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16.04.2024 Market Report


EUR/USD is holding above 1.0600 in the European morning on Tuesday, having hit fresh five-month lows. The pair draws support from sluggish US Treasury bond yields but the rebound appears capped amid a stronger US Dollar and risk-aversion. Germany’s ZEW survey and Powell awaited. 


GBP/USD drifts lower for the third straight day on Tuesday and drops to its lowest level since November 17 during the Asian session. Spot prices trade around the 1.2420 region as traders now look to the UK monthly employment details for a fresh impetus.


The Japanese Yen (JPY) continues with its struggle to register any meaningful recovery and languishes near a 34-year low against its American counterpart heading into the European session on Tuesday. The Bank of Japan’s (BoJ) dovish outlook, indicating that it is in no rush in terms of policy normalization, continues to undermine the JPY. Bearish traders, however, remain on alert and refrain from placing fresh bets in the wake of the recent warnings by Japanese authorities, showing readiness to intervene in the market to prop up the domestic currency. Apart from this, a generally weaker tone around the equity markets helps limit the downside for the safe-haven JPY. 


The Australian Dollar faces hurdles amid concerns that the Reserve Bank of Australia (RBA) might need to lower interest rates ahead of the United States (US). According to the Financial Review, the ongoing high inflation in the world’s largest economy raises uncertainty about whether the Federal Reserve can take action this year. Traditionally, as the world’s most influential central bank due to the scale of the financial markets it oversees, the Fed typically leads global rate-cutting cycles.


NZD/USD depreciates to near 0.5880 during the Asian trading session on Tuesday, as investors turn toward the US Dollar (USD) seeking refuge amid escalated geopolitical tensions in the Middle East. Traders await Israel’s response to Iran’s airstrike over the weekend. Additionally, traders are awaiting New Zealand’s Consumer Price Index (CPI) data for the first quarter of 2024, scheduled for release on Wednesday. Market expectations suggest a slight uptick to 0.6% quarter-on-quarter, compared to the previous period’s 0.5%.


The USD/CAD pair builds on last week’s breakout momentum through the 1.3600-1.3610 supply zone and gains some positive traction for the fifth successive day on Tuesday. Spot prices climb to the 1.3815 region, or the highest level since November 14 during the Asian session and remain well supported by the underlying strong bullish sentiment surrounding the US Dollar (USD).


The USD/CHF pair hovers near six-month high around 0.9150 in Tuesday’s European session. The Swiss Franc asset is expected to extend upside as the US Dollar strengthens due to potential risks of further escalation in Middle East tensions and receded hopes of Federal Reserve (Fed) lowering interest rates from the June meeting.


Oil prices rose on Tuesday as the Chinese economy grew faster than expected, while heightened tensions in the Middle East also kept markets on edge after Israel said it would respond to Iran’s weekend missile and drone attack.


Gold price oscillates in a narrow band on Tuesday and remains close to the all-time peak. The worsening Middle East crisis weighs on investors’ sentiment and benefits the metal. Reduced Fed rate cut bets lift the USD to a fresh YTD top and cap gains for the XAU/USD.

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