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EUR/JPY Price Prediction: Bulls need to break through the 200-EMA to move higher; 130.30 is the target

Despite the bearish opening gap on Monday, the EUR/JPY has been following the primary component of Dow Theory by remaining above Friday’s low of 128.73. The cross continues to form the higher high and higher low structure, but more filters are needed to complete it. On Monday, EUR/JPY opened at 129.16, close to the 61.8 percent Fibonacci retracement (the distance between Friday’s low and high of 128.73 and 130.30). This is typically used to provide significant support for an asset following a correction. These pullbacks are frequently viewed by investors as a good time to buy. The cross is trading in a narrow range of 129.15-129.43, indicating that the volatility bands are being squeezed.

Despite a ‘higher high and higher low’ structure, EUR/JPY is trading below the 50-period and 200-period Exponential Moving Averages (EMA) on a 15-minute scale, indicating a lacklustre move ahead. After trading in a bullish range of 60.00-40.00, the Relative Strength Index (RSI) (14) has dropped sharply near 30.00.Bulls are keeping an eye on the 200-EMA at 129.51, as a break of it will send the cross higher towards Friday’s high at 130.30 and Wednesday’s high at 130.71, respectively.

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XAU/USD is expected to fall below $1,900 as it loses its safe-haven appeal

Gold prices are aiming for support below $1,900 as the market’s risk-off impulse returns. The precious metal has been trading in a range of $1,890.92-1,911.00 as investors await a new catalyst from the Russia-Ukraine conflict. However, Russia’s invasion of Ukraine appears to be escalating. According to Maxar satellite images, the Russian military perimeter around Kyiv has grown to 40 miles, rather than the 17 miles initially reported. This could rekindle interest in the yellow metal.

Furthermore, the US dollar index (DXY) has been vulnerable as market participants have diverted funds away from the DXY and into riskier assets. The greenback has established a short-term ground near 96.80, reducing the precious metal’s exposure to the greenback. On Tuesday, the Institute for Supply Management (ISM) will release Manufacturing Purchasing Managers Index (PMI) data, which will fly under the radar. However, the Federal Reserve (Fed) Chair Jerome Powell’s testimony on Wednesday will be the key event to watch out for, along with another round of peace talks between Russia and Ukraine ‘in the coming days.’

The price of gold has risen as demand for safe-haven assets has remained strong. After rising as much as 2.2 percent earlier in the session, spot gold rose 0.6 percent to $1,898.25 per ounce. Gold futures in the United States finished 0.7 percent higher at $1,900.70. Gold, which is frequently used as a safe haven of value during times of political and financial unrest, has risen about 6.5 percent in February, reaching an 18-month high of $1,973.96 last week.

Russia’s ongoing aggression against Ukraine has weighed on risk assets such as US and European equities, as well as bond yields. Investors are grappling with uncertainty, with bank stocks plummeting as a result of tough Western sanctions imposed on Russia as it continued its invasion of Ukraine. The DJI and S&P 500 fell, but the Nasdaq managed to claw its way back to the top.

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AUD/USD rate stages another attempt for 2022 opening range breakout 

AUD/USD appears to be unfazed by the RBA’s dovish forward guidance as it clears the February high (0.7284), and it remains to be seen if the update to Australia’s Gross Domestic Product (GDP) report will derail the recent advance in the exchange rate amid expectations for a slowdown in economic activity.

Australia is projected to grow 3.7% after expanding 3.9% during the third quarter of 2021, and indications of a slowing economy may keep the RBA on a preset course as the central bank pledges to “not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range.” 

As a result, the advance from the January low (0.6968) may turn out to be a correction in the broader trend with the Federal Reserve on track to normalize monetary policy ahead of its Australian counterpart, but recent price action raises the scope for another run at the January high (0.7314) as it clears the February range. 

In turn, AUD/USD may continue to carve a series of higher highs and lows over the coming days if it shows a limited reaction to Australia’s GDP report, and a further appreciation in the exchange rate may fuel the recent flip in retail sentiment like the behavior seen in 2021. 

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GBP/JPY stays depressed below 155.00 as yields ease on Ukraine fears

GBP/JPY remains sidelined around 154.70 during Thursday’s Asian session, mildly offered after bouncing off a 10-week low the previous day. The cross-currency pair’s latest weakness could be linked to the market’s anxiety ahead of key data/events, as well as a lack of major catalysts. Cautious optimism from an anticipated round of peace talks between Russia and Ukraine battles increasing hopes of a faster rate-hike trajectory by the Fed to test the market sentiment of late.

A Russian negotiator was quoted to share the news of a probable round of diplomatic talks on Thursday. On the same line, Interfax also mentioned, “A potential ceasefire will be discussed in upcoming talks with the Ukrainian delegation.” It’s worth noting that a jump in the probabilities of a 0.50% rate hike in the March Fed meeting, per CME’s Fed Watch Tool, also challenges the market’s optimism. On the same line were the US inflation expectations that rose to a 15-week high, as measured by the 10-year breakeven inflation rate per the St. Louis Federal Reserve (****) data.

