XAUUSD
XAUUSD continued its upward trajectory, breaching the $2,200 mark for the first time in history, before slightly pulling back. The surge in gold prices can be primarily attributed to the Federal Reserve's decision to maintain its outlook for three rate cuts in the current year. Despite a recent uptick in inflation, the Fed's stance suggests it isn't overly concerned, which bolstered the appeal of non-yielding assets like gold.
From a technical standpoint, gold's rally has been supported by longstanding factors such as geopolitical tensions and central bank buying, particularly by China.
The breach of the $2,200 level indicates strong bullish momentum, although some profit-taking after hitting record highs is not unexpected. Traders may look for potential reentries on retracements towards key support levels, while maintaining a bullish bias as long as the fundamental drivers remain intact.
AUDUSD
The Australian Dollar surged against the US Dollar, gaining 0.83% following the Federal Reserve's decision to maintain rates steady while retaining its monetary policy outlook from the previous year, which includes 75 basis points of rate cuts in 2024. As the Asian session commenced, the AUDUSD pair traded at 0.6595, marking a 0.14% increase.
Technically, the AUDUSD pair exhibited a strong upward movement, surpassing critical resistance levels and poised to breach the psychological barrier at 0.6600.
The Relative Strength Index (RSI) supports the bullish sentiment, indicating further upside potential as it trends higher in bullish territory. Additionally, the pair's closure at weekly highs, ending a four-day losing streak, further reinforces the bullish bias. Traders may consider long positions, looking for confirmation of the breakout above 0.6600 as a signal to enter or add to existing positions.
WTI
Oil prices staged a recovery after a decline in the previous session, supported by inventory drawdowns in U.S. crude and gasoline stocks. This provided a positive backdrop for the market, countering concerns stemming from indications that the U.S. Federal Reserve might maintain higher rates for a prolonged period, potentially dampening future fuel demand.
Brent crude oil futures for May settlement rose by 0.6%, reaching $86.47 a barrel, rebounding from a 1.6% decline in the prior session. Meanwhile, U.S. West Texas Intermediate (WTI) futures for May delivery climbed by 0.5% to $81.72 a barrel, following a similar decline in the previous session.
The technical outlook for oil suggests a potential bounce-back from recent losses, supported by inventory data and geopolitical factors. However, given the volatility in the market and uncertainties surrounding global economic conditions, traders should remain cautious and monitor key levels closely.
A sustained move above recent highs could signal further upside, while failure to hold support levels may indicate a deeper retracement. Traders may look for opportunities to enter long positions on pullbacks with tight risk management strategies in place.
Conclusion
Gold's record-breaking rally was supported by the Federal Reserve's dovish stance, while the Australian Dollar strengthened following the Fed's decision. Oil prices rebounded on inventory drawdowns despite concerns about future demand.
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