XAUUSD
XAUUSD prices faced resistance around $2,385 in early Asian trading hours on Monday. The hawkish comments from Federal Reserve (Fed) officials have tempered the upside potential for the precious metal. However, escalating tensions in the Middle East, particularly between Israel and Iran, may provide support to safe-haven assets like gold.
The recent hawkish sentiment in the market, fueled by Fed officials' remarks, poses a challenge to gold's demand. Investors may shy away from non-yielding assets like gold in anticipation of higher interest rates. Nonetheless, geopolitical uncertainties stemming from the Middle East conflict could offset some of the downward pressure on gold prices.
WTI
Oil prices dipped at Asia's open on Monday, primarily driven by renewed attention to market fundamentals. Israel's seemingly limited strike on Iran reduced concerns about an escalation of hostilities in the Middle East, easing upward pressure on oil prices.
Brent futures fell by 0.6% to $86.75 a barrel, while the May contract for U.S. West Texas Intermediate (WTI) crude dropped to $83.02 a barrel. The more active June contract also declined, indicating a general bearish sentiment in the market.
The focus on market fundamentals suggests that supply-demand dynamics are exerting influence on oil prices. While geopolitical tensions can cause short-term fluctuations, the broader trend may be shaped by factors such as global oil inventories, production levels, and demand outlook.
USDJPY
The Japanese Yen (JPY) started the week on a subdued note, remaining near multi-decade lows against the US dollar during the Asian session. A positive risk sentiment in the market has weighed on the JPY, although concerns about intervention from Japanese authorities have limited losses.
The USD/JPY pair continues to consolidate within a range-bound pattern, indicating a period of bullish consolidation following the rally from the March low. Technical analysis suggests that the pair may encounter resistance around the multi-decade high of 154.75-154.80, with the 155.00 psychological level acting as a significant hurdle.
Reduced expectations of a Fed rate cut have bolstered the USD, providing support to USD/JPY. However, intervention fears and the possibility of market corrections could introduce volatility to the pair's trading dynamics.
Entry Suggestions:
XAUUSD: Consider short-term long positions if gold prices breach above the $2,385 resistance level, especially if geopolitical tensions in the Middle East escalate further.
WTI: With oil prices showing a bearish sentiment, short-term short positions could be considered if Brent futures break below $86.75 a barrel or WTI crude falls below $83.00 a barrel, targeting support levels.
USDJPY: Given the consolidation phase of USD/JPY and the potential for a bullish breakout, long positions might be favorable if the pair surpasses the multi-decade high resistance around 154.75-154.80, aiming for the psychological level of 155.00. However, cautious monitoring of intervention risks is advised.
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Paraphrasing text from FXStreet, and Reuters all rights reserved by the original author.
