Canadian CPI 2.6%, RBNZ Policy in the Highlights

AUD/USD rises to 0.6676, supported by Australia's balanced monetary policy outlook, while USD/CAD climbs to 1.3649 amid moderated Canadian inflation.

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• Gold is trading at $2,432.60, down 0.24%, influenced by cautious rate hike discussions from the Australian Monetary Policy Meeting.
  
  
• AUD/USD is trading at $0.6676, up 0.13%, supported by a balanced outlook from Australia's monetary policy insights.
  
  
• USD/CAD rose to $1.3649, up 0.20%, driven by Canada's CPI data showing 0.5% m/m and a median CPI y/y of 2.6%, indicating moderated inflation.

Currency Movements Overview

Today's forex market movements have been shaped by key economic events and data releases, impacting Gold, AUD/USD, and USD/CAD.

Gold: Gold prices are currently at $2,432.60, down 0.24%. This slight decline follows the release of the Australian Monetary Policy Meeting Minutes, which suggested a cautious approach to rate hikes, considering the risks of prolonged inflation. Additionally, comments from US Treasury Secretary Janet Yellen about the economic outlook added to market uncertainty, prompting a minor sell-off in safe-haven assets like gold.

AUD/USD: AUD/USD is trading at 0.6676, up 0.13%. The Australian dollar showed resilience after the release of the Monetary Policy Meeting Minutes, which included:

• Consideration of future rate hikes based on inflation risks.
  
  
• A cautious approach to avoid "excessive fine-tuning" of policy.
  
  
• Observations of a tighter-than-expected labor market and weaker consumer demand.

These insights provided a balanced outlook, supporting the Australian dollar amid broader market fluctuations.

USD/CAD: USD/CAD has risen to 1.3649, up 0.20%. The Canadian dollar faced pressure following the release of CPI data:

• CPI m/m at 0.5%, meeting expectations.
• Median CPI y/y at 2.6%, slightly below the previous 2.7%.
• Trimmed CPI y/y steady at 2.9%.
• Common CPI y/y at 2.6%, down from 2.8%.
  
  

These figures indicate moderated inflation, influencing the Bank of Canada's monetary policy expectations and contributing to USD/CAD's upward movement.

Major Price Movements and Economic Releases

• EUR/USD: 1.0859, +0.04%
• USD/JPY: 156.16, -0.05%
• GBP/USD: 1.2712, +0.06%
• Dollar Index: 104.525, +0.06%
• Crude Oil WTI: $78.40, down 1.13%
• Silver: $31.985, down 1.36%
• BTC/USD: $70,950.00, up 5.83%
  
  

Economic Events Recap (May 21, 2024)

Monetary Policy Meeting Minutes: The Australian Monetary Policy Meeting Minutes revealed that while there was consideration for raising interest rates, the decision ultimately leaned towards maintaining a steady policy. The board noted increased risks of inflation staying above target, expressing limited tolerance for delayed inflation targets. Additionally, the minutes highlighted a tighter labor market alongside weaker consumer demand. This cautious approach reflects concerns over balancing inflation control without stifling economic growth, emphasizing the need for careful monitoring of economic indicators and potential adjustments in future policy meetings.

CPI m/m: Canada's inflation data for May 21, 2024, showed that the CPI m/m met expectations at 0.5%, consistent with the previous month. The Median CPI y/y slightly decreased to 2.6% from 2.7%, while the Trimmed CPI y/y remained stable at 2.9%. The Common CPI y/y also saw a decline to 2.6% from 2.8%. 

These figures suggest moderated inflation, which could influence the Bank of Canada's future monetary policy decisions. The stability in the trimmed CPI indicates steady underlying inflation pressures, though the declines in the median and common CPI point to some easing of broader inflationary trends.

Upcoming Economic Events (May 22, 2024)

Several key economic events are scheduled for May 22, 2024, which are likely to influence trading activities and market sentiment. 

• At 2:00 AM, the Reserve Bank of New Zealand (RBNZ) is expected to announce that the Official Cash Rate will remain at 5.50%. Following this, at 3:00 AM, the RBNZ Press Conference will provide further insights into their monetary policy stance.
  
  
• At 6:00 AM, the UK's Consumer Price Index (CPI) year-over-year data is forecasted to show a decrease to 2.1%, down from the previous 3.2%. Later in the day, at 2:00 PM, the United States' Existing Home Sales figures are projected to rise slightly to 4.21 million, up from 4.19 million. 
  
  
• At 6:00 PM, the Federal Open Market Committee (FOMC) Meeting Minutes will be released, offering details on the Fed's deliberations and future policy direction. 
  
  
• Lastly, at 10:45 PM, New Zealand's Retail Sales quarter-over-quarter data is expected to show a decline of 0.3%, an improvement from the previous -1.9%.

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Gold (XAU/USD) Price Forecast: Technical Outlook 

Gold (XAU/USD) is trading at $2,427.31, up 0.06%. On the 4-hour chart, the pivot point is $2,440. Immediate resistance levels are $2,431.59, $2,440.91, and $2,447.38. Support levels are $2,414.13, $2,393.83, and $2,383.82. The Relative Strength Index (RSI) is at 63.01, indicating the market isn't overbought or oversold, while the 50-day Exponential Moving Average (EMA) is at $2,383.83.

Gold Price Chart - Source: Tradingview

Conclusion: In simple terms, if Gold's price rises above $2,414, it might be a good time to buy, aiming to sell at $2,440. Set a stop loss at $2,400 to manage risk.

Trading Signal:

• Entry Price: Buy Above $2,414
• Take Profit: $2,440
• Stop Loss: $2,400

Start Trading Gold (XAU/USD) Today

AUD/USD Price Forecast: Technical Outlook 

The AUD/USD pair is trading at $0.6672, up 0.01%. The 4-hour chart highlights several key price levels. The pivot point is at $0.6648. Immediate resistance levels are $0.6705, $0.6723, and $0.6760. On the downside, immediate support is at $0.6648, followed by $0.6620 and $0.6612.

Technical indicators show the RSI at 56.02, indicating neutral conditions, while the 50-day Exponential Moving Average (EMA) is at $0.6648.

AUD/USD Price Chart - Source: Tradingview

Conclusion: The current technical setup suggests a potential bullish trend if the price remains above $0.6648. Traders should aim for a target of $0.6723, with a stop loss at $0.6612 to manage risk.

Trading Signal:

• Entry Price: Buy Limit 0.66479
• Take Profit: 0.67231
• Stop Loss: 0.66120

Start Trading AUD/USD Today

USD/CAD Price Forecast: Technical Outlook 

USD/CAD is currently trading at $1.3652, up 0.03%. The 4-hour chart highlights several key price levels. The pivot point is at $1.3666. Immediate resistance levels are $1.3677, $1.3708, and $1.3710. On the downside, immediate support is at $1.3666, followed by $1.3619 and $1.3570.

Technical indicators show the RSI at 42, indicating neutral conditions, while the 50-day Exponential Moving Average (EMA) is at $1.3666.

USD/CAD Price Chart - Source: Tradingview

Conclusion: The technical setup suggests a potential bullish trend if the price moves above $1.3643. Traders should aim for a target of $1.3691, with a stop loss at $1.3590 to manage risk.

Trading Signal:

• Entry Price: Buy Above 1.36428
• Take Profit: 1.36912
• Stop Loss: 1.35898

Start Trading USD/CAD Today

We hope this brief helps you understand today’s market movements. If you have any questions or need further clarification, feel free to reach out. Subscribe to FlowBroker’s daily insights and updates. Happy trading!

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