2024-05-29 12:00

British Pound (GBP/USD) - Analysis and Charts GBP remains above $1.27 Still, momentum seems to be waning after an impressive run higher Can bulls keep the upper hand? The British Pound was a little higher against the United States Dollar on Wednesday, although it seems less comfortable close to current, two-month peaks. Sterling’s strength is perhaps a little puzzling given monetary policy position that ought possibly to favor the Dollar more. The latest look at shop-price inflation in the United Kingdom came from the British Retail Consortium’s May snapshot. That found inflation falling back to normal levels, with its 0.6% rise the weakest since November 2021. This will leave an August interest-rate cut from the Bank of England still quite likely. Contrast this with the situation in the United States, where any reductions at all this year remain open questions, perhaps all the more so following news of upbeat consumer confidence on Tuesday. Indeed, Minneapolis Federal Reserve President Neel Kashkari said he couldn't rule that out while he didn’t expect rates to rise. However, he also said that borrowing costs could remain at their current level for an extended period. The Dollar might have benefitted more if Kashkari had been a voting member of the Open Markets Committee this year. His comments are also more hawkish than some other Fed speakers’ have been lately. Still, the prospect of ‘higher for longer’ rates haunts the Dollar and should probably give bulls of other major currencies pause. Apart from UK election news flow, Sterling traders haven’t got many domestic cues left to anticipate this week. German inflation numbers are coming up later, and there may be some spillover action into EUR/GBP should they spring a surprise. However, the week’s main event will be US pricing figures in the Personal Income and Expenditure series. They’re coming up on Friday and markets know the Fed will be watching as closely as anyone. GBP/USD Technical Analysis GBP/USD Daily Chart Compiled Using TradingView GBP’s impressive revival from the lows of late Apil has stalled at least for now at the highs of March 21. However, GBP/USD is unsurprisingly starting to look a little overbought judging by the stochastic oscillator. This may simply mean that some pause for consolidation is needed before a realistic assault on the recent highs can be made. If retracement is limited to the 1.2640 support region, then it may well mean another move higher. But matters could become more serious for the bulls if falls go much below that and put retracement support back into play. IG’s data find traders happy to be short at current levels, but, again, this is likely to be in anticipation of some consolidation rather than a warning of heavy falls. --By David Cottle for DailyFX https://www.dailyfx.com/news/british-pound-edges-up-vs-usd-market-looks-to-us-pce-numbers-as-next-big-clue-20240529.html

2024-05-29 10:00

FTSE 100, DAX 40, S&P 500 Analysis and Charts FTSE 100 slips to near one-month low The FTSE 100 continues its short-term bearish run and is fast approaching the 8,200 late April high, in the process trading in near one-month lows. Further, more significant, support can be spotted in the 8,095 to 8,017 region, made up of the early and mid-April highs and early May low. Resistance sits at Tuesday’s 8,345 high. FTSE 100 Daily Chart DAX 40 falls through a tentative uptrend line The DAX 40 keeled over on Tuesday and fell from its 18,854 intraday high to 18,619, a level which is being retested. Below it last week’s low at 18,514 may offer support. If not, the way would be opened for a slide to the 18,238 late April high to unfold. Short-term downside pressure should remain in play while Tuesday’s high at 18,854 caps. DAX 40 Daily Chart S&P 500 remains short-term under pressure Last week the S&P 500 swiftly came off its record high at 5,343 and slid by over a percent to 5,257 as strong US flash PMI data increased expectations that interest rates will remain higher for longer, leading investors to shy away from risky assets. A fall through Tuesday’s low at 5,281 would put the 5,257 low back on the plate. The risk of this level being revisited remains in play while Tuesday’s high at 5,321 isn’t bettered. A fall through Thursday’s low at 5,257 would put the 10 May high at 5,239 on the map, below that lies the mid-May low at 5,194. S&P 500 Daily Chart https://www.dailyfx.com/news/ftse-100-dax-40-and-s-p-500-look-to-be-short-term-under-pressure-20240529.html

