Forex News Timeline

Monday, May 23, 2022

The AUD/JPY pair has displayed a firmer upside move after remaining lackluster in the early Tokyo session. The risk barometer remained in a minor rang

AUD/JPY climbs to near 90.60 as RBA sees a modest pace in the quantitative easing program.The RBA raised its cash rates by 25 bps as a measure to contain the soaring inflation.Japan’s CPI numbers have increased to 2.5% on annual basis.The AUD/JPY pair has displayed a firmer upside move after remaining lackluster in the early Tokyo session. The risk barometer remained in a minor range of 90.18-90.44 and now has climbed strongly to near 90.60 after Reserve Bank of Australia (RBA)’s Christopher Kent commented that the central bank is in no hurry to kick-start its balance sheet reduction process. The recent surge in the price pressure forced the RBA to elevate its interest rate by 25 basis points (bps) for the very first time after the Covid-19 pandemic in May’s monetary policy announcement. The move was completely unexpected as the RBA did mention in their comments that the central bank is not seeing rate hikes sooner. As RBA has paddled up its rate cycle, the market participants started thinking that the RBA will also initiate its balance sheet reduction program to speed up the inflation-controlling process. Now, the RBA has dictated that the central bank is in no mood to bank upon quantitatively easing vigorously. RBA Christopher Kent dictated that the Bank will continue to be able to maintain effective control over the cash rate as it withdraws monetary policy stimulus in the period ahead,' as per Reuters. Meanwhile, higher-than-expected inflation numbers in Tokyo are expected to cut the sheer size of stimulus packages provided by the Bank of Japan (BOJ) to spurt the growth rate. Annual Japan’s National Consumer Price Index (CPI) figure at 2.5%, significantly higher than the estimates of 1.5% and the prior print of 1.2.  

NZD/USD extends the previous week’s recovery from a two-year low towards refreshing a fortnight high during Monday’s Asian session. That said, the Kiw

NZD/USD takes the bids to refresh a two-week high, prints three-day uptrend.Clear break of the 21-DMA, previous resistance line from April favor buyers.RSI, MACD also underpin bullish bias targeting monthly high.NZD/USD extends the previous week’s recovery from a two-year low towards refreshing a fortnight high during Monday’s Asian session. That said, the Kiwi pair takes the bids to renew the multi-day top around 0.6450 by the press time. In doing so, the quote crosses the previously key resistance level around 0.6410, comprising the 21-DMA and a downward sloping trend line from April 05. The upside momentum also gains support from the bullish MACD signals and upward sloping RSI (14), not overbought. As a result, the latest NZD/USD run-up eyes the monthly peak surrounding 0.6570. However, the 0.6500 threshold may offer an intermediate halt during the rise. Alternatively, pullback moves below the 0.6410 resistance-turned-support, could once again drag the quote towards the weekly support line, around 0.6230 by the press time. It should be noted, however, that NZD/USD weakness past 0.6230 will make it vulnerable to testing the monthly low near 0.6220 and raise doubts about the latest recovery moves. NZD/USD: Daily chart Trend: Further upside expected  

US Dollar Index (DXY) takes offers to refresh its intraday low near 102.75, fading the previous day’s rebound from a fortnight low during Monday’s Asi

DXY reverses Friday’s corrective pullback from two-week low.Repeated Fedspeak, firmer sentiment weigh on the greenback.Recovery in Treasury yields fails to probe the bears as stock futures rise over 1.0%.Monthly PMIs, FOMC Minutes will be crucial for fresh impulses.US Dollar Index (DXY) takes offers to refresh its intraday low near 102.75, fading the previous day’s rebound from a fortnight low during Monday’s Asian session. The greenback gauge flashed the biggest weekly loss since January, not to forget snapping a six-week uptrend, as the market’s risk-on mood joins the repeated comments from the US Federal Reserve (Fed) officials. The firmer mood could be linked to improving covid conditions in China, recently mixed data from the US and expectations that the global leaders will be able to tackle the growth fears with coordinated measures. A reduction in China’s covid numbers and an absence of historic US statistics join optimism by the major policymakers ahead of this week’s Quad Summit in Tokyo to favor a risk-on mood. On the contrary, escalating fears of the Russia-Ukraine crisis and the divide between the West and Moscow seem to keep the DXY bulls hopeful. That said, The DXY weakness ignores recently firmer US Treasury yields, up to three bps around 2.81% by the press time, by justifying the 1.0% gain of the S&P 500 Futures. Moving on, preliminary prints of May month’s PMIs and Minutes of the latest Federal Open Market Committee (FOMC) will be crucial for clear directions. Risk catalysts, however, can offer intraday directions. Technical analysis Sustained trading below the 21-day EMA, around 103.00 by the press time, directs DXY towards the monthly low surrounding 102.30.  

