Sample Category Title

Eurozone PMI Services was finalized at 55.1 in May, down from April's 56.2. PMI Composite was finalized at 52.8, down notably from April's 54.1. HCOB noted that services activity growth stayed strong, but factory output fell at the quickest pace in six months.

Looking at some countries, Spain PMI Composite (55.2), Italy (52.0) and France (51.2) were at 4-month low. Germany was at 53.9, a 2-month low.

Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said: "Relatively resilient services activity growth should ensure that the eurozone regains some footing and shows a positive rate of expansion in the second quarter after GDP stagnated in the October - March period.

"However, the downturn in manufacturing is a drag on economic growth and is likely to be reflected in a further slowdown in the services sector in the coming months. We do not anticipate an overall economic recession, though."

Full Eurozone PMI Services release here.

Daily Pivots: (S1) 1.3405; (P) 1.3430; (R1) 1.3454; More....

Intraday bias in USD/CAD stays neutral for the moment. Price actions from 1.3976 are seen as a triangle consolidation pattern. Above 1.3666 will target 1.3860 resistance first. Firm break of 1.3860 will argue that larger up trend is ready to resume through 1.3976 high. Nevertheless, sustained break of 1.3229 will dampen this view and turn near term outlook bearish.

In the bigger picture, rise from 1.2005 (2021 low) is expected to resume through 1.3976 after consolidation from there completes. On decisive break of 1.3976, next target will be 1.4667/89 long term resistance zone. This will remain the favored case as long as 38.2% retracement of 1.2005 to 1.3976 at 1.3233 holds.

Daily Pivots: (S1) 0.6566; (P) 0.6602; (R1) 0.6643; More...

Intraday bias in AUD/USD stays mildly on the upside at this point. Rebound from 0.6457 would target 55 D EMA (now at 0.6659). Sustained break there will target 0.6817 resistance next. Nevertheless, rejection by 55 D EMA will keep near term outlook bearish. Below 0.6566 minor support will turn bias back to the downside for retesting 0.6457 low.

In the bigger picture, rejection by 55 W EMA (now at 0.6811) keeps medium term outlook bearish. Current development suggests that down trend from 0.8006 (2021 high) is possibly still in progress. Retest of 0.6169 (2022 low) should be seen next. Firm break there will confirm down trend resumption. For now, this will remain the favored case as long as 0.6817 resistance holds.

Daily Pivots: (S1) 1.0682; (P) 1.0731; (R1) 1.0756; More...

Intraday bias in EUR/USD remains neutral for the moment. On the downside, break of 1.0634 will resume the corrective decline from 1.1094. Deeper fall should then be seen to 1.0515 cluster support, 38.2% retracement of 0.9534 to 1.1094 at 1.0498. On the upside, however, above 1.0778 will resume the rebound from 1.0634 short term bottom to 55 D EMA (now at 1.0829).

In the bigger picture, as long as 1.0515 support holds, rise from 0.9534 (2022 low) would still extend higher. Sustained break of 61.8% retracement of 1.2348 (2021 high) to 0.9534 at 1.1273 will solidify the case of bullish trend reversal and target 1.2348 resistance next (2021 high).

Daily Pivots: (S1) 1.2414; (P) 1.2480; (R1) 1.2517; More...

Intraday bias in GBP/USD remains neutral for the moment. on the downside, break of 1.2306 will resume the correction from 1.2678. Deeper decline would then be seen to 1.1801 cluster support (38.2% retracement of 1.0351 to 1.2678 at 1.1789). On the upside, above 1.2543 will resume the rebound from 1.2306 to retest 1.2678 high.

In the bigger picture, as long as 1.1801 support holds, rise from 1.0351 medium term bottom (2022 low) is expected to extend further. Sustained break of 61.8% retracement of 1.4248 (2021 high) to 1.0351 at 1.2759 will add to the case of long term bullish trend reversal. However, firm break of 1.1801 will indicate rejection by 1.2759, and bring deeper decline, even as a correction.

