The US Federal Reserve meeting started on Tuesday, the two-day policy meeting that will conclude later today. The traders and investors anxiously waiting for the central bank’s interest-rate decision and views on the economic outlook. Several market participants expect the FED will increase the interest rate of 75 bps to tame surging inflation. While the investors also strongly waiting for the comments on inflation and future interest path from chairman Jerome Powell.
European stocks rebounded from the previous session's lows ahead of the European Central Bank meeting. On the other hand, the US stock futures remain under pressure as investors braced themselves for a more aggressive interest rate hike by the Federal Reserve.
Crude oil prices fell to the fresh weekly low driven by the strong US dollar, equity market sell-off and weak API inventory data. The API data showed the US crude inventories increased by 0.736 million barrels in the week ended June 10th, compared to market expectations of a 1.314 million fall.
In the currency market, the Euro rebounded back to above 1.05 after the ECB said it will hold an emergency meeting today to discuss current market conditions. “The Governing Council will have an ad-hoc meeting on Wednesday to discuss current market conditions,” an ECB spokesperson said.
The precious metal struggling to find upside momentum as traders and investors waiting for the Federal Reserve meeting outcome. Meanwhile, the metal slightly rebounded from the weekly lows after the USD gives back some of the gains.
On the data front, the US producer price index increased 0.8% mom in May of 2022, following a 0.4% rise in April. The core PPI, which excludes food and energy prices, was up 0.5%.
Moving ahead today, the important events to watch:
US – Retail sales: GMT – 12.30
US – EIA crude inventories: GMT – 14.30
US – FOMC interest rate decision and statement: GMT – 18.00
Worldwide, more than 535 million people have been confirmed infected and more than 6.3 million have died. The United States has confirmed over 85.5 million cases and has had more than 1011,200 deaths from COVID-19, the highest total in the world.
Technical Outlook and Review
EURUSD: The pair needs to stay above 1.0500 to have a chance to develop upside momentum in the near term. If the price break and closes above 1.0500, the next upside level to watch is 1.0550 then 1.0600/40. On the downside, if the index break below this week's low of 1.0400 the next immediate downside area is to watch 1.0350/40.
The important levels to watch for today: Support- 1.0400 and 1.0350 Resistance- 1.0550 and 1.0640.
GOLD: For today, considering heavy volatility there are chances the metal can rally back to above the key resistance of $1840. On the downside, the decline is more extensive, and it will be hard to rule out a run towards $1786 if the metal breaks below $1800.
The important levels to watch for today: Support- 1800 and 1786 Resistance- 1835 and 1850.
Quote of the day - “The individual investor should act consistently as an investor and not as a speculator.” — Benjamin Graham.