Daily Market Report

27/04/2023
11:18

The US Dollar retreated on Wednesday before bouncing back at the end of the US trading session as traders await the FED’s next interest rate decision due next week.
Gold reached a high of $2009 per ounce before ending the day below the 2000 psychological barrier while Oil extended its decline to the $74 per barrel as sellers managed to fill the recent price GAP. In the US stock market, we have seen a mixed close.
The Dow fell by 0.68%, the S&P500 lost 0.38% while the Nasdaq Composite added 0.47%. Microsoft jumped by more than 7% after beating expectations while Meta shares soared by 10% following better-than-expected financial results.
Looking now at the key economic releases for the day. In the US, pending home sales are expected to have declined in March from 0.8% down to 0.5%. In the meantime, the focus will be on the latest GDP release with analysts expecting a slowdown in the economy. Forecasts are pointing to a decline from 2.6% down to 2.0% in the first quarter.
On the opposite, initial jobless claims are due to rise from 245K up to 248K.
Below, we will be analyzing the latest price action developments in the major currency pairs alongside gold.

EURUSD

The Euro registered a new high for this month at 1.1093 level, however, the single currency was unable to hold its gains and retreated by the end of yesterday’s US trading session.
Technically, the key resistance is located at 1.1075 and buyers should push prices back above this barrier to confirm a continuation higher in the direction of the 1.1125 level.
When looking at the bigger picture, we can see that the Euro trend is still bullish as the pair has stabilized above the falling trendline shown in the chart below. In addition, the positive momentum is likely to stay unchanged while prices continue to trade above the 1.0965 support.
In the near term, the Euro is trading sideways between 1.1093 resistance and 1.0965 support, therefore, we will wait for a clear break outside of this range in the coming hours to confirm the next direction in this pair.

GBPUSD

The British pound traded higher on Wednesday, and the focus remains on the 1.2500 barrier as a breakout above should lead to another advance in the direction of 1.2550 resistance.
From a technical standpoint, the pair remains in an uptrend, in the meantime, when looking at the recent price action, the Sterling is trading inside a wide range located between 1.2550 high and 1.2350 low.
The positive trend is likely to persist as prices continue to respect a series of higher highs and higher lows since forming a low at the 1.1800 level. Meanwhile, a breakout above 1.2500 psychological resistance is needed in the coming hours.
Buyers are expected to target the next resistance zone at 1.2530-1.2550 while prices keep trading above the 1.2390 low. On the other side, only a daily close below the 1.2390-1.2350 support zone will cancel this positive outlook.

USDJPY

The pair faced heavy selling after breaking below the 133.55 support, reaching a low of 133.00 before bouncing back.
For the time being, the bearish momentum remains weak, and prices are expected to continue trading sideways despite the recent decline as prices should remain well supported above the 132.00 low. The trend has become neutral; therefore, traders should wait for more price action before confirming the next direction in the near term.
Looking at the recent drop from the 135.10 high we can see that prices have formed two consecutive lower highs and lower lows, which keeps the short-term view slightly to the downside.
Finally, the nearest resistance stands at 134.00 while the closest support is located at 133.40 followed by 133.00 in extension.

USDCAD

The pair was little changed yesterday after reaching a strong resistance zone located between 1.3635 and 1.3655 levels. This zone represents a formerly broken support that is likely to change its role and become a new resistance.
Therefore, the pair is expected to find strong sellers in the coming hours, and it is important to note that the trend remains neutral in this pair when looking at the higher time frames.
Meanwhile, traders should wait for a move back below the 1.3600 level which represents the near-term support before confirming the beginning of a new wave lower that can target the next support zone located between 1.3550 and 1.3525 levels.
On the other side, a daily close above 1.3655 resistance should clear the path for a continuation higher in the direction of the 1.3695 level.

GOLD

Gold continues to trade sideways as sellers managed to defend successfully the 2015-2012 resistance zone.
The recent bounce in Gold reached a high of $2009 per ounce before reversing lower, which keeps the short-term outlook neutral. However, the biggest picture remains bullish on Gold and will likely remain unchanged while the yellow metal continues to hold above the 1970 support.
This is a key level for future price action, as a daily close below it should lead to a deeper correction to the downside. As of today, 1983 represents the support level to watch, on the flip side, the first resistance stands at $2003 followed by the 2009 level in extension.
Finally, a daily close above the 2012-2015 zone is needed to confirm the end of the current downside retracement, otherwise, the trend will remain neutral.

Economic Analyst
Amine Hiani