Tension heats up as geopolitical stress intensifies

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 1.2389 – 19 April/2024 low – Medium
• S2 1.2374 – 17 November low – Strong

GBPUSD – fundamental overview

Friday price action has been dominated by headlines from the geopolitical front on reports Israel has struck back at Iran. The initial flow was Dollar bullish though as the dust settles and things calm down, the Pound has traded back up after briefly dipping to a fresh 2024 low. On Thursday, the Pound got some support from BOE Greene comments after the central banker said rate cuts were not imminent. Key standouts on Friday’s calendar come from German producer prices, UK retail sales, and central bank speak from various BOE and Fed officials.

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 154.79 – 16 April/Multi-Year high – Medium
• S1 152.59 – 12 April low – Medium
• S2 150.26 – 21 March low – Strong

USDJPY – fundamental overview

Friday price action has been dominated by headlines from the geopolitical front on reports Israel has struck back at Iran. The initial flow saw a drive into the Yen though as the dust settles and things calm down, the Yen has come right back under pressure with market participants back to focusing on aggressive policy divergence and a test of the USDJPY 155.00 barrier. Of course, there has also been plenty of worry around possible intervention, which has kept the major pair capped below 155.00 for the time being. Key standouts on Friday’s calendar come from German producer prices, UK retail sales, and central bank speak from various BOE and Fed officials.

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 0.6362– 19 April/2024 low – Medium
• S2 0.6339 – 10 November low – Strong

AUDUSD – fundamental overview

Friday price action has been dominated by headlines from the geopolitical front on reports Israel has struck back at Iran. The initial flow was Dollar bullish though as the dust settles and things calm down, the Australian Dollar has traded back up after briefly dipping to a fresh 2024 low. Key standouts on Friday’s calendar come from German producer prices, UK retail sales, and central bank speak from various BOE and Fed officials.

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 1.3847 – 16 April/2024 high – Medium
• S1 1.3661 – 11 April low – Medium
• S2 1.3547 – 9 April low – Strong

USDCAD – fundamental overview

Friday price action has been dominated by headlines from the geopolitical front on reports Israel has struck back at Iran. The initial flow was Dollar bullish though as the dust settles and things calm down, the Canadian Dollar has recovered, with no major levels broken. The Canadian Dollar was actually one of the least hit on  the news given the accompanying surge in the price of oil which offset fallout from the flight to safety into the Buck. Key standouts on Friday’s calendar come from German producer prices, UK retail sales, and central bank speak from various BOE and Fed officials.

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 0.5852 – 19 April 2024 low – Medium
• S2 0.5800 – Figure – Medium

NZDUSD – fundamental overview

Friday price action has been dominated by headlines from the geopolitical front on reports Israel has struck back at Iran. The initial flow was Dollar bullish though as the dust settles and things calm down, the New Zealand Dollar has traded back up after briefly dipping to a fresh 2024 low. Key standouts on Friday’s calendar come from German producer prices, UK retail sales, and central bank speak from various BOE and Fed officials.

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 4950– Mid-Figure – Medium
• 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. The trouble right now is that inflation has been showing signs of ticking back up, all while the market contends with additional uncertainty around geopolitical risk.

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, geopolitical 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.