Markets to watch this week

US Dollar Index: Attempting to defend higher lows

The US dollar has been attempting to defend an upward trendline support at the 104.00 level, as buyers seek to keep the series of higher-lows formation intact. This level also marked a support confluence with the lower edge of its daily Ichimoku Cloud. That said, multiple retests of its post-US consumer price index (CPI) dip at the 105.06 level were met with some resistance lately, so greater conviction for buyers may have to come from a move above this level to signal buyers taking greater control.

For now, its daily relative strength index (RSI) is attempting to break away from its downward trend. But in the event of any breakdown of the 104.00 level of support, this may suggest strong selling pressures and potentially pave the way to retest the 103.05 level next.

Levels:

R2: 107.00
R1: 105.30

S1: 104.00
S2: 103.05

US Dollar Index chart:

Spot Silver: Near-term double-top formation on watch

After touching its highest level since 2013, silver prices have formed a potential double-top pattern, with buyers seeking to defend its neckline support at the key US$30.00 level. Prices may attempt to stabilise around this level for now, given that its four-hour RSI is edging into oversold territory, which tends to see some consolidation from past instances.

One may watch for any breakdown of the double-top neckline to signal sellers in control, which may pave the way for prices to retest the US$28.80 level next. However, the broader trend on the daily and weekly chart remains upward bias and any further retracement may be a temporary move , with any formation of a higher low on watch.

Levels:

R2: 32.31
R1: 31.07

S1: 30.00
S2: 28.80

Spot Silver chart:

Nikkei 225: Still struggling for direction?

The Nikkei 225 index continues to display some indecision over the past weeks with a hover within the 38,000-39,000 range, while one may argue that there is still the threat of a bearish pennant formation in place. The index is now facing crucial resistance at the 39,000 level, where the upper edge of its daily Ichimoku Cloud resistance coincides with a downward trendline resistance.

Greater conviction for buyers taking control will warrant a close back above the 39,000. Failure to do so over the coming week could suggest strong selling pressures in place, with any breakdown of the 38,400 level potentially paving the way for the index to retest the 37,645 level next.

Levels:

R2: 39,950
R1: 39,000

S1: 38,400
S2: 37,645

Japan 225 chart:

Calendar

Monday, 3 June, 2023
Data:

• China Caixin manufacturing PMI

• US ISM manufacturing PMI

Tuesday, 4 June, 2023
Data:

• UK BRC retail sales monitor

• Germany unemployment rate

• US JOLTS job openings

• US factory orders

• US American Petroleum Institute (API) crude oil inventories

Wednesday, 5 June, 2023
Data:

• BOC interest rate decision

• Australia Q1 GDP

• China Caixin services PMI

• France industrial production

• Eurozone producer price index

• US ADP employment change

• US ISM services PMI

• US EIA crude oil inventories

Thursday, 6 June, 2023
Data:

• ECB interest rate decision

• Australia trade balance

• Germany factory orders

• UK S&P Global construction PMI

• Eurozone retail sales

• US initial jobless claims

• US trade balance

Friday, 7 June, 2023
Data:

• RBI interest rate decision

• China trade balance

• Germany trade balance

• UK Halifax house price index

• Eurozone Q1 GDP (final)

• US Non-farm payrolls

• US Baker Hughes oil rig count