Asian stock markets retreated on Monday as investors awaited the release of important Chinese economic data and monitored upcoming monetary policy signals from the Federal Reserve. The Shanghai Composite index had its worst week since March, while the blue-chip index experienced its biggest weekly decline in two months.
China maintained its medium-term lending facility at 2.75% as expected but injected additional long-term liquidity into the financial system to support growth amid signs of a faltering recovery. Japanese shares, on the other hand, recorded gains, with the Topix index nearing its highest level since 1990. Benchmark indices in China, South Korea, and Australia also saw stronger gains during the Asian afternoon.
European equity markets were poised for a positive start as investors turned their attention to Turkey's presidential election, which seemed headed for a runoff. The absence of an outright majority for President Tayyip Erdogan and his main challenger Kemal Kilicdaroglu led to another round of voting on May 28. Investors were also anticipating eurozone industrial production data and earnings reports from major European companies.
Regional markets took a weak lead from Wall Street, influenced by softer-than-expected consumer sentiment data suggesting slowing growth in the US economy amidst high- interest rates and persistent inflation concerns.
US inflation worries heightened as a preliminary survey showed five-year expectations for consumer-price gains reaching a 12-year high.
Despite progress in US debt-ceiling talks, the risk of a failure to reach a compromise remains. Treasury Secretary Janet Yellen warned of a potential shortfall in funding by June 1 or in subsequent weeks. President Joe Biden and House Speaker Kevin McCarthy plan to meet on Tuesday to address the issue.
EURUSD
EUR/USD rebounds from one-month low, benefiting from a technical correction and improved market sentiment in the European morning. The pair manages to minimize its losses, with risk perception likely to influence trading dynamics leading up to the weekend.
The recent University of Michigan Sentiment report attracts significant attention, revealing higher-than-anticipated consumer expectations for inflation over the next one year and 5-10 years. This surprising trend persists despite the sentiment gauges falling short of expectations. The persistent concern among most Americans regarding rising prices may have potential economic implications in the future.
Key resistance levels to monitor for potential upward movements in the EURUSD pair are located at 1.0900, 1.0935, and 1.0950. Conversely, significant support levels to keep an eye on for potential downward movements are situated at 1.0850, 1.0800, and 1.0750. The 100MA on the Daily chart AT 1.0800is the most anticipated level to watch for EURUSD
Support 1.0910, 1.0850, and 1.0800
Resistance 1.0940, 1.0980, and 1.1000
GBPUSD:
GBP/USD is showing signs of a recovery near the 1.2450 support, as the US DXY loses momentum following its earlier high of 102.75 in the European session. The Cable is expected to strengthen further once it surpasses the immediate resistance level at 1.2480.
The Pound Sterling is anticipated to remain active in anticipation of the United Kingdom's upcoming Employment data, scheduled for release on Tuesday. The tight labor market conditions in the UK, driven by a shortage of labor, have been a significant factor.
Following the delay of Friday's US debt-ceiling negotiations, US President Joe Biden and Republican House of Representatives Joseph McCarthy are scheduled to meet again on Tuesday.
The current resistance levels to watch are 1.2500, 1.2550, and 1.2580, while the support levels are 1.2450, 1.2400, and 1.2380.
Support 1.2450, 1.2400, and 1.2380
Resistance 1.2500, 1.2550, and 1.2580
XAUUSD:
Gold price is recovering after a three-day decline, experiencing its largest weekly loss since late September 2022. The XAU/USD pair is benefiting from the consolidation of the US Dollar, driven by hopes of avoiding a US default and mixed comments from Federal Reserve officials. Furthermore, the US Dollar is under pressure due to concerning news regarding inflation and consumer confidence data.
Despite these factors, the Gold price remains vulnerable as investors remain cautious about the US debt ceiling extension, potential banking issues, and deposit concerns.
In the short term, the movements of the Gold price will depend on the outcome of US policymakers' negotiations on the debt ceiling extension, as well as important economic indicators such as US inflation data, US Retail Sales for April, and a speech by Fed Chair Jerome Powell.
Technically the 200MA on the 4H chart worked as support holding the price from breaking the 2000 level. any breakout will take the price toward the 1995 target.
The current resistance levels to watch are 2020, 2037, and 2050, while the support levels are 2000, 1995, and 1980.
