Daily Market Report

28/04/2023
11:16

US stocks posted strong gains on Thursday as all three major US indexes closed higher boosted by companies’ strong financial results.
The Nasdaq climbed 2.43%, while the Dow and S&P500 registered their best day since January by adding 1.57% and 1.96% respectively. In the meantime, Gold extended its decline reaching the 1975 support on the back of a stronger Dollar.

The probability of a 25 bps rate hike by the FED for May 3rd is 81%. The upcoming FED rate decision due next week will be a strong catalyst for future price action.

Looking now at the key economic releases for the day. In the US, the Core PCE price index is likely to remain unchanged at 0.3%. However, personal income is expected to have declined from 0.3% down to 0.2%.

In Canada, analysts expect a slowdown in the economy as forecasts are pointing to a lower GDP reading.

Below, we will be analyzing the latest price action developments in the major currency pairs alongside gold.

EURUSD

The Euro continues to fight for a clear direction in the near term, the single currency traded lower on Thursday after failing to break above the daily resistance of 1.1075.

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. However, in the short term, the trend is neutral, which can lead to price stabilization in the coming hours.

Traders should wait for a break above the 1.1075-1.1093 resistance zone to confirm a continuation to the upside that can target 1.1125. On the opposite, the key support zone stands between 1.0985 and 1.0965 levels and the positive outlook is likely to remain unchanged while prices continue to trade above this zone.

GBPUSD

The British pound extended its advance as buyers will likely challenge the 1.2500 psychological barrier in the coming hours.

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 to clear the path for another retest of 1.2550.

On the other side, the pair is expected to remain well-supported above the 1.2390-1.2350 support zone.

USDJPY

The pair managed to bounce from the 133.00 support to stabilize near the 134.00 handle as the short-term remain neutral.

For the time being, prices are expected to continue trading sideways despite the recent decline as prices should remain well supported above the 133.00 low. As mentioned earlier, 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 134.20 while the closest support is located at 133.25 followed by 133.00 in extension.

USDCAD

The pair faced selling pressure from the resistance zone mentioned in our previous report located between the 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.

Technically, the trend remains neutral in this pair when looking at the higher time frames.
Meanwhile, we can see that the pair managed to fall back below the 1.3600 level which represents the near-term support. Therefore, a new wave lower is likely in the coming hours, which can target the next support at 1.3550.

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 failed to overtake the 2003 hourly resistance and dropped to as low as $1975 per ounce before bouncing back.
The short-term trend is neutral, and prices are expected to continue trading sideways in the coming hours ahead of the upcoming FED rate decision due next week.
From a wider angle, 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, 1975 represents the support level to watch, on the flip side, the first resistance stands at $2003 followed by the 2009 level in extension.

Economic Analyst
Amine Hiani