On Wednesday, German Index DAX opened higher after a long weekend due to the Labor Day on Monday. Today's stock market session in Europe brought a continuation of the uptrend. The German DAX (DE30) started strongly after the opening bell and set new highs for this year. However, the momentum did not last long, and a few minutes after the session started, profit-taking occurred, resulting in the DE30 being traded in negative territory.
From the technical analysis point of view, on the chart a false breakout above the consolidation level occurred. After DE30 dropped below the zone around 16,060 points, the decline accelerated and the price touched the EMA100 moving average, where the bulls came into play. If the moving average is defended and a hammer formation appears on the H1 chart, there is a possibility of a retest of resistance levels around 16,060 points. On the other hand, if the formation is invalidated and the price drops below the moving average, a further decline towards last week's lows around 15,830 points cannot be ruled out.
Gold prices confirmed breaching the symmetrical triangle's resistance line and settled with a daily close above it, to resume the main bullish track and head towards achieving positive targets that start by testing the recently recorded high at 2048.70, supported by moving above the EMA50.
Therefore, we are waiting for more expected rise in the upcoming sessions, and the price needs to hold above 1992.20 to guarantee the continuation of the bullish wave, as breaking this level will press on the price to return to the correctional bearish trend again and open the way to visit 1957.30 areas on the near term basis.
Major Asian stock indexes ended the session lower after yesterday's slump on Wall Street.
Chinese and Japanese markets were closed today for holidays.
Retail sales data from Australia came in slightly better than expected. March retail sales came in at 0.4% on a monthly basis, against expectations of 0.3% month-on-month and the previous reading of 0.2% month-on-month.
The Reserve Bank of New Zealand released its latest Financial Stability Report today.
Governor Adrian Orr says that New Zealand's financial system is well placed to handle the higher interest rate environment and international financial disruption.
New Zealand's labor market report for Q1 showed the addition of new jobs and a lower-than-expected unemployment rate.
Data from NZ, combined with the RBNZ's lack of stability concerns, increase the chances of a RBNZ rate hike at its next meeting. That is scheduled for May 24.
NZD/USD rose on the session to highs just above 0.6250.
Bank of Korea Governor Rhee spoke in an interview saying, amongst other points, that it's a little bit premature to talk about a policy pivot.
Across major FX the USD lost ground against a higher JPY, CHF, EUR and GBP. AUD and CAD lagged.
Investors are awaiting a decision on interest rates in the US.
In addition to the Fed decision, today will see the release of the ADP report and the ISM index for services, as well as data on US oil inventories.
Crude oil scored a weak session yesterday. OIL.WTI quotes are on track to test support at the round $70 level.
Gold prices rallied upwards sharply by today's open, as the prices are affected by the FOMC rate hike, to surpass our waited target at 2048.70 and record new historical high at 2080, to hint the continuation of the bullish trend domination on the short term and medium term basis, but we notice that the price declines quickly to settle below 2048.70, which makes us prefer to stay aside until the price confirms its situation according to this level followed by detecting its next destination clearly.
The contradiction between the technical indicators provides another reason for neutrality, as stochastic shows clear negative signals now, while the EMA50 provides the continuous positive support to the price. Note that breaching 2048.7 and holding above it will lead the price to resume the bullish wave and achieve positive targets that reach 2098, while consolidating below it will press on the price to achieve intraday bearish corrections that target testing 2017 areas initially.
Oil prices, including Brent and WTI, dropped more than 5% after yesterday's FED meeting regarding interest rates. Oil.WTI dropped below $69 - the lowest level since March 24, 2023. Prices fell from $71.5 per barrel to as low as $63.6 per barrel. However, prices have rebounded slightly from lows. Higher volatility was caused by rising concerns about the global economy and demand. The re-emergence of US banking problems and OPEC+'s unwillingness to intervene are also contributing factors. The collapse of First Republic Bank has increased the risk of recession in the United States and China's post-COVID demand recovery is slower than expected. The oil producers' calendar remains unchanged, with the next meeting scheduled for June.
