EUR/USD: The European currency rose against the US dollar on Monday after optimistic Eurozone industrial production data came in. Data was stronger than expected in April, fueled by more than doubling the production of consumer staples year-over-year as economies steadily reopened after the COVID-19 pandemic lockdowns. Today Germany publishes Consumer Price Index in May and the Eurozone will release its Trade Balance in April. The US will publish May Retail Sales, expected to slip by 0.8%. The local support level is found at 1.2095. A breakout below this mark could take the pair down to 1.2050.
USD/JPY: The US dollar rose against the Japanese yen on Monday. The pair wobbles near a one-week high after a short two-day uptrend. Investors are looking forward to the upcoming Fed meeting Wednesday, which may herald a change in the outlook for US monetary policy. Recent data suggested that growing inflation has raised concerns that price pressures following the post-COVID-19 economic reopening could force policymakers to reduce currency depreciating stimulus. Japan published April Industrial Production, which was better than expectations. Capacity Utilization in the same month was up 1.1%. Today the country publishes the April Tertiary Industry Index. The strong resistance level can be seen at 110.30. If the pair reaches and rebounds from this level, it can trigger a decline towards 109.25.
SP500: The S&P500 and Nasdaq indexes showed record-high values on Monday despite most investors being focused on this week’s Federal Reserve meeting and not on adding to current positions. Markets are waiting for new signals from the Fed on its inflation outlook after recent data indicated the US economy is regaining momentum but not overheating. This has eased investor worries about inflation. While the Fed has reassured that any spike in inflation would be transitory, policymakers could begin discussing the tapering of bond buying at the upcoming meeting. Any shift in the Fed’s dovish rhetoric could upend equity markets. The S&P benchmark has climbed 13.1% this year.
BUY LIMIT $4250/TP $4272/SL $4242.66