03 May, 2024

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Apple (APPL) Soars, Gold Struggles, USD and VIX Slip, Sentiment Positive Ahead of NFPs

• Apple drives risk sentiment ahead of US NFPs .
• Japanese Yen is starting to push higher after intervention.
• US dollar slips to a three-week low.

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Apple’s Q2 earnings are giving markets an early boost, after the world’s 2nd largest company beat market expectations across a range of metrics and announced a record-breaking USD110 billion share buyback, up from USD90 billion last year. Apple shares rose by 2.3% during regular hours and added nearly 6% in after-hours trading. The move higher has broken a recent series of lower highs and leaves $196-$200 as the next zone of resistance.

Apple (APPL) Daily Chart

 

IG All Sessions Chart

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The Japanese Yen is finally seeing the benefit from the recent rounds of official intervention and is pushing higher, in holiday-thinned trade. USD/JPY is back just above 153.00, its lowest level in nearly three weeks, and is moving towards a prior area of interest around 151.90. Below here 150.00 comes into focus. Japan is closed on Monday 6th.

USD/JPY Daily Chart

Chart via TradingView

A recent sell-off in US Treasury yields is weighing on the US dollar. UST 2s hit 5.04% on Thursday and are now quoted at around 4.93%, while the benchmark UST 10s are offered at 4.63%, around 7 basis points lower than this week’s high.

The US dollar index remains channel bound and recent thoughts that a bullish flag was forming are being tested. Today’s US Jobs Report (13:30 UK) will decide the dollar’s fate ahead of the weekend.

US Dollar Index Daily Chart

Chart via TradingView

The latest bout of risk-on sentiment can be seen in the VIX ‘fear gauge’ which is now testing multi-week lows. The VIX is now testing both the 50- and 200-day simple moving average, and a confirmed break below these two indicators could see the VIX testing a cluster of prior lows down to the 12.00 level in the coming days.

VIX Daily Price Chart

Chart via TradingView

Gold is trading sideways in a small range today after this week’s break out from a bearish flag setup. The precious metal has tested support around $2,280/oz. on three occasions this week and a weaker-than-expected US Job Report or a further strengthening of the current risk-on move will see gold test this support again.

Gold Daily Price Chart

Charts via TradingView

IG Retail Sentiment show 55.89% of traders are net-long with the ratio of traders long to short at 1.27 to 1.The number of traders net-long is 5.87% higher than yesterday and 1.20% higher than last week, while the number of traders net-short is 2.14% lower than yesterday and 2.91% lower than last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall.