The dollar began the week on the weaker side, following its first weekly loss in nearly 2-months as the easing of Chinese lockdowns boosts global growth sentiment. Commodities and commodity-backed currencies rallied in the early Asian session although the bullishness needs to be taken with caution as the Fed remains with a hawkish tone on the Dollar.
The US dollar index fell by -0.31% beneath a 2-decade high of 105.010 made earlier in May. The bears are approaching critical support at 102.500, a 3-week low and a break below that level may renew the bearish outlook towards the 101.000 psychological support. However, a reclaim of the 103.80 level may see the dollar climbing back to the 105.010 highs in the near term.
GBPNZD extended a drop by -0.66% at the beginning of the week. New Zealand strengthened on rising commodity prices as a result of renewed demand undermining the pound’s strength. The pair broke below a 1.9500 psychological level giving way for a further drop towards the 1.9400 support. A break below that level may renew selling pressure towards the 1.9200 support. However, upside gains remain capped by the 1.9650 level. Traders shift their focus to the BoE governor Bailey’s speech later in the New York Session.
EURUSD rallied by +0.28% ahead of the German IFO Business climate data. The pair recovered Friday losses although bulls remain capped by the 1.0600 resistance. A break above that area may see the pair soaring towards the 1.0700 big figure. A weaker dollar remains a tailwind for the EURUSD bulls as they aim at the 1.0800 level. However, a defence of the 1.0550 and 1.0460 levels will be necessary to maintain a bullish outlook in the near term. German Buba President Nagel will be speaking later in the New York session.
Oil prices rose early in the Asian session on Monday with US fuel demand rising, tight supply and receding dollar strength, pushing commodity prices higher. Brent futures rose by +0.75% to 113.37 as bulls target the 114.75 near term barrier. A break above that level may open the way for a bullish rally towards the 120.00 area.
USWTI crude oil futures added gains by +0.38% as bulls managed to defend the 107.20 support and bulls may challenge the 115.50 barrier in the near term. Oil prices are supported as gasoline markets remain tight amid solid demand heading into the peak US driving season.
Gold rallied by +0.48% to an 8-day high at 1858.99 and a breach of that structure may reinforce a bullish outlook towards the 1900 psychological level. However, bulls may need to challenge the 1890 area which coincides with previous support turned resistance.
Silver gained by +0.71%, although gains remain capped by the 22.00 level. A break above that area may see bulls aiming for the 23.00 handle in the near term. However, a failure to hold above the 21.608 and 21.25 levels may cause selling pressure towards the 20.00 psychological support in the near term.
