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XAU/USD consolidates weekly losses, remains under pressure near $1800



  • Gold’s recovery capped by the $1,820 area, stays under pressure.
  • Improvement in risk sentiment offers limited help to the yellow metal.
  • On a weekly basis, XAU/USD is down almost 4%.

Gold bottomed at $1,799 on Friday, the lowest level since February. A recovery followed later that found resistance quickly at $1,820. The yellow metal remains under pressure.

Some risk returns, not for gold

Wall Street is rising sharply on Friday, on a recovery rally. Also, crude oil prices are printing important gains. US yields remain steady and the dollar is correcting lower. Usually, that environment should be positive for gold. It only helped the metal stay above $1,800.

On the contrary, Silver is staging a recovery back to the 21.00 area and is positive on Friday up 1.50%, while on a weekly basis it is down almost 6%, about to post the lowest close since July 2020.

Both metals remain under pressure in the current environment of higher interest rate, a weaker growth outlook and financial tensions. The technical perspective offers no improvement as the only positive is the extreme oversold readings in technical indicators. There is no sign of a rebound or a consolidation yet.

Gold is about to post a weekly decline of almost 4%, the second worst performance of the year and a close below the 20-week moving average, for the first time since January.

“A prolonged weakening of the dollar doesn’t look likely in the current market environment. The factors that have been driving the greenback’s valuation, namely the ongoing Russia-Ukraine conflict, heightened inflation fears amid lockdowns in China and the Fed’s tightening prospects, should remain intact next week. Hence, it would be reasonable to expect that gold’s recovery attempts are likely to remain limited in the short term”, explained Eren Sengezer, analyst at FXStreet.

Technical levels 


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Market Update – May 19 – Fears mount



Trading Leveraged Products is risky

Stock markets sold off, after a slide on Wall Street, with tech stocks in Hong Kong particularly under pressure. Tencent slumped after reporting no revenue and individual company reports aside markets are concerned by the impact of China’s zero Covid policy, the Ukraine war and fear that inflation will get out of control, despite aggressive central bank actions that are adding to the headwinds to the global recovery. Earnings reports from retail giants added to concerns that high inflation would slow global growth, with Target warning of a bigger margin hit due to rising fuel and freight costs as it reported its quarterly profit had halved. One day earlier, Walmart warned of similar margin squeezes. Bonds were supported in Australia and New Zealand, despite a decline in Australia’s jobless number. The 10-year Treasury yield has picked up 1.3 bp though and the Bund yield is up 0.6 bp at 1.01% in early trade. Oil rebounded to $107.90 whilst Gold appreciated to $1814Australia’s unemployment rate fell to 3.9% – the lowest level in almost 50 years – as employment rose 4k over the month.

  • USDIndex recovered to 103.88 
  • EquitiesNikkei lost -1.9%, the ASX -1.7%, while Hang Seng and CSI300 are down -2.5% and -0.2% respectively. USA100 cratered -4.73%, with the USA500 -4.03% lower, and the USA30 off -3.73%.
  • Yields 10- and 30-year rates plunged over 11 bps intraday to lows of 2.875% and 3.065%, respectively.
  • Oil down to 105.15 – Bloomberg cited “people familiar with the data” as saying that API data will report a drop of 5 million barrels in gasoline inventories for last week.
  • Gold up to $1830.
  • FX marketsGBP and EUR falling to parity against the Dollar. However, USDJPY has weakened to 128.15 after surging to a 20-year peak at 130.85 in late April.

Today – The calendar includes ECB Meeting Accounts, US Jobless Claims, New Zealand trade balance and Japanese inflation.

Biggest FX Mover @ (06:30 GMT) USOIL – Gapped down to 105.14, which filled up immediately. MAs have flattened, MACD signal line & histogram are negatively configured, RSI 38.56, H1 ATR 1.07, Daily ATR 5.45.

Click here to access our Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distribution.

Previous articleMarket Update – May 18

Having completed her five-year-long studies in the UK, Andria Pichidi has been awarded a BSc in Mathematics and Physics from the University of Bath and a MSc degree in Mathematics, while she holds a postgraduate diploma (PGdip) in Actuarial Science from the University of Leicester.

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AUD/USD drops back towards 0.6950 on mixed Australia employment numbers



  • AUD/USD retreats towards intraday low despite teasing the first weekly gain in five amid mixed Aussie jobs report.
  • Australia Employment Change eased below forecasts and prior while Unemployment Rate refreshed record low in April.
  • Repeated Fedspeak over 50 bps joins softer yields to weigh on USD amid sluggish markets.
  • Risk catalysts will be crucial to watch for clear directions, US second-tier data eyed too.

AUD/USD pares intraday gains around 0.6960 as the Aussie jobs report flashed mixed reports during early Thursday. Also challenging the pair moves is a lack of major data/events elsewhere as well as a softer USD.

