Tuesday Outlook: Precious Metals Weaken, PMI Data Highlights Global Economy
23 May 2023
Monday's trading began calmly, lacking any significant market volatility. The focal point for traders was the unsuccessful negotiation between U.S. President Joe Biden and House Speaker Kevin McCarthy. However, this development did not greatly concern the bullish investors as the positive trend in stocks and indices continued.
Notably, interesting movements were observed in the Yen, which experienced further weakening. Moreover, these movements were not random, but rather occurred around crucial support and resistance levels. USDJPY successfully defended the key support at 137.7, which is pivotal for a mid-term buy signal. Meanwhile, AUDJPY is currently threatening the 92.3 resistance and the upper line of a flag pattern. GBPJPY managed to break the significant 172 resistance level, previously observed in October and the beginning of May. Consequently, the overall sentiment towards the Yen appears negative.
As Tuesday commences, weakness is observed in the precious metals market, aligning with the recent bearish trend and the strengthening of the Dollar. This situation does not appear likely to change in the near future. On the other hand, trading in the oil market has been relatively uneventful in recent days, with May largely characterized by sideways movement, awaiting a stronger market impulse, aside from an initial sharp drop at the beginning of the month.
The economic calendar for today is filled with PMI data releases from leading economies around the world. We have already seen the data from Australia, which revealed a drop in the Services PMI from 53.7 to 51.8. In Japan, the Manufacturing PMI has climbed back above 50, recording a figure of 50.8.