Tuesday, May 30, 2023

Dow Jones, DAX 30, US Dollar, Euro, ECB, Bitcoin, Elon Musk


Global market sentiment mostly deteriorated this past week, with major benchmark indices underperforming in North America and Europe. On Wall Street, the Dow Jones, S&P 500 and Nasdaq Composite fell about 0.6%, 1% and 1.9% respectively. This is as the FTSE 100 and DAX 30 weakened 1.6% and 0.9% respectively. In Japan, the Nikkei 225 managed to hold a 0.2% gain.

Risk aversion meant that investors flocked to the safety of government bonds, sending Treasury prices higher as yields declined. The haven-linked US Dollar was a clear benefactor, outperforming most of its major counterparts except for the New Zealand Dollar and Japanese Yen. A hawkish RBNZ rate decision and higher New Zealand CPI data bolstered the Kiwi Dollar.

Growth-linked crude oil prices were also under pressure as a combination of OPEC+ output deal uncertainty woes and rising Covid cases amid the emerging Delta variant weighed on market mood. Gold prices were able to end the week slightly higher as still-dovish commentary from Fed Chair Jerome Powell poured cold water on another higher-than-anticipated inflation report.

Ahead, the economic docket notably quiets down. Key events include ongoing earnings reports for stocks and the ECB monetary policy announcement for the Euro. Tech companies remain in focus amid perceived lofty valuations, with Intel, Netflix and Twitter reporting. EUR/USD may see some volatility with ECB policymakers reportedly split on stimulus guidance.

UK Prime Minister Boris Johnson is scheduled to lift pandemic restrictions on Monday for the British Pound. Bitcoin watchers should be aware of a cryptocurrency event on Wednesday. Elon Musk, Jack Dorsey and Cathie Wood are poised to discuss them during this event. What else is in store for financial markets in the week ahead?

Fundamental Forecasts:

Euro Forecast: EUR/USD Price Outlook Still Negative, ECB Meeting in Focus

The ECB’s Governing Council will make its latest statement on Eurozone monetary policy this coming Thursday and it will likely lead to further losses for the Euro.

IBM, Netflix, Twitter Earnings Eyed as Nasdaq 100 Faces “Reality Check”

The magnificent rally of the Nasdaq 100 index is facing a ‘reality check” this week as IBM, Netflix, Intel and Twitter release results. Will they deliver positive surprises?

Bitcoin (BTC), Ethereum (ETH) Sell-Off Into The Weekend, Support Looks Increasingly Fragile

The cryptocurrency market remains under pressure and looks primed to test recent support levels

British Pound (GBP) Weekly Forecast: On Alert for Comments from BOE Members

Hawkish comments from BOE members keep GBP/USD and EUR/GBP within range

Gold Price to Face Fed Blackout Period Ahead of July Rate Decision

Swings in risk sentiment may influence the price of gold as the Federal Reserve enters the blackout period ahead of the interest rate decision on July 28.

Technical Forecasts:

Canadian Dollar Forecast: USD/CAD Test at Major Resistance Coming

USD/CAD has been strong lately, but that is about to be put to the test as major confluent resistance lies just ahead.

Sterling Forecast: GBP/USD Coils at Support- Cable on Breakout Watch

A multi-week consolidation puts the July opening-range just above uptrend support- breakout imminent. Here are the levels that matter on the GBP/USD weekly technical.

Australian Dollar Outlook Remains Bleak: AUD/USD, AUD/JPY, AUD/CAD, GBP/AUD

The Australian Dollar may have more room to give as it keeps aiming lower since topping earlier this year. AUD/USD, AUD/JPY, AUD/CAD and GBP/AUD are in focus for key technical breakouts.

WTI Crude Oil Outlook Remains Constructive, $70 is the Line in the Sand

The technical outlook for WTI crude oil continues to be positive, but for the bullish scenario to play out in the short-term, prices will need to remain above cluster support near the $70.00 area.

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