DAILY MARKET REPORT

Monday, MAY 30, 2022

Risk-flows extend into a fresh week this Monday, as investors cheer news that Shanghai authorities will cancel many conditions for businesses to resume work from Wednesday, easing a city-wide lockdown. The upbeat market mood helps the safe-haven US dollar to continue with its downward correction from two-decade peaks. Fading hopes for aggressive tightening by the Fed after the expected 50 bps rate hikes in June and July also adds to the weakness in the greenback while weighing on the Treasury yields across the curve. The US Personal Consumption Price Index (PCE) rose just 0.2% in April down from the previous month’s 0.9% and lower than economist’s forecasts at 0.8%. The PCE report is the Federal Reserve’s preferred inflation indicator. Ahead of this week’s economic data dump, today’s calendar is light. A weekend of negotiations ahead of a two-day summit that starts later today failed to overcome Hungarian objections to the proposed ban on imports of crude and refined products that would come into force at the end of the yea. There are no major data releases out of Australia, New Zealand, and Asia today. US markets will be partially open as the country celebrates its Memorial Day holiday.

EURUSD

The optimism around the European currency remains well and sound and now lifts EUR/USD to fresh highs in the boundaries of 1.0770. EUR/USD therefore advances for the third session in a row and extends the 4-cent rebound to the vicinity of the interim hurdle at the 55-day SMA, slowly approaching the 3-month resistance line in the 1.0800 neighbourhood.

XAUUSD

Gold Price ended Friday with mild gains above $1,850 while having booked the second straight weekly gains, as the US dollar correction extended alongside the US Treasury yields amid subsiding aggressive Fed tightening expectations. Starting out a new week on Monday, Gold Price is looking to build onto the previous gains, as the dollar and the yields continue holding the lower ground. The next upside target awaits at the mildly bullish $1860. Alternatively, a firm break below the 21-DMA will challenge the bullish commitments at the critical $1849.

 WTI

WTI dribbles around a two-month high during the four-day uptrend ahead of Monday’s European session. That said, the energy benchmark eases from the multi-day to $114.80. Despite the latest pullback from the intraday high, the black gold gained around 0.70% on a day as upbeat markets sentiment and a softer US dollar underpin the commodity prices. The next resistance level is at $116.78 and as for the next support level this is located at $113.41.

*The information presented above is intended for informative and educational purposes, should not be considered as investment advice, or an offer or solicitation for a transaction in any financial instrument and thus should not be treated as such. Past performance is not a reliable indicator of future results.