Zforex
zForex.com Representative
- Messages
- 29
Fed Talk Strengthens Dollar as ECB, BoE Face Different Paths
Recent comments from Federal Reserve officials have bolstered the US Dollar (USD). The US Department of Labor reported that new claims for unemployment benefits for the week ending April 13 rose by 212K, consistent with the previous week's revised count (up from 211K) and below the market consensus of 215K. This suggests that the labor market remains resilient, leading investors to anticipate a possible delay in Federal Reserve interest rate cuts until September.
Fed Chair Jerome Powell emphasized on Tuesday the need for a restrictive monetary policy to continue longer than anticipated, as inflation rates in the first quarter exceeded expectations. Atlanta Fed President Raphael Bostic commented on Thursday that he expects inflation to slowly return to the 2% target, and he is comfortable waiting, predicting potential rate cuts by the end of the year. Meanwhile, New York Fed President John Williams sees no urgent need to cut rates, asserting that the current monetary policy is effective. This narrative of maintaining higher rates for a longer period has continued to support the strength of the US Dollar.
In contrast, the European Central Bank (ECB) already hinted at possible interest rate cuts in June. ECB Vice-President Luis de Guindos expressed his willingness to ease monetary policy if the data meets expectations, and ECB policymaker François Villeroy de Galhau spoke out in favor of a rate cut in June to forestall a backlog in inflation control. ECB policymaker Joachim Nagel also conceded that an interest rate cut in June is becoming increasingly likely despite the persistently high inflation figures. This speculation has put downward pressure on the Euro (EUR).
The Pound Sterling (GBP) is currently finding temporary support at 1.2400, although the short-term outlook is clouded by risk-averse market sentiment due to escalating tensions in the Middle East. UK retail sales data published by the Office for National Statistics for March showed no change from the previous month, falling short of the 0.3% increase expected by economists. This stagnation suggests that the Bank of England's high interest rates are significantly impacting consumer spending.
In Asia, the Japanese Yen (JPY) has strengthened owing to a rise in risk aversion following reports of Israeli missile strikes on Iran, as covered by ABC News. The Yen also saw support from Japan's latest inflation data. Additionally, Bank of Japan Governor Kazuo Ueda's hawkish remarks about potentially raising interest rates if the Yen's decline significantly fuels inflation added to the JPY's strength, affecting the USD/JPY currency pair.
In commodity markets, gold prices surged following the news of the Israeli strike on Iran, reflecting a temporary flight to safety among investors. Meanwhile, oil prices saw a sharp increase of over 3% after the same news, due to concerns about potential supply disruptions in the region, although gains were later pared back.
EUR/USD Slips on Dovish ECB, Hawkish Fed
The EUR/USD pair found resistance at 1.0660 where the bearish outlook continues with the next target set at the 1.0500 area. The ECB's potential rate cut in June, prompted by recent CPI data and ECB member's speeches, contrasts with the Fed's possibly hawkish stance and the likelihood of a delayed rate cut in September as inflation rebounds.
GBP/USD Stalls at 1.2400, Bearish Trend Looms
The GBP/USD pair stabilized at the support level of 1.2400 while the bearish trend mostly will continue. A breakout of this level can take prices lower to new levels as the bearish trend is still solid.
USD/JPY Hits New Highs on Fed-BoJ Policy Gap
The USD/JPY pair stabilized after the strong momentum reaching the Fibo extension level at 154.70, reaching new historical highs, driven by the significant divergence in monetary policies between the Fed and the BoJ. The pair is expected to rise further if Japanese officials don't intervene.
Gold Poised for Record Highs as Momentum Builds
Gold's momentum is steadily driving it towards a new historical peak, while the price once again nearing the 2400 level stabilizes showing some price accumulation. The current conditions remain conducive to further increases in gold prices. Although there are indications of potential price consolidation at these levels, the strong momentum indicates that the upward trend is likely to continue.
Geopolitical Heat Fuels Oil Prices, $80 Support in Play
Today, the oil market exhibits significant volatility with escalating geopolitical tensions, potentially targeting the support level at 80. Geopolitical tensions with demand forecasts, notably from the US and China, render the oil market vulnerable.
Nasdaq Falls Below 17,600 as Risk-Off Sentiment Intensifies
Nasdaq futures persistently decline, breaching the 17600 support level and heading towards 17000. Further declines may ensue if prevailing risk-off sentiment continues to weigh on the market.
DAX Slides Below 50MA as Global Sell-Off Deepens
Currently, the DAX is undergoing a correction below the 50MA support level, reflecting a widespread decline in global equities markets. Confidence in a potential rate cut by the ECB is reinforced by economic data, while geopolitical tensions remain the primary driver of sentiment and may persist.
Recent comments from Federal Reserve officials have bolstered the US Dollar (USD). The US Department of Labor reported that new claims for unemployment benefits for the week ending April 13 rose by 212K, consistent with the previous week's revised count (up from 211K) and below the market consensus of 215K. This suggests that the labor market remains resilient, leading investors to anticipate a possible delay in Federal Reserve interest rate cuts until September.