Elsewhere, global rating agencies like Moody’s and Fitch cut Russia’s ratings and contribute to the offbeat sentiment. At home, the Daily Express quotes data showing a jump in the EU nationals in the UK to shrug off Brexit criticism. Further, UK PM Boris Johnson spoke to Ukrainian President Volodymyr Zelenskiy and said, he will publish ‘full list of all those associated with the Putin regime’ per The Guardian. Additionally, Bank of England (BOE) policymakers, including Silvana Tenreyro and Jon Cunliffe, cited economic risks emanating from Russia’s invasion of Ukraine.

On the same line, Bank of Japan (BOJ) monetary policy board member Junko Nagaya said in a statement on Thursday, “Japan’s economic outlook remains highly uncertain from January onward.” Amid these plays, S&P 500 Futures print mild losses whereas the US 10-year Treasury yields also drop 1.2 basis points (bps) to 1.85% by the press time.

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Gold is surging and breaking records. $2,000/oz

At the start of the week, the price of gold in fast markets has just surpassed $2,000 per ounce. The catalyst is oil, as well as concerns about global stagflation. Oil prices have increased by 10% on Monday as a result of the threat of a ban on Russian products in the United States and Europe. Delays are also occurring in Iranian negotiations. Brent was quoted at $130.84, up $12.73, while US crude was up $9.92 to $125.60. At the time of writing, it is reported that US House Speaker Nancy Pelosi is considering legislation that would prohibit Russia from importing oil. This was a topic that roiled markets right away.

Pelosi stated last Thursday that she supports a ban on Russian oil imports into the United States. Biden has been hesitant to restrict Russian oil shipments to the US or impose energy sanctions, despite the fact that prices are already hitting US citizens’ pockets. However, the sanction has already received widespread support from Republicans and an increasing number of Democrats.

Commodity prices in general have had their best start to a year since 1915. Among the many movers last week, nickel increased by 19%, aluminium by 15%, zinc by 12%, and copper by 8%, while wheat futures increased by 60% and corn by 15%. This makes this week’s US Consumer Price Index a critical event for markets, with an annual growth rate of 7.9 percent and a core measure of 6.4 percent expected ahead of the European Central Bank meeting this week and the Federal Reserve meeting next week.


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With peace talks on the horizon, the XAU/USD remains below $2,000 per ounce

On Wednesday, gold suffered greatly as risk sentiment improved. After reaching a 19-month high at the start of the week, the precious metal fell back below $2,000 per ounce. Spot gold fell 3.3 percent to $1,976 per ounce, capping a rally that had taken it close to the all-time high set in August 2020. Gold futures in the United States fell 2.7 percent to $1,988.20. Profit-taking, as well as a sharp drop in oil prices, fueled the reversal, allowing buyers to scoop up bargains in the stock markets on stocks that had previously been hammered by concerns about Russian sanctions.

On Wednesday, a Russian airstrike severely damaged a children’s hospital in the besieged Ukrainian port city of Mariupol. However, risk sentiment improved as oil prices fell sharply after the United Arab Emirates said it would support increasing output as an OPEC member. Brent oil dropped from $131.50bbls to $105.91bbls. The price had reached a high of $138.03bbls at the start of the week in a market that was in disarray due to supply disruptions caused by sanctions imposed on Russia as a result of the conflict.

The price of oil is critical for gold. Oil’s rally has been a major source of concern as markets assess whether the global economy will face a stagflationary or inflationary shock. “The conflict in Ukraine has serious and obvious implications for commodity prices. Will the implications for inflation, however, be more long-lasting than those for growth? Certainly, global central banks are concerned about one particular channel of self-reinforcing inflation — inflation expectations could be de-anchored if the shock permeates the world’s psyche,” analysts at TD Securities explained.

“While the direct implications of the conflict on growth are more limited in the US, indirect implications may be more relevant as ongoing disruptions to supply chains may have a spillover effect, while inflation is also likely to act as a tax on consumers,” the analysts added. “If the shock depresses consumer sentiment at the same time, the Fed will have to walk a tightrope between its unemployment and inflation targets.” As a result, the market has concluded that the Fed will remain nimble in order to avoid tipping the US economy into a recession for the time being, but the subsequent rate path and the path for quantitative tightening are less clear.”

“In this context, gold bugs are more likely to profit from a subsequent increase in central bank demand for gold, having observed the events unfold as potential vulnerabilities for national accounts.”

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EUR/USD seeks to break a four-week downtrend near 1.1000, with a focus on US data and Ukraine

The EUR/USD is licking its wounds after the ECB while making its way to 1.1000, up 0.15 percent intraday during the mid-Asian session on Friday. The pair’s recent movements could be attributed to the market’s uncertainty about the key risk catalysts, as well as a USD pullback. Nonetheless, the major currency pair is on track to end its four-week losing streak.

The US Senate’s passage of a $13.6 billion aid package to Ukraine and a $1.5 trillion bill to avoid a government shutdown could magnify Western aid to Kyiv, as seen in today’s United Nations (UN) Security Council, which weighs on EUR/USD prices. Concerns about a new surge in China’s covid cases, as well as fears about Russia’s invasion of Ukraine, are all on the same page. The quote was under downward pressure as a result of this. The previous day’s US inflation data and subsequent hopes for faster Fed rate hikes may also have contributed to the pair’s weakness.

