Articles
Silver Price Analysis: XAG/USD consolidates in a range around $28.00 mark
143052 May 31, 2021 21:45 FXStreet Market News
- Silver edged higher for the third consecutive session, though lacked any follow-through.
- Bulls struggled to find acceptance, or build on the momentum beyond the $28.00 mark.
- The set-up supports prospects for an upside breakout through the recent trading range.
Silver built on the previous session’s goodish bounce from one-week lows and gained some follow-through traction on the first day of a new trading week. This marked the third straight day of an uptick, through bulls struggled to find acceptance above the $28.00 mark or capitalize on the move.
Looking at the broader technical picture, the XAG/USD has been oscillating in a range over the past two weeks or so. The recent price moves constituted the formation of a rectangle, marking a consolidation phase and pointing to indecision over the white metal’s next leg of a directional move.
Meanwhile, bullish technical indicators on daily/hourly charts support prospects for an eventual breakout to the upside. That said, it will still be prudent to wait for some follow-through buying beyond the $28.25.30 supply zone before positioning for any further near-term appreciating move.
The next relevant hurdle is pegged near May monthly swing highs, around the $28.75 region, above which the XAG/USD seems all set to surpass the $29.00 round figure. The momentum could further get extended towards an intermediate hurdle near the $29.50 area en-route the key $30.00 psychological mark.
On the flip side, any meaningful slide might continue to attract some dip-buying near mid-$27.00s. This, in turn, should help limit the downside near the trading range support, around the $27.25-20 region, which if broken decisively might shift the bias in favour of bearish traders.
Subsequent selling below the $27.00 mark would turn the XAG/USD vulnerable to accelerate the decline towards mid-$26.00s before dropping to the $26.10-$26.00 support zone.
XAG/USD 4-hour chart
Technical levels to watch
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Reserve Bank of Australia Preview: No fireworks as the focus is on July’s meeting
143050 May 31, 2021 21:29 FXStreet Market News
- The Reserve Bank of Australia is expected to maintain its monetary policy on hold.
- Australian wage growth bounced from record lows but remains below the RBA’s target.
- AUD/USD is neutral in the near-term, the long term bias is bearish.
The Reserve Bank of Australia is having a monetary policy meeting on Thursday. Market players are expecting no fireworks, as policymakers have already anticipated that they will review its yield-curve-control policy and quantitative easing program at the July meeting. With that in mind, it is clear that this particular one will likely pass unnoticed.
The RBA would likely maintain its main rate at a record low of 0.1% and its and three-year yield target at 0.10%, despite signs of economic progress within the pandemic progress. The Australian central bank has upgraded its economic outlook in May but clarified that the ongoing ultra-loose monetary policy is set to continue until at least 2024. In July, the RBA will decide whether to shift yield curve control to target the November 2024 maturity from the current April 2024.
Inflation and employment far below RBA’s targets
Meanwhile, inflation pressures remain subdued, according to Governor Philip Lowe, which also added an employment-related condition to a tighter monetary policy: wage growth at 3%. “It was likely that wages growth would need to be sustainably above 3%,” the March RBA’s minutes said, to be consistent with the central bank’s inflation target.
Australian wage growth plummeted to record lows at the end of 2020 amid the effects of the global pandemic. The latest reading showed that the Wage Price Index inched up to 1.5%YoY in Q1 2021, halfway through the RBA’s target. The annual inflation rate in Australia rose to 1.1% in Q1 2021 from 0.9% in Q4, far below the central bank desired 2-3% range.
Comparisons are awful, but the New Zealand Central Bank had a monetary policy meeting last week, and analysts dictated it was a “hawkish” one. Australian policymakers have been generally optimistic despite cautious, but the main question is if the RBA could be as hawkish as the RBNZ. Most market participants do not believe it would be possible. Hence, the AUD can fall in a non-event meeting.
AUD/USD possible scenarios
The AUD/USD is technically neutral-to-bearish ahead of the event, developing a daily descendant trend line coming from this month´s high, currently at around 0.7770. The 4-hour chart shows that the pair is currently struggling around a bearish 20 SMA, while the longer moving averages remain directionless above the current level. Technical indicators hover around their midlines without directional strength.
