Article by: ETO Markets
According to official data provided by the Australian Bureau of Statistics on Thursday, Australia's unemployment rate increased to 4.1% in April, above the previous number of 3.8% and the 3.9% expected. In addition, the Australian Employment Change exceeded the consensus estimate of 23.7K in April, coming in at 38.5K from -6.6K in March.
Following the release of the US's April inflation figures on Wednesday, the US Dollar saw significant losses versus its main competitors and is now finding it difficult to recover. The US economic docket later in the day will include the Philadelphia Fed Manufacturing Survey, weekly Initial Jobless Claims, April housing, and Industrial Production statistics. Investors will also be closely monitoring remarks made by policymakers at major central banks.
According to data released on Wednesday by the US Bureau of Labor Statistics, the Consumer Price Index increased 3.4% annually in April. During the same time period, the annual core CPI grew by 3.6%; both of these numbers were expected by the market. The probability that the Federal Reserve (Fed) would leave the policy rate steady in September decreased from 35% to 25% prior to the announcement of inflation statistics, resulting in a reduction of more than 2% in the yield on the benchmark 10-year US Treasury bond.
Expectations of monetary policy convergence between the US and the Eurozone are growing, which supports the Euro. It is expected that the European Central Bank would cut interest rates at its next meeting in June. However, given that core inflation declined in April for the first time in six months, market expectations are growing that the Fed will start cutting interest rates in September.
The US Bureau of Labor Statistics released statistics on Wednesday that indicated inflation is declining, raising the likelihood of a Federal Reserve rate decrease in 2024. This led to the gold price continuing its upward trend for the second day in a row and reaching a three-week high of $2,390. As a result, US Treasury bond yields are falling, and the US Dollar Index shows that the Greenback is falling to a five-week low.
The initial resistance level for XAU/USD would be $... The immediate supply zone would be the $… high from April 19 and the all-time high of $… , once surpassed. On the other hand, if sellers entered the market and drove prices below $…, that might cause a decline toward the $…, where the 20-DMA is. The 50-DMA at $… would be the next target if it were to be crossed.
Crude oil prices rose as a result of market bets on Fed rate cuts, which caused a widespread rebound in risk appetite. US CPI inflation dropped in April, falling to 0.3% MoM from the projected hold of 0.4%. Reduced inflation supported rate cut rumors, and rate markets are pricing in more than 70% of a September rate cut from the Fed.
US Crude Oil fell through a short-term demand zone on Wednesday, hitting a two-month low close to $… , but it soon bounced back over the $… handle. WTI is still trading below the 200-HMA at $…, indicating a pessimistic outlook. WTI is caught in a recent consolidation, as indicated by daily candles, just below the 200-DMA at $…, as the energy markets are unable to generate any momentum. Since April's highs, which were at $…, WTI has decreased by almost 10%.