2024-05-29 07:59

Nvidia (NVDA), Nasdaq 100, US Dollar Charts and Analysis Nvidia now worth USD2.8 trillion after latest rally. US dollar and gold tread water ahead of Friday’s Core PCE release. Nvidia's stock surged by 7% overnight as the AI chip behemoth continues its relentless post-earnings rally. This rally has catapulted Nvidia to a market capitalization of just over $2.8 trillion, cementing its status as the third-largest company in the world by market capitalization. The AI titan is now closing in on tech mega-stocks Apple ($2.9 trillion) and Microsoft ($3.2 trillion). Nvidia's chips have become indispensable workhorses for powering cutting-edge artificial intelligence applications, fueling insatiable demand, and propelling the company's stratospheric ascent. The chip giant's rally has been nothing short of blistering since breaching the $500 level at the start of 2024, with the late-March/early-April sell-off retraced quickly as the stock continues defying gravity. Nvidia (NVDA) Weekly Chart Nvidia has a 7.2% weighting in the Nasdaq 100 and last night’s rally helped the tech index hit a fresh closing high. Nasdaq (NDQ) Weekly Chart Charts via TradingView The US dollar is treading water, with traders sidelined and hesitant to take any new positions ahead of this Friday's pivotal US Core PCE inflation release. Persistent stickiness in US inflation has forced financial markets to drastically recalibrate rate cut expectations for 2024, with only a single 25 basis point cut now fully priced in, a far cry from the six cuts anticipated at the end of last year. Minneapolis Fed Reserve President Neel Kashkari yesterday said that the US central bank should wait for ‘many months of positive inflation data’ before looking to cut rates’, adding that if inflation remains elevated, rate hikes cannot be ruled out. Kashkari’s comments underscore the Federal Reserve's unwavering commitment to bringing down inflation, even at the potential cost of short-term economic pain. With price pressures proving more persistent than initially anticipated, policymakers appear steadfast in their determination to restore price stability, regardless of the implications for financial markets. The US Dollar Index is flat in early turnover with a slight downside bias. Initial support is seen at 104.44 (200-dsma) ahead of 104.37 (38.2% Fibonacci Retracement). US Dollar Index Daily Chart Chart via TradingView Are you risk-on or risk-off ?? 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/market-latest-nvidia-nvda-surge-helps-the-nasdaq-100-post-a-fresh-record-high-20240529.html

2024-05-28 14:30

Japanese Yen Prices, Charts, and Analysis Japanese services PPI moves sharply higher. USD/JPY still under threat from official intervention. One gauge of Japanese inflation rose by more than forecast in April, denting recent Japanese Yen weakness. The April services PPI reading accelerated by 2.8% y/y, beating expectations of 2.3% and an upwardly revised 2.4% in March. Today’s reading showed the sharpest rate of increase since March 2015. Today’s data will have been noted by the Bank of Japan as they look for customer inflation to become entrenched so they can start to reverse their multi-decade, ultra-loose monetary policy. While USD/JPY continues to print higher lows off the late-December low, the series of higher highs is currently broken and may well stay that way under threat of official intervention. For the pair to move lower, a break of both the 20-day and 50-day smas, at 155.58 and 154.20 respectively, needs to happen. Below here, support is seen just below 152.00. A move higher will find resistance at 158.00 and the April 29, multi-decade spike high at 160.21. USD/JPY Daily Price Chart Retail trader data show 26.27% of traders are net-long with the ratio of traders short to long at 2.81 to 1.The number of traders net-long is 2.70% higher than yesterday and 3.73% lower from last week, while the number of traders net-short is 1.70% higher than yesterday and 5.02% higher from last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USD/JPY prices may continue to rise. Markets Week Ahead: Gold, EUR/USD, GBP/USD, USD/JPY, Eurozone Inflation, US Core PCE GBP/JPY continues to push higher on the back of Sterling strength. Recent UK economic data has pushed back the timing of the first UK rate cut, with the first 25 basis point move lower now seen in November., although a move at the September meeting cannot be ruled out. This hawkish push-back has propped up Sterling and helped push USD/JPY back to the 200 level and within touching distance of levels last seen in August 2008. A confirmed break higher could see GBP/JPY test 202 ahead of 205. Again, Japanese officials will be wary of allowing the Yen to weaken further. GBP/JPY Daily Price Chart The EUR/JPY looks similar to the GBP/JPY chart although the macro picture is different. The ECB is fully expected to cut interest rates by 25 basis points at next week’s central bank meeting and this may temper further upside in the pair. GBP/JPY Daily Price Chart What is your view on the Japanese Yen – 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/japanese-yen-latest-forecasts-usd-jpy-gbp-jpy-and-eur-jpy-20240528.html

