Thursday’s Market Analysis: The USD Strengthens, Gold Dips, and Oil Awaits Key Signal

By Tomasz Wisniewski|

Published: June 29 2023, 06:12 GMT+0

Thursday’s Market Analysis: The USD Strengthens, Gold Dips, and Oil Awaits Key Signal

In today’s market analysis, the Forex market finally witnessed some interesting movements, particularly driven by a robust American dollar. Notably, the dollar continued to rise from yesterday’s gain, establishing itself as the strongest currency in the market.

Concurrently, the Australian and New Zealand dollars, which had been the weakest currencies yesterday, attempted to correct their prior weakness and are now standing as the strongest currencies in the pack before the start of the European session. Their previous weakness could be partly attributed to the unexpectedly low Australian inflation rate, which came in at 5.6%, noticeably below the 6.1% expectation.

The economic calendar today is marked with significant events, including the release of German inflation data and a speech from the Federal Reserve Chair Jerome Powell. The anticipated inflation data from Germany expects a monthly rise of 0.2%. The American session is set to start with the US GDP number, predicted to rise by 1.4%, and the usual unemployment claims, expected to remain unchanged at 264,000 from the previous month.

Turning to the indices, a bullish correction was witnessed yesterday, extending the reversal that started on Tuesday. This could potentially signal the start of a new bullish wave, especially on European indices, which are rebounding stronger and from more technically significant positions than US indices.

Examining the commodities market, gold continues its downward trajectory, establishing new monthly lows. Oil, particularly Brent, has an essential development to note. Brent tested a $71.7 per barrel support during yesterday’s European session, a critical long-term horizontal support previously tested in mid-June, end-May, and early May. The contact with this support triggered an upswing again, indicating that as long as the price stays above the $71.7 support, there will not be a proper long-term sell signal. However, if the price closes below this support, it could serve as a definitive long-term sell signal.