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Another week with multiple key events

The US economic releases on Friday were in line with market expectations, according to a Bloomberg survey. The data confirmed that inflation remains on the right track, while spending showed notable weakness, which keeps the door open for a rate cut in September.

The US stock market had a volatile day, with sharp declines at the beginning of the session followed by a recovery towards the end. As a result, the Dow Jones increased by 1.5%, the S&P 500 closed 0.8% higher, and the Nasdaq 100 ended the day unchanged after initially dropping by more than 1%.

This week, traders and investors will be eagerly awaiting several key economic releases and events. These include the Manufacturing PMI data, the US Jobs Report, and decisions from the European Central Bank (ECB) and the Bank of Canada (BOC).

10-year yield below 4.5% again

The US 10-year yield continued to decline for the third consecutive day, dropping below 4.5% and erasing last week’s gains, as anticipated and mentioned in our previous reports.

It’s important to keep an eye during the upcoming days as there may be further developments. The next significant date to watch is June 10th, which could mark the end of the current cycle or signal a continuation. Only time will tell. Currently, the next key support levels are at 4.42% and 4.31%.

DXY holding above 104.40 support

The US Dollar Index has been holding above the 104.40 support area since the beginning of last week’s trading. However, technical indicators remain bearish on most time frames, including the RSI indicator, which is below the key level of 50.

On the daily chart, a bearish flag is visible, and confirmation is needed by breaking below 104.40. If this occurs, another leg lower would be more likely, with the next support area at 104.10.

EURUSD bullish flag

The Euro is currently trading in a bullish flag pattern on the daily chart, while most technical indicators remain bullish across different timeframes. However, to pave the way for more gains, a breakthrough above 1.0860 and 1.0895 is required.

This week, the ECB is expected to begin reducing interest rates. However, this decision may not have a negative impact on the Euro, especially if the ECB opts for a hawkish cut. This would mean that the ECB will lower rates in this meeting, but it may not necessarily do so in the following meetings. It might suggest a “one and done” approach, and then assess how the economic data progresses in the future. If this happens, the Euro could end the week above 1.09.

Silver retesting key support

Silver declined at the end of last week, retesting its psychological support at $30, which should be watched very carefully. This level represents an 11-year breakout point. For the bullish outlook on Silver to remain strong, it must hold that support this week.

The support area ranges from 30.15 to 29.80. As long as silver continues to trade above that range, buyers are likely to appear once again.

On the upside view, the first initial resistance stands at 31.40 followed by 31.60 and finally 32.40.

 

Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.

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