Michael_Stark_Exness

Michael_Stark_Exness

Euro-dollar held close to monthly lows in the middle of June as traders continued to expect more cuts from the ECB than the Fed this year and it remained clear that overall economic performance in the eurozone is worse than the USA. However, it’s unlikely that either the EU or the USA will face a recession this year or a significant divergence in policy will open...

Michael_Stark_Exness

Gold is currently trading around where it started the monthly amid similar levels of volatility to May but less clear direction. Traders generally haven’t paid much attention to the war in the middle east or tension around Taiwan in recent weeks, with the focus remaining on American rates and when they’re going to start coming down. On the whole, economic data...

Michael_Stark_Exness

The greenback hasn’t appreciated significantly against the loonie in June so far despite generally gaining elsewhere and fairly mixed economic data from Canada. The main reason for that appears to be oil’s recovery, with American light oil now above $80. Retail sales in Canada have declined in recent months while producer prices have increased, so the Bank of...

Michael_Stark_Exness

The euro is down around 1.6% against the pound in 2024 so far with most of that decline within the last month. June’s PMIs were mostly disappointing, raising the probability of another cut by the European Central Bank (‘the ECB’) later this year. The ECB was among the first major central banks to call for a cut at its meeting earlier this month. The bounce since...

Michael_Stark_Exness

Since the Federal Reserve (‘the Fed’) still seems likely to lag other major central banks in cutting rates, the dollar has mostly strengthened in the last few days. Overall economic conditions in the USA are also significantly better than in the UK; so far, there’s no clear slowdown in either American GDP or the job market. The 200 SMA around $1.262 might be an...

Michael_Stark_Exness

AUDUSD hasn’t shown any obvious direction since gains in the first half of May although the price is somewhat lower than where it started the year as the expected pivot by the Fed has been pushed progressively further and further back. Australian monthly inflation at 3.6% in April is only slightly higher than the figure for the USA, but the Reserve Bank of...

Michael_Stark_Exness

GBPJPY reached a fresh 16-year high on 17 June above ¥201. Among the factors affecting the yen negatively are the ongoing strong divergence in monetary policy with most major, advanced economies, generally weak demand and inflation in Japan and a high ratio of debt to GDP. However, the rhetoric from the Bank of Japan (‘the BoJ’) shifted at its last meeting, with...

Michael_Stark_Exness

The divergence in monetary policy between the USA and Japan is still likely to remain for at least many months and possibly years. This week’s meeting of the Bank of Japan (‘the BoJ’) probably won’t result in any shift in rates, but attention is on whether the BoJ might reduce its purchases of bonds. For now, there’s no discussion of any further intervention to...

Michael_Stark_Exness

Despite generally less inspiring data from the UK recently, the pound has continued its gains against the dollar although with lower momentum. The dominant news for the pound currently is the upcoming general election to be held on 4 July; currently the opposition Labour party is likely to win a landslide according to polling. Traders generally expect the Bank of...

Michael_Stark_Exness

The situation for oil is quite different from gold in most respects, the main one being the overall downtrend. This accelerated earlier this week as OPEC+ announced that some voluntary cuts would end in October while other compulsory ones would continue into next year: the net result is more daily barrels coming to markets from around the middle of...

Michael_Stark_Exness

After a couple of tests of $2,320, gold’s upward momentum has resumed to some degree. The strong resistance of the latest high around $2,450 is quite far away, so there’s some potential for more gains depending on the actual data for the NFP. A clear break above $2,450 might be challenging but could be achieved if upcoming releases are negative for the dollar....

Michael_Stark_Exness

The euro has bounced more aggressively than gold against the dollar since the middle of last month as economic conditions and, possibly, rates in the EU and USA show more signs of converging. Eurozone-wide annual headline inflation has been 2.4% for two months running and seems likely to remain below 3% for the rest of the year barring significant surprising...

Michael_Stark_Exness

Gold’s recent bounce seems to be mainly a reaction to weaker than expected American data recently, primarily GDP and the NFP, but the reaction to inflation in line with the consensus was also positive. Major indices in the USA reached fresh record highs this week, so expectations of recession aren’t currently on traders’ radar. 12 April’s intraday high around...

Michael_Stark_Exness

Rising stocks of crude in the USA over recent weeks have put a hold to the commodity's long rally for now. However, recent rumours that the government's Strategic Petroleum Reserve might start to be refilled with prices of American light oil (Exness' symbol 'USOIL') below $79 seem to be a key reason for reluctance to push much below $80 a barrel as yet. The...

Michael_Stark_Exness

The Fed's meeting this week gave some support to gold, with Jerome Powell saying that another hike this year is unlikely, although that hadn't been a serious expectation anyway. It remains very likely that the Fed won't now start cutting rates this summer and also quite possible that there won't be three cuts in 2024 and that the expected start of the cuts, now in...

Michael_Stark_Exness

The UK is in a technical recession but sentiment overall on the British economy is cautiously optimistic. Inflation has now dropped lower than in the USA though and most participants expect the Bank of England to start cutting from August. Even if that’s correct, the divergence in policy and carry trading for pound-yen is likely to remain for several more years at...

Michael_Stark_Exness

The dollar has generally strengthened against most major currencies since the beginning of March as expectations for the start of the Fed’s pivot have steadily moved back. There’s also the American economy’s overall good performance. GDP remains high and the chance of recession low while inflation and new jobs have consistently beaten the consensus for many...

Michael_Stark_Exness

Gold’s extremely strong gains paused this week after the higher print from inflation in the USA, but there’s currently no indication of a reversal of the trend. A significant retracement is also questionable. The main technical reference in the short term is the 20-day simple moving average which seems to be an important dynamic support. The main resistance is now...