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Crude Oil Remains Under Pressure Amid Global Recession FearsCrude oil prices slumped on Wednesday, with both the U.S. and the U.K. benchmarks losing more than 4% amid growing global recession fears. Prices managed to stabilize on Thursday but remain on the defensive, having pulled sharply from three-month highs struck earlier this month. Investors continue to assess how much of the new “normal” monetary policies major central banks are embarking on could affect global growth after the Fed hiked rates at its highest pace since 1994 last week, aiming to cool down ramping inflation. Testifying before the U.S. Congress, Federal Reserve Chair Jerome Powell said on Wednesday that the central bank is “not trying to provoke a recession.” However, he acknowledged that a recession was “certainly a possibility” against the current global backdrop. Meanwhile, U.S. President Joe Biden called for a three-month holiday on federal gas and diesel taxes and urged states to also temporarily drop fuel taxes in an attempt to contain energy prices. Inventory data from the Energy Information Administration was scheduled for Thursday, but the EIA said data will be delayed due to “systems issues,” with no new release date. The West Texas Intermediate (WTI) barrel continues to back away from the $123 area where it peaked on June 14, hitting a six-week low of $101.56 before steading around $104 on Thursday, 0.6% below its opening price. From a technical perspective, WTI holds a short-term bearish bias, according to the daily chart. The price has broken below the 100-day SMA while the RSI remains in negative territory, not yet reaching oversold conditions. The MACD is printing larger red bars, showing increasing selling interest. On the downside, the next support level is seen at the $100.00 area, followed by the May 12 low at $98.23. A break below this latter would expose the April 11 low at $93.00. On the other hand, the next resistances are located at the 100-day moving average, currently at $105.53 and then the $110.00 area, followed by the 20-day moving average, currently at $115.73.
TVC:USOIL
by Alex_Boltyan_FXAnalyst
EUR/USD Climbs Above 1.0600 After Powell But Momentum FaltersThe EUR/USD pair is rising for the third day in a row on Wednesday with the greenback softer across the board as Fed Chair Jerome Powell testifies before the U.S. Congress. The EUR/USD pair has climbed to a 12-day high of 1.0605, but found resistance at the 20-day SMA and pulled back below the 1.0600 psychological level during the New York session. The Federal Reserve is "strongly committed" to bringing down inflation from its highest level in 40 years, and policymakers are moving "expeditiously to do so," Powell said during his testimony before the U.S. Senate Banking Committee. "It is essential that we bring inflation down if we are to have a sustained period of strong labor market conditions that benefit all." Fed Chair stressed that the central bank is “not trying to provoke a recession,” although he acknowledged that a recession was “certainly a possibility” against the current global backdrop. From a technical standpoint, the EUR/USD pair's short-term outlook has improved somewhat but remains tilted to the downside. The price failed to break above the 20-day SMA, currently at 1.0611. In the daily chart, the RSI has gained an upward slope but remains below its midline, while the MACD shows decreasing red bars, signaling dwindling selling interest. On the upside, a break above the 20-day SMA could give the EUR/USD some upward momentum to test a descending trendline drawn from February’s highs currently standing at the 1.0670 zone. A move above this latter would expose June highs at the 1.0770-80 area. On the other hand, immediate support could be faced at 1.0470, followed by the 1.0400 psychological level and then the cycle lows at around 1.0349.