That said, Australia’s headline Unemployment Rate marched 3.9% forecast while refreshing the all-time low but a fall in the Employment Change to 4K, versus the market consensus of 30K and 17.9K prior, seems to have weighed on the AUD/USD prices. It’s worth noting that the softer-than-expected prints of the Aussie Wage Price Index for Q1 2022 probed the RBA hawks the previous day.

Read: Australian labour report leavs AUD sidelined, so far

Given the softer Employment Change and Wage Price Index , the RBA’s 40 bps rate hikes are questionable at the moment, which in turn probes the AUD/USD pair’s recent corrective pullback. It’s worth noting that the risk-aversion wave and downbeat conditions at the largest customer China, due to the covid resurgence, weigh on the AUD/USD prices. Recently, Shanghai’s refrain from total unlocks joined fresh virus-led activity restrictions in Tianjin, the port city near Beijing to portray COVID-19 woes.

Additionally, inflation woes in the developed nations join the geopolitical fears surrounding Russia to sour the sentiment and exert downside pressure on the AUD/USD prices.

Even so, An absence of major data/events and repeated comments from the Fed policymakers seemed to have recently paused the risk-aversion wave. That said, US 10-year Treasury yields dropped 11 basis points (bps) to 2.88% the previous day, mostly unchanged at around 2.89% by the press time of Thursday’s Asian session, whereas S&P 500 Futures drop 0.50% at the latest. It should be noted that the US Dollar Index (DXY) drop 0.14% around 103.77 by the press tie.

Having witnessed an initial reaction to the Aussie jobs report, which matched market forecasts, AUD/USD sellers are likely to return amid Wednesday’s Q1 2022 Wage Price Index and the risk-off mood. This emphasizes today’s risk catalysts and the US second-tier data relating to housing and manufacturing to forecast the pair moves.

Technical analysis

AUD/USD sellers attack short-term key support around 0.6960 as traders struggle to pare the biggest daily loss in a week.

A confluence of the 100-HMA and a weekly rising trend line, around 0.6960, restricts the immediate downside of the AUD/USD prices, a break of which will quickly direct bears towards the 0.6900 threshold ahead of highlighting the monthly low near 0.6830.

Meanwhile, recovery remains elusive until the AUD/USD prices cross a two-week-long horizontal resistance area near 0.7040-60.


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British Pound Sinks as Traders Pare BoE Rate Hike Bets, GBP/USD Dances on Support




  • GBP/USD takes a turn to the downside as traders pare back bets on Bank of England future rate hikes
  • Market pricing on monetary policy, however, could turn more hawkish in the coming weeks as red-hot UK inflation will likely required a more aggressive response from the central bank
  • This article looks at cable’s key technical levels to keep an eye on in the near term

Most Read: April UK Inflation Hits a 40-Year High at 9%, GBP/USD Slides

After staging its biggest rally in 17 months on Tuesday, the British pound reversed course on Wednesday and took a sharp downward turn, sliding 0.65% to 1.2411, as traders pared back money market bets on Bank of England future rate hikes following slightly lower-than-anticipated inflation data.

By way of context, the April UK consumer price index rose 2.5% m-o-m and 9.0% y-o-y, a tenth of a percent below consensus expectations. While this was the first time that the report did not surprise on the upside in recent months, it is misguided to believe that in itself is a victory, given that price pressures continued to broaden, pushing the cost of living to a new four-decade high.

With CPI expected to climb to double digits during the second quarter, and rising wages threatening to exacerbate the trend, the central bank will likely become more hawkish over the coming weeks and signaled it will have to pull back accommodation more aggressively despite rapidly slowing growth.

True, the likelihood of a recession has increased sharply of late, but the UK labor market is still in a good place and should withstand a steeper path of interest rate hikes without collapsing. In any case, policymakers, who now face a large credibility problem, may soon recognize that it is better to go hard now on the tightening cycle to restore price stability than to risk a long-term stagflationary slump that that could be far more damaging to the economy.

If markets begin to price in a more forceful monetary policy response to the current inflationary environment from the BoE, GBP/USD should stabilize and manage to retrace some of the 2022 losses, especially as the Fed has ruled out supersized 75 bps hikes for now. However, any recovery in sterling should be moderate, as headwinds affecting the UK economy are likely to reduce appetite for long positions in the European currency.

In terms of technical analysis, despite Wednesday’s sharp pullback, cable remains above the psychological 1.2400 level at the time of this writing. If traders manage to defend this support and spark a rebound in the coming sessions, the first resistance to consider appears at 1.2650, followed by 1.2835. On the flip side, if downside pressure accelerates and sellers breach the 1.2400 area decisively, GBP/USD could be on its way to retest its 2022 lows in short order.


GBP/USD Chart Prepared Using TradingView


  • Are you just getting started? Download the beginners’ guide for FX traders
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—Written by Diego Colman, Market Strategist for DailyFX

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