

Market Analysis
US Dollar Index
Forecast: Upsurge
Analysis of Fundamentals:
In March, the Personal Consumption Expenditures (PCE) price index surged to 2.7%, surpassing analyst projections of 2.5%, while the core PCE price index aligned with expectations at 2.8%. These figures underscore ongoing inflationary pressures, potentially prompting a more robust response from the Federal Reserve. Such actions are poised to bolster the US dollar.
Technical Analysis:
Examining the 1-hour chart, the US dollar index demonstrates a pronounced upward trajectory within a steep channel. Despite touching overbought levels, the 14-hour Relative Strength Index (RSI) indicates support for a short-term uptrend. Consequently, the US dollar is anticipated to sustain its ascent, targeting levels around $106.20, potentially extending to $106.40. Conversely, any retracement could see the currency aiming for support zones near $105.79 or possibly descending to $105.58.
XAUUSD
Forecast: Decline
Fundamental Analysis:
Gold concluded the week around $2338, marking a 2.3% decline, the most significant single-day drop since December. Recent US data revealed a March core PCE price index surge of 2.8%, surpassing the market's 2.7% expectation. This robust inflation indicator is driving down XAU/USD prices. Investors anticipate heightened volatility this week, particularly as the Federal Reserve signals a reluctance to cut interest rates before summer.
Technical Analysis:
Examining the 1-hour chart, gold appears to be trading within an ascending channel. Consequently, XAU/USD is poised to capitalize on declines toward support levels at $2320 or potentially even $2305. Conversely, a rebound is anticipated towards resistance levels at $2350, potentially extending to $2363.
USDJPY
Forecast: Decline
Fundamental Analysis:
Last Friday, the Bank of Japan opted to maintain its current interest rate, failing to provide a significant boost to the Japanese Yen. Consequently, the USD/JPY pair surged above the $156 mark. Additionally, the release of US inflation data, revealing a core PCE price increase of 2.8% in March—slightly surpassing expectations—further propelled the USD/JPY upwards. This surge breached key resistance levels, culminating in the pair reaching an all-time high of $158 on Friday night.
Technical Analysis:
With the Bank of Japan refraining from intervention and keeping rates steady at 0.1%, market sentiment suggests that intervention is unlikely unless USD/JPY tests the formidable resistance at the $160 level. Notably, the Relative Strength Index (RSI) indicates an extreme overbought condition, signaling potential for a reversal. Conversely, if the price retraces below $156, robust support is anticipated in the range of 155.35-155.30.
EURUSD
Forecast: Upward Movement
Fundamental Analysis:
Last Friday, US inflation data exceeded expectations, prompting a decline in the EUR/USD pair. However, a counteracting force emerged as US Treasury Yields saw a decrease, lending support to the EUR/USD. Early Asian trading on Monday saw the EUR/USD trading stronger, hovering around $1.0710.
Technical Analysis:
Observing the 4-hour chart, it's evident that the EUR/USD has rebounded from the Fibonacci 23.6% support level, indicating a potential uptrend. The next resistance level at $1.0750 aligns with the Fibonacci 38.2% level. Should the pair maintain stability above this point, the subsequent resistance lies at $1.0835, representing the Fibonacci 61.8% level.
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