Global markets started the new week on a positive note after US President Joe Biden signed the debt ceiling bill into law, averting a potentially catastrophic default by the US government. The bullish sentiment was also boosted by the latest OPEC+ meeting outcome.  

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, on Sunday, agreed another cut in global oil production next year to prop up prices. Saudi Arabia also announced to cut oil production by 1 million barrels per day in July.

Moving ahead to this week, the important economic events to watch are the series of Service PMI numbers from the US, UK, Germany and the Eurozone, the Reserve Bank of Australia and the Bank of Canada interest rate decision.

On the earnings front, the companies scheduled to release their last quarter financial results this week will be GameStop, Nio and DocuSign.

GOLD

Gold price remain under pressure and extend the losses on Monday morning with their safe-haven appeal diminished as risk sentiment improved after the U.S. Congress passed a debt ceiling deal that averted a government default in the world's biggest economy. Meantime, the latest US employment data indicates strong hiring momentum and increased layoffs. June rate hike probability by the Fed rises to 32% post-NFP release, up from 22%. For this week, the main drivers for gold remain the movement of the US dollar and inflation data from China.

From a technical perspective, The $1930 area of confluence has recently been held as a firm support, failure to defend the mentioned support levels has the potential to drag the metal further towards the $1920/18 support zone. On the upper side, in case the metal manages to settle above $1952, it will regain upside momentum and head towards the next resistance level at $1965/70.

DOLLAR INDEX

The dollar index, which measures the US currency against six others holds the Friday gains. The dollar strengthened on Friday after data showed an increase in jobs in the world's largest economy last month. U.S. nonfarm payrolls added 339,000 jobs in May, nearly double the median estimate of 195,000 and the largest increase since January 2023, U.S. Labor Department data showed on Friday. For the dollar, no major data is expected on the economic calendar this week, although the US ISM services PMI and factory orders are scheduled later on Monday and will be important to watch.

This week, good support is expected at the 103.40/30 area, with this zone having been held last week, failure to defend the mentioned support level has the potential to drag the pair further towards the 103 support zone. On the flip side, a move above 104.70 (the previous week high’s) again will push the pair into a new trading zone, which may offer further buying opportunities until the 105 and 105.30 zones.

EURUSD

EURUSD closed last week slightly higher but it is far too early however to suggest the euro-dominant downtrend is over. This week, investors largely focused on ECB President Christine Lagarde’s speech for insights into the central bank's rate hike path. Lagarde is also scheduled to speak at a hearing before the Committee on Economic and Monetary Affairs on Monday evening. It will also be an idea to keep a lookout for the Eurozone retail sales and GDP numbers this week.  

For this week, the immediate support prevails at 1.0660 then 1.0630, further breakout of 1.0630 can lead the index towards 1.0600 and 1.0590 levels. On the flip side, a recovery of the bullish move requires a break of 1.0800. This opens the door toward 1.0850 and a further price advance makes 1.0900 available.

DOW JONES

Dow Jones and other US indices registered solid gains on Friday following the release of mixed US jobs data and the clearance of the US debt limit deal. On the other hand, the growing expectations that the Federal Reserve will pause its interest rate hikes this month also fuel the bullish sentiment. However, flat start at the reopening of futures trading on Monday with US equity futures little changed. This week in Wall Street, the main event of interest is US ISM services PMI data and GameStop earnings results.

DXY is traded steadily above the 33,800 area but seemed limited in its attempts to move higher in the short term. This week's resistance for the Dow appears to be around 34,300. If the price break and closes above 34,300, the next upside level to watch is 34,500 then 34,880. On the downside, if the index breaks and close below the 33,500 area again the next immediate downside area is to watch 33,200 and 33,050.

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