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Aussie rebounds after election

 

“Money is like gasoline during a road trip. You don’t want to run out of gas on your trip, but you’re not doing a tour of gas stations.” — Tim O’Reilly 

 

 

 

HEADLINES

 

 

  • Euro rallies as growth hopes dent dollar demand
  • Gold jumps as dollar weakens
  • Oil reverses course, turns negative
  • Wall Street rebounds with assist from banks, big tech
  • EUR/USD to extend its race higher towards the 1.0758/90 resistance zone – Credit Suisse
  • GBPUSD Near Term: Upside favored

 

 

 

FOREX

 

Euro rallies as growth hopes dent dollar demand

 

The euro rallied on Monday as investors sold the dollar on hopes that loosening lockdowns in China could help global growth.

A calmer mood on equity markets in early European trading also pressured the dollar, which fell sharply last week but has been the go-to currency for investors this year when risk assets tumbled and worries about the economy and inflation jumped.

Risk-sensitive currencies rose across the board, with the Australian dollar, which initially showed a muted reaction to the expected victory for the center-left Labor Party in national elections on the weekend, soaring 1.1%.

 

 

 

COMMODITIES

 

Gold jumps as dollar weakens

 

Gold prices jumped Monday as an easing dollar continued to support greenback-priced bullion, although higher U.S. Treasury yields capped gains.

The dollar index began the week on the back foot, following its first weekly loss in nearly two months, as investors cut bets on more dollar gains from rising U.S. rates and hoped that easing lockdowns in China can aid global growth.

A weaker dollar makes bullion more attractive for overseas buyers.

 

 

 

ENERGY

 

Oil reverses course, turns negative

 

Oil prices reversed early gains and moved lower Monday, despite U.S. fuel demand, tight supply and a lack of progress towards a European ban on Russian oil, as Shanghai prepares to reopen after a two-month coronavirus lockdown that fuelled economic growth fears.

Despite fears over soaring fuel prices potentially denting demand, analysts said that mobility data from TomTom and Google had climbed in recent weeks, showing more people were on the roads in places such as the United States.

 

 

 

STOCKS

 

Wall Street rebounds with assist from banks, big tech

 

Wall Street rallied on Monday as gains from banks and recently battered megacap market leaders helped U.S. stocks rebound after their longest streak of weekly declines since the dotcom bust.

All three major U.S. stock indexes were sharply higher, with a rebound tech and tech-adjacent growth stocks, most notably Apple Inc (AAPL.O) and Microsoft Corp (MSFT.O) providing the biggest lift.

Interest rate-sensitive banks (.SPXBK) shot 5.9% higher after the largest U.S. lender, JPMorgan Chase & Co (JPM.N) raised its current year interest income outlook

JPMorgan Chase's stock was last up 7.2%.

 

 

 

ANALYSIS

 

EUR/USD to extend its race higher towards the 1.0758/90 resistance zone – Credit Suisse 

 

“This morning’s break above the 23.6% retracement of the fall from February and May high at 1.0620/42 should confirm a near-term base and provide the platform for a deeper recovery to the 38.2% retracement, 55-day average and mid-April lows at 1.0758/90. 

“We expect a much tougher barrier at 1.0758/90 and for the medium-term downtrend to reassert itself from here, with medium-term momentum ultimately still very strong.” 

“Support moves to this morning’s breakout point at 1.0608/0599, with 1.0532 now needing to hold to maintain an immediate upside bias. A break below here and then 1.0460 can clear the way for a retest of 1.0350/41.”

 

 

 

CHART

 

GBPUSD Near Term: Upside favored

Technical View: Long position above 1.244. Target 1.265. Conversely, break below 1.244, to open 1.238.

Comments: The pair remains supported. Further advance favored.

 

 

Source: Trading Central 

 

 

CALENDAR

*Times in GMT

 

 

 

Source: FX Street Economic Calendar


 

SOURCES

https://www.cnbc.com/2022/05/23/forex-markets-dollar-australia-dollar-new-zealand-dollar-china-growth.html
https://www.cnbc.com/2022/05/23/gold-markets-dollar-treasury-yield-interest-rate-china-covid-lockdown.html
https://www.cnbc.com/2022/05/23/oil-markets-dollar-china-covid-lockdown-oil-supply.html
https://www.reuters.com/markets/us/futures-rebound-after-volatile-week-takeover-talks-boost-vmware-2022-05-23/
https://www.fxstreet.com/news/eur-usd-to-extend-its-race-higher-towards-the-10758-90-resistance-zone-credit-suisse-202205231231

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