Daily Pivots: (S1) 0.9052; (P) 0.9072; (R1) 0.9110; More...

Intraday bias in USD/CHF remains neutral as consolidations from 0.9146 could extend. But further rally is expected as long as 0.9013 minor support holds. Rise from 0.8818 short term bottom is seen as corrective whole down trend from 1.0146. Above 0.9146 will target 38.2% retracement of 1.0146 to 0.8818 at 0.9325. On the downside, however, break of 0.9013 will turn bias back to the downside for retesting 0.8818 low instead.

In the bigger picture, fall from 1.1046 (2022 high) is seen as a leg in the long term range pattern from 1.0342 (2016 high), which might have completed at 0.8818 already, just ahead of 0.8756 long term support. Sustained trading above 0.9058 support turned resistance should confirm medium term bottoming. Further break of 0.9439 resistance will confirm bullish trend reversal.

• The laggards, Dow Jones Industrial Average & Russell 2000 have recorded stellar single-day outperformances on Friday, 2 June against the Nasdaq 100; at least a three-month high.
• Market breadth has improved but fundamental structure remains weak due to stagflation risk.
• Positive FOMO (“fear of missing out”) flows may persist at least in the short to medium term due to relatively low levels of positioning, exposure, and sentiment.

On Friday, 2 June, we witnessed a significant flow of rotation among the benchmark US stock indices ahead of the key 16 June “Triple Witching” US options expiration; prior laggards, the Dow Jones Industrial Average and Russell 2000 have recorded one of the best single day outperformance in at least three months against the leading mega-cap tech & AI concentrated Nasdaq 100.

Dow Jones Industrial Average & Russell 2000 recorded their highest single-day outperformance against Nasdaq 100 since February 2023 & October 2022

The ongoing medium-term uptrend of the Nasdaq 100 started on 13 October 2022, outperforming the Dow Jones Industrial Average and Russell 2000 in the past seven months. Interestingly, the Dow Jones Industrial Average / Nasdaq 1000 ratio recorded its strongest single-day performance on Friday since 3 Feb 2023 (1.38) while the Russell 2000 / Nasdaq 1000 ratio notched its strongest single-day performance since 26 October 2022 (2.81) supported by strong rallies seen in cyclical, industrial and banking stocks such as 3M (+8.7%), Caterpillar (+8.4%) and US regional banks (KRE ETF +6.2%) on Friday.

Fig 1:  Performances of DJIA & Russell 2000 against Nasdaq 100 measured by their respective ratios as of 2 June 2023

(Source: TradingView, click to enlarge chart)

On the surface, these positive observations can be considered as an improvement in market breadth as rotation is being spread from the high-flying eight mega-cap tech stocks (FAANG plus MNT; Facebook/Meta, Apple, Amazon, Netflix, Google/Alphabet, Microsoft, Nvidia, and Tesla) that are leading the rally since late October 2022 towards the cyclical laggards.

A higher cost of funding environment cannot be ruled out

However, a higher cost of funding environment amid a lingering risk of stagflation may put a damper on earnings growth. The 10-year US Treasury yield has recovered above its 200-day moving ex-post US debt ceiling deal and is looking for a test on a key resistance at 3.90% with positive momentum.

Fig 2:  10-year US Treasury yield trend as of 5 Jun 2023 (Source: TradingView, click to enlarge chart)

The leading inverted US Treasury yield curve is pointing to a potential imminent global recession

In addition, we cannot rule out an impending global recession as the leading US Treasury yield curve, the difference between the 10-year and 2-year is now at -0.81%; it’s the most inverted state in almost 42 years.

Fig 3:  US Treasury yield curve (10-year over 2-year) trend as of 5 June 2023 (Source: TradingView, click to enlarge chart)

However, in a nutshell, the trend is always your friend until its ends so do not be surprised by such positive FOMO irrational behaviour that can persist in the short to medium-term time horizons which in turn may take the US stock market higher due to a relatively low level of positioning, exposure, and sentiment since the start of the year.

