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Gold prices inch lower as firm dollar dents appeal

“In the end, a vision without the ability to execute it is probably a hallucination.” — Steve Case 

 

 

HEADLINES

 

 

  • Euro edges higher with focus on ECB, dollar retreats

  • Gold prices inch lower as firm dollar dents appeal

  • Oil swings higher as tight supplies overshadow demand destruction

  • Banks, energy stocks fuel rebound in European shares

  • Bitcoin holds near $20,000 as investors fear "domino effect"

  • GBP/USD: Close above 1.23 to firm up cable’s ambitions – Scotiabank

  • EURJPY Near Term: Upside favored

 

 

Euro edges higher with focus on ECB, dollar retreats 

 

The euro rose on Monday as markets focused on European Central Bank tools to fight fragmentation in the currency bloc, shrugging off the risk of political gridlock in France for now after President Emmanuel Macron lost an absolute majority in a parliamentary election. 

Macron's Ensemble alliance secured the most seats in the National Assembly but fell well short of the absolute majority needed to control parliament, final results showed.

The dollar was little changed at 135.03 yen , after hitting 135.44 yen in Asia Pacific trading hours, close to Wednesday's peak of 135.60, the highest since October 1998.

 

 

COMMODITIES

 

 

Gold prices inch lower as firm dollar dents appeal 

 

Gold extended losses on Monday as an elevated dollar weighed on bullion demand, with a U.S. market holiday expected to lead to thin trading during the day. 

Spot gold was down 0.2% at $1,836.67 per ounce, as of 0203 GMT. U.S. gold futures were flat at $1,840.00.

“Gold has effectively been in a choppy range since May 19 between $1,805 and $1,880. And that makes it more of a traders’ market than an investors’ market. We think traders will opt to buy dips above $1,800 and sell rallies below $1,880,” Simpson said.

 

 

ENERGY

 

 

Oil swings higher as tight supplies overshadow demand destruction 

 

Oil prices swung higher in volatile trading on Monday, as traders focused on tight supplies over slowing global economic growth.

Brent crude futures settled up $1.01, or 0.9%, at $114.13 a barrel. The global benchmark tumbled 7.3% last week for its first weekly fall in five.

U.S. West Texas Intermediate crude last traded up 61 cents, or 0.56%, at $110.17 in subdued trade on the Juneteenth U.S. holiday. Front-month prices slumped 9.2% last week for the first decline in eight weeks.

Brent prices on Monday touched their lowest in a month before recovering.

 

 

STOCKS

 

 

Banks, energy stocks fuel rebound in European shares 

 

European stocks rose strongly on Monday after a sharp selloff last week on recession worries, while gains in French shares were capped after President Emmanuel Macron lost an absolute majority in the country's parliamentary election. 

The pan-European STOXX 600 index (.STOXX) closed up 1.0%, with battered banking (.SX7P), travel (.SXTP) and energy (.SXEP) stocks leading the gains, but volumes were crimped with U.S. markets closed for a holiday.

The benchmark shed 4.6% and hit over one-year lows last week in a global sell-off that was fuelled by worries about aggressive interest rate hikes by the U.S. Federal Reserve and other major central banks sparking a recession.

 

 

Bitcoin holds near $20,000 as investors fear "domino effect" 

 

The cryptocurrency industry was on edge on Monday as bitcoin held just above $20,000 and investors feared that problems at major crypto players could unleash a wider market shakeout. 

Bitcoin, the world's biggest cryptocurrency, dropped on Saturday to as low as $17,592.78, falling below the key $20,000 level for the first time since December 2020.

It picked up slightly during London trading hours on Monday, at around $20,510 at 1232 GMT. But it has still lost 55% of its value this year and 35% this month alone in the cryptocurrency sector's latest meltdown.

 

 

ANALYSIS

 

 

GBP/USD: Close above 1.23 to firm up cable’s ambitions – Scotiabank 

 

“A close above 1.23 on the day, which is key resistance past the mid-figure area, would firm up the GBP’s ambitions while the 1.22 big figure area stands as support followed by ~1.2175 (Friday’s low).”

“The GBP should follow the broad dollar mood until Wednesday’s inflation print with the UK’s weak macroeconomic backdrop and likely overpriced BoE expectations (~190bps by year-end) acting as headwinds.” 

 

 

CHART

 

 

EURJPY Near Term: Upside favored

 

Technical View: Long position above 140.1. Target 142.6. Conversely, break below 140.1, to open 139.35.

Comments: The pair remains supported. Further advance favored.

 

 

 

 

Source: Trading Central 




 

CALENDAR

 

 

*Times in GMT

 

 

 

 

Source: FX Street Economic Calendar


Footnotes
https://www.reuters.com/markets/us/yen-fragile-near-24-year-low-boj-aftermath-dollar-treads-water-2022-06-20/
https://www.cnbc.com/2022/06/20/gold-markets-dollar.html
https://www.reuters.com/business/energy/oil-wobbly-after-near-6-slump-economic-concerns-2022-06-20/
https://www.reuters.com/markets/europe/european-stocks-muted-french-election-inflation-jitters-2022-06-20/
https://www.reuters.com/markets/europe/crypto-industry-gripped-by-anxiety-bitcoin-wobbles-near-key-20000-level-2022-06-20/
https://www.fxstreet.com/news/gbp-usd-close-above-123-to-firm-up-cables-ambitions-scotiabank-202206201304
 

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