Article by: ETO Markets
Following the FED policy meeting, when rates were left steady and no rate reduction is anticipated before December 24th, US Treasury yields decreased. The 30-year yield has increased while the 10-year yield has somewhat decreased, giving the German yields a mixed picture. All things considered, the medium-term trend is upward. The range of trading for the Indian GOI yields, 10yr and 5yr, is 7.15-7.20/22%.
Assuming the Fed maintains higher interest rates for an extended period of time, the Dow Jones recovery wanes. For now, the Dow Jones, Dax, and Nikkei appear to be range bound. The Nifty has dropped, but before a corrective decline occurs, there is a potential that it may rise above 23000.
The European Central Bank is taking a more dovish posture than the US Federal Reserve, the Eurozone may experience difficulties. As anticipated, April's inflation in the Eurozone remained stable, according to recent inflation figures. Furthermore, core inflation declined, which increased expectations of an ECB interest rate cut in June.
Following Fed Chair Powell's statement that it will probably take longer than previously expected for the bank to have enough confidence in the trend of inflation before starting to decrease interest rates, crude prices have plummeted. Nonetheless, there are short-term supports for crude prices that, if they hold, may offer some relief. While still ranging, precious metals are facing immediate resistance above, which, if it holds, might be negative for the upcoming sessions.
Given that BoE Governor Andrew Bailey expressed confidence that headline inflation will return to 2% in April, investors anticipate the Bank of England to reduce borrowing costs during its meetings in June or August. The economist at the Bank of England, cautioned last week that reducing interest rates too soon posed more hazards than doing so too slowly. His comments lend some credence to the pound sterling.
Before dropping below …, the GBP/USD slightly increased in value toward its daily peak of ... If Fed Chairman Jerome Powell makes any hawkish comments, the pair may be testing the day's lows at … due to the lack of follow-through. The April 26 low at … and the … mark would be the next significant support levels below that. The 200-DMA is located at … , which is higher.
Japanese Yen experiences significant losses relative to the US dollar, undoing much of the day's high gains that were spurred by potential Japanese government intervention. The interest-rate difference between the US and Japan, which is anticipated to stay large for some time, is the primary cause of the JPY's weakness. This gave the USD/JPY pair another boost and contributed to the robust intraday move up, along with a moderate rise in the demand for US dollars.
The USD/JPY pair may run into resistance close to the 50% Fibonacci level, or the … region, according to mixed oscillators on hourly and daily charts, which urge exercising care before preparing for any additional intraday appreciating advance. But some follow-through purchases will imply that the recent correction from the high has peaked and open the door to further rises. Conversely, if there is more loss below the … region, the USD/JPY pair may return to the … psychological level and the … support zone.
