The Japanese yen bounced from a fresh two-decade low in yesterday’s session

• The Bank of Japan stepped into the market again to defend its ultra-low interest-rate policy
• Market expectations solidified for a first interest rate hike from the ECB as early as July
• The British pound climbed against the dollar, gaining after four days of losses

Forex market

The euro perked up to a one-week high today as market expectations solidified for a first interest rate hike from the European Central Bank as early as July. Joachim Nagel, president of Germany's Bundesbank, joined fellow policymakers this week in saying the ECB could raise interest rates at the start of the third quarter. 

Another policymaker Martins Kazaks said this week a rate hike in July "was possible". Against the U.S. dollar, the euro rose 0.4% to $1.0895 and its highest level since April 14. The euro's rise was quite broad-based, with the currency chalking up gains versus the yen, Swiss franc, and Norwegian crown. The euro is all about the ECB drumbeat for a July hike. Money markets are now pricing in a 20 basis point rise from the ECB by July and more than 70 basis points of cumulative increases by the end of 2022. That would take benchmark interest rates above zero for the first time since 2013. European political news was also supportive. 

Economic Calendar

French President Emmanuel Macron cleared a major hurdle ahead of Sunday's runoff election with a combative performance in a TV debate against far-right candidate Marine Le Pen. The Chinese yuan was the big loser in early London trading, its offshore unit declining nearly half a percent to 6.47 yuan per dollar and its lowest level since September. 

The British pound climbed against the dollar yesterday, gaining after four days of losses, with investor attention turning to potential policy signals from the Bank of England this week. Speeches today by Bank of England (BoE) policymaker Catherine Mann and Governor Andrew Bailey were seen as potentially key drivers for the pound. After data last week showed British consumer price inflation hit a thirty-year high of 7% in March, traders are watching for indications of how the BoE views the rating outlook. 

The BoE has recently softened its language on the need for more rate increases. IMF forecasts for British GDP growth this year were cut to 3.7% from January’s forecast of 4.7%.

Euro-EUR

The single currency perked up to a one-week high as market expectations solidified for a first interest rate hike from the ECB as early as July. President of Germany's Bundesbank joined fellow policymakers in saying the ECB could raise interest rates at the start of the 3rd quarter. Another policymaker Martins Kazaks said a rate hike in July "was possible". Overall, the EUR/USD traded with a low of 1.0782 and a high of 1.0865 before closing the day around 1.0851 in the New York session.

Japanese Yen-JPY

The Japanese Yen bounced from a fresh two-decade low yesterday after the Bank of Japan stepped into the market again to defend its ultra-low interest-rate policy, drawing a sharp contrast with the Federal Reserve's aggressive tightening path. The BOJ again offered to buy unlimited amounts of Japanese government bonds. Overall, the USD/JPY traded with a low of 127.43 and a high of 129.39 before closing the day around 127.82 in the U.S session.

British Pound-GBP

The British Pound climbed against the dollar yesterday, gaining after four days of losses, with investor attention turning to potential policy signals from the Bank of England this week. Speeches today by Bank of England (BoE) policymaker Catherine Mann and Governor Andrew Bailey are seen as potentially key drivers for the pound. Overall, the GBP/USD traded with a low of 1.2989 and a high of 1.3069 before closing the day at 1.3066 in the New York session.

Canadian Dollar-CAD

The Canadian Dollar strengthened to its highest level in more than three weeks yesterday, as domestic inflation data bolstered expectations for another upsized interest rate hike from the Bank of Canada in June. Canada's annual inflation rate accelerated faster than expected in March, hitting a 31-year high of 6.7%, amid broad price pressures. Overall, USD/CAD traded with a low of 1.2469 and a high of 1.2622 before closing the day at 1.2496 in the New York session.

Australian Dollar-AUD

The Australian Dollar shot to seven-year highs against a sinking Japanese yen yesterday as major shifts in trade flows and bond yields favored the resource-heavy currencies. Such was the exodus of cash from the yen that it helped the Aussie stabilize on its U.S counterpart after a run of losses. At the same time, the conflict in Ukraine has lifted prices for many commodities. Overall, AUD/USD traded with a low of 0.7358 and a high of 0.7416 before closing the day at 0.7410 in the New York session.

