Fed Officials Emphasise Patience as Inflation Concerns Persist

May 27, 2024

| Fullerton Markets

Fed Officials Emphasise Patience as Inflation Concerns Persist">

Federal Reserve Governor Christopher Waller stated that he requires additional evidence of decreasing inflation before he supports interest rate cuts. In the absence of a significant labour market decline, he needs to see several months of positive inflation data. Boston Fed President Susan Collins also highlighted that the economic data has been mixed, indicating that achieving desired economic conditions may take longer than expected. Both officials stressed the importance of patience in the current economic environment.

NASUSD (Daily). Breaking the resistance level last week, the Nasdaq has a strong bullish continuation. Waiting for the chance to buy in around 18470.00 and aim for the 138.2% Fibonacci level at 19040.00.

XAUUSD (H4). Broke the bullish trend line at the Support level of 2380.00. Gold is eyeing 2300.00, a psychological level for investors.

NZDUSD (Daily). This pair broke the bearish trend line, the ideal buying level for the pair is around 0.6050 and targeting the next Resistance level at 0.6220.

UK inflation fell to 2.3% in April, down from 3.2% in March, according to the Office for National Statistics. This is the first time inflation has been below 3% since July 2021, nearing the Bank of England’s 2% target. Despite this drop, economists had anticipated a steeper decline to 2.1%. Services inflation eased slightly to 5.9%, missing the forecast of 5.5%. Core inflation, excluding energy, food, alcohol, and tobacco, dipped to 3.9% from 4.2%. The unexpected inflation data led traders to retreat from bets on a June interest rate cut by BOE.

GBPNZD (Daily). This pair broke the bullish trend line and is expected to head to the region between 2.0400 and 2.0660.

WTIUSD

Crude oil futures dropped to three-month lows on Friday, with WTI crude hitting $76.15 and Brent falling to $80.65 a barrel. Both benchmarks are on track for weekly losses of around 4% and 3%, respectively. This decline comes as the summer driving season starts with the Memorial Day holiday. OPEC and its allies, including Russia, will meet virtually on June 2 to review production policy, expecting to maintain production limits, especially given the current downward trend in oil prices.

WTIUSD (Daily). WTI is stuck in a small range for 3 weeks. If there is no surprise from the virtual meeting on June 2, WTI is expected to trade within the Support level at 76.50 and the Resistance level at 79.80.