Market Analysis

EURUSD

EURUSD extended its losing streak for the sixth consecutive session, hovering near 1.0610 during Asian trading hours on Tuesday. The primary driver behind this downward movement remains the persistent strength of the US Dollar (USD), propelled by higher US Treasury yields. 

Adding to the pressure, robust Retail Sales figures from the United States have heightened expectations that the Federal Reserve (Fed) might maintain its hawkish stance on interest rates for a prolonged period.

Moreover, the Euro faces additional headwinds due to dovish comments from European Central Bank (ECB) officials, contributing to its decline against the greenback. As a result, EURUSD is likely to remain under pressure in the near term, with further downside potential if the USD continues to strengthen.

Position: Short EURUSD

Entry Suggestion: Consider entering a short position on EURUSD around the current level of 1.0610, with a target price of 1.0550 and a stop-loss at 1.0650.

XAUUSD

XAUUSD prices experienced a notable surge of over 1% during the mid-North American session, driven by strong economic data from the United States. The release of better-than-expected Consumer Spending figures suggests robust economic activity, potentially dissuading the US Federal Reserve (Fed) from implementing interest rate cuts. 

This scenario acts as a supportive factor for Gold, as a sustained interest rate environment tends to diminish the opportunity cost of holding non-yielding assets like precious metals.

Despite the positive economic data, concerns persist regarding geopolitical tensions, particularly in the Middle East. Investors remain wary of potential Israeli retaliation following Iran's recent missile and drone attack, contributing to a cautious sentiment in the market. Such geopolitical uncertainties, coupled with ongoing risk aversion, are likely to provide a floor for Gold prices, preventing significant downside movements.

Position: Long XAUUSD

Entry Suggestion: Consider entering a long position on XAUUSD at the current level of $2,384, with a target price of $2,450 and a stop-loss at $2,350.

WTI

Oil prices recorded gains on Tuesday amid escalating tensions in the Middle East following recent geopolitical developments. Israel's military chief's statement regarding potential retaliation against Iran's missile and drone attack over the weekend heightened concerns of a broader conflict in the region. 

Despite calls for restraint from various allies, geopolitical risks continue to loom large, supporting oil prices.

Brent futures for June delivery rose by 46 cents to reach $90.56 a barrel, while US crude futures for May delivery climbed by 43 cents to $85.84 a barrel. The market remains sensitive to developments in the Middle East, with any escalation likely to exert further upward pressure on oil prices.

Position: Neutral WTI

Given the uncertainty surrounding geopolitical tensions, it's prudent to maintain a neutral stance on WTI at this juncture, awaiting further clarity on the situation.

Conclusion

In conclusion, the EURUSD pair is poised to remain under pressure amid a stronger US Dollar and dovish ECB commentary, while Gold prices may find support from geopolitical concerns despite positive economic data. Oil prices are driven by escalating tensions in the Middle East, warranting a cautious approach in the current environment.

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Paraphrasing text from FXStreet, and Reuters all rights reserved by the original author.