SUMMARY

  • Following the escalation of tensions in the Middle East, investors started the week long in gold.
  • FOMC presentations emphasized that the Fed will not cut interest rates until inflation approaches the 2% annual target.
  • Wall Street stock indexes started the week in negative territory. At the moment, the Dow Jones is correcting 0.10% and trades at 39,031 points.

 

Main events:

  • LFO business confidence index in Germany
  • Eurogroup meeting
  • FOMC statements

GOLD

Specifications

  • Leverage: 100
  • Units: 100
  • Margin requirement: USD$2167
  • Example: movement of USD$10 = $1,000 potential PL.
  • Support 1: 2336.17
  • Support 2: 2332.6
  • Resistance 1: 2341.86
  • Resistance 2: 2343.98

Fundamental Analysis

  • Following the escalation of tensions in the Middle East, investors began the week with long positions in gold. The price of the metal is currently up 0.48% at 2,344 dollars per troy ounce.
  • Chinese industrial profits rose in April, indicating a recovery in demand.
  • US government officials and the CEO of Nvidia will visit Taiwan after China halted military drilling around the island.
  • According to Bank of Japan officials, interest rates in Japan could reach 0.5% by the end of the year.
  • The gold price is entering a resistance zone after bouncing off the lower Bollinger band. However, the price is below the 200-day moving average line.

EURUSD

Specifications

  • Leverage: 200
  • Units: 100,000
  • Margin requirement: USD$542
  • Example: 100 pips change in EURUSD price = USD1,000 potential PL.
  • Support 1: 1.0847
  • Support 2: 1.0845
  • Resistance 1: 1.0852
  • Resistance 2: 1.0855

Fundamental Analysis

  • The FOMC presentations emphasized that the Fed will not cut interest rates until inflation approaches the 2% annual target. On the other hand, the market anticipates a rate cut by the European Central Bank at its June 2024 meeting.
  • The Eurozone composite PMI index came in at 52.3, a 12-month high. This indicates an economic recovery in the European Union.
  • Traders are watching the U.S. PCE index, which is the Federal Reserve’s preferred inflation indicator.
  • Another important data this week is the US GDP result.
  • EURUSD is at the same level as its 200-day moving average. Price could continue to rise towards resistance, or start to fall towards support levels. The RSI and moving averages indicate buying.

DOW JONES

Specifications

  • Leverage: 200
  • Units: 1
  • Margin requirement: USD$195
  • Example: movement of 100 points= $1,000 potential PL.
  • Support 1: 39094.34
  • Support 2: 39072.67
  • Resistance 1: 39140.34
  • Resistance 2: 39164.67

Fundamental Analysis

  • Wall Street stock indexes have started the week in negative territory. The Dow Jones is currently down 0.10% at 39,031 points.
  • Traders are eagerly awaiting statements from FOMC executive delegates, who will confirm the Fed’s intentions regarding interest rates.
  • Bank of America analysts are assessing the performance of commodity exchange-traded funds, which could start to show signs of a price rally as geopolitical tensions increase.
  • The market is anticipating a reduction in Euribor, which will make mortgages cheaper. This could lead to increased demand.
  • The Dow Jones is below the lower Bollinger band, which could lead to a price rally. The index remains below the 200-day moving average.

SOURCES

  • Thomson Reuters
  • Market watch
  • Bloomberg
  • Tradingview

 

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