Risk event for the week starting 20 June: UK inflation
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10/06/21 12:53
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Gold prices fall back and oil prices rally, while live cattle prices sit at a record high Gold has dropped back at the start of the week, while oil prices have been given a lift by a fresh OPEC production cut. Meanwhile, live cattle prices have made further headway. Source: Bloomberg Chris Beauchamp | Chief Market Analyst, London | Publication date: Monday 05 June 2023 Gold renews Friday’s declines While stocks rallied on Friday following the jobs report, gold prices went sharply into reverse. This has continued this morning, with the price nearing the 100-day SMA once again. Last week saw the price hold above the 100-day SMA and above the $1930 support zone. A move below $1930 would mark an interesting development, putting the price below the 100-day SMA for the first time since November. This might then open the way to the 200-day SMA, and then down towards $1800. A revival needs to clear short-term resistance around $1985, and then on above the 50-day SMA ($1991), to suggest that the uptrend has been revived. Source: ProRealTime WTI rallies following production cut Oil prices rallied on Thursday and Friday in expectation of an OPEC production cut. The organisation duly delivered, and prices gapped higher over the weekend. Further gains target the late May high around $74.50, and then on to the 50- and 100-day SMAs. The last production cut prompted a rally to the 200-day SMA before it faltered. Buyers will be hoping that the price can sustain the forward momentum and move on to clear the 200-day SMA this time. Conversely, sellers will be watching for a turn lower, ideally below the 100-day SMA, that will leave the bearish view intact. Source: ProRealTime Live Cattle at record highs Prices here rallied on Friday to a new record high. A remarkable rally has seen the price rise by almost a third over the last year. Clearly, bullish momentum is still very strong, but the price now looks overextended from the 50-day SMA. Some short-term consolidation may well occur, but it is notable that weakness in March and May both stabilised above the 100-day SMA. Trendline support from the March lows will need to be breached if sellers are to gain traction in the short-term. Source: ProRealTime -
Greetings, fellow Forex enthusiasts! Today, I want to delve into the captivating world of economic data and its profound impact on currency exchange rates. As forex traders, we find ourselves in an exhilarating realm where numbers and statistics intertwine with market dynamics. Economic data, such as GDP growth, inflation rates, and employment figures, form an essential foundation for making informed trading decisions. Let's first acknowledge the significance of GDP growth. A country's economic performance, as reflected in its GDP, holds tremendous sway over its currency's strength. When a nation experiences robust GDP growth, it often signifies increased productivity, higher consumer spending, and enhanced investor confidence. Forex traders closely monitor GDP growth rates, as they can indicate a prosperous economy, leading to a potentially stronger currency value. Next, let's explore inflation rates. Inflation refers to the general increase in prices of goods and services over time. When inflation rises, a currency's purchasing power diminishes, causing its value to decline. Forex traders are keenly attuned to inflation figures, as they provide insights into the stability of a country's economy. Higher inflation rates may prompt central banks to implement tighter monetary policies, such as raising interest rates, to curb inflation. These actions can influence currency exchange rates and guide traders' strategies. Furthermore, employment figures hold a crucial place in the realm of forex trading. A country's employment situation reflects the health of its labor market and overall economic vitality. When employment figures indicate a robust job market with low unemployment rates, it often leads to increased consumer spending and economic growth. Forex traders keenly monitor employment data to gauge the strength and stability of a country's economy, as it can impact the value of its currency. In conclusion, economic data acts as a compass, guiding forex traders in their decision-making process. The intricate relationship between GDP growth, inflation rates, employment figures, and currency exchange rates is a testament to the interconnectedness of the global economy. By diligently analyzing and interpreting economic data, we can make more informed trading decisions and navigate the forex market with confidence. Remember, staying informed is key. Embrace the power of economic data and let it illuminate your path to success in the exciting world of forex trading! Happy trading, everyone! -
Indices remain bid amid risk-on sentiment Outlook on FTSE 100, DAX 40 and S&P 500 as the Fed is no longer expected to hike rates at its June meeting. Source: Bloomberg Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Monday 05 June 2023 FTSE 100 nears last week’s high Towards the end of last week the FTSE 100 bounced off its two-month low at 7,433 as the US agreed to raise its debt ceiling, China was preparing new measures to support its property market and solid US labour data but a higher-than-expected unemployment rate at 3.7% and stabilising wage growth gave the US Federal Reserve (Fed) room for a pause in June. For FTSE 100 bulls to be fully back in control, the high seen a couple of weeks ago at 7,660 would need to be exceeded on a daily chart closing basis this week. Above it lie the 7,679 and 7,706 mid-May lows and meanders the 55-day simple moving average (SMA) at 7,718. Slips should find around the 26 May low at 7,556 or along the 200-day simple moving average (SMA) at 7,718. Source: Bloomberg DAX 40 flirts with late May high at 16,080 The DAX 40 flirts with its late May high at 16,080, having formed a potentially bullish Hammer formation on the weekly candlestick chart amid broad global risk-on sentiment towards the end of last week. A rise and daily chart close above the 16,080 high would open the way for the May all-time record high at 16,333 to be reached. Minor support only comes in around last Wednesday’s high at 15,928, ahead of the breached May-to-June downtrend line at 15,900. Source: Bloomberg S&P 500 trades near Friday’s nine-month high On Friday, the S&P 500 rallied to a nine-month high at 4,290, close to its August 2022 peak at 4,325, both of which will remain in focus as long as risk-on sentiment prevails. With more and more market participants expecting the Fed not to raise rates at the June meeting and helped by a new Chinese stimulus package for its struggling property market, stock markets continue to look short-term bid. Potential retracements should find good support between the mid- to late May highs at 4,234 to 4,214. Source: Bloomberg
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