The latest retreat has roughly two parts to it as gold bulls were once again unable to chase a break above $2,070-75 from the 2020 and 2022 highs, as well as the dollar and bond yields moving higher in tandem. That pushed gold back towards the support region around $1,975-81 and that eventually gave way in trading yesterday.

While there is a bit of a pullback now with dollar gains easing up, gold is still trading below $1,970 and sellers are keeping in near-term control for now. Here’s a look at the daily chart:

Unless we do see price climb back above the $1,975-81 region, gold looks poised for a deeper pullback at this point in time. The next plausible target seems to be closer towards the 100-day moving average (red line) at around $1,928.

Beyond that, it could prove to be a slippery slope for gold prices as it lurches back towards $1,800+ levels. I would rate the odds of such a strong pullback as being limited but I wouldn’t discount the risks, especially since markets have been underestimating the dollar side of the equation since the regional banking crisis.

We’ve gone from pricing three Fed rate cuts by year-end to two now and that is exerting its influence on the dollar this week. If there is more to come, that means that the dollar rally may have legs to go and that doesn’t bode well for gold in the short-term.

That said, in the bigger picture, I still like gold’s long-term outlook especially as we draw closer towards the end of the tightening cycle. A deeper pullback to $1,800+ levels will present a very attractive dip buying opportunity in my view and I’d pile in on more longs there.

I wouldn’t go as far as to say that chasing gold shorts on a move under $1,800 is the way to go considering the balance of risks. As such, it is setting up to be a buy on dips kind of thing for gold in my view.

Of course, there still needs to be a break above $2,070-75 in the big picture but if we do return back to the expected playbook during the second-half of this year, I reckon the topside level could easily be taken out as we move towards next year.

This article was written by Justin Low at www.forexlive.com.

On the daily chart below for the Nasdaq,
we can see that we have finally got a breakout. This 12274 level has been a
really tough nut to crack, but the buyers eventually succeeded. We can see how
they’ve been knocking on that door for over a month and as soon as the price
started to run to the upside, sellers folded quickly.

The risk sentiment was also
helped by the recent positive
news on the debt ceiling front which points to a classic “buy the rumour”
type of trade. Right now, the buyers don’t have much resistance on the upside except the clear
swing high at 13174. We may even see the rally extending towards that high with
little to no pullbacks as the FOMO kicks in.

Nasdaq
technical analysis

On the 4 hour chart below, we can
see more closely the breakout of the range just beneath the 12274 resistance.
The big bullish
flag pattern is still working and as previously mentioned, the target should
be right around the 13000 high. The sellers may have a hard time now timing a
top as there aren’t strong levels to lean on as before. Nonetheless, watch out
for Fed Chair Powell today as he may lean more explicitly
towards a June rate hike justified by the recent better than expected economic
data.

On the 1 hour chart below, we can
see that we have just a minor resistance from the August 2022 swing high. This
level may see some profit taking and lead to a pullback. The buyers should be
waiting for another rally at the nearest trendline though, while the sellers will
want to see the price to break below it to get some more confidence on further
downside. What looks clear is that the bias should remain bullish as long as
the price stays above the 12274 resistance.

This article was written by ForexLive at www.forexlive.com.

• ECB will be courageous to take needed decisions to bring inflation back to 2%

Just some token remarks and not really giving much away for now. Another rate hike is well expected for June but we will see if there will be any more after for the ECB. A lot of that is going to come down to the data.

This article was written by Justin Low at www.forexlive.com.

The dollar jump yesterday was certainly noteworthy but we are seeing a light pullback to the gains in trading today. Of note, USD/JPY is down 0.4% to 138.10 levels but buyers are still looking poised in the bigger picture.

Meanwhile, the antipodeans are also taking advantage amid the more positive risk mood. AUD/USD and NZD/USD are both up 0.5% to 0.6650 and 0.6260 respectively with the former holding a decent bounce off 0.6600 at the lows yesterday.

Despite the bit-part retracement so far today, the dollar continues to sit in a good spot from a technical perspective. That is rather evident against the euro and yen, so let’s take a look.

EUR/USD is marginally higher today near 1.0780 but the important detail on the chart remains that break below 1.0800 and the 100-day moving average (red line). That is keeping dollar bulls interested and poised to maintain a downside push in the pair so long as the levels above hold.

As for downside targets, there is room to roam perhaps back towards the March lows at 1.0516-36 and potentially 1.0500. However, there will definitely be a lot of twists and turns in the week(s) ahead so don’t expect any moves to be that straightforward.