Support 2000, 1995, and 1980
Resistance 2020, 2037, and 2050
China maintained its medium-term lending facility at 2.75% as expected but injected additional long-term liquidity into the financial system to support growth amid signs of a faltering recovery. Japanese shares, on the other hand, recorded gains, with the Topix index nearing its highest level since 1990. Benchmark indices in China, South Korea, and Australia also saw stronger gains during the Asian afternoon.
European equity markets were poised for a positive start as investors turned their attention to Turkey's presidential election, which seemed headed for a runoff. The absence of an outright majority for President Tayyip Erdogan and his main challenger Kemal Kilicdaroglu led to another round of voting on May 28. Investors were also anticipating eurozone industrial production data and earnings reports from major European companies.
Regional markets took a weak lead from Wall Street, influenced by softer-than-expected consumer sentiment data suggesting slowing growth in the US economy amidst high- interest rates and persistent inflation concerns.
US inflation worries heightened as a preliminary survey showed five-year expectations for consumer-price gains reaching a 12-year high.
Despite progress in US debt-ceiling talks, the risk of a failure to reach a compromise remains. Treasury Secretary Janet Yellen warned of a potential shortfall in funding by June 1 or in subsequent weeks. President Joe Biden and House Speaker Kevin McCarthy plan to meet on Tuesday to address the issue.
EURUSD
EUR/USD rebounds from one-month low, benefiting from a technical correction and improved market sentiment in the European morning. The pair manages to minimize its losses, with risk perception likely to influence trading dynamics leading up to the weekend.
The recent University of Michigan Sentiment report attracts significant attention, revealing higher-than-anticipated consumer expectations for inflation over the next one year and 5-10 years. This surprising trend persists despite the sentiment gauges falling short of expectations. The persistent concern among most Americans regarding rising prices may have potential economic implications in the future.
Key resistance levels to monitor for potential upward movements in the EURUSD pair are located at 1.0900, 1.0935, and 1.0950. Conversely, significant support levels to keep an eye on for potential downward movements are situated at 1.0850, 1.0800, and 1.0750. The 100MA on the Daily chart AT 1.0800is the most anticipated level to watch for EURUSD
Support 1.0910, 1.0850, and 1.0800
Resistance 1.0940, 1.0980, and 1.1000
GBPUSD:
GBP/USD is showing signs of a recovery near the 1.2450 support, as the US DXY loses momentum following its earlier high of 102.75 in the European session. The Cable is expected to strengthen further once it surpasses the immediate resistance level at 1.2480.
The Pound Sterling is anticipated to remain active in anticipation of the United Kingdom's upcoming Employment data, scheduled for release on Tuesday. The tight labor market conditions in the UK, driven by a shortage of labor, have been a significant factor.
Following the delay of Friday's US debt-ceiling negotiations, US President Joe Biden and Republican House of Representatives Joseph McCarthy are scheduled to meet again on Tuesday.
The current resistance levels to watch are 1.2500, 1.2550, and 1.2580, while the support levels are 1.2450, 1.2400, and 1.2380.
Support 1.2450, 1.2400, and 1.2380
Resistance 1.2500, 1.2550, and 1.2580
XAUUSD:
Gold price is recovering after a three-day decline, experiencing its largest weekly loss since late September 2022. The XAU/USD pair is benefiting from the consolidation of the US Dollar, driven by hopes of avoiding a US default and mixed comments from Federal Reserve officials. Furthermore, the US Dollar is under pressure due to concerning news regarding inflation and consumer confidence data.
Despite these factors, the Gold price remains vulnerable as investors remain cautious about the US debt ceiling extension, potential banking issues, and deposit concerns.
In the short term, the movements of the Gold price will depend on the outcome of US policymakers' negotiations on the debt ceiling extension, as well as important economic indicators such as US inflation data, US Retail Sales for April, and a speech by Fed Chair Jerome Powell.
Technically the 200MA on the 4H chart worked as support holding the price from breaking the 2000 level. any breakout will take the price toward the 1995 target.
The current resistance levels to watch are 2020, 2037, and 2050, while the support levels are 2000, 1995, and 1980.
Support 2000, 1995, and 1980
Resistance 2020, 2037, and 2050
