Bullish Gold Trades To All-Time High

Market Summary

Gold prices have reached another milestone, currently trading steadily above $2300, as market sentiment leans towards the likelihood of a Federal Reserve interest rate cut this year. Federal Reserve Chair Jerome Powell’s speech yesterday reiterated the central bank’s stance, indicating that it will take more time to assess market conditions before considering a reduction in borrowing costs. However, despite recent inflation figures, the overall plan for a rate reduction this year remains unchanged. Powell’s dovish tone in the speech led to a 0.5% decline in the dollar during the last session, consequently boosting gold prices.

Meanwhile, the eurozone’s Consumer Price Index (CPI) readings released yesterday fell short of expectations, suggesting that the region is still some distance away from its targeted 2% inflation rate. This has weighed on the strength of the euro, with the possibility of an early rate cut from the European Central Bank (ECB) looming. Traders are eagerly awaiting the ECB monetary policy meeting minutes scheduled for later today to gain insights into the euro’s strength and potential policy shifts by the ECB.

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Current rate hike bets on 1st May Fed interest rate decision: 

Source: CME Fedwatch Tool

0 bps (85.5%) VS -25 bps (14.5%)  

Market Overview

Economic Calendar

(MT4 System Time)

Source: MQL5 

Market Movements

DOLLAR_INDX, H4

The Dollar Index, tracking against a basket of major currencies, continued its downward slide amidst disappointing economic indicators from the US. Notably, the Institute for Supply Management reported a decline in the Non-Manufacturing Purchasing Managers Index (PMI) to 51.4, below market expectations. This downturn, coupled with weaker-than-anticipated Non-Manufacturing Prices at 53.4, exerted pressure on the dollar’s performance. However, the currency’s losses were cushioned by a positive ADP jobs report, which exceeded forecasts at 184K.

The Dollar Index is trading lower following the prior retracement from the resistance level. MACD has illustrated increasing bearish momentum, while RSI is at 35, suggesting the index might extend its losses toward support level since the RSI stays below the midline.

Resistance level: 104.60, 104.95

Support level:104.00, 103.65

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XAU/USD, H4

Gold prices continued their ascent, driven by the dollar’s depreciation following lackluster economic data releases and dovish sentiments from Federal Reserve officials. While supportive remarks regarding potential rate cuts buoyed the gold market, lingering uncertainties necessitate vigilance among investors. Monitoring key economic indicators such as Nonfarm Payroll and unemployment rates remains crucial to gauging gold’s trajectory amidst evolving market dynamics.

Gold prices are trading higher following the prior breakout above the resistance level. However, MACD has illustrated diminishing bullish momentum, while RSI is at 72, suggesting the commodity might enter overbought territory.

Resistance level: 2305.00, 2325.00

Support level: 2295.00, 2280.00

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GBP/USD，H4

In recent trading sessions, the GBP/USD pair staged a notable recovery from its monthly low, registering a robust rebound over the past two sessions. Driving this reversal is a combination of factors contributing to the weakening of the US dollar’s strength. Notably, Federal Reserve Chair Jerome Powell’s dovish stance underscores the central bank’s commitment to maintaining a trajectory towards rate reduction within the current year. Further dampening the greenback’s vigour are the recent downbeat Purchasing Managers’ Index (PMI) readings, unveiled just yesterday. 

GBP/USD has formed a bullish divergence pattern, suggesting a trend reversal signal for the pair. The RSI has rebounded and is on the brink of breaking into the overbought zone, and the MACD’s higher high pattern suggests fresh bullish momentum may be forming. 

Resistance level: 1.2660, 1.2760

Support level: 1.2540, 1.2440

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EUR/USD，H4

Over the past two sessions, the EUR/USD pair has exhibited bullish momentum, largely driven by a lacklustre performance in the dollar amidst prevailing dovish speculation surrounding the Federal Reserve’s monetary policy. However, yesterday’s release of the euro’s CPI readings revealed a shortfall, indicating that inflation in the eurozone is nearing its targeted 2% rate. This development may weaken the euro’s strength, as market participants anticipate an earlier-than-expected rate reduction from the European Central Bank (ECB).

EUR/USD rebounded strongly and has broken its near-resistance level, suggesting a bullish bias for the pair. The MACD has broken above the zero line, while the RSI is on the brink of breaking into the overbought zone, suggesting the pair is trading with prevailing bullish momentum. 

Resistance level: 1.0866, 1.0954

Support level: 1.0775, 1.0700

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AUD/USD，H4

Initially impacted by dovish minutes from the Reserve Bank of Australia (RBA) meeting and subdued economic data, the Australian dollar has seen a reversal in fortune, thanks to a weakening U.S. dollar. This shift has empowered the AUD/USD pair to break past its previous resistance level, instilling a bullish outlook. Market participants are now keenly awaiting the upcoming release of Australia’s Retail Sales figures, scheduled for today, which is expected to significantly influence the trajectory of the pair.

AUD/USD rebounded strongly in the past two sessions, suggesting the pair is trading with strong bullish momentum. The RSI is about to cross into the overbought zone, while the MACD has broken above the zero line, suggesting the pair has reversed its bearish trend and is trading with bullish momentum. 

Resistance level: 0.6560, 0.6640

Support level: 0.6535, 0.6484

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USD/JPY, H4

Speculation surrounding the Bank of Japan’s (BoJ) next interest rate hike is increasingly leaning towards October, with numerous knowledgeable insiders echoing this sentiment. Strategists further suggest that a comprehensive normalisation process will commence next year, characterised by 25 basis points increases every six months. This anticipated divergence in monetary policy between the BoJ and its counterpart central banks is expected to apply downward pressure on the currency pair in question.

The pair remain trading in a sideways pattern, awaiting a strong catalyst for the pair to pick a direction. The RSI remains above the 50 level while the MACD sustained above the zero line, suggesting the pair is trading with prevailing bullish momentum. 

Resistance level: 151.85, 153.20

Support level: 149.50, 147.60

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Dow Jones, H4

The US equity market held its ground following a dovish tone from Federal Reserve members, affirming the possibility of rate cuts amid economic uncertainties. Lower Treasury yields, influenced by the Fed’s remarks and subdued economic data, contributed to the market’s resilience. Investor sentiment remains cautious yet optimistic, with attention focused on future economic indicators and the Federal Reserve’s policy stance to navigate evolving market conditions effectively.

Dow Jones is trading lower while currently testing the support level. MACD has illustrated increasing bearish momentum, while RSI is at 46, suggesting the index might extend its losses after breakout since the RSI stays below the midline. 

Resistance level: 39855.00, 40995.00

Support level: 39150.00, 37700.00

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CL OIL, H4

Crude oil prices extended their gains, with ongoing geopolitical tensions in the Middle East and expectations of OPEC+ production cuts fueling bullish sentiment. However, gains were tempered by disappointing inventory data, as the US Energy Information Administration reported higher-than-expected crude oil inventories. This divergence underscores the delicate balance between supply disruption fears and inventory dynamics shaping oil price movements.

Oil prices are trading higher while currently testing the resistance level. MACD has illustrated diminishing bearish momentum, while RSI is at 59, suggesting the commodity might extend its gains after breakout since the RSI stays above the midline. 

Resistance level: 85.75, 89.10

Support level: 83.15, 80.20

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