Markets

US payrolls delivered once more in May. The Bureau of Labour Statistics reported a 339k net job gain for May. Payrolls beat consensus by a wide margin (237k!!), also taking into account upward revisions to the March and April data (+93k). The employment increase was nevertheless at odds with a significant increase in the unemployment rate (5.7% from 5.4% despite stable participation rate) with the latter being derived from the separate Household Survey which pointed at a >300k net job… loss in May! Average hourly earnings came in as expected at 0.3% M/M (4.3% Y/Y). Markets had to digest the numbers coming from a week long dovish repositioning after future Fed vicechair Jefferson and voting Fed Harker pulled the plug on a June rate hike. It’s skip and go when it comes to them and probably the majority within the Fed. Markets now fully discount a 25 bps July rate hike while the odds of the US central bank hiking already next week are further reduced. US yields rose by 7.3 bps (30-yr) to 15.8 bps (2-yr) in a daily perspective. US Treasuries underperformed German Bunds with German yields closing 3.3 bps (30-yr) to 9.5 bps (2-yr) higher. The dollar profited from the rate support, but as for US yields, last week’s highs were untested. The trade-weighted dollar (DXY) closed at 104.02 from 103.56 and a May high at 104.70. EUR/USD closed at 1.0708 from 1.0762 and compared to the May low of 1.0635. US stock markets didn’t bother the higher US interest rates as the ongoing labour market strength once again underpins the resilience of the economy. Key indices closed 1% (Nasdaq) to 2% (Dow) higher. Talk that China weighs new property spending to help the economy benefited risk sentiment as well. Asian risk sentiment remains bullish this morning with China underperforming despite a strong services PMI. Higher oil prices (see below) offer part of the explanation. They weigh on core bonds as well.

Today’s agenda contains US non-manufacturing ISM. We expect the global divergence between weakness in manufacturing and strength in domestic services to persist in the US as well. This should avoid a nasty, negative surprise. The eco calendar contains second tier eco data this week with US and European central bankers in their blackout period ahead of key policy meetings next week. This sets the stage for more sideways action with May highs in US rates and the dollar being important resistance levels. We keep a close eye at US Treasury funding statements/action as well. They ran down their general account at the Fed to a rock-bottom $23bn against the background of the debt ceiling debate and have to replenish in coming weeks/months.

News and views

At the OPEC+ meeting on Sunday in Vienna, Saudi Arabia announced that it will cut its production by 1 mln barrels per day as the country aims to stabilize the market, amid persistent downward pressure on the oil price. Other members of the group didn’t engage to a further reduction, but agreed to maintain current cuts till the end of 2024. Russia also didn’t commit to deeper cuts. The United Arab Emirates even are allowed a higher production quotum for 2024. The oil price this morning gains modestly with Brent trading close to $77/b.

Rating agency S&P kept the French AA credit rating unchanged on Friday. The outlook remains negative. The agency expects tighter financial conditions and high core inflation to restrain the country’s activity in 2023 and 2024. It expects France’s budget deficit to decline to 3.8% of GDP in 2026 from about 5% in 2023. Government debt is expected to stay above 110% of GDP, with the forecasts still subject to risks related to growth and the implementation of the government’s economic and fiscal policy. Rating agency Fitch affirmed its AA- UK rating and also kept a negative outlook. The agency expects the UK general government debt to GDP ratio to reach 104.8% of GDP by 2024 from 101% in 2022. The negative outlook signals macroeconomic challenges, including weak growth and suborn inflation, higher borrowing costs and expenditure pressures due to the cost of living crisis and the upcoming elections. Fitch expects the UK to enter a mild recession in 2023 with a 0.1% contraction of GDP in 2023 and a weak recovery of 1.0% in 2024. Finally, Fitch kept the US AAA credit rating on watch negative, even after the political agreement to raise to US debt ceiling, avoiding a default as the rating agency will ‘consider the full implications of the most recent brinkmanship episode and the outlook for medium-term fiscal and debt trajectories’.

