Economic Calendar in the spotlight
Ceasefire in the Middle East between Israel and Palestinians, while there is positive news from Iran deal talks in Vienna and stable movements back to the Crypto market, created a Risk-on mood. Later today, we will have Markit's PMIs data from most developed economies and speeches from central bankers.
As I mentioned in yesterday's analysis, the market needs time for adjustment and realize what exactly to do, based on economic data, rising inflation, and bankers' comment. While the FOMC published minutes consisted of a subtle hint of tightening monetary policies, investors now listen to dovish comments by Fed members, who say the economy has a long way to go.
USD Index: After yesterday's decline, the USD index recovered slightly in the earlier Asian season; however again backed on track to lose 0.10% and breach under 89.70. On the bond markets, U.S. ten-year bond yield, on the other hand, also recovered to 1.63% after yesterday's fall.
Euro: The euro recovered from the previous day's decline and returned above the 1.22 level at 1.2235, but USD recovery caused a return from that level, and pairing seems to have a correction.
GBP: We can see the same scenario for the Pound as well. Cable rose mo to the critical level of 1.4200 against the dollar, which is still about 20 points below the February 24 high. British earlier positive Retail Sales were also not optimistic for Sterling, even though it rose twice more than 4.5% estimates by 9.2% in April and 42.4% year over year.
Commodity currencies: Yesterday, the New Zealand dollar and Australian dollar both stabilized and rebounded against the U.S. dollar and recorded gains of more than 0.6% and 0.7%, respectively, to close at 0.7203 and 0.7772. Loonie also gained 1.2% yesterday by closing under 1.2060. But today, after the USD rebound, they are trading lower and losing momentum. Correction in commodity currencies is what we are expecting from them against the U.S. dollar.
Gold: Gold was supported by the U.S. dollar's weakening again. The precious metal price closed up 0.7% to 1876.89 US dollars per ounce, but today could not keep the gains as the USD gaining back the strength. XAUUSD could not pass the 1880 level so far in today's trading hours, and in case if it can breach the critical support at $1871, deeper numbers will be in the spotlight. However, recovering back above 1880 will put the $1900 again as the next target.
Oil: In the oil market, as news pointed out that the West had agreed to lift sanctions on Iran, US crude oil recorded a three-day drop below a two-week low at US$61.51 per barrel.
Technically, WTI is trying to stabilize and regain a part of its loss. RSI returned above 40-level and can not support the downtrend as much as it did last days. Price breached the downtrend in both charts and OBV indicator while trading above the OBV trend line in the intraday charts. Pivot point at 62.20 is the signal of higher numbers to reach the 63.00 and then 64.50 as the second and third resistance. Failure to pass this level will hold the current downtrend.
