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AUD/USD rallies after RBA

“What do you need to start a business? Three simple things: know your product better than anyone, know your customer, and have a burning desire to succeed.” — Dave Thomas 

 

 

HEADLINES

 

 

Sterling bounces higher as dollar surge eases

Gold prices gain following a pull-back in yields, dollar

Oil slides as China lockdowns outweigh proposed EU Russia oil ban

Banks, megacaps drive Wall Street indexes as Fed decision looms

USD/JPY: Aggressive uptrend is finally showing signs of tiring – Credit Suisse

EURJPY Near Term: Upside favored

 

 

FOREX

 

 

Australia's central bank hikes interest rates, flags more to come

 

Australia's central bank on Tuesday raised its cash rate by a surprisingly large 25 basis points to 0.35%, the first hike in over a decade, and flagged more to come as it pulls down the curtain on massive pandemic stimulus.

 

 

Sterling bounces higher as dollar surge eases

 

 

The British pound rose on Tuesday, moving away from 21-month lows against the dollar as traders took profits on the recent surge in the U.S. currency ahead of both Federal Reserve and Bank of England monetary policy meetings this week.

 

In recent weeks the pound has fallen sharply as investors have piled into dollars in expectation that the Federal Reserve will raise rates faster than other central banks and that the U.S. economy will hold up better than others in the face of soaring inflation and slowing global growth.

 

On Tuesday, sterling climbed 0.5% to as high as $1.2566 , compared with a 21-month low of $1.2412 hit last week.

 

 

COMMODITIES

 

 

Gold prices gain following a pull-back in yields, dollar

 

 

Gold firmed on Tuesday, tracking a slight retreat in U.S. Treasury yields and dollar, while investors anticipated an aggressive interest rate hike from the Federal Reserve when it concludes a two-day policy meeting.

 

While gold is considered an inflation hedge, higher interest rates lift the opportunity cost of holding zero-yield bullion.

 

 

Oil slides as China lockdowns outweigh proposed EU Russia oil ban

 

 

Oil prices fell by more than 2% on Tuesday as demand worries stemming from China's prolonged COVID-19 lockdowns outweighed the prospect of a European embargo on Russian crude.

 

Also in focus will be the latest round of U.S. inventory and supply reports. Five analysts polled by Reuters on average expect U.S. crude inventories fell by 1.2 million barrels last week.

"We have a market that's in flux and reacting from headline to headline in a very choppy trading range," Flynn said.

 

 

STOCKS

 

 

Banks, megacaps drive Wall Street indexes as Fed decision looms

 

Wall Street's main indexes rose on Tuesday, as investors picked up shares of financials and beaten-down megacap companies, while staying cautious about the Federal Reserve's ability to tame inflation without impeding growth.

 

In April, Wall Street was hammered by uncertainty around the Fed's ability to engineer a soft landing for the economy, mixed earnings from some big growth companies, the war in Ukraine and pandemic-related lockdowns in China.

 

The Nasdaq Composite (.IXIC) slumped nearly 13.3% last month, its worst monthly performance since October 2008 as richly valued high-growth stocks came under pressure from rising rates.

 

ANALYSIS

 

 

USD/JPY: Aggressive uptrend is finally showing signs of tiring – Credit Suisse 

 

“We suspect we may be approaching a near-term peak. Support is seen at 129.70/60 initially, then 129.31, with key near-term support seen at the rising 13-day exponential average and price support at 128.44/34. This needs to hold on a closing basis for a touch more strength yet above 131.25/35 to the 78.6% retracement of the 2002/2011 fall to 132.20. We would look for this to then cap at first for an overdue consolidation phase.” 

 

“A close below 128.34 would suggest a consolidation phase is underway with support seen next at 127.36 ahead of the 126.95 recent low. Only beneath this latter level though would warn of a near-term top and deeper setback.”

 

 

CHART

 

 

EURJPY Near Term: Upside favored

Technical View: Long position above 136.5. Target 138.45. Conversely, break below 136.5, to open 135.55.

Comments: The pair is expected to resume advance after correction.

 

 

Source: Trading Central 

 

 

CALENDAR

 

 

*Times in GMT

 

 

 

 

Source: FX Street Economic Calendar

 


Footnotes
https://www.reuters.com/article/britain-sterling/update-1-sterling-bounces-higher-as-dollar-surge-eases-idUSL2N2WV0JV
https://www.reuters.com/business/gold-prices-pinned-near-2-12-month-low-investors-await-fed-meeting-2022-05-03/
https://www.reuters.com/business/energy/oil-climbs-eu-gets-set-ban-russian-crude-2022-05-03/
https://www.reuters.com/business/futures-slip-earnings-disappoint-eyes-fed-2022-05-03/
https://www.fxstreet.com/news/usd-jpy-aggressive-uptrend-is-finally-showing-signs-of-tiring-credit-suisse-202205031330

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