Today's analysis: The Federal Reserve's interest rate decision is approaching, putting downward pressure on gold prices.

Product: XAU/USD

Prediction: Decrease

Fundamental Analysis: 

The Federal Reserve will announce its interest rate decision today during the U.S. trading session. Market participants currently expect the Federal Reserve to keep interest rates unchanged, with federal funds futures showing a 99% chance of this happening. If Federal Reserve policymakers take a hawkish stance, meaning they suggest that interest rates may need to stay high for a longer period, it could overturn the current market expectation of a rate cut at the November meeting. This could support the U.S. dollar and push down precious metal prices.

Technical Analysis: 

Gold prices have continued to fall after breaking below an upward wedge pattern. If they decisively drop below the May 3 low of $2277, there is a high chance they will fall further. The next support level for gold is at the psychological level of $2250. The 14-day RSI is below 50, currently around 44, indicating that gold prices may continue to decline. Any recovery in gold prices would need to break above the 50-day moving average at $2344. After that, reclaiming the 21-day moving average at $2355 would be crucial to remove the recent bearish trend.

Product: EUR/USD

Prediction:Decrease

Fundamental Analysis: 

The three major U.S. stock indexes market opened lower. The U.S. dollar strengthened, while the euro weakened, making it the second worst-performing major currency. Over the weekend, far-right opponents won most of the votes in the European Parliament elections in France, leading Macron to announce elections on Monday. The possibility of the French Parliament being led by the far-right could draw attention to France's poor financial situation, which might shake the EUR. We believe that French politics is another reason the EUR will remain low for a long time.

Technical Analysis: 

The EUR/USD pair is at risk of falling further. The daily chart shows the pair keeps trading below all its moving averages, with a flat 200-period SMA providing dynamic resistance in the $1.0790 price zone. At the same time, the 20 SMA turned lower, in line with the increased selling interest, remaining above the 100 and 200 SMA. So far, the 4-hour chart shows an increase in the downward trend. The next support level on the downside is $1.0719. The next resistance level is $1.0804, which is the 200-period SMA.

Product:USD/JPY

Prediction: Increase

Fundamental Analysis: 

The USD/JPY rose quickly to $157.23. With interest rate decisions from both the Federal Reserve and the Bank of Japan coming up, a hawkish economic forecast from the FOMC might push the currency policy in favour of the U.S. dollar. Analysts note that USD/JPY is nearing a key bullish breakout level. The GDP report for the first quarter of 2024 shows that Japan's exports fell by 5.1% compared to the previous quarter. Even though the USD/JPY surpassed $150 in the first quarter, exports remain weak. However, the weakening yen might increase speculation that the Bank of Japan will raise interest rates to boost the yen.

Technical Analysis: 

The USD/JPY has steadily broken through the 50-day and 200-day EMAs, confirming a bullish trend. If USD/JPY breaks above $157.5, it could move back to the $158 level. If it reaches $158, the bulls might aim for the April 29 high of $160.209. On the other hand, if USD/JPY falls below $156, the bears might act around the 50-day moving average. Breaking below the 50-day moving average would make the $151.685 support level possible. The 14-day RSI is at 57, suggesting that USD/JPY could climb to the April 29 high of 160.209 before entering the overbought zone.

Product: US Oil

Prediction: Decrease

Fundamental Analysis: 

US Oil prices have stayed strong in recent trading sessions because investors are optimistic about demand due to the summer vacation season in the Northern Hemisphere. However, uncertainty about the upcoming May CPI data from the world's largest and second-largest economies has limited oil price increases. Investors are closely watching Chinas annual CPI data, which is expected to have grown steadily by 0.3%.

Technical Analysis: 

WTI oil prices have bounced back by almost 7.5% from recent lows near $72.50 per barrel. However, the upward movement during the day has hit a major resistance at $78.00 per barrel. The long-term upward trend might face a limit soon if the downward trendline stays in place. For prices to reach $80.00, they need to break and stay above the 200-day EMA near $78.90. The RSI is nearly at 70, which means the market might soon be overbought.

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