₦airaland Forum

USDCAD ahead of inflation data tries to continue the rise. Yesterday USDCAD drew a long body bullish candlestick with a slightly long shadow at the bottom of the candle and a short shadow at the top of the candle. The price crossed the middle band line from the downside reflecting a strong uptrend.

Referring to price history, USDCAD has been trading in the low range of 1.35894 to a high of 1.37909 since May 12. Sees the W1 candlestick shape, for five weeks USDCAD closed with a bearish candlestick even though the price moved in a range.

Earlier this week USDCAD tried to rise drawing a bullish candlestick, but investors may be anticipating today's important news CPI Canada and US retail sales. Canada's CPI is expected to be 0.1% from the previous data revision of 0.6%. Medium CPI year after year is expected to be 2.7% from the previous data revision of 2.8%. If the actual data is greater than the forecast, may be good for CAD.

Monday's economic news schedule that may be of interest to investors is the New York Manufacturing Index which surveys 200 New York state manufacturers to measure the relative level of general business conditions, if actual data is greater than forecast good for USD. In other news Fed Chair Jerome Powell's speech at the Economic Club of Washington DC attracted investors' attention in the hope that audience questions would receive hawkish or dovish answers regarding interest rate policy.

The gap occurs on GBPUSD on the day of the opening bell on Monday, usually, the price will close the gap in the same week. If the price falls it could lead near the 61.8 Fibo line, but the next 50.0 Fibo line could be better.

This week the British pound sterling seems to be one of the stronger currencies. This can be seen from GBPUSD soaring and EURGBP falling.
EURGBP on Friday extended its downward streak and drew a long-body bearish candlestick with a small shadow on the top candle. Price reached a low of 0.83911 from a high of 0.84210.

The strengthening of the Pound Sterling is thought to be due to the stable political conditions in England. the direct victory of Keir Starmer's Labor Party in the parliamentary elections resulted in the most stable political conditions in the UK.

UK GDP data also shows the country's economic performance experiencing unexpected growth that may reduce the possibility of a BoE interest rate cut in August.

According to Forexfactory data, UK GDP rose 0.4% from a forecast of 0.2% and previous 0.0%. Rising GDP growth provided fuel for the strengthening of the GBP.

However, there are other concerns about high service prices and rising wages said Bank of England Chief Economist Huw Pill in Reuters.

Happy weekend

Gold prices surged on Thursday from a low of $2370 to a high of $2424. Price draws a long body bullish candlestick with almost no shadow.

The soaring gold price was due to US CPI data showing a slowdown in the US economy. The actual data was smaller than the forecast, causing the USD to weaken.

According to Forexfactory, Core CPI fell 0.1% from previous data of 0.2% and forecast of 0.2%. Monthly CPI fell with a negative value at -1% from earlier data of 0.0% and forecast of 0.1%. Annual CPI fell to 3.0% from the previous 3.3% and forecast at 3.1%.

Meanwhile, Unemployment Claims data fell to 222k from previous data of 239k and forecast of 236k.

Slowing US economic data could increase speculation about the Fed lowering interest rates. However, it seems that Powell is trying to act carefully despite pressure from lawmakers. The Fed may cut interest rates in September.

In front of lawmakers he said he would wait until the Fed's preferred inflation gauge, the Personal Consumption Expenditures (PCE) Price Index, fell below the Fed's target before taking action. This increases speculation the Fed may cut interest rates sooner when the barometer has been met.

Today the market will still be waiting for core monthly CPI and monthly PPI data and Prelim UoM Consumer Sentiment, which may be able to drive the USD price.

Yesterday the price of GBPUSD rose to a high of 1.28480 from a low of 1.27817. The price drew a long body bullish candlestick with almost no shadow.

Powell's statement may have pushed the USD slightly lower amid the cooling down US economy, thereby increasing speculation about the possibility of the Fed cutting interest rates sooner.