Alternatively, uncertainty over Russia’s military position in Ukraine, as well as a lack of major data/events in Asia, appears to limit EUR/USD downside. Having said that, reports of a Russian military attack on a Kharkiv institute containing an experimental nuclear reactor initially shook the market before the news of no negatives quelled fears. Similarly, reports that Moscow’s forces are gradually dispersing and may be retreating favoured the optimists prior to the US Satellite company Maxar’s update indicating more troops being redeployed.

Among these bets, the S&P 500 Futures fell 0.5 percent on the day, while US 10-year Treasury yields fell 4.4 basis points (bps) to 1.965 percent by press time. Furthermore, the US Dollar Index (DXY) remains undecided around 98.50 but remains determined to reverse the previous four-week uptrend.

It’s worth noting that the European Central Bank (ECB) cited inflationary challenges while releasing details on faster Quantitative Tapering (QT) the day before. Euro traders, on the other hand, focused on the eurozone’s currency’s downwardly revised growth forecasts and upwardly revised inflation expectations. “The ECB’s statement, which left the door open to raising interest rates before the end of 2022 because soaring inflation outweighs concerns about the fallout from Russia’s invasion of Ukraine, “The euro rose briefly before market sentiment turned negative,” according to Reuters.

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The AUD/USD is expected to fall further towards 0.7200 as China and the Fed join the Ukraine-Russia crisis

As market sentiment deteriorates ahead of Monday’s European session, the AUD/USD reverts to an intraday low around 0.7250, down 0.48 percent on the day. The risk barometer validates the market’s recent pessimism, as well as its apprehension ahead of this week’s key Federal Open Market Committee meeting (FOMC).
The improved progress in Ukraine-Russia peace talks was not enough to entice AUD/USD buyers, as the latest Russian shelling and demands for Kyiv to back down, as well as Ukraine’s push for more sanctions against Moscow, did. On the same vein, International Monetary Fund (IMF) Managing Director Kristalina Georgieva stated on CBS’s “Face the Nation” programme that Russia may default on its debts as a result of unprecedented sanctions over its invasion of Ukraine, but this would not trigger a default.

In other news, China has reported the highest daily covid infections since May 2020 and has imposed strict lockdowns in two states, bringing back the virus woes and weighing on the AUD/USD. The strength of US Treasury yields is also a challenge to the quote, as the 5-year bond coupon renews at an all-time high above 2.0 percent amid record inflation expectations, according to the 10-year breakeven inflation rate from the St. Louis Federal Reserve (FRED) data.

Among these bets, the S&P 500 Futures and the ASX 200 both pared early Asian session gains. Furthermore, Chinese stocks are falling, despite market expectations for a rate cut by the People’s Bank of China (PBOC). As a result, risk aversion may continue to weigh on AUD/USD prices until commodities regain upside momentum, which is less likely given China’s challenges.

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The dollar is nearing a five-year high against the yen ahead of the Fed, while the Australian dollar is weak due to China concerns

On Wednesday, the dollar traded near a five-year high against the yen as investors awaited a Federal Reserve policy decision against the backdrop of the Ukraine war and China’s surging COVID-19 cases. Treasury yields jumped ahead of the Federal Open Market Committee decision, boosting the dollar against its Japanese counterpart, with traders fully pricing in the first interest rate hike in three years and giving a 13 percent chance of a half-point increase.

The dollar was also near its highest level this month against the Australian dollar, as commodity prices fell from multi-year highs, as markets remained hopeful that Russia-Ukraine talks would lead to an end to hostilities. Australia’s currency was also under pressure as top trade destination China saw new COVID cases more than double to a two-year high on Tuesday, raising concerns about the rising economic costs of the disease’s zero-tolerance policies.

Meanwhile, the euro has resumed its recovery from a near-22-month low earlier this month. This contributed to the dollar index remaining stable around 99.0, after reaching a high of 99.415 at the start of last week. “Whether forlorn or otherwise, there does seem to be some enduring optimism (coming from) the fact that Russia and Ukraine are still talking,” said Ray Attrill, head of FX strategy at National Australia Bank, helping the euro to stabilize.

In terms of the greenback, “the bigger question will be that there’s a lot of historical evidence that the dollar peaks as soon as the Fed begins the tightening cycle, so there’s a lot of interest in whether what the Fed does turns out to be something of a watershed in terms of a peak,” Attrill said, with the dollar index peaking around 100. The dollar index was last at 98.880, slightly lower than on Tuesday.

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With all eyes on the Xi-Biden negotiations, the AUD/USD remains under pressure approaching 0.7350

The AUD/USD broke a three-day rally from a monthly low during Friday’s Asian session, and is now trading at the intraday low of 0.7370. In doing so, the Aussie pair reflects the market’s trepidation ahead of a crucial phone conference between US President Joe Biden and his Chinese counterpart Xi Jinping, which will address a variety of topics, including the Ukraine-Russia situation. China’s Foreign Ministry acknowledged ahead of the meeting that China and Russia met on March 17 to discuss security cooperation. It’s worth mentioning that Beijing has repeatedly refuted US assertions that it is ready to assist Moscow in its conflict with Ukraine.

