Tuesdays starts great for Australian Dollar and gold
11 April 2023
The Easter holidays are now over and trading is officially back on the menu! Before we jump in to see what is happening, let us go back to Friday for a bit. On Friday, most of the markets were closed but, in the US, we still got the NFP data release. The number came in slightly higher than expected, at 236K (228K expected). This caused a mild reaction on the Dollar which generally strengthened.
A much bigger move on the Dollar was seen on Monday. The calendar was empty, as most markets were closed. Nevertheless, we saw a proper strengthening of the American Dollar, which was able to create interesting set-ups on a few charts. For example, on the USDJPY, yesterday's rise helped create the right shoulder of the inverse head and shoulders pattern, which promoted a further rise. On the USDCHF, the price also climbed higher. There is potential for a false bearish breakout here but for that to happen, buyers need to pull the price slightly more.
Indices are doing pretty well. The S&P 500 starts this week close to the local highs, and the same goes for Dow Jones. DAX opened even with a bullish gap, flirting with the long-term highs. Gaps like to be closed, and we might see a small downswing today, but in general, the sentiment remains positive.
On the Forex market, leading gains can be observed on the Australian Dollar. The reason for this can be found in the headlines. In the financial news, we can currently read that Australia reached an agreement with China to settle the dispute over barley. Australia exports plenty of goods to China, and this is definitely a good sign, increasing the sentiment for the AUD.
On the commodities front, we have a promising development on gold. It seems that today, the price is finishing the three-day, flag-shaped bearish correction on gold. The price is currently breaking the upper line of this formation, which is giving us a signal to buy. On the other hand, not much is happening with oil. After the bullish gap from the previous Monday, when we found out about the production cut, the price is moving sideways with extremely low volatility. In my opinion, we will still see a gap-closing movement, so my view on the black gold is rather negative.