Elliott Wave trading idea for S&P500 and Dow Jones - Easter holidays

Euro-Yen EUR/JPY

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The Relative Strength Index is above 61 and lies above the neutral zone. In general, the pair has lost 0.20%.

Sterling-Yen GBP/JPY

Currently, GBP/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 60 reading and lies above the neutral zone. On the whole, the pair has lost 0.26%.

Aussie-Yen AUD/JPY

Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 76 reading and lies above the neutral region. In general, the pair has gained 0.24%.

Euro-Sterling EUR/GBP

This cross is currently trading above 14, 50 and below 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 53 and lies below the neutral region. Overall, the pair has gained 0.06%.

Sterling-Swiss GBP/CHF

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The Relative Strength Index is above 45 and lies below the neutral region. In general, the pair has gained 0.14%.

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All information has been prepared by TraderFactor or partners. The information does not contain a record of TraderFactor or partner's prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may read it. Past performance is not a reliable indicator of future performance.

Elliott Wave trading idea for S&P500 and Dow Jones - Easter holidays

Hello traders and investors. Happy Easter holidays! I am Radi Valov, a professional trader and today I will share with you an update on my Elliott Wave analysis of US indices.

Anyone who wants to trace my previous analysis of US indices and get more info and see longer time frames can see them below:

21.03.2022: Elliott Wave trade idea for S&P500 and Dow Jones UPDATE

09.03.2020: Elliot Waves trading idea for S&P500 and Dow Jones UPDATE

25.02.2022: Elliot Waves trading idea for SP500 DowJones and Nasdaq 

15.02.2022: Elliot waves trading idea for SP500 and the Dow Jones 

04.02.2022: Elliott waves signal for S&P500  

31.01.2022: Elliott waves signals for SP500 and Dow Jones

After my last analysis, in both indices I'm looking at, the upward movement continued just below the targets I described as a supposed area in my analysis.

S&P500-Daily Chart

 

I consider the rise to the zone of 4640 for the S&P 500  and 35385 for the Dow Jones as wave (i) of wave  [iii]  of wave 5, after reaching these local peaks corrective downward movement is expected to develop (marked with wave (ii) in the trading chart).

In both indices, the structure of the corrective downward movement for wave (ii) appears to be a complete double zigzag.

S&P500-H4 Chart

 

My expectations are that after the bottom from April 12 - 34085 for the Dow Jones and from April 18 - 4361 for the S&P 500 the development of the next upward wave has begun, which will take both indices to the foot of their historical peaks.

In particular, I expect a possible target for the S&P 500 in the area around 4680-4710 and 35800-36300 for the Dow Jones, after which we can see a corrective movement again.

I would like to draw the attention of all those who pay attention to technical divergences: at the last bottom for this correction of the S&P 500 from April 18, the Dow Jones does NOT make a new bottom. This discrepancy usually occurs when reaching local bottoms or peaks and is a confirmation in itself that the current wave is exhausted and at its end.

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All information has been prepared by TraderFactor or partners. The information does not contain a record of TraderFactor or partner's prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may read it. Past performance is not a reliable indicator of future performance.

Financial markets in the first-ever round of global "quantitative tightening"

US stock market: U.S stocks surged yesterday on the back of stronger than expected corporate earnings, but bleak forecasts on global economic growth pushed up bond yields and drove down oil. 

The tech-heavy NASDAQ led the way for gains in U.S markets, as many corporations began to report stronger than expected earnings. Those reports helped investors shake off warnings from global forecasters of a slowdown in economic growth, which weighed on other sectors like bonds and oil. Of the 49 companies in the S&P 500 that have reported quarterly earnings as of Tuesday, nearly 80% have topped profit estimates. 

Economic Calendar

The surge came even as global economic bodies began to air warnings on economic growth. Both the World Bank and the International Monetary Fund slashed their global economic outlooks for 2022 by nearly a full percentage point, citing turmoil emanating from Russia's invasion of Ukraine and the pitched battle against inflation worldwide.