On a different page, Reuters reported that China recorded 2,416 new confirmed coronavirus cases on March 17, up from 1,317 the day before, according to the country’s national health authorities. ” It’s worth mentioning that COVID-19 daily infections have been decreasing in the previous two days after reaching an all-time high.

On the contrary, news of industry output restarting in five Shenzen districts keep buyers optimistic. In other news, Turkey is attempting to establish contact between Russian President Vladimir Putin and his Ukrainian counterpart Volodymyr Zelenskyy, but has received no confirmation. Fears of a Russian default add to the risk-off mindset.

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XAU/USD maintains small advances near $1,925, but lacks follow-through

Gold crept up in the early hours of Monday trade, but there was little follow-through purchasing or strong positive confidence. There appears to be no end in sight to Ukraine’s prolonged conflict, which has rejected Russia’s offers to hand up the port city of Mariupol. The deteriorating geopolitical environment put investors on edge, lending some support to the safe-haven precious metal. However, the advent of some US dollar buying worked as a headwind for the commodity priced in US dollars.

The fact that the Fed signalled last week that it may hike rates at all six remaining meetings in 2022 continues to bolster the buck. This, together with increased hawkish statements from important FOMC members and higher US Treasury bond rates, supported the dollar while limiting gains for non-yielding yellow gold. Nonetheless, the metal has managed to keep its head above the $1,920 level so far, as market players await Fed Chair Jerome Powell’s scheduled address later in the US session.

Traders will take cues from new developments in the Russia-Ukraine storey, which will play a significant role in determining market risk sentiment. Aside from that, the USD price dynamics should offer some push to gold in the absence of any market changing economic releases from the US. As earlier update Gold (XAU/USD) is licking its wounds at $1,928, up 0.30 percent intraday during the Asian session on Monday. The yellow gold suffered its largest weekly drop since June 2021, as market confidence strengthened during the previous week, impacting on the bullion’s safe-haven demand. However, Ukraine’s rejection of Russia’s capitulation demand in Mariupol has reignited risk aversion.

In addition to Kyiv’s willingness to fight in Mariupol, increased shelling in Ukraine by Russian soldiers reflects the bleak situation. The Chinese Envoy recently expressed willingness to de-escalate the conflict in Ukraine, but markets remain sceptical, as the past week’s discussion between US President Joe Biden and his Chinese counterpart Xi Jinping failed to deliver any important specifics on the critical topic. On the contrary, the debate over Taiwan heightened Sino-American tensions, reviving gold’s safe-haven demand. Other factors influencing market mood include rising covid numbers in China and the suspension of trade in Hong Kong by struggling real estate giant Evergrande.

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The EUR/USD is once again under pressure as Asia takes over the baton

EUR/USD is down 0.13 percent, having fallen from a top of 1.1013 to a low of 1.0982 thus far. The US dollar rose on Wednesday as oil prices rose again, with US President Joe Biden set to announce more sanctions against Russia with European leaders during his trip to Europe. Traders are anticipating Biden’s arrival in Brussels later Wednesday to meet with NATO and European leaders in an emergency conference at the headquarters of the Western military alliance. According to Reuters, the US package would include sanctions aimed at Russian members of parliament.

Stocks in the United States plummeted as a result of the news, but treasuries rebounded from historic losses ahead of stricter monetary policy to battle inflation. The S&P 500 fell 1.2 percent, driven by financial sector losses, as the 10-year Treasury yield fell to 2.30 percent after touching highs not seen since mid-2019. Traders are piling into bonds as Federal Reserve officials indicate they are likely to hike interest rates rapidly to manage inflation, and the Ukraine crisis has drove commodity prices up 26 percent this year.

Meanwhile, Loretta Mester, a member of the Federal Open Market Committee, has advocated for 50bp rate rises this year, citing the economy’s surplus demand.

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As the Ukraine war and inflation troubles combine stable yields, the XAU/USD is bracing for a $2,000 price

For the third day in a row, gold (XAU/USD) has been in the lead, with bids at $1,963 at press time in Friday’s Asian session. The previous day, amid rising anxiety over the Ukraine-Russia confrontation, the yellow metal hit a new high in almost two weeks. The metal’s recent gain, on the other hand, might be connected to a drop in the value of the US dollar. By press time, the US Dollar Index (DXY) had fallen 0.30 percent intraday to 98.50, halting a two-day upswing. The dollar’s recent fall might be attributed to slow Asian rates and market inflation worries, as well as hesitation over Ukraine’s conflict with Russia.

It’s worth remembering that most global officials, not just the Fed, have recently raised concerns about inflation, which has fueled gold’s safe-haven demand. Japan’s central bankers were the most recent to join the group. The possibility of a 0.50 percent rate rise by the US Federal Reserve (Fed) and talk about Quantitative Tightening are also worth noting (QT).

“Russia will emerge from the Ukraine crisis weakened militarily and diplomatically,” a senior US official was reported by Reuters as saying. On the same topic, Reuters published an article claiming that Russia’s precision missiles are inaccurate and that there has been a shortage of them in recent days. Australia and Japan have recently joined the West in punishing Russia, heightening concerns over the situation.

