Page 11 of 73
The pair extended its gains today, as wages rose further in the first quarter in New Zealand, putting pressure on inflation and the central to maintain its hawkish stance
The pair faces difficulties this week, with mixed Eurozone inflation figures blurring the monetary policy outlook ahead of the decisions by the US Fed and the European Central Bank
The Reserve Bank of Australia stunned markets by restarting its rate hike cycle today, sending the pair higher, but the upcoming policy decision by the US Fed looms
Today’s data showed that CPI inflation moderated to 7% y/y in the first quarter in Australia, not long after the country’s central bank had paused its year-long rate hike cycle
There is an air of uncertainty, with participants unsure of what comes next for markets. A large part of this is that markets are hesitant of how Fed monetary policy plays out and are looking at Q1 GDP and core PCE for direction (released Thursday and Friday at 12:30 GMT).
Given the lag on the EU inflation front, the ECB will need to be more aggressive than the Fed for at least the medium term. This is reflected in the spread between the German (proxy for EU) and US 2-year notes. This is because short-term borrowing costs react quickly to changes in monetary policy.
Yesterday saw a higher-than-expected average earnings index (3m/y) out of the UK at 5.9% (vs 5.1%-forecast). Today inflation has proved persistent with headline CPI (y/y) at 10.1% (vs 9.8%-forecast) and core CPI (y/y) at 6.2% (vs 6.0%-forecast). This suggests at least another 25bps hike from the BoE in May.
Yesterday, the EURUSD slipped from its bullish channel between the upper blue and red bands. Today, it is looking to reclaim that position. The daily RSI is above 50. The longer it maintains on the bullish side of 50, the greater the chances of higher prices ahead.
GBPUSD has slipped out of its bullish channel and is now trading in the neutral zone between the two blue bands. However, today’s candle (still to complete) shows positivity, with price trading off the low for the day. The daily RSI is above 50 and needs to be watched. If it maintains on the bullish side of 50, the bullish channel, between the upper blue and red bands, may be…
FXCM’s USDOLLAR basket reacted off its key support level at 12,750. The catalyst for the reaction were comments by Fed Governor Christopher Waller.
The USDJPY appears to be charting a head and shoulders top. The pattern is yet to complete, as per the pattern completion gap, but its RSI is on the bearish side of 50. If it maintains on this side of 50, the USDJPY will likely be under pressure.
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.