Then, we have USD/JPY which rose to its highest levels since the end of November last year on a break above 138.00 yesterday. That is still very much holding with the broken resistance region at 137.77-91 one to watch if sellers are to wrestle back some momentum towards the end of the week.

Otherwise, buyers are looking poised to keep a push towards 140.00 next for the pair so long as the bond market plays ball.

But the pullback today is also seeing yields drop slightly with 2-year Treasury yields down 5 bps to 4.22% and 10-year yields down 2.5 bps to 3.62% on the day.

This article was written by Justin Low at www.forexlive.com.

The USD is the strongest and the GBP is the weakest as the NA session begins. It is a holiday in most European countries in observance of Ascension Day (banks are closed). US yields are higher. US stocks are modestly higher. Walmart reported better earnings this morning with EPS coming in at $1.47 versus $1.32 expected. Revenues were higher at $152.3 billion versus $148.76 billion expected. Sales ex-gasoline were up 7.3% versus 5.1%. Walmart shares are trading at $151.81 versus $149.53 at the close yesterday. Oil prices have slightly dropped, awaiting the outcome of the debt limit talks. A successful agreement could bolster the prices. Yesterday, the inventory data showed a sharp build of 5.0 million barrels vs an expected draw of -1.2M barrels expected. The price moved higher by 2.78% (go figure).

U.S. President Joe Biden is in Japan for the G7 meeting discussing key global issues, while the spotlight stays on the resolution of the debt ceiling talks back home. The President has expressed optimism, emphasizing that the U.S. „will not default“ and citing ongoing negotiations with top Congress members. He is expected to return to Washington on Sunday to aid in reaching an agreement, which Republican leader Kevin McCarthy believes is feasible by the weekend. Despite guarded optimism, no formal resolution has been reached, and a potential government default looms as early as June 1.

The day’s economic agenda commences at 8:30 am with the release of the Canadian New Housing Price Index (NHPI) data. The forecast suggests a slight dip of -0.1%, compared to the previously recorded 0.0%. In the US at the same time, Unemployment Claims are expected to decrease to 253K from the previous count of 264K (the 4-week average was the highest since November 2021). The Philadelphia Fed Manufacturing Index is also set to be unveiled with an anticipated improvement to -19.5 from a previous -31.3. Recall, the empire manufacturing index fell sharply on Tuesday (to -31.8 from 10.8 in the previous month). At 9:05 am, remarks from FOMC Member Jefferson are scheduled, followed by FOMC Member Barr at 9:30 am. Their commentary could provide valuable insights into the Federal Reserve’s perspective on the state of the economy and monetary policy.

At 10:00 am, the release of US Existing Home Sales data, is forecasted to decline to 4.30 million from the previous figure of 4.44 million. Additionally, the Conference Board Leading Index on a month-on-month basis is expected to report a smaller decrease of -0.6%, an improvement from the previous -1.2%. FOMC Member Logan is also slated to speak during this hour. The sharp decline is forecasting a recession in the US going forward (nothing new).

A tentative release of the Bank of Canada’s (BOC) Financial System Review is on the docket, with no specific time provided. At 11:00 am, remarks from the Bank of Canada’s Governor Macklem are scheduled, potentially shedding light on Canada’s monetary policy direction.

Overnight, in the Asian Pacific session disappointing labor market data for April was released. Jobs in the economy shrunk while the unemployment rate jumped higher (however, the unemployment remains near record lows so it is not all bad). Nevertheless, the data today in addition to the subdued wages data published yesterday, along with other indications showing some steam coming out from the Australian economy should give the Reserve Bank of Australia reason enough to pause at its upcoming June 6 meeting. New Zealand PPI was lower than expectations.

Montana is the first US state to ban TicTok. The decision is expected to be challenged in the courts. If the ban is maintained it will go into effect in January and will raise tensions between the US and China.

A look around the markets is showing.

• WTI crude oil is down $0.05 or -0.07% at $72.78
• Gold is down $5.70 or -0.29% at $1975.77
• Silver is down $0.18 or -0.84% at $23.54
• Bitcoin is back about the $27,000 level at $27,377. The price low reached $26,550.

In the premarket for US stocks, the major indices are marginally higher after yesterday’s gains:

• Dow industrial average is up 14.23 points after yesterday’s sharp 408.63-point rebound
• NASDAQ index is up 37 points after yesterday’s 157.51-point rise
• S&P index is up 8.25 points after yesterday’s 48.89-point rise

Although it is a banking holiday in Europe, stocks continue to trade:

• German DAX +1.64%
• Frances +0.92%
• UK’s FTSE 100 +0.49%
• Spain Ibex +0.64%

in the US debt market, yields are higher:

• 2-year yield 4.186% +3.0 basis points
• 5-year yield 3.617% +2.6 basis points
• 10-year yield 3.602% +2.1 basis points
• 30-year yield 3.89% +1.1 basis points

This article was written by Greg Michalowski at www.forexlive.com.