On Thursday, US Vice President Joe Biden pressed European leaders, the Group of Seven (G7), and NATO members to impose more sanctions on Russia for its invasion of Ukraine. While his NATO allies were able to set up combat guards for four Ukrainian cities and denounced Beijing’s connections with Moscow, the rest of the world mostly avoided substantial sanctions against Russia.

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The NZD/USD is in command as the US dollar strengthens

NZD/USD is trading 0.23 percent down on the day at 0.6944, having fallen from a high of 0.6963. The US dollar is up in the morning after posting its sixth weekly rise in the last seven. The DXY index, which measures the US dollar against a basket of currencies, is up 0.3 percent to 99.100. The dollar has benefitted from its role as a safe haven, and the situation in Ukraine has increased hopes that the Fed would raise interest rates. Meanwhile, the New Zealand dollar has settled into what appears to be a comfortable “groove” around the mid to high 0.69s, according to ANZ Bank strategists.

“There is really little going on domestically, but markets are now fairly completely priced for impending rises (while 50bp hikes aren’t entirely priced in, the risk of them is). Rates are unlikely to move much more (either for themselves or the NZD) until the RBNZ decision on April 13th.” “But it’s a different picture across the Tasman, as probabilities of RBA hikes continue to rise, with a full hike priced in by June and “612” rises factored in by year end,” the analysts wrote. This appears to be pushing the NZD at the moment, and it appears that the question is, will the NZD/USD break higher?”
In terms of the Reserve Bank of New Zealand and market pricing, Westpac analysts suggest that markets are currently overpricing the expected scope of OCR rises over the next couple of years.

“However, if we’re accurate, what would cause the market to correct?” We believe it will come down to proof that monetary policy is already having an impact – cooling the housing market and eventually lowering consumer demand to more sustainable levels,” the analysts concluded.

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GBP/USD falls from 1.3080 as the DXY declines on improved risk appetite

The GBP/USD pair has seen some hefty bids at 1.3080 as investors’ risk appetite improves and risk-perceived assets acquire more demand. Previously, the cable underperformed despite the Bank of England’s tightening monetary policies (BOE). To counteract rising inflation, the Bank of England raised interest rates to 0.75 percent. The central bank increased its benchmark interest rate three times in a row, each time by 25 basis points (bps). In addition, the UK’s Office for National Statistics published the annual Consumer Price Index (CPI) at 6.2 percent, which was much higher than market expectations and prior readings of 5.9 percent and 5.5 percent, respectively. A higher-than-expected report of UK inflation may drive the BOE to raise interest rates again in May.

The US dollar index (DXY) has hit a roadblock after failing to set a new nine-month high and is on the danger of falling below 99.00. The DXY has been pounded at 99.30 due to an increase in risk appetite following the absence of three major Moscow demands: denazification, demilitarization, and legal protection for the Russian language in Ukraine. Meanwhile, the 10-year US Treasury yield is hanging around 2.46 percent ahead of the release of US Nonfarm Payrolls (NFP) on Friday. The early estimate of US NFP at 475K is a considerable decrease from the prior print of 678K.

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XAU/USD pair remains bullish as the US currency continues to fall

The gold price is rising as the US currency and US yields fall. The 10-year yield is down almost 2% on the day, while the DXY index, which measures the US dollar against a basket of currencies, is down about 0.3 percent at the time of writing. Russia has promised to pull back military activities near Ukraine’s capital and north, while Kyiv has recommended that Ukraine join the EU while remaining neutral by not joining NATO.

“Talks were fruitful enough for Putin and Zelensky to meet,” said Ukrainian presidential advisor Mykhailo Podolyak. “We have documentation ready today that will allow the presidents to meet bilaterally,” he added. However, overall, movement has been very subdued. This suggests that the Russia-Ukraine conflict is not as priced in as some may have expected, or that markets are not fully buying it. Markets have been up and down in the previous 24 hours. The most important event, however, was the increase in 2Y UST rates to 2.45 percent yesterday, as well as yield curve inversions.

Market investors have pounced on gold (XAU/USD) as safe-haven assets lose attractiveness as peace negotiations between Russia and Ukraine continue. This week, the precious metal fell precipitously after failing to hold above the $1,950.00 level. Despite a response purchase just below $1,900, gold prices have risen to about $1,920.00. The Russian government has ignored the opening step of a ceasefire with Ukraine and has evacuated its soldiers from northern Ukraine and Kyiv. While Ukraine has declared itself neutral and has elected not to join the NATO alliance.

Moscow and Kyiv’s opening move toward a ceasefire plan has lifted market mood. Risky assets are gaining momentum in the midst of a strong risk-on drive. Meanwhile, the US dollar index (DXY) has been subjected to a barrage of selling in safe-haven assets. The DXY is retracing to approximately 98.00, its low from Tuesday, and is expected to continue its losses once the latter is violated. The Federal Reserve (Fed) has a better chance of raising interest rates by 50 basis points (bps) despite weak US JOLTS Job Openings data. The JOLTS Job Opening number was 11.266M, slightly higher than the prior result of 11.263M and the projection of 11M.

