Weekly Technical Euro Forecast: Upside Potential Persists
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Technical Forecast for the Euro: Neutral
The Euro appears to be consolidating after recent upside moves; there is plenty of room in futures positioning for speculators to drive prices higher.
Net-long Euro positioning is back to its highest level since the last week of March.
Euro Rates Week in Review
The Euro has a mostly positive turn through the middle of May, even if the headline stats don’t appear so. Even though four EUR-crosses gained and three EUR-crosses fell, the bias was towards the upside: the average loss was -0.10%, while the average gain was +0.81%. If anything, it appears that the Euro is consolidating after a strong run higher against the safe havens, while volatility in global equity markets is giving traders a reason to take their foot off the pedal when it comes to the commodity currencies.
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Gold Price Forecast: Breakout Above Multi-Month Resistance - Levels for XAU/USD
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Gold Price Outlook:
Gold prices have moved beyond multi-month bull flag resistance, suggesting that a march back to all-time highs has begun.
However, with soft ag and industrial metal commodities pulling back and the US Dollar catching a bid post-FOMC minutes, the ‘runaway inflation’ narrative may be tempered, capping near-term price gains by gold prices.
According to the IG Client Sentiment Index, gold prices have a mixed bias in the near-term.
Shining Again
Gold prices have climbed back to their highest level since the first week of 2021, thanks in part to the ongoing manifestation inflation fears, and perhaps, the bouts of weakness seen in cryptocurrency markets. The ongoing erosion in real US yields due to the combination of loose monetary policy and expansionary fiscal policy is once again proving to be a strong fundamental tailwind for gold prices.