Gold lifted after US inflation data

“Wonder what your customer really wants? Ask. Don’t tell.” — Lisa Stone 

 

 

HEADLINES

 

 

• Sterling edges up against dollar, little changed versus euro 
• Gold bounces as dollar retreats post U.S. inflation data
• Oil up as Russia gas flow to Europe falls, EU Russian oil ban looms
• Nasdaq falls in volatile trading as traders struggle to find their footing after another hot inflation report
• Bitcoin hovers above $30,000 as investors digest hot U.S. inflation report
• EUR/USD: The 1.05 and 1.06 figure areas remain solid support and resistance zones – Scotiabank
• EURJPY Near Term: Downside favoured

 

 

FOREX

 

 

Sterling edges up against dollar, little changed versus euro 

 

Sterling barely changed against the euro on Wednesday, while it edged up versus the dollar but still within striking distance with its lowest since June 2020. 

The dollar weakened after moving sharply off its lows and briefly turned positive on the day after economic data showed inflation was unlikely to cause the Federal Reserve to adjust their aggressive path of monetary policy.

 

 

COMMODITIES

 

 

Gold bounces as dollar retreats post U.S. inflation data 

 

Gold resumed its uptick on Wednesday after a knee-jerk retreat immediately after the release of U.S. inflation data, as the dollar slipped with investors latching on to a slight cooling of consumer prices. 

Although gold is considered a safe haven from inflation, rising U.S. interest rates increase the opportunity cost of holding bullion, while boosting the dollar, the currency in which gold is priced.

 

 

ENERGY

 

 

Oil up as Russia gas flow to Europe falls, EU Russian oil ban looms 

 

Oil prices jumped almost 5% on Wednesday after plunging nearly 10% in the previous two sessions, buoyed by supply concerns as flows of Russian gas to Europe fell and the European Union worked on gaining support for a Russian oil embargo.

The price of crude has surged in 2022 as Russia's invasion of Ukraine added to supply concerns, with Brent reaching $139, the highest since 2008, in March. Worries about growth caused by China's COVID curbs and U.S. interest rate hikes have prompted this week's slump.

 

 

STOCKS

 

 

Nasdaq falls in volatile trading as traders struggle to find their footing after another hot inflation report 

 

Tech shares struggled on Wednesday, tempering gains for the Nasdaq. Meta Platforms and Netflix each fell around 4% while Microsoft dipped 2% as investors continued their movement out of growth areas. Information technology and consumer discretionary sectors fell more than 2%, dragging down the S&P 500. 

Meanwhile, Chevron was the best-performing Dow stock, climbing nearly 2% followed by Visa. Merck shares also popped about 2%. The energy sector jumped 2%, while utilities added 1.5%.

 

Bitcoin hovers above $30,000 as investors digest hot U.S. inflation report 

 

Bitcoin pared losses and briefly turned positive on Wednesday after dropping below the $30,000 for the second time this week. 

Cryptocurrencies fell with stocks after the Bureau of Labour Statistics reported consumer prices for the month of April jumped 8.3%, which was slightly higher than expected by economists polled by Dow Jones.

That spooked investors, leading them to exit risk assets including crypto. Cryptocurrencies remain highly correlated with the S&P 500 and, more recently, the Nasdaq Composite.

 

 

ANALYSIS

 

 

EUR/USD: The 1.05 and 1.06 figure areas remain solid support and resistance zones – Scotiabank 

 

“The 1.05 and 1.06 figure areas remain solid support and resistance zones, respectively, while the broad trend in the EUR points to this consolidation period eventually giving way to further losses to a five-year-low.”

“Intraday support ahead of the figure is ~1.0525 while the daily high of ~1.0575 stands as intermediate resistance followed by ~1.0585 ahead of the figure zone.” 

“Losses below 1.05 find support at the late Apr low of 1.0472.”

 

 

CHART

 

 

EURJPY Near Term: Downside favoured

Technical View: Short position below 137.65. Target 135.55. Conversely, break above 137.65, to open 138.45.

Comments: The pair breaks below support.

Source: Trading Central 

 

 

CALENDAR

 

 

*Times in GMT

 

 

Source: FX Street Economic Calendar

SOURCES:

https://www.reuters.com/article/britain-sterling/update-2-sterling-edges-up-against-dollar-little-changed-versus-euro-idUSL2N2X315O 
https://www.cnbc.com/2022/05/11/gold-markets-dollar-us-inflation-data-federal-reserve.html 
https://www.reuters.com/business/energy/oil-falls-uncertainty-over-russian-energy-embargo-by-eu-2022-05-11/ 
https://www.cnbc.com/2022/05/10/stock-market-futures-open-to-close-news.html 
https://www.cnbc.com/2022/05/11/bitcoin-drops-below-30000-as-hot-inflation-report-causes-investors-to-shun-risky-assets.html 
https://www.fxstreet.com/news/eur-usd-the-105-and-106-figure-areas-remain-solid-support-and-resistance-zones-scotiabank-202205111410