XAG/USD continues to trade with small on-the-day losses just above the $25.00 per troy ounce mark, having admittedly fended off earlier session pressure that saw the metal dip as low as the $24.89 and eye a test of its 50-Day Moving Average at $24.83.

Fed policymakers are sounding increasingly open to the prospect of taking interest rates above neutral in order to tackle rampant inflation. If Powell’s remarks on Thursday strike a hawkish tone, recent upside in the US dollar and US yields could be reignited, presenting further downside risks for silver. A stronger US dollar makes USD-denominated commodities more expensive for foreign buyers, while higher yields represent a rise in the “opportunity cost” of holding non-yielding assets like silver.
A dip back below $25.00 is certainly on the cards for the second half of this week. However, with geopolitical tensions still very high as the US/NATO ups weapons shipments to Ukraine as Russia escalates its assault in the eastern Donbas oblast and sanctions only likely to be tightened from here, stagflationary risks to the global economy remain elevated. This should mean good demand for silver it slips back towards the low $24.00s.

XAGUSD D1 04 20 2022 1750

Trade accordingly with your risk

 

The backdrop to this scarce occurrence is a Japanese government and central bank that are comfortable with a depreciating Yen. There has been a certain amount of jawboning from Japanese officials expressing concern of the rate of change and that exchange rates should reflect fundamentals. This is largely seen by the market as an attempt to avoid being singled out as currency manipulator by the US.

While the US Federal Reserve and many other central banks globally are in a tightening cycle, the Bank of Japan is maintaining extremely loose monetary policy. This is also playing a significant role in boosting USD/JPY in this unparalleled succession of up-days. 

USDJPY D1 04 19 2022 1418

 

 

 

Yesterday, WTI crude oil took out the March low fractionally before reversing higher to close above the low of 93.53. The low, given the test and daily closing hold yesterday, makes support even more important. Today we are seeing some follow through that could lead to a meaningful recovery.

Maintaining support will be key to the outlook moving forward. It appears there is a high likelihood we see a bounce back over 100 in the near-term, but where we go from there will be interesting should it happen. A descending wedge will be in the works at that juncture. 

USOilSpot D1 04 12 2022 1746

Right now, there is no wedge to speak of, but should it come to pass, then the coiling up of price action following the fireworks to 130 will likely lead to another powerful move. Descending wedges tend to hold a bearish tilt, but need to be taken into context.

The lower highs and flat bottom indicate a market that is losing its ability to hold a rally at increasingly faster rates. This often times leads to the flat bottom support getting taken out. But the overall trend in oil is higher, so we could see a top-side breach. Have to play wedges/triangles as they unfold.

For now, there is resistance around the March 29 low at 98.44. The past few days oil has found it difficult to rise above, so if the rally is to extend higher off the larger support level, then it will need to clear that level. Above there the trend-line off the March high will come into play.

To get a solid-looking wedge the trend-line will need to be taken out with price advancing to around the 104/108 area. If we don’t see price rise from here and the March low gets clipped on a daily closing basis we may see oil decline towards the 2021 high at 85.41.

 

 

 

 


Markets appear to be convinced that the US Federal Reserve would raise interest rates more aggressively to confront persistently rising inflation. Meanwhile, the mood surrounding the Bank of England is dovish after the dovish rise given in March, owing to concerns about the economic prospects. Nonetheless, higher-than-expected inflation in the coming weeks may put further pressure on the Fed to move more aggressively. 

GBPUSD D1 04 18 2022 2104


The GBP/USD price is traveling at the 1.3012 level. The price is below 20, 50, 100, and 200 SMAs, signifying a bearish trend.
The next key resistance level for the pair is 1.3074. If we see a rise beyond this level, the cable can climb towards the price goes above this level, it can further climb towards 1.3094.

On the other hand, the next support is at 1.3000. If the price dips below this level, we can see it further drifting towards the 1.2972 level.

Next week the ECB will deliver their interest rate decision which is not expected to reveal a surprise rate hike but more importantly, market participants will be hanging on every word from ECB President Christine Lagarde regarding the end of APP (ECB’s version of QE) and the subsequent rate hike timeline.

The minutes from the March meeting were largely received as hawkish, much like the meeting itself but members of the governing council still differ in their views on inflation with some advocating for immediate normalization measures while others seemingly comfortable with inflation’s medium-term outlook.

EURUSD D1 04 08 2022 1514


The daily EUR/USD chart shows a strong rejection at the blue trendline resistance stemming from May 2021 which coincided with the upper bound of the rising channel. Since then, EUR/USD broke below the lower bound of the channel and now approaches the 2017 trendline acting as support. The trendline appears just before the March low of 1.0805 which is well within reach ahead of the ECB meeting. A deeper move would see 1.0635 appear as support – the March 2020 low. Any euro defiance would be contained by 1.0940 before the psychologically important 1.1000 comes back into focus.

 

 

 

 

 

 

 

 

Our Partners

logo ms capital consulting   pawlogo5

Payments

formas de pago