DAILY MARKET REPORT

THURSDAY, JUNE 02, 2022

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Global markets remain dicey on Thursday even as growth fears join China-linked headlines. The reason could be linked to the cautious sentiment ahead of this week’s key data, as well as the US Treasury yields’ struggle to refresh its two-week high. The Bank of Canada (BoC) lifted interest rates by 50 bps from 1.0% to 1.50% on Wednesday, a move that had been expected by most analysts, with a minority calling for a larger 75 bps hike. According to the BoC's latest statement on monetary policy, the bank is prepared to "act more forcefully if needed" to achieve its 2.0% inflation target, in light of the risk of elevated inflation becoming more entrenched having risen. In US, the headline ISM Manufacturing Purchasing Manager's Index (PMI) rose to 56.1 in May from 55.4 in March versus expectations for a small decline to 54.5, according to the latest release by the Institute for Supply Management (ISM). OPEC+ will hold a meeting on Thursday and Reuters reported earlier in the day that the group was looking to come up with a solution to compensate for Russia's one million barrels per day decline in its output due to sanctions.

GBPUSD

GBP/USD is currently testing the 1.2550 hurdle, trading almost flat throughout the day. As long as this level stays intact, the pair could have a difficult time gathering bullish momentum. In case that resistance turns into support, 1.2578 and 1.2610 (psychological level, static level) could be seen as the next recovery targets. On the downside, 1.2500 (psychological level) aligns as support ahead of 1.2421 and 1.2361.

XAUUSD

Gold price continues to push higher toward $1,860 in the second half of the day on Thursday. The next key resistance level is seen at $1,862. A firm break above the latter will call for a retest of the previous week’s high of $1,870. A breach below $1841(pivot level) might test the next support level of $1833.

EURUSD

The EUR/USD pair hovers around 1.0700, as US employment data had no impact on financial markets. From a technical point of view, chances are skewed to the upside, according to the H30 chart. The pair is trading above a mildly bullish 20 SMA, while technical indicators stand at positive levels, although without directional strength.

*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.