Serious risks to consider into the 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 latest push to a fresh 2024 high beyond 1.2830 confirms the outlook and opens the door for the next major upside extension towards the 2023 high at 1.3143. Any setbacks should now be well supported ahead of 1.2500.

• R2 1.2804 – 21 March high – Strong
• R1 1.2710 – 9 April high – Medium
• S1 1.2510 – 11 April/2024 low – Medium
• S2 1.2500 – 13 December low – Strong

GBPUSD – fundamental overview

The Pound has held up relatively well into the end of the week when considering just how hard currencies have been hit against the Buck. A lot of the recent support for the Pound is said to be coming from sizable demand in the 1.2500 area and hawkish comments from BOE Greene who has warned against cutting rates too soon. The local rates market is pricing in less than two BOE cuts for 2024, down from nearly three cuts earlier this week. Key standouts on Friday’s calendar come from German inflation, UK GDP, industrial production, trade, and construction output, US trade, Michigan sentiment, and central bank speak.

USDJPY – technical overview

The market remains confined to a strong uptrend, most recently pushing through the multi-year high from 2022 at 151.95. This now opens the next major upside extension towards 155.00. Key support comes in at 150.00, with only a weekly close below to delay the constructive outlook.

• R2 154.00 – Figure – Medium
• R1 153.32 – 11 April/Multi-Year high – Strong
• S1 151.98 – 27 March high – Medium
• S2 150.00 – Psychological – Strong

USDJPY – fundamental overview

The Yen has slid to a 34 year low against the Buck after US inflation data came in hotter than expected this week, forcing a healthy further repricing of Fed expectations. The chatter making the rounds now is that there won't be any intervention until USDJPY 155.00. Key standouts on Friday’s calendar come from German inflation, UK GDP, industrial production, trade, and construction output, US trade, Michigan sentiment, and central bank speak.

AUDUSD – technical overview

There are signs of the potential formation of a longer-term base with the market trading down into a meaningful longer-term support zone. Only a monthly close below 0.6200 would give reason for rethink. Back above 0.6900 will take the big picture pressure off the downside and strengthen case for a bottom.

• R1 0.6668– 8 March high – Strong
• R2 0.6645 – 9 April high – Medium
• S1 0.6481– 1 April low – Medium
• S2 0.6443 – 13 February low – Medium

AUDUSD – fundamental overview

Slightly cooler US producer prices and a recovering US equity market were the primary drivers behind the latest mild recovery in the Australian Dollar. Key standouts on Friday’s calendar come from German inflation, UK GDP, industrial production, trade, and construction output, US trade, Michigan sentiment, and central bank speak.

USDCAD – technical overview

Above 1.3000 signals an end to a period of longer-term 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 1.3777 – 16 November high – Medium
• R1 1.3726 – 11 April/2024 high – Medium
• S1 1.3547 – 9 April low – Medium
• S2 1.3478 – 4 April low – Strong

USDCAD – fundamental overview

Recent economic data out of Canada has been less encouraging and odds for rate cuts from the Bank of Canada have ramped up. This in conjunction with the latest slide in oil and broad based US Dollar demand have contributed to the Canadian Dollar's slide to fresh yearly lows against the Buck. Key standouts on Friday’s calendar come from German inflation, UK GDP, industrial production, trade, and construction output, US trade, Michigan sentiment, and central bank speak.

NZDUSD – technical overview

Overall pressure remains on the downside with the market continuing to stall out on runs up into the 0.6500 area. At the same time, there are some signs of the market wanting to put in a longer-term base. Ultimately, a break back above 0.6500 would be required to take the medium-term pressure off the downside and encourage this prospect. A monthly close below 0.5800 will intensify bearish price action.

• R2 0.6107 – 21 April high – Strong
• R1 0.6083 – 10 April high – Medium
• S1 0.5939 – 1 April 2024 low – Medium
• S2 0.5900 – Figure – Medium

NZDUSD – fundamental overview

Slightly cooler US producer prices and a recovering US equity market were the primary drivers behind the latest mild recovery in the New Zealand Dollar. However, softer Kiwi data in the form of business PMIs and credit card sales, have weighed on the currency into rallies. Key standouts on Friday’s calendar come from German inflation, UK GDP, industrial production, trade, and construction output, US trade, Michigan sentiment, and central bank speak.

US SPX 500 – technical overview

Longer-term technical studies continue to look quite extended after pushing to fresh record highs, begging for a deeper correction ahead. Look for rallies to be well capped in favor of lower tops and lower lows. Next key support comes in at 5110.

• R2 5300 – Figure – Strong
• R1 5287 – 1 April high/Record – Medium
• S1 5110– 15 March low – Strong
• S2 5058 – 5 March low – Medium

US SPX 500 – fundamental overview

Though we have seen an adjustment of investor expectations towards the amount of rate cuts in 2024, the market still believes policy will end up erring more towards the investor friendly, accommodative side of things. This bet has kept stocks well bid and pushing record highs. Still, it's important to highlight the fact that the Fed has yet to declare a victory over inflation and could disappoint investors with less accommodative policy than desired going forward. If this happens, stocks could be in for a nasty bearish reversal.

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 1900 on a monthly close basis ahead of the next major upside extension towards 2500.

• R2 2400 – Round Number – Medium
• R1 2396 – 12 April/Record high – Medium
• S1 2223 – 21 March high – Strong
• S2 2146 – 18 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 end.