Market Analysis
XAUUSD
Prediction: Increase
Fundamental Analysis:
The XAU/USD pair has rebounded above $2360 due to the weakening of the US dollar and a shift towards negative market sentiment. Earlier in the day, gold prices had declined due to concerns over decreased demand from China and a reduced probability of the Federal Reserve cutting interest rates. Additionally, investors were taking profits after recent gains, and the market is anticipating key US inflation data due later this week. Despite these factors, gold prices may continue to find support through buying on dips and central banks' diversification strategies.
Technical Analysis:
The initial target for the rising gold prices is set at $2,427. Should the upward trend continue, prices may reach the all-time high of $2,450. A break above this level could propel the price to the significant psychological mark of $2,500. On the downside, the first support level is the low of $2,325 recorded on May 24, followed by the round number support at $2,300.
The 14-hour RSI indicates that while buyers still dominate the market, their momentum is waning as the RSI flattens. If gold prices fail to remain above $2350, there will likely be increased downward pressure, targeting the key support levels. The psychological support level for gold is at $2350.
EURUSD
Prediction: Decrease
Fundamental Analysis:
The European Central Bank’s (ECB) recent Consumer Expectations Survey revealed that consumers expect inflation to be 2.9% over the next year, down slightly from 3.0% in March. This marks the lowest expectation since September 2021, though inflation is still anticipated to exceed the ECB's 2% target over the next three years. This news did not impact the Euro significantly, as the market had already priced in a rate cut expected in June. Additionally, Germany's April Wholesale Price Index rose by 0.4% from the previous month, surpassing the forecasted 0.1% increase.
Technical Analysis:
EUR/USD is trading within a well-known range, with a hidden bullish signal suggesting potential upward movement if buyers can support the price at the 200-hour EMA of $1.0844. However, the 200-day EMA at $1.0804 is exerting downward pressure, keeping the daily candles in a neutral zone. The daily MACD is also providing unclear signals regarding the direction. The 14-hour RSI is below 50 and trending downward, while the momentum indicator is below 100. These technical factors indicate that the market is likely to see EUR/USD continue its downward trend.
USDJPY
Forecast: Anticipated Increase
Fundamental Analysis:
On Tuesday, USD/JPY climbed to approximately $157.40 as the Japanese Yen (JPY) experienced a broad weakening, lifting Yen pairs. Key events for Yen traders this week include the Japanese Tokyo Consumer Price Index (CPI) inflation data. For USD investors, US growth and inflation figures will be crucial, particularly with the market's focus on potential rate cuts by the Federal Reserve (Fed).
Technical Analysis:
With USD/JPY surpassing the $157.00 mark, further gains are anticipated. The first resistance level to watch is the April 26 high at $158.44, followed by this year’s peak at $160.32. Should the price fall below $157.00, a pullback to $156.05 is likely, with additional support at $155.72. The 14-hour RSI is nearing 70, indicating that the market still possesses sufficient strength for USD/JPY to maintain its short-term upward trend.
US Oil
Prediction: Decrease
Fundamental Analysis:
OPEC+ is scheduled to meet on June 2 to discuss oil production levels for the second half of the year. It is anticipated that they will continue their production cuts. Currently, these cuts amount to 3.66 million barrels per day, which is nearly 6% of the global oil demand. Given the market's expectation of OPEC+ extending these cuts, the risk for oil prices tends to be on the upside. Therefore, oil futures are expected to continue rising due to the anticipated extension of production cuts.
Technical Analysis:
WTI US Crude Oil has surged over 5% from its recent low, reaching $76.00 per barrel. It has broken past $80.00, with gains of more than $1.50 per barrel on Tuesday. WTI is now testing last week's highs, and a near-term consolidation pattern is emerging on the charts. US Crude Oil is poised to close higher for the third consecutive trading day but remains below its 2024 peak of approximately $87.00.
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