Spreads
Spreads
Spreads
Spreads
Spreads
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EUR/USD (4 Hours)
EUR/USD Holds Steady Amid Central Bank Talks and Debt Limit Negotiations
The EUR/USD remained steady at 1.0800 level after recovering from a month-low, but the overall sentiment remains negative. The focus shifted to central bank discussions and negotiations around the US debt limit. Federal Reserve officials expressed a hawkish stance, suggesting the need for higher interest rates. The market expects a potential rate hike in June, but chances are around 25%. The release of FOMC minutes and the Core Personal Consumption Expenditures Price Index will be crucial for monetary policy expectations. Additionally, attention is on resolving the debt limit crisis. Increased volatility is expected as European PMI numbers are released, providing insight into economic performance in May. The market anticipates another rate hike from the European Central Bank, although consensus on future actions is starting to waver.
According to technical analysis, the EUR/USD pair is currently experiencing a slight upward movement from its lowest price, returning to hover around the middle band of the Bollinger Bands. It is anticipated that the EUR/USD will maintain a consolidation phase during the early session before adjusting its movement based on key events, namely the Flash Manufacturing and Services PMI reports scheduled for today. The Relative Strength Index (RSI) currently stands at 44, indicating that the EUR/USD has returned to a neutral position.
Resistance: 1.0815, 1.0848
Support: 1.0750, 1.0715
XAU/USD (4 Hours)
Gold (XAU/USD) Under Pressure as Markets Await Catalysts and Monitor US Debt-Ceiling Talks and Fed’s Rate Hike Signals
Spot gold (XAU/USD) is experiencing slight downward pressure as it trades at around $1,975 per troy ounce, although it remains at the higher end of Friday’s trading range. The market is eagerly awaiting a new catalyst while keeping an eye on US debt-ceiling negotiations, as a potential default on June 1 looms. Discussions are ongoing but no significant agreements have been reached yet. Tensions are also rising ahead of the release of the FOMC Meeting Minutes next Wednesday, accompanied by statements from several Federal Reserve speakers. James Bullard believes the central bank will raise the policy rate further with at least two more 25 basis points hikes, while Neel Kashkari sees it as a close call and is willing to maintain rates to assess past rate increases’ effects. Mary Daly suggests that tighter credit conditions could be equivalent to one or two rate hikes and emphasizes the need for data-dependent decision-making. Financial markets predict that the US central bank will avoid raising rates in June and July due to concerns over potential harm to the financial system.
According to technical analysis, on Monday, XAU/USD made a slight upward movement but was unable to maintain its position and dropped below our resistance level, settling around the middle band of the Bollinger Bands. There is a chance that XAU/USD might undergo a modest downward movement and attempt to reach the lower band of the Bollinger Bands. Currently, the Relative Strength Index (RSI) is at 43, signaling that XAU/USD has returned to a neutral stance.
Resistance: $1,974, $1,991
Support: $1,950, $1,934
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