Fed Chair Jerome Powell emphasized on Tuesday the need for a restrictive monetary policy to continue longer than anticipated, as inflation rates in the first quarter exceeded expectations. Atlanta Fed President Raphael Bostic commented on Thursday that he expects inflation to slowly return to the 2% target, and he is comfortable waiting, predicting potential rate cuts by the end of the year. Meanwhile, New York Fed President John Williams sees no urgent need to cut rates, asserting that the current monetary policy is effective. This narrative of maintaining higher rates for a longer period has continued to support the strength of the US Dollar.
In contrast, the European Central Bank (ECB) already hinted at possible interest rate cuts in June. ECB Vice-President Luis de Guindos expressed his willingness to ease monetary policy if the data meets expectations, and ECB policymaker François Villeroy de Galhau spoke out in favor of a rate cut in June to forestall a backlog in inflation control. ECB policymaker Joachim Nagel also conceded that an interest rate cut in June is becoming increasingly likely despite the persistently high inflation figures. This speculation has put downward pressure on the Euro (EUR).
The Pound Sterling (GBP) is currently finding temporary support at 1.2400, although the short-term outlook is clouded by risk-averse market sentiment due to escalating tensions in the Middle East. UK retail sales data published by the Office for National Statistics for March showed no change from the previous month, falling short of the 0.3% increase expected by economists. This stagnation suggests that the Bank of England's high interest rates are significantly impacting consumer spending.
In Asia, the Japanese Yen (JPY) has strengthened owing to a rise in risk aversion following reports of Israeli missile strikes on Iran, as covered by ABC News. The Yen also saw support from Japan's latest inflation data. Additionally, Bank of Japan Governor Kazuo Ueda's hawkish remarks about potentially raising interest rates if the Yen's decline significantly fuels inflation added to the JPY's strength, affecting the USD/JPY currency pair.
In commodity markets, gold prices surged following the news of the Israeli strike on Iran, reflecting a temporary flight to safety among investors. Meanwhile, oil prices saw a sharp increase of over 3% after the same news, due to concerns about potential supply disruptions in the region, although gains were later pared back.
The EUR/USD pair found resistance at 1.0660 where the bearish outlook continues with the next target set at the 1.0500 area. The ECB's potential rate cut in June, prompted by recent CPI data and ECB member's speeches, contrasts with the Fed's possibly hawkish stance and the likelihood of a delayed rate cut in September as inflation rebounds.
| Resistance 3 | Resistance 2 | Resistance 1 | Support 1 | Support 2 | Support 3 |
| 1.0950 | 1.0870 | 1.0800 | 1.0700 | 1.0660 | 1.0500 |
GBP/USD Stalls at 1.2400, Bearish Trend Looms
The GBP/USD pair stabilized at the support level of 1.2400 while the bearish trend mostly will continue. A breakout of this level can take prices lower to new levels as the bearish trend is still solid.
| Resistance 3 | Resistance 2 | Resistance 1 | Support 1 | Support 2 | Support 3 |
| 1.3100 | 1.3000 | 1.2700 | 1.2600 | 1.2500 | 1.2400 |
USD/JPY Hits New Highs on Fed-BoJ Policy Gap
The USD/JPY pair stabilized after the strong momentum reaching the Fibo extension level at 154.70, reaching new historical highs, driven by the significant divergence in monetary policies between the Fed and the BoJ. The pair is expected to rise further if Japanese officials don't intervene.
| Resistance 3 | Resistance 2 | Resistance 1 | Support 1 | Support 2 | Support 3 |
| 154.70 | 153.00 | 152.00 | 148.2 | 146.30 | 145.00 |
Gold Poised for Record Highs as Momentum Builds
Gold's momentum is steadily driving it towards a new historical peak, while the price once again nearing the 2400 level stabilizes showing some price accumulation. The current conditions remain conducive to further increases in gold prices. Although there are indications of potential price consolidation at these levels, the strong momentum indicates that the upward trend is likely to continue.
| Resistance 3 | Resistance 2 | Resistance 1 | Support 1 | Support 2 | Support 3 |
| 2560 | 2300 | 2260 | 2140-45 | 2088 | 2055-60 |
Geopolitical Heat Fuels Oil Prices, $80 Support in Play
Today, the oil market exhibits significant volatility with escalating geopolitical tensions, potentially targeting the support level at 80. Geopolitical tensions with demand forecasts, notably from the US and China, render the oil market vulnerable.
| Resistance 3 | Resistance 2 | Resistance 1 | Support 1 | Support 2 | Support 3 |
| 94 | 89 | 84.7 | 85 | 80 | 78 |
Nasdaq Falls Below 17,600 as Risk-Off Sentiment Intensifies
Nasdaq futures persistently decline, breaching the 17600 support level and heading towards 17000. Further declines may ensue if prevailing risk-off sentiment continues to weigh on the market.
| Resistance 3 | Resistance 2 | Resistance 1 | Support 1 | Support 2 | Support 3 |
| 18800 | 18500 | 18400 | 18000 | 17600 | 17000 |
DAX Slides Below 50MA as Global Sell-Off Deepens
Currently, the DAX is undergoing a correction below the 50MA support level, reflecting a widespread decline in global equities markets. Confidence in a potential rate cut by the ECB is reinforced by economic data, while geopolitical tensions remain the primary driver of sentiment and may persist.
| Resistance 3 | Resistance 2 | Resistance 1 | Support 1 | Support 2 | Support 3 |
| 18700 | 18440 | 18000 | 17600 | 17500 | 17300 |
