepped in to support the market, leading to renewed upward movements and the establishment of new highs. This resilience in the face of negative interest rates maintained by the Bank of Japan highlights the underlying strength of the bullish sentiment surrounding the EUR/JPY pair. Moving averages, such as the 50-period simple moving average (SMA), have played a crucial role in providing dynamic support during these pullbacks. Forex traders often rely on these moving averages as visual indicators to identify potential entry points. The fact that the EUR/JPY pair tested the 50-period SMA last week but rallied higher, with the moving average holding as support, underscores its significance in guiding trading decisions and confirming bullish momentum.

EUR/GBO – H1 Chart

Cryptocurrency Update

Bitcoin Stays Close to $70K

The struggle to sustain BITCOIN ‘s price above $70,000 might signify a potential near-term peak for the cryptocurrency. This threshold serves as a critical resistance level, suggesting a waning bullish momentum. If buyers fail to maintain prices above this mark, it could signal a decrease in demand and a shift in market sentiment. Additionally, the presence of a bearish reversal pattern on the daily chart supports the notion of a possible price reversal. Such patterns often indicate a transition from bullish to bearish sentiment, typically preceding further price declines. However, the price managed to hold above $65,000 and bounced off the 50 SMA, returning to $70K again.

BTC/USD – Daily chart

Ethereum Consolidate Above $3,000 

The 50-period Simple Moving Average (SMA) has emerged as a significant support level for ETHEREUM , underscoring its importance in forecasting price movements. As Ethereum’s price nears the 50-period SMA, the bounce observed from this level signifies the eagerness of buyers to participate in the market and uphold the price. However, Ethereum has encountered resistance in proximity to the 20-period SMA, hindering further upward momentum. The 20-period SMA is acting as a barrier to higher price advancement, indicating the presence of either selling pressure or insufficient bullish momentum to propel Ethereum’s price beyond this threshold. Additionally, a negative reversal occurred on Tuesday, causing the price to approach $3,000 but ultimately halting above the March lows. These technical dynamics suggest a tug-of-war between buyers and sellers in the Ethereum market, with the 50-period SMA offering support while the 20-period SMA presents resistance. We are closely monitoring these moving averages and price levels for potential shifts in market sentiment and direction since we are long on ETH/USD already.

ETH/USD – Daily chart