The markets are currently digesting mixed economic data and ongoing geopolitical tensions. The US dollar remains strong, putting pressure on other currencies. The euro, pound, and gold could see downside pressure in the near term. Gold prices are finding some support but could face a correction in the near future. This week’s key data points, particularly US ISM manufacturing data and the US NFP report, could provide further direction for the markets.
Euro (EUR/USD):
- The euro initially surprised markets by rising despite the French election results.
- However, the euro quickly retreated and is currently trading near its opening level.
- Technical indicators suggest a bearish trend in the short-term, with resistance at 1.0772 and support at 1.0666.
- Key data points to watch this week include German inflation and US ISM manufacturing data.
- Support Levels: 1.0708, 1.0685, 1.0666
- Resistance Levels: 1.0772, 1.0837
- Trading opportunities:
- Buy above 1.0700 if consolidation occurs, targeting 1.0742 and 1.0761 (short-term)
- Sell below 1.0708 if bearish momentum resumes, targeting 1.0665 (short-term)
British Pound (GBP/USD):
- The pound mimicked the euro’s movements, rising initially and then retreating.
- There is weak correlation between the pound and the French elections, suggesting the initial rise may have been technical.
- The pound has strong support at 1.2605-1.2620, but a break below this area could signal further decline.
- Important data points to watch include US ISM manufacturing data and potential developments in the UK election.
- Support Levels: 1.2623, 1.2602, 1.2566
- Resistance Levels: 1.2664, 1.2693, 1.2735, 1.2806
- Trading opportunities:
- Buy around 1.2681 if supported by weak US data, targeting 1.2718 (short-term)
- Sell below 1.2653 if supported by strong US data, targeting 1.2619 (short-term)
Japanese Yen (USD/JPY):
- The Japanese yen weakened further, with USD/JPY reaching a new 38-year low.
- This decline is due to a combination of factors, including a downward revision to Japan’s GDP and a dovish Bank of Japan.
- Technically, the trend is bullish for USD/JPY, with support at 160.80 and resistance at 161.50.
- US ISM manufacturing data could further impact the pair’s movement.
- Support Levels: 160.36, 159.81
- Resistance Levels: 161.37, 162.38
- Trading opportunities:
- Buy around 1.6115 if supported by strong US data, targeting 1.6165 (short-term)
- Sell below 1.6091 if supported by weak US data, targeting 1.6033 (short-term)
Gold (XAU/USD):
- Gold prices rose on Monday due to a weaker US dollar and uncertainty around monetary policy.
- The metal is facing a potential pullback after strong gains earlier in the year.
- Geopolitical uncertainty continues to provide some support for gold prices.
- Key data points to watch this week include US ISM manufacturing data and the US NFP report.
- Technically, gold could test resistance at $2370, with support at $2320.
- Support Levels: 2320, 2310, 2309
- Resistance Levels: 2334, 2340, 2350, 2370
- Trading opportunities:
- Buy above 2318 if bullish momentum continues, targeting 2337 and 2343 (short-term)
- Sell below 2320 if bearish momentum resumes, targeting 2309 or even 2289 (short-term)
Categories: Market News