The week kicked off with a jump in oil prices, after Saudi announced that it will cut its production by another 1mbpd starting from July, pulling its production to the lowest levels since years.

The UAE will be given higher quotas, as African countries - which repeatedly fell below their production quotas– will see their upper production limit lessened.

Saudi will continue doing the heavy lifting of production cuts, hoping that its efforts will reverse the falling price trend in oil markets and boost prices, but the gifts to some OPEC members in expense of the others hint that we could see further cracks within the cartel in the next few months, and that’s not a winning setup for OPEC, and oil bulls.

US crude gapped 3.5% higher on Monday open, while Brent crude traded past $78pb. But the rally remained short-lived, and below the peak reached after Saudi Prince bin Salman had told oil bears to watch out a couple of weeks ago.

Oil bears – decidedly daring, rushed in to sell the rally triggered by the Saudi decision, as expected. Most of the gains are gone even before Europeans woke up.

The short-term price risks remain tilted to the upside as OPEC meeting continues today, but any price rally continues to be seen as interesting top selling opportunity by oil traders, as Chinese post-Covid reopening doesn’t gather the pace investors expected, while above-target global inflation and tight monetary policies threaten global growth. Any further price rally will likely hit resistance at 50/100-DMA range, between $74.90/75.50 area, and the 200-DMA will likely act as an ultimate stop at $78.90.

Seeing the glass half full

Asian equities were mostly in the green this Monday, to catch up with the US session rally following Friday’s jobs data. The US economy beat expectations for the 14th straight month and printed another blowout NFP data. The US economy added 339K new nonfarm jobs in May, far above the 180K expected by analysts. That would’ve been bad news for the Federal Reserve (Fed), if the wages growth hadn’t eased – though slightly, and the unemployment rate hadn’t jumped to 3.7% from 3.4% printed a month earlier.

As a result, investors preferred seeing the glass half full, betting that the Fed will likely pause hiking rates in June. The probability of a no hike in June rose to 75%, but activity on Fed funds futures still price in more than 50% chance for a July action, if inflation remains sticky and economic data strong enough.

The idea of a June skip & July hike keeps the US short-end of the US yield curve tilted to the upside. The US 2-year yield jumped past 4.50% on Friday, after the solid NFP read, and stabilizes above that level this morning.

The US dollar remains well bid against most majors, as the EURUSD is offered into the 1.07 level, and the USDJPY easily finds buyers below the 140 level, as yield spread between the US Japan 10-year bond spread remains favourable for buying the pair.

The US dollar remains under pressure against the Canadian dollar, on the other hand, as the OPEC-fueled oil prices leads to some inflows into the Loonie, while the AUDUSD spiked on Friday, boosted by a rally in iron ore futures, and defying a broadly bid US dollar.

The Reserve Bank of Australia (RBA) and Bank of Canada (BoC) will deliver their next policy decisions this week, and both are expected to keep the rates steady at this week’s meetings. But swap contracts showed a better chance for a rate hike on Friday, than a pause. A surprise rate hike from the RBA should give a further strength to the AUDUSD, but the deteriorating macroeconomic environment, the slowing China and falling raw material prices would normally be expected to soften the RBA’s hand. If that’s the case, we shall see AUDUSD remain under pressure for some more weeks.

Liquidity drain

In equities, the rising yields haven’t yet translated into selling pressure. The S&P500 rallied 1.45% on Friday, and is now approaching last summer peak, as the US debt ceiling agreement, and strong jobs data hinted that the US is still far from recession levels. The problem is that the US Treasury will issue a ton of new bonds from now to refill the Treasury’s General Account which got almost emptied during the debt ceiling crisis, and that will hit the market liquidity along with the Fed which will continue pulling away liquidity from the market within its QT program. Lower liquidity will likely lead to a decent downside correction in equities in the coming weeks.

