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AUD/USD Pair Climbs to One-Month High, Faces Consolidation AheadOn Tuesday, the AUD/USD pair reached its highest level in a month at 0.6807 following the release of US economic data. However, it later retreated, reducing its daily gains. The Australian dollar struggled to stay above 0.6800. Although the upward trend remains intact after rising in eight of the last nine trading days, it appears that some consolidation or correction is overdue. The latest data revealed that the Australian Westpac Consumer Confidence increased by 0.2% in June, in line with expectations. On the other hand, the National Australia Bank reported a larger-than-expected decline in the Business Conditions Index from 15 to 8 in May, along with a drop in the Confidence Index from 0 to -4. The most significant economic report of the week, which includes employment numbers, is scheduled for release on Thursday. It is expected to show a positive change of 15,000. The decision by the People's Bank of China to ease short-term policy rates contributed to the positive sentiment towards the Australian dollar. This move by Chinese policymakers could potentially lead to further rate cuts. Specifically, on Tuesday, the 7-day reverse repo rate was lowered by 10 basis points to 1.9%. However, the impact on commodities and Chinese equities remained limited. In the US, data indicated that consumer inflation eased in May, with the Consumer Price Index rising by 0.1% and the annual rate at 4.0%, the lowest reading since March 2021. These figures reinforced the Federal Reserve's decision to pause. On Wednesday, the FOMC will release new economic projections, and Chair Powell is expected to provide a message that might signal the possibility of more rate hikes despite recent numbers. Additionally, the US May Producer Price Index is due before the FOMC statement. The US dollar and risk sentiment will continue to be the key drivers in the next few hours. Market participants will closely analyze the inflation figures from the US ahead of the FOMC statement. If a positive tone prevails in equity markets during the Asian session and commodity prices continue to rise, the Australian dollar could strengthen. The performance of the AUD/USD pair after the FOMC statement will be crucial in determining its trajectory, particularly in the 0.6800 area. From a technical standpoint, we anticipate a potential reaction and drop to the 38.2% or 50% Fibonacci level from the previous swing low before resuming growth.
by FOREXN1
5
EUR/USD:US Inflation Annual Consumer Price Index Slows in MayIn May, the Annual Consumer Price Index (CPI) in the US is projected to show a 4.2% increase, marking a slowdown compared to April's 4.9% rise. The Core CPI inflation, which excludes volatile food and energy prices, is anticipated to grow at a slightly faster pace of 5.6% year on year, surpassing April's 5.5% growth. The forthcoming release of US CPI inflation data by the US Bureau of Labor Statistics (BLS) on June 13 at 12:30 GMT is expected to have a significant impact on the Federal Reserve's interest rate outlook and the US Dollar markets. As a result, market participants have been closely monitoring the US Dollar's performance ahead of this crucial inflation report, particularly following the mixed May Nonfarm Payrolls report. The recent string of disappointing US economic indicators has reinforced expectations of the Federal Reserve opting for a pause in its interest rate hike trajectory during its upcoming two-day policy meeting. The outcome of the US CPI inflation data could shed new light on whether the Federal Reserve, the world's most influential central bank, will align with market expectations and pause its tightening cycle. Hence, this highly anticipated economic data release is likely to significantly impact the valuation of the US Dollar. What should we anticipate in the upcoming CPI data report? According to market consensus, the US Consumer Price Index is expected to rise by 4.2% in May compared to the previous year, indicating a deceleration from April's 4.9% increase. Conversely, the Core CPI, which excludes volatile food and energy prices, is projected to advance at a slightly quicker pace of 5.6%, surpassing April's growth rate of 5.5%. On a monthly basis, the Consumer Price Index is forecasted to increase by 0.3% in May, following a 0.4% uptick in April. However, the Core CPI is expected to rise by 0.4%, maintaining the same pace as the previous month.
Short
by DAY_PROFITS
18
GBP/CAD Pair in Pullback Mode: Assessing Bullish OpportunitiesThe GBP/CAD pair is currently experiencing a pullback phase following a notable reversal at the 50% and 61.8% Fibonacci levels. This retracement suggests a temporary correction in the price movement. However, there is potential for a new bullish impulse to emerge, which could propel the price towards the 1.6900 level. If this bullish momentum continues, the pair may eventually approach the resistance level at 1.69200. Considering these factors, traders are actively seeking a long setup in this market. The pullback presents an opportunity to enter a long position, anticipating a continuation of the upward trend. Traders will closely monitor price action and key technical indicators to confirm the strength of the bullish bias and assess the likelihood of the price reaching the target level of 1.6900. It's important to exercise caution and employ appropriate risk management strategies while trading in order to navigate potential market fluctuations and optimize trade outcomes.
