Focus on the Rebound in the Short Term and Falling in the Later Period of the Range Trading

Commodity

Economic

Summary:

WTI crude oil prices remained depressed in the range, and remained under pressure for the second consecutive day. API crude oil inventory unexpectedly decreased, and the market focused on the EIA inventory report to clarify the direction.

SELL WTI

EXP

EXPIRED

73.800

Entry Price

68.690

76.070

69.060 -0.846 -1.21%

Pips

EXPIRED

68.690

72.653

Exit Price

73.800

Entry Price

76.070

Fundamentals

The market is now focusing on the impact of the EIA inventory report for the week ending June 2, which is expected to decrease by 1.2 million barrels after an unexpected increase of 4.5 million barrels. A lower increase or an unexpected flat figure may mean more room for crude oil prices to rise.

Earlier today, the API report showed that private crude oil inventories decreased by 1.71 million barrels, which may be due to the increase in purchases before the Memorial Day holiday. The market had expected an increase of 1.5 million barrels this week.

In addition to inventory data, investors need to closely observe risk catalysts and economic growth signals to make clear the trend of crude oil prices.

Risk factors and a weaker USD could also add to crude oil price gains, although hopes of a Fed tightening this month are now supporting the USD after the May non-farm payrolls report showed that employment again exceeded expectations. Nonetheless, the pessimistic ISM Services PMI released earlier this week is limiting the USD's gains.

In May, the U.S. ISM PMI for non-manufacturing fell to 50.3 from 51.9 in April, the lowest level since this year. The business activity index recorded a decline for the fourth consecutive month, which, together with the reduction in orders, indicates that service providers are experiencing a sluggish demand. This is likely to continue to drag down oil prices.

WTI: Focus on the Rebound in the Short Term and Falling in the Later Period of the Range Trading_1

Technical Analysis

WTI crude oil found support near the pre-trend line in its hourly time frame and may further expand the increase to USD$73.80. However, the technical indicators look mixed.

The 100 SMA is below the 200 SMA, indicating bearish pressure, but the gap between the indicators has narrowed, suggesting that prices could move further up in the near term. Moreover, crude oil prices are above the 10- and 20-day SMAs, so they could become dynamic support.

Short-term bulls could target the 38.2% Fibonacci retracement extension at US$73.80 or the 50% level at US$74.32; stronger bullish momentum could take prices to the 61.8% level or even US$75.26, near the swing high, or up to US$76.42.

However, the stochastics have moved down from the overbought zone, suggesting that selling pressure may be about to return. The RSI also appears to be moving south, although the oscillator still has some room to climb. It is recommended to go short at the highs.

Trading Recommendations

Trading direction: Short

Entry price: 73.80

Target price: 68.69

Stop loss: 76.07

Deadline: 2023-06-21 23:55:00

Support: 72.02, 71.09, 70.25

Resistance: 73.12, 73.80, 74.32

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Eva Chen

Forex

Central Bank

Economic

Summary:

Data released last week showed that the core inflation rate in the UK unexpectedly accelerated to 6.8% in April, prompting the market to raise expectations for the Bank of England to raise interest rates.

SELL GBPUSD

Close Time

CLOSED

1.24559

Entry Price

1.23380

1.25600

1.32076 -0.00039 -0.03%

104.1

Pips

Loss

1.23380

1.25600

Exit Price

1.24559

Entry Price

1.25600

Fundamentals

After the data showed that the core inflation in the UK unexpectedly accelerated in April, investors bet that the Bank of England (BOE) would raise interest rates very aggressively, but the GBP seems to be easily affected by the expected weakening.

Judging from the trend of the UK forward overnight-index swap curve, the UK will raise interest rates by a full 50 basis points before August and nearly 100 basis points before November. If the BOE's new round of tightening policy is not as strong as the market currently expects, the GBP still faces the risk that the BOE's interest rate expectation will be re-priced. If signs continue to show that the inflation problem in the UK is more serious than that in the U.S. and the eurozone, the GBP may experience a period of poor performance.

The BOE may continue to raise interest rates in June and August to curb inflation, but long-term interest rates should fall in the second half of the year, as investors' concerns shift from high inflation to weak economic growth. Weak credit demand, early signs of weak employment, and a sharp drop in energy prices will all help shift the focus.

