STERLING MOVES SIDEWAYS AMID UK TRAIN WORKERS STRIKE
American stock futures jumped sharply on Tuesday as investors bought the dip. Futures tied to the Dow Jones rose by more than 480 points while those tied to the S&P 500 and Nasdaq 100 rose by more than 1.78%. This is a strong performance considering that stocks had the worst week in two years last week. The bullish mood spread in other assets like cryptocurrencies, as Bitcoin jumped to more than $21,000. The total market cap of all cryptocurrencies rose by more than 5% to over $972 million. Some of the top companies to watch will be Lennar, KB Home, and FedEx, which are expected to publish their results this week.
The Australian dollar moved sideways after the latest minutes by the Reserve Bank of Australia (RBA). The minutes showed that members of the committee were extremely hawkish in a bid to fight inflation. They noted that more rate hikes will be needed this year. Analysts expect another 0.50% rate hike in July. Meanwhile, the RBA governor warned that the ongoing wage increase will push inflation much higher. His statement came after the Fair Work Commission recommended that the minimum wage of 184k people should rise by 5.2%.
The British pound moved sideways as UK rail workers went on the biggest strike in over 30 years. The strike led to a major disruption in the economy as thousands of people struggled to get to work. In a statement, the country’s transport minister said that the government will not get involved as doing so will make matters worse. This strike worsens the situation for the UK economy at a time when inflation has surged. The economy has also contracted in the past two straight months and analysts expect it to decline this month.
GBPUSD
The GBPUSD pair moved sideways even as the strike happened in the UK. The pair is trading at 1.2295, which is close to its highest level on Friday last week. On the four-hour chart, the pair moved above the 25-day and 50-day moving averages. The Relative Strength Index has moved slightly above the neutral level. The pair will likely continue rising as bulls target the key resistance at 1.2350.
EURUSD
The EURUSD pair tilted upwards ahead of the US pending home sales data. It rose to a high of 1.0585, which was the highest level since Thursday. It is trading at 1.0556, which is slightly above the important support level at 1.0545. It has also moved above the 25-day moving average while the RSI is slightly below the overbought level. The pair has made a break and retest pattern, meaning that it will likely continue rising, with the next key resistance being at 1.0600.
XNGUSD
The XNGUSD pair declined sharply as the price of natural gas pulled back. It dropped to a low of 6.67, which was the lowest point since May 10. It has moved below the 25-day and 50-day moving averages while the MACD has moved below the neutral level. It has also formed a bearish flag pattern. Therefore, the pair will likely keep falling as bears target the key support at 6.00.
