The global economic slowdown and rising interest rates are creating a headwind for most currencies. However, the interest rate differential between the US and other major economies could offer some support for currencies like the euro and pound in the short term. Gold could see some upside potential if it breaks above a key resistance level.
Euro (EUR):
- The euro is caught between conflicting forces.
- The euro is drifting lower after weak German data and the prospect of an ECB rate cut in June, while the ECB’s dovish policy stance is also weighing on it.
- However, the interest rate differential between the ECB and the Fed could continue to support the euro in the short term.
- Technical Analysis: Resistance at 1.0764 and 1.0779, support at 1.0739 and 1.0724.
- Forecast: Downward trend likely to continue, with potential for a decline below 1.0450.
British Pound (GBP):
- The pound is also facing headwinds due to a potential BoE rate cut and a lack of clear direction.
- However, similar to the euro, the interest rate differential with the US could offer some support.
- Technical Analysis: Resistance at 1.2504, support at 1.2468.
- Forecast: Range-bound trading with a slight downward bias.
Australian Dollar (AUD):
- The Australian dollar is under pressure and could be headed lower towards 0.6480.
- It is facing a potential correction after breaking above a key resistance level.
- Technical Analysis: Marlin oscillator is moving downwards, MACD lines on both charts acting as resistance.
- Forecast: Downward trend likely to continue.
Canadian Dollar (CAD):
- The Canadian dollar is struggling despite strong PMI data.
- The BoC’s next move on interest rates will depend on inflation data.
- The BoC’s reluctance to cut rates could weigh on the CAD.
- Technical Analysis: Resistance at 1.3757 and 1.3790, support at 1.3709 and 1.3676.
- Forecast: Range-bound trading with a possible bias towards USD strength depending on BoC and Fed decisions.
Japanese Yen (JPY):
- The yen is weakening again despite warnings from Japanese officials about intervention.
- It is under pressure due to rising inflation concerns and potential intervention by the Bank of Japan.
- However, intervention efforts have had limited success so far.
- Technical Analysis: Resistance at 155.35 and 155.91, support at 155.01 and 154.43.
- Forecast: Upward trend likely to continue.
Gold (XAU):
- Gold is forming a bullish pennant pattern and could break higher if it surpasses $2,312.
- Technical Analysis: A break above $2,312 could signal a bullish breakout. Support at $2,300.
- Forecast: Short-term neutral, long-term bullish (if breaks above $2,312).
Crude Oil:
- The outlook for Crude Oil is uncertain.
- Recent data suggests a potential build in inventories, which could put downward pressure on prices.
Categories: Market News
