Gold Prices at All-Time High Ahead of CPI

• Dollar index poised ahead of Wednesday’s CPI reading. 
• Gold prices are hovering at all-time high levels while Oil prices are stimulated by tightening supply outlook. 
• BTC prices are whisker away from its all-time high at $73630. 

Market Summary

As the financial markets brace for the forthcoming U.S. Consumer Price Index (CPI) announcement on Wednesday, U.S. equities presented a subdued performance, while the dollar index witnessed a modest decline. The anticipation surrounding the Federal Reserve's rate-cutting measures has been significantly adjusted, with expectations now set at a 60 basis points reduction for the year, a stark contrast to the 150 basis points forecasted at the year's start. Concurrently, U.S. long-term treasury yields have surged to their highest point since last November, indicating a potential parallel movement with the dollar. Nevertheless, investors' focus remains keenly set on the upcoming CPI data for further insight into inflation trends.

In the commodities sector, gold prices are maintaining their position near record highs, whereas oil prices are testing their peak levels since last October. The primary drivers behind the oil price surge include ongoing supply concerns and the unpredictable geopolitical tensions in the Middle East.

Additionally, the Reserve Bank of New Zealand (RBNZ) is poised to announce its interest rate decision tomorrow, 10th April. Market consensus leans towards the central bank holding its interest rate steady at 5.50%. This decision would notably distinguish the RBNZ from other major central banks, which have been exploring rate reduction strategies. The anticipation of a steady interest rate policy by the RBNZ could further bolster the strength of the New Zealand dollar in the global currency markets.

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 Movements 

DOLLAR_INDX, H4

The Dollar Index, tracking against a basket of major currencies, saw a slight retreat in anticipation of upcoming US inflation figures later this week. Despite upbeat reports on Nonfarm Payrolls and the Unemployment Rate, economists forecast a potential dip in inflation compared to the previous reading. Projections suggest a 0.30% monthly rise in the headline Consumer Price Index (CPI), down from February's 0.40%. Heightened market uncertainties led some investors to steer clear of the US market, diversifying their portfolios and reducing demand for the US Dollar.

The Dollar Index is trading lower while currently near the support level. MACD has illustrated increasing bearish momentum, while RSI is at 40, suggesting the index might extend its losses after breakout since the RSI stays below the midline. 

Resistance level: 104.60, 104.95

Support level:104.00, 103.65

 XAU/USD, H4

Gold prices maintained resilience amid escalating tensions in the Middle East and stalled ceasefire negotiations. Heightened demand for the safe-haven asset persisted as geopolitical risks intensified. Market volatility is expected to remain elevated in anticipation of the US inflation report, potentially further bolstering demand for gold. Investors are advised to closely monitor developments in US inflation data for additional trading signals amidst ongoing geopolitical uncertainties.

Gold prices are trading higher following the prior breakout above the previous resistance level. MACD has illustrated diminishing bearish momentum, while RSI is at 61, suggesting the commodity might extend its gains toward resistance level since the RSI stays above the midline. 

Resistance level: 2350.00, 2370.00

Support level: 2335.00, 2320.00

 GBP/USD，H4

Yesterday, the GBP/USD pair experienced an uptick, though it presently confronts a formidable resistance at the 1.2660 mark. This dynamic primarily stems from a tepid U.S. dollar performance, as market participants await the critical U.S. Consumer Price Index (CPI) data scheduled for release tomorrow. Nevertheless, the Pound's momentum remains muted; recent labour market data and inflation indicators have sparked discussions regarding a potential rate cut by the Bank of England (BoE), exerting downward pressure on Sterling.

GBP/USD traded higher but was rejected at its near-resistance level of 1.2660. The RSI continue to flow at above 50 level while the MACD flowing flat at above the zero line suggests the bullish momentum remains intact with the pair. 

Resistance level: 1.2660, 1.2760

Support level: 1.2540, 1.2440

 EUR/USD，H4

The EUR/USD pair maintains its upward trajectory, currently facing resistance around the 1.0866 level. The currency pair is capitalising on a reticent dollar, leveraging the anticipation surrounding tomorrow's U.S. Consumer Price Index (CPI) release to gain ground. Concurrently, market participants are closely monitoring the upcoming European Central Bank (ECB) monetary policy statement and interest rate decision, also scheduled for tomorrow, which could significantly influence the pair's movement.

EUR/USD rebounded at its psychological support level at 1.0800, suggesting a bullish bias for the pair. Yesterday, the MACD flowed flat above the zero line, while the RSI hovered above the 50 level, suggesting the pair remains trading with bullish momentum. 

Resistance level: 1.0866, 1.0954

Support level: 1.0775, 1.0700

 USD/JPY，H4

The Japanese yen faced downward pressure following reports of continued declines in real wages for Japanese workers, marking the 23rd consecutive month of decrease. This trend, indicating the impact of higher prices on consumer spending, saw inflation-adjusted real wages fall by 1.3% in February, following a revised decline of 1.1% in January. The prospect of reduced inflation risks and lower Japan Treasury yields accompanied the downward trajectory of the yen.

USD/JPY is trading higher while currently testing the resistance level. MACD has illustrated increasing bullish momentum, while RSI is at 58, suggesting the pair might extend its gains after breakout since the RSI stays above the midline. 

Resistance level: 151.95, 153.10

Support level: 150.80, 149.35

 NZD/USD, H4

The NZD/USD pair has rebounded strongly, retracing up to the 50% Fibonacci level after a recent pullback, and is currently testing its April high. Market attention is focused on the upcoming Reserve Bank of New Zealand (RBNZ) interest rate decision scheduled for tomorrow, with expectations for heightened volatility surrounding the event. Additionally, traders are closely monitoring the accompanying monetary policy statement, which is poised to play a crucial role in determining the pair's price action.

The pair is attempting to break above its previous high level; breaking above such a level suggests a solid bullish signal for the pair. The MACD flowing at the elevated level while the RSI moves up toward the overbought zone suggests the bullish momentum remains strong. 

Resistance level: 0.6050, 0.6100

Support level: 0.5950, 0.5895 

CL OIL, H4

Oil prices continued their upward momentum amidst ongoing fears of supply disruptions in the market. Geopolitical tensions in the Middle East, exacerbated by the failure of ceasefire talks between Israel and Hamas, supported oil prices. Despite efforts by the US and its allies to broker peace, prospects for an immediate resolution appear to be waning, contributing to sustained concerns over supply stability.

Oil prices are trading higher following the prior rebound from the support level. MACD has illustrated diminishing bearish momentum, while RSI is at 60, suggesting the commodity might extend its gains since the RSI stays above the midline. 

Resistance level: 87.90, 89.10

Support level: 83.35, 83.05