Today investors may focus on CPI and Unemployment Claims data. Core CPI Ex Food and Energy is predicted at 0.2% from previous data of 0.2%. The CPI price of goods and services consumers purchase is expected to be 0.1% from the previous data of 0.0%. CPI Change in the price of goods and services purchased by consumers year after year is predicted to be 3.1% from previous data of 3.3%.

The next economic calendar schedule Unemployment Claims is predicted to be 236k from the previous 238k. Investors may respond after the release of the actual news data mentioned. Greater actual data may lead USD strengthening

Silver prices were stable in the range of price levels 30-31 yesterday. Price draws a doji candlestick with wicks at the top and bottom of the candlestick reflecting market indecision.

Prices are consolidating near the upper band line, after last weekend silver prices jumped to 31,489. However, Silver failed to continue its rise and fell again to the lowest level of 30,424.

A symmetrical triangle pattern appears which reflects degraded buyers and sellers. The market may still be waiting for Fed Chair Powell to testify. Powell will testify on the Semi-Annual Monetary Policy Report.

According to CME's FedWatch Tool, there are increasing investor expectations that the Fed will lower interest rates in September. Although lawmakers are pressuring Powell to lower interest rates, Powell will likely keep rates high for a longer time. The Fed is predicted to cut interest rates in September.

Silver has a positive correlation with gold, often when gold rises, silver also rises, but sometimes there are different moving average anomalies between gold and silver. Silver is used in industries that influence demand such as electronics and solar energy.

Yesterday gold price fell to a low of $2350 from a high of $2390 drawing a bearish candlestick. However, Gold failed to continue its upward trend and returned to its range.

Post-NFP gold prices last Friday suddenly fell to a low of $2350 but quickly the price then rolled up and finally jumped to $2392. Gold price is now back to around $2350 which may be the current support zone.

Today Jerome Powell will testify in Washington DC on the Semi-Annual Monetary Policy Report before the Senate Banking Committee. Next, there is Yellen Speaks and FOMC member Bowman Speaks.

But Powell's testimony benefited markets because of his important role. As head of the central bank, which controls short-term interest rates, he has more influence over the value of the nation's currency than anyone else.

Powell will provide 2 testimonies reading prepared, unscripted statements in which he will answer unknown questions. This moment may provide subtle clues regarding future monetary policy.

Yesterday, members of the board of the Swiss National Bank (SNB) decided to reduce the Sight Deposit Rate benchmark interest rate by 25 basis points (bp) from 1.50% to 1.25%. This cut was already projected by analysts after the SNB cut interest rates earlier in March. As a result of the lowering in interest rates, CHF experienced a drastic price spike, CHFJPY which suddenly fell after several bullish weeks. EURCHF suddenly rose after several weeks of bearish. And USDCHF suddenly strengthened after several days of bearish. In contrast to the oil market, although yesterday's oil price rose to a high of 81.36 for WTI, the spike was not too extreme, perhaps investors were more concerned with the US unemployment claims data which was lower than forecast so the USD currency weakened somewhat.

Today's oil price is trading above the price level of 80. Price is consolidating near the upper band line on the D1 timeframe. Yesterday's price in the low volatility may be due to the US Bank Holiday marking Juneteenth. In terms of geopolitical risks, a Ukrainian drone attack on a Russian oil terminal caused the terminal to catch fire. Meanwhile, Israel may attack the Hezbollah in Lebanon after the group launched intensive attacks against Israel targeting military bases. Oil prices are also supported by a positive oil demand outlook, especially after OPEC, IEA, and EIA predicted high oil demand growth in the second half of this year.

Yesterday oil prices continued their rise and drew a bullish candlestick with a shadow at the bottom of the candle. Oil prices rose despite a report by The American Petroleum Institute (API) showing an increase in US oil inventories of 2.264 million barrels this week. The Department of Energy (DoE) reported that crude oil inventories in the Strategic Petroleum Reserve (SPR) rose by 0.4 million barrels on June 14. Inventories now stand at 370.9 million barrels. The strengthening of oil may be driven by optimism about oil demand in 2024 and hopes that the Fed will lower interest rates at the end of the year.

