Economic Spotlight

Market Overview

Investors await the release of the April consumer price index (CPI) this coming Wednesday. This week passed with a slight uptick in the DXY to 105.314 while investors waited for the printing. Previous strength on the dollar came from a higher-than-expected CPI print, pushing rate cut expectations to later this quarter. However, things slowly changed as higher unemployment claims were released and lower job openings were reported. A slowdown in a section of the economy. Analysts still generally call the economy of the US to be very strong. It is a fact, however, that previous data printed from last year's quarter when compared today, are lower. And so, a softer CPI print this coming Wednesday may rekindle hopes for a cut in rates this coming September, allowing another wave of sellers to come into the market. 

But we remain prudent of this scenario as the dollars peers like Canada and the Eurozone show signs of an earlier move toward cutting rates. Thus, allowing more businesses to flourish in their areas, leading to potential growth in their currencies in the longer term. On the other hand, confidence in the US is shaky as geopolitical factors also come into play, alongside the upcoming election. Thus, a more careful approach is expected from the FED as they fear a reignition of inflation if they decide to cut rates too early as they measure data to tell if the current bumps are not more than just a bump on their road to 2%. 

We can also see the worsening of inflation through the prices of the GOLD. While some studies directly go against the relation of GOLD to inflation, I see this as a measurement of human sentiment toward DXY and their confidence in the current monetary system. A rising GOLD price means a shaky relationship with the USD. 

Alongside GOLD, there is a looming shortage of supply for SILVER, making it an appealing investment opportunity. This appeal is evident in the current drop shown in the market. It is at a prime for buys to occur. Other than this, analysts presented two silver mining companies that you can look into to buy shares: Mag Silver Corp (MAG) and Silvercorp Metals Inc. (SVM). 

The announcement of the two potentials increases the likelihood of a continuous rise as people jump onto the investment alongside the holdings these analysts control. 

GOLD - The markets are looking very bullish, but the current high levels of price print scare analysts and investors and call GOLD overbought. However, with the current price, we can call GOLD to be in a proper zone for consolidation, between two supply and demand zones.

The price has reached 2365.443 and we expect it to reach higher.

SILVER -The markets are looking very bullish and are positively on the rise. We expect the price to rise as it has settled above 28.073. We expect the price to continue rising as a higher 4H structure shows a good bullish momentum. However, the price can go the opposite to complete an M formation. This possibility is not removed until the markets go beyond 29.018 and successfully show the price to be comfortable.         

DXY -The market has shown a good bearish momentum. We expect the price to move lower and be comfortable underneath 105.071. However, the possibility of a rise is not removed until the markets break beyond 104.607. Within the coming week, we expect for price to continue going lower or consolidate. 

GBPUSD - The price is currently staying within the daily range, above 1.25019 and we see now that price is stalling within the range. While the price can drop from here, considering that the range is built on a daily structure, we still call on this market to be bullish. There is a huge possibility for the price to go toward 1.26487. A run on the opposite requires the price to break beyond 1.24268 before a possible break above. 

AUDUSD -The price is being held back by 0.66145 but we can see a strong bullish momentum coming into the market. We expect the weeks volume to stay a bit to collect orders before running beyond the structure level. From there, we expect a strong push above. However, a possibility for a price test on 0.65250 is possible. A break below may call for a sudden price shift.

NZDUSD - The market is collecting orders above the monthly structure at 0.59796 which is a good indication for a bullish market. We continue to view the price to break beyond 0.60847. We can only wait for how the markets will play out, especially with the upcoming CPI coming up.

EURUSD -The market is showing good momentum and volume for the buying market, but it can also be said that the entirety of the movement is possibly, corrective in nature. The price is nearing the daily trendline and we can expect the price to test said structure. However, as it stands, we expect the price to break beyond 1.07757 or consolidate between it and 1.07240. 

USDJPY - The market drop is looking very attractive now as we know that the BoJs intervention hopes to bring US prices down and control the strength of the currency as seen in the previous aggressive movements. While the natural tick of the price is going to the upside, we have an M formation on the chart and the bullish move is starting to come in with lesser momentum.

USDCHF - This market has shown comfort outside of the uptrend channel. We expect the price to drop below 0.90054. However, an alternate scenario is the price being pulled back in. However, with current price momentum and volume, it is unlikely.

USDCAD - With the current price momentum in this market, we can see the price ranging between 1.37881 and 1.36563 while creating lower highs. We view the market to maintain a bearish run and to run below 1.36052.

COT Reports Analysis

CAD - Weak (5/5)

CHF - Weak (5/5)

GBP - Strong (3/5)

JPY - Strong (1/5)

EUR - Strong (5/5)

AUD - Strong (2/5)

NZD - Weak (5/5)

USD - Strong (2/5)

Silver - Strong (4/5)

GOLD - Strong (4/5)