2024-05-28 12:30

Australian Dollar Analysis and Chart AUD/USD remains in the green on Tuesday Global inflation numbers, including the US PCE series will probably set the pace this week The Aussie remains bid, but below its recent highs The Australian Dollar crept higher again against its big brother from the United States on Tuesday as broad risk appetite overcame some underwhelming Aussie economic data. Retail sales for April limped in with a 0.1% rise. Admittedly that was much better than the 0.4% slide seen in March but it was still short of the hardly stellar 0.2% economists expected. While this might have been expected to knock the Australian Dollar, in the event the currency held up in a market still thinned in any case by the absence of the US on Monday for the Veterans’ Day holiday. The US Dollar has been broadly lower against its rivals including AUD in the absence of New York trading desk. The Aussie retains plenty of monetary support. The Reserve Bank of Australia left interest rates on hold at its May meeting, and the minutes from that hardly suggested a central bank in any hurry to ease monetary conditions. In common with many of their international colleagues, the RBA is far from certain as to when lower borrowing costs might be appropriate. This week will bring plenty of the inflation numbers that markets crave, with German, Eurozone, and, most importantly, the US Personal Consumption and Expenditure series all on tap, as well as plentiful speakers from the Federal Reserve. This year has seen expectations as to when US interest rates might fall pushed further and further back, to the point where markets are far from sure that they’ll see many reductions this year, if any. In such an environment it’s probably best to be cautious about any bouts of US Dollar weakness, against the Aussie as much as any other unit. Still, IG’s data finds traders net-short of AUD/USD for the first time since May 21, with the sharp increase in net shorts a possible contrarian signal of further near-term AUD Gains. AUD USD Technical Analysis AUD/USD Daily Chart Compiled Using Trading View AUD/USD remains within a wide uptrend channel from the five-month lows of late April. This has taken it above the medium-term downtrend from late December but has yet to convincingly break the broad, sideways trading range seen since mid-January this year. That offers near-term support at 0.66266 and bulls will need to keep the rate above that to maintain the uptrend’s pace. There’s further support at May 7’s high of 0.6646, ahead of downtrend support at 0.65326. The 0.6710 regain appears to be capping the market for now, and it will be instructive to see whether it continues to do so into this month’s end. --By David Cottle for DailyFX https://www.dailyfx.com/news/australian-dollar-holds-up-against-usd-despite-tepid-retail-sales-data-20240528.html

2024-05-28 08:08

Gold and Silver Outlooks and Charts US inflation is the next driver of price action. US rate cut expectations pared further. The recent re-pricing of US interest rate cuts continues to weigh on gold and silver, dampening demand for the previously high-flying commodities. The latest market forecasts show the first 25 basis point US rate cut is now fully priced for the December meeting, although the November meeting remains in play. Strong US economic data of late gives the Fed additional wiggle room to keep rates higher for longer as the US central bank continues its battle with stubbornly sticky inflation. Source: LSEG Datastream. After printing a fresh multi-decade high on May 20th, gold has fallen by over $100/oz. on further Fed speculation of higher rates and strong economic data. Short-term US Treasury yields remain elevated, keeping downward pressure on gold and silver, and unless Friday’s PCE data surprises to the downside, both gold and silver may struggle to move higher. In the case of any further sell-off, gold should find initial support at around $2,280/oz. Gold Daily Price Chart Retail trader data show 63.97% of traders are net-long with the ratio of traders long to short at 1.78 to 1.The number of traders net-long is 3.95% higher than yesterday and 36.52% higher than last week, while the number of traders net-short is 6.68% higher than yesterday and 20.68% lower than 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. 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 Gold trading bias. Silver has outperformed gold over the last month with the silver/gold spread now back at highs last seen in mid-November 2021. A break, and open, above the mid-October 2021 high would give this spread room to move higher. Silver/Gold Weekly Price Chart Silver recently traded at its highest level in over a decade, breaking the $30/0z. barrier with ease. This level, supported by a prior high at $29.80/oz. now turns into short-term support. Silver Daily Price Chart All Charts via TradingView What is your view on Gold and Silver – 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/gold-consolidates-silver-continues-to-outperform-us-inflation-data-key-20240528.html