Dow Jones Industrial Average

The Dow Jones Industrial Average rose 1.45%. The best performers of the session on the Dow Jones Industrial Average were Nike Inc., which rose 4.12% or 5.42 points to trade at 137.05 at the close. Meanwhile, Boeing Co added 3.41% or 6.13 points to end at 185.98 and Walt Disney Company was up 3.23% or 4.13 points to 131.90 in late trade. The worst performers of the session were The Travelers Companies Inc., which fell 4.89% or 9.06 points to trade at 176.16 at the close. Chevron Corp declined 1.18% or 2.06 points to end at 171.83 and Merck & Company Inc. was down 0.33% or 0.28 points to 85.79.

Forex News: Forex analysis

NASDAQ 100

The NASDAQ index climbed 2.15%. The top performers on the NASDAQ were Checkmate Pharmaceuticals Inc. which rose 329.46% to 10.35, Sono Group NV which was up 65.22% to settle at 7.60 and Toughbuilt Industries Inc. which gained 37.01% to close at 0.20. The worst performers were Lyra Therapeutics Inc. which was down 20.92% to 5.48 in late trade, Mawson Infrastructure Group Inc. which lost 18.71% to settle at 4.04, and Arqit Quantum Inc. which was down 16.33% to 10.45 at the close.

Oil price - Crude Oil market, Brent Oil market

Oil prices rebounded today from sharp losses in the previous session as concerns about tighter supplies from Russia and Libya dominated, while industry data showed a drop in U.S crude inventories last week. WTI crude futures contract, which expires today, rose 46 cents, or 0.5%, to $103.02 a barrel. The second-month contract gained 64 cents to $102.69 a barrel. 

Forex and Commodities Trading Signals

Global oil prices have been volatile, pulled higher by a tighter supply outlook following sanctions on Russia, the world's second-largest oil exporter and a key European supplier, after its invasion of Ukraine, which Moscow calls a "special operation". However, a softer global economic outlook and ongoing COVID-19 lockdowns in China that have hurt demand in the world's top crude importer are weighing on prices. 

On the supply side, the OPEC and its allies, known as OPEC+, produced 1.45 million barrels per day (bpd) below its production targets in March, as Russian output began to decline following sanctions imposed by the West.

Precious and Base Metals - Gold price, Silver price, Palladium price

Gold prices eased today, following a sharp drop in the previous session, as elevated U.S Treasury yields continued to pull investors away from zero-yield bullion. Spot gold was down 0.2% at $1,946.04 per ounce. U.S gold futures fell 0.5% to $1,949.50. In the previous session, gold prices fell up to 1.8% to an over one-week low as a stronger U.S. dollar and rising Treasury yields overshadowed safe-haven inflows into bullion. 

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U.S. Treasury yields continued to surge to multi-year highs as investors prepared for the Federal Reserve to aggressively raise rates as the central bank tries to stem soaring inflation. Gold is highly sensitive to rising U.S. interest rates and higher yields, which increase the opportunity cost of holding non-yielding bullion. 

The dollar held near recent highs, making the greenback-priced gold less attractive for other currency holders. The International Monetary Fund on Tuesday slashed its forecast for global economic growth by nearly a full percentage point, citing Russia's war in Ukraine, and warned that inflation was now a "clear and present danger" for many countries. 

Major central banks, already plotting interest rate hikes in a fight against inflation, are also preparing a common pullback from key financial markets in the first-ever round of global "quantitative tightening" expected to restrict credit and add stress to an already-slowing world economy. Spot silver dipped 0.5% to $25.04 per ounce, platinum eased 1.1% to $979.74, and palladium edged down 0.1% to $2,369.36.

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Copper prices rose to their highest in two weeks yesterday, buoyed by hopes that more economic stimulus from China would boost demand from the world’s top consumer of the metal. China, which accounts for about half of global metals demand, will step up financial support for industries, companies, and people affected by COVID-19 outbreaks, the central bank said on Monday in its latest move to cushion the economic slowdown. 

