Tuesday off to a sour start

Next 24 hours: No rush to make decisions ahead of the Fed

Today’s report: Tuesday off to a sour start

There is still no official confirmation of any intervention in the Yen following the recent breakdown to its lowest level against the US Dollar in 34 years. Meanwhile, economic data out thus far on Tuesday has been less than impressive.

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Wake-up call

Chart talk: Technical & fundamental highlights

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EURUSD – technical overview

The Euro has been in a multi-month consolidation since bottoming out in 2022. Setbacks have since been exceptionally well supported on dips below 1.0500, with a higher platform sought out ahead of the next major upside extension. Look for a push through the 2023 high at 1.1276 to strengthen the constructive outlook and extend the recovery run towards 1.2000. Only back below 1.0400 negates.

  • R2 1.0800 – Figure – Medium
  • R1 1.0753 - 26 April high – Medium
  • S1 1.0674 - 26 April low– Medium
  • S2 1.0601 – 16 April, 2024 low – Strong

EURUSD – fundamental overview

The Euro has been trying to find some bids, perhaps most recently on the back of less dovish ECB comments and German inflation data coming in mostly as expected. ECB Wunsch was out cautioning against the signaling of rapid rate cuts, while ECB Knot said it was too early to comment beyond June. Key standouts on Tuesday’s calendar come from German retail sales, German employment data, German GDP, UK mortgage approvals, Eurozone GDP, Eurozone inflation, Canada GDP, US Case Shiller, Chicago PMIs, and US consumer confidence.

EURUSD - Technical charts in detail

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 1.2600 – Figure – Medium
  • R1 1.2570 – 29 April high – Medium
  • S1 1.2448 – 25 April low – Medium
  • S2 1.2393 – 22 April high – Medium

GBPUSD – fundamental overview

The Pound is trying to hold onto impressive Monday gains despite this latest much lower than expected UK BRC shop price index for April. Key standouts on Tuesday’s calendar come from German retail sales, German employment data, German GDP, UK mortgage approvals, Eurozone GDP, Eurozone inflation, Canada GDP, US Case Shiller, Chicago PMIs, and US consumer confidence.

USDJPY – technical overview

The market remains confined to a strong uptrend, most recently extending to a multi-year high through 160.00. Key support comes in at 151.95, with only a weekly close below to delay the constructive outlook.

  • R2 160.20 – 29 April/Multi-Year high – Very Strong
  • R1 158.00 – Figure – Medium
  • S1 154.52 – 29 April low – Medium
  • S2 153.59 – 19 April low – Strong

USDJPY – fundamental overview

Japan's top currency official Masato Kanda said he had "no comment for now" when asked if the MOF has conducted an FX intervention. On the data front, the Japan job-to-applicant ratio increased against expectations for a hold, retail sales contracted by a lot more than expected, and industrial production was better than expected. Key standouts on Tuesday’s calendar come from German retail sales, German employment data, German GDP, UK mortgage approvals, Eurozone GDP, Eurozone inflation, Canada GDP, US Case Shiller, Chicago PMIs, and US consumer confidence.

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 0.6587 – 29 April high – Medium
  • S1 0.6362– 19 April/2024 low – Medium
  • S2 0.6339 – 10 November low – Strong

AUDUSD – fundamental overview

Aussie retail sales came in much softer than expected, while China PMI reads were also discouraging. All of this has contributed to the latest downside pressure on the Australian Dollar. Key standouts on Tuesday’s calendar come from German retail sales, German employment data, German GDP, UK mortgage approvals, Eurozone GDP, Eurozone inflation, Canada GDP, US Case Shiller, Chicago PMIs, and US consumer confidence.

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 1.3632 – 29 April low – Medium
  • S2 1.3547 – 9 April low – Strong

USDCAD – fundamental overview

Things have been relatively quiet out of Canada, though we have seen renewed Canadian Dollar weakness in recent sessions as the price of oil dips back down. Key standouts on Tuesday’s calendar come from German retail sales, German employment data, German GDP, UK mortgage approvals, Eurozone GDP, Eurozone inflation, Canada GDP, US Case Shiller, Chicago PMIs, and US consumer confidence.

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

The New Zealand Dollar isn't getting any help from Tuesday updates. The ANZ Business Outlook survey for April saw both the business confidence and activity outlook gauges fall sharply to their lowest levels since September 2023, and the Ministry of Business, Innovation, and Employment released job ads data for Q1, showing job ads falling 5.4% on a Q/Q basis, registering a seventh straight quarterly decline on softness in the IT, manufacturing, and construction industries. Key standouts on Tuesday’s calendar come from German retail sales, German employment data, German GDP, UK mortgage approvals, Eurozone GDP, Eurozone inflation, Canada GDP, US Case Shiller, Chicago PMIs, and US consumer confidence.

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 4928– 19 April low – Medium
  • S2 4921 – 13 February low – Strong

US SPX 500 – fundamental overview

Though we have seen a healthy 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 2291 – 23 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.

Peformance chart: 30-Day Performance vs. US dollar (%)

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