USDCAD is extending its retreat from the recorded 17½-month high of 1.3076, heading lower towards the converged simple moving averages (SMAs), which are not now endorsing any sturdy price trend. The pair has retracted within the region of a trading range that had lingered for a period of nearly ten months.   The short-term oscillators are reflecting the increase in negative momentum. The MACD, in the positive area, has distanced itself below its red trigger and is approaching the zero mark, while the RSI is falling in bearish territory. Moreover, the renewed negative charge of the stochastic oscillator is promoting additional downward price action in the pair. To the downside, an initial fortified support section from the 1.2718 barrier until the inside swing low of 1.2646 exists. This includes all the SMAs and the lower Bollinger band and could prove to be a difficult task for sellers to accomplish. However, if this upside defence fails to dismiss selling intentions, the price may then tumble towards the April 21 trough of 1.2457, simultaneously testing the 1.2450 support too. In the event bearish pressures continue to overwhelm, the 1.2402 low and the adjacent 1.2351-1.2386 support band could draw traders’ attention. On the flipside, if buyers unearth some positive traction somewhere within the 1.2646-1.2718 support zone, resistance could commence from the 1.2762 obstacle before the price jumps to test the resistance region linking the mid-Bollinger band at 1.2865 with the 1.2920 inside swing low. Breaching this, not too far above the 1.2981 high may come into play. Further hikes in the price may then encourage the bulls to aim for the upper Bollinger band at 1.3042 before challenging the 1.3076 peak and the 1.3112 high, where selling in the pair intensified back in November 2020.    Summarizing, USDCAD’s recently readopted bearish tone is weighing on the directionless SMAs. For positive developments to remain on the table, the price would need to hold north of the SMAs. A climb above the 1.2900 handle could boost buying interest, while a close below the SMAs may reinforce negative tendencies in the pair.

Global stocks continued their recovery as investors have rushed to buy the dip. Futures tied to the Dow Jones and S&P 500 have risen by more than 0.50%. If this trend continues, it will be the first weekly gain since March. The same situation happened in Europe, where the German DAX and CAC 40 rose by almost 1%. Some of the top movers in the pre-market session were Kraft Heinz, Medtronic, and Centene, which fell by over 5%. Dollar General, Dollar Tree, and DXC Technology rose by more than 15% after these firms reported strong results. Other top gainers were firms like Dell and Ulta Beauty. The price of crude oil jumped sharply as the EU continued to debate measures to ban Russia’s crude oil. While many countries support the measure, a small group of them have opposed the measure citing the vast amount that they buy from the country. Meanwhile, oil prices rose even after a sharp decline in China’s industrial output. According to the country’s statistics agency, industrial profits declined by 8.5% in April compared to the same period in 2021. The contraction piles pressure on the government after it has implemented Covid-zero strategies.  The Japanese yen moved sideways as investors reacted to the latest inflation data from Tokyo. According to the country’s statistics agency, the headline CPI declined from 2.5% in April to 2.4% in May. Excluding the volatile food and energy, core CPI remained unchanged at 1.9% during the month. These numbers show that the country’s inflation has topped. The other important economic numbers showed that Australia’s retail sales rose by 0.9% in April as people invested in food and personal effects.  USD/JPY The USDJPY pair remained in a tight range after the latest Japan inflation numbers. The pair is trading at 127, where it has been in the past few days. It has also moved slightly below the 25-day and 50-day moving averages. The pair has also formed a small symmetrical triangle pattern. At the same time, the Relative Strength Index (RSI) has moved to the neutral point at 50 while the momentum indicator has tilted upwards. Therefore, the pair will likely have a bearish breakout as sellers target the key support at 126. EUR/USD The EURUSD pair declined slightly as the US dollar crawled back. The pair is trading at 1.0700, which is along the 25-day moving average. The pair has formed a sliding double-top pattern whose chin is at 1.0646 while the pair has moved below the 61.8% Fibonacci retracement level. The Relative Strength Index (RSI) and the MACD have pointed downwards. Therefore, the pair will likely keep falling as bears target the support at 1.0650. NZD/USD The NZDUSD pair rose to a high of 0.6520, which was the highest level since May 9th. This price is significantly higher than this month’s low of 0.6220. On the four-hour chart, the pair rose above the 25-day and 50-day moving averages. The MACD has moved above the neutral level while the Relative Vigor Index (RVI) has moved upwards. Therefore, the pair will likely keep rising as bulls target the key resistance at 0.6600.

The Dow Jones Industrial Average cash index traded higher on Wednesday, breaking above the downside resistance line drawn from the high of April 21st. The index continued its recovery today as well, reaching the 32755 resistance zone, marked by the high of May 10th. Bearing in mind that the index broke the aforementioned downside line, we would see decent chances for some more advances. A clear and decisive break above the 32755 zone could encourage the bulls to climb to the 33350 zone, marked by the high of May 3rd, and if they are not willing to stop there, then we may see them pushing towards the 34120 zone, which acted as a key resistance between April 25th and May 5th, or the 34320 barrier, defined by the inside swing low of April 19th. Should neither of those two zones hold, then we could see a test at 34800, the high of April 22nd. Shifting attention to our short-term oscillators, we see that the RSI flattened near its 70 line, but the MACD remains above both its zero and trigger lines. Both indicators detect strong upside speed, which supports the idea of further advances, but the fact that the RSI has flattened near its 70 line make us careful over a possible setback before the next leg north. On the downside, we would like to see a clear break below 31315 before we start examining the bearish case again. This could confirm the index’s return back below the downside resistance line taken from the high of April 21st, and could pave the way towards the 30535 zone, which is slightly below the low of May 20th, and is marked by the low of March 4th.

