Market Update by Solidecn.com

[Solid ECN]

Gold

Hawkish comments from a number of Fed members as well as better-than-expected macro data from the United States is providing support for the US dollar today. Fed members speaking today have been reluctant to speak about any immediate rate cuts and instead hinted that rates may rise further if no sufficient progress on inflation is made. On top of that, retail sales and industrial production data for April, which was released today in the evening, turned out to be better-than-expected with retail sales ex-autos and gas jumping 0.6% MoM higher (exp. 0.2% MoM) and industrial production increasing 0.5% MoM (exp. 0.0% MoM). As a result, USD is the best performing G10 currency today. This in turn is putting pressure on precious metals, which are also benefitting from an increase in uncertainty amid lack of agreement on US debt ceiling.




Taking a look at GOLD at D1 interval, we can see that the price of this precious metal is dropping more than 1% today and has broken below the psychological $2,000 per ounce mark. A near-term support zone to watch can be found in the $1,980 area, where the 50-session moving average (green line) and 38.2% retracement of the upward move launched at the turn of February and March 2023 can be found. A break below this hurdle would pave the way for a test of the 50% retracement in the $1,940 area. However, a key support zone to watch can be found around 1% lower in the $1,922 area, where the lower limit of the Overbalance structure can be found.

[Solid ECN]

GBPUSD: Pound ticks lower after concerning UK macro figures

The British pound lost ground early in the European session following the publication of weak macro data from the UK, reducing the chance of a hawkish turn from the Bank of England. The reading for March showed that the unemployment rate in the UK rose to 3.9% against an expected 3.8% and an earlier reading of 3.8%. What's more, the negative overtones of the publication were provided by a big jump in unemployment claims, which came in at 46.7 thousand against an earlier reading of 26.5 thousand (today's reading beat analysts' expectations by more than 49%. Wage growth excluding bonuses is also down and came in at 6.7% y/y vs. the expected 6.8% y/y. At the moment, the money market is pricing in a 30% chance of a halt to the hike cycle at the upcoming BoE meeting in June.



Preliminary data from the UK's tax office showed the first drop in total headcount in more than two years in April, down 136,000 from March.




The GBPUSD pair reacted with declines to today's UK data reading, however, the scale of the sell-off has already been largely negated. The downward impulse stopped at the support defined by the 200-period exponential moving average (golden curve), which is currently the main support on the H4 interval.

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NZDUSD

NZDUSD pair provides clear additional negative trades to approach our first waited target at 0.6200, waiting for more decline to head towards 0.6140 as a next negative station.



Therefore, we will continue to suggest the bearish trend for today unless the price rallied to breach 0.6290 and hold above it.

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EURUSD

Raphael Bostic, head of Atlanta Fed, delivered a speech today. He pointed out that there is still a lot to do on inflation and the economy will have negative impact on price growth (as he expects a slowdown). Bostic sees risk of a recession although it will rather be a short and shallow one.

Bostic stresses that rate cuts this year are not a base case scenario for him and that Fed will not cut rates until well into 2024. However, one should remember that the FOMC dot-plot assumes rate cuts next year. Simultaneously, Fed should maintain an outlook on possible continuation of rate hikes. Overall, Bostic wants to see what impact previous rate hikes will have on the economy.



EURUSD is trading slightly higher on the day after two final days of the previous week were marked with significant strengthening of USD. EURUSD is currently trading below 2 important resistance levels - 1.09 area and 50% retracement of the last major upward impulse.