Looking at the technical analysis of OIL.WTI on the H4 interval, after midnight the downward trend intensified and a tests of the lows from March occurred at $63.6 per barrel. However, the price decrease was temporary and bulls responded immediately at the support level resulting in a pro-growth hammer formation on the chart. If the upward trend continues, attention should be paid to two resistance levels. The first, at $71.30 is derived from measuring the 38.2% Fibonacci retracement of the last downward wave. The second resistance level is around $74 and set at the previous local lows and the next Fibonacci retracement - 50%. On the other hand, If the bearish sentiment extends, the support level should be at $66.30, which is the upper limit of the 1:1 formation breakout.
The DAX futures / DE30 is pulling back from the yearly high this week and testing the previous week's low.
W1 chart
The horizontal trend line at 15,816 points seems to be holding. This offers the chance for a recovery - as in the past two weeks. A break to the downside could in turn mean targeting the breakout level at 15,698 points - then later the interim high at 15,463 points.
M15 chart
The sell-off has been stopped. However, this does not change the downward trend structure. As long as the DAX does not have higher highs and higher lows above the moving averages and a change in direction is confirmed by a crossover, the index is vulnerable to further losses.
Gold price continues its bullish trend trajectory on Tuesday. The price of gold is currently trading around $2,030 per ounce, which is a +0.41% daily change. The upward trend channel has provided continuous positive support to gold prices - marked with dark blue parallel lines.
The stochastic indicator is beginning to gather positive momentum, indicating a potential upward movement in the price of gold. The resistance level near the range of $2,060-2,070, marked with a green line, has been tested multiple times, suggesting a strong price action and weakening resistance.
Based on these factors, it is probable that the Gold price continues to rise in the upcoming days. The first positive target is expected to be around $2,049. A break of this level could push the price above $2,068 as the next target. However, a break below the support level of $2,000 would be considered as a negative factor and could initiate a bearish correction wave. In such a scenario, the next support line is in the range of $1,960-1,970. The overall structure is bullish for gold.
Traders and investors should monitor the price action around these key levels and wait for confirmation of a breakout or reversal before making trading decisions. Technical indicators and additional market analysis could provide further insights into the potential direction of gold prices.
Gold price continues its bullish trend trajectory on Tuesday. The price of gold is currently trading around $2,030 per ounce, which is a +0.41% daily change. The upward trend channel has provided continuous positive support to gold prices - marked with dark blue parallel lines.
The stochastic indicator is beginning to gather positive momentum, indicating a potential upward movement in the price of gold. The resistance level near the range of $2,060-2,070, marked with a green line, has been tested multiple times, suggesting a strong price action and weakening resistance.
Based on these factors, it is probable that the Gold price continues to rise in the upcoming days. The first positive target is expected to be around $2,049. A break of this level could push the price above $2,068 as the next target. However, a break below the support level of $2,000 would be considered as a negative factor and could initiate a bearish correction wave. In such a scenario, the next support line is in the range of $1,960-1,970. The overall structure is bullish for gold.
Traders and investors should monitor the price action around these key levels and wait for confirmation of a breakout or reversal before making trading decisions. Technical indicators and additional market analysis could provide further insights into the potential direction of gold prices.
Crude oil price faces clear negative pressure to move below 72.80 level now, which urges caution from the upcoming trading, as consolidating below this level will stop the expected bullish trend and put the price under additional negative pressure that targets visiting 71.55 as a next negative station, while the price needs to step above 72.80 to manage to resume the bullish wave that its targets begin by breaching 73.80 to confirm heading towards 76.10.
The expected trading range for today is between 71.50 support and 75.00 resistance.
Silver price didn't show any strong move since morning, thus, no change to the expected bullish trend scenario on the intraday basis, which targets 26.07 followed by 26.90 levels as next main stations, supported by the EMA50 that continues to carry the price from below, reminding you that the continuation of the bullish wave depends on the price stability above 25.50 and 25.30 levels.
The expected trading range for today is between 25.30 support and 26.10 resistance.
