EURUSD Steady at $1.08 as ECB Meeting Nears, Rate Cut Hints Awaited

Solid ECN—The euro remained steady at about $1.08, with investors taking a cautious stance as they awaited Thursday's European Central Bank (ECB) announcement.

It's widely anticipated that ECB officials will keep interest rates at their current record highs for the sixth time in a row. The focus is now on how the statement is worded and what ECB President Lagarde might say in her press conference to hint at when the first interest rate decrease of the year could happen.

Recent documents from the ECB show that the officials are more confident about inflation moving towards their goal of 2%, which makes a strong argument for a reduction in interest rates. On the other hand, the US dollar kept getting support because the latest data showed the American job market is still doing well, indicating that the Federal Reserve might not hurry to lower interest rates soon.

USDJPY Breakthrough: Bullish Uptrend Resumes, Ichimoku Cloud Watch

Solid ECN – In the current trading session, the bulls of USDJPY have finally broken through the 159.9 barrier. This suggests that the uptrend is likely to continue. However, the next bullish target remains uncertain as there are no significant obstacles for the bulls.

It’s important to note that the Ichimoku cloud is the dividing line between bull and bear markets. We should consider pausing the bullish scenario if the price falls below this level.

GBPUSD's Pullback: An Opportunity?

Solid ECN—In yesterday's trading session, The GBPUSD pair dipped below 1.2593, April's lowest point against the U.S. dollar. As of writing, the pair is experiencing a pullback toward the broken support at 1.2575. This pullback was expected because the price exceeded the envelope indicator's lines, interpreted as an oversold market.

From a technical perspective, the market is bearish as long as the GBPUSD price hovers below the Ichimoku Cloud and the EMA 50. The pullback can provide opportunities to join the bear market if it stops at the 1.2575 resistance, followed by 1.2613. Therefore, monitoring these levels and looking for bearish candlestick patterns, such as a doji or a bearish engulfing pattern, can signal investors to join the sellers.

If this scenario comes into play, the next target for the bears will likely be the 50% Fibonacci level, the 1.247 mark, followed by the lower band of the bearish flag.

Conversely, if the GBPUSD closes and stabilizes itself above the cloud and the upper band of the flag, the bear market should be considered invalid.

Monitoring Yen's Rally Against Sterling

Solid ECN – The Japanese yen is making a comeback against the pound sterling from 192.9 and is increasing its pace toward the 23.6% Fibonacci level.

The pair trades in the bullish flag depicted in red, as shown on the daily chart. The current downward momentum occurs while the RSI indicator closes on the 50 levels and the Awesome Oscillator signals divergence. This could be interpreted as a trend reversal or the beginning of a new consolidation phase, which appears stronger.

From a technical standpoint, the primary trend is bullish. Still, due to the divergence signal, the consolidation phase might extend to the 23.6% Fibonacci support, followed by the lower band of the bearish flag in blue.

Therefore, we suggest monitoring the aforementioned levels closely for a hammer stick pattern since these levels provide a decent price point for joining the bull market.

EURUSD Trading Tips Amid Market Volatility

Solid ECN – The EURUSD currency pair dipped to as low as 1.062 during Friday's trading session and traded at about 1.066, with an increase in today's trading session.

The RSI indicator signals that the market is oversold, while the Standard Deviation indicator hovers at a peak of around 0.0079 and is declining. This can be interpreted as the market being oversold and market volatility slowing down.

From a technical perspective, joining the bears in an oversold market condition is not recommended. Therefore, waiting patiently for the EURUSD to correct some of its losses is logical and wise. However, we don't see signals from the Awesome Oscillator indicating the start of a consolidation phase. Regardless of the AO, if the price reaches the 23.6% Fibonacci level, this resistance area can provide a decent entry point for retail traders to join the bear market.

Please be aware that the Ichimoku cloud stands between bear and bull markets. The market remains bearish as long as the price hovers below the cloud.

Analyzing USDCAD's Recent Overbought Status

Solid ECN – As of this writing, the USDCAD currency pair is trading at about 1.3737, slightly below the 78.6% Fibonacci level. The rise that began on April 4 from 1.3477 has led to the pair becoming overbought. Notably, the RSI indicator highlighted yesterday's saturated market when it hovered above 70.

Subsequently, the USDCAD formed a doji candlestick pattern with a long wick on the 4-hour chart, and interestingly, the Awesome Oscillator is showing signs of a bearish wave.

Therefore, from a technical perspective, the USDCAD price might dip. However, for this to occur, the bears must close and stabilize the price below the 1.3725 minor support. If this scenario unfolds, the correction phase could extend to the 1.3682 broken resistance, which offers a decent entry point to join the bull market.

It is worth noting that the market remains bullish as long as the USDCAD price trades above the EMA 50.

Bullish Gold: Navigating the Upswing with Fibonacci and Technical Indicators

Solid ECN – The gold price returned upward after it touched the 38.2% Fibonacci level, which coincides with the EMA 50 and the Ichimoku cloud at the $2,324 mark. Interestingly, the XAU/USD 4-hour chart formed a bullish long-wick candlestick pattern, which signals the continuation of the bull market.

As of this writing, the yellow metal is trading at about $2,370, slightly above the 23.6% Fibonacci support. The technical indicators are also bullish. The RSI indicator hovers above the 50 level and the Awesome Oscillator bars are green and above the signal line.

