Greenback Shines as Market Sentiment Shifts.
“China lockdown and economic tension in Europe threaten the market.”
The financial market slumps into turmoil as equities slid further into oblivion while greenback touches a two-decade high. A series of hawkish signals delivered by the Federal Reserve switched investors’ perceptions, piloting their focus towards the greenback. Subsequently, China’s latest trade data for April came in with a single digit of 3.9%, its lowest since June 2020. The data raised concerns as negative impact from the lockdowns in Shanghai began to reflect on their economic momentum. Likewise, Europe’s proposal to sanction Russian oil import jeopardizes market sentiment even further as it raises economic distress on the region.
Quick recap on XAUUSD
XAUUSD relinquished as the commodity breaches through its stronghold around 1917.18.
XAUUSD Weekly Technical Analysis
The commodity retraced significantly following prior failure to conquer its hurdle around 1978.57. MACD in weekly chart starts to portray bearish momentum, suggesting further downside ahead. However, it is worth noting that downside bias may be limited by the upward trendline.
XAUUSD Daily Technical Analysis
XAUUSD managed to stabilize near 1859.30 while still being under the 200-MA line. In the short term, we may see a slight correction before extending its losses thereafter.
ORDER: SELL STOP
STOP LOSS: 1890
Target 1: 1790
Target 2: 1765
ZFX Analyst’s Comment
XAUUSD may extend its downside for the time being due to hawkish rhetoric from the Federal Reserve. Likewise, a divergence in between US economy and the rest of the world, especially China (due to Zero Covid Policy and lockdowns) may place further emphasis upon greenback.
Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.
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