Europe returns from long holiday weekend

GBPUSD – technical overview

Signs have emerged of the market wanting to put in a longer-term base after collapsing to a record low in September 2022. The November 2022 monthly close back above 1.2000 strengthens this prospect. Any setbacks should now be well supported ahead of 1.2000. Next key resistance comes in at 1.2667.

• R2 1.2667 – Monthly high, May 2022 – Strong
• R1 1.2547 – 14 April/2023 high – Medium
• S1 1.2344 – 10 April  low– Medium
• S2 1.2275 – 3 April low – Strong

GBPUSD – fundamental overview

UK markets were closed on Monday for the May Day holiday and will be getting back to fuller form today. Looking ahead, key standouts on the calendar come from German retail sales, some German and Eurozone manufacturing PMI reads, UK manufacturing PMIs, Eurozone inflation, US JOLTs job openings, and factory orders.

USDJPY – technical overview

The major pair has seen a nice recovery following the massive correction out from multi-year highs. Setbacks have finally been well supported ahead of 125.00 in the 127s thus far. At this stage, it looks like the market could be wanting to resume the bigger picture uptrend and head back towards a retest of that multi-year high from October 2022 up at 151.95. Look for any weakness to continue to be well supported in favor of higher lows along the way.

• R2 138.18 – 15 December high – Strong
• R1 137.92– 8 March/2023 high – Strong
• S1 137.00 – Figure – Medium
• S2 136.12 – 1 May low – Medium

USDJPY – fundamental overview

The Yen has come under intense pressure in the aftermath of last week's BOJ decision which disappointed many hawks out there. The central bank kept to form, leaving current negative interest rate policy and yield curve controls in place. Looking ahead, key standouts on the calendar come from German retail sales, some German and Eurozone manufacturing PMI reads, UK manufacturing PMIs, Eurozone inflation, US JOLTs job openings, and factory orders.

AUDUSD – technical overview

There are signs of the potential formation of a longer-term base following the late 2022 surge back above 0.6500. The recent weekly close back above previous support now turned resistance at 0.6682 strengthens the outlook for a bullish structural shift. Next key resistance comes in at 0.7284. Setbacks should be well supported ahead of 0.6500.

• R1 0.6772 – 20 April high – Strong
• R2 0.6710– 2 May high – Medium
• S1 0.6590 – 15 March low – Medium
• S2 0.6564 – 10 March low – Strong

AUDUSD – fundamental overview

The RBA came out with a surprise decision earlier today, opting to raise rates by 25 basis points after most of the market though the central bank would hold. RBA Lowe was also on the wires flagging the possibility for additional hikes in the coming months. All of this has factored into the run of Aussie outperformance we're seeing on this Tuesday. Looking ahead, key standouts on the calendar come from German retail sales, some German and Eurozone manufacturing PMI reads, UK manufacturing PMIs, Eurozone inflation, US JOLTs job openings, and factory orders.

USDCAD – technical overview

A recent surge back above 1.3000 signals an end to a period of bearish consolidation and suggests the market is in the process of carving out a more significant longer-term base. Next key resistance now comes in up into the 1.4000 area. Setbacks should be very well supported down into the 1.3000 area.

• R2 1.3805 – 24 March high – Strong
• R1 1.3700 – Figure– Medium
• S1 1.3500 – Psychological – Medium
• S2 1.3448 – 20 April low – Strong

USDCAD – fundamental overview

Canadian Dollar gains slowed down on Monday, with most of this attributed to renewed selling in the price of oil. Looking ahead, key standouts on the calendar come from German retail sales, some German and Eurozone manufacturing PMI reads, UK manufacturing PMIs, Eurozone inflation, US JOLTs job openings, and factory orders.

NZDUSD – technical overview

Overall pressure remains on the downside with the market once again stalling out on a run up into the 0.6500 area. Ultimately, a break back above 0.6577 would be required to take the immediate pressure off the downside.

• R2 0.6391 – 14 February high – Strong
• R1 0.6350 – Mid-Figure – Medium
• S1 0.6111– 26 April low – Medium
• S2 0.6084 – 8 March low – Strong

NZDUSD – fundamental overview

The New Zealand Dollar has been getting a boost on Tuesday as it trades alongside its Aussie cousin, benefitting from the momentum from the RBA rate hike. Looking ahead, key standouts on the calendar come from German retail sales, some German and Eurozone manufacturing PMI reads, UK manufacturing PMIs, Eurozone inflation, US JOLTs job openings, and factory orders.

US SPX 500 – technical overview

Longer-term technical studies are in the process of unwinding from extended readings off record highs. Look for rallies to be well capped in favor of lower tops and lower lows. A monthly close back above 4300 will be required at a minimum to take the immediate pressure off the downside. Next major support comes in at 3806.

• R2 4198 – 2 February/2023 high – Strong
• R1 4193 – 1 May high – Medium
• S1 3921 –  2 March low – Medium
• S2 3806 – 13 March low – Strong

US SPX 500 – fundamental overview

We've finally reached a point in the cycle where the Fed recognizes unanchored inflation expectations pose a greater downside risk than over-tightening. This is significant, as it means less investor friendly monetary policy that risks potential recession in the months ahead. Overall, we expect inflation to continue to be a problem in 2023 that results in downside pressure into rallies.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs. Setbacks should now be well supported above 1600 on a monthly close basis ahead of the next major upside extension. The recent break back above 1808 strengthens the bullish outlook. Next major resistance comes in at the record high from 2020 at 2076, above which opens the next extension towards 2,500.

• R2 2076 – Record high, 2020 – Very Strong
• R1 2071 – 2022 high – Strong
• S1 1969 – 19 April low – Medium
• S2 1934 – 22 March low – Medium

GOLD (SPOT) – fundamental overview

The yellow metal continues to be well supported on dips with solid demand from medium and longer-term accounts. These players are more concerned about inflation risk and a less upbeat global growth outlook. All of this should keep the commodity well supported, with many market participants also fleeing to the hard asset as the grand dichotomy of record high equities and record low yields comes to an unnerving climax.