2024-06-03 14:24

US Dollar, Gold Analysis and Charts US manufacturing sector back in the doldrums. US dollar index eyes a two-month low. According to the Institute for Supply Management (ISM), the US manufacturing sector contracted for the second consecutive month in May, as the Manufacturing PMIregistered 48.7%, down 0.5% compared to April’s reading of 49.2%. “After breaking a 16-month streak of contraction by expanding in March, the manufacturing sector has contracted the last two months at a faster rate in May. Two out of five subindexes that directly factor into the Manufacturing PMIare in expansion territory, up from one in April. The New Orders Index moved deeper into contraction after one month of expansion in March.’ Full ISM Report The US dollar turned lower after the ISM release with the US dollar breaking through 38.2% Fibonacci retracement support at 104.37 and through the 200-day simple moving average. The greenback is now looking at the May 16th multi-week low at 104.10. US Dollar Index Daily Chart Chart by TradingView Gold moved a touch higher after the release, trading back above $2,340/oz. The precious metal has been under pressure in the last two weeks and today’s data may help to stem any further falls. Support remains at $2,280/oz. Gold Daily Price Chart Retail trader data shows 60.04% of traders are net-long with the ratio of traders long to short at 1.50 to 1.The number of traders net-long is 0.32% higher than yesterday and 6.82% lower from last week, while the number of traders net-short is 15.37% higher than yesterday and 10.74% higher from last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Gold price trend may soon reverse higher despite the fact traders remain net-long. What are your views on the US Dollar – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/us-dollar-index-slips-as-us-manufacturing-contracts-again-gold-nudges-higher-20240603.html

2024-06-03 10:00

GBP/USD Analysis and Charts UK Manufacturing outlook brightens. Sterling effective exchange rate index hits an eight-year high. The UK manufacturing sector experienced a resurgence in May, with output expanding at the fastest rate in over two years, driven by an influx of new orders. This positive development also bolstered manufacturers' optimism, as their confidence levels soared to the highest point since early 2022, with 63% of companies anticipating an increase in output over the next year. The seasonally adjusted S&P Global UK Manufacturing Purchasing Managers' Index climbed to 51.2 in May, up from 49.1 in April, marking its highest reading since July 2022, though slightly below the initial flash estimate of 51.3. According to Rob Dobson, director at data provider S&P Intelligence, ‘May saw a solid revival of activity in the UK manufacturing sector, with production levels and new business both rising at the quickest rates since early 2022. The breadth of the recovery was also positive, with concurrent output and new order growth registered for all of the main subindustries (consumer, intermediate, and investment goods) and all company size categories for the first time in over two years.’ Full UK Manufacturing PMI Report The Sterling effective exchange rate is back at levels last seen in June 2016 before the British Pound fell on the Brexit vote. The effective exchange rate represents a weighted average that gauges a nation's currency value relative to a basket of foreign currencies from its key trading partners. Positive UK economic data has helped to prop up the British Pound this year, while a positive risk sentiment backdrop has also aided GBP. GBP/USD is now retesting the 1.2700 area after posting a multi-month high of 1.2800 last week. A lot of this move lower is due to USD strength, fuelled by expectations that the Fed will leave interest rates at their current levels for longer. The first 25 basis point rate cut is forecast at the November 7 meeting, although the September 18 meeting remains a live option. Support is seen at 1.2667 and the 38.2% Fibonacci retracement at 1.2628. GBP/USD Daily Price Chart IG Retail data shows 37.42% of GBP/USD traders are net-long with the ratio of traders short to long at 1.67 to 1.The number of traders net-long is 4.10% higher than yesterday and 3.01% higher than last week, while the number of traders net-short is 2.49% higher than yesterday and 8.47% lower than last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBP/USD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBP/USD price trend may soon reverse lower despite the fact traders remain net-short. What is your view on the British Pound – bullish or bearish?? You can let us know via the form at the end of this piece or contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/gbp-usd-testing-1-2700-as-usd-picks-up-a-bid-uk-manufacturing-expands-in-may-20240603.html

