The Bitcoin “death cross” has occurred. The S&P 500 rallied the most in five weeks! Crude oil and gold jumped as the US dollar weakened.
USD strengthened as optimism waned
- The market optimism waned amid stricter restrictions to control rising coronavirus infections. S&P 500 and Nasdaq dropped from the all-time highs, while the USD jumped higher.
- President Joe Biden warned that the Covid-19 pandemic will worsen before it improves.
- Hong Kong will for the first time lock down tens of thousands of citizens to take the virus spread under control. It added to the overall risk-off tone in markets.
- ECB President Christine Lagarde cautioned that the Covid-19 continues to present a severe risk. The central bank will continue pumping huge amounts of money to support the economy.
- Elsewhere, oil dropped amid Friday’s risk-off mood.
- All attention to PMI reports from the EU, UK, and USA during the day.
Since the pair touches the upper line of Bollinger Bands, we can assume that it should fall till it reaches the 50-period moving average of 1.2140. The move below this level will drive the euro lower to the next support of 1.2100. Resistance levels are 1.2180 and 1.2220.
The British pound dropped below the key support of 1.3700, but the 50-hour moving average constrained the further falling. It’s more likely to reverse up as it could be just a natural selling after the breakout above 1.3700. If it rises above 1.3740, the way up to 1.3750 will be open.
XAU/USD is trying to break down the support of $1 860 but has failed to do it so far. If it manages to do so, it will plunge to the 50-period moving average of $1 850. On the flip side, the move above yesterday’s high of $1 875 will push the pair up to $1 885.
The aussie may turn to the upside now as it touches the 50- and 100-period moving averages at 0.7730. The move above yesterday’s high of 0.7780 will drive the pair up to 0.7800. Support levels are 0.7730 and 0.7690.
Wednesday will please traders as many economic indicators will be out! The USA, UK, and Euro Area will release PMI reports on June 23 from 10:15 to 16:45 MT.
Last week the USD soared versus other major currencies, while gold headed for the biggest weekly loss in 15 months. Let’s see what new moves await us this week!
US PCE Price Index will be out on Friday at 15:30 MT.
Microsoft joined Apple in the $2 trillion dollar club! Follow PMI reports from the US, UK, and EU throughout the day!
The Bank of England will release its statement and announce its monetary policy decision on June 24 at 14:00 MT.