The Dow Jones FXCM Dollar
(ticker = USDollar) endured a critical tumble this past week – a move
that threatens to seismically alter a nine-month bull trend for the
currency. Yet, both technical break and trend ambitions can be
immediately reversed by one critical piece of event risk: the Federal
Reserve’s June rate decision.
The Euro finished higher
against the US Dollar for the fourth-consecutive trading week, good for
its largest win streak since September and leaving it poised to test
fresh peaks.
The Bank of Japan is firmly
on hold despite recent volatility in Japanese financial instruments,
which keeps the bull case for the Japanese Yen intact. Furthermore, with
US Treasury yields set to fall and European peripheral yields set to
rise, the Yen looks well-suited to gain further against the Euro and the
US Dollar.
The British Pound extended
the rebound carried over from the previous month, with the GBPUSD
climbing to a fresh monthly high of 1.5736, and the sterling may
continue to appreciate next week should the fundamental developments
coming out of the U.K. further dampen speculation for additional
monetary support.
Gold crept higher this week
with the precious metal posting a modest advance of just 0.36% to trade
at $1387 at the close of trade in New York on Friday. Bullion price
action has remained rather subdued despite the wide spread volatility
seen in FX and broader equity markets with prices continuing to hold
steadily below the $1400-threshold. All eyes now turn to key event risk
next week as prices continue to coil into a clearly defined range.
Use the DailyFX-Plus Technical Analyzer to identify possible trade setups.
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