Traditional Agricultures - Corn futures, Wheat futures,  Soybean futures

Corn was largely unchanged today in the Asian trading session and near a decade-high scale in the previous session, as traders fretted over planting delays in the United States and a lack of supplies from war-torn Ukraine. Soybeans and wheat inched higher earlier in today’s session.

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The dollar rose yesterday to a fresh 20-year high against the Japanese yen

• The dollar tested a two-year peak against the euro, supported by high U.S Treasury yields
• The Euro recovered some grounds, trading 0.06% higher against the dollar at $1.0787
• European currencies weren’t helped by the latest fighting in Ukraine

Forex market

The dollar surged yesterday to a 20-year high against the Japanese yen, underpinned by the divergence in monetary policy between a Federal Reserve determined to keep a lid on soaring inflation and a Bank of Japan that has kept interest rates ultra-low. The greenback hit 128.97 yen, the highest since May 2002. 

It was last up 1.5% at 128.94 yen. The dollar has risen 5.9% on the yen so far this month, on pace for the largest monthly percentage rise since 2016. The BOJ has done the opposite of normalization. They have dug their heels in. Japanese monetary authorities could actually intervene to strengthen the yen, but it is not about a particular level. Japanese Finance Minister Shunichi Suzuki made the most explicit warning against the yen's recent slump on Tuesday, saying the damage to the economy from a weakening currency at present is greater than the benefits from it. 

Economic Calendar

While Japan's core consumer price index (CPI) data, to be released on Thursday, likely rose 0.8% in March from a year earlier, faster than a 0.6% gain in February, the level is still way below the BOJ's long-held inflation target of 2%. Providing a dollar lift is the continued rise in U.S. yields. U.S. benchmark 10-year Treasury yields hit 2.93% on Tuesday, the highest since December 2018, while U.S. 10-year inflation-linked bond yields rose to -0.01%, on the cusp of turning positive for the first time in two years. 

Chicago Federal Reserve Bank President Charles Evans, who is not a voter on this year's Federal Open Market Committee, said yesterday he is "comfortable" with a round of rate hikes this year that includes two 50 basis-point increases and reaches a neutral setting by year-end, but he does not see the need for bigger hikes. Evans joins a chorus of Fed speakers who are pushing for front-loading the rate increases. The greenback rose versus the Swiss currency, the highest since June 2020.

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Euro-EUR

The single currency recovered some ground, trading 0.1% higher against the dollar. Dollar strength and euro weakness has increased inflation, made worse by the central bank’s continuing stimulus programs. The Eurozone, however, is where the most discomfort is felt because it is exacerbating inflation, in part because imports become more expensive. Overall, the EUR/USD traded with a low of 1.0768 and a high of 1.0820 before closing the day around 1.0780 in the New York session.

Japanese Yen-JPY

The Japanese Yen fell to a 20-year low against the Dollar, underpinned by the divergence in monetary policy between a Federal Reserve determined to keep a lid on soaring inflation and a Bank of Japan that has kept interest rates ultra-low. The dollar has risen 5.9% on the yen so far this month, on pace for the largest monthly percentage rise since 2016. Overall, the USD/JPY traded with a low of 126.22 and a high of 126.98 before closing the day around 126.97 in the U.S session.

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British Pound-GBP

The British Pound dropped below $1.30 yesterday, falling for a fourth straight day against the dollar amid doubts over the Bank of England’s policy path and increased political uncertainty. Against the euro, the pound was 0.3% lower at 83.08 pence, retracing all the gains seen post the European Central Bank decision on Thursday. Overall, the GBP/USD traded with a low of 1.3002 and a high of 1.3062 before closing the day at 1.3012 in the New York session.

Canadian Dollar-CAD

The Canadian Dollar was little changed as oil prices fell and domestic data showed signs of cooling in the red-hot housing market, while bond yields rose to multi-year highs. The price of oil, one of Canada's major exports, fell in volatile trading on demand concerns after the IMF reduced economic growth forecasts and warned of higher inflation. Overall, USD/CAD traded with a low of 1.2600 and a high of 1.2641 before closing the day at 1.2609 in the New York session.

