May 14, 2024
CURRENCIES
Gold Price Technical Analysis:
- Recent Performance:
- Gold (XAU/USD) dropped on Monday after failing to break trendline resistance at $2,375 on Friday.
- Prices slipped back below $2,350 at the start of the new week.
- Potential Downside:
- Support zone near May’s low and the 50-day simple moving average around $2,280.
- If this support fails, attention shifts to $2,260.
- Potential Upside:
- If bulls regain control, the first technical hurdle is $2,350.
- Next resistance at the dynamic trendline, currently crossing $2,365.
- Further upward movement could lead to a rally towards $2,420 and possibly $2,430.
EUR/USD Forecast:
- Recent Performance:
- EUR/USD advanced on Monday, clearing its 50-day and 200-day simple moving averages near 1.0785.
- Potential Upside:
- Sustaining the bullish breakout, overhead resistance stretches from 1.0805 to 1.0810.
- A move beyond this barrier could lead to 1.0865, the 50% Fibonacci retracement of the 2023 selloff.
- Potential Downside:
- If sellers drive the pair below the moving averages, sentiment could sour.
- This may lead to a pullback towards 1.0725 and 1.0695.
- Further losses could trigger a descent towards 1.0650, May’s trough.
USD/JPY Forecast:
- Recent Performance:
- USD/JPY continued its upward trajectory on Monday, consolidating above 156.00.
- Potential Upside:
- If momentum continues, resistance at 158.00 and then 160.00.
- Exercise caution due to potential FX intervention by Japanese authorities, which could cause a rapid decline.
- Potential Downside:
- Initial support at 154.65 during a pullback.
- A breakdown could lead to a decline towards 153.15.
- Persistent weakness may shift focus to trendline support and the 50-day simple moving average near 152.50.
STOCK MARKET
European and US Markets:
- European stocks and US equity futures remained within small ranges as investors awaited upcoming US inflation reports.
- Japanese bond yields climbed to decade highs.
Key Market Movements:
Europe:
- Stoxx Europe 600 index remained near a record high.
- Anglo American Plc: Edged higher following major company shake-up to counter BHP Group takeover approach.
- Delivery Hero SE: Soared up to 20% after selling its Taiwan business.
- Alcon Inc.: Jumped after an earnings beat.
- Rheinmetall AG: Dropped after missing earnings expectations.
US:
- S&P 500 and Nasdaq 100 futures showed little change.
- Regional Asian share gauge climbed, with Chinese tech shares among notable gainers.
- Earnings Reports: Tencent Holdings Ltd. and Alibaba Group Holding Ltd. to report later Tuesday.
Currencies and Bonds:
- Bloomberg dollar index remained flat.
- 10-year Treasury yields were little changed ahead of US producer prices report.
- Federal Reserve Chair Jerome Powell scheduled to speak.
- Consumer price index due Wednesday, expected to show moderation but still high.
Expert Insight:
- Oppenheimer & Co. Inc. Chief Strategist John Stoltzfus expects April CPI report to be central to market focus, with near-term volatility presenting investment opportunities.
Japan and Commodities:
Japan:
- 20-year government bond yield hit its highest level since 2013.
- Speculation of Bank of Japan reducing debt-buying to ease yen pressure.
- Japanese yen extended losses against the greenback to a two-week low.
Commodities:
- Oil: Held gains ahead of OPEC’s market outlook release.
- Iron Ore: Slumped after major Chinese developer defaulted, indicating ongoing debt crisis in China’s property sector.
- Industrial Metals: Nickel and copper climbed.
- Gold: Steady after a decline of more than 1% on Monday.
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