Senior Daily Market Update 3rd May

Good morning,
 
Unsurprisingly, investors have swum to the side of the pool ahead of Wednesday’s FOMC monetary policy statement by the US Federal Reserve at which it is anticipated that the central bank will keep interest rates unchanged.
 
A skinny AUD 1664 – 1672 XAU/AUD range was seen yesterday with movements driven entirely by AUD / USD fluctuations (XAU / USD flat lining).
 
Not much more to add presently. The geopolitical flame for the moment has been turned down from ‘heat’ to ‘simmer’ with US President Trump engaging with Russian Federation President Putin via telephone overnight to discuss North Korea, Syria and US - Russian relations.
 
Once the FOMC announcement is dispensed with the markets will turn their attention to Friday’s US employment data release and the onto the second round of the French Presidential election at the weekend. Whilst I hold no strong view one way or the other regarding the outcome, the punditry, (discredited) pollsters and bookies are all showing candidate Macron as an unbackable short-priced favourite in the two-horse race against the National Front’s Mme Le Pen. What could possibly wrong after witnessing Brexit & the election of Donald Trump under similar circumstances (i.e. rank outsiders given next to no chance of success)? The situation brings to mind the following trading pearl from ‘the man who broke the Bank of England’ that; “Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.”
 
From a technical perspective, XAU / AUD flirts with the first potential area of support at the Fibonacci retracements of the AUD 1578 to 1712.75 move. Respectively those are; AUD 1661.25 (38.2%), 1645.30 (50.0%) & 1629.40 (61.8%). The 200 Day Moving Average at AUD 1656.00 will also be a closely watched - a potentially critical inflexion point. In XAU / USD terms, gold continued to push towards the bottom of the triangular congestion and held just above the technically important 200 Day Moving Average at USD 1251.00 with trendline support beneath that at USD 1242.00.
 
The Gold / Silver ratio continued higher reaching its highest level since June 28th last year.
 
Good luck.
 
Regards,
Andre