Long
by DAY_PROFITS
2
EUR/JPY Reaches Two-Week High on ECB-BoJ Policy DivergenceFor the second consecutive day, EUR/JPY has scaled higher, reaching a two-week high on Tuesday. The ongoing upward move is supported by the policy divergence between the European Central Bank (ECB) and the Bank of Japan (BoJ), favoring bullish sentiment. Traders are now eagerly awaiting the upcoming ECB decision and BoJ meeting before making fresh directional bets. During the early European session, the EUR/JPY cross continues its positive momentum, extending the steady climb witnessed in the previous day. The spot prices surge to over the 150.70-150.75 region, marking a two-week high. The upward trajectory of the EUR/JPY cross is driven by the increasing expectations of further policy tightening by the ECB. The shared currency benefits from this sentiment, with ECB President Christine Lagarde suggesting the likelihood of additional interest rate hikes. She stated that there is no clear evidence of a peak in underlying inflation, aligning with recent hawkish remarks from several ECB policymakers. Despite a decrease in the headline Eurozone CPI to 6.1% in May, these factors indicate that the central bank still has room to raise borrowing costs. In contrast, the BoJ is expected to maintain its dovish stance to support the economy and ensure the sustainability of recent positive signs. BoJ Governor Kazuo Ueda emphasized the need to continue with ultra-loose monetary policy until durable wage growth accompanies price increases. Additionally, BoJ Deputy Governor Masazumi Wakatabe recently expressed the overwhelming case for the continuation of ultra-easy monetary policy measures. These factors contribute to the boost in the EUR/JPY cross. However, concerns about a global economic slowdown and the possibility of Japanese authorities intervening to support the domestic currency could provide some support to the safe-haven JPY. Traders may exercise caution in placing aggressive bullish bets on the EUR/JPY cross and instead wait for the upcoming central bank events. The ECB decision on Thursday, followed by the BoJ meeting on Friday, pose significant risks. Nevertheless, considering the aforementioned fundamental backdrop, the path of least resistance for spot prices appears to be on the upside.
Long
by DAY_PROFITS
1
GBP/USD Rides High on Weaker US Dollar, but Challenges Lie AheadOn Monday, GBP/USD capitalized on the overall weakness of the US Dollar (USD) and surged to its highest level in a month, surpassing 1.2590. However, the pair now faces resistance at 1.2600, and the short-term technical outlook suggests the possibility of a downward correction before the next upward move. The positive market sentiment at the start of the week has prevented the safe-haven USD from remaining resilient against its main rivals, thereby supporting GBP/USD in maintaining a positive stance. The UK's FTSE 100 Index rose by 0.3%, while US stock index futures showed gains ranging from 0.1% to 0.3% during the European session. Earlier in the day, hawkish comments from Bank of England (BoE) policymaker Jonathan Haskel further bolstered the strength of Pound Sterling. Haskel expressed his view that it is important to counter the risks of inflation momentum and did not rule out the possibility of further interest rate increases in the future, as stated in an article published in The Scotsman newspaper. On Tuesday, the UK's Office for National Statistics is set to release labor market data, including wage inflation figures. Average Earnings Excluding Bonus, a measure of annual wage inflation, is expected to rise to 6.9% in April from 6.7% in March. Currently, the markets have fully priced in a 25 basis points (bps) rate hike by the Bank of England at the upcoming policy meeting on June 22. Therefore, if wage inflation comes in weaker than expected, it could pose challenges for Pound Sterling to outperform other currencies. Conversely, a stronger-than-forecast reading may have a short-lived positive impact on the currency. The GBP/USD pair may experience significant volatility due to the release of May inflation data from the US and Bank of England Governor Andrew Bailey's speech during the Lords Economic Affairs Committee hearing on Tuesday. From a technical analysis perspective, the pair exhibits a Gartley pattern, where there was a reversal in price followed by a recovery. This suggests a bearish setup is still plausible.
