Daily Market Analysis By zForex

Gold Analysis by zForex Research Team - 05.30.2024

With the strengthening of the dollar, the yellow metal retested the major support level around the 2320-2325 range. If this range is breached, the first level to monitor would be the 2308-2300 range. If this level is also broken, the 2280 major support level may come into play. However, in the event of positive news flow from the United States, prompting an upward movement in prices, the first major resistance above 2355 would be the 2370-2375 range. The third level to watch above this range would be 2395.

Daily Analysis by zForex Research Team - 06.04.2024

On Tuesday, the dollar index remained steady at around 104, marking its lowest level in almost two months. This drop was fueled by indications of economic weakness in the US, bolstering expectations for Federal Reserve interest rate cuts. Despite forecasts for a slight improvement, data released on Monday revealed a further contraction in US manufacturing activity in May. Consequently, market sentiment shifted, with the probability of a Fed rate cut in September rising to approximately 52%, compared to about 42% on Friday. Investors are now eagerly awaiting key economic reports scheduled for later this week, including the ISM Services PMI, JOLTS Job Openings, and the highly anticipated monthly jobs report, for additional guidance. Additionally, markets are anticipating the European Central Bank’s policy decision on Thursday, with expectations leaning toward rate reductions. While the dollar remained at multi-month lows against most major currencies, it only experienced modest declines against the Australian dollar and Japanese yen, trading at two-week lows.

Gold prices remained steady at around $2,348 per ounce, following gains in the previous session, supported by increasing expectations of relaxed monetary policies from major central banks. Monday’s data revealed a second consecutive slowdown in US manufacturing activity in May, alongside an unexpected decline in construction spending for April, primarily driven by drops in non-residential activity. These developments fueled speculation that the Federal Reserve has the flexibility to implement rate cuts later this year. Currently, traders are estimating a 52% likelihood of a rate cut in September, according to the CME FedWatch tool. Simultaneously, the European Central Bank is anticipated to lower interest rates this week, with similar expectations for easing policies from the Bank of Canada and the People’s Bank of China. Investors are now awaiting Wednesday’s ADP employment report and Friday’s non-farm payrolls data to gauge the health of the US economy and its potential impact on the Fed’s policy trajectory.

On Tuesday, WTI crude futures dropped below $74 per barrel, marking their fifth consecutive decline to the lowest level in four months amidst concerns about a potential increase in global supply later in the year. OPEC+ reached an agreement on Sunday to extend most of their supply cuts into 2025 but introduced the possibility of gradual unwinding of voluntary cuts from eight member countries starting in October. It is anticipated that over 500,000 barrels per day will re-enter the market by December, with a total of 1.8 million barrels per day returning by June 2025. Additionally, signs of economic weakness in the United States, the world’s largest oil consumer, added pressure to oil prices after US manufacturing activity continued to contract in May. Furthermore, recent fears that the US Federal Reserve may refrain from cutting interest rates this year have further weighed on oil markets, potentially slowing economic growth and reducing oil demand.

EUR/USD Analysis by zForex Research Team - 06.04.2024

After yesterday’s rally, the pair started the day above the 1.0900 level. The initial resistance stands at 1.0940, and a breakthrough above this level may lead to further resistance levels at 1.0960 and 1.1000. However, in case of a downward movement, support levels are seen at 1.0880, 1.0840, and 1.0810 respectively.

Gold Analysis by zForex Research Team - 06.04.2024

After ending yesterday’s session with an increase, gold’s first resistance level is at 2358. Above this level, resistance is observed in the range between 2365 and 2375, with 2395 being the subsequent resistance level. On the downside, the initial support is at 2334, followed by additional support levels at 2321 and 2307.

Market Outlook by zForex Research Team - 06.06.2024

The Bank of Japan highlighted potential upward pressures on inflation and signaled its readiness to adjust monetary policy while anticipating continued accommodative financial conditions, as outlined in a summary of its April policy meeting. The central bank emphasized the need to monitor various inflationary factors, including faster progress in the wage-price spiral, further depreciation of the yen, active fiscal policy, constraints in supply capacity primarily due to labor shortages, and increases in commodity prices. Additionally, the BOJ acknowledged that achieving the outlook for economic activity and price increases might necessitate interest rate hikes. It identified key indicators for potential policy adjustments, such as positive corporate behavior throughout the summer and an improving consumption trend. In another context, a Ministry of Finance representative expressed concerns about sluggish consumption momentum and urged the BOJ to collaborate closely with the government to attain sustainable 2% inflation.

