09 June 2022 – ECB Meeting Is Under The Microscope

U.S. Dollar Index (USDX)

The U.S. Dollar was down this morning in Asia. The European Central Bank meeting and its policy are the focus of the market today. The U.S. Dollar Index inched down 0.09% to 102.45.

Technically:

The U.S. Dollar index formed a declining pattern as bears formed resistance at 102.60, but the USDX remains trading above 102.30 for the time being. Meanwhile, on the daily chart, the USDX is trying to break away from the declining trendline, but it remains bearish for the longer term.

On the hourly chart, 20 SMA and 55 SMA are moving below the current price levels pointing support formation.

PIVOT POINT: 102.40

SUPPORT	RESISTANCE
102.30	102.60
102.00	102.80
101.90	103.00

Euro (EURUSD)

The ECB seems not confident to pull an end to its long-running asset purchase program at the end of this month and promises a rate hike for July, but the size and pace of its tightening are uncertain. Speculation is growing that eurozone inflation could push the ECB into booting off its hike campaign with a 50 basis point rate increase.

Technically:

Bears remain in control over the overall trend of the currency while heading towards 1.0650.

Fibonacci retracement shows resistance1.0750 and fairly strong support at 1.0650, on the other hand, technical indicators show a possibility of a decline. Though, moving averages show a horizontal movement and set support at 1.0700.

PIVOT POINT: 1.0700

SUPPORT	RESISTANCE
1.0650	1.0720
1.0610	1.0780
1.0550	1.0840

Japanese Yen (USDJPY)

The yen extended its slide, falling to a fresh 20-year low of 134.56 against the greenback. It is trading close to 135.20 and if it weakened beyond that would be its lowest since October 1998. Rising interest rates around the world held the yen down, while the Bank of Japan remains stubborn in keeping policy stimulatory.

Technically:

On the daily chart, the USDJPY is a continuation of the current uptrend, while daily chart technical indicators show a slowdown. Though, Technical indicators on both the hourly and the daily charts are easing and signalling a change in the trend. that the pair is slowing the rise.

PIVOT POINT: 133.50

SUPPORT	RESISTANCE
132.00	134.20
130.00	134.50
127.00	135.20

Spot Gold (XAUUSD)

The yellow metal traded lower and formed a bearish pattern below 1,854 and showed a tendency to form a resistance below the previous support of 1,852. Gold prices are set for a decline towards 1,810 on the daily chart. Meanwhile, in the hourly chart, spot gold penetrated out of the regression channel, but it remains set to decline.

On the daily chart, the precious metal returns to its primary decline trend targeting the resistance at 1,810 and 1,790. However, spot gold shows a change in direction and signals further decline below the support at 1,842 during the day.

PIVOT POINT: 1,850

SUPPORT	RESISTANCE
1,842	1,866
1,837	1,872
1,830	1,875

West Texas Crude (USOUSD)

Oil was up on Thursday morning in Asia as U.S. demand stays strong and China demand may rebound with COVID-19 curbs easing. Brent oil futures rose 0.26% to $123.90, while WTI futures edged up 0.18% to $122.33.

Wednesday’s U.S. crude supply data from the U.S. Energy Information Administration (EIA) showed a build of 2.025 million barrels. EIA data also indicated that gasoline stockpiles dropped by 812,000 barrels to 218.18 million barrels last week, implying fuel demand resilience despite soaring prices.

Technically:

As mentioned yesterday, WTI broke the resistance at $118 to trade above $122 before retreating towards $120 a barrel. WTI remains in the uptrend on the daily chart targeting $125 a barrel while forming support above $118.60 as per the 55 SMA readings.

However, today WTI is likely to swing to the same level as the 55 SMA at $118.60. Fibonacci retracement shows firm support at 115. RSI is showing WTI is oversold.