USD/CAD is under pressure at the start of the week, losing the 1.28 level at the time of writing and down some 0.26%. The pair has fallen from a high

USD/CAD bears take control at the start of the week ahead of key events.Risk appetite has improved and bulls are running out of steam.USD/CAD is under pressure at the start of the week, losing the 1.28 level at the time of writing and down some 0.26%. The pair has fallen from a high of 1.2842 and has made a low of 1.2799 so far. The greenback has lost steam and ended its worst week since early February on the backfoot vs. a basket of rival currencies on Friday. In the open, the DXY index is down over 0.2% despite the fears of the impact of soaring inflation and Russia's invasion of Ukraine. Risks to growth from aggressive monetary tightening, led by the Federal Reserve and China's strict lockdowns to quash a COVID-19 outbreak, the dollar's appeal as a haven was eclipsed by rising equities. Asian shares jumped on Friday after China cut a key lending benchmark to support a slowing economy and Wall Street followed suit.  The S&P 500 turned marginally higher having briefly entered bear-market territory intraday. The S&P 500 closed at 3,901.36 while the Dow Jones Industrial Average also ended the day slightly higher, at 31,261.90. West Texas Intermediate crude oil futures rose by $1.02 to $113.23 a barrel, supportive of commodity-linked currencies such as CAD. Meanwhile, MSCI's broadest index of Asia-Pacific shares outside Japan was 0.04% higher in the open and Australian shares gained 0.2% while Japan's Nikkei stock index was 0.85% higher. The week ahead Meanwhile, for the week ahead, Retail Sales are expected to should rise by 1.0% in March on another large contribution from gasoline stations, although core sales (ex. autos/gas) and retail volumes should paint a much weaker picture, analysts at TD Securities said. ''Motor vehicles should weigh on the headline, leaving ex-auto sales up 2.0%, while furniture/building materials will face headwinds from a softening housing market.'' From the Fed, markets will be tuned in for the minutes of the prior board meeting and 50bps rate hike. ''Fed officials have continued to communicate their intent to bring inflation under control amid a push to get policy to neutral,'' analysts at TD Securities explained. ''Chair Powell has reiterated the Fed's guidance of consecutive 50bp hikes in June/July and the May meeting minutes are likely to provide colour about these discussions. A few Fed officials have hinted at slowing the pace of hikes after reaching neutral.''  

Gold (XAU/USD) picks up bids towards an intraday high as bulls benefit from the downbeat US dollar, as well as a firmer mood, during a quiet Asian ses

Gold defends the first weekly gain in five inside short-term bullish chart formation.Repeated Fedspeak, risk-on mood weigh on the US dollar ahead of FOMC Minutes.Yields, stock futures print gains amid mixed clues, quiet session in Asia. Gold Weekly Forecast: XAU/USD starts reacting to US yields but bulls remain hesitantGold (XAU/USD) picks up bids towards an intraday high as bulls benefit from the downbeat US dollar, as well as a firmer mood, during a quiet Asian session on Monday. That said, the precious metal snapped a four-week downtrend while bouncing off the two-year low at the latest as the greenback bulls took a breather amid mixed data and repeated chatters of a 50 bps rate hike, as well backed by the optimism in China. Multiple Fed policymakers, including Chairman Jerome Powell, refrained from a 75 bps rate hike calls while defending their previous projections of the half a percent increase in the Fed rate during the next few meetings. The same joins mixed US data and cautious optimism in the market to weigh on the US dollar. Shanghai’s gradual unlocking and the mainland’s reduction in the covid cases, as well as the virus-led deaths, underpin optimism for the gold buyers, due to China’s status as one of the world’s largest gold consumers. That said, the US Dollar Index (DXY) flashed the biggest weekly loss since January, not to forget snapping a six-week uptrend, down 0.22% on a day near 102.80 by the press time. The DXY weakness ignores recently firmer US Treasury yields, up to three bps around 2.81% by the press time, by justifying the 1.0% gain of the S&P 500 Futures. Given the risk-on mood and the downbeat US dollar, the gold price may extend the latest recovery moves. Though, the monthly PMIs and Minutes of the latest Federal Open Market Committee (FOMC) will be crucial for clear directions. Technical analysis A clear upside break of the monthly falling channel joins firmer RSI (14) keeping the gold buyers hopeful inside a one-week-old rising channel formation. However, the 100-SMA level surrounding $1,852, quickly followed by the stated weekly channel’s upper line near $1,860, restricts short-term XAU/USD upside. On the contrary, pullback moves remain elusive beyond the support line of the aforementioned channel, at $1,825 by the press time. Gold: Four-hour chart Trend: Further upside expected  

