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Markets Weekly Outlook: US Dollar, Dow Jones, Australian Dollar, Crude Oil

US benchmark stock indexes – such as the S&P 500, Dow Jones and Nasdaq Composite – aimed cautiously higher this past week. Yet, Wall Street has been struggling to find material upside follow-through since late April with the aggressive pace in gains since March noticeably ebbing. The sentiment-linked Australian Dollar and New Zealand Dollar were unable to follow equities.

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Most of the upbeat tone occurred early on in the week as Moderna reported degrees of success in a virus vaccine trial. Yet investors’ confidence waned after this was critiqued and as China unveiled a national security law on Hong Kong that sent the Hang Seng tumbling 5.56% on Friday. The haven-linked US Dollar and similarly-behaving Japanese Yen cautiously rose this past week.

Growth-oriented crude oil has been on the rise, suggesting markets may be looking forward to gradual lockdown easing measures across the globe. Central bankers have been warning about the long-term impact on growth, particularly if additional virus waves unfold. Over 38 million citizens in the world’s largest economy have filed for unemployment claims. This may top 40m ahead.

Conference Board Consumer Confidence and University of Michigan Sentiment data will reveal how attitudes are shaping in a nation where 2/3 of GDP is in consumption. Australia’s Prime Minister speaks to the National Press Club in Canberra as tensions with China brew. These woes may bring back trade war fears, complicating efforts to economically recover from the virus.

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Fundamental Forecasts:

Euro Forecast: EUR/USD Outlook Lifted Long-Term by Recovery Fund Plan

The long-term outlook for the Euro has been boosted significantly by a Franco-German proposal for a €500 billion coronavirus Recovery Fund, even though an agreement is not yet close.

Gold Price Outlook Bearish on GDP Data, US-China Tension and Covid-19

Gold prices may face heightened liquidation pressure as US-China tensions over Hong Kong heat up ahead of US GDP data amid the coronavirus pandemic.

Australian Dollar Faces Data Drought, RBA Silent so Covid Will Drive

The Australian Dollar market is headed for a bare domestic data cupboard which will once again leave overall market risk appetite in charge. This may well mean it remains stuck in its current range.

USD/MXN Outlook: Downside Pressure Continues as Investors Cheer Drug Hopes

The possibility of a Covid-19 cure by year end keeps market sentiment high despite ongoing political tensions

US Dollar Outlook: US-China Tensions Complicate Virus Recovery Bets

The US Dollar may find some strength if tensions between the US and China keep rising, adding an extra layer of uncertainty to the global economic outlook amid the coronavirus outbreak.

S&P 500, Nasdaq 100, DAX 30 Forecast for the Week Ahead

The S&P 500 and Nasdaq will look for developments in US-China tensions while the DAX 30 awaits a string of regional data. Possible coronavirus vaccines may also influence sentiment in the week ahead.

Technical Forecasts:

GBP/USD Forecast: Pound Weakness to Persist Amid Break of April Low

The British Pound has depreciated against all of its major counterparts so far in May, and the weakness may persist as GBP/USD takes out the April low (1.2164).

Crude Oil Weekly Outlook: Rally Runs Into Resistance as Risk-On Appetite Stalls

Crude oil sold-off Friday on news that China is looking to introduce stringent new security laws in Hong Kong, damaging global risk appetite.

S&P 500, FTSE 100 Technical Outlook For Next Week

S&P 500 faces pivotal resistance, while FTSE 100 continues to trade in rangebound fashion.

Gold Price Trend May Reverse as the Rally Loses Steam Near $1800 Gold prices

have enjoyed impressive gains in recent weeks but momentum seems to ebbing on approach to $1800/oz. A reversal downward may be brewing ahead.

US DOLLAR WEEKLY PERFORMANCE AGAINST CURRENCIES AND GOLD

US Dollar Weekly Performance vs currencies and Gold