Today market outlook

[Zerologic]

Gold prices still hold above $3000

Although yesterday the gold price drew a bearish candle, the gold price still holds above the $3000 price level. Yesterday the price drew a small-bodied bearish candle with movement within the previous candle price range. The price has formed a high of 3033, a low of 3002, closing of 3011.

The USD seems to still maintain its short-term broad strength, causing this precious metal to trade slightly above the lowest level in the previously mentioned daily trading. The dollar index (DXY) drew a bullish candle extending its previous increase and has reached a high of 104,444. The RSI is at level 42, increasingly leaving the oversold zone level.

Expectations of Trump's more targeted tariffs than previously threatened provide support for the strengthening of the dollar index. Most recently Trump will announce tariffs on cars, aluminum, and pharmaceuticals in the near future.

Meanwhile, the US PMI data for March was released yesterday, the manufacturing PMI was 49.8, lower than expected at 51.9 from the previous revision of 52.7. Meanwhile, the Service PMI rose to 54.3, higher than the expected 51.2 and the previous revision of 51.0.

There are no relevant economic data releases today, but the US will release the Personal Consumption Expenditure Price Index (PCE) figure on Friday. The PCE is a key indicator that the Fed prefers when making interest rate decisions.

 

[Zerologic]

Waiting for UK inflation data, GBP/USD rose slightly above the middle band

The GBPUSD pair has still been moving in the price range of 1.28705 - 1.30144 since March 11 between the middle band and the upper band line. Yesterday the pair drew a small-bodied bullish candle with a little shadow on the top and bottom of the candle. The price formed a high of 1.29669 low of 1.29020, closing at 1.29431, although slightly up, but generally still moving in the previous week's range.

The dollar index (DXY), which tracks the USD against six major currencies, fell slightly yesterday at a low of 103.944 from the previous high of 104.467. DXY closed at 104.211. The DXY movement is still below the EMA 20, which may be a dynamic resistance. While the RSI is at level 41 with the potential for a downtrend that may continue.

In the US, according to Adriana Kugler, the Governor of the Federal Reserve, stated that in certain categories, there is evidence that inflation has increased again in recent months. Another Fed official, New York Fed President John Williams, said that businesses and households are experiencing increasing uncertainty about the future of the economy.

US inflation concerns may increase and push the Fed to keep interest rates unchanged, which may increase USD adoption. According to the CME group Fedwatch tool, the Fed's likelihood of leaving interest rates unchanged in the current range of 4.25%-4.50% is 87.1%, and the possibility of a 0.25% cut is only 12.9% at the May 7 meeting later.

Today, investors will focus on UK inflation data, CPI year-on-year is estimated to remain at 3.0% the same as the previous revision. The BoE also maintained the latest interest rate of 4.50% issued in March 20. Besides CPI, investors will also pay attention to the Annual Budget Release, which will outline the government's budget for the year.

 

[Zerologic]

EUR/USD is more down ahead of US economic data

Yesterday, EURUSD crossed the middle band line and drew a bearish candle extending the previous decline since March 19. The price formed a high of 1.08027, a low of 1.07440, and a close of 1.07537. The economic outlook in several European countries with negative sentiment seems to be the reason for the weakening of the Euro against the US dollar lately. The trade war echoed by US President Donald Trump is expected to also have an impact on Europe. Trump has repeatedly hinted that he will impose tariffs on Europe because it does not buy enough American goods.

The dollar index (DXY) still maintained its strengthening yesterday after dropping to a low of 103.944. Yesterday, DXY rose to 104.683, trying to cross the EMA 20 from the downside. The RSI indicator drew an upward channel pointing to level 47, indicating that the price is increasingly leaving the oversold zone level.

In Europe, expectations of central banks to lower interest rates are increasing, amid economic risks caused by Trump's tariffs on the continent. With low interest rates, it is hoped that it can boost the domestic economy when external conditions are not supportive.

Germany, one of the developed countries in Europe, has extended the borrowing limit to increase defense spending and create a 500 billion Euro infrastructure fund. This could support the circulation of the Euro in the European region, which in turn supports the domestic economy.

On the other hand, ECB President Christine Lagarde tried to ease concerns and stated that the inflationary impact of the trade war was only temporary and would subside in the medium term.

Investors and traders today will pay attention to US economic data. According to Forexfactory, there will be a release of the Final GDP per quarter, which is estimated to be the same as the previous revision of 2.3%. The Final GDP Price Index is estimated at 2.4%. Meanwhile, the Unemployment Claims data is expected to be 225k from the previous revision of 223k.

 

[Zerologic]

Trump's tariffs threaten the auto industry, USD/CAD slightly up, seeking a new balance.

The USDCAD pair drew a bullish candle yesterday, the Canadian dollar weakened amid US President Donald Trump's new tariff threat on cars manufactured outside the US to be subject to a 25% tariff. Trump's new tariffs will certainly get a response from his trading partner countries, including Japan. Japanese Prime Minister Shigeru Ishiba said his cabinet was considering all kinds of retaliatory measures.

Canadian Prime Minister Mark Carney called Trump's tariffs a direct attack on workers in his country. He said the cabinet would meet on Thursday to discuss retaliatory measures.

