During yesterday’s trading, US equities experienced a bumpy session due to a lack of fundamental activity. The Dow Jones closed the day slightly higher by 0.1%, while the SPX closed down by 0.2%. The Nasdaq 100 was the biggest loser with a decline of more than 0.8%.

Bond selloff continued after the auction, pushing the US 10-year yield up for the third consecutive session to reach 4.20%. This is the highest level since March 5, and it caused a pause in the metals rally including gold and silver.

Eyes on US data ahead

Indicator Forecast Prior
Retail Sales MoM 0.8% -0.8%
Core Retail Sales MoM 0.5% -0.6%
PPI MoM 0.3% 0.3%
Core PPI MoM 0.2% 0.5%
PPI YoY 1.2% 0.9%
Core PPI YoY 1.9% 2.0%

Estimates suggest that today’s Retail Sales outcomes will be significant. They will either confirm that growth has stalled or show a positive result after last month’s decline.

On the other hand, the focus will be on producers’ inflation figures, particularly the Core PPI more than PPI. The YoY Core PPI is expected to slow down to 1.9%, marking the third-lowest reading since 2020.

Any positive surprise in PPI data would delay the first rate cut. Currently, Fed Fund Futures are pricing in a 75% chance of a rate cut in June and 120% in July.

DXY retesting resistance

The US Dollar Index approached the resistance level at 103.0 but failed to surpass it during yesterday’s trading session. Today’s economic figures will serve as a new catalyst for the next move.

The price/time method suggests that the Dollar Index may have limited and short-lived upside moves before the downtrend resumes.

The bearish bias remains in place as long as the index trades below 103.30 and/or 103.65. On the downside, the next support level is at 102.65, followed by 102.34. If these levels are breached, it would pave the way for further declines towards 102.0/101.90.

Brent crude oil breakout

After several weeks of trading within a narrow range and with no clear direction, Brent Crude has finally broken out. Yesterday, it recorded its highest daily close since November of last year and has continued trading higher today, reaching the highest level since November 7th, 2024, nearing $85 a barrel.

According to the time/price method, the downward trend in Brent crude oil prices may have ended at the beginning of this year when it was trading at around $78 per barrel. Today’s breakout could be the start of a bigger upward movement, provided that it holds above the breakout point.

The next resistance level is $85. A break above would pave the way for further gains at $86 and $87.

 

Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.

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