Brent oil is currently on a bullish trend, facing resistance near $84 and supported by the 200-day EMA. Breaking above this level could lead to a climb towards $90. Short-term support is observed around $80, backed by the 50-day EMA. As summer approaches and travel increases, crude oil tends to benefit from seasonal patterns. Despite temporary setbacks, buying...
Morning brief for May 29
2019-11-11 • Updated
The start of this week was really quiet with the UK, the US observing Memorial Day and China celebrating Dragon Boat Festival.
The British pound slumped to 1.2775 on Friday after YouGov poll suggested the UK election race was getting tighter with Theresa May’s party lead over her Labour counterparts to just 5 points. GBP will likely remain under pressure throughout this week as Sunday’s opinion poll appear to confirm the decline of Conservative support. A poll for the Sunday Telegraph showed Labour party regaining its support lacking just 6 points to catch up with the Conservative party. While the conservative win is still the most probable outcome in June 8 election, recent polls raised concerns over the possibility of a smaller working majority for Tories or even a hung parliament.
The US dollar regained its strength on Friday after the Commerce Department upgraded its first quarter GDP estimate and after Fed of San Francisco President John Williams said that the US economy is strong enough for three-four rate hikes this year. The possibility of President Trump being impeached is low. US domestic intelligence and security service is now investigating into the ties of Trump’s son law Jared Kushner with Russian authorities.
Trump’s finally back home after his 9-day foreign trip. Trump’s first foray on the international stage saw him engaged in multiple negotiations in which he touched on many global issues. He visited Saudi Arabia, Israel, met with the Pope Francis, discussed security issues with NATO members and participated in G7 summit in Taormina, Sicily. The later one ended up with the most developed countries failing to agree on a common stance on climate change or trade (because of Trump of course).
USD/JPY is trading a little bit higher in today’s session at around 111.30 from Friday’s low at 111.20. The yen didn’t show any reaction to North Korea’s missile launch. It seems that market already used to this sort of occasions. The pair has room for extension towards the solid resistance towards 111.80 – the horizontal Senkou B span (the upper border of Ichimoku Kumo).
EUR/USD declined to 1.1170 in the Asian session from Friday’s high at 1.1235. The single currency soared to 1.268 last week following the fortunate election outcome but failed to make any further gains. European Central Bank President Mario Draghi is speaking today at 4:00 PM MT time. He will likely be asked about his plans for stimulus withdrawal (QE taper). If Draghi still points to still low inflation figures, the euro will be hurt. The euro area data that came in recent weeks is very strong, The disconnect between accelerating growth in the Eurozone and sluggish inflation is a puzzle that should be unraveled by the ECB officials before they meet to decide on their monetary policy stance on June 8.
The NZD was the major performer on Friday. It spiked almost to 0.7080. In today’s Tokyo session, it was trading at 0.7060 level.
USD/CAD ticked up to 1. 3460 from Friday’s low of 1.3430 as oil crude futures slipped some points in the Asian session. Oil prices suffered significant losses last week after an OPEC-led decision to curb oil supply didn’t go as far as many investors projected.
Bearish Scenario: Sales below 78.99 with TP1: 77.93, TP2: 77.45, and upon its breakout TP3: 76.56 and TP4: 75.70 Bullish Scenario: Purchases above 78.00 (wait for a pullback to this area) with TP1: 1679.00 (uncovered POC*), TP2: 79.33, and TP3: 79.66 intraday
Bearish Scenario: Sales below 80.00 with TP1: 79.34, TP2: 78.94, TP3: 78.55, and 78.00 Bullish Scenario: Buys above 78.00 (wait for a retracement to the zone) with TP: 79.34 TP2: 80.00, and TP3: 81.00
On Friday, the gold price (XAUUSD) retreated from a recent two-week high, facing selling pressure. This decline was driven by hawkish minutes from the FOMC meeting, indicating the Fed's reluctance to cut interest rates. Elevated US Treasury bond yields, supported by a "higher-for-longer" narrative, further weakened demand for gold...
Bearish Scenario: Selling below 22.65 with TP1: 22.34 (intraday) and TP2: 22.02 (swing). Bullish Scenario: Buying above 22.70 with TP1: 22.90.
Intraday and swing scenarios based on price action and volume profile.