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S&P 500 drops for 5th week

“Always look for the fool in the deal. If you don’t find one, it’s you.” — Mark Cuban 

HEADLINES

  • Dollar index is little changed after hitting fresh 20-year high 
  • Gold heads for weekly dip on rate hike bets, palladium sheds 8%
  • Oil rises as supply concerns persist
  • Wall Street ends down on fears inflation will force tougher Fed tightening
  • Gold Price Forecast: XAUUSD set to test the $1,836/26 support zone – Credit Suisse
  • USDJPY Near Term: Upside favored

 

 

FOREX

 

 

Dollar index is little changed after hitting fresh 20-year high 

 

 

The dollar index pared gains Friday after hitting a new 20-year high, as traders weighed a recent global market sell-off stoked by recession fears. 

The U.S. currency has stood tall on expectations the Federal Reserve will tighten monetary policy faster than peers to stem runaway inflation.

The dollar index, which tracks its performance against a basket of six major rivals, gained as much as 0.5% in early European trading hours to hit a fresh 20-year high of 104.07.

But it later lost ground in choppy trade, and was last down 0.1% at 103.66. It posted a fifth straight week of gains, up 0.7% over the 1-week period.

 

 

COMMODITIES

 

 

Gold heads for weekly dip on rate hike bets, palladium sheds 8%

 

 

Gold rose on a weaker dollar on Friday but prospects of aggressive rate hikes from the U.S. Federal Reserve put bullion on course for a third consecutive weekly decline, while palladium fell over 8% on demand concerns. 

Spot gold rose 0.3% to $1,882.78 per ounce, but was down 0.7% for the week. U.S. gold futures settled 0.4% higher at $1,882.8.

While gold is perceived as an inflation hedge, higher U.S. interest rates lift the opportunity cost of holding zero-yield bullion. Gold is considered a safe store of value during global uncertainties, such as the Ukraine war.

 

 

Oil rises as supply concerns persist 

 

 

Oil prices climbed for a third straight session on Friday, shrugging off concerns about global economic growth as impending European Union sanctions on Russian oil raised the prospect of tighter supply. 

Brent and WTI are on track to rise for a second week in a row, buoyed by the EU’s proposal to phase out supplies of Russian crude oil in six months and refined products by the end of 2022. It would also ban all shipping and insurance services for transporting Russian oil.

 

 

STOCKS

 

 

Wall Street ends down on fears inflation will force tougher Fed tightening 

 

 

Wall Street's main indexes extended losses on Friday as investors worried that the Federal Reserve will need to be more aggressive than expected in raising interest rates to combat inflation. 

The tech-heavy Nasdaq registered its lowest close since 2020, notching a fifth straight weekly loss, its longest losing streak since the fourth quarter of 2012. The S&P 500 also posted its fifth straight weekly loss, its longest string of weekly losses since the second quarter of 2011.

 

 

ANALYSIS

 

 

Gold Price Forecast: XAUUSD set to test the $1,836/26 support zone – Credit Suisse

 

 

 “We look for a fall back to the uptrend from last August and 200-DMA at $1,836/26, but with fresh buyers expected here.”

“A weekly close below $1,826 though would warn of a retest of pivotal long-term support at $1,691/77.”

“Above $1,998 is needed to reassert an upward bias for a retest of the $2,070/75 record highs.”

 

 

 CHART

 

 

USDJPY Near Term: Upside favored

Technical View: Long position above 129.35. Target 131.4. Conversely, break below 129.35, to open 128.65.

Comments: The pair remains supported. Further advance favored.

 

 

Source: Trading Central 

 

CALENDAR

*Times in GMT

 

 

Source: FX Street Economic Calendar

Footnotes
https://www.cnbc.com/2022/05/06/forex-markets-dollar-federal-reserve-us-economy.html 
https://www.reuters.com/article/global-precious/precious-gold-heads-for-weekly-dip-on-rate-hike-bets-palladium-sheds-8-idUSL3N2WY2Y9 
https://www.cnbc.com/2022/05/06/oil-markets-supply-concerns-global-economy.html 
https://www.reuters.com/business/futures-slip-focus-turns-monthly-jobs-report-2022-05-06/ 
https://www.fxstreet.com/news/gold-price-forecast-xauusd-set-to-test-the-1-836-26-support-zone-credit-suisse-202205061227