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The US Dollar Index is testing 4-week lows at 97.70 ahead of data

The greenback has been under pressure this week, trading at multi-week lows of 97.70 when measured by the US Dollar Index (DXY) on Thursday. For the third session in a row, the index loses ground and trades at the 97.70 level, despite a cautious posture in wider risk appetite trends and resumed demand for bonds. On the latter, US yields continue to lose momentum and grind lower from recent peaks, with the US 10y benchmark falling for the third straight day to approximately 2.30 percent (down from around 2.55 percent on Friday).

On the geopolitical front, increased scepticism prevails in reaction to apparent progress in the ongoing Russia-Ukraine peace negotiations in Turkey, which have so far failed to produce any serious follow-up. Initial Claims are due in the US data sector, followed by inflation as defined by the PCE, Personal Income/Spending, and the Chicago PMI.

In addition, J.Williams of the New York Fed (permanent voter, centrist) is scheduled to speak. The index stays on the defensive, retesting the first support zone at 97.70.

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GBP/JPY recovers from 160.00 as the BOJ blames rising commodity prices for the yen’s weakness

The GBP/JPY pair has received some considerable offers at 159.50 amid widespread selling in the Japanese yen as a result of the Bank of Japan’s unlimited bond-purchase program me (BOJ). The cross is soaring, having risen over 0.7 percent on Friday from its previous close at the time of publication.

After the completion of the four-day bond-buying spree on Thursday, the aftereffects of the excessive purchase of Japanese Government Bonds (JGBs) to cap yields at 25 basis points appear to be gone. It appears that market players were waiting for the conclusion of JGB distribution from market participants to the BOJ, and that the pullback was just a result of investors capitalizing on a firmer rally.

According to Japan’s Chief Cabinet Secretary Matsuno, the economy is improving, according to the BOJ Tankan survey, although difficulties from the Covid-19 outbreak linger. Furthermore, BOJ officials have stressed growing commodity costs, indicating that Japanese firms have primarily highlighted the impact of rising raw material prices and part shortages on present business circumstances.

Meanwhile, the pound has been supported against the yen by the UK’s GDP’s strong performance (GDP). On Thursday, the quarterly GDP came in at 1.3 percent higher than the market consensus and previous number of 1%.

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In Asian markets, the XAU/USD bleeds out, falling below $1,920

The price of gold, XAU/USD, has been under pressure this week due to conflicting mood around the Ukraine issue against anticipation of a rapid-fire response from the Federal Reserve following last week’s Nonfarm Payrolls report.

XAU/USD is down 0.26 percent at the time of writing, having fallen from a high of $1,926.86 to below Friday’s low of $1,918.32. The dollar got off to a strong start on Monday, boosted by a surge in US Treasury rates on anticipation of a series of Fed rate hikes.

Following the release of the NFP report, US 2-year bond rates hit a new all-time high in the North American session, while US 10-year yields also climbed, indicating a drop in investor demand.

After a large upward revision to the February statistics to 750k, non-farm payrolls gained 431k in March. The unemployment rate decreased to 3.6 percent, while average hourly wages rose 0.4 percent month over month, bringing annual growth to 5.6 percent. The report was mixed, with hourly wages for February reduced down to 0.1 percent, indicating that, together with the March number, the pressure on the US labor market may be fading.

Overall, the report has bolstered the Fed’s case for using aggressive rate rises to keep inflation under control. Fed funds futures have a nearly 4/5 likelihood of a 50 basis point rise next month built in.
Despite this, economists at ANZ Bank believe that demand for safe have assets would continue robust because to the ongoing conflict in Ukraine. “Since Russia invaded Ukraine, the disparity between fair value and current gold prices has jumped from zero to USD300/oz, implying a significant risk premium. In addition, the Russia-Ukraine conflict’ indirect effects will give a considerable degree of support. The wider isolation of Russia will result in an inflationary structural change in the energy industry.”

In other markets, speculation about further penalties kept the general tone cautious in early trade, but this, too, bolstered the US dollar. After Ukrainian and European authorities accused Russian soldiers of crimes, Germany’s defense minister suggested on Sunday that the European Union should consider restricting Russian gas supplies. Ukraine has accused Russian soldiers of carrying out a “massacre” in Bucha, which Russia’s defense ministry has denied.

“Haven flows are expected to keep the yellow metal sustained as long as significant progress on ceasefire discussions and de-escalation remains elusive,” analysts at TD Securities said. “At the same time, the 2-year and 10-year curves flirting with inversion has fanned rumours of a coming recession, providing yet another favorable dynamic for gold.”

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XAU/USD is expected to drop to about $1,900 as aggressive Fed officials dampen market sentiment

After a massive sell-off on Tuesday, gold (XAU/USD) is struggling in the Asian session. Given the adverse market movement and aggressive tone espoused by Federal Reserve (Fed) policymakers, the precious metal is anticipated to drop to around the psychological support of $1,900.00. In a speech on Tuesday, Fed Governor Lael Brainard stated that the Fed is prepared to act aggressively if inflation data and expectations indicate that such action is warranted. While Fed President Mary Daly has underlined the need for the Fed to reduce its balance sheet as quickly as possible. Furthermore, increased oil costs will not cause a significant downturn in the US economy.