The USD/CHF pair is displaying back and forth moves in a narrow range of 0.9742-0.9749 in the Asian session. The pair is trading lackluster amid subdu

USD/CHF is facing barricades around 0.9750 on softer DXY.A holiday-truncated week for the Swiss economy will keep investors on the sidelines.Fed policymakers are advocating for two more jumbo rate hikes this year.The USD/CHF pair is displaying back and forth moves in a narrow range of 0.9742-0.9749 in the Asian session. The pair is trading lackluster amid subdued performance from the US dollar index (DXY). On a broader note, the asset is juggling a little wider range of 0.9697-0.9767 from the last week after a sheer downside move from 1.0050, recorded last week. The DXY has fallen like a house of cards last week after failing to cross the round-level resistance of 105.00. Federal Reserve (Fed) policymakers are expecting that the Fed would announce two more 50 basis points (bps) rate hikes consecutively in June and July. After that, the Fed will follow its traditional approach of elevating interest rates by 25 bps and will maintain a certain interest rate to keep inflation under control. The necessity of spurting the interest rates is very much high as inflationary pressures amid soaring commodity and fossil fuel prices are impacting the paychecks of the households. Meanwhile, the Swiss franc is looking stronger against the greenback on the soaring market mood. Risk-sensitive currencies are gaining traction as the safe haven loses appeal. This week, Swiss ZEW Survey Expectations will remain in focus. The catalyst is expected to land at -39.3, better than the prior print of -51.6. Also this week, the Swiss markets will remain closed on Thursday on account of Ascension Day.  

EUR/USD pares intraday gains inside a bullish megaphone as buyers struggle to extend the previous week’s recovery moves amid a sluggish Asian session

EUR/USD retreats from intraday high within an immediate trend widening pattern.Sustained trading beyond 200-HMA, firmer RSI keeps buyers hopeful.One-week-old ascending trend line adds to the upside filters before the monthly high.EUR/USD pares intraday gains inside a bullish megaphone as buyers struggle to extend the previous week’s recovery moves amid a sluggish Asian session on Monday. Even so, the above-50 status of the RSI (14) joins the major currency pair’s ability to stay beyond the 200-HMA to underpin the bullish bias. That said, the latest pullback remains elusive until staying beyond the stated megaphone’s support line, near 1.0525. Also acting as immediate support is an upward sloping trend line from May 13, close to 1.0515, as well as the 200-HMA level of 1.0490. Meanwhile, 1.0590 and the recent swing high of the 1.0600 may entertain buyers before the weekly resistance line, close to 1.0640 at the latest, will test the upside further. In a case where EUR/USD remains firmer past 1.0640, the odds favoring the pair’s run-up towards the mid-April low near 1.0755 can’t be ruled out. EUR/USD: Hourly chart Trend: Further upside expected  

AUD/USD grinds higher towards 0.7100 as the market’s firmer sentiment battles political change in Australia, as well as mixed comments from RBA’s Kent

