Daily Market Report - Wed, May 25, 2022

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Germany released stronger-than-expected gross domestic product data. The GDP increased 0.2 percent on quarter in the first three months of 2022, recovering from a 0.3 percent contraction in the previous period. The GDP expanded by 4% on year in the first quarter, compared to a 1.8% expansion in the fourth quarter of 2021. On a yearly basis, the economy grew by 3.8 percent, from 3.7%.

While the Euro pause the upside momentum despite the release of strong economic data. EURUSD retreated back to below 1.0670 on Wednesday during the European session, the focus shifted to the FOMC meeting minutes.

EQUITIES

US futures slightly retreated from the early session gains as investors await the minutes from the last Federal Reserve meeting, which is set to be released at 18.00 GMT.

On the earnings front, Nvidia and Snowflake are amongst those reporting the last quarter's financial results today.

OIL

Crude oil futures extended the gains supported by a weakening U.S. dollar and rallying equities. On the other hand, the API inventory data showed the US inventories unexpectedly rose by 5,67,000 barrels last week. Moving ahead to the North American session, the oil traders should closely monitor the release of the EIA inventory report.

CURRENCIES

In the currency market, the New Zealand dollar bounced after the RBNZ released more hawkish guidance on its future policy path. The US dollar index rebounded back to above 102 on Wednesday morning while the British pound recovered from the previous session lows, currently trading above 1.2540.

GOLD

The safe-haven metal struggling to find the upside momentum as gold investors remain cautious ahead of the release of last US Federal Reserve's policy meeting minutes. The metal is expected to be extra volatile after the release of the FOMC meeting minutes. At the time of writing, the gold prices trade below $1860.

Economic Outlook

On the data front, the Reserve Bank of New Zealand raised its key interest rate by half a point, as widely expected. RBNZ now projects the cash rate will double to 4% over the next year and remain there into 2024.

"A larger and earlier increase in the interest rate reduces the risk of inflation becoming persistent, while also providing more policy flexibility ahead in light of the highly uncertain global economic environment," the RBNZ said in its statement.

Moving ahead today, the important events to watch:

US – Durable goods orders: GMT – 12.30

US – FOMC meeting minutes: GMT – 18.00

Coronavirus update:

Worldwide, more than 527 million people have been confirmed infected and more than 6.28 million have died. The United States has confirmed over 83 million cases and has had more than 100,000 deaths from COVID-19, the highest total in the world.

Technical Outlook and Review

EURUSD:
For today, the resistance for the pair is above 1.0740, any break over targets 1.0770/1.0810. On the other side, the immediate support is near 1.0650 and any break will drag the pair to 1.0620/00 levels.



The important levels to watch for today: Support- 1.0650 and 1.0620 Resistance- 1.0710 and 1.0740.

GOLD: The yellow metal trades above $1855 on Wednesday. Any break below the $1845 will open the doors to $1838/36. On the upper side, $1870/72 is a crucial resistance area to watch.



The important levels to watch for today: Support- 1850 and 1845 Resistance- 1865 and 1872.

Quote of the day - “A lot of people get so enmeshed in the markets that they lose their perspective. Working longer does not necessarily equate to working smarter. In fact, sometimes it is the other way around.” - Martin Schwartz.

Read more - https://gulfbrokers.com/en/daily-market-report-499
 
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