As you must already know, the direction of Gold is mainly dependent on the Price action of DXY (US Dollar index). So first, we take a look at the US Dollar index.
What to Trade on June 6-10?
2022-12-15 • Updated
Last week was full of economic events, from the Canadian bank rate and OPEC meeting to US Non-farm employment change. The US Fed is speeding up its monetary tightening, and crypto may experience the most challenging times since the beginning of the market. Commodities are in danger, too. Dive deeper into the most important events of next week!
The ECB will meet on the main refinancing rate (interest rate) on Thursday, 14:45 GMT+3. The six members of the ECB Executive Board and 15 of the 19 governors of the Euro area central banks vote on where to set the rate. Despite the common knowledge that the rate will remain unchanged, ECB will hold a press conference after the monetary policy statement. We will look at plans to fight inflation in the EU. EURUSD will gain volatility and may break through the vital resistance area of 1.0760-1.0800. In case of a breakout, the next resistance for the pair will be at 1.1030.
Oil & Gold
EU leaders had agreed to ban 90% of Russian crude by the end of the year as part of the bloc’s sixth sanctions package on Russia since it invaded Ukraine. Later, Saudi Arabia reported it could step up if Russian output dips under sanctions. Oil didn’t have enough momentum to exit the three-month consolidation with borders at $90-120 per barrel. Still, the outlook for XBRUSD is bullish due to difficulties in switching from Russian imports.
Gold oscillates near the vital support area of $1790-1800. The slide below will mean the bull market for XAUUSD is postponed for several months, and the USD may strengthen simultaneously. However, the greenback prospects are gloomy amid inflation that doesn't slow down fast enough.
Take a closer look at the HK50 index. The Chinese economy is recovering from lockdowns and supply disruptions so we can expect some bullish movements in the nearest time. Step by step, the country takes control over microchip production as the settlements with Taiwan suppliers are now partly managed by China. Also, HK50 is close to the strong resistance trendline, which is the final threshold on the way to the uptrend.
A comparative examination of the strength of the US-Dollar often gives tangible insight into the direction of Gold (XAUUSD). The chart above indicates the expectation of a bullish price reaction from the demand zone.
Last week, Pierre-Olivier Gourinchas, the IMF's chief economist, commented on the IMF's global economic outlook stating clearly that the worst was yet to come. For many people, he opined that the year 2023 would feel like a recession.
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates?
Western countries are trying to find other options for oil and gas supplies after a 10th package of sanctions, which will put more pressure on Russian oil and decrease global oil supply. Italy, for example, is in talks with Libya.