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Australian Dollar-AUD

The Australian Dollar was on the defensive yesterday as surging Treasury yields widened the U.S dollar's rate advantage and investors fretted about the state of China's coronavirus-hit economy. The Reserve Bank of Australia (RBA) is seen likely to move by just 15 basis points to 0.25% in June, and maybe reach 2% by Christmas. Overall, AUD/USD traded with a low of 0.7358 and a high of 0.7416 before closing the day at 0.7410 in the New York session.

Euro-Yen EUR/JPY

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The Relative Strength Index is above 61 and lies above the neutral zone. In general, the pair has gained 0.16%.

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Sterling-Yen GBP/JPY

Currently, GBP/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 60 reading and lies above the neutral zone. On the whole, the pair has gained 0.06%.

Aussie-Yen AUD/JPY

Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 76 reading and lies above the neutral region. In general, the pair has lost 0.18%.

Euro-Sterling EUR/GBP

This cross is currently trading above 14, 50 and below 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 53 and lies below the neutral region. Overall, the pair has gained 0.05%.

Sterling-Swiss GBP/CHF

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The Relative Strength Index is above 45 and lies below the neutral region. In general, the pair has lost 0.16%.

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All information has been prepared by TraderFactor or partners. The information does not contain a record of TraderFactor or partner's prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may read it. Past performance is not a reliable indicator of future performance.

Rising inflationary pressures increased safe-haven bids for the precious metal Gold

US stock market: U.S stocks closed lower yesterday after a session that saw all three benchmarks slip between positive and negative territory, as investors contrasted Bank of America's positive earnings with surging bond yields ahead of further earnings cues this week. 

Market participants are bracing for a barrage of earnings that will help them assess the impact of the Ukraine war and a spike in inflation on company financials. Netflix, Tesla, Johnson & Johnson, and International Business Machines are all to report this week. Trading volumes were thin after the Easter break: 10.35 billion shares changed hands, compared with the 11.79 billion average for the full session over the last 20 trading days. 

Economic Calendar

With European markets also remaining shut on Monday, this listless trading contributed to the topsy-turvy session. Shares of market-leading technology and growth companies have come under pressure as expectations of a string of interest rate hikes threaten to erode their future earnings.

Dow Jones Industrial Average

The Dow Jones Industrial Average lost 0.11%. The biggest gainers of the session on the Dow Jones Industrial Average were Goldman Sachs Group Inc., which rose 2.56% or 8.24 points to trade at 329.88 at the close. Intel Corporation added 2.12% or 0.97 points to end at 46.64 and JPMorgan Chase & Co was up 1.86% or 2.34 points to 128.46 in late trade. The biggest losers included Walt Disney Company, which lost 2.07% or 2.70 points to trade at 127.77 in late trade. Honeywell International Inc. declined 1.60% or 3.12 points to end at 192.07 and Home Depot Inc. shed 1.42% or 4.31 points to 300.21.

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NASDAQ 100

The NASDAQ index declined 0.14%. The top performers on the NASDAQ Composite were Casa Systems Inc. which rose 82.52% to 7.10, Frequency Therapeutics Inc. which was up 30.82% to settle at 1.91 and Natus Medical Incorporated which gained 28.64% to close at 33.51. The worst performers were Diffusion Pharmaceuticals Inc. which was down 34.22% to 0.17 in late trade, Nutex Health Inc. which lost 29.18% to settle at 5.17 and Digital Brands Group Inc. which was down 23.57% to 0.85 at the close.

Oil price - Crude Oil market, Brent Oil market

Oil prices see-sawed today as investors fretted over tight global supplies after Libya halted some exports and as factories in Shanghai prepared to reopen post a COVID-19 shutdown, easing some demand worries. U.S West Texas Intermediate crude fell 45 cents, or 0.42%, to $107.76 a barrel, after rising to $108.92 earlier. 

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Prices came under pressure with the dollar trading at a fresh two-year high. A firmer greenback makes commodities priced in dollars more expensive for holders of other currencies. The latest supply hit came just as fuel demand in China, the world's largest oil importer, was expected to pick up as manufacturing plants prepared to reopen in Shanghai. 