On Thursday, the dollar index approached 104, nearing its lowest point in two months, as indications of weakness in the US labor market revived expectations for two Federal Reserve interest rate cuts this year, with the initial cut anticipated in September. The ADP report revealed that private sector job additions fell short of expectations, further suggesting a softening labor market. However, ISM data indicated that US services sector activity expanded the most in nine months in May, surpassing market projections. Investors are eagerly awaiting Friday’s monthly jobs report for deeper insights into the economy and potential monetary policy directions. Additionally, markets prepared for an anticipated rate reduction from the European Central Bank, marking its first such action since 2019. The dollar experienced broad weakening, notably against the Australian dollar and Japanese yen, with significant selling activity observed.

On Thursday, gold surged above $2,370 per ounce, extending its upward momentum from the previous session, buoyed by recent US economic data bolstering expectations of potential Fed rate cuts this year. ADP data revealed that US private payrolls increased less than forecasted in May, with downward revisions to the previous month’s figures, indicating a softening yet resilient labor market. With speculation mounting for two rate cuts by the Fed in 2024, investors are currently pricing in a 70% likelihood of a cut in September, according to the CME FedWatch Tool. Traders are eagerly awaiting Friday’s non-farm payrolls data to gauge the health of the US economy and glean insights into the Fed’s possible rate-cut timeline. Meanwhile, the Bank of Canada made its first policy rate reduction in four years on Wednesday, while the European Central Bank is anticipated to follow suit later today.

EUR/USD Analysis by zForex Research Team - 06.06.2024

Despite closing lower yesterday, the EUR/USD pair is currently showing a positive bias ahead of the interest rate decision today. The initial resistance stands at 1.0900, with 1.0940 and 1.0960 as subsequent levels to monitor above this point. On the downside, support levels to watch are 1.0865, 1.0835, and 1.0815, respectively.

Gold Analysis by zForex Research Team - 06.06.2024

Gold, which concluded yesterday with an upward rally, has resistance levels at 2375, 2395, and 2405, respectively. The initial support is at 2355, followed by 2340 and 2330 as subsequent support levels to monitor.

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Dollar Analysis by zForex Research Team - 06.11.2024

On Tuesday, the dollar index maintained its position above 105, having reached a four-week peak in the previous session. Investors were gearing up for significant events such as the Federal Reserve’s interest rate decision and the release of the CPI report later this week. Following strong US job data last Friday, where the economy added 272,000 jobs in May, the index surged by 0.8%. With the revised April figures at 165,000 and an expected 185,000 jobs, this significant increase led to a revision in market expectations, now projecting only one rate reduction from the Fed this year, likely in November. On Monday, the dollar reached a one-month high against the euro due to the rise of far-right parties in the European Parliament elections, adding to political uncertainty in the region. It also hit a one-week high against the yen ahead of the Bank of Japan’s policy meeting this week. While the BoJ plans to maintain current rates, they will discuss reducing monthly bond purchases.

Gold prices dipped close to $2,300 per ounce, lingering near one-month lows. Market participants are observing for signals regarding the timing of potential rate adjustments by the Fed, particularly following the strong payroll report released last Friday. Expectations for a Fed easing this year have been tempered, with investors now estimating a 50% likelihood of a rate cut in September. Additionally, China’s central bank, a significant purchaser of gold in the official sector, paused its buying streak in May after 18 months of acquisitions. In Europe, political uncertainty escalated as the far-right secured gains in the European Parliament elections, prompting French President Macron to announce a surprise snap legislative ballot.

On Tuesday, WTI crude futures hovered around $78 per barrel, maintaining their position after surging nearly 3% in the previous session. There’s speculation that the US government may speed up the replenishment of the Strategic Petroleum Reserve by purchasing oil at approximately $79 per barrel. The US jobs data released last Friday raised concerns that the Fed might prolong higher interest rates, potentially impacting the market adversely. Market attention is now focused on the US crude inventory data from the API scheduled for Tuesday and the EIA report due on Wednesday, which could offer further insights into the oil market’s fundamentals. Monthly market reports from the EIA, OPEC, and IEA will also be released this week, adding to the market’s caution and influencing trading sentiment.

