Yesterday started with New Zealand releasing its inflation data for the January-March quarter of 2024. The Consumer Price Index (CPI) for this period rose by 0.6% quarter-on-quarter (q/q), meeting expectations and slightly higher than the previous quarter’s CPI of 0.5%. On a year-on-year (y/y) basis, inflation was recorded at 4.0%, representing the lowest level since 2021 but still significantly above the Reserve Bank of New Zealand’s (RBNZ) target. This y/y figure was in line with expectations but lower than the previous reading of 4.7%, indicating a continued downward trend in inflation.

The March UK’s Consumer Price Index (CPI) rose by 3.2% year-on-year, surpassing expectations of +3.1%. This figure is slightly lower than the previous month’s CPI of +3.4%. Meanwhile, the Core CPI, which excludes volatile food and energy prices, increased by 4.2% year-on-year, exceeding expectations of +4.1%. The previous Core CPI stood at +4.5%. Initially, the pound strengthened in response to the slightly stronger-than-expected inflation figures; however, it quickly retreated. Despite the decrease in annual readings compared to February, the Bank of England may still have concerns, especially as core inflation remains above 4%. Prior to this report, there was a 71% probability of a rate move in August, with markets factoring in a total reduction of 42 basis points for the year.

In the US session, the absence of substantial economic data was noticeable, with no major releases affecting the market. However, interest was piqued by weekly oil inventory data, which suggested a larger-than-expected growth in oil inventories. Despite this, petrol and distillate inventories fell. The oil price fell today, spurred by muted geopolitical news from Israel and Iran. The drop in tensions contributed to a more peaceful market environment in terms of potential regional disputes.

Today’s Market Expectations

Today opened with the employment figures from Australia.

The US Jobless Claims report remains one of the most significant weekly releases to watch since it provides a more timely signal of the condition of the labour market. This is because a deteriorating labour market increases the likelihood of disinflation to the Fed’s objective. However, a resilient employment market may make meeting the aim more challenging. Initial Claims continue to meander near cycle lows, while Continuing Claims remain stable around the 1800K level. There is no consensus at the time of writing, however the previous week had Initial Claims at 211K vs. 215K predicted and Continuing Claims at 1817K vs. 1800 expected.

Forex Signals Update

Yesterday the US Dollar retreated against most major currencies and the volatility was low in most forex majors, while in Gold the volatility remained high. We opened 6 trading signals in total, ending up with 3 losing ones and 3 winning forex signals in total after getting caught up in the volatility and the bounces.

MAs Keeping Gold Bullish

Despite a slight retreat to $2,355 this morning, representing a loss of approximately 1%, gold’s moving averages held as support. From a technical standpoint, the precious metal remains bullish. The 50-period Simple Moving Average (yellow) acted as support on the hourly chart (H1), and after forming a doji candlestick pattern, which is a bullish reversal signal, the price began to bounce higher. This suggests that buyers are stepping in to support the price, potentially signaling further upside momentum in the near term.

XAU/USD – 240 minute chart

AUD/USD Stays Below 0.65

The AUD/USD pair maintains its bearish trajectory, staying below the 0.65 level. This downward movement reflects a prevailing risk-averse sentiment in the market, largely influenced by heightened geopolitical tensions, particularly in the Middle East. However, the Australian Dollar (AUD) saw a reversal of three consecutive losses yesterday, benefiting from a corrective rebound in the US Dollar (USD). This rebound caused the AUD/USD pair to test the resistance-turned-support level at 0.6450.

NZD/USD – 60 minute Chart

Cryptocurrency Update

Bitcoin COntinues to Consolidate Between 60k and 70K

Bitcoin’s price has recently dropped below the $60,000 threshold, marking its lowest point since the beginning of March. Currently hovering around $61,200, the cryptocurrency is approaching its lowest level in over a month, which was approximately $59,300. Should this level be breached, the next downside target is anticipated. On the daily chart, the 100-day moving average serves as the initial support, positioned at $57,850.

BTC/USD – Daily chart

Ethereum Slips Below $3,000

The 50-period Simple Moving Average (SMA) was broken as a support level for Ethereum (ETH), as indicated by the yellow line, slowing down its upward trajectory. Currently, the 100-period SMA (green) acts as a barrier, suggesting that sustained buying pressure or a lack of selling momentum may propel Ethereum’s price beyond this level. Additionally, a bearish reversal occurred late last week, pushing the price down below $3,000. These technical patterns suggest a battle between buyers and sellers in the Ethereum market, with the 100 SMA acting as support and the 50-period SMA which might be turning into resistance.

ETH/USD – Daily chart