by Alex_Boltyan_FXAnalyst
Gold Steadies After Last Week’s LossesGold prices seesaw between small gains and losses on Tuesday as U.S. investors return from a long weekend. The spot, XAU/USD, is currently trading at the $1,835-40 area, virtually unchanged on the day, following last week’s 1.7% loss. The yellow metal has managed to stabilize but remains on the defensive as U.S. Treasury yields continue to trade at multi-year highs. The yield on the U.S. 10-year note stands at 3.288% after hitting its highest level since 2011 at 3.497% last week. U.S. yields – which could be considered the opportunity cost of holding gold – remain underpinned by the Federal Reserve’s hawkish stance and its pledge to fight inflation that is running at four-decade highs. The FOMC hiked rates by 75 basis points last week, which is the most aggressive increase since 1994. From a technical perspective, XAU/USD holds a neutral short-term bias slightly tilted to the downside, according to the daily chart. The RSI remains flat below its midline, while the MACD continues to print green, but decreasing bars. At the same time, the price has broken below the 200-day SMA, which could keep any bounce attempt limited below the $1,845 area. If the metal manages to break through this level, next resistance is seen last week’s highs at the $1,860 area, followed by the 100-day SMA at around $1,890. On the other hand, the immediate support level could be found at $1,830. A break below this area could mount the bearish pressure on the metal price and pave the way to the $1,800 threshold, loss of which would expose May lows at the $1,780 area.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Stabilizes Above 1.0500, Braces For July LiftoffThe EUR/USD pair advances slightly at the weekly opening in the absence of relevant economic data and showing limited reaction to the statements of several members of the European Central Bank Governing Council, including president Christine Lagarde. At the time of writing, EUR/USD is trading around 1.0515-20, 0.2% above its opening price, having hit an intraday high of 1.0545 during the European session. In her statement before the European Parliament, Lagarde said the bank plans to raise the policy rate by 25 points next month, while she also left the door open for another hike in September. Furthermore, Lagarde declined to comment on any details of the ECB's new bond-buying tool while stressing that fighting fragmentation is a precondition for the success of the monetary policy. She also said conditions are in place for further economic growth in the region. Meanwhile, in the United States, the stock and bond markets remain closed this Monday in observance of the Juneteenth holiday. The dollar, measured by the DXY index, trades lower which, coupled with a new advance in 10-year German Bund yields, has favored the European currency's gains. Looking ahead, Fed Chairman Jerome Powell's testimonies to Congress on Wednesday and Thursday will be key events of the week. From a technical point of view, the EUR/USD pair maintains a neutral bias in the short term, although the long-term outlook remains bearish. The daily RSI shows a positive slope, still below its midline, while the MACD prints decreasing red bars, which could signal a continuation of the upward correction in the coming days. On the upside, the 20-day moving average offers immediate resistance at the 1.0620 area, followed by the psychological level of 1.0700, which is reinforced by a downtrend line drawn from the February highs, and then the 1.0770 zone. On the other side, immediate support is seen at the 1.0450 area, followed by the 1.0400 psychological level. A break below this latter would pave the way to retest the cycle low of 1.0349. Then, the next support could be found around 1.0300.
by Alex_Boltyan_FXAnalyst
EUR/USD Back Below 1.0500, Posts Third Consecutive Weekly FallThe EUR/USD pair snapped a three-day gain streak as U.S. Treasury yields lifted the dollar on Friday. At time of writing, the pair trades at 1.0483, 0.66% below its opening price, erasing most of Thursday's gains that saw the pair hit a weekly high of 1.0601. Furthermore, the EUR/USD is on track to close its third consecutive week with losses. The yield on the U.S. 10-year note has stabilized around 3.25% after hitting a cycle high at 3.497% on Tuesday. Meanwhile, the yield on the 10-year German Bunds has also steadied reaching its highest level since 2014 at 1.926% on Thursday. On the other hand, after deciding to hike rates by 75 bps on Wednesday, Federal Reserve Chair Jerome Powell stressed that Fed’s main objective is to return inflation to 2% and that they will take the necessary measures to stabilize prices. For next week, investors will closely follow his testimony before the Senate, where he could give more information about his vision of the macroeconomic environment and the next monetary policy steps. The technical outlook for the EUR/USD remains clearly bearish according to weekly chart, with the pair posting its third weekly loss in a row. On the daily chart, the pair holds a neutral bias, slightly skewed to the downside. The daily RSI has gained a significant downward slope, while the MACD histogram suggests that the selling momentum is picking up steam. To the downside, first support is seen at the 1.0400 psychological level, loss of which would expose the May 13 cycle low of 1.0349. The next support below these two levels is seen at 1.0300. On the other hand, the first significant short-term resistance level is located in the 1.0640 area, where the 20-day moving average stands. Beyond that, the EUR/USD could face resistance at the 1.0700 psychological level, which is reinforced by a downtrend line coming from the February highs, and the 1.0770 zone.