At present, the inflation-adjusted real rate of return in the UK has risen, and the GBP has been boosted, but this situation may change. As the UK's core inflation development begins to differ from other major economies, the GBP should be very sensitive to the re-downward pricing of the UK's real rate of return. The short-term risk-return ratio of the GBP tends to go down.

GBPUSD: Go Short at the Highs as the Foundation for Further Rise Is Not Solid_1

Technical Analysis

The GBPUSD rebounded from 1.2370 in the 1H timeframe and is currently trading above 1.2400.

It not only tested the resistance of 1.2440 and kept it above the 50-hour SMA. However, to start a new rally, the GBPUSD bulls must clear the resistance zone of 1.2440 and keep stable above it and may continue to stay there for a longer period.

It is also worth mentioning that the Relative Strength Index (RSI) in the 4H timeframe rose slightly, reflecting the bullish tendency in the short-term market outlook.

However, we are not optimistic about the asset price moving up further, because the period after the price hit the level of 1.2545 on June 2 and retreated sharply is too crowded, and the foundation for continuing to rise in the short term is not solid, and the path with the least risk is downward, which is also in line with the Theory of Mean Reversion. It is recommended to go short at the highs.

Trading Recommendations

Trading direction: Short

Entry price: 1.2465

Target price: 1.2338

Stop loss: 1.2560

Deadline: 2023-06-21 23:55:00

Support: 1.2439, 1.2392, 1.2367

Resistance: 1.2460, 1.2483, 1.2545

Risk Warnings and Disclaimers

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Eva Chen

Forex

Central Bank

Economic

Summary:

The AUDUSD rose to a three-week high on Wednesday. Earlier, the Reserve Bank of Australia unexpectedly raised interest rates by 25 basis points to 4.1%, the highest level in 11 years, and said that further interest rate hikes may be needed to push inflation to the target.

BUY AUDUSD

Close Time

CLOSED

0.66964

Entry Price

0.67770

0.65500

0.67614 -0.00002 0.00%

48.8

Pips

Profit

0.65500

0.67452

Exit Price

0.66964

Entry Price

0.67770

Fundamentals

The Reserve Bank of Australia (RBA) once again raised the policy interest rate by 25 basis points to 4.10% and said that it may be necessary to further tighten monetary policy to ensure that inflation returns to the target level within a reasonable time, but this will depend on the development of the economy and inflation. This doesn't sound like a short-term suspension of interest rate hikes, especially if the inflation rate remains high because the inflation rate rose to 6.8% in April.

The RBA's decision was regarded as a hawkish shift, after the RBA abandoned its statement that the medium-term inflation expectation remained well-anchored, indicating that people were increasingly worried that inflation was still too high.

The decision of the RBA increased the signal of further interest rate hikes, and the market now expects the bet of an interest rate hike in July to rise to 60%. The upcoming labor market and inflation data will determine whether the AUD can maintain its upward trend. As long as the RBA continues to adopt restrictive policies, the AUD should continue to be supported.

Given the RBA's concerns about inflation risks, and market pricing does not seem to fully reflect this, the AUD and government bond yields may continue to rise. Market pricing fully reflects that the RBA will raise interest rates again, and there may be more risk premium, especially considering that the Fed may raise interest rates again in the next few months, and the previous expectation is that the Fed's interest rate hike cycle has ended.

AUDUSD: After the Bear Stop Loss Order Is Triggered, the Price May Continue to Rise_1

Technical Analysis

The decision of the RBA boosted the AUD, extending the latest rally from the low of 0.6458 on May 31 to the level of 0.6700. Nevertheless, there may be selling in this range, because the stochastics are overbought in the 1D timeframe and consolidate before continuing to push up.

However, the risk premium may continue to push the price higher. In particular, after the three bear stop loss orders at 0.6660, 0.6675, and 0.6697 are triggered, the price may continue to move up to complete the AB=CD pattern (but not by much). It is recommended to buy the dips and go short at the highs in the later stage.

Trading Recommendations

Trading direction: Long

Entry price: 0.6690

Target price: 0.6777

Stop loss: 0.6550

Deadline: 2023-06-21 23:55:00

Support: 0.6638, 0.6611, 0.6557, 0.6543

Resistance: 0.6691, 0.6733, 0.6746, 0.6771

Risk Warnings and Disclaimers

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King Ten

Commodity

Summary:

The market enters a vacuum period, waiting for next week's Fed meeting and CPI data.