From a technical perspective, as long as the price remains above the EMA 50 and inside the flag, the market trend remains bullish. The next target will likely be April’s high at the $2,432 mark.

Conversely, the bull market is invalidated if the XAU/USD price dips below the 38.2% Fibonacci support.

Canadian Bonds and Inflation Trends Amid US Fed Expectations

Solid ECN – The Canadian 10-year government bond yield has stabilized at 3.78%, a peak not seen since November. This rate holds steady as investors carefully balance their expectations between the US Federal Reserve maintaining a strong stance and anticipating a potential rate cut from the Bank of Canada (BoC).

Amid this backdrop, new economic data revealed that Canada's annual inflation rate in March was recorded at 2.9%, which was below the expected figures. This decline in inflation is noteworthy as it indicates a possible easing in price pressures within the economy. Core inflation measures, closely monitored by the Canadian central bank, also dipped more than anticipated. This decline further bolsters the belief that underlying inflation in Canada might be settling down.

These inflation trends come as Canada has observed an uptick in its national unemployment rate and contractionary Purchasing Managers' Index (PMI) readings earlier in the month. These indicators typically suggest a slowdown in economic activity.

The combination of these factors has led to significant market speculation. Nearly two-thirds of investors now foresee a rate cut by the BoC in the upcoming June meeting. This expectation has provided substantial support to Canadian government bonds, helping them withstand the pressures that have led to a more pronounced selloff in US Treasury bonds.

As the market anticipates the BoC's next moves, these developments are critical for investors and policymakers alike, offering a glimpse into the potential directions of Canada's financial and economic landscape.

Bitcoin Price Fails at Key Resistance Levels

Solid ECN – Bitcoin price failed to surpass the EMA 50 and the 50% Fibonacci resistance level in the previous trading session. Consequently, the digital gold dipped below the 23.6% Fibonacci support level and traded at about $62,800 when writing.

The technical indicators give mixed signals. The RSI hovers below 50, and the awesome oscillator bars are green and approaching the signal line. This can be interpreted as uncertainty in the market.

As shown in the BTCUSD 4-hour chart above, the pair trades with a wide bearish flag in red, which widens the trading range and increases the risk. This is the downside of trading cryptocurrencies.

Therefore, we suggest waiting for the Bitcoin price to reach critical support levels before entering the market. Since the trend is bearish in the short term, the market dip might extend to the lower band of the flag or to April's low, the $60,500 area.

USDCHF Dips but Bullish Trend Holds

Solid ECN – The USDCHF currency pair experienced a slight decline, reaching approximately 0.910. This movement brings it close to the lower boundary of the bullish flag—a pattern suggesting a potential rise in value. This specific price point is bolstered by additional support at 0.908 and further underpinned by the Ichimoku cloud.

Despite the dip, no significant candlestick patterns used to forecast price direction changes were observed on the USDCHF 4-hour chart. This absence typically indicates that the current upward trend may continue, provided the price remains above the Ichimoku cloud. Should this scenario hold, the U.S. Dollar will likely climb toward the 0.915 mark, aiming next for the upper boundary of the bullish flag.

However, there is a flip side to consider. If the price falls below 0.9062, it would signal an end to the bullish trend, transitioning into a bear market. Such a drop could increase selling pressure, potentially pushing the price to around 0.899.

Tracking the Dip: U.S. Oil's Technical Outlook

Solid ECN – Oil is trading within a bullish flag pattern, indicating potential for future gains. However, it's crucial to note that it remains above the 50-day Exponential Moving Average (EMA 50), a key indicator that suggests bullish momentum is intact. Nevertheless, the plot has a twist as the technical indicators hint at a bearish trend.

The Relative Strength Index (RSI) has dipped below 50, and the Awesome Oscillator shows red bars declining toward the signal line. This combination of signals might indicate a potential shift towards bearish territory, especially if prices continue to fall towards the 50% Fibonacci level, which coincides with the EMA 50.

Short-Term Forecast and Trading Suggestions

The market appears to be entering a consolidation phase, with a possible decline to the lower boundary of the bullish flag at $76.0. For the bearish trend to gain momentum, prices must breach significant support levels, including the EMA 50 and the psychological $80.0 mark. Traders should closely monitor these levels as they could dictate the market's short-term direction.

Today, we expect the downward trend to extend to the $80.0 support level. Further declines could push the price to approximately $77.0 per barrel if this level fails. Keeping up-to-date on these developments is crucial for traders and market analysts alike.

Australian Dollar's Struggle Below EMA 50 Explained

Solid ECN – The Australian dollar trades at about 0.644 against the U.S. dollar as of writing, slightly below the broken support level of 0.6455. Interestingly, the AUDUSD 4-hour chart shows a doji candlestick pattern, highlighted in the image above.

The Relative Strength Index still hovers below 50, but the Awesome Oscillator bars are green, giving mixed signals. Despite the contradiction between the technical indicators, the primary trend is bearish, and the pair trades below EMA 50. Based on price action analysis, our first bearish signal is the doji candlestick pattern.

Therefore, from a technical standpoint, selling pressure will likely increase if the AUDUSD remains below EMA 50. Should the market shift downwards, its initial target would be this week's low of 0.6389.

Conversely, EMA 50 is the dividing line between bull and bear markets. The bear market could be considered over if the price crosses and stabilizes above EMA 50. In this scenario, the uptick momentum that began this week at 0.6389 could extend to 0.652.