Euro Analysis by zForex Research Team - 06.11.2024

The EUR/USD pair is attempting to recover after a significant decline earlier this week. The key challenge to overcome is the initial resistance level of 1.0780. If breached and held, further resistance lies at 1.0800 and 1.0850. Conversely, if the pair dips further, the first support level to watch sits at 1.0750. Should that break, attention will shift to 1.0700 and 1.0660 as the next potential support zones.

Gold Stabilizes After $100 Drop

Following a nearly $100 decrease, gold traded calmly on Monday. The initial resistance level gold may face is at 2320. Above this level, 2330 and 2355 are subsequent important levels to watch. Conversely, on the downside, the first level likely to support the price is 2280. If this level is breached and selling pressure intensifies, 2265 and 2245 will become notable support levels to monitor, respectively.

Dollar Strength, Gold Trends, and Oil Outlook Drive Investor Sentiment

The dollar index stabilized above 105.2 on Wednesday after a three-session uptrend. Over the past few days, the index has climbed by over 1%, supported by strong US employment figures that led traders to reassess expectations for Fed rate cuts. Fed’s updated economic forecasts are on the way, which will signal fewer rate cuts than previously thought. Markets are currently pricing in only one rate decrease from the Fed this year, with a September adjustment seeming less likely. Japan saw producer prices rise more than predicted in May, sparking concerns about potential consumer inflation upticks. In China, May’s consumer price increase fell short of expectations, while producer prices remained in deflationary territory.

Gold prices inched towards $2,310 an ounce, lingering near one-month lows. All eyes are on the central bank’s updated economic forecasts, which are expected to signal fewer rate cuts than previously expected. Following solid payroll data last Friday, only one rate reduction from the Fed seems likely this year. Moreover, China’s central bank, the largest official sector purchaser of gold, halted its buying spree in May after 18 months of acquisitions. In other news, gold miner Polymetal International revealed plans this week to double output by 2029 through acquisitions in Central Asia.

WTI crude futures climbed above $78 per barrel, marking gains in five out of the last six sessions with a strengthening global demand outlook. The US Energy Information Administration (EIA) revised its forecast for global oil demand growth to 1.1 million barrels per day in 2024, up from the previous estimate of 900,000 bpd, driven by increased demand in Asian countries excluding Japan. OPEC remains optimistic about global oil demand growth this year, expecting a strong increase driven by higher travel and tourism later in the year. Additionally, industry data revealed a decline in US crude inventories by 2.428 million barrels last week, surpassing market projections for a 1.75 million barrel decrease. In other news, May’s consumer price increase in China fell short of expectations, while producer deflation persisted. The focus is now on the upcoming US inflation report and the latest Federal Reserve interest rate decision.

EUR/USD Outlook Before the FOMC Meeting

Ahead of the FOMC Meeting and the Fed interest rate decision later in the day, the EURUSD pair began the day slightly positive after enduring three days of selling pressure. The first resistance level stands at 1.0750. If this level is breached with robust momentum and the pair manages to stay above it, the next levels to watch would be 1.0780 and 1.0810, respectively. On the downside, 1.0730 serves as the first support level. Should the pair surpass this level, 1.0700 and 1.0660 would be the subsequent levels to monitor.

Gold’s Resilience After a $100 Decrease

After experiencing a $100 decrease in just one day, gold navigated through the first two trading sessions of the week relatively calmly. The initial resistance level able to withstand price action is at 2320. Beyond this point, attention should be given to the subsequent levels of 2330 and 2355 for potential upward movements. On the downside, the primary support level stands at 2307. Should the price fall below this level, the next levels to observe are 2280 and 2260.

Gold Retreats Despite Dovish Central Banks, Fed Dot Plot Hints at Slower Cuts

On Thursday, the dollar index hovered around 104.8 after a 0.5% dip in the previous session. This drop was influenced by low inflation figures and assurances from the Federal Reserve regarding a potential interest rate cut this year. In May, the annual US inflation rate slowed to 3.3% from April’s 3.4%, contrary to market expectations of stability. The core inflation measure also decreased more than predicted. Despite keeping the Fed funds rate unchanged, the Fed hinted at a single rate reduction this year, possibly in December. However, the dot plot suggested a more aggressive reduction trajectory for 2025. While the dollar faced significant losses against many major currencies, it swiftly rebounded against the yen before the Bank of Japan’s upcoming policy decision.