BUY WTI

Close Time

CLOSED

71.500

Entry Price

74.500

68.500

69.060 -0.846 -1.21%

300.0

Pips

Loss

68.500

68.497

Exit Price

71.500

Entry Price

74.500

Fundamentals

During the Asian session on Wednesday (June 7th), WTI crude oil dropped slightly, and it is currently trading near $71.80/bbl. Yesterday's U.S. oil trend is still puzzling, especially closed within the SMAs, indicating that the short-term competition between Bulls/Bears is still intense without stable directional support. Today, it is expected that U.S. crude oil will probably keep oscillating, but because of yesterday's pullup from lows, the short-term structural center may be raised and narrow the oscillation range, which requires further guidance of the fundamentals. Thus, the U.S. EIA crude oil inventory data to be released in the evening is more worthy of attention.

Macro: The latest semi-annual Global Economic Outlook released by the World Bank raised the global economic growth forecast for 2023 to 2.1% from the previous 1.7%. At the same time, the World Bank highlighted the risks and hazards of the Fed's interest rate hike and the banking crisis in Europe and the US for developing economies. Separately, the OECD released its economic outlook report, forecasting global GDP growth to slow to 2.7% in 2023 while the growth will be 2.9% in 2024. Besides, the expected U.S. federal funds rate will peak at 5.25%-5.5% in the second quarter of 2023, with two "moderate" rate cuts expected in the second half of 2024. Comparingly, the eurozone's economy is expected to grow 0.9% in 2023 and 1.5% in 2024.

News: EIA's short-term energy outlook report demonstrates that global crude oil demand growth is expected to be revised upward to 1.59 million bpd in 2023, compared with the previous estimate of 1.56 million bpd. The price of WTI crude oil is expected to be $74.60/bbl. in 2023, slightly higher than previously expected.

Generally, the current macro recession risk has not been lifted (the Fed has not yet ended monetary policy tightening). Therefore, investors still need to be wary of the downside risk that current oil prices may face, especially in the case triggered by the expected revision of the monetary policy of major central banks. However, the impact of this needs data to be constantly verified and will not be reflected instantly. On the contrary, the greater impact on crude oil results from a disturbance on the supply side, as the current production cut is settled, the implementation of production cuts is essential, especially on the Russian side. Overall, there hasn't been a plummet in demand, crude oil is difficult to appear a significant decline, but a smooth appreciation will be from July. On the one hand, the interest rate hikes will end, and on the other hand, Saudi Arabia implements production cuts. As long as OPEC + production cuts are in place, the oil market gap in the summer peak is a probable event.

Technical Analysis

Daily chart: The 5-day, 10-day, and 20-day SMAs of WTI are sticking together, showing little momentum on both the demand and supply sides. The short-term center is lifted, and the oscillation is narrowed, missing further directions. But WTI is now standing above the three SMAs, suggesting the advantages of bulls.

Today's trading plan: Don't go short today but go long after a retracement. Both bulls and bears have opportunities under the oscillating pattern. Investors must be patient to take profits and stop losses. For aggressive traders, try to go long with small positions near the 5-day SMA ($71.5) and set the stop-loss at $70. If WTI surges to $74, take profits partially and settle the remaining positions for breakeven and take profits. WTI: Keep Oscillating Without Direction_1

WTI: Keep Oscillating Without Direction_1

Trading Recommendations

Trading direction: Long

Entry price: 71.500

Target price: 74.500

Stop loss: 68.500

Support: 70.000/67.000

Resistance: 74.800/75.600

Risk Warnings and Disclaimers

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King Ten

Commodity

Summary:

In the absence of guidance signals, bulls are cautious and wait patiently for inflation data and Fed meetings.

BUY XAUUSD

Close Time

CLOSED

1950.00

Entry Price

1985.00

1930.00

2559.14 -10.20 -0.40%

146.7

Pips

Profit

1930.00

1964.67

Exit Price

1950.00

Entry Price

1985.00

Fundamentals

During the Asian session on Wednesday (June 7), spot gold extended fluctuations in a narrow range and is currently trading around 1956. Gold prices oscillated slightly yesterday, with a range of less than $10. Currently, the market has fallen into a tangled period again, and traders are generally choosing to stick to the sidelines. The focus of the market is on whether the Fed will raise interest rates next week, how many bps, and the consumer price index (CPI) data that will be released before the Fed's interest rate decision is announced.

Markets believe that the Fed is likely to pause rate hikes in June to assess the impact of higher interest rates on the economy. While the Fed funds rate futures traders see a 65% chance that the Fed will raise rates by at least 25 bps in July.