On the other hand, on negative market mood, the US dollar index (DXY) has risen to almost 99.60. Fed members’ hawkish positions suggest that, in the future, rising interest rates will limit liquidity influx throughout the world. The risk-off impulse has been triggered, and the greenback is now climbing higher. Aside from the DXY, increased prospects of a 50 basis point (bps) interest rate hike have injected steroids into US Treasury rates. The 10-year US Treasury rates have surpassed 2.6 percent and are on the verge of setting a new three-year high.

The price of gold fell somewhat as the US currency gained strength. The DXY index, which measures the value of the dollar against a basket of other currencies, reached its highest level in over two years. The benchmark 10-y++3fear Treasury yield has risen to 2.55 percent, while the two-year yield has risen to 2.56 percent for the first time since March 2019.

Spot gold fell 0.3 percent to $1,916 per ounce, but was trading in a tight range, while US gold futures down 0.1 percent to $1,931.20. XAU/USD is down 0.2 percent at $1,921 at the time of writing, pressured in Asia after comments by Federal Reserve Governor Lael Brainard.

In advance of tomorrow’s hawkish minutes, the Fed member mentioned the possibility of forceful action by the central bank. Brainard stated that the Fed might begin lowering its balance sheet as early as May, and that it would do so at a “rapid pace.” Interest rate rises might be more aggressive than the usual 0.25 percentage point increments, according to Brainard. Meanwhile, during the March meeting, Fed policymakers began the process of policy normalisation by raising rates 25 basis points to 0.25 percent -0.50 percent, and the minutes of that meeting will be issued on Wednesday.

“Gold prices have remained remarkably robust, indicating strong ETF and comex inflows into gold trumping withdrawals linked with a hawkish Fed,” according to TD Securities analysts. “Because actual rates may be less effective as a barometer for evaluating gold’s relative price, we look at gold flows to see how long interest in the yellow metal will last.” ETF flows have tended to be more significantly connected with changes in market expectations for Fed hikes than real rates, the yield curve, or even price momentum, according to our study.

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US Dollar Price Action Setups: EUR/USD, GBP/USD, AUD/USD, USD/JPY

AUD: AIG Services Index, Survey of about 200 service-based companies which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories

AUD: Trade Balance, it measures difference in value between imported and exported goods and services during the reported month.

JPY: JGB Auction, it measures average yield on a 30-year bond the government sold at auction, and the bid-to-cover ratio of the auction.

JPY: Leading Indicators, it measures Level of a composite index based on 11 economic indicators. Forecast 100.9%

CHF: Unemployment Rate, the number of unemployed people is an important signal of overall economic. Forecast 2.2%

EUR: German Industrial Production, Change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities. Forecast 0.1%

GBP: HBOS (Halifax Bank of Scotland) HPI (House Price Index), It’s a leading indicator of the housing industry’s health because rising house prices attract investors and spur industry activity.

CHF: Foreign Currency Reserves, It provides insight into the SNB’s (Swiss National Bank) currency market operations, such as how actively they are defending the franc’s exchange rate against the euro.

EUR: Retail Sales, It’s the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

EUR: ECB Monetary Policy Meeting Accounts, record of the ECB Governing Board’s most recent meeting, providing in-depth insights into the economic conditions that influenced their decision on where to set interest rates

GBP: MPC Member Pill Speaks, Bank of England Monetary Policy Committee members vote on where to set the nation’s key interest rates and their public engagements are often used to drop subtle clues regarding future monetary policy.

USD: Unemployment Claims, it measures number of individuals who filed for unemployment insurance for the first time during the past week. Forecast 201K.

USD: FOMC Member Bullard Speaks, about the economy and monetary policy at an event hosted by the University of Missouri, in Columbia.

USD: Treasury Sec Yellen Speaks, about cryptocurrency policy and regulation at an event hosted by American University, in Washington DC.

USD: Nat Gas Inventories, it measures Change in the number of cubic feet of natural gas held in underground storage during the past week. Forecast -28B.

USD: Consumer Credit m/m, It’s correlated with consumer spending and confidence – rising debt levels are a sign that lenders feel comfortable issuing loans, and that consumers are confident in their financial position and eager to spend money. Forecast 18.0B.

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Market News: EUR/USD, GBP/USD, AUD/USD, NZD/JPY


NZD: International Travel and Migration, it measures change in the number of short-term overseas visitors who arrived in the country

GBP: Like-for-like Retail Sales, it measures change in the value of same-store sales at the retail level.

JPY: Bank Lending, it measures change in the total value of outstanding bank loans issued to consumers and businesses.

JPY: Producer Price Index, it measures change in the price of goods sold by corporations.

AUD: NAB Business Confidence, It’s a leading indicator of economic health – businesses react quickly to market conditions, and changes in their sentiment can be an early signal of future economic activity such as spending, hiring, and investment.

EUR: German Final CPI m/m, it measures change in the price of goods and services purchased by consumers.

EUR: German WPI m/m, it measures change in the price of goods by wholesalers.

GBP: Average Earnings Index 3m/y, it measures change in the price businesses and the government pay for labor, including bonuses.

