Markets Analysis

U.S. FOMC hints at halt to future rate hikes; Gold hits record high【May 4, 2023】

May 04, 2023

Markets Analysis

Fundamental Analysis

  • Major U.S. stock indexes continue to fall, FOMC hints at rate hike halt
  • U.S. ADP employment report was twice as strong as expected; labor market shows strength
  • Gold rallied sharply and crude oil fell sharply immediately after the close of the New York market
  • ECB policy rate and future outlook in focus today
  • US hinted at a halt to interest rate hikes, which is likely to encourage buying of the Eurodollar

Technical Analysis

In New York, the yen was quoted higher across the board, and the dollar dropped to the low JPY 134. Although the FOMC decided to raise interest rates, the dollar/yen was dominated by selling as the language regarding future rate hike policy was removed.

Gold and crude oil prices soared and fell in the morning, with Gold temporarily falling to USD 2,078 and Crude Oil falling below USD 64, respectively. Gold reached a new all-time high and is likely to rise in the future. Crude oil, on the other hand, is beginning to factor in the deteriorating U.S. economy.

Dollar-Yen (USDJPY)

The dollar has fallen back twice at the moving average and failed to exceed JPY137. If the U.S. stops raising interest rates and is inclined to lower rates in the future, the yen is likely to be bought. Looking at the shape, it appears to be forming a double top.

A lull in the yen’s weakening trend can be seen, and a change in direction needs to be watched carefully.

[USDJPY / D1]
Estimated rangeJPY 133.26 – JPY 135.65
Resistance lineJPY 135.20
Support lineJPY 134.48

GOLD (XAUUSD)

Gold hit a new all-time high in the morning, hitting a high of USD 2,081. This may have been due to the impact of the FOMC’s suggestion of a halt to future rate hikes, or it may have been due to large buyers looking for stop losses.

We would be cautious about making a buy entry here, but we would like to buy the push. Looking at the short legs, the price is rising through a window, and we need to watch out for a window-filling move.

[XAUUSD / D1]

Estimated rangeUSD 2030 – USD 2095
Resistance lineUSD 2080
Support lineUSD 2042

Crude Oil (USOUSD)

Crude oil fell sharply in the morning, falling below USD 64, perhaps beginning to factor in the deteriorating U.S. economy. The price has hit a new recent low. The price is at a low, and fundamentally, this is a phase where selling is likely to prevail. It will be interesting to see if the price can clearly break below USD 64.

[USOUSD / D1]
Estimated rangeUSD 65.2 – USD 70.63
Resistance lineUSD 68.4
Support lineUSD 66.8

Today’s Important Economic Indicators

Economic Indicators and EventsJST (Japan Standard Time)
ECB Policy Rate Announcement21:15
ECB President Press Conference21:45

*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.

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