Bearish pressure on Bitcoin is increasing as Friday's option expiration approaches. The bears could cause the price to settle below $27,000 allowing options market speculators betting on declines to cash in on record profits. Bitcoin has been pushed below $30,000 several times in April and today the cryptocurrencies are recording another weak day:
In addition to the uncertainty surrounding the BTC network's technical problems (soaring fees and tens of thousands of outstanding transactions), sentiment also weakened after still unconfirmed reports of a BTC sale by the US, which holds significant reserves of seized BTC from SilkRoad;
Investors are assessing the impact of a potential economic slowdown and Fed policy on cryptocurrencies. Today's claims came in stronger than expected, showing a strong U.S. labor market. This one may cause the Federal Reserve to stay on a hawkish track longer which does not seem positive for risky assets;
The call to put ratio (the ratio between call and put options) at 1.65 shows a lack of balance between bulls and bears. There is $560 million in call options and $340 million in put options. Bullish options have been by far the more popular in recent weeks, but in the end it is the supply side that gets the upper hand
It is now in the sellers' interest to get the lowest possible price before the options expire tomorrow. A drop below $27,000 could bring the bears as much as $230 million in profits, if the bulls manage to maintain the current level sellers will earn about $120 million according to Coinglass estimates.
Bitcoin chart, H1 interval. The price has fallen below the SMA100, SMA200 and the 23.6 Fibonacci retracement of the March 10 upward wave, making it likely that demand will only be more active at the 38.2 Fibo level, near $26,650.
EURNZD is one of the G10 FX crosses that experienced large moves so far today. The pair is trading higher as EUR got supported by hawkish comments from Joachim Nagel, Bundesbank President and ECB member. Meanwhile, NZD is the worst performing G10 currency after RBNZ lowered 1- and 2-year inflation expectations.
Starting with EUR news, Joachim Nagel said that inflation still remains too high and too strong. He continued saying that central bankers need to be sure that the inflation wave ends before they decide to pause policy tightening. He stressed it loud and clear that the latest rate hike delivered by the ECB won't be the last. While Nagel sounding hawkish is nothing new as he is one of the biggest ECB hawks, comments suggesting that more rate hikes are coming have been delivered throughout the week by various ECB members throughout this week.
Moving onto NZD news, the Reserve Bank of New Zealand lowered its 1- and 2-year ahead inflation expectations. 1-year expectations dropped from 5.11 to 4.28% while 2-year expectations were lowered from 3.30 to 2.79%. This can be seen as a dovish move as lower inflation expectations suggest that RBNZ is progressing in its fight against inflation and may not need to raise rates too much. Money markets currently see just 25 basis points of additional tightening through July.
Taking a look at EURNZD chart at D1 interval, we can see that the pair has halted recent sell-off at 50% retracement of the upward impulse launched in mid-December 2022. Recovery move was launched yesterday and gains accelerated today. The pair climb above resistance zone in the 1.7420 area, marked with 38.2% retracement and is looking towards a test of the 50-session moving average (green line).
Stock traders launched a new week in upbeat moods with indices from Asia-Pacific finishing today's trading higher and European benchmarks advancing as well. US index futures also trade higher with Russell 2000 (US2000) leading with 0.7% gain and Nasdaq-100 (US100) lagging behind others with 0.3% gain. The week ahead is slightly lighter in terms of data and macro events than previous ones but traders will be nevertheless offered some interesting reports. US retail sales data for April tomorrow at 1:30 pm BST as well as Powell's speech on monetary policy on Friday, 4:00 pm BST are top events to watch in US macro calendar for the week. US tech shares may see some moves later into the week when Alibaba Group reports earnings on Thursday.
Taking a look at US100 chart at H1 interval, we can see that the index managed to halt recent declines at 13,330 pts support zone, marked with 23.6% retracement of the upward move launched in late-April, lower limit of the market geometry as well as the upward trendline. Bouncing off this area confirmed the bullish sentiment and index started to recover recent losses. A break above 50-hour moving average (green line) was delivered today and now the way for a test of recent highs just shy of 13,500 pts mark is open.
