GBPUSD is one of the strongest bearish pairs on the EdgeFinder right now. The score is now -10 due to the downtrend slowing a bit. Retail is still long this pair while COT continues to buy USD and sell GBP. Because this pair is somewhat correlated to the US stock market, it will likely suffer more loss if the market does.
With threats of retaliation from Israel on Iran, investors look to put their money elsewhere outside of risk-favoring assets. So, they may flock to things like gold or the dollar, which is likely why the pound is seeing more funds pulled out of the currency from smart money.
Data from the A1 EdgeFinder
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Oil 4H Chart:
Staying strong at 84.50. Demand side looks strong with the recent strong US economic data.
- Nick
Gold, 4H Chart:
While this trend has gone on for some time, it isn't over just yet!
Support continues to hold for the bulls, and I would say the bullish trend is intact unless we break the support zone in green around the 2325 price area.
- Nick
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US retail sales beat expectations and rose above last month's report. This might be more bullish for the dollar than the indices, however. As higher inflation rates are expected from this report, the trend of CPI may continue to beat expectations at a concerning rate for the Fed which wants to start monetary easing this year.
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Retail is now long on several risk-favoring assets such as crypto, Russell (small caps) and NASDAQ. Gold is still mixed, SPX and GER30 are the top short positions from the crowd.
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USDJPY is the same way as the US has a much higher interest rate. Price finally broke a significant line of resistance on the 1D timeframe. If the pair came back to the 151.5 level, it could be a buying opportunity for those looking to long.
Otherwise, chasing price could difficult. After breaking the highs, the uptrend will have to take a breather before seeming like another buying opportunity. Right now, price is the highest it's been since the '90s. The next level of resistance is around 160.
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NZD/USD
Kiwi dollar is now getting an extremely bearish reading of -16 which is now the strongest score on the EdgeFinder. Money is flocking to the dollar now that geopolitical tensions have risen further in the Middle East and that the Fed has decided to wait until there is further confidence that inflation rates are coming down to the 2% target. Now there is little confidence of a rate cut in June. Retail sentiment is majority long this pair, while COT has sold NZD and bought USD.
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USD/JPY
UJ is still climbing today as yields rise and tensions worsen in the geopolitical scope. Unlike the US indices, a hawkish tone could help propel price further to the upside as the pair nears levels last touched since the ‘90s. We will have to keep a close eye on yields and earnings today to see where the pair might turn. -Frank
SPX500
The S&P has fallen 4.5% off the highs and is now shuffling around a hard level of support on the 1D timeframe. Tensions in the Middle East have escalated and seem to be thwarting the optimism from stronger earnings this week. Powell is also set to speak this afternoon and discuss monetary policy going forward. If he delivers a hawkish tone by considering rate hikes again or leaving rates where they are for the remainder of the year, the indices could tumble. If he remains cautiously dovish and wants to keep the rate cuts on the table this year, we might see a bounce from this level. -Frank
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COT data came in mixed for last week's sentiment data. Metals are long, US indices long, dollar is long bonds are long. They are shorting gold, bitcoin, silver, Russell, oil, and a number of currencies.
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USDCAD is one of the strongest bullish biases on the EdgeFinder right now at +12. The score changed by 8 points to the upside with help from COT, Services PMI, and jobs numbers. This is seasonally one of the worst months of the year, but this time might be different.
Canada is set to report their CPI numbers tomorrow which is expected to come in higher on a month-to-month basis. If CPI does come in higher, it may spark some bullishness around CAD which is still expected to cut much sooner than the US. However, BOC may have to wait on it if inflation does end up coming in hotter.
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Retail Sales came in higher than expected which is a good sign for the economy. It's also strong for the USD as it may indicate a further rise in inflation over time. The pair's score increased by 7 points with help from COT data and unemployment data.
CHF is getting heavily sold from last week's report as investors see higher-for-longer interest rates in the US. A longer period of this will help the carry trade for the bulls on this pair so investors may want to keep piling in this asset as well as others that have low or lowering interest rates.
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