This week’s markets: gold, EUR/USD, USD/JPY

Most read: USD Forecast: Market waits for US GDP and core PCE – EUR/USD, USD/JPY, GBP/USD

After a brief spike in geopolitical tensions, traders are betting on Israeli countermeasures, suggesting a potential de-escalation in the Middle East and a refocus on drivers of market fundamentals. There may be some relief in Iran’s decision not to retaliate further.

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Featured economic data

Important economic indicators that could shake up market sentiment are expected to be released next week. Of particular interest are first-quarter US GDP and March core PCE data, a key inflation measure for the Fed. Recent strong numbers for retail sales, CPI, and PPI suggest that these reports may exceed expectations.

If the data turns out to be higher than expected, investors could conclude that the U.S. economy remains resilient and inflation is proving stubbornly persistent. This scenario could prompt a reassessment of expectations, with traders betting that the Fed will keep interest rates high for longer than previously thought and that the easing cycle will be shallower, which could push U.S. yields higher. Potentially bullish outcome for the US dollar.

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Earnings season gets even hotter

The first quarter earnings season has begun, with major technology companies scheduled to report earnings. Tesla, Meta, Alphabet, Amazon, and Microsoft provide insight into the company’s landscape. Strong results could boost market sentiment and push major indexes higher, while disappointing results could raise concerns about future economic challenges.

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Central Bank Watch: Focus on the Bank of Japan

The central bank continues to be in the spotlight, with all eyes on the Bank of Japan’s policy decisions. Traders will carefully analyze the guidance for clues about the Bank of Japan’s stance on rate hikes. If the bank shows a lack of urgency to raise rates further, pressure on the Japanese yen could increase. However, given the recent depreciation of the yen, the Bank of Japan may adopt a more hawkish stance to counter currency weakness.

Important points

Next week promises to be an action-packed week as traders navigate geopolitical developments, pivotal economic data releases, earnings reports, central bank announcements, and more. Staying informed about these events is very important for traders who want to take advantage of market movements and manage their risk exposure.

For a comprehensive look at the variables that can impact financial markets and cause volatility in the upcoming trading sessions, explore our carefully curated assortment of key predictions provided by the DailyFX team.

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Fundamental and technical forecasts

British pound weekly forecast: weak data week could mean some respite

Sterling remains above £1.2400, but it is under clear pressure and bulls will fight hard to maintain the psychologically important level this week.

Euro Weekly Forecast: Geopolitics and US key data will move EUR/USD next week

The European Central Bank has made it clear that interest rates are falling, making its June meeting a live event, but the Middle East crisis and a series of high US indicators could shape EUR/USD next week. It will be.

Gold weekly forecast: XAU/USD bullish trend refuses to end

Gold appears to be trading higher, unaffected by a stronger dollar and higher US yields. XAU/USD continues its uptrend, supported by safe-haven appeal and central bank buying.

USD Forecast: Market waits for US GDP and core PCE – EUR/USD, USD/JPY, GBP/USD

This article will focus on the fundamental and technical outlook for the US dollar across three major pairs: EUR/USD, USD/JPY, and GBP/USD. This article also examines market sentiment and price action dynamics ahead of next week’s major US economic announcements.