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South Korean president Moon Jae-in had a surprised meeting with North Korean leader Kim Jong-un on Saturday, regarding the summit with the US. Moon's office said after the meeting that the leaders "exchanged views and discussed ways to implement the Panmunjom Declaration and to ensure a successful US-North Korea summit."

Moon added in a press conference that "should the North Korea-US summit succeed, I would like to see efforts to formally end the (Korean) war through a three-way summit of the South, the North and the US." Moon also sought agreement from Kim that the summit must be held.

A South Korean official said that "the discussions are just getting started, so we are still waiting to see how they come out, but depending on their outcome, the president could join President Trump and Chairman Kim in Singapore."

White House spokeswoman Sarah Sanders also said that "the White House pre-advance team for Singapore will leave as scheduled in order to prepare should the summit take place."

Also, Trump himself tweeted that the US teams is now in North Korea to discuss the meeting.

https://twitter.com/realDonaldTrump/status/1000831304836018176

USDCHF - The pair looks to weaken further in the new week on corrective pullback threats. On the downside, support lies at the 0.9850 level. A turn below here will open the door for more weakness towards the 0.9800 level and then the 0.9750 level. On the upside, resistance resides at the 0.9950 level where a break will clear the way for more strength to occur towards the 1.0000 level. Further out, resistance comes in at the 1.0050 level. Above here if seen will turn attention to 1.0200. All in all, USDCHF faces further corrective downside pressure.

EURUSD - The pair remains weak and vulnerable to the downside as it closed lower the past week. On the upside, resistance comes in at 1.1700 level with a cut through here opening the door for more upside towards the 1.1750 level. Further up, resistance lies at the 1.1800 level where a break will expose the 1.1850 level. Conversely, support lies at the 1.1600 level where a violation will aim at the 1.1550 level. A break of here will aim at the 1.1500 level. Below here will open the door for more weakness towards the 1.1450. All in all, EURUSD faces further downside pressure.

Buckle in for an action-packed holiday-shortened week brimmed with essential events, none more significant than the May employment report particularly in light of the recent dovish conversation on wage growth in the May 2 FOMC minutes. A marginally firmer reading on the AHE could set the dollar tone through June FOMC.

Last weeks slight risk-off sentiment and pre-holiday positioning led to USD outperformance across G10 as the market continued to iron out what is happening with Italy, Trump -Kim summit, US-China Trade, especially the USTR final decision on Section 301 tariffs which could trigger a Chinese reprisal. And of course, let’s not forget NAFTA as negotiators and the market face a hard deadline of May 31.

But with no shortage of moving parts, the currency markets have opened with a bang this morning as the EURUSD, and USDJPYare trading + 50 as the markets mull the latest in Italian politics and the US-North Korea summit. So much for US and UK holidays influencing a quiet start to the week.

A relief rally on the EURO is underway as Italian President Mattarella rejected PM-designate Conte’s candidate for finance minister – Paolo Savona, a die-hard Euroskeptic. But given how high emotions run in Italian politics this is far from over but indeed will be viewed as a vote of confidence for the EURO and temper Italy contagion fears.

All roads do lead to Singapore, at least on June 12 anyway, as the Trump-Kim Summit is( apparently) going ahead – which should be risk-friendly news for the markets. But with USTR final decision on Section 301 tariffs looming the markets are not jumping for joy just yet.

Oil Markets

Given Oil market positioning, prices were going to be susceptible to the slightest bearish news. Russia, Saudi Arabia and the UAE’s comments after the St. Petersburg meeting hinted that the cartel was considering providing more supply to offset the Iran and Venusuala supply disruption. Not to mention President Trump is coercing OPEC to stop manipulating prices via supply curbs after Gasoline breached 3 dollars per gallon ahead of the Memorial Day long weekend.

Whether it was nothing more than an OPEC trial balloon or not, the markets plunged 4 % on the outside chance this could lead to a compliance breakdown. However, what the producer decides to do at the Vinnea June 22 meeting will likely have much about where prices are sitting as it will about supply dynamics at that time.

