Fundamental Analysis & Market Sentiment
On June 2nd, it was predicted that the best trade opportunities for the week would be long positions in the NASDAQ 100 Index, Silver, and the CHF/JPY currency cross. However, only the NASDAQ 100 Index trade produced a loss of 0.26%.
The key takeaway from last week was the lower-than-expected US CPI data, which led to a cautious tone on inflation and rate cuts from the US Federal Reserve. The Fed left rates unchanged, causing the US Dollar to regain ground lost after the CPI data. Major US stock market indices continued to rise to new record highs.
Another significant event was the surprise calling of a general election in France, following the far right’s victory in the European Parliament elections. This move by President Macron could potentially put the far right in power in France for the first time since 1944, leading to a weakening Euro.
The Bank of Japan announced plans to reduce its bond purchase operations next month, causing the Yen to weaken slightly. Other important data releases included lower-than-expected US PPI, UK GDP as expected, and mixed results from US and UK consumer data.
Looking ahead to the week of June 17th-21st, key events include the release of UK CPI data, central bank meetings at the Bank of England, Swiss National Bank, and Reserve Bank of Australia, as well as various economic indicators from the US, Germany, UK, France, and New Zealand.
In the Forex market, the US Dollar Index showed signs of bullishness but remains near strong resistance levels. The EUR/USD pair fell due to political risk in France, while the USD/JPY pair showed bullish signs. The CHF/JPY and NZD/JPY crosses also indicated potential for bullish trades.
In the stock market, the NASDAQ 100 Index and S&P 500 Index both made strong gains after reaching new record highs. Bullish momentum is expected to continue in these indices.
Overall, the best trading opportunities for the week ahead are likely to be in the NASDAQ 100 Index and selected currency crosses. It is essential to monitor key economic indicators and central bank meetings to make informed trading decisions.