USDJPY
The USDJPY pair extended its losses for the second consecutive session on Thursday, trading around 154.30 during Asian hours. The ongoing decline in the US Dollar (USD) continues to exert pressure on the pair, while the Japanese Yen (JPY) might have found support from Japan's trade balance shifting to a surplus in March.
The decline in USD/JPY can be attributed to the broader correction in the US Dollar, which has been under pressure due to various factors including concerns about the US economy, inflation, and the Federal Reserve's monetary policy stance. As a result, investors are turning towards safe-haven currencies like the Japanese Yen, contributing to the downward pressure on USD/JPY.
Looking ahead, traders will be closely watching Japan's Consumer Price Index (CPI) data scheduled to be released on Friday. Expectations are for a moderation in consumer prices for March, which could further support the Japanese Yen if the data comes in line with or exceeds expectations. Therefore, traders may continue to monitor the USD's performance against other major currencies and assess the impact of economic data releases on USD/JPY's trajectory.
WTI
Oil prices experienced a slight rebound in early trade on Thursday, partially recovering from the losses seen in the previous session. This came after the United States announced plans to reinstate oil sanctions on Venezuela, while the European Union discussed the possibility of imposing fresh curbs on Iran.
Brent futures edged up by 10 cents, or 0.11%, reaching $87.39 a barrel, while U.S. crude futures traded 2 cents higher at $82.71 a barrel at 0053 GMT. Both benchmarks had slid by 3% in the previous session amid concerns about global demand.
The geopolitical factors surrounding oil markets, particularly the potential for supply disruptions due to sanctions on major oil-producing countries, continue to influence oil prices. Traders are closely monitoring developments in Venezuela and Iran, as any escalation in tensions or disruptions to oil supply could lead to further volatility in oil prices.
XAUUSD
XAUUSD prices edged lower on Wednesday, although they remained near record highs reached the previous week. The decline in gold prices was driven by pressure from fading hopes of interest rate cuts in the United States, which overshadowed gains stemming from safe-haven demand amid geopolitical turmoil in the Middle East.
Spot gold eased by 0.2% to $2,376.39 per ounce, as of 2:15 p.m. ET (1815 GMT). Prices had reached an all-time high of $2,431.29 per ounce on Friday. Meanwhile, U.S. gold futures settled 0.8% lower at $2,388.4.
The fluctuation in gold prices reflects the balancing act between interest rate expectations and geopolitical tensions. While gold is traditionally seen as a safe-haven asset during times of uncertainty, the prospect of higher interest rates can diminish its appeal as it does not offer interest payments like bonds or other interest-bearing assets.
Traders will continue to monitor developments surrounding US monetary policy, economic indicators, and geopolitical events for clues on gold's future direction. Additionally, any shifts in investor sentiment and risk appetite could also influence gold prices in the near term.
Entry Suggestions:
USDJPY: Given the ongoing decline in the USD and potential support for the JPY from Japan's trade surplus, short positions on USD/JPY could be considered. Traders may look for opportunities to enter short positions on any rallies towards resistance levels, with a target towards recent support levels.
WTI: With geopolitical tensions potentially impacting oil supply, long positions on WTI crude oil could be considered. Traders may look for buying opportunities on pullbacks towards key support levels, with a target towards recent highs.
XAUUSD: Despite the recent pullback in gold prices, the overall bullish trend remains intact. Long positions on gold could be considered, particularly on dips towards support levels, with a target towards previous highs and beyond.
Disclaimer
Derivative investments involve significant risks that may result in the loss of your invested capital. You are advised to carefully read and study the legality of the company, products, and trading rules before deciding to invest your money. Be responsible and accountable in your trading.
RISK WARNING IN TRADING
Transactions via margin involve leverage mechanisms, have high risks, and may not be suitable for all investors. THERE IS NO GUARANTEE OF PROFIT on your investment, so be cautious of those who promise profits in trading. It's recommended not to use funds if you're not ready to incur losses. Before deciding to trade, make sure you understand the risks involved and also consider your experience.
Paraphrasing text from FXStreet, and Reuters all rights reserved by the original author.