WTI oil prices finally rose to a high of 79.91 yesterday. Investor optimism leads to WTI oil rising.OPEC+ has assured markets that it can rethink plans to supply more barrels to the market if conditions permit. Reuters reported that traders on Monday bought back the oil they sold last week following assurances from OPEC+. Chinese economic data also supports optimism about oil demand. Chinese investment in manufacturing this year rose 9.6% even though China's industrial output remained below expectations. 2024 global oil supply growth according to Rystad Energy forecasts will slow in 2024 due to the extension of OPEC+ voluntary cuts.

WTI oil prices have since traded above the 77 price level amid oil demand optimism. The EIA raised its forecast for world oil demand growth in 2024 to 1.10 million barrels per day from its previous estimate of 900,000 barrels per day. OPEC also maintained its forecast for strong global oil demand growth in 2024 due to expectations for the travel and tourism sector. Meanwhile, Russia announced oil production exceeded the quota agreed with OPEC but would take corrective measures to be implemented in June to reach target production levels, the Russian energy ministry said.

WTI oil yesterday fell again at 77.34 after previously drawing a Doji indecision candle. Oil prices fell perhaps more due to reduced market optimism due to the latest Department of Energy inventory statistics which showed a larger-than-expected increase in inventories. Meanwhile, Russia slightly exceeded the quota agreed with OPEC in May but they promised to compensate for the excess production problem until the end of September 2025. The threat of World War 3 may be a serious threat to humanity after the killing of Iranian general Saeed Abyar in Aleppo by Israel created new tensions because Iran threatened revenge.

Oil prices failed to reach the resistance of 80 price level and yesterday reached a high of 78.95 then rebounded and drew an indecision candle. Yesterday US inflation showed a significant slowdown in consumer price increases for May, which is the clearest indication that inflation is easing. The consumer price index rose 3.3% this year until May, indicating a slowdown in inflation. Meanwhile, the core CPI fell to 0.2% from the previous 0.3% with a forecast of 0.3%. Investors are expected to focus on PPI data and US unemployment change, which are pending economic indicators as one of the foundations of the Fed's policy on interest rates.

Oil prices were stable yesterday at around 77.70 ahead of today's important data that is of concern to investors about the US CPI, which is also an important economic indicator for the Fed in determining the direction of interest rate policy in addition to the FOMC economic projection. Markets usually respond to hawkish or dovish statements regarding their impact on currencies. On the other hand, the EIA released forecasts estimating US crude oil production to average 13.2 million barrels per day in 2024 and 13.7 million barrels per day in 2025.

WTI oil prices surged at the close of trading on Monday with a long-body bullish candlestick reflecting oil prices rising high from a low of 74.96 to a high of 77.82 in US crude oil. This increase may be caused by increasing optimism regarding increasing oil demand in the summer despite the decreasing potential for the Fed's interest rate cuts.

The price increase was also linked to US oil drilling which has decreased since May and a decline in production from 13.3 million barrels per day to 13.1 million barrels per day according to FXstreet.

After the US crude oil price went up to a high of 75.95 then fell and closed at 75.07. The NFP data released on Friday did not seem to have much influence on changes in oil prices even though prices also fell due to the strengthening of the USD. More oil news Antonio Guterres secretary-general of the United Nations condemned oil and gas advertisers. The UN attacked the oil industry because it was concerned about painting an apocalyptic picture of a future that would lead to mass extinction caused by the oil and gas industry. Today there is no important news that might be a trigger for market movements, some banks in Australia and China are not operating due to commemorating holidays. It is predicted that some bank holidays will reduce market volatility considering that China is one of the largest oil importing countries.

Yesterday oil prices continued their increase and reached a high of 75.54 before the price of WTI oil fell to a low level of 72.42 on June 4. The ECB cut its benchmark interest rate by 25 basis points to 4.25% from 4.5% at its meeting last Thursday, June 6, this is the first cut since 2019. On the other side, the level of expectation that the Fed will cut interest rates in September is also getting higher. Lower interest rates could trigger oil demand again. CME's TheFedWatch tool data shows the probability level of the Fed reducing interest rates in September reached 69%.

