USDJPY Analysis Provided by zForex Research Team - 05.24.2024
The USD/JPY pair remains steady above 157.00 during today’s Asian session, maintaining its previous gains despite market risk aversion. The pair benefits from weaker Japanese inflation data, which puts pressure on the Japanese Yen.
Technically, the first resistance level appears at 157.10. If the pair breaks and holds above this level, it could aim for higher levels at 158.00 and then 158.85. Conversely, if the pair falls below 156.10, the key support levels to watch are 155.15 and 153.90.
Gold (XAUUSD) Analysis by zForex Research Team - 05.24.2024
Gold prices made a comeback on Friday, even as the US dollar strengthened. While there might be limited room for significant growth in gold prices, there are still potential gains to be had. One reason is the likelihood that the Federal Reserve won’t cut interest rates in September. Additionally, rising geopolitical tensions in the Middle East could lead to increased safe-haven demand for gold, which would support higher gold prices.
Technically, the $2320/25 region remains a critical support area. A break below this region would likely lead to a test of the immediate support at the 50-day SMA of $2311. If the price continues to drop below this point, the next target could be $2277/80. On the upside, a correction could extend to the $2353 level, with further resistance at $2369.
US Stock Market Analysis by zForex Research Team - 05.24.2024
US stock futures showed gains on Friday, with S&P 500 and Nasdaq contracts rising by 0.3%, while the Dow Jones climbed 40 points. This uptick aimed to recover losses from the previous two sessions amidst concerns among traders that the Federal Reserve might maintain higher interest rates for an extended period. These concerns arose following hawkish FOMC minutes and robust business activity reflected in the flash S&P Global PMIs, which also indicated rising price pressures.
Notably, Nvidia’s momentum persisted, with its shares gaining about 1% in premarket trading after a 9% surge on Thursday. Other technology stocks such as Micron Technology (1.1%), Microchip Technology (1.8%), and Advanced Micro Devices (0.8%) also saw gains. Among the mega caps, Microsoft (0.2%), Apple (0.6%), Amazon (0.4%), Meta (0.6%), and Alphabet (0.4%) were all in positive territory. Meanwhile, in economic news, new orders for manufactured durable goods in the US unexpectedly rose by 0.7% month-over-month in April 2024, marking the third consecutive monthly increase.
This growth was mainly driven by robust demand for transport equipment, computers, electronic products, fabricated metal products, machinery, and electrical equipment. Additionally, orders for non-defense capital goods excluding aircraft, a key indicator of business spending plans, rebounded by 0.3% in April following a slight decline in March.
Although the Nasdaq faced significant selling pressure yesterday, it rebounded from the major support level around the 18650-18630 range. If there’s further downward movement in the index, this level will continue to serve as a prominent support. In the event of a break below this level, the subsequent levels to watch would be 18430 and 18100, respectively.
However, if the buying momentum persists and the upward movement continues, the initial resistance to monitor would be at 18785. Sustaining above this level would lead to monitoring resistance levels at 18900 and 19000, respectively.
EUR/USD Analysis by zForex Research Team - 05.28.2024
The EUR/USD currency pair has gained momentum after breaking the short-term intraday downtrend, reaching the daily downtrend resistance. To sustain this upward movement, the pair needs to surpass the 1.0880-1.0900 range. If it successfully breaks and maintains above this range, the next resistance levels to watch are 1.0950-1.0960 and 1.1000. However, if the pair encounters selling pressure, the first support level is at 1.0860. Below this, the 1.0830-1.0835 range is crucial, and a break below it could push the price down to test the 1.0800-1.0810 range.
USD/JPY Analysis by zForex Research Team - 05.28.2024
The USD/JPY pair, maintaining its muted momentum, saw an upward move of approximately 20 pips after core inflation fell below expectations. If this upward trend continues and the pair breaks above 157.00, it would indicate the short-term downtrend has been broken. The next levels to monitor would be 157.50 and 158.00. Conversely, if the pair moves downward, the first support zone to watch is the 156.50-156.40 range. A breach below this range would highlight 156.00 and 155.00 as subsequent support levels.
GBP/USD Analysis by zForex Research Team - 05.28.2024
In the past two days, the GBP/USD currency pair has gained momentum and approached the resistance level on the daily chart. The 1.2780-1.2800 range stands out as the key resistance zone. If this zone is breached and sustained above, the next resistance levels to monitor are 1.2850-1.2860 and then 1.2900. However, if profit-taking occurs, the first support level to watch is 1.2740. Should this level be breached, the subsequent support levels are 1.2700 and 1.2670.
USD/Yen Analysis by zForex Research Team - 05.30.2024
On Thursday, the dollar index maintained levels above 105 after registering a 0.5% increase in the prior session. This increase was driven by rising Treasury yields due to weak demand at a bond auction and expectations of prolonged high US interest rates. Recent comments from a Federal Reserve official hinted at the possibility of further rate hikes in response to potential inflationary pressures. Additionally, May’s unexpected improvement in US consumer confidence added to the sentiment. The market focus now shifts to revised US GDP figures scheduled for Thursday and the US PCE price index report set for release on Friday. Forecasts now suggest December as the potential start of the easing cycle, marking a significant shift from earlier projections of a September rate cut. Following that, the dollar reached its highest levels in two weeks against a basket of major currencies.
Gold approached the $2,330 per ounce mark, marking a further decline. Fed Atlanta President Bostic’s remarks on Wednesday, highlighting uncertainties regarding achieving 2% inflation and the significance of price increases, added to the sentiment. Minneapolis Fed President Kashkari’s statement on delaying rate cuts until inflation improves and not ruling out rate hikes if inflation stays high further impacted market sentiment. The initial jobless claims data for the week ending May 25 will also provide insights into the central bank’s policy outlook.
On Thursday, Asia-Pacific markets continued their decline, mirroring the performance of Wall Street, as investors braced for a barrage of economic indicators scheduled for release from the region on Friday. Japan’s Nikkei 225 experienced a decline of approximately 1.6%, while the Topix index fell by 0.8%. Similarly, South Korea’s Kospi dropped by 0.72%, with the smaller cap Kosdaq slipping by 0.3%. Industrial production figures from Japan and South Korea are slated for release on Friday, along with China’s official purchasing managers index for May. Additionally, inflation data for Tokyo will also be disclosed.
The Japanese yen strengthened beyond 157 per dollar, rebounding from four-week lows as a sell-off in risky assets led investors to seek it as a safe haven. Rising domestic yields also provided support to the yen, with Japan’s 10-year benchmark yield hitting 1.1% this week, marking its highest level since July 2011. Earlier comments from BoJ member Seiji Adachi hinted that the central bank might consider raising interest rates if significant declines in the yen lead to increased inflation. Market participants are now focused on Tokyo’s inflation data on Friday, considered a leading indicator of nationwide price trends. However, the yen continued to face pressure from a robust dollar and Treasury yields with growing expectations of prolonged higher US interest rates.
EUR/USD Analysis by zForex Research Team - 05.30.2024
Yesterday, the expectation that interest rates would remain elevated for some time yields led to a strong close on 10-year government bonds, which devaluated the EUR/USD currency pair. With the expected breach of 1.0835, the pair saw the 1.0800 level. The initial support expected for today stands at the 200-day moving average level of 1.0780. If this level is breached with momentum from news flow, the focus may shift to the 1.0750-1.0760 range, followed by the 1.0710 level. However, in an upward reversal, the 1.0815 level will pose as resistance. If this level is broken with momentum, the subsequent levels to watch are the 1.0830-1.0835 range and the 1.0860 level.