by Alex_Boltyan_FXAnalyst
EUR/USD Oscillates After Fed Hikes 75 Basis PointsThe EUR/USD pair oscillated sharply on Wednesday following the Federal Reserve monetary policy announcement. The Federal Reserve decided to raise rates by 75 basis points taking the federal fund range to 1.5%-1.75%, being the highest increase since 1994. Besides, the dot plot showed the median rate expected by the end of 2022 was 3.4%, paving the way for at least two or three more hikes this year. The EUR/USD initially moved lower and struck a one-month low of 1.0358, before bouncing to levels above 1.0500 with Jerome Powell conference. Chairman Powell said that labor market remains extremely tight and inflation high, so they considered appropriate a 75 basis point increase at the June meeting. He also said that either a 50 bps or 75 bps rate hikes will be appropriate at next meeting and will remain data dependent. Despite the hawkish tone, the dollar turned lower alongside with yields, while Wall Street indexes advanced following the presser. Also worth mentioning, the European Central Bank called an urgent meeting on Wednesday and announced that it plans to create a tool to tackle the risk of eurozone fragmentation. The ECB said it will reinvest redemptions from its emergency bond-purchasing program (PEPP) in a flexible way. The EUR/USD moved from a low of 1.0358 to a high of 1.0508 before settling at mid-range around 1.0450. The short-term technical perspective remains negative for the EUR/USD, according to the daily chart. The RSI remains below its mid-line although it has turned flat, while the MACD shows decreasing red bars. Now that the FOMC is behind, the pair could enter a phase of consolidation. On the downside, key support is seen at the 1.0350 area, while significant resistance could be found at the 1.0520 zone.
by Alex_Boltyan_FXAnalyst
Gold Slumps Ahead of Fed’s Verdict Gold prices slumped on Tuesday, extending losses into a second day, as U.S. Treasury yields continued to push higher ahead of the Federal Reserve decision. The yellow metal (XAU/USD) fell to a low of $1,805 an ounce during the New York session despite the risk-averse environment as investors increase their bets that the Fed could “surprise” with a higher than expected rate hike. Jerome Powell & Co. has hinted at a 50 basis points hike in June and September. However, after CPI data on Friday showed U.S. inflation reached yet another four-decade high of 8.6%, some participants now expect the FOMC to raise rates by 75 bps. As a result, U.S. Treasury yields have reached fresh multi-year highs, underpinning the greenback and weighing on the non-yielding metal. The yield on the 10-year note climbed to an 11-year high of 3.497% on Tuesday. From a technical perspective, XAU/USD holds a bearish short-term bias according to the daily chart. The price trades below its main moving averages after breaking below the 20-day SMA on Monday, while indicators have entered negative territory. The RSI has gained downward slope and is deep into the red, although still not hitting oversold levels, while the MACD has printed a red bar. The immediate support level is seen at the $1,800 threshold, with a break below this level paving the way for a retest of the May low at $1,786 and then the $1,760 area. On the other hand, the convergence of the 20- and 200-day SMAs offer key short-term resistance at the $1,840-45 zone. A break above this area could ease the immediate bearish pressure exposing the next target at $1,880.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Falls to One-Month Lows Amid Higher YieldsThe EUR/USD is falling sharply for the third day in a row on Monday, having hit its lowest level in a month at 1.0403 as the dollar rallies across the board amid higher U.S. yields. U.S. Treasury yields climbed to their highest levels in over a decade on Monday, while part of the curve inverted, in the aftermath of U.S. Consumer Price Index data. The 10-year rate reached a peak of 3.44%. On Friday, data showed the U.S. inflation rate rose to 8.6% in May – its highest level in 41 years – which slammed expectations of prices beginning to cool off and raised prospects the Fed should continue on its aggressive tightening path. The Federal Reserve will conclude its two-day meeting on Wednesday. While expectations favor a 50 bps hike this month, some analysts are now calling for a 75 bps increase following the CPI figures. The greenback has soared across the board, dragging the EUR/USD back to test the 1.0400 area. The DXY, which measures the dollar versus a basket of currencies, reached its highest level in almost 20 years at 105.28 on Monday. From a technical perspective, the EUR/USD holds a bearish tone according to the daily chart. Indicators are in negative territory, without reaching oversold levels just yet. The RSI has gained a steep negative slope, while the MACD prints bigger red bars, pointing to increasing selling interest. The loss of the 1.0400 psychological level would expose the 2022 lows at 1.0348 and then 1.0300. On the other hand, the EUR/USD needs to recover the 20-day SMA, currently around 1.0650, to ease the short-term bearish pressure and attempt a move toward 1.0700.