AUD/USD picks up bids towards refreshing two-week top as firmer sentiment, RBA’s Kent join Australia’s political challenge.RBA’s Kent hints at the below target Cash Rate for some years, Labour Party retakes Australian command after nine years.Risk catalysts, FOMC Minutes will be important for fresh impulse.AUD/USD grinds higher towards 0.7100 as the market’s firmer sentiment battles political change in Australia, as well as mixed comments from RBA’s Kent, during Monday’s Asian session. That said, the Aussie pair registered the first weekly gain in eight amid the US dollar pullback and improving covid conditions in China at the latest. Reserve Bank of Australia (RBA) Assistant Governor Christopher Kent hints at a gradual downsizing of the balance sheet during his speech on QE to QT on early Monday. The RBA policymaker also said, “Only around A$4 billion of bonds were maturing this year, with another A$13 billion in 2023.” This also compresses the cash rate as Reuters mentioned, “This abundance of funding in turn means the actual overnight cash rate is trading slightly below the RBA's official target for the cash rate, though usually within 10 basis points of it.” Read: RBA's Kent: Australia's central bank balance sheet to shrink only slowly Elsewhere, Australia’s Labour Party wins the latest Federal elections, marking a change in the government and retaking control after nine years of ruling by the Liberal-National Coalition. After being sworn in as 31st Aussie PM, Anthony Albanese promised a "journey of change" but the markets seem to respond with less zeal. That being said, China’s covid improvement and the repeated Fedspeak backing the 50 bps move seem to underpin the recently firmer sentiment, which in turn favor the AUD/USD prices. However, escalating geopolitical tensions in Europe seem to test the bulls of late. While portraying the mood, Wall Street closed mixed but the S&P 500 Futures rise 1.0% by the press time. Further, the US 10-year Treasury yields gain 2.8 basis points (bps) to around 2.80% at the latest whereas the US dollar remains pressured. Looking forward, Quad Leaders' Summit in Tokyo and other risk catalysts are likely to offer immediate directions, not to forget an immediate announcement from the new election Aussie PM. Above all, this week’s PMIs and Minutes of the latest Federal Open Market Committee (FOMC) will be crucial for the fresh impetus. Technical analysis A convergence of the descending trend line from early April, as well as the 21-day EMA, guards the AUD/USD pair’s near-term upside around the 0.7075 mark. Pullback moves, however, remain elusive until the quote stays beyond the weekly support line, around 0.7020 at the latest.  

United Kingdom Rightmove House Price Index (YoY): 10.2% vs 9.9%

Reuters reported that ''Australia's central bank on Monday projected its A$600-billion ($423.66 billion) balance sheet would remain large for some yea

Reuters reported that ''Australia's central bank on Monday projected its A$600-billion ($423.66 billion) balance sheet would remain large for some years to come as bonds it bought under quantitative easing slowly mature and repeated it had no plans to sell its holdings early.'' The news agency was reporting on the Reserve Bank of Australia (RBA) Assistant Governor Christopher Kent's comments who said only around A$4 billion of bonds were maturing this year, with another A$13 billion in 2023. Key notes ''Maturities would then range from around A$35 billion to A$47 billion a year out to 2031, before tailing off by 2033, Kent told a KangaNews bond conference.'' ''The A$188 billion lent to commercial banks under the Term Funding Facility, another emergency stimulus program begun in 2020, will also be paid in 2023 and 2024, further shrinking the size of the RBA's balance sheet.'' ''Much of the extra cash created by the QE program is held by the banks in their exchange settlement (ES) accounts at the RBA, which currently amount to about A$439 billion.'' ''This will decline as TFF loans are repaid and the RBA's bonds mature, but will likely remain larger than before the pandemic.'' ''Kent said the RBA had considered running down these ES balances more quickly but had decided that could create unwanted volatility in financial markets.'' ''This abundance of funding in turn means the actual overnight cash rate is trading slightly below the RBA's official target for the cash rate, though usually within 10 basis points of it.'' '"Most importantly though, the Bank will continue to be able to maintain effective control over the cash rate as it withdraws monetary policy stimulus in the period ahead,' said Kent.' RBA in focus All eyes are on whether the RBA will ramp up around 125bps of hikes in 2022. The data of late leaves doubts over the RBA's next move.  The ''wage and employment data haven’t, in our view, met Governor Lowe’s threshold of there needing to be “a very strong argument” for the RBA to “deviate” from moves of 25bp in coming months,'' analysts at ANZ Bank said in a note.  ''Especially when the minutes from the May meeting highlighted that the Board meets monthly, so has 'the opportunity to review the setting of interest rates again within a relatively short period of time.' Still, we think the option of a 40bp move will be considered at the RBA’s June meeting before a move of 25bp is chosen.''