Gold fell to approximately $2,310 per ounce on Thursday, retracting from a brief rebound in the preceding session. Despite soft inflation data, with headline inflation decreasing and the core gauge falling more than predicted, dot-plot projections from FOMC members suggested an average expectation of only one 25 basis points rate cut this year, with four members forecasting no cuts at all. This hawkish adjustment came alongside policymakers expressing diminished optimism regarding disinflation in the US economy, despite ongoing growth expectations. However, gold found support from dovish actions by major central banks, including rate cuts from the ECB and the BoC, preceding cuts by the BoE and the PBoC.

WTI crude futures declined to around $78 per barrel on Thursday, moving back from two-week peaks following EIA data indicating a 3.73 million barrel surge in US crude inventories last week. This surpassed market forecasts, which had predicted a drawdown of 1.55 million barrels. Additionally, both US gasoline and distillate stocks rose more than expected. Furthermore, the Federal Reserve hinted at just one interest rate reduction this year, potentially in December, despite cooler US inflation figures for May. The prospect of elevated borrowing costs potentially constraining economic growth and energy demand loomed. Developments in Gaza are being eyed with indications of optimism from Hamas in ceasefire negotiations with Israel. Nevertheless, Houthi militants persisted in their assaults on Red Sea shipping, demonstrating solidarity with Palestinians and claiming responsibility for recent attacks involving small watercraft and missiles.

EUR/USD Stumbles After Fed Rally

Following yesterday’s interest rate decision by the Fed and Powell’s press conference, the pair rallied up to 1.10850 but failed to sustain above this level and encountered selling pressure. In the event of further upward movement, the initial resistance will be at 1.0815, with subsequent levels to watch at 1.0850 and 1.0900 upon surpassing this zone. On the downside, the first support lies at 1.0780, followed by 1.0750 and 1.0700, respectively.

Gold Eyes Breakout Above 2320

The first support in gold is at 2308, and a breakthrough below this level would indicate subsequent support levels at 2280 and 2260, respectively. On the upside, if the price moves above 2320, the next levels to watch are 2342 and 2355.

Market Review: Yen Depreciation, Fed’s Rate Strategy, Gold and Oil Gains Highlight Financial Landscape

The Japanese yen depreciated to 158 per dollar, a six-week low, after the BoJ kept rates unchanged in June, following its first rate hike in seven years in March. The BoJ will continue bond purchases at the current rate, deferring any reduction decision to July. BoJ Governor Kazuo Ueda reiterated plans to gradually reduce the balance sheet, but the timing is uncertain. Former BOJ member Takahide Kiuchi suggested the bank will use the flexible bond purchase program as a tool for managing growth and inflation risks.

The dollar index stabilized around 105.2 on Friday, poised for a second weekly advance, driven by concerns that the Fed might keep higher rates for longer. Despite softer US consumer inflation and a decline in producer prices, the Fed left its policy rate unchanged, signaling only one rate cut this year. Weekly initial unemployment claims surged to a ten-month high. The dollar is expected to post its largest gains against the euro due to political uncertainties in Europe, while also advancing against the yen and yuan but weakening against the sterling, Aussie, and Kiwi

Gold stayed above $2,300 per ounce on Friday, on track for its first weekly increase in four weeks. Investors weighed softer US inflation data against the Fed’s interest rate projections. US PPI for May unexpectedly declined due to lower energy costs, following cooler consumer inflation data. The latest FOMC dot-plot projections showed an average expectation of one 25 basis point rate cut this year, with some members projecting no cuts.

WTI crude futures dipped towards $78 per barrel on Friday but were set for a weekly gain of over 3%, supported by a robust global demand outlook. The US EIA raised its 2024 global oil demand growth forecast to 1.1 million barrels per day. OPEC maintained an optimistic outlook for oil demand growth due to expected increases in travel and tourism. Russia committed to its OPEC+ output commitments after surpassing its quota in May. US crude, gasoline, and distillate inventories rose more than expected last week.

EUR/USD Faces Selling Pressure, Retests 1.0730 Level

After encountering selling pressure at 1.0815, the EUR/USD pair retraced to retest the 1.0730 level. The initial support level expected to hold the price is situated at 1.0720. Below this level, the levels to watch are 1.0700 and 1.0660, respectively. On the upside, the first resistance level is found at 1.0750. Above this level, the levels to monitor are 1.0780 and 1.0815, correspondingly.

Gold Faces Resistance at 2320, Key Support at 2296

The first resistance level for gold stands at 2320. Beyond this point, sequential resistance levels would be at 2342 and 2355. On the downside, the first support level is at 2296, coinciding with yesterday’s low. Below this level, attention should be paid to 2280 and 2260.