Market Digest:

Markets opened the week with investors balancing diplomacy optimism against persistent geopolitical risk.
The US Dollar softened after the US Department of Justice ended its investigation into Fed Chair Powell, while growing expectations of renewed US-Iran peace negotiations reduced safe-haven demand.
US Treasury yields remained elevated, however, as markets priced out aggressive easing and even revived discussion around possible rate hikes later this year.

Gold slipped below $4,700 in early Asian trade and may test the $4,650 zone as Iran adopted a firmer negotiating stance and persistent inflation concerns kept real yields supported.
Oil remained highly volatile, with WTI briefly breaking below $95 before recovering to settle near $97, as traders weighed potential peace talks against ongoing Strait of Hormuz disruption risks.

In FX, EUR/USD held firm near 1.1715 as softer USD sentiment supported the pair, while USD/JPY eased back toward 159.40 amid cautious positioning ahead of the Bank of Japan meeting.
Attention now shifts to central bank divergence this week, with the Fed, ECB, BoE, and BoJ all in focus.

Technical Analysis:

USD Index (DXY) – Rebound Fades Below 98.95 as Bearish Pressure Rebuilds

Technical Analysis

The Dollar Index failed to sustain gains above 98.95 and has turned softer after finding support near 98.45.
Price action suggests the recent rebound may be corrective within a broader short-term bearish structure.
If rebounds remain capped below 98.80, downside pressure could extend toward 98.35 and potentially 98.20.
A move above 99.10 would be needed to challenge the bearish bias.

Technical Indicators & Key Levels
Major Resistance: 98.80, then 99.10
Major Support: 98.35, then 98.20

EUR/USD – Pullback Holds Above 1.1685 as Bulls Target 1.1755

Technical Analysis

EUR/USD continues to hold a constructive recovery structure after defending support near 1.1670.
Price remains positioned for renewed upside if buyers hold above 1.1685, opening room toward 1.1740 and potentially 1.1755.
Failure to maintain support could expose a deeper retracement toward 1.1660.

Technical Indicators & Key Levels
Major Resistance: 1.1740, then 1.1755
Major Support: 1.1685, then 1.1660

XAU/USD – Gold Holds Recovery Structure Above 4,673 as Upside Targets 4,789

Technical Analysis

Gold remains in a corrective pullback but broader bullish structure is intact while support at 4,673 holds.
Stabilization above 4,674 may allow another attempt toward 4,756 and potentially 4,789.
Failure to defend the lower support cluster could trigger deeper retracement toward 4,625.

Technical Indicators & Key Levels
Major Resistance: 4,756, then 4,789
Major Support: 4,673, then 4,625

Economic News:

1. USD – Dollar Slips as Powell Probe Ends and Peace-Talk Optimism Builds

Details:

The US Dollar weakened Friday after the Justice Department ended its investigation into Fed Chair Powell, reducing institutional uncertainty.
Markets also responded positively to reports that Iranian officials arrived in Islamabad to discuss restarting peace negotiations.
Fed funds traders increased expectations for year-end easing, though inflation concerns kept broader policy expectations cautious.

Overview:

Key Outcome: The Dollar gave back recent gains as geopolitical risk premium eased.
Market Reaction: USDX slipped toward 98.50 while EUR/USD and risk currencies firmed modestly.
Broader Implication: Near-term USD direction now hinges on Fed guidance this week and whether diplomacy progresses.

Mainly Affected Pairs:

• USDX: Fell toward 98.49 after failing to hold prior highs.
• EUR/USD: Advanced toward 1.1714 on softer dollar sentiment.
• USD/JPY: Slipped toward 159.40 amid cautious positioning.

2. USOIL – Oil Swings Violently as Peace Hopes Clash with Supply Fears

Details:

WTI crude experienced sharp volatility, dropping below $95 before recovering toward $97 as markets weighed the possibility of US-Iran talks against ongoing Strait of Hormuz disruption.
Despite Friday’s pullback, both Brent and WTI posted strong weekly gains on supply risk concerns.

Overview:

Key Outcome: Oil remained headline-driven and highly unstable despite late-session stabilization.
Market Reaction: Traders reduced long exposure into the weekend while awaiting geopolitical clarity.
Broader Implication: Unless shipping risks ease materially, crude may remain supported despite peace-talk optimism.

Mainly Affected Instruments:

• USOIL: Settled near $97.08 after extreme intraday swings.
• Brent: Held near $100+ despite volatility.

3. XAU/USD – Gold Holds Supported Despite Weekly Pullback

Details:

Gold rose modestly Friday but still posted its first weekly loss in five weeks as elevated yields and inflation concerns increased the opportunity cost of holding bullion.
The partial easing in conflict fears capped upside despite lingering geopolitical uncertainty.

Overview:

Key Outcome: Gold remains supported on dips but upside momentum has moderated.
Market Reaction: Buyers defended weakness near support while rallies met profit-taking.
Broader Implication: Gold remains sensitive to both war headlines and evolving rate expectations.

Mainly Affected Pair:

• XAU/USD: Closed near $4,708 after testing $4,740 intraday.

Upcoming Economic Themes to Watch

Central Bank Focus

Federal Reserve (This Week)

• Markets expect rates unchanged.
• Focus is on tone regarding inflation and revived hike speculation.
   Hawkish hold: Bullish USD
   Dovish shift: Bearish USD

European Central Bank (April 30)

• Rates expected unchanged.
• Markets watching whether June hike expectations remain intact.
   Hawkish tone: Bullish EUR
   Dovish tone: Bearish EUR

Bank of England (Thursday)

• Expected to hold rates.
• Any tightening bias may support GBP.

Bank of Japan (Tuesday)

• Rates expected unchanged.
• Focus on signals toward eventual policy tightening.

Market Performance Snapshot

US Equities:

• Dow Jones: -0.16%
• S&P 500: +0.80%
• Nasdaq: +1.63%

European Equities:

• DAX 30: -0.11%
• FTSE 100: -0.75%
• Euro Stoxx 50: -0.19%

Precious Metals:

• Gold: +0.33% to $4,708.37
• Silver: +0.34% to $75.67

CWG Trading Outlook:

• DXY: Sell rallies near 98.80, target 98.25
• EUR/USD: Buy dips near 1.1685, target 1.1755
• GBP/USD: Buy dips near 1.3475, target 1.3590
• USD/JPY: Sell rallies near 159.75, target 159.00
• USD/CAD: Sell rallies near 1.3700, target 1.3630
• XAU/USD: Buy dips near 4,673, target 4,789

Risk Note:
If first profit targets are reached early, conservative traders may stand aside for the day. Once trades move 30+ pips in profit, protect positions at breakeven or secure gains.

Position Sizing Guidance:

• Low Risk (under 20%): 0.1 lot per $2,000
• Medium Risk (20–50%): 0.1 lot per $1,000
• Higher Risk (50%+): 0.2–0.3 lot per $1,000