Stock traders launched a new week in upbeat moods with indices from Asia-Pacific finishing today's trading higher and European benchmarks advancing as well. US index futures also trade higher with Russell 2000 (US2000) leading with 0.7% gain and Nasdaq-100 (US100) lagging behind others with 0.3% gain. The week ahead is slightly lighter in terms of data and macro events than previous ones but traders will be nevertheless offered some interesting reports. US retail sales data for April tomorrow at 1:30 pm BST as well as Powell's speech on monetary policy on Friday, 4:00 pm BST are top events to watch in US macro calendar for the week. US tech shares may see some moves later into the week when Alibaba Group reports earnings on Thursday.
Taking a look at US100 chart at H1 interval, we can see that the index managed to halt recent declines at 13,330 pts support zone, marked with 23.6% retracement of the upward move launched in late-April, lower limit of the market geometry as well as the upward trendline. Bouncing off this area confirmed the bullish sentiment and index started to recover recent losses. A break above 50-hour moving average (green line) was delivered today and now the way for a test of recent highs just shy of 13,500 pts mark is open.
Hawkish comments from a number of Fed members as well as better-than-expected macro data from the United States is providing support for the US dollar today. Fed members speaking today have been reluctant to speak about any immediate rate cuts and instead hinted that rates may rise further if no sufficient progress on inflation is made. On top of that, retail sales and industrial production data for April, which was released today in the evening, turned out to be better-than-expected with retail sales ex-autos and gas jumping 0.6% MoM higher (exp. 0.2% MoM) and industrial production increasing 0.5% MoM (exp. 0.0% MoM). As a result, USD is the best performing G10 currency today. This in turn is putting pressure on precious metals, which are also benefitting from an increase in uncertainty amid lack of agreement on US debt ceiling.
Taking a look at GOLD at D1 interval, we can see that the price of this precious metal is dropping more than 1% today and has broken below the psychological $2,000 per ounce mark. A near-term support zone to watch can be found in the $1,980 area, where the 50-session moving average (green line) and 38.2% retracement of the upward move launched at the turn of February and March 2023 can be found. A break below this hurdle would pave the way for a test of the 50% retracement in the $1,940 area. However, a key support zone to watch can be found around 1% lower in the $1,922 area, where the lower limit of the Overbalance structure can be found.
Indices from Asia-Pacific struggles for direction today, with mixed performance from leading markets. This is a potential response to mixed closing of Wall Street session on Monday when US500 closed with +0.11% gains
S&P/ASX 200 gains 0.1%, Kospi trades 0.6% higher and Nifty 50 declines 0.1%. Indices from China trade fell 0.3% - HKComp performed slightly better.
The Japanese index adds 0.35% and is trading at 30,100 points. The NIKKEI 225 index is one of the best performing indices from the last couple of days and now is trading near an all time high after strong economic data and positive comments from country leaders.
DAX futures point to a slightly higher opening of the European cash session today, with DE30 trading 0.3% higher at 15.964 points.
Energy commodities are trading sideway - Brent and WTI trade 0.2% higher while US natural gas prices falls 0.6%
Precious metals continue weaker performance with gold trading once again below $2,000 per ounce and silver at $23,6 per ounce - over 10% lower than last month highs
The dollar held steady in trading, supported by positive US data, particularly in retail sales. USDJPY maintained its upward push above 136.00. Dollar pairs trade with limited volatility, which may persist during the European trading session.
Fed's Bostic highlights that if unemployment rises and inflation remains sticky, the Fed will face enormous pressure. The Fed must maintain a strong commitment to inflation, although it is unclear what actions they would take in the event of a debt default.
Japanese shares extended their gains due to stronger-than-expected economic growth, boosting market optimism. Goldman Sachs suggests that Japan's markets may be on the verge of a rare bull market. Wall Street strategists attribute the gains to corporate reforms and easy monetary policy, predicting another 10% increase in shares.
Japan's economy grew at its quickest rate in three quarters, according to the reading, which showed an annualized rate of GDP growth for Q1 at 1.6% versus 0.7% expected.