Key data for investors to pay attention to this trading day: the US April trade balance, the US EIA crude oil inventory changes in the week ended June 2, the OECD economic outlook report, and the Testimony of US Treasury Secretary Janet Yellen before the House Financial Services Committee.

Overall: The World Bank released its latest semi-annual Global Economic Prospects yesterday. While raising the global economic forecast for 2023, the outlook highlights the harm and risks to developing economies caused by the Fed's rates raising and the banking crisis in Europe and the US, which indicates the world economy has not yet entered a recession as quickly as expected. Although this is emotionally negative for gold prices, it may not constitute the trading logic of gold, which can only act as a short-term disturbance. The market is still dominated by insisting on observing the data later. In the face of complex factors, the market is currently more cautious, waiting for the release of the CPI and the Fed meeting. Gold prices may keep oscillating in the near future.

The trading reference range today is 1950-1965.

Technical Analysis

Trading at the daily timeframe, the overall state of XAUUSD is relatively strong, according to the gold closing pattern and intraday operation rhythm yesterday. Starting from Monday, the market rose sharply after bottoming out on Monday at 1938, which can be clear that gold cannot make new lows in the short term after this wave came out. The daily chart closed on Monday with a white body, similar to the previous test of 1932. For the time being, gold may have little space to fall. While the market is slightly stronger at present, it is also necessary to pay attention to the downside space. Support below focuses on the 1950-1955 range, which is the low support of yesterday's multiple retracements. An effective break below will weaken the bullish momentum of XAUUSD in the short term.

Be aware of the resistance around 1966 above, which is also near yesterday's highs. The MACD has a trend of forming a golden cross again at present, with the price stabilized at the MA5 and MA10. Following this trend, gold will attempt to go higher, with resistance at 1975 and 1985.

Traders are recommended not to go short during the day and wait patiently for the retracement to go long. It is appropriate to go long after the gold price pulls back to the support point. Aggressive traders can keep testing long in 1950-1955 with small positions. Stop loss is around 1942. The first target to take profit sees 1965, at which traders can partially exit the market, and the second target could look at 1975-1985. XAUUSD: The Wait-and-See Mood Is Strong, with Gold Prices Fluctuating Narrowly_1

XAUUSD: The Wait-and-See Mood Is Strong, with Gold Prices Fluctuating Narrowly_1

Trading Recommendations

Trading Direction: Long

Entry Price: 1950

Target Price: 1985

Stop Loss: 1930

Support: 1940.000/1932.000

Resistance: 1965.000/1988.000

Risk Warnings and Disclaimers

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Saif

Central Bank

Economic

Forex

Summary:

Australian interest rate decisions lead the market .

SELL EURAUD

EXP

EXPIRED

1.62424

Entry Price

1.60000

1.63691

1.64320 -0.00018 -0.01%

Pips

EXPIRED

1.60000

1.61043

Exit Price

1.62424

Entry Price

1.63691

Fundamental analysis

Fundamentally in this pair, We see the data released today in Australia's interest rate decision has increased to 4.1% From 3.85% means adding on 0.25% Which gives strength to the Australian dollar on the other hand we have negative news construction PMI on the Europe zone

Australia's Overnight Lending Rate

Prev.: 3.85% Act.: 4.1%

Eurozone IHS Markit Construction PMI

Prev.: 45.2 Act.: 44.6

Technical analysis

In this 4 - hour diagram chart, the market price now is 1.60212, we expect the market to push the price up to the previous supply zone at 1.62210 and from that point, the market will push the price down to the oldest demand zone at 1.60000 with the 20-moving average point down.

Trading Recommendation

Trading Direction: Short

Entry Price: 1.62424

Target Price: 1.60000

Stop Loss: 1.63691

Risk Warnings and Disclaimers

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Eva Chen

Commodity

Central Bank

Economic

Summary:

The market is changing, so we should meet change with constancy. The price of gold was forced to rise by the bottom of US$1,940 yesterday and did not retreat. Under this circumstance, it is undoubtedly "stupid" to wait for the price to retreat today. If our Wave 5 downward structure is proven to be correct, then the previous Wave 3 must be adjusted, which means that Wave 4 must move up; Then the conclusion is that bulls have no choice but to be forced to pull up.

