Market Analysis

XAUUSD

Prediction: Increase

Fundamental Analysis:

On Thursday, the U.S. Department of Labor reported that initial unemployment claims rose by 8,000, reaching a seasonally adjusted total of 229,000 for the week ending June 1, surpassing the forecasted 220,000. Earlier in the week, data revealed a larger-than-expected drop in U.S. job openings for April, bringing the number of available jobs per job seeker to its lowest point since June 2021. The upcoming U.S. employment data, expected on Friday, could further impact gold prices.

Technical Analysis:

XAU/USD prices, after consolidating within the $2,320-$2,360 range, have resumed their upward trajectory. Buyers breaking above this range's upper limit have paved the way for additional gains. With the 14-day RSI remaining bullish, momentum continues to favor buyers. Should the price maintain its ascent, the next resistance levels to watch are $2,400, followed by the yearly high of $2,450. Conversely, if the price drops below $2,350, the 50-day SMA at $2,337 will act as support, with the next bearish target being the May 8 low of $2,303.

EURUSD

Prediction: Increase

Fundamental Analysis:

On Thursday, the European Central Bank (ECB) reduced interest rates by 0.25%, setting the three primary rates at 4.25%, 3.75%, and 4.50%. This marks the ECB's first rate cut since 2019, making it the second G7 central bank to do so. The ECB is projected to reduce rates twice more this year, likely in September and December, a notable shift from early-year predictions of over five rate cuts.

Technical Analysis:

Should buyers maintain control, the EUR/USD might initially test June's high of $1.0916, followed by March's high of $1.0981, and then the weekly high of $1.0998, eventually reaching the key level of $1.1000. Conversely, if sellers prevail, the pair could target the weekly low of $1.0788, supported by the 200-day SMA. The 14-RSI is around 56 on the 4-hour charts. The pair is currently in a medium-term consolidation pattern, but a pullback to around 1.0800 could attract buyers due to the 50-day EMA crossing over the long-term MA.

USDJPY

Prediction: Decrease

Fundamental Analysis:

On Thursday, the Japanese Yen (JPY) gave up its earlier gains, while the US Dollar (USD) rebounded due to rising US Treasury yields. However, speculation that the US Federal Reserve might cut interest rates in September could cap the potential rise of the USD and the USD/JPY pair. In the short term, the pair's movement will be influenced by Japan's household spending data and the U.S. employment report. If household spending in Japan sees a significant uptick and U.S. wage growth falls short of expectations, it could negatively impact the demand for buying USD/JPY.

Technical Analysis:

The 14-day Relative Strength Index (RSI) is slightly below 50, indicating a potential further decline that could confirm a bearish trend. Immediate support for the USD/JPY pair is at the $156.00 level, with additional support at the 50-day Exponential Moving Average (EMA) at $154.69. If the pair breaks above $157.00, it could advance to retest $160.32.

US Oil

Prediction: Increase

Fundamental Analysis:

US crude oil prices are poised for a rebound following a recent decline of nearly 10% across five trading sessions. The drop occurred after the OPEC+ meeting failed to implement measures to stabilize prices around $80.00, disappointing the markets. Additionally, cautious signals from central banks about potential interest rate cuts due to slowing inflation further dampened sentiment.

Technical Analysis:

Looking ahead, there is optimism that oil prices could see an uptick, fueled by expectations that the US Federal Reserve might initiate interest rate cuts by September. From a technical standpoint, oil needs to reclaim the $75.27 mark as a pivotal level before aiming for the key resistance zones at the 100-day and 200-day Simple Moving Averages (SMA) around $79.09 and $79.42, respectively. Conversely, a drop below $70.00 could potentially lead to further declines towards the $68.00 level.

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