Bullet Report | USD: Back with a Bang & GOLD/OIL at new Highs

The USD is recovering and is likely to close the week on a strong foot, considering the very important week that is coming ahead. FOMC, Bank of Japan, Swiss National Bank as well as Bank of England are expected to release policy decisions before the UK referendum on June 23. Today, US is releasing Consumer confidence data while UK releases construction numbers for April.

Currencies: EURUSD Dropped yesterday from 1.1415 all the way to 1.1290 after US jobless claims data revealed that the jobs market is not actually that grim as the NFP numbers showed. To the upside, the strong resistance can be seen at 1.1375 while support lies at 1.1270. GBPUSD fell as low as 1.4435 on Thursday, as the pair found downside momentum on worries that Britain will vote to leave the European Union at a referendum in two weeks’ time. Resistance is seen at 1.4518 with support at 1.4400. Elsewhere AUDUSD dipped to 0.7412 from 0.7500 after weak Chinese data were released while JPY and CHF also weakened after 2 strong days of gains.

Stocks: Regarding risk sentiment in global financial markets, yesterday it was more or less a risk off day with euro area stock markets mostly in the ‘red’. Japan’s Nikkei declined 0.5 %, extending losses for the week to 0.3 %. Wall Street shares also pulled back on Thursday after three days of gains, as a decline in the number of unemployment benefits claims last week showed the labor market remains strong despite May’s unexpected drop in job growth.

Oil and Gold: Spot gold pulled back 0.2 % on Friday to $1,266 an ounce, after climbing as high as $1,271.31 overnight. It’s up 1.8 % for the week. Gold is currently taking advantage from the supportive monetary policy adopted by the world’s major central bank, the FED. Dovish comments from Fed Chair Janet Yellen, which followed weak NFP, lowered expectations of an interest rate hike next week. Now, analysts believe the Fed would hike interest rates in July or even later in September, which could help non-interest bearing GOLD in the coming period. OIL prices also dropped a bit, after hitting fresh 2016 highs. U.S. crude slid 0.2 % to $50.44 a barrel, poised to end the week 3.7 % higher.

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