XAUUSD
Prediction: Increase
Fundamental Analysis:
The U.S. Department of Labor reported on Thursday that the number of people filing for unemployment benefits for the first time increased by 8k to a seasonally adjusted total of 22.9k for the week ending June 1, which is higher than the expected 22k. Earlier this week, data showed that job openings in the U.S. decreased more than expected in April, with the number of available jobs per job seeker reaching the lowest level since June 2021. The U.S. employment data, expected on Friday, could influence gold prices.
Technical Analysis:
After consolidating in the $2320-$2360 range, XAU/USD prices have continued to rise. Buyers breaking through the top of this range has opened the door for further increases. Since the 14 days-RSI is still bullish, momentum is on the buyers' side. If the price continues to rise, the next resistance level will be $2400, followed by the yearly high of $2450. On the other hand, if the price falls below $2350, the next support level will be the 50-day SMA at $2337. The next bearish target would be the May 8 low of $2303.
EURUSD
Prediction: Increase
Fundamental Analysis:
On Thursday, the European Central Bank (ECB) lowered interest rates by 0.25%, bringing the three main rates down to 4.25%, 3.75%, and 4.50%. This is the first time the ECB has cut rates since 2019, making it the second central bank among the G7 countries to do so. The ECB is expected to cut rates two more times this year, likely in September and December. This is a significant change from the beginning of the year when more than five rate cuts were expected.
Technical Analysis:
If buyers stay in control, the EUR/USD could first test the June high of $1.0916, then the March high of $1.0981, and finally the weekly high of $1.0998, before reaching the key level of $1.1000. If sellers take over, the pair might first aim for the weekly low of $1.0788, which is supported by the 200-day SMA. The 14-RSI is around 56 on the 4-hour charts. The pair is stuck in a medium-term consolidation pattern, but if it pulls back to around 1.0800, buyers might come back since the 50-day EMA is crossing over the long-term MA.
USDJPY
Prediction: Decrease
Fundamental Analysis:
On Thursday, the Japanese Yen (JPY) lost the gains it had made earlier, while the US Dollar (USD) recovered from its losses because of higher US Treasury yields. However, growing speculation that the US Federal Reserve might cut interest rates in September could limit how much the US Dollar and the USD/JPY pair can increase. In the short term, the movement of the USD/JPY pair will depend on Japan's household spending data and the U.S. employment report. If household spending in Japan increases significantly and U.S. wage growth is lower than expected, it could affect the demand for buying USD/JPY.
Technical Analysis:
The 14-day Relative Strength Index (RSI) is just below 50, suggesting a possible further decline that could confirm a bearish trend. The immediate support for the USD/JPY pair is at the $156.00 level. Further support appears at the 50-day Exponential Moving Average (EMA) at $154.69. If the pair breaks above #157.00, it could move up to retest $160.32.
US Oil
Prediction: Increase
Fundamental Analysis:
US Oil prices started to recover on Thursday after dropping nearly 10% over five trading days. This big drop happened because the OPEC+ meeting did not take steps to keep prices around $80.00. Markets were disappointed, and several central banks made things worse by indicating that they might not cut interest rates aggressively because inflation is slowing down too slowly. Oil prices might get a boost because data shows that the US Federal Reserve might cut interest rates in September.
Technical Analysis:
Oil prices need to first rise back to around $75.27 before targeting the key 100-day and 200-day SMA at $79.09 and $79.42. The $76.00 level is now a resistance point, and the $75.27 level is crucial if traders hope to reach $80.00 again. However, if prices fall below $70.00, they could drop further down to $68.00.
Market Analysis Disclaimer:
The market analysis provided by KVB Prime Limited is for informational purposes only and should not be construed as investment advice or a recommendation to buy or sell any financial instrument. Trading forex and other financial markets involves significant risk, and past performance is not indicative of future results.
KVB Prime Limited does not guarantee the accuracy, completeness, or timeliness of the information provided in the market analysis. The content is subject to change without notice and may not always reflect the most current market developments or conditions.
Clients and readers are solely responsible for their own investment decisions and should seek independent financial advice from qualified professionals before making any trading or investment decisions. KVB Prime Limited shall not be liable for any losses, damages, or other liabilities arising from the use of or reliance on the market analysis provided.
By accessing or using the market analysis provided by KVB Prime Limited, clients and readers acknowledge and agree to the terms of this disclaimer.
RISK WARNING IN TRADING
Transactions via margin involve products that use leverage mechanisms, carry high risks, and are certainly not suitable for all investors. THERE IS NO GUARANTEE OF PROFIT on your investment, so be wary of those who guarantee profits in trading. You are advised not to use funds if you are not prepared to incur losses. Before deciding to trade, ensure that you understand the risks involved and also consider your experience.
