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Play down Powell and risk-on, markets also ignore Sino-American tensions, gold shines

The market mood remains optimistic despite a stark warning from Jerome Powell, Chairman of the Federal Reserve, who warned that a full recovery may have to wait for a vaccine. Stocks and oil are on the rise and the US dollar is on the back foot.

Moreover, he said that it may take until late next year to recover and stressed that “we really do not know” and added that asset prices may decline. His 60 Minutes interview came after the US reported a sharp decline of 16.4% in retail sales in April, worse than expected. However, consumer confidence bounced in May

Gold is trading around $1,760, levels last seen in late 2012, and consolidating its gains. The precious metal is benefiting from central bank bond-buying schemes and falling yields.

EUR/USD is clinging to its range around 1.08 as large European countries continue gradually lifting restrictions. Over the weekend, Spain and Italy reported the lowest number of deaths since March. Germany also reported a substantial fall and stated that the Reproduction rate is just under 1. Phillip Lane, Chief Economist at the European Central Bank, reiterated that his institution is ready to add further stimulus.

UK: A Bloomberg survey suggests that the Bank of England will likely increase its bond-buying program by around £100 billion in its upcoming meeting. Andy Haldane, Chief Economist at the BOE, did not rule out negative interest rates and other tools. GBP/USD has been consolidating its losses around 1.21.

WTI Oil has been extending its recovery, trading above $30. The increase in demand – albeit from a low point – and a drop in supply from the US and Saudi Arabia have pushed prices higher. The rollover of contracts may trigger choppy trading.

GBP/USD: Trading in one month lows – Commerzbank

GBP/USD trades in one month lows, slides towards the 1.2000 zone, Axel Rudolph from Commerzbank reports.

Key quotes

“GBP/USD trades in one month lows and nears the 50% retracement of the March-to-April advance at 1.2030 as well as the minor psychological 1.2000 mark. Below it lie the September low at 1.1958 and the March 20 high at 1.1935.”

According to Trading Central (3rd party RIA) the GBPUSD is short positions below 1.2440 with targets at 1.1950 & 1.1685 in extension.

* Past performance is not a guarantee of future performance

Number of Lots:Required Margin:Risk Management (50%):Potential Profit/Loss 1.1950
1€ 3,728.56€ 1,864.28€ 1,733.67
5€ 18,642.80€ 37,285.61€ 8,668.37
10€ 37,285.61€ 74,571.22€ 17,336.75
25€ 93,214.02€ 186,428.04€ 43,341.87
50€ 186,428.04€ 372,856.08€ 86,683.75

AUD/USD: Bulls re-attempt 0.6450 as Gold sees fresh leg higher

Fresh bids emerged near 0.6425 in European trading, allowing the AUD/USD bulls to re-attempt the 0.6450 barrier.

The main catalyst behind the renewed uptick in the resource-linked, the aussie, is seen as the fresh leg higher gold and oil prices. Gold refreshed 7.5-year highs above $1760 while WTI oil conquered the 31 mark after the European traders hit their desks and took cues from their Asian peers.

The aussie ignored the upbeat results of the employment survey conducted by the Australian Bureau of Statistics (ABS), as the risk sentiment and gold price-action remain the key market drivers. The focus now shifts towards the Reserve Bank of Australia’s (RBA) monetary policy meeting’s minutes due out on Tuesday. The US macro calendar remains almost data-empty on Monday.

According to Trading Central (3rd party RIA) the AUDUSD is long positions above 0.6270 with targets at 0.6570 & 0.6685 in extension.

* Past performance is not a guarantee of future performance

Number of Lots:Required Margin:Risk Management (50%):Potential Profit/Loss 0.6570
1€ 2,977.96€ 1,488.98€ 1,108.92
5€ 14,889.82€ 29,779.63€ 5,544.60
10€ 29,779.63€ 59,559.26€ 11,089.20
25€ 74,449.08€ 148,898.15€ 27,723.00
50€ 148,898.15€ 297,796.31€ 55,446.00

According to Trading Central (3rd party RIA) the GOLD is long positions above 1680.00 with targets at 1790.00 & 1835.00 in extension.

* Past performance is not a guarantee of future performance

Number of Lots:Required Margin:Risk Management (50%):Potential Profit/Loss 1790
0.5€ 4,074.07€ 2,037.04€ 1,388.89
1€ 8,148.15€ 4,074.07€ 2,777.78
5€ 40,740.74€ 20,370.37€ 13,888.89
10€ 81,481.48€ 40,740.74€ 27,777.78
20€ 162,962.96€ 81,481.48€ 55,555.56


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