In this week’s Live from the Vault, iconic financial commentator and life-long stockbroker, Bill Holter, joins Andrew Maguire to share his eye-opening examination of the West’s insurmountable debt. As the Fed’s money-printing tactics start to closely resemble a Ponzi scheme, the precious metals expert explains, with mathematical certainty, why the current system is destined for bankruptcy. Timestamps 00:00 - Start. 01:30 - Bill Holter - the introduction. 02:45 - Jim Sinclair’s “QE to infinity and beyond” going since 2008. 06:05 - 80% of all the dollars have been printed in the last 2 years! 09:05 - About Central Bank Digital Currency (CNBC). 10:50 - Bailing is already in place! How to get out of the system! 16:15 - Silver as the fuse to break the financial system! 20:00 - Silver short positions, nickel blowing up and the Rubicon line. 24:35 - What would Bill do if he came from Mars? 28:20 - Could silver and gold be confiscated? 32:00 - Silver’s Backwardation described. 35:40 - About Exchange of Futures for Physical (EFP). 38:30 - Final parting message From Bill Holter.

US non-farm payrolls (May) – 03/06 – there’s a great deal of uncertainty about how resilient the US economy is when it comes to some of the underlying numbers. A sharp contraction in economic output in Q1 doesn’t appear to be altering the dynamics around the labour market, which is struggling with weak participation levels. This weakness in the participation rate contrasts to over 11m job vacancies, although we are expecting to see this pick up in May to 62.3%. 428k new jobs were added in April, while the March figure was revised lower to 428k, so a nice bit of symmetry there. Average hourly earnings remained steady at 5.5% which again seems counterintuitive with so many unfilled vacancies, while unemployment remained steady at 3.6%. This trend isn’t expected to improve significantly in the May payrolls numbers, with job creation set to slow to 329k, while unemployment is expected to fall to 3.5%. Neither of these numbers is expected to move the dial that much, however wages growth might well offer clues to central banks tightening pace. If wages growth continues to remain lacklustre, with an expectation of a fall to 5.2%, then we could see more urgency go out of the central bank tightening timeline.     European Services PMIs (May) – 03/06 – recent PMI numbers, especially out of Europe have been rapidly losing credibility in terms of the headline numbers at least, when it comes to assessing the resilience or otherwise of the French, German and UK economies. In terms of the wider economy, it is quite apparent that economic growth is struggling across the bloc as well as here in the UK. Yet to look at the PMI numbers it would be tempting to think that all is well. Nothing could be further from the truth with rising energy prices and supply chain disruptions posing significant challenges to business, large and small. This week’s services PMIs are all expected to slow from the numbers we saw in April, all of which were in the mid 50’s for all three of the UK, Germany and France. PMIs in China look even worse with private surveys in the mid-30s.     UK lending data (Apr) – 30/05 – rather surprisingly we saw UK retail sales rebound strongly in April. House price growth has also remained resilient despite rising inflationary pressures and 4 rate rises in succession from the Bank of England. So far consumer credit and mortgage lending numbers have remained resilient throughout the first quarter of 2022, with net lending rising to £7bn in March and a six-month high. Net consumer credit has also recovered after a slow start to the year, coming in at £1.3bn. As we look apprehensively ahead to Q2 the mortgage approvals numbers might start to show signs of slowing, while consumer credit numbers could go either way, rising as struggling consumers borrow more to pay for everyday items, or slowing as consumers tighten their belts and dip into savings.      EU CPI flash (May) – 31/05 – with EU CPI currently at a record high of 7.5%, and core prices less than half of that at 3.5%, there has been some talk that inflation in the euro area is plateauing. This view seems dangerously misguided given what is happening with PPI with the latest German numbers posting a new recorded high earlier this month. We also have the ECB starting to prep the markets for a possible 25bps rate hike at the July meeting in response to this inflation surge, however it’s doubtful that such a small move when rates are already negative at -0.5% will do that much good. CPI is already much higher in other parts of the EU. While its lower in France, at 4.8%, due to the French government capping energy prices, in places like Estonia its 18.8%, and 16.8% in Lithuania. Expectations are for EU CPI to come in at a new record high of 7.6%.   Bank of Canada rate decision – 01/06 – after spending most of Q1 procrastinating about whether to raise interest rates, the Bank of Canada finally bit the bullet in April pushing its headline rate up to 1% from 0.5% against a backdrop of falling unemployment and surging inflation. The central bank also announced it would be ending its purchase of government bonds by 25th April. This was entirely predictable given that the Federal Reserve was going to be raising raise rates by a similar amount a few weeks later, and that there was little sign that inflation pressures were abating. In the most recent CPI numbers Canada inflation rose to 6.8% and its highest levels since 1990. With unemployment also low at 5.2% this week’s Bank of Canada decision is likely to see the central bank mulling a further...

Equities continue to move higher as the week draws to a close, with hopes that this rally might last longer than some of the recent failed bounces. Stocks make fresh gains “Investors have been more comfortable about buying into this rally thanks to the lack of any hints of 75 bps rate hikes in this week’s minutes. This has been enough to move the sentiment dial out of its trough, providing some space for at least a short-term bounce. Worries about inflation have been the big driver of declines of late, so the slowdown in the PCE price index on both the headline and core measures helped to shore up sentiment as well.” Recession not fully priced in “Stocks on both sides of the Atlantic seem content to push higher for the time being, but this isn’t a return to the old ways of steady gains. A gain of even 10% from here might look like an all-clear signal for investors, but growth and earnings forecasts probably need to come down a bit more, which in turn points towards fresh lows for the market in the months to come.”