XAUUSD
Prediction: Decrease
Fundamental Analysis:
Gold climbed more than 0.80% after US Treasury bond yields dropped following the release of mixed data from the United States (US), increasing hopes that the US Federal Reserve might ease policy. That, along with a risk-off impulse, kept the yellow metal climbing after hitting a daily low of $2,314 and trading at $2,345.
Last week, the Fed’s preferred inflation gauge, the US Core Personal Consumption Expenditure Price Index (PCE), stabilized, augmenting hopes for rate cuts. Meanwhile, business activity was mixed, according to reports from S&P Global and the Institute for Supply Management (ISM) in May, with the latter contracting for the second consecutive month.
Technical Analysis:
Gold price uptrend remains intact after bouncing off the 50-day Simple Moving Average (SMA) at $2,331. Momentum shifted in favor of the buyers, as the Relative Strength Index (RSI) remained above the 50 midline, opening the door for further Gold’s upside. Further gains lie ahead if XAU/USD buyers reclaim the $2,400 level, followed by the year-to-date high of $2,450 and, subsequently, the $2,500 mark. Conversely, if XAU/USD falls below the 50-day Simple Moving Average (SMA) at $2,331, that could pave the way to challenge the May 8 low of $2,303, followed by the May 3 cycle low of $2,277.
USDJPY
Prediction: Increase
Fundamental Analysis:
The latest Tokyo inflation report, widely regarded as a leading indicator for national inflation trends, reveals increasing price pressures in May. The core Consumer Price Index (CPI), which excludes fresh food, rises in line with forecasts to 1.9% year-on-year, up from 1.6% in April. Meanwhile, the headline CPI, which includes all items, climbs from 1.8%, a two-year-plus low, to 2.2% year-on-year.
This upward movement in inflation is a positive development for the Bank of Japan. However, it will unlikely prompt the central bank to tighten its monetary policy in the coming weeks. The Bank of Japan closely monitors price dynamics to achieve its longstanding 2% inflation target sustainably and stably.
Technical Analysis:
Retail trader data show 25.18% of traders are net-long with the ratio of traders short to long at 2.97 to 1.The number of traders net-long is 3.42% lower than yesterday and 11.68% lower than last week, while the number of traders net-short is 4.31% lower than yesterday and 1.38% lower than last week.
WTI
Prediction: Increase
Fundamental Analysis:
The Organisation for Petroleum Exporting Countries and its allies, otherwise known as OPEC +, decided to extend their existing production cuts when officials met on Sunday. The move comes amid a backdrop of rising stockpiles, surging US oil production and tepid demand growth from the world’s largest oil importer, China.
Technical Analysis:
Oil prices have fallen off in recent days, seeing higher prices capped at $85 before heading towards the psychologically important $80. The recent decline also took out the $82 marker with relative ease but today’s price action appears to have found support ahead of the $80 mark.
Upside potential appears to be capped at the $84/$85 level with the 200-day simple moving average (SMA) repelling higher prices. The medium-term trend remains in favour of further downside but the risk of a near-term pullback will need to be observed at the start of the week, with the descending trendline offering the first test of a potential counter-trend move.
HSI
Prediction: Increase
Fundamental Analysis:
Hong Kong's stock market has staged a powerful rally after China's stimulus package lifted sentiment and global investors rebalanced their portfolios to take advantage of cheap local shares. The Hang Seng Index's four-month winning streak is its longest since a five-month run through February 2021.
Recent interactions with investors have generated "very positive feedback", with long-term overseas funds, hedge funds and even some sovereign wealth funds showing more interest in IPO deals in the pipeline, Selina Cheung, co-head of Asia equity capital markets at UBS, said at the briefing.
Technical Analysis
The Hang Seng Index looks like it has found its bottom and is looking to rebound back up to the upside once the price touches 200 MA. We can look for an entry at 17900 with a profit taker at 19800 and look further to the ATH.
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