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Forex Forecast & Forex Technical Outlook for 22 April 2024 to 26 April 2024

Forex Forecast & Forex Technical Outlook for 22 April 2024 to 26 April 2024

Strong retail sales figures dominated U.S. economic news last week. Indicators such as industrial output and unemployment claims supported the nation's robust economic position.

In the interim, the persistent hostilities between Israel and Iran serve to emphasize the arduous nature of attaining stability in the Israel-Hamas conflict. 

While inflation in England remains relatively stable, it is not diminishing at the rate that policymakers had anticipated.

Last week was notable because President Biden announced that tariffs on Chinese aluminum and steel products would substantially increase. Nevertheless, over the past six years, the effect of such tariffs on U.S. industrial production has been comparatively insignificant, as detailed in our recent special report.

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Forex Technical Outlook for 22 April 2024 to 26 April 2024

Let’s see the list of events to look at this week

  • Eurozone PMIs on Tuesday
  • The UK PMIs on Tuesday
  • The US PMIs on Tuesday
  • AUD CPI on Wednesday
  • The US Advance GDP q/q on Thursday
  • BOJ Policy Rate and Rate Statement on Friday

Let’s see the market outlook from the weekly forecast:

EUR/USD

In response to Israel's recent limited-range assault on Iranian soil, the euro fluctuated marginally around the 1.0650 level overnight. 

The difficulties expressed as the euro could not exceed the 1.07 threshold. Notwithstanding prevalent circumstances that favor the US dollar, the euro exhibits remarkable resilience and resistance.

Investor sentiment continues to be cautious due to the persistence of geopolitical tensions, as evidenced by the S&P index's decline below 5,000 and Israel's actions. Because of the absence of noteworthy occurrences on the agenda for today, currency fluctuations are likely to remain moderate, barring any unanticipated developments.

EUR/USD

The ongoing selling pressure took the EUR/USD price below the 1.0691 swing level with a bearish daily candle. As the RSI is below the 50.00 line with a bullish slope in the ADX, a downside continuation is potent, targeting the 1.0516 level.

GBP/USD

GBP/USD has tested the 1.2400 level in the wake of stagnant UK retail sales volumes in March. The pair's recovery coincides with a rise in risk aversion as investors anticipate possible Israeli missile strikes against Iran.

Recently, Atlanta Fed President Raphael Bostic commented on high inflation, stating that the United States central bank has additional options to combat it and excluding rate cuts from consideration. President of the Federal Reserve Bank of New York, John Williams, emphasized the Fed's reliance on data and deemed the current monetary policy appropriate, placing no urgency on rate cuts but leaving the door open to increases if required.

About the Bank of England (BoE), Megan Greene noted that inflation continues to be excessively high, precluding the institution from considering a reduction in the Bank Rate. The individual ascribed inflationary pressures to the wage and service sectors, which are not conducive to maintaining an inflation target of 2%.

GBP/USD

In the daily chart of GBP/USD, impulsive downside momentum is visible below the dynamic 20-day EMA, supported by the bearish Relative Strength Index.

The immediate support level is at the 1.2186 level, which could be the primary target of the bearish trend. However, the gap between the price and 20-day EMA has expanded, which signals a pending upward correction from extending the major trend.

AUD/USD

On last Friday, the Australian Dollar (AUD) faced resistance with a decrease in the ASX 200 Index, marginally approaching its lowest level in two months at 7,489. Overnight weak signals from Wall Street influenced this trend. Furthermore, the yield on 10-year Australian government bonds declined from its highest level in over four months, dropping below 4.3%, as investors anticipated the Reserve Bank of Australia's (RBA) dovish posture on monetary policy.

As concerns regarding the potential escalation of the Israel-Gaza conflict in the Middle East increased, the US Dollar Index (DXY), which measures the USD against six main currencies, advanced. Investors pursuing safe-haven assets were drawn to this. In addition, the AUD/USD pair was subjected to downward pressure due to the surge in US Treasury yields and the US Dollar that followed hawkish remarks by Federal Reserve (Fed) officials on Thursday.

AUD/USD

AUD/USD was exhausted below the previous support line and became volatile. Although the RSI is below the 50.00 level, the recent daily candle suggests a weaker selling pressure.

In that case, any bullish reversal with a daily candle above the 0.6455 level would create a bullish signal, targeting the 0.6600 level.