by Alex_Boltyan_FXAnalyst
EUR/USD Extends Losses, U.S. Inflation Data Spurs Risk AversionThe EUR/USD pair fell sharply on Friday, recording its second daily loss in a row against a backdrop of risk aversion following the release of U.S. inflation data. The EUR/USD hit its lowest level in three weeks at 1.0505 and is on track to record its second straight weekly fall. The U.S. Consumer Price Index grew at its fastest pace in 40 years in May, with annualized inflation hitting 8.6% versus 8.3% expected. The Core CPI increased by 6.0% from a year earlier. The greenback strengthened across the board on the data, as these figures proved wrong those arguing that inflation had already peaked and added pressure on the Fed to keep on its aggressive tightening path. On Thursday, the European Central Bank hinted at a 25 basis point rate hike in July as the EU also faces spreading inflation pressure. However, President Lagarde has signaled a more gradual approach as the ECB walks a fragile line trying to dodge stagflation in the old continent. From a technical standpoint, the EUR/USD pair short-term outlook has turned bearish, according to the daily chart. The inability to surpass a four-month resistance line near 1.0740 and the break below the 20-day SMA are strong bearish signals for the pair. At the same time, both the RSI and the MACD have entered into negative territory, all of which point to further losses ahead. If the EUR/USD breaks below the 1.0500 psychological level, the next support could be found at the previous swing low at 1.0470, seconded by the 1.0400 area. Loss of this level would expose the 2022 low of 1.0348. On the other hand, the 20-day SMA at the 1.0650 area offers immediate resistance, followed by 1.0700 and the mentioned trendline at around 1.0740.
by Alex_Boltyan_FXAnalyst
EUR/USD Under Pressure After ECB, U.S. Inflation Data EyedThe EUR/USD pair is losing ground on Thursday, following the European Central Bank monetary policy announcement. After hitting a nine-day high of 1.0773, the EUR/USD turned lower and dropped to its lowest in over two weeks at 1.0615 as investors assess the ECB outcome. The ECB announced the end of its monetary stimulus program at the beginning of July and hinted at a 25 basis points rate hike for next month. While many were expecting a nod to a more aggressive 50 bps increase move, the bank also painted a grim economic outlook, triggering risk aversion across the board. President Christine Lagarde suggested that the economic outlook has worsened, as near-term activity is expected to be negatively affected by higher energy costs, while price increases have spread across other sectors and risks remain tilted to the upside. During Lagarde’s press conference, the euro came under pressure even as German 10-year bond yields hit fresh multi-year highs at 1.47%. Despite US 10-year yields staying above 3.0%, the US-DE 10-year spread fell to its lowest level since July 2021 of 160 bps but provided no relief to the shared currency. On Friday, the U.S. will release May’s Consumer Price Index, which is expected to show that prices grew at an annualized pace of 8.3%, supporting the view that the Fed is headed to more rate increases. From a technical perspective, the EUR/USD short-term outlook has turned slightly bearish according to the daily chart. The price has dipped below the 20-day SMA while the RSI has crossed its midline upside-down and the MACD continues to point at dwindling buying interest. Still, the pair has managed to hold above the 1.0600 level so far. A break below could increase the bearish pressure. Next supports are seen at 1.0532, May 20 low, 1.0500 and the previous swing low at 1.0470. On the other hand, the EUR/USD needs to regain the 1.0700 level to improve the short-term perspective, with 1.0770 and 1.0850 as next bullish targets.
by Alex_Boltyan_FXAnalyst
Crude Oil Hits Three-Month Highs Above $120 The barrel of Western Texas Intermediate (WTI) crude reached its highest level in three months above $123 and recorded a 2.3% gain on Wednesday following the release of U.S. crude inventories data by the Energy Information Administration. The barrel of Brent rose past $124 per barrel and scored a daily gain of 2.5%. On the supply side, EIA data showed that U.S. crude inventories fell 2 million barrels in the week ending June 3, while gasoline inventories fell by 800,000 barrels and inventories of distillates increased 2.6 million barrels. At the same time, prices were supported by the potential for a strike by Norwegian offshore oil workers next week, which could cause output shortages from the largest producer in Western Europe outside Russia. Both WTI and Brent have risen more than 30% since the Russian invasion of Ukraine on February 24, adding to inflationary pressures in major economies. On the demand side, the relaxation of Covid-related policies in China is another bullish factor for the crude prices, as it means higher demand from the world's largest importer. The short-term technical outlook for WTI remains bullish, according to the daily chart, after the price broke above the $120.00 threshold. The RSI has accelerated higher in convergence with the price and is close to overbought territory, while the MACD has printed a new green candle and continues to gain momentum. To the upside, the next resistance level is seen at $125.00, followed by the March 8 high at $129. On the other hand, immediate support is seen at the $120.00 level, followed by the 20-day SMA at $114.00 and then the $112.50 area.