Asset price movements are unpredictable, changes in price direction can change in a matter of minutes. Oil prices, which had previously fallen since May 29, rose yesterday after reaching a low of 72.42, now rising to a price level of 74.20. Analysts estimate that the increase in oil prices was due to expectations as mixed US data fueled speculation of an interest rate cut by the Fed. According to CME FedWatch Tool data, the probability of the Fed cutting interest rates in September by at least 25 basis points has increased to nearly 70.0%, up from 47.5% in the previous week. A Reuters poll, also provided positive sentiment as nearly two-thirds of economists now expect an interest rate cut in September.

The decline in oil prices continued, WTI oil fell to a low level of 72.42 yesterday, according to Oilprice the decline in oil was caused after the API report which surprisingly showed data on US oil inventories increasing. Crude oil inventories in the United States rose this week by 4.052 million barrels for the week ending May 24, while analyst forecasts were only 1.9 million barrels. The decline in oil could also be due to sluggish oil demand even though 8 OPEC+ members agreed to extend voluntary cuts until 2025. On the other hand, the weak United States (US) ISM Manufacturing PMI has also raised concerns over the outlook for oil demand. The US Manufacturing PMI report showed that factory activity contracted for the second consecutive month in May. The price is now in the range of 72.78, technically in the oversold zone referring to the RSI indicator.

Unexpectedly after Monday's opening session oil rose slightly, but failed, and after breaking the support level of 76, the price fell strongly to a low of 73.79. Markets may ignore the OPEC+ agreement to extend voluntary oil production cuts until 2025.
Goldman Sachs managing director and head of research, Daan Struyven, said via Bloomberg that the outcome of the OPEC+ meeting was bearish due to the decision to return supply to the market despite the recent surprise increase in inventories. Risks to oil prices currently tend to be on the downside. Oil prices plummeted on Monday and failed to maintain support at the 76 price level.

Oil prices rose today from a low of 76.19 to a high of 77.30 on US crude oil. Perhaps this increase was triggered by the results of the OPEC+ meeting on June 2 which was held virtually. According to CNBC, the Oil Exporting Countries or OPEC+ agreed to increase their oil production cuts until 2025. Saudi Arabia will extend voluntary cuts of almost 1.7 million barrels per day until all of 2025. And several other small countries are extending voluntary cuts of 2.2 million barrels per day until the end of the third quarter of this year.

Even though the previous day had reached the price level of 80.38, this did not last long and oil fell again to levels below 80.
Analysts assume this decline is caused by sluggish demand as rising bond yields mean the Fed may delay lowering interest rates, and another reason is weak US GDP which reflects a decline in US performance. Aramco plans to launch a secondary public offering (SPO) of 1.545 billion ordinary shares, on Sunday, June 2, 2024. which represents around 0.64% of the company's issued shares. Today the market is waiting for the release of the core PCE index which may have an impact on financial markets.

US crude oil prices fell yesterday from a high of 80.38 to a low of 78.79. Oil prices are still having difficulty maintaining the 80 price level, which is a psychological level near the upper band line.

A number of analysts estimate that the decline in oil prices is related to Minneapolis Fed President Neel Kashari's hawkish comments, which predict that there is a chance of the Fed increasing interest rates. High interest rates can hinder economic growth and reduce oil demand. Minneapolis Fed Bank President Neel Kashkari said in an interview with CNBC broadcast, "I think the chances of us raising interest rates are pretty low, but I don't want to take any risks."

CME FedWatch data shows a decrease in the chances of the central bank lowering interest rates from the previous 57.5% to 46%, reflecting that investors' confidence in the FED will reduce interest rates is starting to fade.

The market now is still waiting for the OPEC+ meeting which will be held on June 2, which will likely maintain the policy of limiting production to support crude oil prices.

Oil prices rose for three consecutive days from the lowest point in the range of 76.00 to now the highest point at 79.91. After oil prices successfully crossed the middle band line, the price continued to rise until it reached the upper band line. Investors may pay attention to the OPEC+ meeting to be held on June 2. Analysts warn supplies may decrease with current cuts of two million barrels per day. Another market focus is on US core Personal Consumption Expenditure (PCE) Price Index data for April, which will be published on Friday.