USD/JPY

The Japanese Yen (JPY) appreciated as financial markets were seized by risk aversion. Moreover, the release of Japanese inflation data slightly supported the JPY.

March's National Consumer Price Index (CPI) for Japan increased 2.7% annually, the Japan Statistics Bureau reports, which is a marginal increase from February's 2.8% increase. This index monitors the price fluctuations of products and services acquired by households.

On Thursday, the Japanese yen (JPY) was further strengthened by hawkish remarks by Governor Kazuo Ueda of the Bank of Japan (Big Jou). As cited by Reuters, Ueda suggested during a press conference that the central bank might reconsider increasing interest rates if significant depreciations in the yen substantially contribute to inflation.

Conversely, Federal Reserve (Fed) officials in the United States issued hawkish statements on Thursday, causing an upsurge in US Treasury yields and the US Dollar (USD). As a result, the USD/JPY pair's losses were contained.

USD/JPY

The daily USD/JPY price shows potent buying pressure, with a Fakey candlestick formation last Friday.

The RSI shows an overbought condition with no divergence signal, while the ADX is above the 30.00 line.

Based on this outlook, an upward continuation could take the price to the 158.00 psychological line in the coming day. However, a downside pressure with a bearish daily close below the 20-day EMA could extend a bearish correction before offering another long opportunity.

XAU/USD

The most recent increase in gold prices was predominantly driven by mounting apprehensions regarding a possible regional dispute in the Middle East. These concerns were heightened when ABC News, citing a US official, obtained confirmation of Israeli missile strikes against Isfahan, a central city in Iran.

As a result of these occurrences, there was an abrupt flight to safety on the financial markets, as investors sought refuge in gold, which caused its price to rise back above $2,400.

Although the US dollar experienced certain improvements due to increased risk aversion, its ascent was impeded by a decline in US Treasury bond yields, which was driven by heightened demand for government bonds. As a result, gold prices have remained relatively stable in the face of escalating geopolitical tensions.

Besides, Gold prices maintained their resilience last Thursday, notwithstanding the increasing rumors that the US Federal Reserve (Fed) might implement a 'higher rates for longer' strategy in response to persistent inflation and a strong labor market. Atlanta Fed President Raphael Bostic and New York Fed President John Williams echoed a hawkish tone in their statements.

Bostic emphasized a methodical approach to attaining a 2% inflation rate, expressing confidence in exercising patience and not viewing rate increases as urgent. In the interim, Williams reaffirmed confidence in the existing posture of monetary policy, emphasizing the lack of imminent urgency to modify interest rates.

XAU/USD

 

In the daily XAU/USD price, the recent upward pressure came with a bullish pennant breakout, suggesting a continuation opportunity above the 2400.00 psychological line.

The RSI found the 70.00 level to be a support with steep upward traction in the ADX line. In that case, a bullish daily candle above the 2497.94 support level could be a high probable long signal, targeting the 2460.00 resistance level.

However, a bearish pressure below the 2350.00 level might extend the loss toward the 2324.37 level.

BTC/USDT

Deutsche Bank's research emphasizes the importance of the Bitcoin halving, which was predominantly driven by retail investors. These investors consider the ensuing reduction in the supply of Bitcoin to be advantageous for its price. As a consequence, the number of addresses holding Bitcoin increased significantly after the halving.

The number of retail addresses that retain 1,000 BTC approximately 150 days after each halving event significantly rises. The 52%, 37%, and 3% growth rates for these addresses in 2012, 2016, and 2020, respectively, demonstrate the retail-oriented character of the halving phenomenon.

Retail investors now hold an estimated 53.3 million addresses, which is significantly larger than the 2121 addresses possessed by whale or institutional investors with more than 1,000 BTC. In accordance with past patterns, these figures are anticipated to explode after the halving, which may have a positive impact on the price of Bitcoin.

Bitcoin has historically peaked at its all-time high (ATH) approximately 410 days after each halving. ATHs were attained at approximately 378 days, 518 days, and 336 days after the initial, second, and third halving incidents, that is, afterward.

BTC/USDT

In the BTC/USD daily chart, a sell-side liquidity sweep is visible from the wedge breakout. As the current price hovers above the 60737.37 support level, a bullish rebound with a D1 candle above the 20-day EMA could resume the existing trend.

However, the upcoming halving event could be a crucial trend identifier for this instrument, which might create a long-term bull run, following the previous halving sentiments.

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