Markets to watch this week
What to watch for US Dollar Index, Spot Silver and Nikkei 225.
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
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