This week, we have seen a lot of market swings in sentiment along with uncertainty around economic stability. Because of this mixed mindset, investors have been shifting their interest towards gold. This article will cover why gold could continue to move higher.
Medium to high impact news is coming up for all currencies such as AUD, CHF, GBP, USD, EUR, JPY & CAD.
EdgeFinder Analysis
AUDNZD is a new strong sell rating on the EdgeFinder. At -7, the kiwi fundamentally beats the buck in all categories except GDP growth. Despite a slow in GDP growth - which could be a result of much higher interest rates - NZD has a better handle on inflation.
Although retail usually moves opposite of COT, it seems to agree on being short kiwi. However, institutions are largely short AUD as well. The mid term target for this pair is another -0.50% lower at 1.06353.
NZDCAD is now a +5 buy from yesterday's +2 neutral. As the pair retests a falling trend line on the 1D timeframe, it could be looking to break higher. A previous top lies around 0.86148 should price break the trend line. The fact that price hurriedly returned back up to the recent highs could be an indication of a bullish move.
In order to confirm a bullish move, we would need to see a close above that line. Next week's CPI report on the buck will also help shape the score of the EdgeFinder. If CPI gets closer to the kiwi's level, the score will shift towards a neutral rating.
Gold continues to move higher in light of the banking crisis last week and the FOMC report yesterday. Regardless of where the Fed shifts focus, gold has an argument to the upside. Some reasons for that include the SVB and Credit Suisse collapse. Investors have been shifting focus from stocks to treasuries, gold and crypto as a result of an 'unstable' sentiment towards banks.
In terms of current economic conditions, people seem to be more comfortable in putting their finances in assets that go against risk. Gold is historically that type of asset, regardless of moving similar to the dollar.
Seasonality Spotlight
Gold's seasonality going into next month is close to no gain on the 10 year average and positive gain on the 5 year average. The next three months after March are considerably bullish from the past 5 years' data but not for the last 10 years.
Bank Signals Spotlight
Bank signals and analyst signals point toward a higher EURUSD for the most part. The only outlier is Goldman Sachs who is mostly bearish with a quarterly view.
Fundamental Spotlight
The Fed Tracker shows the latest stances from the Fed regarding monetary policy now and going forward. Forecasts say that rates won't go higher than 5.25% interest for the remainder of the year. The Fed has been clear that it will depend on future inflation numbers, but the "ongoing" hike sentiment is not as prevalent.
Gold is up nearly half a percent today while USD down a third of one as of 10:18 am EST. As we wait for the upcoming and looming NFP numbers this Friday, we can assess the economic data we already have. EdgeFinder Analysis The stock market sighed in relief after the debt ceiling bill finally […]
The dollar flew higher last week as a result of resilient economic news along with a higher PCE than expected. Now the DXY has reached a decision point in price action. This week's NFP will help determine the sentiment around the potential June rate hike. Here is what we are looking at: EdgeFinder Analysis USDCAD […]
Considerably dovish news from central banks in the US and New Zealand has caused a major stir in the markets. Governor Orr and Vice Chairman Powell both released some reassuring news for the economy in the long term. But what does this mean for USD and NZD? EdgeFinder Analysis GBPNZD is a pair that should […]