The USD/JPY pair is attempting to overstep 128.00 despite the underperformance from the US dollar index (DXY) displayed in the Asian session. The pair

USD/JPY is hovering around 128.00 as the focus shifts to the US PMI data.A positive market mood has underpinned the risk-perceived currencies.Investors are keeping an eye on the US PMI data, which is due on Tuesday.The USD/JPY pair is attempting to overstep 128.00 despite the underperformance from the US dollar index (DXY) displayed in the Asian session. The pair have been struggling to surpass Monday’s high and is likely to remain volatile as a firmer rebound in the positive market sentiment will demand more strength from the market participants. An unexpected rise in Japan’s Consumer Price Index (CP) numbers released last week is expected to bring a potential shift in the ideology of the Bank of Japan (BOJ) on the policy structure. The Statistics Bureau of Japan reported annual Japan’s National Consumer Price Index (CPI) figure at 2.5%, significantly higher than the estimates of 1.5% and the prior print of 1.2%. Meanwhile, the core CPI that excludes food and energy prices has turned positive to 0.8% than the forecast of -0.9% and the former print of -0.7%. A sudden rise in Japan’s inflation is not going to support a rate hike alternative as the inflation is still near the targeted levels however, the BOJ could reduce its stimulus packages, which the BOJ was using to spurt the aggregate demand in its zone earlier. Meanwhile, the US dollar index (DXY) is losing its strength after facing hurdles at 105.00. The DXY has surrendered more than 2% and is expected to lose more amid the soaring market mood. Going forward, investors will keep the US Purchase Managers Index (PMI) on the radar.  The S&P Composite PMI is seen at 55.5 against the prior print of 56. While the preliminary estimate for the Manufacturing and Services PMI is 58 and 55.3 against the former figures of 59.2 and 55.6 respectively.      

Silver (XAG/USD) picks up bids to $21.85 as buyers reverse the week-start pullback, justifying the previous week’s breakout of crucial hurdles. Also k

Silver extend recovery from two-year low towards three-week-old horizontal hurdle.21-DMA adds strength to the upside filter, 10-DMA restricts pullback moves.RSI rebound, a clear break of descending trend line from April underpin bullish bias.Silver (XAG/USD) picks up bids to $21.85 as buyers reverse the week-start pullback, justifying the previous week’s breakout of crucial hurdles. Also keeping the metal buyers hopeful is the gradual recovery in the RSI as prices rebound during Monday’s Asian session. It’s worth noting, however, that a confluence of the 21-DMA and horizontal area comprising multiple highs marked since early May, around $22.10-15, appears a tough nut to crack for the bulls. In a case where XAG/USD rises past $22.15, the odds favoring further upside towards the monthly high of $23.28 can’t be ruled out. During the rise, the $23.00 threshold can act as a buffer. Should silver buyers manage to cross the monthly peak, the early April swing low near $24.15 will be on their radars. On the contrary, pullback moves remain elusive beyond the 10-DMA level of $21.54. Even if the quote drops below the 10-DMA, the $21.00 round figure and the $20.00 psychological magnet will be crucial challenges for the XAG/USD bears before prospering further. Silver: Daily chartTrend: Further upside expected  

GBP/USD is on the way towards the weekly supply area in a 38.2% Fibonacci retracement of the weekly bearish impulse. The following illustrates the bul

GBP/USD bulls are taking on the bears at key daily resistance. Bulls eye a deeper correction of weekly bearish impulse. GBP/USD is on the way towards the weekly supply area in a 38.2% Fibonacci retracement of the weekly bearish impulse. The following illustrates the bullish bias for the meanwhile on lower time frames although bears will be looking to take advantage of a discounted price with determination for a downside extension towards 1.2075.  GBP/USD weekly chart From the weekly perspective, the bulls are in control within the correction that has so far yet to breach the 1.2530s and the 38.2% Fibo. The bears are attempting to guard the 1.25 areas as follows: GBP/USD daily chart If the bulls manage to break the current resistance, there is little that stands in the way to the 1.2650s.  If the bulls manage to break there, then the path will be opened for a run towards the 1.30s and prior support. 

United Kingdom Rightmove House Price Index (MoM) increased to 2.1% from previous 1.6%

USD/CAD eyes further losses as bears attack the 1.2800 threshold during the initial Asian session on Monday. In doing so, the Loonie pair pays little