Economy Minister Goto emphasizes the need to carefully watch the impact of price rises on consumers. Future economic growth is expected to be moderate, supported by rising salaries, better attitudes, and company investment. The Japanese government approved an electricity bill rise, expected to keep inflation above 2% for longer than expected.
The BoJ may consider to revise its Yield Curve Control (YCC) policy at the upcoming June meeting. The stronger-than-expected GDP outcome supports the view that the BoJ could take a step toward normalization soon.
NIKKEI 225 index is one of the best performing indices. Price is near the all time high level at 30,500 points.
Japanese NIKKEI 225 is on the rise trading near an all-time high following positive GDP data and supportive comments from country leaders. The Japanese economy grew at a faster-than-expected rate of 1.6% in Q1, surpassing the projected 0.7% growth. This strong economic performance has boosted market optimism.
The recent earnings season has been a positive catalyst for Japanese equities, supported by Warren Buffett's endorsement and improvements in corporate governance. The projected operating profit growth in the fiscal year ending March 2024 is about 6% for Tokyo Price Index (Topix) companies. Additionally, Goldman Sachs sees a potential in the Japan market, attributing the gains to corporate reforms and easy monetary policy.
The Bank of Japan (BoJ) may consider revising its Yield Curve Control (YCC) policy in the upcoming June meeting, supported by the robust GDP outcome. However, the BoJ is likely to remain patient in taking any policy actions and may wait until next year to make rate hikes, as they review recent developments in inflation and other macroeconomic data. Current interest rate is maintained at -0.1% level and has remained unchanged since 2016. The argument for the YCC policy to remain unchanged is the government's approval of an electricity bill rise, which likely will support inflation to stay above 2% for a longer period.
JAP225 (Nikkei 225) index is trading at 30,100 points, which is near its all-time high of 30,500. The price is also approaching the upper line of an uptrend channel (marked with blue line) that started in early March. The next significant resistance level should be expected at 30,500, indicating a potential target for further price gains. On the other hand, the support levels are identified at 29,300 and 28,300, which can act as price floors in case of a downward movement.
The MACD indicator, a momentum oscillator, indicates a strong bullish momentum without any signs of divergence at the moment. This suggests that the upward trend may continue, supporting the bullish outlook for the Nikkei 225 index. Traders and investors will be closely monitoring the resistance and support levels for potential trading opportunities.
Crude oil price shows some slight bullish bias now, affected by grand support (62.3 - 62.7) current positivity, and it might test the key resistance (82.29 - 85.31) .55 before turning back to decline again.
H4: Noting that the EMA50 meets this resistance to add more strength to it.
Until now, the bearish trend scenario still valid and active as long as (69.56) area remains intact, waiting to visit (72.7 - 73.7) area as a next main target, noting that breaching 73.7 will lead the price to recover and achieve gains that start at 76.7 direct.
Turkish media reports that Russian and Ukrainian negotiators with help from Turkey and the United Nations are closing in on an extension to Black Sea grain deal. This has triggered a drop on the WHEAT market with grain price erasing all of today's gains. Nevertheless, the news has not been confirmed yet and Russian media reported over the weekend that any extensions are likely to be just for 60 days (similarly to previous extensions).
European indices rally, DE30 closes in on all-time highs
European indices are rallying at the beginning of today's cash trading session on the Old Continent. This comes after a stellar Wall Street session yesterday that saw major US indices gain over 1%, with small-cap Russell 2000 jumping over 2%. Optimism on Wall Street yesterday was triggered by upbeat comments on US debt ceiling negotiations - US president Biden said that talks are progressing and he will have more news on the matter on Sunday, when he returns from G7 summit, while US House Speaker McCarthy said that default is off the table and reaching a deal this week is doable.
Major blue chips indices from Europe are trading over 0.5% higher on the day. German DAX deserves a special mention as the index outperforms regional peers with 1.5% gain. Taking a look at DAX futures (DE30) we can see that price broke above a recent trading range and reached a fresh 1-year high today. Moreover, the index is currently trading just 0.4% below all-time highs from November 2021.
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