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Dollar on defensive as markets pin hopes on global economic recovery

The dollar was on the defensive on Tuesday as investors stuck to hopes of a global economic recovery despite heightened concerns over U.S.-China tensions and mass protests in many U.S. cities over the death of a black man in police custody.

The U.S. dollar’s index against a basket of six major currencies stood at its weakest level since mid-March, at 97.790.

The euro fetched $1.11295, little changed so far on Tuesday but holding near a 2-1/2-month high of $1.1154 touched on Monday.

Sterling traded at $1.2491, having hit a one-month high of $1.2506.

U.S. manufacturing activity eased off an 11-year low in May and although the reading was weaker than forecast, it fit into markets’ expectations that the worst of the economic downturn was behind as businesses reopen.

“There are some potential flash points such as U.S. demonstrations and China-U.S. tensions. But, on the whole, the market is still moderately risk-on,” said Kyosuke Suzuki, director of forex at Societe Generale.

Against the safe-haven yen, the dollar was at 107.57 yen, stuck in a well-worn range between 106 and 108 over the last several weeks.

https://www.cnbc.com/2020/06/02/forex-markets-us-dollar-global-economy-in-focus.html

According to Trading Central (3rd party RIA) the USDCAD is short positions below 1.3900 with targets at 1.3435 & 1.3200 in extension.

* Past performance is not a guarantee of future performance

https://europefx.tradingcentral.com/Product?PK_ANALYSE=10764658

Number of Lots:Required Margin:Risk Management (50%):Potential Profit/Loss 1.3435
1€ 2,994.91€ 1,497.45€ 961.64
5€ 14,974.54€ 29,949.09€ 4,808.20
10€ 29,949.09€ 59,898.17€ 9,616.40
25€ 74,872.72€ 149,745.43€ 24,041.00
50€ 149,745.43€ 299,490.87€ 48,082.00



GBP/USD: Potential move to 1.2600 – UOB

24-hour view: “We expected GBP to strengthen yesterday but did not anticipate the sudden lift-off that sent it soaring to a high of 1.2506 (closed at 1.2490, +1.16%). Robust upward momentum suggests further GBP gains would not be surprising even though the major 1.2600 resistance is likely out of reach (minor resistance is at 1.2555). On the downside, 1.2420 is expected to be strong enough to hold any pull-back (minor support is at 1.2470).”

Next 1-3 weeks: “Yesterday (01 Jun, spot at 1.2365), we highlighted that ‘we continue to wait for a daily closing above 1.2380 before adopting a more a positive outlook in GBP’. We noted that ‘the prospect for such a move is quite high’ and that ‘a daily closing above 1.2380 could lead to an advance in GBP towards 1.2465, possibly above 1.2500’. However, we did not anticipate the sudden and strong surge that sent GBP to a high of 1.2506. Upward momentum received a strong boost and from here, GBP could continue to advance to 1.2600. Only a move below 1.2360 (‘strong support’ level was at 1.2275 yesterday) would indicate that our positive view in GBP is wrong.”

https://www.fxstreet.com/news/gbp-usd-potential-move-to-12600-uob-202006020524

According to Trading Central (3rd party RIA) the GBPUSD is long positions above 1.2360 with targets at 1.2640 & 1.2870 in extension.

* Past performance is not a guarantee of future performance

https://europefx.tradingcentral.com/Product?PK_ANALYSE=10764657

Number of Lots:Required Margin:Risk Management (50%):Potential Profit/Loss 1.2640
1€ 3,740.70€ 1,870.35€ 1,346.85
5€ 18,703.48€ 37,406.95€ 6,734.25
10€ 37,406.95€ 74,813.90€ 13,468.50
25€ 93,517.38€ 187,034.75€ 33,671.25
50€ 187,034.75€ 374,069.50€ 67,342.50

Oil prices rise ahead of OPEC+ meeting on extended output cuts

Oil prices rose on Tuesday, with traders waiting to see whether major producers agree to extend their huge output cuts to shore up prices at a virtual meeting expected later this week.

Brent crude futures rose 0.91%, or 35 cents, to $38.67 a barrel as of 0427 GMT.

West Texas Intermediate (WTI) crude futures rose 0.56%, or 20 cents, to $35.64 a barrel.

Brent has doubled over the past six weeks, thanks to supply cuts by the Organization of the Petroleum Exporting Countries and allies, including Russia, a grouping dubbed OPEC+.

“The whole story is very much based around the supply cuts and the demand recovery,” said Commonwealth Bank commodities analyst Vivek Dhar.

https://www.cnbc.com/2020/06/02/oil-markets-opec-meeting-crude-output-in-focus.html

According to Trading Central (3rd party RIA) the WTI is long positions above 1.2360 with targets at 1.2640 & 1.2870 in extension.

* Past performance is not a guarantee of future performance

https://europefx.tradingcentral.com/Product?PK_ANALYSE=10762726

Number of Lots:Required Margin:Risk Management (50%):Potential Profit/Loss 41.40
0.501,594.79797.392,650.49
1.003,189.581,594.795,300.99
5.0015,947.897,973.9426,504.94
10.0031,895.7815,947.8953,009.88
20.0063,791.5531,895.78106,019.77