2024-06-03 08:19

Oil (Brent Crude, WTI) News and Analysis OPEC+ extends production cuts into 2025 with voluntary cuts to taper off from October this year The oil market seeks to halt recent declines on tighter supplies IG client sentiment is skewed to the upside but the contrarian indicator lacks conviction Are you new to commodities trading? The team at DailyFX has produced a comprehensive guide to help you understand the key fundamentals of the oil market and accelerate your learning: OPEC+ Extends Production Cuts into 2025 – Voluntary Cuts to be Wound Down from October The Organisation for Petroleum Exporting Countries and its allies, otherwise known as OPEC +, decided to extend their existing production cuts when officials met on Sunday. The move comes amid a backdrop of rising stockpiles, surging US oil production and tepid demand growth from the world’s largest oil importer, China. Elevated interest rates and a generally restrictive economic environment have weighed on the outlook for global growth, which has seen speculators drive down the price of both Brent crude and WTI oil. The vote to sustain the deep supply cuts – which amounts to around 5.7% of global oil demand – was aided by narrowing margins from OPEC producers that are likely to come under pressure if prices move notably below $80. The 5.86 million barrels per day (mbpd) of cuts are comprised of a larger 3.66 mbpd and a voluntary 2.2 mbpd which was advanced by the Saudis. The 3.66 mbpd cuts are to run until the end of 2025 while the voluntary cuts are to remain until the end of September. Thereafter, the voluntary cuts will be tapered off into 2025. The Oil Market Seeks to Halt Recent Declines on Tighter Supply Oil prices have fallen off in recent days, seeing higher prices capped at $85 before heading towards the psychologically important $80. The recent decline also took out the $82 marker with relative ease but today’s price action appears to have found support ahead of the $80 mark. Upside potential appears to be capped at the $84/$85 level with the 200-day simple moving average (SMA) repelling higher prices. The medium-term trend remains in favour of further downside but the risk of a near-term pullback will need to be observed at the start of the week, with the descending trendline offering the first test of a potential counter-trend move. Brent Crude Oil Daily Chart Source: TradingView, prepared by Richard Snow US oil (WTI) price action continues in a choppy manner, marking new short-term highs and lows as the sideways move expands its range. Today’s price action appear to be halting the sell-off and the long-term level of significance at $77.40 provides an immediate gauge of the counter-trend potential at the start of the week. Resistance appears around the 200 SMA, above the $80 mark with the recent swing low of $76.15 the level to breach if the bearish move is to continue. WTI (US) Oil Daily Chart Source: TradingView, prepared by Richard Snow IG Client Sentiment Skewed to the Upside but the Contrarian Indicator Lacks Conviction Source: IG data, prepared by DailyFX Oil- US Crude:Retail trader data shows 85.03% of traders are net-long with the ratio of traders long to short at 5.68 to 1. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggestsOil- US Crude prices may continue to fall. Read the full client sentiment report to view crucial, shorter-term positioning changes that have influenced the guidance issued below. Positioning is less net-long than yesterday but more net-long from last week. The combination of current sentiment and recent changes gives us a further mixed Oil - US Crude trading bias. https://www.dailyfx.com/news/opec-fights-declining-oil-prices-with-extended-production-cuts-phased-tapering-20240603.html