Adding to the downward momentum was US oil rigs this week which rose by a gargantuan 15 to 859. But keep in mind the data does come on the heels for flat rig count at 844 the week before, but none the less an impressive number and suggests shale drillers are not expected prices to fall off the ledge and probably correct given that additional supply disruptions are more likely than not.

Gold Markets

Likely another week of conflicting indicators as Italy contagion fears, US-China tariff escalation and Trump- Kim summit concerns are offset by the rising US dollar which remains the primary headwind gold price. There’s a deluge of key US economic data this week that could test the USD fortitude after the greenback has shown some incredible backbone in May. Given a busy economic docket awash with high-risk events, while dotted with geopolitical headlines, volatility abounds. However, risk sentiment has opened in a much friendly place this morning as a relief rally has ensued with the Trump-Kim summit back on while the EU is in the midst of a relief rally after Paolo Savona was not endorsed for finance ministers in Italy.

With that said, gold positions have turned a bit oversold above $1300 indicating we could see a significant bounce higher if the USD buckles on weaker than expected economic data. The dollar remains the overall driver, but traders are not positioned for worst case scenarios in the trade war or any negative fall out from the North Korea summit, so gold prices could also catch a fillip if one or both of these key market storylines go sideways.

Currency Markets

Some political risk is unwinding this morning, but market dynamics hold true

EUR: While longer-term influences remain negative for the USD, near-term growth dynamics based on the recent run of weak economic data in the EU are providing tailwinds for the USD. Short-term growth narratives will continue to influence relative monetary policies ( negative ECB and positive FED) So until we see this reverese m the EURUSD will continue to trade off its back foot

JPY: The dynamics of trade disputes along with higher US interest rates suggests the bar is high for the Nikkei to move significantly higher over the next few months. Ultimately a collapse in the Nikkei could pull USDJPY lower. The Nikkei is only up 100 points in futures trading on the North Korea news, so the balance of risk could remain lower.

MYR: Despite slightly better risk sentiment on the back of the North Korea headlines, the elephant in the room is the discussion around government debt. My guess, since when dealing with political risk is a calculated guess is all we have given political risk is so very very difficult to quantify. But the Ringgit will most likely put in a repeat performance of last week while gravitating to the higher end of the current 3.95-4.00 support and resistance zone. Local political thunder clouds remain threating, but expect external factors to drive momentum where EM currencies, in general, continue to fall under pressure as the USD dollar remain well positioned vs the EURO heading into the weekend.

Oil prices look very heavy both from a fundamental and technical perspective suggesting we may be coming to an end in the bull market run. And this could weight on MYR sentiment. The potential increase in OPEC output to counter global supply concerns due to Venuseal and Iran could lead to a breakdown in OPEC / Non-OPEC compliance.

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Traditionally, summer is the time when business activity slows down: VIPs are basking in the sun on their snow-white yachts, the heads of the Central Banks leave the boring offices, setting important tasks aside for the autumn, and they are followed by ordinary traders who get a break. However, even the summer months can present surprises. Suffice it to recall the referendum on the withdrawal of the UK from the EU in June 2016, the results of which literally shocked all the stock and financial markets.

Such breaking news is not expected in the coming three months, but some events will be able to exert a strong, if not decisive, influence on the formation of exchange rates and trends.

EUR/USD. Most likely, the ECB will send a signal in summer about its intention to end this year with a super-soft policy of buying up assets. This will happen, most likely, either after the meeting on June 14, or July 26, because the next meeting will happen in autumn. The intention to finish with the quantitative easing program (QE) and go into a new phase of development has been repeatedly stated by the heads of European Central Banks - by the head of the Bank of France Villeroia de Gallo, and the management of the German Bundesbank, and the head of the Bank of Lithuania Vitas Vasiliauskas.

As a result, despite the fact that the Euro can still continue to decline for some time, the markets are already prepared for a trend change. And if after one of the mentioned meetings the statements of the ECB Head Mario Draghi contain hawk notes, the Euro will immediately fly up.

