The other week, the pair gained more than 0.5%, although a few gains were pared heading into the weekend as Fed rate rise forecasts firmed up the US Dollar on Friday following the non-farm payrolls data. Market morale is still shaky as concerns of recession abound, forcing traders to take a defensive stance.
As Asia-Pacific trade starts the week, economic figures from China might set the stage. At 01:45 GMT, Caixin Global, the financial media company based in China will release its purchasing managers’ index for the services industry. In April, the index fell to 36.2 as a result of expanding Covid-19 restrictions for the second consecutive month. If the report of the day reveals a resurgence in May, it may encourage some risky behavior.
S&P Global is set to release a PMI assessment for Hong Kong. Because non-manufacturing enterprises are the key drivers of promoting the growth on a local level, the Asian economy and financial sector has fared better during Covi-19 enhanced restrictions and lockdown measures. In May, Australia’s TD-MI inflation indicator and ANZ employment adverts will be released, while Thailand will publish its inflation figures.
The prices of crude oil are expected to rise in the week, boosted by increased demand forecasts throughout Asia, thanks in part to the relaxation of Chinese restrictions. For the month of July, Aramco of Saudi Arabia raised the premium to Asian oil clients by $2.10 bbl. Crude prices of Brent could rise more in comparison to WTI, as Aramco kept its prices for US clients steady.
The other week, the May swing high appeared to be a worthy barrier, and it is a level that is expected to be tested again soon. If prices breach over that level, they will be able to reach the Fibonacci retracement of 61.8 %. On the other hand, should the bearish sentiment of last week persist, bullish traders could seek support by eyeing 38.2% on the Fibonacci retracement. The MACD and RSI oscillators are strengthening, implying that additional gains are possible.