EURNZD Long near correction coming soon
EUR/NZD’s rebound this month has lacked strength, just as the cross approaches a stiff hurdle at the early-May high of 1.7835. Chances are that EUR/NZD could settle in a 1.7150-1.7850 range in the near term. This follows a retreat in April from the top of a rising channel since 2015. Any break above immediate support at Tuesday’s low of 1.7570 would raise the odds of the range view.
RSI above 50 increasing bullish momentum: Pullback possible.
Data from Eurostat revealed that the euro zone economy entered into a technical recession as recently as Q1, although only just. Q4 data was revised from a 0 quarterly growth to a 0.1% contraction while the third estimate of Q1 went from 0.1% growth to a 0.1% contraction.
Deteriorating economic conditions considered alongside encouraging core inflation data suggest that the euro could come under more pressure despite the ECB adamant on further rate hikes. Markets anticipate the ECB will hike next week and again in either July or September but if subsequent inflation data heads lower, a case could be made that the committee consider a pause or even a ‘skip’ like the Fed is likely to implement.
RSI above 50 increasing bullish momentum: Pullback possible.
Data from Eurostat revealed that the euro zone economy entered into a technical recession as recently as Q1, although only just. Q4 data was revised from a 0 quarterly growth to a 0.1% contraction while the third estimate of Q1 went from 0.1% growth to a 0.1% contraction.
Deteriorating economic conditions considered alongside encouraging core inflation data suggest that the euro could come under more pressure despite the ECB adamant on further rate hikes. Markets anticipate the ECB will hike next week and again in either July or September but if subsequent inflation data heads lower, a case could be made that the committee consider a pause or even a ‘skip’ like the Fed is likely to implement.
Comment:
The pair made decline in C leg and reached buying zone at 1.7388-1.7108 area
Pull back completed at the 1.71945 low and we are getting good reaction from the buying zone. Bounce reached and exceeded 50 fibs against the connector’s high. So members who took the long trade are enjoying profits now in a risk free positions
Pull back completed at the 1.71945 low and we are getting good reaction from the buying zone. Bounce reached and exceeded 50 fibs against the connector’s high. So members who took the long trade are enjoying profits now in a risk free positions
Comment:
Gold is Being Pulled Between a Hawkish Fed and New Geopolitical Concerns
US Housing Surprises, Fed Pauses but Remains Hawkish
Last week, US economic data revealed a much stronger than expected housing market, with the NAHB Housing Market Index surpassing expectations to hit its highest level since July of last year. New building permits also beat market expectations, and new housing starts surged to their highest level since May 2022.
Last month, we reviewed the three possibilities of a Federal Reserve pivoting to rate cuts, continuing to hike, or pausing. The June FOMC meeting delivered our most likely scenario of a pause, which we presented as one of the better cases for gold, at least in the short term.
However, what markets received from the June FOMC meeting was a hawkish pause, in which no action was taken, while Chair Powell renewed his hawkish rhetoric, underlining his commitment to the task of bringing down inflation.
In a busy week for FOMC speakers, markets had the opportunity to digest comments from a total of six FOMC members. Jerome Powell also made his semi-annual trip to Capitol Hill, testifying before the House Financial Services Committee, and Senate Banking Committee, where he all-but confirmed that more rate hikes are in store and stated that “we don’t see rate cuts any time soon.”
Gold’s Reaction
The result of this pull between the resilience of the US economy plus a hawkish Fed on the one hand, and growing geopolitical uncertainty on the other, has resulted in muted price action despite the overall bearish trend.
We’re seeing this among investors at HYCM as well, for whom gold is one of the most popular assets this year. Positioning suggests current price action could be a period of short-term profit-taking within a longer-term bullish view.
We can see this reflected in gold’s chart. Between June 20 and 22, which saw the release of US housing data and FOMC speeches, gold prices declined by almost 2.4%.
US Housing Surprises, Fed Pauses but Remains Hawkish
Last week, US economic data revealed a much stronger than expected housing market, with the NAHB Housing Market Index surpassing expectations to hit its highest level since July of last year. New building permits also beat market expectations, and new housing starts surged to their highest level since May 2022.
Last month, we reviewed the three possibilities of a Federal Reserve pivoting to rate cuts, continuing to hike, or pausing. The June FOMC meeting delivered our most likely scenario of a pause, which we presented as one of the better cases for gold, at least in the short term.
However, what markets received from the June FOMC meeting was a hawkish pause, in which no action was taken, while Chair Powell renewed his hawkish rhetoric, underlining his commitment to the task of bringing down inflation.
In a busy week for FOMC speakers, markets had the opportunity to digest comments from a total of six FOMC members. Jerome Powell also made his semi-annual trip to Capitol Hill, testifying before the House Financial Services Committee, and Senate Banking Committee, where he all-but confirmed that more rate hikes are in store and stated that “we don’t see rate cuts any time soon.”
Gold’s Reaction
The result of this pull between the resilience of the US economy plus a hawkish Fed on the one hand, and growing geopolitical uncertainty on the other, has resulted in muted price action despite the overall bearish trend.
We’re seeing this among investors at HYCM as well, for whom gold is one of the most popular assets this year. Positioning suggests current price action could be a period of short-term profit-taking within a longer-term bullish view.
We can see this reflected in gold’s chart. Between June 20 and 22, which saw the release of US housing data and FOMC speeches, gold prices declined by almost 2.4%.
Comment:
trade is open
Deteriorating economic conditions considered alongside encouraging core inflation data suggest that the euro could come under more pressure despite the ECB adamant on further rate hikes. Markets anticipate the ECB will hike next week and again in either July or September but if subsequent inflation data heads lower, a case could be made that the committee consider a pause or even a ‘skip’ like the Fed is likely to implement.