GBP: Claimant Count Change, it measures change in in the number of people claiming unemployment-related benefits during the previous month.

GBP: Unemployment Rate, it measures percentage of total work force that is unemployed and actively seeking employment during the past 3 months.

EUR: French Trade Balance, it measures difference in value between imported and exported goods during the reported month.

EUR: ZEW Economic Sentiment, it measures Level of a diffusion index based on surveyed German institutional investors and analysts.

EUR: German ZEW Economic Sentiment, it measures level of a diffusion index based on surveyed German institutional investors and analysts.

USD: NFIB Small Business Index, it measures level of a composite index based on surveyed small businesses.

USD: Consumer Price Index, it measures change in the price of goods and services purchased by consumers.

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NZD/USD higher after the larger than expected interest rate hike from the RBNZ


NZD: Food Price Index , It measures change in the price of food and food services purchased by households.

JPY: Core Machinery Orders m/m, It measures change in the total value of new private-sector purchase orders placed with manufacturers for machines, excluding ships and utilities.

JPY: M2 Money Stock y/y, It measures change in the total quantity of domestic currency in circulation and deposited in banks.

AUD: Westpac Consumer Sentiment, It measures change in the level of a diffusion index based on surveyed consumers.

NZD: Official Cash Rate, Short term interest rates are the paramount factor in currency valuation – traders look at most other indicators merely to predict how rates will change in the future. Forecast 1.25%

NZD: RBNZ (Reserve Bank of New Zealand) Rate Statement, It’s among the primary tools the RBNZ uses to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it discusses the economic outlook and offers clues on the outcome of future decisions.

GBP: CPI (Consumer Price Index) y/y, Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate. Forecast 6.7%

GBP: Core CPI y/y, It measures change in the price of goods and services purchased by consumers, excluding the volatile food, energy, alcohol, and tobacco items.

GBP: PPI Input m/m, It measures change in the price of goods and raw materials purchased by manufacturers.

GBP: PPI Output m/m, It measures change in the price of goods sold by manufacturers.

GBP: RPI y/y, It measures change in the price of goods and services purchased by consumers for the purpose of consumption.

JPY: BOJ Gov Kuroda Speaks, As head of the central bank, which controls short term interest rates, he has important influence over the nation’s currency value. Traders scrutinize his speeches as they are often used to drop subtle clues regarding future monetary policy and interest rate shifts.

EUR: Italian Industrial Production m/m, It measures change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.

GBP: House Price Index (HPI), It measures change in the selling price of homes.

USD: Producer Price Index (PPI), It’s a leading indicator of consumer inflation – when producers charge more for goods and services the higher costs are usually passed on to the consumer. Forecast 1.1%

USD: Core PPI m/m, It measures change in the price of finished goods and services sold by producers, excluding food and energy.

CAD: BOC Monetary Policy Report, It provides valuable insight into the bank’s view of economic conditions and inflation – the key factors that will shape the future of monetary policy and influence their interest rate decisions.

CAD: BOC Rate Statement, It’s the primary tool the BOC uses to communicate with investors about monetary policy. It contains the outcome of their decision on interest rates and commentary about the economic conditions that influenced their decision. Most importantly, it discusses the economic outlook and offers clues on the outcome of future decisions.

CAD: Interest Rates, Short term interest rates are the paramount factor in currency valuation – traders look at most other indicators merely to predict how rates will change in the future. Forecast 1.00%

USD: Crude Oil Inventories, It measures change in the number of barrels of crude oil held in inventory by commercial firms during the past week.

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XAU/USD Lacks Directional Conviction on Conflicting Market Forces

XAUUSD had gotten a ailment break of an earlier triangle pattern at $1,898. In any case, its advance can be tempered for the present by $2,001, the 61.8% Fibonacci retracement of the unpredictable March range of $2,070-$1,890.

Bypassing $1,981 opens the entryway for a trial of the psychological $2,000 price boundary. XAUUSD breakthrough has all the earmarks of being in fact driven, and some movements driven by the expansion hedge theme this week with March PPI for definite interest flooding by most in records back to 2010.

This could be only a more limited traversed three-legged adjustment which makes 2,001 an acutely watched resistance stake. So don’t preclude a rollback which safeguards the super bullish pattern given the week after week MACD

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EUR/USD Rising US yields, sour market mood weigh on Euro

EUR/USD has experienced bearish move on early Monday subsequent to having shut the earlier week somewhere down in regrettable territory. Despite the fact that trading conditions stay slender because of the Easter Monday holiday in Europe, rising US Treasury bond yields and risk-averse marketing strategy is developed that the common currency is probably going to make some extreme memories tracking down interest.

Following a long weekend, the benchmark 10-year US T-bond yield opened with a bullish gap and hits at its most grounded level since December 2018 2.8% during the Asian session. Mirroring the positive effect of rising US yields on the greenback, the US Dollar Index sits at a two-year high above 100.70 in the early European session.

In the interim, US stock index futures are down somewhere in the range of 0.25% and 0.8%, highlighting to a risk-averse market environment toward the start of the week.

The US financial agenda won’t offer any high-sway information discharges and the dollar’s market valuation ought to keep on driving EUR/USD’s activity.

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