Bulls could have better chances on a break above the mentioned trend line, but the bullish case will be stronger if the pair advances beyond 0.7820. A critical support level comes at 0.7675, with a break below it opening the door for a steeper decline.
AUD/USD edges higher toward 0.7750 in choppy day
143049 May 31, 2021 21:21 FXStreet Market News
- AUD/USD is trading in the positive territory on Monday.
- US Dollar Index fluctuates in a very tight range at the start of the week.
- Focus shifts to Reserve Bank of Australia’s (RBA) policy announcements.
The AUD/USD pair registered small losses last week but managed to stage a rebound on Monday. As of writing, the pair was rising 0.32% on a daily basis at 0.7738.
Nevertheless, with the trading conditions remaining thin due to the Memorial Day holiday in the US, AUD/USD is likely to spend the rest of the day in a tight range. Reflecting the choppy market action, the US Dollar Index is moving sideways around 90.00.
Focus shifts to RBA meeting
Earlier in the day, the data from Australia showed that the Private Sector Credit grew by 1.3% on a yearly basis in April. This reading came in slightly higher than the previous month’s print of 1% but failed to trigger a noticeable market reaction. Meanwhile, the China Federation of Logistics and Purchasing (CFLP) reported that the Non-Manufacturing PMI improved to 55.2 in May from 54.9 in April.
On Tuesday, the Reserve Bank of Australia (RBA) will announce its Interest Rate Decision and release the Rate Statement. Previewing this event, “we continue to expect the cash rate to remain unchanged until 2024 and expect a full AUD100bn extension of quantitative easing (QE) beyond the second round,” said Lee Sue Ann, Economist at UOB Group.
On a similar note, Bloomberg reported that the RBA is expected to keep its policy settings unchanged.
Technical levels to watch for
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EUR/USD: Bulls to take over on a break above 1.2230
143048 May 31, 2021 21:12 FXStreet Market News
The EUR/USD pair trades uneventfully in a quiet start to the week, hovering around the 1.2200 figure. Bulls would gain ground on a break above 1.2230 while a dip below 1.2165 would see the shared currency accelerating its downfall, according to Valeria Bednarik, Chief Analyst at FXStreet.
EUR/USD is technically neutral
“Germany published the preliminary estimate of May inflation figures, which were better than anticipated. The Consumer Price Index was up 2.5% YoY and 0.5% MoM. The EU published M3 Money Supply that contracted to 9.2% YoY in April, missing the market’s expectations.”
“EUR/USD is neutral in the near-term. The pair could gain bullish potential once above 1.2230, while bears could take over on a break below 1.2165. Both scenarios seem unlikely for Monday.”
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Chile Industrial Production (YoY): 5.1% (April) vs 2.9%
143047 May 31, 2021 21:09 FXStreet Market News
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If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Chile Unemployment rate down to 10.2% in April from previous 10.4%
143046 May 31, 2021 21:09 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
OPEC+ JTC leaves 2021 oil demand growth forecast unchanged
143045 May 31, 2021 21:02 FXStreet Market News
The OPEC+ Joint Technical Committee (JTC) has decided to keep the global oil demand growth forecast for 2021 unchanged at 5.95 million barrels per day, Reuters reported on Monday, citing sources familiar with the matter.
Meanwhile, according to the latest Reuters survey, OPEC’s oil output increased by 280,000 barrels per day in May.
Market reaction
Crude oil prices continue to edge higher on Monday and the barrel of West Texas Intermediate (WTI) was last seen trading at $67.30, where it was up 1.05% on a daily basis.
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EUR/GBP sticks to modest gains around 0.8600 post-German CPI, lacks follow-through
143044 May 31, 2021 20:56 FXStreet Market News
- EUR/GBP gained some positive traction for the second consecutive session on Monday.
- Mixed German CPI readings did little to influence the euro or provide any fresh impetus.
- The upbeat UK economic outlook continued underpinning the GBP and capped the upside.