DXY:

The DXY instrument is currently demonstrating bearish momentum, with the price falling below a significant descending trend line, suggesting that a continuation of bearish momentum is likely.

The price may potentially make a bearish reaction off the first resistance level and fall to the first support level. The first support level is located at 100.80 and is significant due to its role as a multi-swing low support.

The first resistance level is at 105.65, which is significant due to its status as an overlap resistance, meaning it could potentially halt or reverse any bullish price movement.

The second resistance level is at 107.87, which is also an overlap resistance, serving as another potential obstacle for bullish price movements.

EUR/USD:

The EUR/USD instrument currently exhibits a bearish momentum. This has been triggered by the price breaking below an ascending support line, suggesting a potential continuation of the bearish move.

The price could potentially continue its bearish trend towards the first support level. This support, located at 1.0080, has a multi-swing low support status, making it a potentially significant level where buyers might enter the market and halt or reverse the bearish trend.

On the other side, the first resistance level is at 1.0806. This level is an overlap resistance and aligns with the 50% Fibonacci retracement level, giving it additional significance as a potential barrier to any bullish price movements.

The second resistance level is at 1.1044, identified as a multi-swing high resistance. This suggests it’s a significant level where sellers have previously entered the market and could do so again, potentially halting or reversing any bullish price movements.

GBP/USD:

The GBP/USD instrument is currently demonstrating bearish momentum. There is potential for the price to continue its bearish trend, moving towards the first support level.

The first support is located at 1.2245, acting as an overlap support. Additionally, this level coincides with both the 50% Fibonacci retracement and the 61.80% Fibonacci projection levels, indicating significant potential for market activity and possible trend reversal.

Further down, the second support stands at 1.1834, serving as a multi-swing low support. This level could potentially attract buyers, providing a robust defense against further price drops.

On the flip side, the first resistance level is positioned at 1.2662, functioning as an overlap resistance. This could potentially pose challenges for any upward price movement.

Moreover, the second resistance level is located at 1.2975, identified as a pullback resistance. This level might act as a significant barrier to upward price momentum, with sellers likely to enter the market at this point.

USD/CHF:

The USD/CHF chart is currently showing a bullish momentum. This suggests that the price could potentially break through the first resistance level and rise towards the second resistance.

The first level of support is at 0.8977, which serves as an overlap support. This level might serve as a significant area where buyers could enter the market, thereby preventing the price from falling further.

The second level of support is at 0.8827, serving as a multi-swing low support. This level could also attract buyers, providing a robust defense against further price dips.

On the other hand, the first level of resistance is at 0.9088, which serves as an overlap resistance. This level could potentially act as a temporary barrier to the upward price movement.

The second resistance level is at 0.9197. This level serves as a pullback resistance and aligns with the 61.80% Fibonacci Retracement and the 100% Fibonacci Projection. This confluence of technical indicators might strengthen its significance, potentially posing a significant challenge to further upward price movement.

USD/JPY:

The USD/JPY chart is currently exhibiting a bullish momentum. This can be attributed to the price being above a significant ascending trendline, which indicates that further bullish momentum may be expected.

Based on this momentum, the price could potentially continue to rise towards the first resistance level.

The first support level is located at 137.65 and is seen as an overlap support as well as aligning with the 50% Fibonacci retracement level. This adds to its significance as a potential area where buyers might enter the market, thus preventing further price declines.

Should the price break below this level, the second support level is located at 134.31 and is identified as a multi-swing low support. This level could also attract buyers, further preventing the price from falling.

On the other hand, the first resistance level is located at 142.11 and is identified as an overlap resistance, also aligning with the 61.80% Fibonacci retracement level. This level could pose a challenge to any potential upward price movements.

The second resistance level is situated at 144.99 and is seen as a pullback resistance. This level could also act as a barrier to further price increases.

USD/CAD:

The USD/CAD chart is currently displaying a neutral momentum, suggesting an indecisive market.