USD/CAD remains pressured around daily low after snapping seven-week uptrend.Oil prices struggle to justify escalation in geopolitical fears, optimism in China.US dollar stays on the back foot amid firmer sentiment, less support for 75 bps rate hike move.Monthly PMIs, Canada Retail Sales and FOMC Minutes are the week’s key events.USD/CAD eyes further losses as bears attack the 1.2800 threshold during the initial Asian session on Monday. In doing so, the Loonie pair pays little heed to a pullback in oil prices, Canada’s main export, while also cheering the softer US dollar, amid a mostly quiet session. WTI crude oil prices print the first daily negative in three, down 0.70% around $109.15 by the press time, even as the Russia-Ukraine crisis escalates. The reason for the black gold’s latest weakness could be linked to Germany and Italy’s approval of Russia gas payment, getting the nod from Brussels, as well as global oil producers’ rejection of the more output cut than already discussed. On the other hand, the US Dollar Index (DXY) flashed the biggest weekly loss since January, not to forget snapping a six-week uptrend, as market players seemed to have bored with the 50 bps rate hike comments from the Fed policymakers, including Chairman Jerome Powell. Also keeping the greenback under pressure was the latest headline economics that flashed mixed numbers. It should be noted that the hawkish comments from the European Central Bank (ECB) have recently gained major attention and exerted additional downside pressure on the greenback. Furthermore, Shanghai’s gradual unlocking and the mainland’s reduction in the covid cases, as well as the virus-led deaths, underpin optimism at the Antipodeans, due to China’s status as the world’s largest industrial player. Amid these plays, Wall Street closed mixed but the S&P 500 Futures print mild gains by the press tie. Further, the US 10-year Treasury yields remain softer around 2.78 at the latest and weigh on the US dollar. That said, USD/CAD traders may rely on the risk catalysts and oil prices for immediate directions but major attention will be given to this week’s PMIs and Minutes of the latest Federal Open Market Committee (FOMC) for clear directions. At home, Canada’s Retail Sales will also be important to watch as the Bank of Canada (BOC) remains hawkish. Technical analysis USD/CAD holds onto the previous week’s downside break of an upward sloping trend line from late April as well as the 21-DMA, respectively around 1.3050 and 1.2875, which in turn directs the sellers towards a confluence of the 50-DMA and 100-DMA, surrounding 1.2700.  

The EUR/USD pair has continued its consolidation move in the Asian session which is covering a narrow range of 1.0545-1.0600. The asset has remained i

EUR/USD is looking to sustain above 1.0600 amid positive market sentiment.Mounting inflationary pressures in the eurozone have raised the odds of a rate hike by the ECB.In today’s session focus will remain on the Eurogroup meeting.The EUR/USD pair has continued its consolidation move in the Asian session which is covering a narrow range of 1.0545-1.0600. The asset has remained in the grip of bulls last week after sensing a responsive buying action last week after printing a low of 1.0350 last week. A firmer rebound in the risk on impulse has underpinned the risk-perceived currencies. The shared currency bulls got buying traction last week after the street started raising bets on a rate hike announcement by the European Central Bank. The Euro’s Harmonized Index of Consumer Price (HICP) landed at 7.4%, constant with the prior figures. However, the sustainability of the inflationary pressures at elevated levels is raising concerns for the counter. Rising inflationary pressures in times when the eurozone is facing the heat of the Ukraine crisis may force the ECB to paddle up their rate hike cycle. In today's session, investors will keep an eye on the Eurogroup meeting, which may discuss the embargo on Russian oil imports. A few nations such as Germany which were opposing the sooner prohibition of Russian oil have withdrawn their opposition and have arranged their dependency on other oil imports alternatives. On the dollar front, the US dollar index (DXY) has slipped below 103.00 in the early Asian trade and is expected to log more losses on positive market sentiment. The safe-haven assets are losing their appeal amid a firmer rebound in the global equities.  

NZD/USD holds onto the previous week’s recovery moves from a two-year low as NZIER reveals major support for the RBNZ’s 0.50% rate hike among shadow b