TVC:USOIL
by Alex_Boltyan_FXAnalyst
EUR/USD Searches For Direction Around 1.0700The EUR/USD pair is treading water around 1.0700 as it struggles to hold above the psychological mark while the greenback recovers strength. The pair fell to a daily low of 1.0651 but managed to bounce back to the 1.0710 area at the beginning of the New York session. The U.S. dollar advanced earlier on the day underpinned by Treasury yields’ rise. However, as yields turned lower, so did the buck. The yield on the 10-year note hit a peak of 3.062% on Tuesday before falling back to 2.96%. On Thursday, the European Central Bank will announce its monetary policy decision. Although no rate changes are expected at this point, the bank is poised to end its QE program. The tone officials take in their monetary policy statement and their outlook for the July meeting will be key for the EUR/USD. The lack of clear signals toward a first hike in July or a "dovish" tone from the President Christine Lagarde could weigh on the euro. However, even if the “hawkish” tone is present, a “buy the rumor, sell the fact” scenario cannot be ruled out. From a technical standpoint, the EUR/USD holds a slightly bullish tone according to the daily chart, although the upward momentum continues to fade as the pair is unable to establish above a descending trendline coming from February highs. The RSI is flat just above its midline, while the MACD continues to print green but dwindling bars, indicating the decreasing buying interest. On the upside, the EUR/USD pair needs to break above the mentioned trendline, currently around 1.0760, to pick up bullish momentum, with next targets seen at the 1.0850area and then the 100-day SMA at 1.0950. On the other hand, immediate support is seen at the 20-day SMA around 1.0620, followed by the 1.0600 psychological level and the May 20 low at 1.0532.
by Alex_Boltyan_FXAnalyst
Gold Struggles Around $1,850 as Market Sentiment Improves Gold prices fell slightly on Monday, recording the second consecutive decline as the improvement in investors' sentiment diminishes the demand for safe-haven assets. The spot, XAU/USD, struggles to hold on to the $1,850 area after scoring a high of $1,857 during the European session. On Monday, Beijing announced the relaxation of Covid-related restrictions following similar announcements for China's financial hub, Shanghai, last week, which has helped to ease concerns related to the slowdown in the Asian giant's economy and hence contributed to improving the market's mood. Meanwhile, the increase U.S. bond yields – which could be considered the opportunity cost of holding gold – is a significant headwind for the yellow metal. The yield on the 10-year note extends its advance and prints its six consecutive daily gain, standing at around 3.01%. From a technical perspective, XAU/USD maintains the short-term bearish tone according to the daily chart, as indicators suggest a continued decrease in buying interest. The RSI maintains a negative slope below its midline, while the MACD shows with its histogram that the bullish momentum is slowly fading. If XAU/USD breaks decisively below $1,850, the immediate support is seen around $1,840, which is reinforced by the convergence of the 20- and 200-day moving averages. Below this area, next supports could be found at $1,828, June 1 low and the $1,800 psychological level. On the other hand, initial resistance could be faced at $1,860, followed by the June 3 high at $1874 and the $1,900 psychological level.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Snaps 2-Week Winning Streak, Signals Upward ExhaustionThe EUR/USD pair pulled back on Friday and is poised to post the first weekly loss following two consecutive gains, on the back of better-than-expected Nonfarm payrolls data and the unremitting advance of Treasury yields. The EUR/USD spiked to a three-day high of 1.0764 in the immediate aftermath of the U.S. employment report but quickly pulled back to the 1.0720 zone, where it is set to post weekly and daily losses. The U.S. nonfarm payrolls showed the economy created 390,000 new jobs in May, above expectations of a 325,000 gain, while the April figure was upwardly revised to 436,000. At the same time, the unemployment rate stayed at 3.6%. Higher bond yields also underpinned the dollar. The rate on the 10-year note rose for the fifth day in a row and reached a high of 2.986%. Although it might be too soon to assess the impact of the Fed's contractive monetary policy, today's figures provided some comfort to investors worried about the effects of higher rates on jobs and growth. From a technical perspective, the EUR/USD outlook remains slightly tilted to the upside according to the daily chart, as indicators hold on positive ground although showing signs of decreasing bullish momentum. At the same time, the reiterated failure of the EUR/USD to break above a descending four-month-old trendline, currently around 1.0780, could pose a threat to the bullish scenario. The pair needs a decisive break above this resistance to pave the way to more gains, with 1.0860 and 1.0900 as the next targets. On the other hand, immediate support is seen at the 1.0600 area, where the 20-day SMA reinforces the psychological level. Loss of this area would worsen the short-term outlook, exposing the 1.0530 zone.
