U.S. dollar edged higher in thin holiday-affected trade Monday, as traders digested the impact of last week’s central bank decisions, with a speech by Fed Chair Jerome Powell looming large.
Dollar Index, which tracks the greenback against a basket of six other currencies, rebounded from its recent one month low 102.006 and traded 102.480 up 0.18%. However, activity remained limited with the U.S. markets closed on Monday for the Juneteenth holiday.
Gold prices extended their fall at the start of the week. Prices dropped by 0.33% and settled at 59157. Silver prices remained slightly negative and settled at 72446 down 0.33%.
Today, Gold futures having immediate support are seen at 59080-58850 and resistance is at 59420-59650.
Silver Future has resistance at 73200-73700 and support at 71180-70650.
Base metals gave up some earlier week gains yesterday. As a number of large banks have cut their forecasts for China’s 2023 growth in gross domestic product after May data last week showed the post-COVID recovery in the world’s second-largest economy was faltering.
China is widely expected to cut its benchmark loan rates on Tuesday after a similar reduction in medium-term policy loans last week to shore up a shaky economic recovery.
Copper futures settled at 729.40, retreated from the day’s high of 732.90, down 0.63%. Zinc prices were down by 1.10% at 219.40 Aluminum prices were down by 0.92% and Lead traded flat at 184.10, down by 0.08%.
Technical Levels – Copper prices now have support at 725.20-720.00-716.50. On the upside, resistance will be 734.20-738.50.
Crude Oil prices had a negative trade yesterday as questions over China’s economy outweighed OPEC+ output cuts and the seventh straight drop in the number of oil and gas rigs operating in the United States.
Brent crude fell 0.24%, to $76.08 a barrel while U.S. West Texas Intermediate (WTI) crude lost 0.21%, to $71.44. Trading volumes were thin due to a U.S. holiday. MCX Crude oil closed at 5865, up 0.45%.
Technical Levels – Crude oil has immediate resistance 5925-5965. On the downside, crucial support is seen at 5865-5820..
Economic data and events to watch
Japan
At 10.00 am – Revised Industrial Production m/m to release. Data is forecast to have a contraction by 0.4%, unchanged from the previous.
Above data could have a negative impact on Yen.
Eurozone
At 11.30 pm- German PPI m/m to be released. Data expect a contraction by 0.7% from the previous 0.1%.
At 1.30 pm – Current Account. Data is foreseen at 27.3B, slightly lower from previous 31.2B.
All the above data could have a negative impact on the Euro.
U.S.
At 6.00pm – Building Permits to be released with a forecast is to come at 1.43M, slightly higher from previous 1.42M.
Housing Starts forecast is to stay unchanged at 1.40M, from previous readings.
At 9.15pm – FOMC Member Williams Speaks.
All above numbers will have a volatile to positive impact on the dollar.