Новини ринків

• Silver extends pullback from a two-week top, pressured around intraday low of late.
• Confirmation of a bearish chart pattern, downbeat MACD signals favor sellers.
• 50-SMA, monthly act as intermediate halts during the theoretical slump towards $20.00.

Silver (XAG/USD) remains on the back foot around the daily bottom, keeping the pullback from a fortnight high, as sellers flirt with $21.75-70 during Tuesday’s Asian session.

In doing so, the silver prices tease bears by confirming the one-week-old rising wedge bearish chart pattern.  Bearish MACD signals also back the rising wedge confirmation and add strength to the downside hopes.

That said, the 50-SMA level of $21.48 and the $21.00 threshold may entertain silver sellers ahead of directing them to the monthly low of $20.45.

It’s worth noting that the XAG/USD weakness past $20.45 will aim for the stated wedge confirmation’s theoretical target surrounding $20.00.

On the flip side, corrective pullback needs to cross the 61.8% Fibonacci retracement of May 05-13 downside, around $22.20, to restore the silver buyer’s confidence.

Following that, the upside momentum will aim for the monthly high near $23.30.

Silver: Four-hour chart

Trend: Further downside expected

Reuters reports that Kansas City Federal Reserve Bank President Esther George on Monday said she expects the US central bank to lift its target interest rate to about 2% by August, with further action dependent on how both supply and demand are affecting inflation.

"Fed policymakers have emphasized a commitment to act expeditiously to restore price stability, and I expect that further rate increases could put the federal funds rate in the neighborhood of 2% by August, a significant pace of change in policy settings" George said in remarks prepared for delivery to an agricultural symposium put on by the Kansas City Fed.

"Evidence that inflation is clearly decelerating will inform judgments about further tightening."

."The central bank’s job is to prevent persistent imbalances from feeding into inflation and unmooring inflation expectations," George said.

''The Fed's interest rate hikes can only reduce demand and cannot influence supply factors that are also heavily impacting inflation,'' she said.

"The evolution of its efforts alongside other factors will affect the course of monetary policy, requiring continuous and careful monitoring."

US dollar under pressure

Meanwhile, the European Central Bank is getting attention which is resulting in a bid in the euro, weighing on the US dollar. The dollar index, DXY, fell on Monday while the euro rallied after the European Central Bank indicated a move from negative interest rates.

• AUD/USD consolidates recent gains around multi-day top, renews intraday low of late.
• Australia’s S&P Global Manufacturing PMI for May came in softer but Services PMIs rose past market consensus.
• Risk-on mood, hopes from new government previously favored bulls.
• US activity data, Fed’s Powell and headlines from Quad, as well as concerning China, will be important for fresh impulse.

AUD/USD holds lower ground near the intraday low after downbeat Australia activity data allowed the bulls to take a breather after refreshing two-week top. That said, the Aussie pair remains pressured around 0.7090 by the press time of the initial Asian session on Tuesday.

That said, Australia’s preliminary readings of the S&P Global Manufacturing PMI for May dropped to 55.3, versus 57.8 expected and 58.8 prior, whereas the Services counterpart improved from 52.2 forecast to 53.0, compared to 56.6 prior (revised). As a result, the Composite PMI also eased to 52.5 from 55.9 prior.

Also allowing the quote to pare recent gains is the downbeat prints of the S&P 500 Futures, printing 0.65% intraday losses by the press time, despite the Wall Street benchmarks’ gains.

Comments from San Francisco Federal Reserve Bank President Mary Daly seem to have triggered the latest risk-off mood. “I think that we can weather this storm, get the interest rate up...price stability restored and still leave Americans with jobs aplentiful and with growth expanding as we expect it to," said the policymaker during an interview with Fox News on Monday.

Previously, the risk-on mood joined a lack of bullish bias to drag the US Dollar Index (DXY) to a two-week low. In doing so, the US Dollar Index (DXY) extended the first weekly loss in seven as mixed covid signals from China, mostly positive, join the repeated Fedspeak around a 50 bps rate-hike, contrary to the recently hawkish comments from the ECB policymakers. Also weighing on the greenback were the headlines from Japan where US President Joe Biden mentioned that he is considering reducing tariffs on China. In addition to the softer USD, hopes from the Labour Party, as they retake control in Australia after nine years, also favored AUD/USD buyers earlier.

Moving on, risk catalysts like headlines from Quad Summit in Tokyo and covid updates from China can entertain AUD/USD traders ahead of the US preliminary readings of the S&P Global Manufacturing and Services PMIs for May. . Also, Fed’s Powell is always crucial to move the markets and can do so if refrained from the usual support for a 50 bps rate hike trajectory.

