Despite the broad Dollar weakness, precious metals have been struggling to gain momentum.
Silver is consolidating around the $26 level and traders are keeping a close eye on trendline support from the late March low, as well as the 200 DMA (currently around $25.50). If XAG/USD breaks through $25.65 support and the 200 DMA, it could spell trouble for the metal. A correction towards $24.70 support would appear likely in such scenario. To the topside, the resistance zone at $26.45/70 will be the next major obstacle for Silver to overcome.
While the charts are sending mixed signals, Wednesday could be a crucial day for Silver. The Federal Reserve is expected to keep rates unchanged and reiterate their commitment to its ultra-loose monetary policy. Fed Chair Jerome Powell is likely to play down the threat of rising inflation in the United States. While surprises are unlikely, dovish messages from the central bank could put the Dollar under additional pressure and give metals a boost.
USD/JPY has been in a short-term downtrend since the beginning of the month, and while the outlook remains bearish, there are signs that the currency pair could recover slightly before the correction resumes. The H4 is showing a positive RSI divergence and USD/JPY is currently testing key trendline resistance. A break to the upside could pave the way for a short squeeze towards the 109.00 resistance level. There, sellers are likely to return.
The Euro rally is not showing any signs of weaknesses, despite EUR/USD looking slightly overbought in the short-term.
A dovish Fed is likely to keep the US Dollar under pressure, while in Europe the progress of the EU vaccination campaign is giving Euro bulls confidence. To the downside, traders will be looking at the lower channel line for immediate support, followed by the 1.1980/1.20 support zone. To the topside, the next major hurdle for the Euro will be the 78.6 % Fibonacci of the January-March decline around 1.2210. A clear break above this level could pave the way for a return to the 2021 high around 1.2350.
Is Bitcoin staging a comeback? BTC traders are already used to frequent sell-offs, but the recent one has triggered a deeper correction than many have anticipated. Nevertheless, it appears that investors feel comfortable again buying the dip and the cryptocurrency broke above the psychological $50k level, triggering further momentum buying. The next major test for Bitcoin will be the resistance zone between $57,140 and $57,56, where a clear break to the upside could pave the way for a return towards the all-time high.
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USD regains ground on April inflation figures to outperform low-yielding currencies; EUR/USD meets strong resistance; Gold looks increasingly attractive