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EURTRY

• Indices from Asia-Pacific are trading mostly higher today. Nikkei gains 0.7%, S&P/ASX 200 adds 0.1%, Nifty 50 jumps 0.4% and Kospi trades flat. Indices from China trade up to 1.2% higher
• European and US index futures trade slightly above Friday's cash closing prices
• NBC reports that meeting to discuss debt ceiling between US President Biden and congressional leaders was scheduled for Tuesday
• With almost all votes counted, no single candidate managed to score an over-50% result in Turkish presidential elections, meaning that a run-off between incumbent president Erdogan and opposition candidate Kilicdaroglu is likely to take place in 2 weeks (May 28, 2023)
• According to preliminary results, Erdogan's party AKP managed to win parliamentary elections with 35.6% votes and secure 268 seats in 600-seat parliament
• Turkish lira has been rather calm so far today as investors wait for an official confirmation that run-off in presidential elections will be needed
• According to Financial Times, G7 countries and European Union consider banning restarting of the Russian gas pipelines if Moscow has previously halted supplies via them
• According to Reuters, G7 also aims to more strictly target sanctions evasion involving third countries
• Iraqi oil minister said he does not expect OPEC+ to announce more oil output cuts at June meeting
• ECB's De Guindos said that rate hike cycle in EMU is on the final stretch and that's why ECB decide to return to 25 basis point moves
• According to Reuters report, it was advised during BoJ-government meeting that Bank of Japan considers changing its policy approach should CPI and wages keep rising
• Energy commodities trade mixed - oil drops 0.3% while natural gas jumps 0.7%
• Precious metals advance - gold gains 0.2% while silver and platinum trade 0.3% higher
• AUD and NZD are the best performing major currencies while JPY and USD lag the most

Turkish lira is trading a touch higher against USD and EUR today, as a run-off will be needed to decide the next Turkish president. It looks like there are expectations for a tight race with TRY seeing rather muted moves.

[Solid ECN]

NZDUSD

NZDUSD pair provides clear additional negative trades to approach our first waited target at 0.6200, waiting for more decline to head towards 0.6140 as a next negative station.



Therefore, we will continue to suggest the bearish trend for today unless the price rallied to breach 0.6290 and hold above it.

[Solid ECN]

Silver

Silver price didn’t show any strong move since morning, thus, no change to the expected bullish trend scenario on the intraday basis, which targets 26.07 followed by 26.90 levels as next main stations, supported by the EMA50 that continues to carry the price from below, reminding you that the continuation of the bullish wave depends on the price stability above 25.50 and 25.30 levels.



The expected trading range for today is between 25.30 support and 26.10 resistance.

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GBPJPY repeats the positive closes

The GBPJPY pair repeated providing positive closes above the extra support at 169.25 level, confirming its readiness to resume the bullish attack, to notice its fluctuation near 170.70.



note that stochastic begins providing positive momentum by its rally above 50 level will ease the mission of reaching the initial extra target at 172.13, then wait for attacking the extra barrier at 172.50 level, which represents the key for detecting the expected trend in the upcoming period. The expected trading range for today is between 169.70 and 171.40.

[Solid ECN]

Gold

Gold price continues its bullish trend trajectory on Tuesday. The price of gold is currently trading around $2,030 per ounce, which is a +0.41% daily change. The upward trend channel has provided continuous positive support to gold prices - marked with dark blue parallel lines.

The stochastic indicator is beginning to gather positive momentum, indicating a potential upward movement in the price of gold. The resistance level near the range of $2,060-2,070, marked with a green line, has been tested multiple times, suggesting a strong price action and weakening resistance.



Based on these factors, it is probable that the Gold price continues to rise in the upcoming days. The first positive target is expected to be around $2,049. A break of this level could push the price above $2,068 as the next target. However, a break below the support level of $2,000 would be considered as a negative factor and could initiate a bearish correction wave. In such a scenario, the next support line is in the range of $1,960-1,970. The overall structure is bullish for gold.

Traders and investors should monitor the price action around these key levels and wait for confirmation of a breakout or reversal before making trading decisions. Technical indicators and additional market analysis could provide further insights into the potential direction of gold prices.

[Solid ECN]

GBPUSD presses on the channel’s support line

GBPUSD pair ended yesterday negatively, to test the intraday bullish channel’s support line, noticing that the price begins today with slight decline to move below this support, while stochastic reaches the oversold areas now, to form positive motive that we are waiting to assist to push the price to resume the main bullish wave and head to achieve gains that reach 1.2850.



Therefore, the overall bullish trend will remain valid for the upcoming period, supported by the EMA50, and the price needs to breach 1.2625 to confirm resuming the bullish track, noting that failing to achieve the required breach will push the price to achieve additional decline that its next target reaches 1.2550.