Last week everyone was in anticipation of the US PCE price index report, which is the FED’s favourite, however the week started with some negative economic numbers. The European and US manufacturing and services came mostly softer, with manufacturing falling deeper in recession in the Eurozone, which shows that the global economy is still weak, despite some positive numbers recently.

The headline number for the US Q1 GDP also came in lower,  however, the underlying components were quite solid, with the GDP price index jumping to 3.1%, which indicated a stronger PCE reading for Friday. The Australian CPI inflation also jumped to 3.1%, however that didn’t help the Aussie much. The PCE inflation on Friday leaned on the stronger side again, which helped the USD turn bullish, while this week’s FOMC meeting will probably push it higher.

Today’s Market Expectations

This week the FOMC meeting will be the highlight in financial markets, with no expectations for a move this time, while the odds for a June cut have declined considerably. The uncertainty remains about how many rate cut they will deliver in 2024.

Monday:

• Spanish Flash CPI for April
• German Preliminary CPI for April
• Eurozone Sentiment Survey for April

Tuesday:

• FOMC meeting begins, with an announcement scheduled for May 1st
• Japanese Retail Sales and Industrial Output for March
• Chinese Caixin Manufacturing Final PMI for April
• French Flash CPI for April
• German Flash GDP for Q1
• Eurozone Flash CPI and Flash GDP for Q1
• US Employment Wages for Q1 and Case-Shiller Index for February
• US Chicago PMI for April
• New Zealand Jobs for Q1

Wednesday:

• FOMC Meeting
• UK and US Manufacturing Final PMIs for April
• US ADP National Employment for April
• US ISM Manufacturing PMI for April
• US JOLTS Job Openings for March

Thursday:

• Swiss CPI for April
• Eurozone Manufacturing Final PMI for April
• US Durable Goods for April

Friday:

• Final PMIs for Services and Composite sectors in Eurozone, UK, and US for April
• US Jobs Report for April
• US ISM Services PMI for April

Forex Signals Update

Last week the volatility remained mostly low, even for Gold which traded in a range after retreating from the highs previously. Only on Friday the volatility picked up after the US PCE inflation report. As a result we opened a limited number of forex signals at 12, with 6 winning trading signals and four losing ones, while one remains open.

Selling Gold at the Top of the Range

Gold made new highs earlier this month, climbing above $2,400 a few times, but it retreated lower below $2,300 early last week. However the price climbed above it and traded mostly in a tight range below $2,350 for most of the week, so we tried to play the range, selling at the top and buying retreats lower.

XAU/USD – 240 minute chart

EUR/USD Reversed Down at the 20 Daily SMA

EUR/USD experienced a reversal around the 1.06 mark two weeks ago, and last week it managed to surpass the crucial barrier level of 1.07, suggesting potential bullish momentum. However, the recent rejection near 1.0750 and the 20-day moving average (grey) suggest notable resistance in that area. Sellers seem to be stepping into the market, setting risk levels above the Fibonacci line, signaling a bearish outlook and the potential for a decline to new lows. However, for confirmation, we’ll need to see a break below the 1.07 level again.

EUR/USD – Daily Chart

Cryptocurrency Update

Bitcoin Not Continuing the Decline

Bitcoin has dipped below the $65,000 mark, after it bounced following the dip below $60,000. Currently BTC is hovering around $62,200, after buyers failed to push the price above the 50 SMA (yellow). This moving average turned into resistance, and forcing BTC to make a lower high, which indicates aretreating period, however, there is strong support at $60,000, were we are planning to buy Bitcoin again.

BTC/USD – Daily chart

Ethereum Holds Above $3,000

Ethereum dropped below the $3,000 mark last week, breaking through the 100-day Simple Moving Average (SMA) on the daily chart. However, it managed to recover and climb back above $3,000. Despite significant gains made by buyers yesterday, the upward momentum halted around the 20-day SMA (grey) and shifted direction downwards.

ETH/USD – Daily chart