NZD/USD grinds higher following the first weekly gain in eight.NZIER unveils that majority of RBNZ shadow board members expect a half-point increase.Softer USD joins mixed sentiment, improvement in China’s covid conditions to favor bulls.RBNZ is likely to announce 50 bps rate hike on Wednesday, PMIs, FOMC Minutes are also crucial for clear directions.NZD/USD holds onto the previous week’s recovery moves from a two-year low as NZIER reveals major support for the RBNZ’s 0.50% rate hike among shadow board members. Adding to the Kiwi pair’s rebound is the broad US dollar weakness and slightly upbeat risk appetite. That said, the Kiwi pair picks up bids to 0.6410 during the initial hours of Monday’s Asian session. The NZ Institute of Economic Research (NZIER) came out with an update on the shadow board members’ expectations for this week’s Reserve Bank of New Zealand (RBNZ) rate increase. The economic institute mentioned, “The majority view amongst Shadow Board members was that the Official Cash Rate (OCR) should be increased by 50 basis points (bps) at the May meeting.” Given the statements from NZIER being mostly in-line with the market expectations, which seems also priced-in, the NZD/USD remains firmer, while also cheering the US dollar pullback from a multi-year high, as well as optimism at China. The US Dollar Index (DXY) flashed the biggest weekly loss since January, not to forget snapping a six-week uptrend, as market players seemed to have bored with the 50 bps rate hike comments from the Fed policymakers, including Chairman Jerome Powell. Also keeping the greenback under pressure was the latest headline economics that flashed mixed numbers. Elsewhere, Shanghai’s gradual unlocking and the mainland’s reduction in the covid cases, as well as the virus-led deaths, underpin optimism at the Antipodeans, due to China’s status as the world’s largest industrial player. The market sentiment could be witnessed in downbeat US Treasury yields and the slow grind of equities in the US. Moving on, New Zealand Retail Sales for Q1, scheduled for publishing on Tuesday, appears to be the last signal for forecasting the RBNZ moves. However, the 50 bps move has been widely-chattered and hence any surprise will become more interesting to watch for wild moves. Additionally, the Fed’s repeated signals for a 50 bps rate increase and China’s sustained recovery from the covid may help the NZD/USD to extend the latest rebound. Technical analysis NZD/USD floats above a seven-week-old descending resistance line, now support around 0.6385, as buyers await sustained trading beyond the previous week’s peak of 0.6415 ahead of targeting the monthly high of 0.6568. Meanwhile, the one-week-old ascending trend line and the 10-DMA restrict the short-term downside of the pair around 0.6350 and 0.6330 respectively.  

The Reserve Bank of New Zealand will be a major feature of forex markets this week and ''there is a wide range of views within the Shadow Board over h

The Reserve Bank of New Zealand will be a major feature of forex markets this week and ''there is a wide range of views within the Shadow Board over how much the Reserve Bank should increase interest rates, particularly for the coming year. The majority view amongst Shadow Board members was that the Official Cash Rate (OCR) should be increased by 50 basis points at the May meeting. However, there was a divergence in views on how much the OCR should be increased beyond the May meeting. This wide range of views reflects both different concerns held by the Shadow Board members compounded by the large degree of uncertainty over the economic outlook over the coming year.'' Analysts at TD Securities explained that the ''both Consumer Price Index inflation (6.9% YoY) and sectoral core inflation (4.2% YoY) were elevated in the first quarter and hint at the urgency needed from the RBNZ to constraint inflation expectations. The Bank seems content with its 'stitch in time' approach to policy and didn’t push back on market pricing which leads us to conclude that the Bank will go ahead with another 50bps hike.''

Gold price (XAU/USD) is expected to carry forward its bullish move in the Asian session recorded on Friday. The precious metal delivered a strong rebo

Gold price is likely to advance higher towards $1,850.00 amid broader weakness in the DXY.The odds of a jumbo rate hike by the Fed are progressing quickly.The DXY has surrendered more than 2% from its 19-year high.Gold price (XAU/USD) is expected to carry forward its bullish move in the Asian session recorded on Friday. The precious metal delivered a strong rebound last week after sensing significant bids below the psychological support of $1,800.00. A gradual upside approach by the gold bulls was witnessed right from the initial response of the market participants. The optimism came in the bright metal despite the progressing odds of a 50 basis point (bps) by the Federal Reserve (Fed) in June. The Fed is determined to absorb liquidity from the market as inflation fears are heightened and are needed to be taken care of. Meanwhile, last week, the US dollar index (DXY) witnessed a steep fall after failing to sustain around the fresh 19-year high at 105.00. The DXY eased more than 2% from its recent highs. This week investors’ focus will remain on the release of the Fed Open Market Committee (FOMC), which is due on Friday. This will provides insights on the strategic planning by the Fed behind the announcement of the 50 bps by the Fed policymakers. Gold technical analysis On an hourly scale, XAU/USD is moving higher after sensing support from the critical support placed at $1,836.63. The critical resistance of $1,836.63 has turned into a support for the asset. The 50-period Exponential Moving Average (EMA) AT $1,836.65 has been significant support for the counter. Meanwhile, the Relative Strength Index (RSI) is attempting to break above the 60.00. This will trigger the gold pulls and will drive the asset higher. Gold hourly chart  
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