More than 60% of the polled experts agree with this scenario at the moment, they believe that the pair EUR/USD will definitely return to the highs of 2018 in the zone 1.2400-1.2555 by September.

10% of analysts are still undecided, and about 30% of experts have voted for the further strengthening of the dollar. This, in their view, will be facilitated by the further raise of the interest rate by the US Federal Reserve against the backdrop of the ECB's muffled rhetoric.

The bears' supporters expect the Fed to raise the rate by another 0.5% in the next six months, which will lead to a fall of the euro to the last September's low in the zone 1.1550. Moreover, such a decrease may occur in the near future, far outstripping the real actions of the Fed.

If we talk about technical analysis, its forecasts are more modest. It predicts a fairly low volatility and fluctuations of the pair in the corridor 1.1600-1.2000 for the beginning of the summer. Oscillators also expect correction upwards after 700 points of fall. So, a quarter of them are already signaling that this pair is oversold on the daily and weekly timeframes.

GBP/USD. The pound continues to be pressured by uncertainty and disagreement with the European Union regarding the Brexit, as well as the absence of any changes in the monetary policy of the Bank of England. Starting from April 17, the pound has already lost more than 900 points and, if you look at the readings of graphical analysis and indicators, it does not intend to stop there.

So, the graphical analysis on D1 assumes that, having beaten off from resistance 1.3455, the pair can sharply go down, reaching the bottom at the level of 1.3065. And in case of the breakdown of this support, it can fall another 300 points lower - to the horizon 1.2765.

However, only 35% of experts support this development, 10% are neutral and 55% are confident that, starting from the middle of summer, the pound will start to gain strength and the pair will rise at least to 1.4000-1.4100. In this case, we must take into account that as of now, only one out of ten oscillators indicates that the pair is oversold.

USD/JPY. It is clear that almost all trend indicators and oscillators on D1 and W1 are painted green. Only 10% of oscillators say that this pair is overbought.

It is necessary to pay attention to the fact that the pair has returned to the boundaries of the side channel 108.25-114.70, along which it has moved starting from the beginning of 2017.

It broke through the lower boundary of this corridor in mid-February 2018, but now it has again approached its Pivot Point. Perhaps this is the reason for the divergence of opinions among experts: a third of them are for the movement of the pair to the north, a third vote for the east and a third think it will go to the south.

We can conclude from the above that the pair will stay in this range for the nearest months, which is confirmed by graphical analysis. At the beginning of summer, it expects the pair to move in the range of 108.25-112.00, after which the pair can go up to resistance 114.70.

Cryptocurrencies. We should remind you once again that, due to the fact that the cryptocurrency market is thin and has increased volatility, digital currency rates can be strongly influenced not only by the decisions of various regulators, but also by the statements and actions of private companies and newsmakers of this industry.

For the pair BTC/USD, experts expect growth to the height of 11,750-12,980 by the middle of July, after which it is expected to roll back - first to the horizon of 10,000, and then, possibly, to the support of 7,160.

Analysts expect about the same dynamics for other cryptocurrencies included in the TOP-10 in terms of capitalization. So, it is not excluded that the pair ETH/USD will overcome the mark of $1000 for 1 coin in July, then it will return to the values of May in the $650 area.
LTC/USD. The pair will try to approach the height of $200 for a litecoin, then it will roll back to $140.

The immediate goal of the pair XRP/USD is to return to zone 0.8850. If it is reached, the next height is 1.0000, after which the rollback to the values in the region of 0.6300-0.7000 is expected.

EUR/USD's decline from 1.2555 extended to as low as 1.1643 last week. There is no sign of bottoming yet. Initial bias remains on the downside this week for 50% retracement of 1.0339 to 1.2555 at 1.1447 next. On the upside, above 1.1750 minor resistance will turn intraday bias neutral first. But near term outlook will remain bearish as long as 1.1995 resistance holds.