Technical analysis

A daily closing beyond a seven-week-old descending trend line, around 0.7070 by the press time, keeps AUD/USD buyers hopeful of challenging the monthly high surrounding 0.7265.

• The AUD/JPY begins the week on the right foot and is gaining some 0.64%.
• In the FX space, the market mood is mixed as safe-haven peers get buoyant and risk-sensitive currencies stalled.
• AUD/JPY Price Forecast: Bullish above 90.76 and bearish below the aforementioned, as it would open the door for a re-test of 87.30.

The AUD/JPY records minimal losses of 0.18% as the Asian session begins. On Monday, the cross recorded gains close to 0.90%, on a positive market mood, following a dismal week, particularly for US equities. At the time of writing, the AUD/JPY is trading at 90.63.

Sentiment shifted from positive to mix as Asian equity futures fluctuated post-Wall Street close. On Monday, the mood was positive due to some reports which stated that the US could consider lifting some trade tariffs on China, which was cheered by investors. That, along with increasing concerns that the US could be hit by a recession and optimism about global economic growth, kept market players shifting toward riskier assets.

On Monday, the AUD/JPY opened near the day's lows at around 90.18. Later, the cross soared and reached a daily high above the 91.00 mark but retreated somewhat and settled at approximately at 90.76.

AUD/JPY Price Forecast: Technical outlook

The AUD/JPY is trading around crucial support recorded on March 31 at 90.76. From the market structure perspective, failure at the previously mentioned level would open the door towards a re-test of the March 31 swing low at 87.30. Furthermore, the Relative Strength Index (RSI) slope shifted horizontally beneath the 50-midline, meaning that sellers could be exerting downward pressure on the pair.

Therefore, the AUD/JPY bias is neutral-downwards, and its first support would be the 90.00 mark. Break below would expose the May 19 swing low at 88.99, which, once cleared, would send the AUD/JPY aiming towards the confluence of the March 31 swing low and the 100-day moving average (DMA) at around 87.23-30.

Nevertheless, if AUD/JPY traders reclaim 90.76, that would open the door for a test of a downslope trendline. That said, the cross-currency pair's first resistance would be the March 31 swing low-turned-resistance at 90.76. A breach of the latter would send the AUD/JPY to 91.00, followed by the 50-DMA at 91.57 and the downslope trendline around the 92.00 area.

Key Technical Levels

• The DXY is consolidating around 102.00 and seeks more losses on a positive market tone.
• Fed’s Powell is expected to dictate the interest rate elevation in his speech.
• A softer US PMI is the outcome of rising interest rates. 

The US dollar index (DXY) is moving sharply lower as positive market sentiment has underpinned the risk-perceived currencies and safe-haven assets are losing traction. The asset has surrendered around 2.80% after hitting a 19-year high of 105.00 on May 13. The asset has tumbled below its crucial support of 102.35 and is expected to extend its losses after violating the round-level support of 102.00.

US PMI

On Tuesday, investors will keep an eye on the release of the S&P Global Composite PMI, which is seen at 55.5, a tad lower than the prior print of 56. In a detailed manner, Manufacturing and Services PMI are expected to land at 57.9 and 55.4 respectively. A little underperformance is expected by the market participants as higher interest rates by the Federal Reserve (Fed) have trimmed the scale of economic activities in the US economy. Due to the unavailability of dirt-cheap money, corporate are channelizing their funds into more filtered investments and projects, which is dampening the manufacturing and services sector.

Fed Powell’s speech

The speech from Fed chair Jerome Powell on Tuesday will fade the obscurity over the interest rate decision by the Fed in its upcoming June monetary policy. As per the market consensus, a rate hike announcement by 50 basis points (bps) looks possible to contain the soaring inflation. Also, the status of balance sheet reduction will be keenly watched.

Key events this week: S&P Global PMI, New Home Sales, Durable Goods Orders, FOMC minutes, Initial Jobless Claims, Gross Domestic Product (GDP), Core Personal Consumption Expenditure (PCE), and Michigan Consumer Sentiment Index (CSI).

Major Events this week:  Fed Powell’s speech, European Central Bank (ECB)’s Christine Lagarde’s speech, Reserve Bank of New Zealand (RBNZ) interest rate decision.

• NZD/USD takes offers to renew intraday low, consolidates recent gains around 13-day top.
• New Zealand Q1 Retail Sales flashed -0.50% figures versus 8.3% prior growth.