The euro has received a boost from a combination of hawkish guidance from the ECB and positive economic data in the region

The Euro stole the spotlight as it surged to a record high following Germany’s upward revision of its economic growth forecast for 2023. The move is reinforced by positive indicators, including increased industrial production and a robust business climate index, signalling an economic resurgence in the Eurozone. The European Central Bank’s Chief Economist recommending an interest rate hike further boosted investor confidence. In the US, strong earnings from tech giants Microsoft and Alphabet contributed to an improved risk appetite, leading to a drop in the demand for safe-haven assets, including the dollar. In contrast, oil prices experienced significant bearish momentum, dented by ongoing economic uncertainties and expectations of multiple interest rate hikes by major central banks.               

---

Current rate hike bets on 3rd May Fed interest rate decision: 

Source: CME Fedwatch Tool

25 bps (23.3%) VS 50 bps (76.7%) 

---

Market Overview

Economic Calendar

Market Movements

DOLLAR_INDX，Daily

The US Dollar has experienced a slight dip in value mainly due to a technical correction. The correction comes after the currency made sharp gains overnight, driven by concerns about an economic slowdown and the health of the US banking system. In addition, risk appetite improved slightly after the release of stronger-than-expected earnings from tech giants Microsoft and Alphabet, which further dragged down the appeal of the safe-haven Dollar.

The Dollar Index is trading lower while currently testing the support level. MACD has illustrated diminishing bullish momentum, while RSI is at 42, suggesting the index to extend its losses after breakout since the RSI stays below the midline.   

Resistance level: 103.15, 105.25

Support level: 101.25, 99.10

XAU/USD, H4

Gold prices are range-bound around the $2,000 level as investors await major market-moving events. The release of the first-quarter US GDP report on Thursday is the primary focus, as it may provide insights into the health of the world’s largest economy and influence gold’s near-term outlook. The US Core PCE Price Index, the Federal Reserve’s preferred inflation gauge, will follow on Friday and is also expected to impact the direction of both gold and the Greenback. As investors await these critical releases, it remains to be seen whether gold will break out of its consolidation range.

Gold prices are trading flat while currently testing the resistance level. MACD has illustrated diminishing bullish momentum while RSI is at 49, suggesting the commodity might trade lower since the RSI stays below the midlines.      

Resistance level: 2000.00, 2025.00

Support level: 1975.00, 1945.00

EUR/USD，H4

The Euro has surged, poised to record its largest single-day gain since early March, following the German government’s upward revision of its economic growth forecast for 2023. The latest spring economic projections, released on Wednesday, show an increase in the predicted growth rate from 0.20% to 0.40%. This positive outlook is reinforced by current economic indicators, including industrial production, received orders, and business climate index, all of which point to an economic resurgence in the Eurozone.

EURUSD is trading higher while currently testing the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 61, suggesting the pair will extend its gains after it successfully breakout since the RSI stays above the midline. 

Resistance level: 1.1075, 1.1168

Support level: 1.0924, 1.0790

Nasdaq，H4

The Nasdaq Composite index closed slightly higher by 0.47% to 11854 points on Wednesday. The Nasdaq index outperformed and was boosted by strong Microsoft results against Dow Jones and S&P 500 due to concerns about a weakening U.S. economy and the banking sector. Microsoft shares rallied 7.2%, and Facebook parent Meta Platforms rose about 10% after strong quarterly results. Alphabet reported better-than-expected results and a share buyback plan, but its shares closed down 0.1%. Investors are awaiting more earnings reports, a key inflation reading on Friday, and the Federal Reserve meeting next week.

The MACD shows a decrease in bullish momentum. RSI has dropped to 40, suggesting a shift towards bearish momentum.

Resistance level: 12321, 13151

Support level: 11559, 10975

GBP/USD, H4

On Wednesday, the pound gained 0.38% against the U.S. dollar, reaching $1.2469 as investors moved away from safe-haven assets, prompted by concerns over the U.S. banking sector the previous day. Traders were seen divesting from the dollar and trimming their long positions established on the preceding day. The market took comfort from positive earnings reports from major U.S. tech companies and confidence that the banking crisis would not spread, reducing demand for safe-haven assets and allowing the pound to benefit. It puts the pound close to its 10-month high against the dollar, achieved on April 14.

The MACD is trading around the zero line, indicating a neutral trend. The RSI  has climbed to 52, suggesting a neutral-to-bullish momentum.

Resistance level: 1.2545, 1.2645

Support level: 1.2370, 1.2262

Dow Jones, H4

The Dow Jones Industrial Average experienced a decline of 0.68% amid fresh banking turbulence, which dampened market sentiment, despite a Microsoft-fueled surge in the technology sector on the back of better-than-anticipated results. The regional lender, First Republic Bank, suffered a severe setback, plummeting by 29.80%, and reaching a new all-time low for the second consecutive day. This triggered a negative spillover effect on the US equity market, exacerbating investor concerns. In contrast, the energy sector experienced a decline of nearly 1% as oil prices tumbled due to ongoing concerns about a recession.

The Dow is trading lower while currently near the support level. MACD has illustrated increasing bearish momentum, while RSI is at 45, suggesting the pair might extend its losses toward support level since the RSI stays below the midline. 

Resistance level: 34263, 35520

Support level: 33233, 32238

CL OIL, H4

Despite the recent announcement by OPEC+ of an additional output reduction until the end of 2023, oil prices have now returned to their pre-announcement levels, effectively erasing all gains made in early April. This worrying trend is attributed to the continued economic uncertainties and expectations of multiple interest rate hikes by major central banks such as the Federal Reserve, European Central Bank, and Bank of England. The combined effect of these factors poses a significant threat to fuel demand growth.

Oil prices are trading lower while currently testing the support level. MACD has illustrated increasing bearish momentum. However, RSI is at 26, suggesting the commodity might enter oversold territory.     

Resistance level: 76.95, 79.70

Support level: 73.75, 70.95