by Alex_Boltyan_FXAnalyst
Gold Picks Up Pace After U.S. Data Gold prices are rising for the second day in a row on Thursday, with the spot XAU/USD climbing more than 1% and reaching a nine-day high of $1,869 following the release of weaker-than-expected U.S. employment data. ADP data showed that the U.S. economy added 128,000 new private jobs in May, missing by far expectations of a 300,000 gain. This figure is particularly concerning ahead of the Nonfarm Payrolls report to be published on Friday. The official employment report is expected to show the economy added 325,000 in May. The yellow metal accelerated to the upside after the report, extending its recovery from a two-week low of $1,828, but so far, it has failed to break above last week’s high at the $1,870 area. At the same time, gold benefited from the pullback of U.S. Treasury yields – which could be considered the metal’s cost of opportunity. The yield on the U.S. 10-year note has retreated to 2.89% after three consecutive daily advances. From a technical perspective, the XAU/USD short-term perspective is tilted to the upside, as the RSI gains slope and crosses over its midline, while the MACD points to growing buying interest. On the upside, gold needs to decisively break above the $1,870 area to gain further bullish momentum and move towards the 100-day SMA at $1,890 and make an attempt at the $1,900 mark. On the other hand, immediate support is given by the 20- and the 200-day SMA, which converge at the $1,840-45 area, followed by the $1,820 zone and then the $1,800 psychological level.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Extends Pullback And Hits One-Week Lows The EUR/USD pair is retreating for the second day in a row on Wednesday as the greenback continues to gather pace across the board after the long weekend in the United States. The dollar has strengthened over the last sessions, supported by higher U.S. yields along the curve, pushing the EUR/USD from a one-month high of 1.0787 struck on Monday to a low of 1.0651 so far on Wednesday. The euro had been recovering ground from a five-year low of 1.0340 hit mid-May amid growing speculation that the European Central Bank would start hiking rates in July to fight ramping and widening inflation. In fact, the EU Harmonized Consumer Price Index grew by 8.1% last month, surpassing expectations of 7.7%, data showed on Tuesday. Consensus point to a 25 bps hike to start with, but many ECB members continue to advocate for a more aggressive move. Meanwhile, data from the U.S. showed manufacturing PMI rose to 56.1 in May, exceeding expectations of 54.5. Investors’ focus now turns to the Nonfarm payrolls report that will be published on Friday. From a technical standpoint, the EUR/USD holds a slight bullish bias according to the daily charts as indicators remain on positive ground, although losing momentum. The RSI has turned lower, while the MACD signals decreasing buying interest. At the same time, the EUR/USD pair prints its second red candle after failing to break above a descending trendline coming from February highs. Loss of the 1.0640 support area would pave the way to a steeper decline towards 1.0600, where the 20-day SMA reinforces the psychological level. A break below this latter would worsen the short-term perspective, targeting the May 20 low at 1.0532. On the other hand, if the pair manages to recover the 1.0700 level, it could gather renewed momentum to charge against the mentioned trendline, currently around 1.0790. From there, a break of 1.0800 could improve the outlook for the EUR/USD.
by Alex_Boltyan_FXAnalyst
EUR/USD Approaches Key Short-Term ResistanceThe EUR/USD pair started the week on the right foot, recording its third consecutive daily gain, underpinned by the dollar's pullback across the board. The euro posted a fresh five-week high at 1.0780 and remains close to that level at the start of the American session. The dollar, measured by the DXY index, posted its lowest level since April 25 at 101.35 on Monday, while the 10-year U.S. bond yield remains limited at around 2.74%. Investors will now be expecting the U.S. Nonfarm Payrolls report to be released on Friday. Meanwhile, inflation data from Germany showed that May's HIPC grew 8.7% year-on-year, beating the market forecast of 8% and fueling expectations that the European Central Bank will have no choice but to raise interest rates sooner rather than later. In addition, the fact that major Chinese cities began to relax COVID-19 controls over the weekend helped risk sentiment, benefiting riskier assets to the detriment of the greenback. From a technical perspective, the EUR/USD maintains a short-term bullish bias, according to the indicators on the daily chart. Both the RSI and the MACD remain on positive ground, while the latter signals strong buying interest. To the upside, EUR/USD faces immediate resistance at the 1.0800-10 zone, where the psychological level converges with a descending trend line from the February high. A break above this area could improve the short-term outlook for the EUR/USD and push it towards the 1.0900 area. On the other hand, the 1.0700 psychological level is the first support in line, followed by 1.0600 and the 20-day moving average, currently at around 1.0580.
