SUMMARY

  • The FED has decided to keep interest rates at 5.50% per annum. At the FOMC press conference, delegates indicated that the FED is waiting for inflation to continue to approach 2% p.a. before launching the interest rate reduction program.
  • Saudi Aramco has announced a 60% increase in its natural gas production, indicating that it is geared to supply demand in Europe. Natural gas is currently up +0.35% and is trading at USD 1.708 per BTU.
  • Interesting rebound in EURUSD in reaction to the Fed decision. The currency was up +0.67% yesterday. Currently, the price is up +0.15% and trades at 1.0934.

 

Main Events:

    • French manufacturing and services PMI.
    • Swiss Central Bank interest rate decision.
    • German manufacturing and services PMI
    • Eurozone Manufacturing and Services PMI
    • U.K. manufacturing and services PMI
    • Bank of England interest rate decision
    • U.S. unemployment claims
    • Fed manufacturing index
    • U.S. manufacturing and services PMI

S&P500

Specifications

  • Leverage: 100
  • Units: 1
  • Margin requirement: USD$51
  • Example: movement of 100 points = $1,000 potential PL.
  • Support 1: 5237,7
  • Support 2: 5235,9
  • Resistance 1: 5241,4
  • Resistance 2: 5243,3

Fundamental Analysis

  • The FED has decided to maintain interest rates at 5.50% per annum. At the FOMC press conference, delegates indicated that the FED is waiting for inflation to continue to move closer to 2% p.a., before implementing the interest rate reduction program.
  • Traders will be watching for new US jobless claims, where 212,000 claims are expected.
  • The U.S. manufacturing PMI is expected to come in at 51.8, which is in the economic expansion zone for the sector. The services PMI is expected to come in at 52, also in the expansion zone.
  • Following the Fed’s interest rate decision, Wall Street stock indices closed positive yesterday as the statements clearly indicated that the Fed was sticking to its guns on monetary easing.
  • The S&P500 closed up 0.89%. The index is currently up 0.37% to 5,243 points. The index is close to the upper Bollinger band, which could trigger an initial profit-taking.

NATURAL GAS

Specifications

  • Leverage: 100
  • Units: 10,000
  • Margin requirement: USD$186
  • Example: movement of USD$1 = $1,000 potential PL.
  • Support 1: 1,704
  • Support 2: 1,702
  • Resistance 1: 1,708
  • Resistance 2: 1,710

Fundamental Analysis

  • Saudi Aramco has announced that it is increasing its natural gas production by 60%, indicating that it is focusing on supplying demand in Europe. Natural gas is currently up +0.35% and is trading at USD 1,708 per BTU.
  • Suriname is in talks with Exxon and Total to develop natural gas projects in the country.
  • Weather forecasts continue to indicate warmer than expected weather in the United States, which continues to put upward pressure on natural gas prices. Storage platforms continue to increase purchase volume. Long-term traders are beginning to open positions, hoping for a summer rally.
  • Yesterday, the price of the commodity closed 2.35% lower, after profit taking from the rally of the last two days. The price is above the USD 1.709 support and is looking to break above the 40-day moving average line.

EURUSD

Specifications

  • Leverage: 200
  • Units: 100,000
  • Margin requirement: USD$544
  • Example: 100 pips change in EURUSD price = USD1,000 potential PL.
  • Support 1: 1,0932
  • Support 2: 1,0929
  • Resistance 1: 1,0938
  • Resistance 2: 1,0941

Fundamental Analysis

  • Interesting rebound of the EURUSD in reaction to the Fed decision. The currency rose +0.67% yesterday. It is currently up +0.15% and trades at 1.0934.
  • The Fed has made it clear that it will only start cutting rates when inflation falls below 2%. Accordingly, it has indicated that it expects a significant rate cut in 2025.
  • Traders are awaiting the Bundesbank’s statement. They will analyze the Fed’s decision and assess Europe’s economic outlook.
  • Eurozone manufacturing PMI is expected at 47, slightly below the economic expansion zone. The services PMI is expected at 50.5, presenting the sector as one of the most important in the economic bloc.
  • EURUSD is near the 1.0960 resistance and the upper Bollinger band, which could lead to profit taking.

SOURCES

  • Thomson Reuters
  • Market watch
  • Bloomberg
  • Tradingview

 

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