Asian stocks went high on Monday after Friday’s rally in the U.S. session. The U.S. stock rally was much helped by the upbeat Nonfarm payroll number.  Nonfarm payroll rose unexpectedly by 2.5 million in May, trouncing forecasts for a sharp decline. The jobless rate fell to 13.3% from 14.7%. The Australian and New Zealand dollars both rose to their highest since January after data showed a smaller-than-expected fall in Chinese exports, which supports commodity currencies.

The dollar headed for an eighth straight day of declines, while ten-year Treasuries retained last week’s losses. This week’s focus will be on the Federal Reserve policy decision due on Wednesday. Officials are expected to leave rates above zero and re-commit to using their full range of tools. If the Fed is open to more stimulus to save the economy, we might see this benign market sentiment to continue. 

Copper prices retreated from a 3-month high hit in the previous session, after data showed top consumer China’s exports weakened in May. The main driver behind these moves was due to the contraction in China’s exports in May as global coronavirus lockdowns continued to dampen demand for the metal, although at a smaller pace than expected. According to Reuters, China’s unwrought copper imports in May fell 5.5% from the previous month but was up 20.8% from the same period a year earlier, customs data showed.

Gold prices tumbled to its lowest level since late April last week, as it continued to lose its safe-haven appeal amidst unprecedented demand for higher-yielding, higher-risk assets. Meanwhile, sellers were also influenced by a higher spike in Treasury yields and a stronger dollar after US job data exceeded market’s expectations. The recent price action in gold suggests the precious metal was overpriced as investors grow more optimistic with more countries easing lockdown measures and moving towards the reopening of their economies. 

Oil poised to rise as OPEC+ group has agreed to a one month extension of the 9.7mb/d production cuts that were initially meant to apply only for May and June. The hope is that while US producers will seek to maximize returns from existing wells as oil prices move higher, they’ll exercise a greater level of capital discipline when it comes to plans for new drilling. All this while, Russia has been rather non-confrontational which is always a good sign for markets. With both Russia and Saudi Arabia presenting a unified front, the markets will be rebalancing and supporting oil prices going forward.

Technical & Trade views

 

USDCAD (Intraday bias: bullish above 1.3393)usdcad-5.png

We turned bullish as price is bouncing off our 1st support at 1.3393 where the 61.8% fibonacci extension is. Price is likely to bounce  further from here towards 1st resistance where the horizontal swing high is. Stochastics also indicates further bullish pressure.

 

 

UKOIL (Intraday bias: bullish above 43.25)ukoil-5.png

Oil prices are retesting our upside confirmation at 43.25 where the  61.8% fibonacci extension and horizontal swing high are. If price could break above this level, it will open up a bigger upside till our resistance level at 45.81.  Ichimoku is also indicating further upside pressure.

 

 

XAUUSD ( Intraday bias: Bearish below 1696.468) xauusd-5.png

Price is approaching first resistance in line with our descending trend line, horizontal pullback resistance, 78.6% fibonacci extension and 50% fibonacci retracement. Ichimoku cloud is showing signs of bearish pressure in line with our bearish bias.

 

 

XCUUSD ( Intraday bias: bearish below 2.53436)xcuusd-5.png

A break below our downside confirmation level at 2.53436, in line with our 78.6% fibonacci extension and horizontal swing low support could provide the bearish acceleration to our first support level. Stochastic is facing bearish pressure from our resistance as well.