Global stocks descended into Q2 lacking inspiration, following the heavy declines in oil prices that arrested risk appetite and dampened confidence towards the global economy. Asia markets were left under pressure in the early trading sessions of Tuesday with most Asian stocks venturing into the red territory as risk aversion empowered the safe-haven Japanese Yen. Although Europe displayed some resilience during trading on Monday, a decline may be pending as risk aversion and anxiety ahead of the release of the FOMC minutes encourages investors to scatter from riskier assets. Wall Street had previous gains relinquished as investor anxiety, complimented with growing caution ahead of the heavily anticipated minutes, spurred a selloff that left most stocks at the mercy of the bears. With Q2 commencing in such a tepid fashion and ongoing concerns over the health of the global economy lingering in the background, stock markets could be poised for further declines.

FTSE100 Spotlight

The FTSE100 has displayed signs of exhaustion as the incessant declines in mining stocks amid plunging commodity prices continues to ensure that the index remains depressed. Risk aversion is rife ahead of the FOMC minutes and this could trigger another round of selling with bearish investors aiming for a breakdown below 6150. From a technical standpoint, prices are trading below the daily 20 SMA while the MACD currently still crosses to the upside. A breakdown below 6150 should open a steeper decline towards 6100.

Dollar under pressure

Sentiment continues to remain bearish towards the Dollar despite the positive NFP last week that suggested a recovery in the US economy. Market participants may direct their focus towards the FOMC minutes later this week which could provide further clarity on how and when the Fed may decide to respect its pledge to raising rates twice this year. As of now uncertainty envelopes the Dollar which has provided further inspiration for bearish investors to weaken the Dollar further.

The Dollar Index is still bearish on the daily timeframe and may be poised to decline further if the FOMC minutes fail to provide the clarity investors have sought. From a technical standpoint, prices are trading below the daily 20 SMA while the MACD has crossed to the downside. Previous support at 95.50 may transform into a dynamic resistance which could trigger a further decline towards 94.00.

Sterling submitting to pressure

Sterling bears have been infused with further encouragement as the intensifying Brexit concerns continue to breed uncertainties that encourage sellers to pounce on the vulnerable currency at any signs of weakness. The pound is fundamentally bearish and this nasty cocktail of scenarios from Brexit risks, faltering inflation and fading expectations of a UK rate hike may ensure prices are left depressed for an extended period. Service PMI will be released today and if it follows a negative path then the GBPUSD may be offered a smooth decline towards 1.420. From a technical standpoint, prices are trading below the daily 20 SMA while the MACD has crossed to the downside. A breakdown below 1.420 should encourage a deeper decline towards 1.400.

Gold bulls stand firm

Gold bulls have exploited the mounting anxieties and caution ahead of the FOMC minutes this week consequently providing an opportunity for bullish investors to send prices back above $1225. I remain bullish on this resilient yellow metal and ongoing Dollar weakness could be critical for a sharp appreciation back towards $1250. A dovish sounding FOMC minute clouded by further uncertainty on rate hike expectations may provide a foundation for bulls to install another round of selling back towards the daily 20 SMA. From a technical standpoint, the breakout above $1235 has opened a path towards $1250. 

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