Are investors losing confidence in the Fed?

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 1.2000.

• R2 1.2579 – 11 April high – Medium
• R1 1.2500 – Psychological – Medium
• S1 1.2420 – 16 April/2024 low – Medium
• S2 1.2374 – 17 November low – Strong

GBPUSD – fundamental overview

The Pound hasn't been able to avoid falling victim to the wave of Dollar demand, but has managed to outperform on a slightly more hawkish BOE policy trajectory expectation than at the ECB and other major central banks. Key standouts on Tuesday’s calendar come from German wholesale prices, UK employment, Eurozone trade, Eurozone and German ZEW reads, Canada inflation, US housing starts and building permits, US industrial production, 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 155.00 – Psychological – Very Strong
• R1 154.45 – 15 April/Multi-Year high – Medium
• S1 152.59 – 12 April low – Medium
• S2 150.26 – 21 March low – Strong

USDJPY – fundamental overview

The market is perhaps going to start to get a little more nervous about selling the Yen now that we're that much closer to the much talked about USDJPY 155.00 line in the sand. Earlier today, Chief Cabinet Secretary Hayashi said excessive FX moves were undesirable, and that he was watching the market closely, warning about possible FX intervention. Similar sentiment was expressed by FinMin Suzuki. Key standouts on Tuesday’s calendar come from German wholesale prices, UK employment, Eurozone trade, Eurozone and German ZEW reads, Canada inflation, US housing starts and building permits, US industrial production, 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 0.6554 – 11 April high – Medium
• S1 0.6408– 16 April/2024 low – Medium
• S2 0.6339 – 10 November low – Strong

AUDUSD – fundamental overview

The Australian Dollar has been feeling the weight of broad based US Dollar demand and a slide in US equities. Stronger China GDP data earlier today has done nothing to help the risk correlated commodity currency which has sunk to a fresh yearly low. It's worth noting the stronger China GDP read was offset by softer retail sales and industrial production prints. Key standouts on Tuesday’s calendar come from German wholesale prices, UK employment, Eurozone trade, Eurozone and German ZEW reads, Canada inflation, US housing starts and building permits, US industrial production, 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 1.3900 – 1 November/2023 high – Strong
• R1 1.3814 – 16 April/2024 high – Medium
• S1 1.3661 – 11 April low – Medium
• S2 1.3547 – 9 April low – Strong

USDCAD – fundamental overview

Canada manufacturing sales data came out stronger than expected on Monday, while also putting in an impressive recovery from the previous print. Unfortunately for the Canadian Dollar, this wasn't enough to prevent the Loonie from extending declines to fresh yearly lows against the Buck. Key standouts on Tuesday’s calendar come from German wholesale prices, UK employment, Eurozone trade, Eurozone and German ZEW reads, Canada inflation, US housing starts and building permits, US industrial production, 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 0.5873 – 16 April 2024 low – Medium
• S2 0.5863 – 14 November low – Medium

NZDUSD – fundamental overview

The New Zealand Dollar has extended its run of yearly lows against the Buck on the back of a wave of broad based US Dollar demand and downside pressure on US equities. Earlier today, the REINZ House Price Index for March showed housing market values rising, albeit at a slower pace than in February, while the monthly property report showed sales activity across much of the country rising at a decent pace. Key standouts on Tuesday’s calendar come from German wholesale prices, UK employment, Eurozone trade, Eurozone and German ZEW reads, Canada inflation, US housing starts and building permits, US industrial production, 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 4921.

• R2 5287 – 1 April high/Record – Strong
• R1 5194 – 8 March high – Medium
• S1 5000– Psychological – Strong
• S2 4921 – 13 February low – Strong

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 hopes policy will end up erring more towards the investor friendly, accommodative side of things. This bet has kept stocks well bid into dips and consistently pushing record highs.

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 2500 – Psychological – Medium
• R1 2432 – 12 April/Record high – Medium
• S1 2268 – 5 April low – Medium
• S2 2223– 21 March high – Strong

GOLD (SPOT) – fundamental overview

The yellow metal has pushed record highs in 2024 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.