In this article, we have covered the highlights of global market news about the Australian Dollar, Gold Price, and British Pound and Crude Oil.
Low Australian Dollar keeps Good Times Rolling.
The AUD/USD exchange rate had another week of ups and downs due to the activities in the world’s financial markets.
Early in the week, the RBA increased rates as anticipated. The bank increased the cash rate from 0.85 percent to 1.35 percent by 50 basis points. The bank raised rates by 50 basis points in two sessions for the first time.
The Australian Dollar came under selling pressure after the RBA met expectations, and it remained weak until trade data later in the week. Going into the weekend, the AUD recovered thanks to a vast beat on predictions.
May’s trade surplus of AUD 15.96 billion is considerably above the AUD 10.85 billion forecasts. Despite falling spot commodity prices, the ongoing trade surplus demonstrates the underlying strength that derives from the use by exporters of long-term contracts for bulk commodities.
Australia’s second-tier economic data releases the week before were all significant and positive surprises. Retail sales, job postings and openings, private sector credit expansion, house loans, and construction approvals exceeded forecasts.
Technical Gold Price Prediction: Gold Drops into Last Line of Defense
This week saw a more than 3.8 percent loss in gold prices, with XAU/USD on track for the worst weekly drop since June 2020. The decline brings the sell-off streak to four straight weeks, pushing the price into crucial resistance for a multi-year uptrend extending from the 2018 lows. The bulls’ final line of defense is here; therefore, we’re keeping an eye out for any potential price inflections into this crucial technical area.
The last line of defense for the 2018 uptrend, multi-year trend-line support, is being tested by gold as it searches for a downward inflection. From a trading perspective, this is a decent area to cut short exposure and lower protective stops. Keep an eye out for potential downward exhaustion into this technical confluence, and remember that a close above 1791 is required to relieve the pressure on prices to fall immediately.
NFP Beat Sets Up GBP for Further Decline in Weekly British Pound (GBP) Forecast
The U.K. economy’s residual problems are waiting to surface once again, so the respite that the pound sterling has gained from Prime Minister Boris Johnson’s departure may not last long. The leader will continue in charge for the time being until a new leader is chosen, which should take place in around six weeks.
While the U.S. dollar remains strong, we anticipate important UK-specific data, such as GDP (see the calendar below), which might compound the GBP’s unsettling fundamental environment. In light of the current uncertain market environment, Bank of England (BoE) Governor Bailey is set to speak the following week. His remarks might provide greater insight into the U.K. economy and impact market pricing (BoE rates).
The current NFP print has set the stage for next week’s U.S. inflation read, allowing us to determine whether increasing inflation (headline inflation) will continue despite falling commodity prices or taper down.
U.S. Crude Tests Key Levels in Weekly Technical Crude Oil Prediction
Fundamental considerations have unquestionably been the primary influence on commodities prices since before the Covid-19 epidemic began, and Crude Oil is no exception.
Energy prices have rapidly increased due to supply restrictions, conflict, and interruptions in demand. However, technical levels have also contributed to the price action’s encouraging trend.
Looking back, it is almost unfathomable to imagine that an excess of oil and a capacity shortage in April 2020 prompted several producers to pay for storage, sending oil futures into the red. OPEC+ decided to lower production to restore equilibrium in reaction to the historical shock.
Oil prices significantly increased after breaking over the $93.5 resistance level at the start of the conflict (24 February 2022), reaching a high of $130.5 in the first week of March. Bulls were then able to battle back after a decline to the currently supported level before hitting a wall of resistance at the $114 handle.