Global stocks and crude oil futures trade higher on Monday while the upside momentum is limited as investors remain concerned about rising inflation globally and tensions in Ukraine. This week, the main event on the calendar for monetary policy is the June European Central Bank rate decision and the RBA decision. On the other hand, this week all eyes will be turning to the US inflation data which will give us the latest insight into whether inflation continues to rise further upside.
On the earnings front, the companies due to release their results will be the Nio and Stitch Fix will be among those reporting earnings this week.
The safe-haven metal reached a fresh 3-week high of $1873 last week but the metal ended lower on Friday after the better-than-expected US NFP data reinforced the Fed’s stronger rate hike cycle. Fundamentally the metal is expected to be extra volatile this week due to a busy economic calendar and all eyes remain on Friday‘s US CPI data.
This week the metal has key resistance at $1875 breaking above this resistance level then expect the market to zoom up to $1888 and $1895. On the downside, $1830 remains the crucial support area to watch, any break below this level will open doors to $1818/10.
The US dollar index retreated back to below 102 on Monday after the index failed to extend Friday’s rebound. The biggest driver for the greenback this week is the latest US CPI data which is set to be released on Friday. The expected trading range for the DXY this week is between 100.60 support and 103 resistance.
The Index remained in a range above 102 last week, and the initial bias remains neutral for the upcoming week. The key resistance is located for the pair around 102.80, a break above this level will confirm a possible move to 103.40/90. On the downside, any meaningful pullback now seems to find some support near the 101.50 zones, below which the slide could further get extended towards the 100.80/60 regions.
The Euro started the new week on a bullish note ahead of the highly anticipated European central bank meeting on Thursday. The key topic of discussion at this week's ECB meeting going to be the current inflation pressures. The currency pair ended slightly lower during the last week, driven by weak retail economic data from Germany and the Eurozone area.
Technically, the overall momentum remains bullish supported by recent dollar weakness. On the downside, the immediate support will be the same as last week's low at 1.0630, below which the slide could further get extended towards 1.0600 and then 1.0570. On the flip side, the immediate resistance is seen at 1.0780 any break above this level will open a minimum of 1.0830/70.
The Dow Jones ended in negative territory on Friday after the US employment report failed to impress investors. The employment data showed the US economy added 390,000 jobs in May, above market estimates while the unemployment rate was unchanged at 3.6% vs 3.5% expected. Moving ahead to the new week, the Dow traders should monitor the latest developments surrounding the Russia-Ukraine war and the US inflation report.
For this week, considering heavy volatility there are chances the Dow can rally back to above the key resistance of 33,500. On the downside, the decline is more extensive, and it will be hard to rule out a run towards 35,500 and 32,300 if the index breaks below 32,750.
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