The price could potentially fluctuate between the first resistance and first support levels due to this uncertainty.

The first support level is at 1.3305 and is identified as a multi-swing low support. This level represents an area of significant buying interest, which could prevent further price declines.

On the other hand, the first resistance level is at 1.3667. This level serves as an overlap resistance and aligns with the 61.80% Fibonacci retracement, enhancing its potential to halt upward price movements.

The second resistance level is at 1.3881 and is recognized as a swing high resistance. This level could also serve as a hurdle to further price increases.

A noteworthy observation is the presence of a symmetrical triangle chart pattern. This pattern typically represents a period of consolidation before the price is forced to breakout or breakdown. A break above the pattern’s upper trendline could signal a bullish breakout, while a break below the lower trendline might indicate a bearish breakdown.

AUD/USD:

The AUD/USD chart is currently demonstrating a bearish momentum, suggesting a downward trend in the market.

Considering this bearish momentum, it’s plausible that the price may react bearishly off the first resistance level and drop towards the first support level.

The first support level is located at 0.6496. This is identified as an overlap support, an area in the market structure that has previously attracted buyers.

The second support level is at 0.6386, serving as a swing low support and aligning with the 78.60% Fibonacci retracement. This enhances its significance as a potential buying zone.

On the contrary, the first resistance level is at 0.6604. Recognized as an overlap resistance, this level could temporarily halt any bullish price movements.

Additionally, the second resistance level is at 0.6790. This multi-swing high resistance level could pose a significant challenge to further price increases.

NZD/USD

The NZD/USD chart is currently demonstrating bearish momentum, with the price being below a major descending trend line which suggests a continuation of the bearish trend.

In light of this bearish momentum, it’s possible that the price may react bearishly off the first resistance level and drop towards the first support level.

The first support level is at 0.5758, identified as an overlap support and aligning with the 78.60% Fibonacci retracement. This adds to its significance as a potential buying zone in the market structure.

An intermediate support level is also present at 0.6027, serving as a swing low support and aligning with the 50% Fibonacci retracement, further reinforcing its potential significance.

In contrast, the first resistance level is at 0.6100, recognized as an overlap resistance. This level could act as a barrier to potential bullish price movements.

Finally, the second resistance level is at 0.6380, identified as a multi-swing high resistance, which could pose a challenge to further price increases.

DJ30:

The DJ30 (Dow Jones Industrial Average) chart is currently exhibiting bullish momentum, which is reinforced by the fact that the price is above a significant ascending trend line, suggesting that further bullish movement is on the horizon.

Given this momentum, it’s possible that the price might continue to rise towards the first resistance level. The first support level is found at 32595.85, serving as an overlap support and aligns with the 78.60% Fibonacci retracement level, reinforcing its importance.

An intermediate support level is located at 31744.50. This multi-swing low support is significant and is associated with the 50% Fibonacci retracement level.

The first resistance level is at 34267.73 and is identified as an overlap resistance, which could act as a temporary barrier to further price increases.

The second resistance level is at 35003.28 and is categorized as a swing high resistance, suggesting that it could pose a challenge to further bullish momentum.

An intermediate resistance level is at 33716.08, which is a swing high resistance and coincides with the 61.80% Fibonacci retracement level, suggesting that it might act as a temporary barrier to price increases.

GER30:

The GER30 (Germany 30) chart currently shows bullish momentum, supported by the fact that the price is within a bullish ascending channel, indicating potential for further upward movement.

Given this momentum, the price might potentially continue its ascent towards the first resistance level. The first support level is set at 15707.42, defined as an overlap support, enhancing its significance in the chart.

An intermediate support level is located at 15266.30, acting as a pullback support and coinciding with the 23.60% Fibonacci retracement level, reinforcing its importance.

The first resistance level is placed at 16290.73. This level is considered a multi-swing high resistance and could act as a temporary barrier to further price increases.

The second resistance level is found at 35003.28, aligning with the 127.20% Fibonacci extension. This suggests that it could provide a considerable challenge to continued bullish momentum.