Oil prices, however, are still vulnerable to demand shocks as China continues to impose tough COVID-related curbs. In the United States, crude inventories rose by 9.4 million barrels in the week to April 8 to 421.8 million barrels, against analysts' hopes for an 863,000-barrel rise, a preliminary Reuters poll showed.

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Precious and Base Metals - Gold price, Silver price, Palladium price

Gold rose to a one-month high yesterday, just shy of the $2,000 an ounce level, as concerns around the Russia-Ukraine conflict and rising inflationary pressures increased safe-haven bids for the precious metal. Spot gold rose 0.1% to $1,976.56 per ounce, after earlier hitting its highest since March 11 at $1,998.10. 

U.S gold futures settled 0.6% higher at $1,986.4. Gold's advance was curbed late in the session by a jump in benchmark 10-year U.S Treasury yields and further gains in the dollar, which dulls the appetite for gold among overseas buyers. The little step-up in tension due to the Russia-Ukraine war with inflationary pressures across the board boost safe-haven demand for gold. 

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Concerns over the economic hit from COVID-led restrictions in China also supported the metal. Although concerns of soaring inflation boost gold's safe-haven appeal, interest rate hikes to temper higher prices could hurt demand for the metal because of the higher opportunity cost of holding non-yielding bullion. The U.S Federal Reserve is expected to accelerate its pace of policy tightening when it meets next, with a rise of 50 basis points expected in the May and June meetings. 

From a technical perspective, spot gold may face little resistance once it goes north of $2,000. However, gold's ability to keep its head above $2,000 may be strained once real yields break into positive territory. Spot silver rose 0.5% to $25.80 per ounce, having earlier hit its highest in over a month at $26.21. Platinum gained 2.2% to $1,011.89, its highest since March 25, while palladium was up 2.2% to $2,419.30. The epitome of concerns for palladium and platinum is about supply disruptions due to the war.

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Traditional Agricultures - Corn futures, Wheat futures,  Soybean futures

U.S grains futures edged higher today, with corn prices touching a decade high, as unfavorable U.S weather conditions and stalled Black Sea exports due to the Ukraine crisis intensified worries over tightening global supplies. The USDA rated 30% of U.S winter wheat in good-to-excellent condition, down two percentage points from a week ago. The rating was below the average of analyst expectations and the lowest for this time of year since 1996. Approximately 69% of the U.S. winter wheat crop was in an area experiencing drought as of April 12, the government said.

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All information has been prepared by TraderFactor or partners. The information does not contain a record of TraderFactor or partner's prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may read it. Past performance is not a reliable indicator of future performance.

The dollar rose to a fresh two-year high in yesterday’s in thin and choppy trading

• Volume was light on the day with many markets closed for Easter Monday
• The U.S rate futures market has priced in a 96% chance of a 50 basis-point tightening
• The greenback also climbed to a new 20-year peak of 126.98 yen versus the Yen

Forex market

The dollar rose to a fresh two-year high yesterday in thin and choppy trading, in line with higher U.S Treasury yields, as investors braced for multiple half a percentage-point rate hikes from the Federal Reserve. 

Volume was light on the day with Hong Kong, European, Australian and New Zealand markets closed for Easter Monday. The U.S. rate futures market has priced in a 96% chance of a 50 basis-point tightening at next month's Fed policy meeting, and about 215 basis points in cumulative rate increases in 2022, providing ample support for the dollar. 

Economic Calendar

The greenback also climbed to a new 20-year peak of 126.98 yen versus the Japanese currency, highlighting the contrast in monetary policy between a hawkish Fed and an ultra dovish Bank of Japan. The benchmark U.S. 10-year Treasury yield, meanwhile, touched a three-year high of 2.884%. The dollar index, a gauge of the greenback's value against six major currencies, surged to 100.86, the highest since April 2020. It was last up 0.3% at 100.77. 

There is indeed history that when the Fed plans for hiking and tightening, the buck ends up losing during those cycles, but at the moment there is little optimism out there that can knock the buck down. Speculators' net long bets on the U.S dollar fell for a second straight week, according to calculations by Reuters and U.S Commodity Futures Trading Commission data released on Friday. 

