Article by: ETO Markets
The final trading day before an extended holiday weekend is frequently erratic, particularly when month-end activities and significant economic announcements like the PCE report on Good Friday are combined. Consider the S&P 500. Few anticipated a rally into the weekend, yet to the amazement of many traders, the index hit yet another record high on Wednesday. The market has surged by 10% as a result of this gain, capping an excellent quarter. Apple and Tesla, two underperforming Mag 7 equities, saw rises as well. But profit-taking caused Nvidia, the industry leader in artificial intelligence, to drop. However, the S&P 500's resilience indicates that market confidence is still strong in spite of possible inflationary pressures.
Finding a needle in a haystack is how one might describe the present market conditions, especially with a long Easter weekend on the horizon, month-end dynamics, and big data releases coming up. It could be difficult to pinpoint a single catalyst that is causing changes in the market because there are so many variables at work.
Due to the lack of pertinent macroeconomic data and the speculative interest that is building for a long weekend because of the Easter vacations, activity across financial boards is still restricted. Investors are also anticipating the release of the US Personal Consumption Expenditures Price Index for February, which will provide an update on inflation in the US.
The risk is skewed to the upside because XAU/USD is up for the third straight day. The yellow metal continues to rise over bullish moving averages and posts lower lows. Dynamic support is offered by the 20-SMA, which keeps a firmly bullish slope well above the longer ones at $... As bulls continue to dominate, technical indicators continue to grind higher within favorable levels.
However, the 4-hour chart indicates that XAU/USD is neutral to positive in the near future. Technical indicators do not move in a bearish direction; instead, they stay far above their midlines. Simultaneously, the pair encountered intraday buyers at a 20-SMA that is developing above bullish longer ones and is bullish.
The US Federal Reserve policymaker's aggressive remarks early on Thursday strengthen the US currency overall. One of the most hawkish Fed governors, Christopher Waller, stated that the US central bank may need to hold onto the current rate goal for longer than anticipated and that it is not in a rush to cut the benchmark interest rate. A stronger dollar depresses WTI prices by raising the cost of oil denominated in dollars for holders of other currencies, which reduces demand for oil.
For oil bulls, the next cap will show up at $... Ascending further, $… does likewise, with $… and $… as the ultimate targets.
On the negative side, the 200-DMA serves as the level to catch any falling knives around $…, with $… and $… serving as support. $… is the approximate value of the 50-DMA, while the 100-DMA is close to $…
