Market Overview
- The USD/CAD pair is trading near 1.3575, influenced by mixed US Retail Sales data and Middle East tensions. The Canadian Dollar is supported by elevated Oil prices and geopolitical risks.
- Gold is trading around $3,392 against the US Dollar, bolstered by rising safe-haven demand due to escalating tensions in the Middle East.
- The Indian Rupee weakened against the US Dollar, reaching its highest level since April due to geopolitical tensions, higher Crude Oil prices, and a strong Greenback.
- The Japanese Yen (JPY) remained unchanged against the US Dollar (USD) in Tuesday's NA session after a modest gain driven by the Bank of Japan's policy decision.
- The Pound Sterling (GBP) is slightly down against the US Dollar (USD) and is underperforming other G10 currencies. Market focus is on upcoming CPI data on Wednesday and the Bank of England (BoE) meeting on Thursday.
Fundamental Analysis
- In May, industrial production in the US decreased by 0.2%, following a 0.1% growth in April, which was below the expected 0.1% expansion.
- Retail sales in the US fell by 0.9% to $715.4 billion in May, worse than the expected 0.7% decline.
- The Federal Reserve may consider keeping rates steady or easing later in the year based on mixed consumer spending trends shown in the US Retail Sales report.
- Geopolitical tensions in the Middle East are influencing currencies due to their commodity links.
Technical Analysis
- EUR/USD: The pair is trading in a tight range just below recent multi-year highs. Resistance is limited before the 1.1680-1.1700 area.
- GBP/USD: GBP/USD trend is bullish, reaching multi-year highs above 1.36, with no major resistance levels until 1.3750.
- USD/JPY: The pair has been appreciating for the third consecutive day, nearing the 145.35 resistance level.
- Gold (XAU/USD): Technical analysis shows gold consolidating above support at $3,375-$3,380, with resistance at $3,408.
Conclusion
- The market is currently influenced by geopolitical tensions in the Middle East and mixed economic data from the US.
- Investors are closely monitoring central bank decisions and economic data releases for potential trading opportunities.
- Technical analysis suggests potential for a technical rebound in USD/CAD and a bullish trend in GBP/USD.
- Gold prices are expected to remain supported due to rising safe-haven demand.
