Market Analysis
XAUUSD
Prediction: Increase
Fundamental Analysis:
Gold prices (XAU/USD) are on the rise, expected to reach above $2400 on Friday. This upward trend began earlier due to lower-than-expected US inflation in April, leading to speculation that the US Federal Reserve might reduce interest rates. However, Fed officials stated on Thursday that they plan to maintain high-interest rates for the foreseeable future, indicating no imminent rate cuts. Additionally, potential political instability in the Middle East, possibly triggered by the reported death of Iran's president in a helicopter crash, could further drive gold prices up.
Technical Analysis:
The 4-hour chart shows a consistent upward movement in gold prices since May 2. Gold remains strong as it trades above the 100-period EMA, with the crucial resistance level at $2,432 acting as the upper boundary of this trend. The price has also risen above the 100-hour moving average, suggesting that it may soon reach an overbought condition on the 14-hour RSI. Buyers are targeting long-term profits at around $2497, with potential for even higher levels at $2592. Conversely, sellers may aim to take profits if the price falls to $2321 or lower, with a significant support level at $2226.
USDJPY
Prediction: Increase
Fundamental Analysis:
The consensus still suggests that the Federal Reserve might begin cutting interest rates in September. The probability of this event occurring has declined to 68%, down from 73%, following the release of low inflation data. In Japan, weak GDP data for the first quarter has posed additional challenges for the Bank of Japan's plans to tighten monetary policy. The Japanese economy contracted by 0.5%, which is worse than the anticipated 0.4% decline.
Technical Analysis:
The 14-day Relative Strength Index (RSI) indicates a bullish trend as it remains above 50 without entering overbought territory. This suggests a higher likelihood of price increases. The initial resistance level is at $156.05, with a subsequent target at $157.00 if it breaks above the first resistance. On the downside, if the USD/JPY pair declines, it may test support levels at $155.18, and further down at the low of $153.60 from May 16.
EURUSD
Prediction: Increase
Fundamental Analysis:
The EUR/USD began the week on a positive note, closing at $1.08670, near recent highs. Despite expectations that the U.S. Federal Reserve might contemplate cutting interest rates, it is improbable that such a move will occur in June. Should Fed officials maintain a cautious stance, the USD could retain its strength, posing a challenge for the EUR/USD to sustain its upward momentum throughout the week.
Technical Analysis:
Key support levels to monitor are between $1.08500 and $1.08400. If these levels hold, it could present buying opportunities. Early in the week, the range to watch is from $1.08400 to $1.08800. Should financial markets remain stable and U.S. Treasury yields continue to decline, the USD might weaken, thereby facilitating a rise in the EUR/USD.
BTCUSD
Prediction: Increase
Fundamental Analysis:
Bitcoin's price has remained just above the crucial support level of $65,000, maintaining its strength in the eyes of cryptocurrency traders. Many believe that a significant drop is unlikely and that the price may continue to rise. Over the past 30 days, Bitcoin has appreciated by nearly 9%. This upward trend in the cryptocurrency market aligns with the renewed investment in U.S. spot Bitcoin ETFs. As of May 16, these funds hold approximately $12.4 billion worth of Bitcoin, up from $11.18 billion at the beginning of the month.
Technical Analysis:
For BTC/USD, as long as the price remains comfortably above $66,000, buyers are targeting $67,736.45. A break above this resistance level could propel the price to $68,077.79, with the next target being $71,567.03 if the rally continues. Conversely, sellers are eyeing $66,553.46 as their target, with the next support level situated at $65,623.30.
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