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Gold Slips As Fed Stresses On Central Bank Independence
Gold prices were seen trending lower this morning after price rallied to a fresh six-year intraday high of 1439. Fed Chair Jerome Powell stressed the independence of the central bank in a speech on Tuesday. Powell also warned about the risks of monetary policy caving into political interests. Powell, however, did not tip his hand into what the Fed would do at the next meeting. The odds for a July rate cut have been increasing since the last Fed meeting.
How Far Will Gold Prices Correct?
The strong gains in gold prices over the past few weeks has led to the precious metal appreciating over 10% in just four weeks. However, the early correction seen this morning has pushed price to the short term support of 1404.33. A rebound off this level could keep prices supported to the upside. However, gold will need to break past the previous highs above 1439 to confirm the bullish trend continuation.
Crude Oil Rises On Inventory Drawdown
WTI crude oil prices broke past the sideways range established over the past two days. WTI crude oil closed at $58.72 on Tuesday. The gains came after the weekly inventory report from the American Petroleum Institute (API) showed a larger than anticipated drawdown in stockpiles. API’s weekly inventory saw crude oil stockpiles reporting a drawdown of 7.55 million barrels for the week ending June 20th. This was well above the median estimates of 2.89 million barrels in drawdown.
Will Crude Oil Prices Rise Further?
The current bullish breakout after the Doji candlesticks since the past two days indicate further gains. With price clearing the resistance area of 57.50, further gains are expected. The next main upside resistance is seen at the 61.00 level. We, therefore, expect oil prices to continue to rise to this level in the near term. To the downside, the bias shifts if oil prices fall back below 57.50. This will open the way for a retest to the 54.00 level of support
Euro Losses At 1.1400 Handle
The common currency was bearish on Tuesday just after the rally pushed the currency to the 1.1400 handle. The declines come amid any major economic news out of the Eurozone. Italy’s deficit continues to remain one of the prevailing narratives. However, the declines in the euro came due to a stronger greenback which is on track to post the second day of consecutive gains. On the economic front, Germany’s GfK consumer confidence report is due to come out later today.
Will the EURUSD Retrace Lower?
The reversal off the 1.1400 handle comes on a potential profit taking. The currency pair has extended strong declines since hitting this level. The short term support is found at 1.1339. If EURUSD fails to rebound at this support, we expect to see a sharper correction. This will pull the euro lower to the 1.1250 level. To the upside, the currency pair could remain range bound within 1.1400 and 1.1339.
Crude Oil Expect 60.50
Pivot (invalidation): 57.80
Our preference Long positions above 57.80 with targets at 59.70 & 60.50 in extension.
Alternative scenario Below 57.80 look for further downside with 57.25 & 56.75 as targets.
Comment The RSI shows upside momentum.
Silver Spot Under Pressure
Pivot (invalidation): 15.4000
Our preference Short positions below 15.4000 with targets at 15.1400 & 15.0400 in extension.
Alternative scenario Above 15.4000 look for further upside with 15.5000 & 15.5600 as targets.
Comment The RSI advocates for further decline.
Gold Spot The Downside Prevails
Pivot (invalidation): 1425.00
Our preference Short positions below 1425.00 with targets at 1402.00 & 1391.00 in extension.
Alternative scenario Above 1425.00 look for further upside with 1439.00 & 1445.00 as targets.
Comment The RSI has broken down its 30 level.
S&P 500 Under Pressure
Pivot (invalidation): 2935.00
Our preference Short positions below 2935.00 with targets at 2910.00 & 2895.00 in extension.
Alternative scenario Above 2935.00 look for further upside with 2948.00 & 2963.00 as targets.
Comment The RSI is bearish and calls for further downside.
DAX The Downside Prevails
Pivot (invalidation): 12290.00
Our preference Short positions below 12290.00 with targets at 12180.00 & 12120.00 in extension.
Alternative scenario Above 12290.00 look for further upside with 12337.00 & 12420.00 as targets.
Comment The RSI advocates for further downside.
USD/TRY Further Upside
Pivot (invalidation): 5.7850
Our preference Long positions above 5.7850 with targets at 5.8300 & 5.8480 in extension.
Alternative scenario Below 5.7850 look for further downside with 5.7520 & 5.7170 as targets.
Comment The RSI calls for a new upleg.
AUD/USD Key Resistance At 0.6975
Pivot (invalidation): 0.6975
Our preference Short positions below 0.6975 with targets at 0.6945 & 0.6925 in extension.
Alternative scenario Above 0.6975 look for further upside with 0.7000 & 0.7020 as targets.
Comment As Long as the resistance at 0.6975 is not surpassed, the risk of the break below 0.6945 remains high.