In the bigger picture, current development suggests that EUR/USD was rejected by 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. And, a medium term top was formed at 1.2555 already. Decline from there should extend further to 61.8% retracement of 1.0339 to 1.2555 at 1.1186 and below. For now, even in case of rebound, we won't consider the fall from 1.2555 as finished as long as 55 day EMA (now at 1.2049) holds.

In the long term picture, the rejection from 38.2% retracement of 1.6039 to 1.0339 at 1.2516 argues that long term down trend from 1.6039 (2008 high) might not be over yet. EUR/USD is also held below decade long trend line resistance. Focus will now turn to 1.1553 support. Break there would raise the chance of retesting 1.0339 low. It's early to tell, but the chance of long term bullish reversal is fading.

USD/JPY's sharp decline last week confirmed short term topping at 111.39. Price action from there is seen as a corrective move. We'd expect support from 108.82 cluster support (38.2% retracement of 104.62 to 111.39 at 108.80) to bring rebound. On the upside, above 110.32 minor resistance will argue that the pull back is completed. And, in that case, retest of 111.39 high should be seen. However, firm break of 108.82 will dampen our view and bring deeper decline to 61.8% retracement at 107.20 and possibly below.

In the bigger picture, corrective decline from 118.65 (2016 high) has completed with three waves down to 104.62. Rise from 104.62 is possibly resuming the up trend from 98.97 (2016 low). This will be the preferred case as long as108.82 support holds. Decisive break of 114.73 resistance will confirm our view and target 118.65 and above. However, sustained break of 108.82 will dampen the bullish outlook and revive the case of a break of 104.62 low before bottoming.

In the long term picture, the rise from 75.56 (2011 low) long term bottom to 125.85 top is viewed as an impulsive move, no change in this view. Price actions from 125.85 are seen as a corrective move which could still extend. In case of deeper fall, downside should be contained by 61.8% retracement of 75.56 to 125.85 at 94.77. Up trend from 75.56 is expected to resume at a later stage for above 135.20/147.68 resistance zone.

GBP/USD's fall from 1.4376 resumed last week and reached 1.3290. Initial bias stays on the downside this week for 50% retracement of 1.1946 to 1.4376 at 1.3161. On the upside, break of 1.3568 resistance is needed to indicate short term bottoming. Otherwise, outlook will remain bearish in case of recovery.

In the bigger picture, current development suggests that whole medium term rebound from 1.1936 (2016 low) has completed at 1.4376 already, with trend line broken firmly, on bearish divergence condition in daily MACD, after rejection from 55 month EMA (now at 1.4223). 61.8% retracement of 1.1936 (2016 low) to 1.4376 at 1.2874 is the next target. We'll pay attention to the reaction from there to asses the chance of long term down trend resumption. For now, outlook will stay bearish as long as 55 day EMA (now at 1.3730) holds, even in case of strong rebound.

In the longer term picture, rise from 1.1946 (2016 low) is viewed as a corrective move, no change in this view. Rejection from 55 month EMA argues that it might be completed already. Larger down trend from 2.1161 (2007 high) could extend to a new low. This will now be the preferred case as long as 1.4376 resistance holds.

USD/CHF's correction extend lower last week and outlook is unchanged. Initial bias remains on the downside this week for trend line support (now at 0.9833). We'd expect strong support from trend line (now at 0.9830) to contain downside and bring rebound. On the upside, above 0.9977 will suggest that the pull back is finished and bring retest of 1.0056 high. However, sustained break of the trend will will argue that it's a larger scale correction and will target 0.9724 fibonacci level.

In the bigger picture, medium term decline from 1.0342 has completed with three waves down to 0.9186. Rise from there is currently viewed as a leg inside the long term range pattern. Hence, while further rally would be seen, we'd be cautious on strong resistance from 1.0342 to limit upside. For now, further rise is expected as long as 38.2% retracement of 0.9186 to 1.0056 at 0.9724 holds.

In the long term picture, price actions from 0.7065 (2011 low) are not clearly impulsive yet. Thus, we'll treat it as developing into a corrective pattern, at least, until a firm break of 1.0342 resistance.