Weekly outlook: From US inflation spikes to ECB rate cut signals

Last week was action-packed for traders, featuring major moves across all asset classes. 
 

US inflation accelerates and delays rate cuts 
 

US inflation reached its highest annual increase since September 2023, climbing from 3.2% to 3.5%, which was higher than expected. Consequently, markets are postponing their predictions for the first Fed rate cut. This shift directly affected the US dollar, gold, indices, and cryptocurrencies. Ahead of last week's US CPI inflation report, the Fed indicated in its FOMC minutes its readiness to maintain high-interest rates unless inflation decreases, further setting the stage for a potential delay in rate cuts. 
 

ECB looks ready to cut interest rates 
 

The European Central Bank (ECB) also conducted a rate meeting. Although the meeting was neutral, after the meeting, many members expressed willingness to cut rates in June. Additionally, there were hints that the ECB might cut rates independently of the US. At the same time, it aimed to synchronise rate cuts with the Federal Reserve to minimise fluctuations in the EUR/USD exchange rate. However, given the current conditions where US inflation remains elevated, and European inflation follows a different trajectory, traders have already positioned themselves for a divergent monetary policy and sent EUR/USD to a new yearly low. 
 

Geopolitical tensions  
 

The world was on edge this weekend as fears of World War 3 emerged once more. However, there seems to be a likely shift towards de-escalation as all involved parties are showing reluctance to intensify the situation. 

Events to watch

Here are the key financial events to watch (London time): 
 

Monday :

• 13:30: US Retail Sales 

Tuesday: 

• 07:00: UK Labor Market Report 
• 13:30: Canadian Consumer Price Index 
• 18:00: Speech by the head of the Bank of England, Governor Bailey 
• 18:15: Speech by the head of the Federal Reserve, Jerome Powell 
• 23:45: New Zealand Inflation Data 

Wednesday:  

• 07:00: UK Inflation Data 

Thursday: 

• 02:30: Australian Labor Market Report 
• 13:30: US Jobless Claims 
• Various times: Multiple speeches from Federal Reserve officials 

Friday: 

• The Bitcoin halving is anticipated to occur around April 19th around 17:26 

EUR/USD 

EURUSD trades to a new 2024 low, and the trend will remain downwards as long as the price trades below 1.0732. 


 

GBP/USD 

GBPUSD has triggered the levels we shared last week, and the rectangle pattern has a target of 1.2225. The pattern will remain in play as long as the price trades below 1.2563.


 

USDJPY 

Last week we said “USD/JPY could surge on a breach to 151.89 and reach 157.38 a few weeks later per a large ascending triangle.” The price triggered this pattern, and the short-term trend will remain upwards as long as the price trades above Friday’s low of 152.56.


 

Brent Crude oil 

Brent crude oil (BRENT) remains in an upwards trend as long as the price trades above 87.58. 


 

Gold 

Gold (XAUUSD) prices remain in an upward trend as long as the price trade above $2314. 


 

Nasdaq 100 (NAS100) 

The trend is upwards above 17,776.  


 

Bitcoin 

Bitcoin (BTCUSD) is currently in a descending triangle pattern. A downward break to $60,776 could potentially send the price plummeting toward the pattern's target of $50,752. Conversely, an upward break through the triangle's upper boundary at $72,802 might propel the price to $84,226. Given the upcoming halving event, a bullish breakout is more likely than a bearish one. However, this event is expected to be highly volatile and significant movements in cryptocurrencies were observed last weekend, so caution is advised as always. 


 

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