by FOREXN1
7
EUR/USD Hits Resistance at 1.0800 on Fed-ECB Policy Convergence The Euro has seen significant demand as market participants anticipate a decrease in the policy divergence between the Federal Reserve (Fed) and the European Central Bank (ECB). Despite concerns of a recession in Europe, an ECB interest rate hike is anticipated. Expectations of a softer US headline inflation due to a decrease in energy prices, while core inflation remains persistent, have contributed to the Euro's strength. This has pushed the EUR/USD pair closer to the key resistance level of 1.0800, following a strong recovery from 1.0743. This week, the Euro is expected to experience volatility as ECB President Christine Lagarde announces the June interest rate decision. Similarly, the US Dollar is likely to see increased volatility as the Federal Reserve announces its interest rate policy on Wednesday. Prior to these announcements, significant market action is anticipated in the EUR/USD pair ahead of the release of the United States Consumer Price Index (CPI) data for May. Market participants are closely focused on the US inflation data as it will provide important guidance regarding the Fed's policy. It is expected that monthly headline inflation will accelerate at a slower pace of 0.2% compared to April's 0.4% pace. However, core CPI, which excludes oil and food prices, is projected to remain steady at 0.4%. The softening of headline inflation can be attributed to the negative impact from the energy component, while core CPI is expected to show persistence due to solid demand for durables and services. A weaker reading of US CPI would strengthen the case for a neutral interest rate policy announcement by the Federal Reserve, especially considering other factors such as the unemployment rate, jobless claims, and contraction in factory activities. There are indications that the Federal Reserve may adopt a more cautious stance, as tight lending conditions imposed by US commercial banks are impeding inflationary pressures. Furthermore, President Joe Biden is set to announce the appointment of a Federal Reserve Vice Chair and fill the vacant Fed Board seat, which could influence the central bank's policy direction. Meanwhile, ECB President Christine Lagarde is expected to raise interest rates by 25 basis points (bps) to 4.25%, despite concerns of a deepening recession in Europe. The final reading of the Eurozone's Q1 Gross Domestic Product (GDP) indicated a contraction of 0.1%, largely driven by declining factory activities. Germany, in particular, has already entered a recession after two consecutive quarters of contraction. An ECB interest rate hike combined with an unchanged policy stance by the Fed would narrow the policy divergence between the two central banks. The US Dollar Index is currently defending its immediate support level of 103.35 amid positive market sentiment. From a technical perspective, the price has dipped below 1.0800, and a rebound at this resistance level with a subsequent pullback is possible.
by FOREXN1
3
USD/CHF Struggles Amid Fed Rate Hike UncertaintyThe USD/CHF pair is struggling to take full advantage of its recent strong gains. Uncertainty surrounding the Fed's interest rate hike is keeping USD bulls on the defensive and limiting the upside. Traders are also hesitant to take aggressive positions ahead of the crucial US CPI report. During the Asian session on Tuesday, the USD/CHF pair is trading within a narrow range below the 0.9100 level, consolidating the significant gains it made in the past two days. The strengthening belief that the Federal Reserve (Fed) is likely to postpone a rate hike this month continues to weigh on the US Dollar (USD) and act as a hindrance for the USD/CHF pair. It's important to note that several influential Fed officials have recently reinforced market expectations of a temporary pause in the US central bank's year-long tightening cycle. However, Fed fund futures indicate the possibility of a 25 basis point increase in the July FOMC meeting. This speculation gained traction following surprise rate hikes by other major central banks such as the Reserve Bank of Australia (RBA) and the Bank of Canada (BoC) last week, indicating that the fight against inflation is ongoing. Consequently, the USD losses are limited, supporting the USD/CHF pair. Traders are also showing reluctance to take significant positions and are waiting for the release of the latest US consumer inflation data, which will be available later during the early North American session. This critical US CPI report will impact the Fed's policy outlook and drive USD demand, potentially providing momentum to the USD/CHF pair before the FOMC policy decision on Wednesday. Furthermore, the generally positive sentiment in equity markets may weaken the safe-haven Swiss Franc (CHF) and offer some support to the USD/CHF pair. However, a slight decline in US Treasury bond yields could discourage traders from anticipating a substantial USD recovery. As a result, the pair is more likely to continue its subdued or range-bound trading pattern on Tuesday. From a technical standpoint, there is a possibility of a price pullback within the 50% and 61.8% Fibonacci levels, followed by potential growth.
by FOREXN1
7
EUR/USD Surges Amid Soft US Employment DataThe EUR/USD faced downward pressure, remaining below the 1.0800 level. However, it experienced a notable upswing on Thursday, delivering its strongest performance in weeks, primarily driven by a weakened US Dollar. The Greenback faltered across the board as softer employment data from the US emerged ahead of the upcoming FOMC meeting next week. This favorable outlook suggests the potential for further gains in the near term. Despite downward revisions in Euro area Q1 GDP, the Euro remained unaffected. The growth rate was adjusted from 0.1% QoQ to -0.1% QoQ. Growth varied across countries, with Italy and Spain displaying a 0.5% expansion, France at 0.2%, and Germany experiencing a contraction of 0.3%. These figures did not significantly alter expectations for the upcoming European Central Bank meeting. Market pricing already accounts for a 25 basis points rate hike. However, the updated macroeconomic forecasts may carry more significance. Thursday's rally in EUR/USD was propelled by a combination of factors, including a weakened US Dollar, increased risk appetite, and technical considerations. In the US, Initial Jobless Claims unexpectedly rose to their highest level since October 2021. These figures further tempered expectations of a more hawkish stance from the Federal Reserve. However, the crucial report to watch will be the release of the May Consumer Price Index next Tuesday, just a day before the FOMC decision. Interestingly, Wall Street responded positively to the negative employment numbers, boosting risk appetite and exerting additional downward pressure on the US Dollar. As we approach Friday, the highlight on the economic calendar will be a speech from ECB's Guindos. Currently, the US Dollar appears weak in the lead-up to the Asian session, potentially extending its losses after some consolidation. However, it's worth noting that a shift in market sentiment could limit the upside potential and potentially favor a sharp correction. From a technical perspective, the EUR/USD is now approaching a series of resistance levels, particularly around the 1.0800 mark, where a reversal may occur. Based on this analysis, our recommendation is to consider a short setup.
