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AUD/USD gains ground due to risk-on mood, US CPI awaited
AUD/USD remains steady with a positive sentiment despite the lower-than-expected Wage Price Index released on Wednesday by the Australian Bureau of Statistics. This index serves as an indicator of labor cost inflation. The appreciation of the Aussie Dollar could be attributed to the improved risk appetite.
USD/JPY extends its upside above 156.50 ahead of US CPI, Retail Sales data
The USD/JPY pair trades in positive territory for the fourth consecutive day near 156.55 on Wednesday during the Asian session. The uptick of the pair is bolstered by the speculation that the Federal Reserve might maintain rates higher for longer amid the elevated inflation.
Gold price trades with a mild positive bias, US CPI and PPI data loom
Gold price posts modest gains on the weaker US Dollar on Wednesday. The rising gold demand from robust over-the-counter market investments, consistent central bank purchases, and safe-haven flows amid Middle East geopolitical risk act as a tailwind for XAU/USD.
Ethereum bears attempt to take lead following increased odds for a spot ETH ETF denial
Ethereum is indicating signs of a bearish move on Tuesday as it is largely trading horizontally. Its co-founder Vitalik Buterin has also proposed a new type of gas fee structure, while the chances of the SEC approving a spot ETH ETF decrease with every passing day.
US CPI data expected to show slow progress towards 2% target
The US Consumer Price Index is set to rise 3.4% YoY in April, following the 3.5% increase in March. Annual core CPI inflation is expected to edge lower to 3.6% in April. The inflation report could influence the timing of the Fed’s policy pivot.
DEEPER DIVE
Like there’s no tomorrow: Unpacking consumer credit
The recent run-up in revolving debt combined with the much higher financing costs raises doubts about the ability of credit to continue to make up for the shortfall between modest real income growth and aspirational spending.
Inventories are quiet, a little too quiet
The economy is in the midst of an unusually calm stretch with respect to inventory investment. It is like the point in the scary movie when someone points out that all the forest creatures have gotten quiet.
Softer growth, cooler inflation and rate cuts remain on the horizon
Economic growth in the United States appears to be in solid shape. Although real GDP growth came in well below consensus expectations and amounted to just 1.6% annualized in Q1-2024.
FXS Signals
Technical Confluences Detector
XAU/USD regains its poise on broad US Dollar’s weakness Premium
Spot Gold advanced towards the $2,350 region mid-Tuesday, ticking north on the US DollarDollar'sess. XAU/USD picked at $2,356.96 following the release of the United States (US) Producer Price Index (PPI) data. The figures indicated inflationary pressures persist, as the monthly PPI rose 0.5% in April, up from -0.1% in March and above the 0.3% expected. Furthermore, it rose 2.2% YoY, while the core annual reading was 2.4%, unchanged from March. The overall figures were not really worrisome, as they stand just above the desired 2% inflation level, but the monthly uptick spurred concerns as it suggests the increase at wholesale levels will soon show in consumers.
The US will release the April Consumer Price Index (CPI) report on Wednesday. Although the Federal Reserve (Fed) bases its monetary policy decision on a different inflation measure, any deviation will likely trigger action across the FX board.
CRYPTOCURRENCIES
OpenAI parts ways with cofounder and chief scientist Ilya Sutskever
OpenAI cofounder Ilya Sutskever is exiting the firm for reasons not disclosed yet. Jakub Pachocki replaces Sutskever, taking the baton after running many of OpenAI’s most important projects, Altman says. Reportedly, Sutskever played a key role in the November ouster of CEO Sam Altman.
Sonne Finance suspends all Optimism markets after over $20 million exploit
With PeckShield attributing the attack to a time-locked contract, Sonne Finance has suspended all Optimism markets, adding that the Base market is safe. Noteworthy, Sonne Finance is the first platform to launch a lending protocol on Optimism.
Bitcoin Price Outlook: Will GameStop stock resurgence have downstream effect on BTC and alts?
Bitcoin continues to glide along an ascending trendline on the four-hour time frame. Meanwhile, the GameStop saga that has resurfaced after three years distracts the market, with speculation that it could inspire risk appetite among traders and investors.
Ethereum bears attempt to take lead following increased odds for a spot ETH ETF denial
Ethereum is indicating signs of a bearish move on Tuesday as it is largely trading horizontally. Its co-founder Vitalik Buterin has also proposed a new type of gas fee structure, while the chances of the SEC approving a spot ETH ETF decrease.
THE STOCK OF THE DAY
GameStop, AMC stocks see 100% swings as meme fever returns Premium
GME, AMC meme stocks gain more than 100% in premarket. Prices descend to +50% to +80% gains in regular market on Tuesday. Keith Gill continues to post video clips on social media, hyping up his retail followers.
ECONOMIC CALENDAR
WEEKLY FORECAST
EUR/USD: A better mood puts pressure on the US Dollar Premium
The EUR/USD pair seesawed in a tight range just above the 1.0700 threshold for most of the week, with the US Dollar (USD) finally giving up and extending its slide while heading into the weekly close.
GBP/USD: Pound Sterling loses strength as BoE opens door to summer rate cut Premium
The British Pound (GBP) traded in a choppy fashion and struggled to extend gains seen in the previous couple of weeks against the USD, prompting GBP/USD to recoup ground lost in the first half of the week and flirt with the key 200-day SMA around 1.2540 on Friday.
US Dollar: Greenback regains strength, snapping two straight weeks of losses Premium
A tepid recovery during the week led to a bounce of the US Dollar (USD) to the area beyond the 105.00 barrier when gauged by the USD Index (DXY), reversing two consecutive weeks of negative price action.
Gold: Bulls return and aim for record highs Premium
Spot Gold price (XAU/USD) heads into the weekly close posting solid gains and changing hands at around $2,360 a troy ounce. XAU/USD struggled for direction, spending most of the week hovering between $2,300 and $2,330.
Bitcoin: Why BTC is close to a bottom
Bitcoin (BTC) price efforts of a recovery this week have been countered by selling pressure during the onset of the American session. However, the downside potential appears to have been capped.
Week ahead – US inflation numbers to shake Fed rate cut bets
Fed rate-cut speculators rest hopes on US inflation data. After dovish BoE, pound traders turn to UK job numbers. Will a strong labor market convince the RBA to hike? More Chinese data on tap amid signs of slow Q2 start.
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