U.S. Equity Market Rally Ahead of GDP

Market Summary

The dollar index (DXY) edged higher in anticipation of the U.S. GDP release scheduled for later today. However, it’s noteworthy that the U.S. long-term treasury yield is easing from its recent peak at 4.30%, which may exert downward pressure on the dollar’s strength. Meanwhile, the U.S. equity market, led by the Dow Jones, gained more than 1% last night as institutional investors rebalanced their quarter-end portfolios and exhibited enthusiasm for equities.

In the commodities realm, gold prices remained poised at elevated levels, awaiting the U.S. GDP reading as well as Friday’s PCE reading, which could potentially have a direct impact on gold prices. Despite U.S. crude stockpile data coming in significantly higher than the previous reading, oil prices rose in last night’s session. The OPEC+ supply cut, which could tighten the global market supply, has overshadowed demand concerns in the U.S.

Additionally, BTC is currently supported above $69,000 levels, with open interest back above the $20 billion level, suggesting that enthusiasm among BTC traders is back on track. Investors are closely monitoring these developments across various asset classes for potential market implications.

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Current rate hike bets on 1st May Fed interest rate decision: 

Source: CME Fedwatch Tool

0 bps (85.5%) VS -25 bps (14.5%)  

Market Overview

Economic Calendar

(MT4 System Time)

Source: MQL5 

Market Movements

DOLLAR_INDX, H4

The Dollar Index, hovering around its recent high and testing the resistance level at 104.45, is under scrutiny as the market anticipates the release of the U.S. GDP data later today. This economic indicator is crucial and could significantly influence the dollar trend, setting the stage for potential movements based on the health of the U.S. economy. Additionally, attention is placed on Friday’s PCE index, an essential gauge for forecasting the Federal Reserve’s upcoming monetary policy decisions. However, it’s important to note that the U.S. market will observe a shortened session, closing at 2 p.m., before the Good Friday holiday. This adjusted schedule may result in reduced market volatility, as trading volumes are likely to decrease.

The Dollar Index is on the brink of breaking its recent high level at 104.45, suggesting a bullish bias for the index. The RSI remained at the higher region while the MACD observed a sliding manner, suggesting the bullish momentum is easing slightly. 

Resistance level: 104.45, 104.95

Support level:104.00, 103.65

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XAU/USD, H4

Gold prices, experiencing an uptick and nearing the significant psychological resistance level of $2200, illustrate the market’s anticipatory behaviour in response to key economic indicators. This upward movement is primarily attributed to traders and investors positioning themselves strategically ahead of crucial U.S. economic data releases, including the Gross Domestic Product (GDP) figures and the Personal Consumption Expenditures (PCE) index, scheduled for today and tomorrow, respectively.

Gold prices hovering at the $2195 level after breaking above the ascending triangle pattern suggest a bullish bias for gold. The RSI is hovering near the overbought zone, while the MACD shows signs of rebounding from above the zero line, suggesting the bullish momentum remains intact.

Resistance level:  2195.00, 2230.00

Support level:  2175.00, 2160.00

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GBP/USD，H4

The GBP/USD pair is currently in a phase of consolidation, albeit within a broader bearish trend. Both the UK and the US are scheduled to release their Gross Domestic Product (GDP) data today, events that are highly anticipated by the market. These data releases are crucial as they provide insight into the economic health and growth trajectory of both nations, which in turn, can have a significant impact on the currency pair.

GBP/USD trade with minimal volatility ahead of crucial economic data, which a lower-high pattern suggests a bearish bias for the pair. The RSI remain below the 50 level while the MACD is approaching the zero line from below, suggesting the bearish momentum is easing. 

Resistance level: 1.2710, 1.2770

Support level: 1.2530, 1.2440

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EUR/USD，H4

The EUR/USD pair experienced a slight decline as the U.S. dollar edged higher in anticipation of the upcoming U.S. GDP data set for release later today. The German economy’s growth rate slowed to 0.1%, falling short of its previous performance, indicating economic challenges that have curbed the euro’s momentum. This has hindered the euro’s strength amid growing speculation that the ECB may consider a rate cut as the inflation in the region seems to be easing. 

EUR/USD was retraced and is approaching its support level, suggesting a bearish bias for the pair. The MACD flowing flat below the zero line while the RSI hovering near the oversold zone suggests the pair is trading with bearish momentum. 

Resistance level: 1.0866, 1.0955

Support level: 1.0780, 1.0700

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AUD/USD，H4

The Australian dollar is currently in a consolidation phase after breaking out of its uptrend channel, awaiting a catalyst to determine its next direction. The Antipodean Retail Sales reading came in at 0.3%, below the previous reading of 1.1%, indicating a slowdown in the economy. This has exerted downward pressure on the Australian dollar. Meanwhile, the U.S. dollar has strengthened ahead of the GDP reading scheduled for later today, adding further pressure on the AUD/USD pair.

The AUD/USD pair is consolidating, and the RSI is hovering near the 50 level, while the MACD is flowing flat closely to the zero line, which has also given a neutral signal for the pair. 

Resistance level: 0.6560, 0.6640

Support level: 0.6535, 0.6485

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USD/JPY, H4

The USD/JPY pair has formed a triple-top price pattern, reaching its highest level since 1990. This development has sparked speculation in the market regarding potential intervention from Japanese authorities. The sentiment is reinforced by statements from the Japanese Finance Minister, who emphasised the possibility of taking necessary action to stabilise the Japanese Yen. As the pair hovers near its all-time high, investors are closely monitoring any signs of intervention by Japanese authorities to manage currency volatility.

The USD/JPY pair has formed a triple-top price pattern and is currently consolidating at elevated levels. The RSI is gradually moving lower while the MACD is approaching the zero line from the above, which, given a divergence signal for the pair, suggests a potential trend reversal. 

Resistance level: 151.85, 153.35

Support level: 149.50, 147.65

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CL OIL, H4

Crude oil prices have staged a rebound from their recent liquidity zone, although they have not yet reached their previous highs, signalling a lack of definitive trend reversal. This resurgence comes despite the release of U.S. weekly crude stockpile data, which revealed a significant increase compared to the previous reading. However,  oil prices have found support from heightened geopolitical tensions in both the Eurozone and the Middle East and the decision by OPEC+ to extend oil production cuts until the end of June has contributed to the buoyancy of oil prices. 

Oil prices rebounded above their liquidity zone, suggesting the oil price is trading with a bullish trajectory. The RSI hovers between the 50 level while the MACD flows closely toward the zero line, with both indicators giving a neutral signal for oil prices. 

Resistance level: 82.85, 84.10

Support level: 80.20, 78.00