Headlines:

• The dollar’s resilience should not be understated
• EUR/USD hovers near key support with large expiries in play today
• USD/JPY flirts with key resistance region, 140 being eyed next?
• AUD/USD looks resigned to test the March and April lows again
• DAX closes in on record highs again as equities maintain the optimism
• ECB’s de Guindos: There is still scope to keep raising rates
• BOE’s Bailey: I do not envisage balance sheet returning to pre-financial crisis level

Markets:

• USD leads, GBP lags on the day
• European equities higher; S&P 500 futures up 0.2%
• US 10-year yields up 1.9 bps to 3.600%
• Gold down 0.3% to $1,975.66
• WTI crude down 0.2% to $72.67
• Bitcoin up 0.1% to $27,365

It was a quiet session with not many headlines, as some parts of Europe are on holiday and with there being no major economic releases whatsoever.

That did not stop the dollar though, as it continues its grind higher and to test key levels in EUR/USD and USD/JPY.

The former is closing in on key support near 1.0800, although there are large option expiries limiting the downside push for now. Meanwhile, the latter is also running up against recent highs around 137.77-91 at the moment as buyers look for a breakout towards 140.00.

This comes despite equities continuing to show much optimism, with European indices rallying hard after the Wall Street gains yesterday. US futures are also slightly higher, so that is helping with the mood. Of note, the DAX is just inches away from fresh record highs set last year at 16,285-90.

As the dollar holds more resilient again, GBP/USD is seen down 0.4% to 1.2440 as the retreat this week continues while AUD/USD is down 0.3% to 0.6640 as the aussie is dragged down by softer jobs data earlier.

It’s a rare sight to see the dollar move higher in a time where stocks are also performing well, but it is what it is at the moment in markets.

Traders have been quick to price in relatively dovish Fed expectations since the regional banking crisis but perhaps that is now backfiring as high inflation is keeping the Fed on course to hold rates higher for longer, alongside economic conditions that are holding up in the US.

This article was written by Justin Low at www.forexlive.com.

Market picture

The crypto
market capitalisation rose 0.55% over the past 24 hours to 1.134 trillion. Late
Wednesday afternoon, another attempt was made to break above 1.14 trillion,
following the US stock market rally on the government debt ceiling news.
However, it has so far failed to stay in this territory.

Bitcoin is
up 0.7% at $27.2K, staying within the recovery trend that has been in place
since the 12th. However, this recovery is painfully slow, and local resistance
at $27.5K, which has been supporting since late March, remains in place.

According to
Santiment, large Bitcoin holders continue accumulating BTC – over the past five
weeks, cryptocurrency holdings have increased by nearly 85,000 BTC ($2.3
billion). Santiment believes Bitcoin is now in a consolidation phase before a
new surge.

News background

The stock
and cryptocurrency markets will collapse if the US defaults, says Mike McGlone,
senior strategist at Bloomberg Intelligence. He is bearish on cryptocurrencies
but bullish on gold.

Lightning
Labs, the developer of the Lightning Network, announced the release of Taproot
Assets Protocol v 0.2, which avoids potential delays in transaction processing
due to congestion on the Bitcoin network.

The UK
Parliament has proposed regulating cryptocurrencies as gambling. Crypto assets
can potentially be used for fraud and money laundering, posing a high risk to
consumers and the economy.

Tether’s
issuance team has decided to invest up to 15% of its net profits in Bitcoin
monthly to diversify its reserves. It has already invested $1.5 billion in BTC.
The bulk of USDT’s collateral is still in short-term US Treasuries.

According to
a Bloomberg survey, only 31 of the top 60 cryptocurrency companies have
successfully undergone external financial audits or confirmed reserves. Many
auditors are reluctant to work with cryptocurrency companies or need more
expertise.

This article was written by FxPro’s Senior Market Analyst Alex
Kuptsikevich.

This article was written by FxPro FXPro at www.forexlive.com.

On the daily chart below for the S&P
500, we can see that the price action remains rangebound just beneath the 4175
level. This has been a really strong resistance and we can expect some quick
rally once the price breaks out decisively with buyers jumping in aggressively
and sellers folding fast.