BUY XAUUSD

Close Time

CLOSED

1963.27

Entry Price

1999.00

1932.00

2559.14 -10.20 -0.40%

16.8

Pips

Profit

1932.00

1964.95

Exit Price

1963.27

Entry Price

1999.00

Fundamentals

According to data released on Monday, the U.S. ISM non-manufacturing PMI in May dropped to 50.3 from 51.9 in April, the lowest level this year. After the data was released, traders reduced their bets on the Fed to raise interest rates next week. The U.S. Dollar Index (USDX) fell nearly 30 points in the short term, and the short-term increase of gold price once expanded to US$14.

The PMI of the ISM service industry in the U.S. dropped from 51.9 in April to 50.3 in May. This data is far below the market expectation of 52.4%. This is the fifth consecutive month of service industry expansion, but optimism has been steadily fading since the end of 2022.

The service industry update in May reflects that the economy is gradually slowing down. Similar to the update of the manufacturing industry last week, with the slowdown of demand growth, the backlog of orders and supplier delivery time continue to improve. The improvement in supplier delivery time since February was last seen at the end of the economic recession during the global financial crisis.

Combined with last week's ISM manufacturing report, enterprises signaled that demand growth was slowing down. Combining this with improving the supply chain and easing the price pressure, although the employment growth in the non-farm payrolls report continues to be strong, the Fed has a certain guarantee that the fight against inflation is gradually making progress.

It is worth recalling that many influential Fed officials supported not raising interest rates in June last week. In addition, the market now expects that the Fed is more likely to keep interest rates unchanged at the policy meeting of the Federal Open Market Committee on June 13th and 14th. This, in turn, will lead to a further decline in U.S. Treasury Securities yields and may prevent USD bulls from making aggressive bets. In addition, the generally cautious market sentiment continues to promote the safe-haven gold price and limit the downside.

Against the above-mentioned fundamental background, the path of least resistance to the gold price is upward. However, investors seem reluctant, preferring to wait for the Fed's recent policy prospects to become clearer. Therefore, the focus will still be on the high-profile policy decision in June.

XAUUSD: Bulls Have No Choice but to Be Forced to Pull Up_1

Fundamentals

According to our narrative and our strategy yesterday, the ups and downs of gold prices in recent trading days fully meet our expectations; However, there were some new changes in the market yesterday, which made our model have to be adjusted (although the expected mid-term decline remained unchanged).

The price of gold has been in a steady decline since it reached a record high of US$2,079 on May 4. According to our simulation graph, the price shows signs of coming out of the falling structure of Wave 5. If our 5-wave downward structure is proven to be correct, then the previous Wave 3 must be adjusted; The price of Wave 3 is not the expected US$1,951, but further moved down to the recent low of US$1,932, indicating that Wave 4 must move up. The path of least resistance to the gold price is upward.

Why do we come to such a conclusion? First of all, as a continuation of last Friday's price drop, yesterday's sharp rise and no retracement means that there are still many trapped selling orders below US$1,940; Second, the price does not retreat, which means that Wave 4 must be weighted and averaged and then raised, but it will not exceed US$2,000, otherwise the Wave 5 downward structure will not be established. Therefore, we conclude that bulls have no choice but to be forced to pull up. It is recommended to buy the dips.

Trading Recommendations

Trading direction: Long

Entry price: 1964

Target price: 1999

Stop loss: 1932

Deadline: 2023-06-20 23:55:00

Support: 1946, 1938, 1932

Resistance: 1969, 1983, 1993

Risk Warnings and Disclaimers

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Focus on the Rebound in the Short Term and Falling in the Later Period of the Range Trading

Fundamentals

Technical Analysis

Trading Recommendations

Go Short at the Highs as the Foundation for Further Rise Is Not Solid

Fundamentals

Technical Analysis

Trading Recommendations

After the Bear Stop Loss Order Is Triggered, the Price May Continue to Rise

Fundamentals

Technical Analysis

Trading Recommendations

Keep Oscillating Without Direction

Fundamentals

Technical Analysis

Trading Recommendations

The Wait-and-See Mood Is Strong, with Gold Prices Fluctuating Narrowly

Fundamentals

Technical Analysis

Trading Recommendations

Is EURAUD Continuing Down?

Fundamental analysis

Australia's Overnight Lending Rate

Eurozone IHS Markit Construction PMI

Technical analysis

Trading Recommendation

Bulls Have No Choice but to Be Forced to Pull Up

Fundamentals

Fundamentals

Trading Recommendations

Risk Disclosure