2024-06-02 09:00

Markets Week Ahead: ECB Rate Decision, US NFPs – USD, Gold, Euro, Nasdaq ECB to cut interest rates by 25 basis points on Thursday. US jobs week culminates with NFPs on Friday. Gold eyes early-May lows. Navigating Volatile Markets: Strategies and Tools for Traders A week full of potential volatility with the ECB policy meeting and the latest US Jobs Report the highlights for traders looking for volatility. While the ECB will cut rates by 25 basis points, will ECB President Christine Lagarde signal the timing of the next cut? Markets suggest that the second rate cut may be announced at the September 12th meeting but the October 17th is now seen as more likely. The ECB post-decision press conference will need to be parsed closely. In the US, a raft of US jobs data – JOLTS, ADP, and initial jobless claims - will be released before Friday’s US Jobs Report. The market has pushed back US rate cuts over the past months as inflation remains uncomfortably high for the Federal Reserve. Any weakening in the US Jobs market may see the market start to re-price US interest rate cuts. In addition to the above, the Bank of Canada announce their latest policy decision, Australian GDP is released, while US ISM Services data is always worth watching. The US dollar looks under pressure and the US dollar index is withing 20 pips of printing a two-month low. From a technical viewpoint, the USD index is testing the 200-day simple moving average, and a confirmed break lower could see the greenback trade below 104.00. US Dollar Index Daily Chart Gold also looks vulnerable to a move lower. US Treasury yields rose during the week, driven by a raft of bills and bond sales, and a test of the $2,280/oz. looks likely. Friday’s US NFPs will direct the gold’s future performance. Gold Daily Price Chart The Nasdaq 100 turned lower this week as cracks started appearing in Magnificent Seven members. With the index pulling back from a sharp early sell-off, Friday's price action will give bulls some hope of higher prices. Still, an index dominated by a handful of mega-cap companies remains vulnerable to a change in sentiment. Nasdaq 100 Daily Chart All Charts using TradingView https://www.dailyfx.com/news/markets-week-ahead-ecb-rate-decision-us-nfps-usd-gold-euro-nasdaq-20240602.html

2024-06-01 11:00

Most Read: British Pound Weekly Forecast: Ranges Likely To Hold As Focus Moves To ECB In a recent article, I explored a compelling trading idea, discussing the possibility of gold's recent softness persisting in the near term. I pointed out that a breach of support located around $2,335 could serve as a technical signal for a bearish continuation. On Friday, bullion not only slipped below this region but also fell under its 50-day simple moving average at $2,327. Despite this breakdown, the subsequent drop lacked vigor and wasn’t decisive, with sellers failing to pounce on the move, indicating some indecision in the camp. However, the situation could change in the coming week if prices do not reverse upwards soon. In this scenario, we could start seeing an increased appetite for short positions. Looking at potential directional outcomes, if XAU/USD follows through to the downside in the days ahead, bearish sentiment could become more dominant, creating the right conditions for a deeper pullback moving into June. In this case, bears may initially target the $2,265 level, which represents the 61.8% Fibonacci retracement of the March-May rally. On further weakness, attention will shift to $2,225. On the other hand, a resurgence of buyers lifting the yellow metal past the 50-day SMA and above $2,340 could rekindle buying interest in the market, setting the stage for a rally toward $2,365. Upside progress beyond this key ceiling would likely invalidate the near-term bearish outlook, possibly propelling prices toward $2,377 and even $2,420. GOLD PRICE TECHNICAL CHART Gold Price Chart Created Using TradingView https://www.dailyfx.com/news/xau-usd-gold-price-forecast-bears-take-out-key-support-next-leg-lower-may-be-underway-20240601.html

2024-05-31 13:01

US Dollar Weakens After Monthly Inflation Cools, Gold Gains Momentum US Core PCE 2.8% vs 2.8% expectations and prior. US dollar edges lower, but move lacks conviction. The US dollar slipped lower and gold picked up a small bid after the latest US PCE data hit the screens. Both the Core and Headline y/y PCE came in line with expectations, and March’s readings, at 2.8% and 2.7% respectively, but the m/m Core reading came in marginally below expectations and last month’s reading. Monthly personal income and spending both fell. It is a slightly positive release but unlikely to move any rate-cut expectations. The US dollar index fell after the inflation release and is being propped up by the 200-day simple moving average at 104.45 ahead of the 38.2% Fibonacci retracement level at 104.37. US Dollar Index Daily Chart Chart by TradingView Gold is around 0.50% higher at $2,353/oz. and eyes near-term resistance from the 50-day simple moving average at $2,358/oz. Above here lies $2,400/oz. Gold Daily Price Chart What are your views on the US Dollar – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/us-dollar-weakens-after-monthly-inflation-cools-gold-gains-momentum-20240531.html