by Alex_Boltyan_FXAnalyst
EUR/USD Extends Recovery From 5-Year Low, Second Weekly GainThe EUR/USD pair is correcting lower on Friday after posting its highest level in a month at 1.0765 during the European session. The euro failed to sustain the bullish momentum above the 1.0750 resistance area and it is currently trading around 1.0710-20. Still, the shared currency is poised to record a 1.4% weekly gain, the second in a row, extending its bounce from the five-year low of 1.0348 struck on May 9. On Friday, U.S. data showed that the Core PCE Price Index – the Federal Reserve’s preferred gauge of inflation – rose by 4.9% in May (annualized), easing down from the 5.2% rate printed in April. This could be a sign that inflation is close to peak (or even might have already done so). Earlier this week, the Fed published the minutes of its May’s meeting, which showed FOMC members brace for two more 50 bps rate hikes. But if inflation proves to be slowing down, the bank might take a more gradual approach to avoid taking an unnecessary toll on growth. On Thursday, U.S. GDP figures showed the economy contracted by 1.5% in the first quarter, more than the preliminary estimate of 1.4%. Meanwhile, the European Central Bank has continued hinting at the beginning of the hiking cycle, as soon as July, which along with a technical correction has helped the euro to recover from five-year lows. From a technical point of view, the EUR/USD pair holds a negative bias according to the weekly chart. Both the RSI and the MACD remain in negative territory although the bearish momentum seems to be dwindling. However, the pair retains the positive tone in shorter-term charts. The daily indicators favor an upward continuation, but the EUR/USD might need to break decisively above 1.0750 to attract more buyers. In that case, a descending trendline drawn from February, currently at 1.0815, would become a significant resistance level ahead of the 1.0900 area. On the other hand, the 1.0640 zone stands as immediate support followed by the 1.0600 level and the 20-day SMA around 1.0560.
by Alex_Boltyan_FXAnalyst
EUR/USD Clings To Weekly Gains But Momentum Fading The EUR/USD pair advanced on Thursday, reversing the previous day's pullback amid rising stocks and despite the increase in Treasury yields. The risk-on mood prevailed, keeping the dollar under pressure and favoring a retest of the 1.0730 area. The dollar came under mild pressure following the release of the Federal Reserve's last meeting minutes on Wednesday. The minutes showed FOMC members bracing for two more 50 basis point rate hikes but were deemed as less hawkish than expected. On Thursday, the U.S. published the Q1 GDP data, which showed the economy contracted by 1.5% annualized, more than the preliminary estimate of a 1.4% shrink. The economic calendar will feature U.S. Personal Income and Spending and the closely-watched Core PCE Price Index on Friday. From a technical perspective, the EUR/USD holds the short-term bullish bias, according to indicators on the daily chart, although the pair is losing bullish momentum and the upside remains well limited by the 1.0750 area. The RSI has turned flat but hovers above its midline, while the MACD remains in positive territory but signals decreasing upward momentum. If the EUR/USD manages to break above the 1.0750 resistance area, the next resistance level is seen at a descending trendline coming from February highs, currently at 1.0810. On the other hand, immediate support could be found at the 1.0700 mark. Loss of this level could add pressure on the EUR/USD pair and send it to test the weekly low of 1.0640, exposing the 1.0600 area.
by Alex_Boltyan_FXAnalyst
Gold Pulls Back From Two-Week Highs Ahead Of Fed Minutes Gold prices pulled back from two-week highs on Wednesday, snapping a four-day streak of gains, as the U.S. dollar recovers some ground across the board ahead of the Federal Reserve’s minutes release. XAU/USD erased Tuesday’s advance entirely, and it is trading just above $1,850 an ounce. Over the last months, it seems that gold has broken its inverse correlation with stocks. The metal is retreating alongside Wall Street futures, despite the pullback seen in U.S. Treasury yields. Investors’ focus remains on the release of the Fed last meeting minutes later during the New York session. The market expects at least two more meetings of 50 basis points rate increases, but the path is not as clear past that point. Minutes could shed some light on FOMC members’ mindsets. From a technical standpoint, XAU/USD maintains a short-term slight positive bias as the price struggles to hold above the 20-day SMA and indicators begin to lose upward momentum. The RSI turned lower after touching its midline and now heads south in negative territory. At the same time, the MACD continues to print green bars but signaling dwindling buying interest. If the metal breaks decisively below the $1,850 zone, the next supports could be found at the 200-day SMA, currently at $1,839 an ounce. Loss of this latter would expose the $1,800 psychological level and May swing lows at the $1,785 area. On the other hand, a rise above the $1,870 area could resume the short-term bullish momentum and target the 100-day SMA at $1,885 en route to the $1,900 level.
