May 25, 2023
EUR/USD: During the mid-Asian session, the EUR/USD pair continues to face downward pressure, with Euro bears taking a pause after reaching the lowest levels since late March. This has led to a two-day downtrend in cautious markets. It is important to note that concerns have recently been mounting over the possibility of the US defaulting on its debt payments in early June, which has negatively affected market sentiment and weighed on the EUR/USD pair. Despite these concerns, policymakers remain optimistic about reaching a deal to extend the debt ceiling. As a result, the US Dollar Index is currently trading around a nine-week high, supported by stronger Treasury bond yields. Looking ahead, market focus will be on the second readings of US and German GDP, along with the US weekly Jobless Claims, the Chicago Fed National Activity Index, and Pending Home Sales, which are all scheduled on the economic calendar. However, the ongoing US debt ceiling negotiations will attract significant attention.
SELL LIMIT 1.0770/TP 1.0710/SL 1.0800
GBP/USD: The GBP/USD pair is currently trading at its lowest level in 1.5 months, having recently hit a multi-day low. The lack of movement in the pair can be attributed to sluggish market conditions. However, concerns about a potential US default and the UK’s inflation figures, which failed to support bullish sentiment for long, are weighing on the price of the British Pound. According to the Consumer Price Index, the UK’s inflation rate rose by 8.7% in April, compared to the previous month’s 10.1% and the forecasted 8.2%. UK Finance Minister Jeremy Hunt stated the need to lower inflation in order to safely reduce taxes. Looking ahead, the progress in the US debt ceiling negotiations will be crucial for GBP/USD traders to determine clear directions. Therefore, a lack of a deal by the end of today could potentially prevent the pair from facing further downward pressure.
SELL STOP 1.2320/TP 1.2270/SL 1.2345
XAU/USD: During the Asian session, there has been a shift in the placement of gold prices. The precious metal is experiencing downward pressure as the US Dollar Index is on track to reach a 10-week high. The US Dollar Index has exhibited significant strength as concerns over the unresolved US debt ceiling persist despite lengthy negotiations between the White House and Republican leaders. Despite dovish signals regarding interest rate guidance in the Federal Open Market Committee minutes, gold prices have been unable to benefit. Federal Reserve policymakers view the likelihood of a rate hike in June as less certain due to the possibility of a banking crisis.
SELL 1955.00/TP 1942.00/SL 1962.00