In line with Trump's statement, the dollar index (DXY), which tracks the USD against six major currencies, briefly rose to 104.653 but fell later to a low of 104.070 with a close of 104.279. The DXY is moving near the 20 EMA, which seems to act as dynamic resistance at a given time.

US final quarterly GDP data showed a value of 2.4% higher than the expected 2.3%, but the Final GDP Price Index fell 2.3% from the expected 2.4%. While unemployment claims fell 224 from the expected 225k.

Today, investors and traders will focus on the Core PCE Price Index data, which is the Fed's most preferred inflation data for interest rate policy. The PCE index is estimated at 0.3%. On the other hand, Canada will release GDP which is estimated to increase 0.3% from the previous 0.2%.

 

[Zerologic]

Gold prices hit new record highs amid trade war fears

On Friday, gold prices soared higher, extending gains by drawing a long-bodied bullish candle with almost no shadow. Prices formed a high of 3086, a low of 3054, and a close of 3084.

Investors appear to still be fearful of the impact of the trade war caused by President Donald Trump's tariff policies. Market sentiment is pessimistic as traders prepare for April 2, which was dubbed Liberation Day by US President Donald Trump, who signed an executive order imposing a 25% tariff on all cars imported into the US. This has sparked reactions around the world, especially in Canada and the European Union (EU), which have begun preparing retaliatory measures against the move.

Looking at the PCE data released on Friday, it showed actual 0.4% higher than expected 0.3%. The Bureau of Economic Analysis report showed that personal consumption expenditures (PCE) increased by $87.8 billion (0.4%). Despite the increase in core PCE, San Francisco Fed President Mary Daly expects the Fed to make two interest rate cuts in 2025.

The dollar index (DXY), which tracks the US dollar against six other major currencies, dropped to 104.011 in response to US data on Friday. Previously, the DXY was at a high of 104.498. Meanwhile, according to the CME group's Fedwatch tool, at the Fed's May 7 meeting, the Fed is expected to maintain interest rates at 4.25%-4.50% with a probability of 83.8%, and a cut probability of 4.%-4.25%, only 16.2%.

Today's economic data that may be of concern to investors is the China Manufacturing PMI, which is estimated to be the same as the previous period at 0.5%.

 

[Zerologic]

AUD/USD drops ahead of RBA rate announcement

The AUDUSD currency pair depreciated ahead of the RBA rate announcement, the price has fallen drawing a long-bodied bearish candle across the lower band with a wick at the bottom of the candle. The price has formed a high of 0.63003 low of 0.62188, and closed at 0.62474.

The Australian dollar's decline was the worst in four weeks against other currencies ahead of the RBA monetary policy meeting due to be released today. Investors expect the RBA to maintain the Official Cash Rate (OCR) at the current level of 4.1%. Therefore, investors will be paying close attention to the RBA's monetary policy guidance.

In the latest developments, President Donald Trump's tariff policy has brought economic fears and is expected to affect the Chinese economy. Trump's "Liberation Day" will announce reciprocal tariffs on April 2 could affect the Chinese economic outlook, given that the world's second-largest country has the largest trade surplus with the US. Here, Australia will be affected by the Chinese economy. This fear seems to have caused the Australian dollar to underperform.

The dollar index (DXY), which tracks the performance of the USD against six major currencies, is trying to recover after weakening. DXY rose to 104.392 from a low of 103.752.

Today, investors will focus on several fundamental data points from the US and Australia. In the US, investors will be waiting for manufacturing PMI data and job openings data. Final Manufacturing PMI is expected to be the same as the previous revision of 49.8, while ISM Manufacturing PMI is expected to fall to 49.5 from the previous 50.3. JOLTS Job Openings are expected to be 7.69 M from the previous 7.74 M.

 

[Zerologic]

USD/CAD is volatile amid Trump's tariff policy

Yesterday, the USDCAD pair drew a long-bodied bearish candle with a wick on the top of the candle. The price formed a high of 1.44148, a low of 1.42979, and a close of 1.42994. Previously, USDCAD drew a bullish candle with a body of almost the same length.

One possible cause is Trump's tariff policy which triggered a trade war, causing market fears of global economic uncertainty. On the other hand, demand for safe havens seems to be increasing, as seen from the price of gold, which continues to rise.

Trump also threatened to impose large tariffs on Russian oil, and the potential for bombing Iran further raises uncertainty in geopolitical risk.

Meanwhile, investors now seem convinced that slowing US economic growth amid uncertainty surrounding Trump's trade tariffs could force the Fed to continue its interest rate cut policy soon. However, according to the CME group's Fedwatch tool, the Fed is expected to maintain interest rates in the range of 4.25%-4.50% at the May 7 Fed meeting with a probability of 84.5%.

On the other hand, the Dollar Index (DXY), which tracks the USD against six major currencies, is still in doubt, drawing a doji candle yesterday. DXY formed a high of 104.180 low of 104.019, closing at 104.199 with an open of 104.180. Visually, DXY is moving below the EMA 20, indicating a bearish sentiment.

The US JOLTS job openings data released yesterday showed lower than expected figures raising speculation of a weak US economy. The ISM Manufacturing PMI of 49.0 was lower than expected, 49.5 providing negative support to the USD.

Today, traders and investors will focus on the ADP Non-Farm Employment Change, which is expected to rise to 118k from the previous 77k.