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The Dollar Up, Gold Vulnerable as Asia Session Opens

The Dollar Up, Gold Vulnerable as Asia Session Opens

Stay informed with a comprehensive overview of Asia’s market movements and key economic indicators for May 14: dollar up, gold vulnerable, oil rebounds.

In the wake of the US session, where Federal Reserve Governor Philip Jefferson underscored the importance of clear communication in monetary policy, markets brace for potential shifts in global currencies and commodities. Here’s a comprehensive overview of key developments and anticipated movements across major assets in the Asia session.

US Session Recap

Federal Reserve Governor Philip Jefferson emphasized the necessity of effective communication in monetary policy during his speech at an event hosted by the Federal Reserve Bank of Cleveland. Jefferson focused on maintaining optimal employment levels and stable prices, highlighting the importance of policymakers’ decisions and transparent communication to mitigate unintended market volatility. The dollar index (DXY) displayed limited movement, fluctuating within a narrow range and settling around 105.20 after touching a low of 105.05.

Asia Session Outlook

Dollar Index (DXY): The DXY exhibited upward momentum, inching closer to 105.30, while gold stabilized around $2,335/oz following a previous decline. Crude oil rebounded, surpassing $79 per barrel, although lingering overhead pressures persist.

Gold (XAU): Gold prices remain vulnerable to further downside pressure amidst expectations of a potential dollar strengthening, particularly in light of Federal Reserve Chair Jerome Powell’s upcoming speech and the release of the Producer Price Index (PPI).

Australian Dollar (AUD): The AUD faced initial pressure as demand for the dollar softened, but it retreated to around 0.6610 by the end of the US session. Overhead pressures could persist, with support and resistance levels set at 0.6560 and 0.6640, respectively.

The Dollar Up, Gold Vulnerable as Asia Session Opens

New Zealand Dollar (NZD): Similarly, the NZD experienced fluctuations, reaching 0.6015 by the close of the US session. The currency pair may encounter further pressure during the day, with support at 0.5980 and resistance at 0.6040.

Japanese Yen (JPY): The yen weakened, resulting in USD/JPY climbing above 156. While the currency pair traded around 156.40 in the Asia session, the Bank of Japan (BoJ) intervention measures could influence its trajectory, with support at 154.50 and resistance at 157.90.

Euro (EUR): Positive sentiment surrounds the Euro, supported by an anticipated rise in the ZEW Economic Sentiment index. EUR/USD traded around 1.790 at the start of the Asia session, with potential upward movement during European trading hours.

Swiss Franc (CHF): The CHF weakened against the USD, with USD/CHF hovering near 0.9090. Support and resistance levels stand at 0.9050 and 0.9100, respectively, while the Swiss National Bank’s (SNB) recent monetary policy easing continues to impact the currency’s performance.

British Pound (GBP): The GBP faces scrutiny ahead of the UK’s Labour Force Survey release, with potential softening in the labor market contributing to bearish sentiment. Support and resistance levels for GBP/USD are uncertain, pending the report’s outcome.

Canadian Dollar (CAD): The CAD remained relatively stable, with USD/CAD trading around 1.3680 in Asia. Support and resistance levels are set at 1.3630 and 1.3760, respectively, while the Bank of Canada’s ongoing quantitative tightening policy influences market sentiment.

Oil: Crude oil prices rebounded, surpassing $79 per barrel, although concerns over increased API crude oil stockpiles in the US could exert downward pressure on prices.

Conclusion

Amidst evolving global economic indicators and central bank policies, market participants navigate various asset classes, anticipating shifts in currency and commodity prices. Key events such as Powell’s speech and economic data releases like the PPI and the Labour Force Survey will shape market sentiment and asset trajectories throughout the Asia session.

Disclaimer: The above analysis is for informational purposes only and does not constitute financial advice. Readers should research and consult with a financial professional before making investment decisions.

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