US crude oil prices tried to continue their recovery yesterday, US crude oil prices rose from a low level of 77.37 to a high level of 78.58. Oil-related news that may be important to pay attention to is OPEC's optimism regarding the outlook for oil demand. According to OPEC Secretary General Haitham Al Ghais estimates that global oil demand growth will show a strong increase of 1.8 million barrels per day year on year, with an average of 106.3 million barrels per day. On the other hand, investors' focus this week is on the United States' core Personal Consumption Expenditure (PCE) price index data for April and the Eurozone's preliminary inflation data for May, which will influence speculation on interest rate cuts by the Fed and the European Central Bank (ECB ).

WTI oil prices are still trading around 77.50, up slightly by 0.03% to 77.57 today.
The University of Michigan's 5-year Consumer Inflation Expectations report for May on Friday fell slightly to 3.0% from an estimate of 3.1%. This decline in inflation expectations supports investor sentiment regarding the Fed's potential cut in interest rates, which analysts predict at least in September. In other news, Iran's economic council led by interim Iranian president Mohammad Mokhber has approved a plan to increase the country's oil production from 3.6 million barrels per day to 4 million barrels per day, according to Reuters.
And in perhaps other important news, Aramco, Saudi Arabia's largest oil company, will prepare a share sale to raise around $10 billion in early June.

Even though it had risen to the price level of 78.52, the price of US crude oil fell again to a low of 76.31, according to analysts, the fall in oil prices occurred because the EIA data report showed US oil inventories increased high, contrary to the forecast of a survey by Reuters. According to Energy Information Administration data, US commercial crude oil inventories rose by 1.8 million barrels, this is contrary to forecasts from a survey conducted by Reuters which predicted a decline of 2.5 million barrels.

Today's US crude oil price is below the price level of 80, yesterday the price moved down from a high of 78.30 to a low of 77.05
Yesterday's FOMC meeting minutes resulted in the decision to keep the interest rate unchanged as the inflation target of 2% wasn't reached.
FOMC unanimously decided at the meeting to maintain its benchmark short-term lending rate at 5.25%-5.5%. The meeting summary said "Participants observed that although inflation has declined over the past year, in recent months there has been a lack of further progress in achieving the Committee's goal of 2 percent. The recent monthly data had shown significant increases in components of goods and services price inflation."

WTI oil prices (XTIUSD) today are trading at around 78.06. Yesterday the price drew a bearish candle with a high of 79.19 and a low of 77.59.
On the daily timeframe, oil prices move between the middle and lower band lines below the 80 price level. oil prices continued their decline and drew a bearish candlestick amid hawkish statements from Fed officials regarding keeping interest rates higher for longer. On the other hand, US oil supplies increased this week by 2.48 million barrels at the end of May 10 according to The American Petroleum Institute (API).

Oil prices are still below the price level of 80 for US Crude oil, the PBOC's decision to keep interest rates unchanged only had a temporary impact in increasing oil prices to reach the price level of 80.03 before finally falling again to a low of 78.61. Oil price increases may be restrained due to Fed officials' doubts about the 2% inflation target. inflation developments may be unstable and indicate that the decline is only temporary and there will be no further progress in inflation this year. Elsewhere, gold and silver experienced consolidation after a strong rally last week, however, precious metals may still receive support from geopolitical risks, and the possibility of the Fed cutting interest rates.

US crude oil prices are still below the 80 price level. On Monday, the market may turn its attention to the monetary policy of the People's Bank of China (PBoC), which is expected to remain dovish as the economy recovers. China is the largest oil importer in the world. On the other hand, easing US inflation also has the potential to increase oil demand. The released CPI gives hope to the Fed to lower interest rates at its September meeting. However, Fed officials seem still don't seem convinced that the inflation rate has reached the 2% target. New York Fed President John Williams said “In the near term, I don't see the greater confidence we need to see inflation progress towards the 2% goal,” a Reuters source