OANDA:XAUUSD
by Alex_Boltyan_FXAnalyst
EUR/USD Holds On To Gains Above 1.0700 Amid Hawkish ECB BetsThe EUR/USD pair kept pushing higher on Tuesday, posting its highest level in a month at 1.0748 as the U.S. dollar continued correcting lower across the board, while European Central Bank officials advocated for aggressive rate hikes. After comments from President Christine Lagarde on Monday, other ECB members such as Martin Kazaks and Robert Holzmann hinted at a 50 bps hike in July, further boosting the euro. In the meantime, worse-than-expected U.S. economic data kept the greenback under pressure. Manufacturing and Services preliminary PMIs for May were below expectations, although still in the expansionary territory at 57.5 and 53.5, respectively. From a technical perspective, the short-term outlook for EUR/USD has turned positive, although the euro is far from out of the woods as unfavorable macroeconomic data or risk aversion could turn the tables for the shared currency in the coming days. The RSI is gaining a steeper bullish slope above its midline in the daily chart, without reaching overbought conditions just yet. At the same time, the MACD continues to print higher green bars, signaling increasing buying interest. A break above the 1.0750 resistance area could pave the way to a test of the 1.0800 psychological level and then a descending trendline, drawn from February highs, currently at 1.0840. Breach of this barrier would improve the medium-term perspective. On the other hand, the 20-day moving average at 1.0540 offers immediate support, followed by the 1.0470, April low, and then the 1.0400 psychological level.
by Alex_Boltyan_FXAnalyst
EUR/USD Approaches 1.0700 Lifted By Lagarde’s Hawkish Comments The EUR/USD pair pushed higher on Monday and struck a fresh one-month high as the dollar remained on the defensive amid a broader correction, while the shared currency benefited from hawkish comments from European Central Bank President Christine Lagarde. President Lagarde hinted at a probable rate hike in July while suggesting that rates could be in the positive territory at the end of Q3. She also noted that disinflationary dynamics that prevailed during the last decade are unlikely to be seen again. The euro found an additional tailwind in the uptick in the German 10-year Bund yields, which are advancing for the first time in four days. The EUR/USD pair peaked at 1.0697 during the New York session and currently trades at the 1.0685 area, up more than 1.1% on the day. From a technical viewpoint, the short-term outlook for the EUR/USD has turned positive as the price trades at its highest since April 26. The RSI has gained a positive slope, crossing above its midline, while the MACD signals increasing buying interest. Against this backdrop, the continuation of the upward corrective move appears likely in the very near term at least. The next bullish target is seen at the 1.0750 area, ahead of a descending trendline drawn from February highs, currently at 1.0850. A break above this latter would be a constructive signal for the euro. On the other hand, immediate support is offered by the 20-day SMA at 1.0530, followed by the 1.0470 zone and the 1.0400 psychological level.
by Alex_Boltyan_FXAnalyst
EUR/USD Posts Weekly Gain, Short-Term Perspective ImprovesThe EUR/USD pair has managed to post a weekly gain even after Friday’s pullback amid broad dollar weakness despite the persistent risk-off mood in financial markets. The EUR/USD hit a two-week high of 1.0607 on Thursday, but failed to consolidate above the 1.0600 level and is on track to close around 1.0550, down 0.23% on the day but recording a 1.4% gain for the week. The main driver this week has been a downward correction of the U.S. currency following nearly six weeks of uninterrupted gains. The dollar’s pullback took place despite the risk aversion dominating markets – and reflected by Wall Street indexes plunge – amid continued worries about inflation and how major central banks walk the tightrope trying to avoid stagflation. Following the release of the European Central Bank Accounts on Thursday, it seems clear that the ECB is poised to start policy normalization in July, but the question is whether President Lagarde and Co will take a gradual stance or will follow the Fed’s steps by raising 50 bps. From a technical perspective, the EUR/USD short-term outlook has improved after breaking above the 20-day SMA and with indicators gaining bullish tone on the daily chart. The RSI remains flat below its midline, but the MACD printed another green bar on Friday. However, the bias remains negative according to the weekly chart, although indicators are turning higher after correcting oversold readings. A decisive break above 1.0600 could pave the way for a steeper correction, with 1.0640 as the next resistance, May 5 high, followed by the 1.0750 area. On the other hand, loss of the 1.0470-60 zone could revive the bearish interest and send the EUR/USD to retest the YTD lows at 1.0348, exposing the 1.0300 psychological level.
by Alex_Boltyan_FXAnalyst