Forex

The U.S. manufacturing PMI in April 2023 revealed decreasing business sentiment in the country, which is correlated with a shift towards a more general risk-off sentiment, as evidenced by rising gold prices against declining bond rates and cryptocurrency.

Despite worries about global banking, the Russia-Ukraine war, and a recession, U.S. Treasury Secretary Yellen stated in a news conference that the U.S. economy is doing "exceptionally well" and that she "does not anticipate a downturn in the economy."

The preliminary U.S. Consumer Sentiment Index for April showed an improvement in sentiment: 63.5 (62.5 anticipated), up from 62.0 previously.

The Bank of England (BOE) Credit Conditions Survey for Q1 2023 demonstrated little signs of a potential broader credit crunch after recent tensions to the global banking system; British lenders are likely to slow the supply of new mortgages in the quarter ahead. BOE Governor Bailey downplayed banking system risks on Wednesday, increasing the likelihood that additional hikes in interest rates may be ahead to combat high inflation conditions in the U.K.

Regardless of the recent dip in the US dollar, the GBP/USD rebound remained below the resistance near 1.2506, even after the currency pair engaged in vigorous selling activities that drove it toward the 1.2386 support level.

In anticipation that the European Central Bank (ECB) will likely continue to take the lead in tightening monetary policy among the major developed market central banks, EUR/USD maintained gains above $1.1, close to the one-year peak of $1.1095 on April 26.

Meanwhile, The relaxation of COVID-19 limitations helped the Chinese economy develop by 4.5% quarter-over-quarter in Q2 compared to a projected 4.0% expansion and the prior 2.9% growth statistic.

According to the meeting minutes held by the Reserve Bank of Australia, rate increases in April were under consideration. AUD/USD kept consolidating between $0.6775 - $0.6560 until the end of April 2023.

Commodities

Brent crude lost $3.08 or 3.8% to close at $77.69 per barrel. The West Texas Intermediate oil price in the United States lost $2.77 or 3.6% to settle at $74.30 per barrel.

Data from the Energy Information Administration reported that U.S. oil stockpiles dropped 5.1 million barrels by April 23, above analyst expectations of a 1.5 million reduction in a Reuters poll, helping to restrain the price decline.

The medium-term forecast for gold prices is favorable. The sell pressure bar from mid-April shows a declining buying momentum. The price will likely fluctuate or settle within the range of 1,960 and the resistance at 2,000. The resistance at 2070, the highest price gold has ever hit, can be tested if XAUUSD breaks above the consolidation zone.

Prices for natural gas are beginning a noticeable rebound. However, the bullish move on April 35 was driven by declining open interest, which suggests that the recovery may continue to have some challenges in the near future. The next significant resistance now appears in the $2.50 per MMBtu range.

Indices

A number of variables caused the Indices market volatility in April 2023. The global growth scenario is a source of concern, especially since the COVID-19 epidemic continues to impact economies worldwide. Furthermore, global concerns and ongoing trade conflicts are increasing market instability.

Approximately 37% of the retail traders remain net-long the Dow Jones, according to IGCS. Since most of them are still negatively skewed, prices may continue to rise in the future. This is because upside exposure is currently up 10.41% from a week ago while down 1.59% from yesterday. Recent shifts in exposure signal a potential extension of the Dow Jones' recent decline.

The S&P 500 confirmed a breakdown below the 20-day SMA. The price has also tested the Fibonacci extension level of 23.6% at 4005. If the latter is breached, the upside will shift to the April 2023 high of 4164.

Market Events

According to the report released on April 3, the ISM Manufacturing PMI fell to 46.3%, the lowest level since May of 2020, from 47.7% in February, plus a consensus of 47.5, indicating that growing interest rates and increased recession fears are weighing on businesses.

The US ADP Non-Farm Employment Change report released on April 5 suggests that the US has created 145K jobs during March, below a substantially revised 261K during February and predictions of 200K, indicating a weakening labor market as consumer demand ebbs and borrowing costs rise.

Bank of Canada published the latest Monetary Policy Report on April 12. BOC kept its overnight rate goal at 4.50%, including the Bank rate at 5.75% plus the deposit rates at 4.50%.

On April 21, the Bank of England reported the UK Manufacturing PMI fell to 46.6 from 47.9 in March, below projections of 48.5.

Furthermore, the Bank of Japan will publish the Monetary Policy Statement on April 28. Investors and traders will pay extra attention to this event since it’ll be the first meeting of the new BOJ governor Ueda.