Overall, the market hasn’t done
much since April as we’ve just been bouncing up and down between the 4175
resistance and the 4061 support. This is the type of market that
chops out many traders that suffer from impatience. At the moment, it’s a
waiting game until we get a clear breakout supported by a fundamental catalyst.

In the 4
hour chart below, we can see that we have an even tighter range between the
4175 resistance and the 4120 support. Such compressions generally lead to big
moves once the market breaks out. The big spike yesterday was due to positive
news on the debt ceiling front, but it’s more likely that in case of a deal
we get a “sell the fact” reaction rather than a rally. The risk events to watch next are the US Jobless Claims
today and Fed Chair Powell speech tomorrow.

In the 1
hour chart below, we can see more closely the tight range we’ve been stuck into
since the start of May. A break above the 4175 level should lead to a quick
rally into the 4206 high. That will be the last line of defence for the sellers
as a break beyond that will lead to further upside into the 4300 area. On the
downside, the sellers may lean again on the 4175 resistance and target the 4120
support first, and 4061 support next. Keep close eye on these levels.

This article was written by ForexLive at www.forexlive.com.

On the daily chart below for
EURUSD, we can see that the market has finally turned around and the trend has
now changed. The multiple failures to break above the 1.1033 high were
significant and once the price fell below the red long period moving
average, the sellers started to pile in aggressively, eventually pushing the
price much lower.

The moving averages have now
crossed to the downside in a further confirmation that we are in a downtrend.
We could also have a major double
top pattern
with the neckline at 1.0533. The first support for the buyers should be at the
1.0750 level, where we may see the first deeper pullback after such a quick
selloff.

EURUSD
technical analysis

On the 4 hour chart below, we can
see that the market was trading within a rising channel diverging with the MACD. This is generally a sign of
weakening momentum and it’s often followed by pullbacks or reversals. The
divergent rally into the 1.1033 high was in fact meaningful as the rally
stalled there and started to range until we eventually got a breakdown. The
moving averages are acting as resistance for the current downtrend and the
sellers should keep on leaning on them until the 1.0750 support.

On the 1 hour chart below, we can
see that the price has recently pulled back into the 1.0845 resistance before
falling again towards the 1.0810 low. The sellers should pile in more heavily
once the price breaks below the low, targeting the 1.0750 support. It’s worth
noticing that the price has started to diverge with the MACD, and we are
getting closer to the key support.

This may be a sign that we are
about to see a deeper pullback to the upside before the next selloff. The
buyers, on the other hand, should be waiting at that 1.0750 support to target a
rally towards the 1.09 handle or wait for the price to break above the
trendline before piling in.

This article was written by ForexLive at www.forexlive.com.

Headlines:

• Dollar starting to benefit from that discarded tailwind?
• EUR/USD staggers towards key technical test as dollar holds firmer
• USD/JPY inches closer towards key resistance point
• BOE’s Bailey: Things are looking a bit brighter than they did a couple of months ago
• UK’s Hunt: The overwhelming priority has to be lowering inflation
• Eurozone April final CPI +7.0% vs +7.0% y/y prelim
• US MBA mortgage applications w.e. 12 May -5.7% vs +6.3% prior

Markets:

• NZD leads, JPY lags on the day
• European equities mixed; S&P 500 futures up 0.3%
• US 10-yeaar yields down 3 bps to 3.518%
• Gold down 0.1% to $1,986.53
• WTI crude up 0.5% to $71.23
• Bitcoin down 1.1% to $26,675

It was a quiet session in terms of headlines but there were some decent and light moves during the session at least.

The handover from Asia saw major currencies stuck in very narrow ranges but that extended in European morning trade, as the dollar gathered a bit of poise – particularly against the euro, pound and yen.

EUR/USD fell from 1.0860 to 1.0820 while GBP/USD declined from 1.2480 to 1.2425 before a light bounce after as dollar gains ease up. It can be seen as price action stretching its muscles, awaiting further conviction by traders. However, mixed markets are not really helping.

USD/JPY also moved up to a high of 137.17 but is keeping just below the 137.00 mark now alongside its 200-day moving average.

That comes despite bond yields looking a tad softer but equities are keeping marginally positive as US futures are higher while European indices are little changed mostly.

The mood in stocks is at least helping to see the antipodeans hold up with AUD/USD up 0.1% to 0.6660 after hitting a low of 0.6630 earlier while NZD/USD is up 0.5% to 0.6260 as price moves back just above its own 100-hour moving average.

It’s one of those days where traders are still largely sorting out their feet, awaiting some form of headline to really firm up any convictions out there.

This article was written by Justin Low at www.forexlive.com.