Trading Signals and Trading Forecasts

The value of the net long dollar position was $13.22 billion for the week ended April 12. The currency positioning lacked a clear sense of narrative for the reduction in U.S dollar bullish sentiment, while a further rise in bearish bets in the Swiss franc and the yen "reflected the U.S dollar's yield advantage over these two currencies - whose respective central banks remain far from tightening policy. 

The yen, on the other hand, earlier came off a 20-year low after both Bank of Japan Governor Haruhiko Kuroda and Finance Minister Shunichi Suzuki voiced concerns about their weakening currency. The rally proved short-lived as the yen hit a fresh 20-year trough in the New York session, and was last up 0.3% at 126.93 yen. There's growing speculation about FX intervention to save the yen, although that seems unlikely. Japan would have to intervene alone since the Americans and Europeans wouldn't agree to weaken their own currencies in this inflationary environment, and Japanese authorities haven't even described the moves as disorderly yet to foreshadow action.

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Euro-EUR

The single currency traded lower as Russia is committed to compelling Ukraine to abandon its Euro-Atlantic orientation and asserting its own regional dominance, even as Moscow’s operational focus has shifted to the east of its neighboring country, British military intelligence. Russian forces were continuing to redeploy combat and support equipment. Overall, the EUR/USD traded with a low of 1.0768 and a high of 1.0820 before closing the day around 1.0780 in the New York session.

Japanese Yen-JPY

The Japanese Yen won a brief reprieve after hitting fresh two-decade lows from Japanese policymaker comments on Monday, even as holidays confined the U.S dollar to narrow ranges against most other currencies. With the Easter holiday in Australia, Hong Kong and other parts of Asia dulling trade in other currencies, the dollar remained strong. Overall, the USD/JPY traded with a low of 126.22 and a high of 126.98 before closing the day around 126.97 in the U.S session.

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British Pound-GBP

The British Pound rose against the euro as the single currency weakened after the ECB maintained its plans to slowly rein in stimulus measures. Meanwhile, financial markets are all but certain the Bank of England will raise rates for a fourth consecutive meeting on May 5, before taking them to 2%-2.25% by the end of 2022, as inflation continues its sharp rise. Overall, the GBP/USD traded with a low of 1.3002 and a high of 1.3062 before closing the day at 1.3012 in the New York session.

Canadian Dollar-CAD

The Canadian Dollar weakened as bond yields jumped and the U.S currency broadly climbed, with the loonie pulling back from its strongest level in more than one week. Domestic data for February showed that wholesale trade decreased 0.4% from the previous month, missing analyst estimates of a 0.9% gain, and that factory sale grew by 4.2%. Overall, USD/CAD traded with a low of 1.2600 and a high of 1.2641 before closing the day at 1.2609 in the New York session.

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Australian Dollar-AUD 

The Australian Dollar traded at its lowest level since March 17 on thin holiday trading early today. The selling is being primarily fueled by the strong U.S Dollar. Traders, for the most part are showing little reaction to mixed, but mostly positive economic data from China. Although the Reserve Bank of Australia (RBA) recently strongly suggested it was preparing to raise rates sooner than previously expected. Overall, AUD/USD traded with a low of 0.7358 and a high of 0.7416 before closing the day at 0.7410 in the New York session.

Euro-Yen EUR/JPY

EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The Relative Strength Index is above 61 and lies above the neutral zone. In general, the pair has gained 0.16%.

Sterling-Yen GBP/JPY

Currently, GBP/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 60 reading and lies above the neutral zone. On the whole, the pair has gained 0.06%.

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Aussie-Yen AUD/JPY

Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 76 reading and lies above the neutral region. In general, the pair has lost 0.18%.

Euro-Sterling EUR/GBP

This cross is currently trading above 14, 50 and below 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 53 and lies below the neutral region. Overall, the pair has gained 0.05%.

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Sterling-Swiss GBP/CHF

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The Relative Strength Index is above 45 and lies below the neutral region. In general, the pair has lost 0.16%.

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