The U.S. dollar started the week with minor strength. As traders remained sideline to take new positions ahead of several key policy decisions due the next day. The Federal Reserve anticipated that rates will remain unchanged for the first time since January 2022.
This week’s events will be shaped by monetary policy meetings at the Federal Reserve, the European Central Bank (ECB), and the Bank of Japan (BOJ), as markets look for hints from decision-makers on the future direction of interest rates.
Commodity Update
Precious metals gave up some earlier gains. Gold Future settled at 59641, down by 0.30% and Silver settled at 72974, down by 1.11%.
Today, Gold Future has support at 59450-59300 and resistance at 59780-59980.00
Silver Future has support at 72300-71625.00 and resistance at 73250-73820.
Base metals were off from their day’s high, while copper prices stayed in a small range as traders awaited more cues from major commodity importer China.
The world’s top copper importer, China, is anticipated to implement additional stimulus measures in June, and as the country’s economic recovery falters, markets are preparing for probable interest rate cuts by the People’s Bank.
Copper prices hit six-month lows in May as a result of a slew of dismal Chinese economic statistics, and the red metal is still battling to recover.
Technical Levels – Copper prices have immediate support at 715.50-711.00 and resistance at 722.80-725.50.
Crude oil plunged by 4.38% yesterday. Prices dropped below its 4 May 2023, aftermarket highlighting rising global supplies and concerns about demand growth just ahead of key inflation data and a U.S. Federal Reserve meeting later this week.
Brent crude futures hit their lowest price since December 2021 when they dropped 3.9% to end at $72.01 a barrel. West Texas Intermediate crude fell by 4.24%, to settle at $67.31 a barrel.
MCX Crude settled at 5569, down by 4.38%.
Technical Levels – A sustained trade below immediate support 5550 will expect to drop towards 5510-5460-5420.00. On the upside, resistance is seen at 5592-5680.00
Economic data and events to watch ahead
China
9th-15th June – New Loans. Data is foreseen at 1540B, higher than the previous 719B.
9th – 15th June – M2 Money Supply y/y. Data is foreseen at 12.0%, lower than the previous 12.4%.
U.K.
At 11.30am – Claimant Count changed. Data is foreseen at 21.4K lower than 46.7K previously.
At 11.30pm – Average Earnings Index 3m/y. Data is foreseen at 6.1%, an increase from the previous 5.8%.
At 11.30pm – Unemployment Rate. Data is foreseen at 4%, higher from previous 3.9%.
At 7.00pm- CB Leading Index m/m, previous was at -0.9%.
At 7.30pm – BOE Gov Bailey Speaks.
All above the data and speech of BOE gov will have a strong impact on the pound.
Technical Levels –GBPINR having crucial support at 102.95-102.40 and resistance at 103.25-103.45.
Eurozone
At 11.30am- German Final CPI m/m to be released. Data expect to stay unchanged at -0.1%, from previous.
At 1.30pm – Italian Quarterly Unemployment Rate. Expect to come at 7.8%, unchanged from previous.
At 2.30pm – German ZEW Economic Sentiment. Forecast to have a contraction by 13.4%, against contraction of 10.7.
At 2.30pm – ZEW Economic Sentiment. Forecast is to have a contraction of 12.10, against previous contraction of 9.4.
Both above data could have a negative impact on the Euro.
Technical Levels – EURINR having immediate resistance at 88.75-89.05 and support at 88.45-88.20..
U.S.
At 6.00pm – CPI m/m to be released with a forecast to decrease by 0.2% from the previous month of 0.4%. Meanwhile, CPI y/y expects to reduce by 4.1% from the previous 4.9%.
At 6.00pm – Core CPI m/m, data is foreseen at 0.4%, unchanged from previous 0.4%.
All above numbers will have a negative impact on the dollar.
Technical Levels – Dollar index having crucial support at 102.95 below it will expect to extend losses and it could test 102.65-102.45. On the upside, resistance is seen at 104.20-104.60.