The EUR/GBP cross held on to its modest gains around the 0.8600 round-figure mark and had a rather muted reaction to mixed German consumer inflation figures.
The preliminary data published by Destatist showed that headline German CPI is seen edging lower to 0.5% in May from 0.7% in the previous month. This, however, was better than consensus estimates pointing to a reading of 0.3%. On a yearly basis, the CPI climbed 2.5% as against market expectations for a rise to 2.4% from 2% in April. Further details revealed that the Harmonized Index of Consumer Prices (HICP) – the European Central Bank’s preferred gauge of inflation – rose to 2.4% YoY and fell short of consensus estimates pointing to a reading of 2.5%.
This comes amid a subdued US dollar demand, which extended some support to the shared currency and provided a modest lift to the EUR/GBP cross. This marked the second consecutive day of a positive move and pushed the cross further away from the two-and-half-week lows touched last Friday. That said, the upside remains limited amid the optimistic outlook for the UK economy amid the gradual easing of lockdown measures. In fact, UK Prime Minister Boris Johnson said last week that there is nothing in the data to delay the plan to end restrictions fully on June 21.
Adding to this, the Bank of England policymaker Gertjan Vlieghe indicated that the central bank was likely to raise rates well into next year. Vlieghe also noted that an increase could come earlier if there is a smooth transition from furlough and the economy rebounds more quickly than expected. The combination of factors acted as a tailwind for the British pound and kept a lid on any meaningful upside for the EUR/GBP cross, at least for the time being. This, in turn, warrants some caution for bullish traders and before positioning for any further appreciating move.
Technical levels to watch
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EUR/USD Forecast: On hold amid markets’ holidays
143042 May 31, 2021 20:45 FXStreet Market News
EUR/USD Current Price: 1.2198
- The UK and the US markets will remain closed, resulting in low trading volumes.
- German’s inflation came in better than expected in May, up by 2.5% YoY.
- EUR/USD is technically neutral, consolidating around the 1.2200 level.
The EUR/USD pair trades uneventfully in a quiet start to the week, hovering around the 1.2200 figure. The daily low was set at 1.2182, while advances beyond the mentioned 1.2200 level fail to progress. Meanwhile, European stocks are under mild-pressure, following the lead of their Asian counterparts.
Market volumes are reduced amid holidays in the UK and the US and the absence of first-tier data. Germany published the preliminary estimate of May inflation figures, which were better than anticipated. The Consumer Price Index was up 2.5% YoY and 0.5% MoM. The EU published M3 Money Supply that contracted to 9.2% YoY in April, missing the market’s expectations. The US won’t publish macroeconomic figures today.
EUR/USD short-term technical outlook
The EUR/USD pair is neutral in the near-term. The 4-hour chart shows that it is hovering around a bearish 20 SMA, while technical indicators stand directionless around their midlines. The longer moving averages maintain their bullish slopes below the shorter one. The pair could gain bullish potential once above 1.2230, while bears could take over on a break below 1.2165. Both scenarios seem unlikely for Monday.
Support levels: 1.2165 1.2120 1.2070
Resistance levels: 1.2230 1.2280 1.2320
View Live Chart for the EUR/USD
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Canada posts current account surplus of C$1.18 billion in Q1
143041 May 31, 2021 20:40 FXStreet Market News
- Canada’s current account balance moved into the positive territory in Q1.
- USD/CAD continues to trade in a tight range below 1.2100.
Canada has posted a current account surplus of C$1.18 billion in the first quarter of 2021 after registering a current account deficit of C$5.27 billion (revised from C$7.26 billion) in the fourth quarter of 2020.
Other data from Canada revealed on Monday that the Raw Material Price Index and the Industrial Product Price Index increased by 1% and 1.6%, respectively, in April.
Market reaction
The USD/CAD pair showed no immediate reaction to this report and was last seen trading at 1.2070, where it was virtually unchanged on a daily basis.
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Canada Raw Material Price Index dipped from previous 2.3% to 1% in April
143040 May 31, 2021 20:40 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Canada April industrial product price +1.6% m/m vs +1.7% expected
143039 May 31, 2021 20:35 Forexlive Latest News Market News
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