Sterling set for 1st monthly gain in 5

“If you’re interested in the living heart of what you do, focus on building things rather than talking about them.” — Ryan Freitas 

HEADLINES

• Sterling rangebound near one-month high
• Gold prices rise in range-bound trade as the dollar dips
• Oil above $120 a barrel as EU meets on Russia sanctions
• World stocks turn positive in May on Fed bets
• NZD/USD: Break above 0.6556/68 to signal another lengthy reversion higher – Credit Suisse
• USDJPY Near Term: Upside favored

FOREX

CURRENCIES

Sterling rangebound near one-month high 

The British pound edged higher against a faltering U.S. dollar on Monday and was set for its first monthly gain in five as the risk-sensitive currency benefited from improving sentiment. 

As markets have readjusted their rate hike expectations from the Federal Reserve lower, the dollar index has weakened over 3.5% from its mid-May peak. This helped lift sterling after it reached its lowest level since March 2020 earlier in the month.

At 1358 GMT, the pound was up 0.1% against the dollar at $1.2640, just off Friday's monthly high of $1.26665.

Against the euro, sterling was down 0.2% at 85.15 pence.

COMMODITIES

Gold prices rise in range-bound trade as dollar dips 

Gold prices firmed in choppy trading on Monday, as a weakening dollar buoyed greenback-priced bullion, although gains were capped by some investors turning to riskier assets in Asia. 

“With the 3-day holiday in the U.S., which means lower liquidity than usual, and a lack of top-tier data until Wednesday, we may find that gold will remain nailed to its tight range around $1,850 unless a new catalyst arrives,” City Index senior market analyst Matt Simpson said.

ENERGY

Oil above $120 a barrel as EU meets on Russia sanctions 

Oil prices climbed above $120 a barrel on Monday, hitting their highest in more than two months as traders priced in expectations that the European Union will eventually reach an agreement to ban Russian oil imports.

U.S. West Texas Intermediate (WTI) crude futures jumped $1.11, or 1%, to $116.18 a barrel, extending solid gains made last week.

STOCKS

World stocks turn positive in May on Fed bets 

World share markets rose on Monday and the dollar was anchored at five-week lows on bets of a possible slowdown in U.S. monetary tightening and after an easing of COVID restrictions in China. 

The gains built on last week's rally, helping the MSCI's benchmark for global stocks (.MIWD00000PUS) turn positive on the month, as confidence in a less aggressive Federal Reserve grew following signs of peaking American inflation on Friday.

The pan-European STOXX 600 (.STOXX) equity benchmark gained 0.3%, while Japan's Nikkei (.N225) added 2.2% and Chinese blue chips (.CSI300) firmed 0.7%.

ANALYSIS

NZD/USD: Break above 0.6556/68 to signal another lengthy reversion higher – Credit Suisse

“With the daily and weekly MACD still negative and with the moving averages still falling, we retain our bearish view and look for a turn back lower again, with immediate support now seen at 0.6522/21.” 

“A break below 0.6421/15 and then below 0.6310/6288 is needed to shift the short-term risk back lower again and pave the way for a move to the YTD low and major retracement support at 0.6231/13.” 

“A sustained break above 0.6556/68 would signal another lengthy reversion within the 2021/22 downtrend, similar to the July/Oct 2021 and Jan/April 2022 recoveries, with next key resistance seen at the 55-day moving average at 0.6656/93. However, this is not our base case.” 

CHART

USDJPY Near Term: Upside favored

Technical View: Long position above 126.55. Target 128.25. Conversely, break below 126.55, to open 125.9.

Comments: The pair remains supported. Further advance favored.

Source: Trading Central 

CALENDAR

*Times in GMT

Source: FX Street Economic Calendar

SOURCES

https://www.reuters.com/markets/us/sterling-steady-near-one-month-high-2022-05-30/
https://www.cnbc.com/2022/05/30/gold-markets-dollar.html
https://www.reuters.com/markets/commodities/oil-climbs-ahead-eu-meeting-russia-sanctions-2022-05-30/
https://www.reuters.com/markets/europe/global-markets-wrapup-1-pix-2022-05-30/
https://www.fxstreet.com/news/nzd-usd-break-above-06556-68-to-signal-another-lengthy-reversion-higher-credit-suisse-202205301313