Market Analysis

XAUUSD

Fundamental Analysis:

Gold prices experienced an uptick in Asian trading today, bolstered by indications of a moderating U.S. economy, which spurred some interest in the precious metal. However, the gains were tempered as investors awaited further signals for potential interest rate adjustments from crucial inflation data. Despite this upward movement, gold is on track for notable weekly losses following a significant decline from recent highs, with market sentiment adjusting to reduced expectations for imminent U.S. rate cuts.

Technical Analysis: 

From a technical standpoint, the price of gold encountered resistance after testing the support level within the previously established bullish channel. Briefly dipping to $2325.90 per ounce, there are indications suggesting a potential resumption of a downward correction. Should gold breach the $2325.90 per ounce mark, it could pave the way for further decline towards the next target of $2260.60 per ounce.

USDJPY

Fundamental Analysis:

USD/JPY saw continued upward momentum following the release of the March core Personal Consumption Expenditures Price Index (PCE), the preferred inflation gauge of the US Federal Reserve (Fed). The US Core PCE exceeded expectations, registering a year-on-year increase of 2.8% compared to analysts' anticipated 2.6%, as reported by the US Bureau of Economic Analysis (BEA).

After reaching $160, USD/JPY experienced a substantial sell-off, retracing back to 155 before recently rebounding to around 156. The expectation is for USD/JPY to revisit 158 before potentially retracing to previous support levels.

Factors Influencing the Market:

US Monetary Policy: The decisions made by the Federal Reserve regarding interest rates have a significant impact on the strength of the USD. An increase in interest rates typically bolsters the USD against the Yen, given Japan's reputation for low interest rates.

Bank of Japan Intervention: There are indications that the Bank of Japan (BOJ) may intervene to weaken the Yen if it appreciates excessively. Recent reports suggest the possibility of taking short positions based on anticipated BOJ intervention and the presence of overbought technical indicators.

Japan's Economic Health: The relative strength of the Japanese economy can influence the value of the Yen against the USD.

Technical Analysis:

The Relative Strength Index (RSI) on the daily chart signals an overbought market condition. This prompted significant selling pressure at the beginning of the current trading week. It is anticipated that the 157.00 level will provide substantial support, particularly as it coincides with the breakout point of the ascending channel. This juncture holds significance, as a decisive breach could shift the short-term trajectory in favor of sellers, potentially leading to a notable downturn in prices.

EURUSD

Fundamental Analysis:

European equity markets experienced gains on Monday, driven by a wave of notable corporate earnings reports. Investor focus shifted towards the imminent release of crucial German inflation figures.

In economic developments, Spain witnessed a 3.3% annual increase in consumer prices for April, marking a monthly uptick of 0.7%. This figure continued to surpass the European Central Bank's targeted 2% medium-term inflation rate. However, greater attention was directed towards the forthcoming German state CPI data, given Germany's significant economic influence within the eurozone.

Technical Analysis:

Turning to technical indicators, the 14-period Relative Strength Index (RSI) currently registers between 40.00 and 60.00, indicating a potential period of stability. The EUR/USD pair is endeavoring to maintain levels above 1.0700 after a gradual ascent from 1.0600. Nevertheless, uncertainty lingers regarding future movements, particularly as Euro bulls encounter resistance around the 20-day Exponential Moving Average (EMA) situated near 1.0720.

BTCUSD

Fundamental Analysis: 

Bitcoin's recent halving event on April 20 stirred anticipation for a surge in miner revenue. However, contrary to predictions, the hash price plummeted sharply, currently resting below $50 per PH/s per day.

Technical Analysis: 

On the technical front, Bitcoin's price surged from $61,700 and continues its ascent. With the Relative Strength Index (RSI) indicating sufficient momentum, investors anticipate further gains in the coming hours, with a target projection nearing $67,000.

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