Markets to watch this week
What to watch for US Dollar Index, AUD/USD and Spot Gold.
US Dollar Index: False breakdown of trendline?
The recent breakdown of an upward trendline support in the US dollar failed to find much follow-through, as Federal Reserve (Fed)’s rate expectations shifted to price for a potential delay in policy easing, following resilient US labour conditions. The US dollar managed to push back above the trendline support last Friday as a sign of buyers regaining control, leaving the 105.30 level on watch ahead for a retest.
On the daily relative strength index (RSI), the US dollar is also attempting to break a downward line. A firm sit above the key mid-line will offer greater conviction for buyers, which may validate a near-term upward trend in place. For now, there are efforts in place from buyers to defend the upward bias in the US dollar, with the US dollar now trading back within its daily Ichimoku Cloud pattern.
Levels:
R2: 107.00
R1: 105.30
S1: 104.00
S2: 103.05
US Dollar Index chart:
AUD/USD: Near-term trendline support given way
Renewed strength in the US dollar has dragged theAUD/USD to its three-week low, with the pair breaking below a near-term upward trendline support on the four-hour chart. Projection of the trendline breakdown may leave a potential price target at the 0.648 level. On the daily chart, its RSI has also dipped below the key 50 level for the first time since April 2024, which may point to a minor trend reversal.
On the broader scale, the AUD/USD remain in a range, with the 0.670 level serving as key resistance to overcome. This level also marked the upper edge of its Ichimoku Cloud resistance on the weekly chart, which has capped the pair on at least five occasions since 2022.
Levels:
R2: 0.670
R1: 0.661
S1: 0.656
S2: 0.648
AUD/USD chart:
Spot Gold: Double-top neckline put to the test
Higher Treasury yields and a firmer US dollar have not been well-received for the yellow metal, with gold prices finding its way to retest a key support confluence at the US$2,292 level, which some may argue that it marks the neckline of a potential double-top formation pattern. Any breakdown of the level could seem to pave the way for the retracement to deepen towards the US$2,223 level, where a previous resistance-turned-support stands.
Thus far, the daily RSI has been marked by the formation of lower highs, with the indicator dipping to its lowest level since February this year. All eyes will be on the upcoming US consumer price index (CPI) to provide fresh update on US inflation progress, which will determine if the high-for-longer rate narrative can find further validation following recent run in stronger economic data.
Levels:
R2: 2,420
R1: 2,350
S1: 2,292
S2: 2,223
Spot Gold chart:
Calendar
Monday, 10 June, 2024
Data:
- Japan Q1 GDP (final)
Tuesday, 11 June, 2024
Data:
- UK unemployment rate
- US API crude oil inventories
- OPEC monthly report
- Australia NAB business confidence
Wednesday, 12 June, 2024
Data:
- Fed interest rate decision
- FOMC economic projections
- Japan PPI
- China CPI
- China PPI
- UK monthly GDP
- UK trade balance
- UK industrial production
- US CPI
- US EIA crude oil inventories
Thursday, 13 June, 2024
Data:
- Australia Westpac consumer sentiment
- Australia unemployment rate
- Eurozone industrial production
- US PPI
- US initial jobless claims
Friday, 14 June, 2024
Data:
- BoJ interest rate decision
- Eurozone trade balance
- US import and export prices
- US Michigan consumer sentiment
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