US500

The US500 chart currently displays bullish momentum, as the price is above a significant ascending trend line, indicating the potential for further bullish momentum.

Given the current momentum, the price could potentially drop to the first support level in the short term before bouncing back and rising to the first resistance level.

The first support level is at 4206.4 and is identified as a pullback support, which strengthens its significance in the chart.

An intermediate support level is at 4060.4 and is identified as an overlap support, which further emphasizes its significance.

The first resistance level is at 4303.5. This level is seen as an overlap resistance and aligns with the 127.20% Fibonacci Extension and -27% Fibonacci Expansion. This alignment, known as Fibonacci confluence, can add to the level’s credibility as a potential resistance point.

The second resistance level is at 4385.8, recognized as a pullback resistance, which could potentially act as a temporary barrier to further price increases.

BTC/USD:

The BTC/USD chart currently exhibits a bearish momentum, with the price below a significant descending trend line, suggesting potential further bearish movements.

In light of this bearish momentum, the price could potentially continue its downward movement towards the first support level.

The first support level is at 25377, identified as a pullback support. This level aligns with the 50% Fibonacci Retracement, reinforcing its significance.

A second support level is at 23954, identified as an overlap support, which also aligns with the 61.80% Fibonacci Retracement, enhancing its significance.

The first resistance level is at 27976. This level is identified as an overlap resistance and coincides with the 50% Fibonacci Retracement, adding to its importance as a potential resistance point.

The second resistance level is at 29943, recognized as a multi-swing high resistance, potentially acting as a temporary barrier to further price increases.

There is also an intermediate support level at 25819, recognized as a swing low support, which could provide additional support to the price.

ETH/USD:

The ETH/USD chart currently shows a bullish momentum, with the price having broken above a significant descending resistance line, suggesting potential further bullish movements.

Given this bullish momentum, the price could potentially continue its upward trend towards the first resistance level.

The first support level is at 1843.29, identified as an overlap support. This level serves as a significant area where buyers have previously entered the market, adding to its significance.

The second support level is at 1730.08, also identified as an overlap support. This level also aligns with the 50% Fibonacci Retracement, enhancing its importance as a potential support area.

The first resistance level is at 2006.28. This level is recognized as a swing high resistance, indicating its historical significance as a price level where selling pressure has emerged, potentially acting as a temporary barrier to further price increases.

WTI/USD:

The WTI chart currently exhibits a bearish momentum, as the price is below the bearish Ichimoku cloud, suggesting potential further downward movements.

Given this bearish momentum, the price could potentially react off the first resistance level and continue its downward trend towards the first support level.

The first support level is at 62.25, identified as a multi-swing low support. This level has historically served as a significant area where buyers have entered the market, adding to its importance as a potential support area.

The first resistance level is at 74.31, recognized as an overlap resistance. This level also coincides with the 50% Fibonacci retracement, enhancing its significance as a potential barrier to further price increases.

The second resistance level is at 82.72, identified as an overlap resistance. This level represents a price point where sellers have previously entered the market, potentially acting as another barrier to upward price movements.

XAU/USD (GOLD):

The XAU/USD chart currently exhibits a bullish momentum, with the price above a major ascending trend line. This implies that there’s potential for further upward movements.

In this bullish context, the price could potentially continue its upward trend towards the first resistance level.

The first support level is at 1935.46. This level, recognized as a multi-swing low support, also coincides with the 50% Fibonacci retracement level, strengthening its significance as a potential area where buyers may enter the market.

The second support level is at 1859.67. This pullback support level is also at the 78.60% Fibonacci retracement level, enhancing its importance as a potential price floor.

The first resistance level is at 1976.91, identified as an overlap resistance. This is an area where sellers have previously entered the market, possibly acting as a barrier to further price increases.

The second resistance level is at 2066.35, noted as a multi-swing high resistance. This level could serve as another significant barrier to further upward price movement.