The dollar index, which measures the greenback against six other major currencies retreated from the 20-years highs. The greenback is expected to be extra volatile today during the North American session as the US will release the April month retail sales data and Federal Reserve chair Powell is also due to speak about inflation at an event tonight. The U.S. retail sales data is expected to show that retail sales increased by 1.0% during April and core retail sales rose by 0.4%.
US futures trade near the session highs as investors wait for the retailer’s earnings numbers and the latest US retail sales report. The world’s largest retailer Walmart (NYSE: WMT) kicks off retailers’ earnings week on Tuesday. Walmart is expected to post quarterly earnings of $1.47 per share and revenues are expected to be $138.8 billion.
Crude oil futures extended gains on Tuesday after the European Union failed to unanimously agree on an import ban on Russian crude, a move that would further tighten global supply. The oil prices also received additional buying pressure on hopes that Shanghai plans to gradually reopen after spending more than six weeks in lockdown.
In the currency market, the EURUSD rebounded from record lows since January 2017. Moving ahead to the North American session, the EURO traders should closely monitor the speech from the President of the European Central Bank (ECB) Christine Lagarde. Meanwhile, the data on the Q1 gross domestic product of the EU countries showed the GDP increased 0.3% on quarter in the last quarter.
Gold price rebounded back to near the short-term resistance area of $1830 on Tuesday morning session boosted by the pullback in the US dollar. As of this writing, the precious metal trades at $1826.
On the data front, the UK released a better-than-expected employment report on Tuesday. The UK rate of unemployment dropped to 3.7% in the three months to March – the lowest since October to December 1974. While the number of UK workers on the payroll, up 121,000 between March and April to 29.5 million.
Moving ahead today, the important events to watch:
US – Retail sales: GMT – 12.30
US – Industrial production: GMT – 13.15
Worldwide, more than 521 million people have been confirmed infected and more than 6.26 million have died. The United States has confirmed over 82 million cases and has had more than 999,000 deaths from COVID-19, the highest total in the world.
Technical Outlook and Review
EURUSD: The currency pair holding the early session gains. If the bullish momentum continues the next upside levels to watch are 1.0510 and 1.0540. On the downside, the immediate support is around 1.0400.
The important levels to watch for today: Support- 1.0430 and 1.0400 Resistance- 1.0500 and 1.0540.
GOLD: Gold price trades steady above $1825. If the bullish momentum continues the next upside levels to watch are $1832 and $1836. On the downside, any meaningful pullback now seems to find some support near the $1820 zones, below which the slide could further get extended towards the $1816/12 region.
The important levels to watch for today: Support- 1820 and 1816/12 Resistance- 1832 and 1836/40.
Quote of the day - “I think investment psychology is by far the more important element, followed by risk control, with the least important consideration being the question of where you buy and sell.” – Tom Basso.