EURUSD
- EUR/USD fell 0.08% to 1.0932, nearing a one-month peak and currently consolidating around the 50% Fibonacci level traced back from the January 2021 highs, which has historically acted as a strong resistance.
- The European Central Bank (ECB) raised interest rates by 25 basis points on Thursday, signalling its openness to potential further hikes in the future.
- In thin holiday-affected trade on Monday, the U.S. dollar edged higher as traders analysed the outcomes of last week's central bank decisions, with particular focus on an upcoming speech by Fed Chair Jerome Powell.
- The U.S. Federal Reserve led the series of senior central bank meetings last week, opting to pause its year-long cycle of rate hikes in order to assess their impact on inflation and the economic outlook.
- Market attention remains on the EUR/USD pair, which continues to hover close to its recent one-month peak following the ECB's rate hike, while traders eagerly await insights from Jerome Powell's speech to gauge the potential implications for currency markets and monetary policy dynamics.
| SMA (20) | Slightly Rising |
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| RSI (14) | Neutral | ||
| MACD (12, 26, 9) | Neutral |
Closing statement: The EUR/USD pair experienced a slight decline but remains near its one-month peak after the European Central Bank's interest rate hike. Traders are now closely monitoring the effects of last week's central bank decisions, including the U.S. Federal Reserve's decision to pause its rate hike cycle. The upcoming speech by Fed Chair Jerome Powell holds significant importance as it may influence market sentiment and future monetary policy decisions.
GBPUSD
- GBP/USD edged higher to 1.2824, as market focus shifted to the release of consumer price data on Wednesday, which is expected to significantly impact sentiment leading up to Thursday's Bank of England meeting.
- The Bank of England is widely anticipated to raise its main interest rate from 4.5% to 4.75% on Thursday, with the May Consumer Price Index (CPI) expected to validate the prevailing inflationary pressures in the UK.
- The DXY, which tracks the dollar against six other major currencies, inched higher to 102.361, hovering just above its recent one-month low. However, trading activity is likely to be subdued due to the closure of US markets on Monday for the Juneteenth holiday.
- This week, market participants will closely scrutinize data on the US housing market, initial jobless claims, and the current account, alongside Federal Reserve Chair Jerome Powell's two-day semi-annual congressional testimony before both chambers of Congress.
- With a mix of economic indicators and Powell's testimony on the horizon, market sentiment surrounding GBP/USD is expected to be influenced by these developments, warranting careful observation.
| SMA (20) | Slightly Rising |
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| RSI (14) | Neutral | ||||
| MACD (12, 26, 9) | Rising |
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Closing statement: GBP/USD experienced an upward movement, reaching 1.2824, as investors shift their attention to the upcoming consumer price data release and the Bank of England's monetary policy meeting. The DXY, which tracks the dollar, showed slight gains, but trading activity remained limited due to the closure of US markets for the Juneteenth holiday. In the coming days, market participants will closely monitor US economic data and Jerome Powell's testimony for potential implications on GBP/USD.
GOLD
- Gold prices remained relatively unchanged on Monday as markets awaited a string of Federal Reserve speakers and testimonies this week for more cues on monetary policy.
- The technical analysis shows that gold is still following its 20-day Moving Average on the daily graph, indicating its current trend and potential support or resistance levels.
- Market expectations are currently factoring in a 25-basis point hike by the Federal Reserve in July, driven by persistent inflation levels surpassing the central bank's 2% annual target.
- The Federal Reserve's indications suggest the possibility of further rate increases ahead, given the elevated consumer prices that remain double the 2% target. However, the importance of upcoming economic data in supporting these decisions is emphasized.
- Copper prices retreated as investors took profit after recent gains.
Closing statement: Gold prices showed limited movement as market participants awaited insights from Federal Reserve speakers and testimonies. The technical analysis indicates that gold's trend is aligned with its 20-day Moving Average. Expectations of a July interest rate hike and the focus on inflation levels underscore the significance of upcoming economic data in shaping monetary policy decisions. Additionally, copper prices experienced a retreat as investors booked profits.
CRUDE OIL
- Crude oil prices declined in Asian trade on Monday, driven by anticipation of further interest rate cuts in China and the focus on U.S. monetary policy ahead of Federal Reserve Chair Jerome Powell's upcoming testimony.
- Despite strong gains last week, crude markets experienced profit taking as mixed signals from the Federal Reserve and weak global economic indicators weighed on sentiment.
- Refinery demand in China provided some support to crude prices, with refineries processing the highest volume of crude in years during May. However, concerns remain regarding the country's slowing economic rebound, which could limit fuel consumption and impact overall crude demand.
- Goldman Sachs joined other major investment banks in lowering its annual growth forecast for China, highlighting the view that current stimulus measures in the world's largest oil importer may not be sufficient to support a robust economic recovery.
- The upcoming testimony from Federal Reserve Chair Jerome Powell will be closely watched for further insights into the central bank's monetary policy stance.
| SMA (20) | Slightly Falling |  |
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| RSI (14) | Neutral | ||
| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: Crude oil prices faced downward pressure in Asian trade as markets focused on potential interest rate cuts in China and awaited Federal Reserve Chair Jerome Powell's testimony. Mixed signals from the Federal Reserve and concerns over China's economic rebound influenced market sentiment. While refinery demand in China remained strong, doubts persist regarding the effectiveness of current stimulus measures. The upcoming testimony from Powell will provide valuable insights into the future course of monetary policy.
DAX
- European shares opened lower on Monday, with Franco-German lab equipment maker Sartorius leading the declines, as investors awaited further stimulus measures from China to boost demand.
- The DAX index in Germany dropped 0.43% in the morning session, while the CAC 40 in France fell 0.67% and the FTSE 100 in the U.K. declined 0.14%.
- In Friday's trading session, German stocks ended higher, driven by gains in the Retail, Utilities, and Financial Services sectors.
- The top performers on the DAX included Rheinmetall AG, which rose by 4.93%, and Zalando SE, which added 3.53%.
- The worst performers on the DAX were Infineon Technologies AG, which fell by 1.78%, BASF SE, which declined by 1.41%, and Deutsche Bank AG, which was down by 1.32%.
| SMA (20) | Slightly Rising |
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| RSI (14) | Slightly Falling | |
| MACD (12, 26, 9) | Slightly Rising |
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Closing statement: European shares started the week on a downward trajectory, with Sartorius leading the declines. Investors remained cautious as they awaited additional stimulus measures from China to stimulate demand. German stocks had a positive close on Friday, with gains in the Retail, Utilities, and Financial Services sectors. Notable performers on the DAX included Rheinmetall AG and Zalando SE, while Infineon Technologies AG, BASF SE, and Deutsche Bank AG faced downward pressure.