by FOREXN1
20
EUR/USD Holds Steady around 1.0750 in Quiet Market ConditionsEUR/USD is maintaining a steady position near 1.0750 as it consolidates its pullback from Friday's movement in the early hours of Monday. The main currency pair is treading cautiously, influenced by a generally stronger US Dollar and US Treasury bond yields. Market activity remains subdued as investors brace themselves for upcoming events from the Federal Reserve (Fed) and the European Central Bank (ECB). EUR/USD kicked off the new week on a positive note, making gains beyond 1.0750 during the European trading session. While the technical outlook suggests the potential for further gains in the near future, investors may adopt a wait-and-see approach ahead of key risk events scheduled for this week. The prevailing risk-on sentiment in the market is making it challenging for the US Dollar (USD) to attract significant demand at the start of the week, which is providing support to EUR/USD. The Euro Stoxx 50 Index is up nearly 1%, and US stock index futures are holding onto modest gains during the early European session. On Tuesday, the US will release May inflation data, with the Consumer Price Index (CPI) anticipated to show a 4.2% year-on-year increase, significantly lower than the 4.9% rise recorded in April. The second half of the week will see increased volatility in financial markets as the Fed and ECB announce their respective policy decisions on Wednesday and Thursday. If Wall Street's main indexes gain bullish momentum after the market opens, the USD could remain under pressure, while a reversal could occur if the opposite scenario unfolds. However, without any high-impact macroeconomic data releases to impact the currency's valuation, the market is likely to focus on the central banks' announcements. From a technical perspective, EUR/USD remains within a bearish channel, approaching significant resistance levels that may prompt a potential downward move.
Short
by FOREXN1
17
AUD/USD's Sharp Recovery Despite Consolidation BreakdownThe AUD/USD is currently experiencing bullish momentum, and we are looking to capitalize on the next upward movement using a trend-following setup. However, in terms of fundamental analysis, the AUD/USD pair is facing difficulties in sustaining its current rally above 0.6680. This rally was initially sparked by the unexpected announcement of an interest rate hike by the Reserve Bank of Australia (RBA). RBA Governor Philip Lowe raised the Official Cash Rate (OCR) by 25 basis points to 4.10%, despite the fact that Australian inflation levels are significantly below the desired target. As a result, the policy divergence between the RBA and the Federal Reserve (Fed) has narrowed. The S&P500 futures are exhibiting a subdued performance, lacking any significant triggers. The overall market sentiment is cautious as investors hold differing opinions regarding the June monetary policy meeting by the Fed. After a decline driven by weaker-than-expected United States ISM Services PMI data, the US Dollar Index (DXY) has found some support around 103.80. Interestingly, the AUD/USD witnessed a strong recovery despite breaking down from its consolidation range of 0.6563-0.6808 on a daily basis. The lack of sustained selling pressure on the Australian dollar following the consolidation breakdown contributed to this notable rebound.
Long
by FOREXN1
25
USD/JPY Shows Strong Bearish Impulse after Pullback 140.400 In terms of technical analysis, yesterday the USD/JPY experienced a strong bearish impulse after reaching the 140.400 value. This indicates a downward price change and suggests a bearish setup. On the fundamental side, the US Dollar (USD) has been recovering from a one-week low since the release of the Non-Farm Payrolls (NFP) data. This recovery is seen as a positive factor for the USD/JPY pair and is supported by the expectation of a 25 bps rate hike by the Federal Reserve (Fed) at its upcoming policy meeting. The rise in US Treasury bond yields due to this expectation continues to strengthen the US Dollar. On the other hand, the Japanese Yen (JPY) is being negatively affected by the Bank of Japan's (BoJ) more dovish stance. Additionally, the JPY's safe-haven status is being diminished by the prevailing risk-on sentiment in the equity markets, further supporting the USD/JPY pair. However, the possibility of Japanese authorities intervening in the markets limits deeper losses for the JPY and prevents significant gains for the USD/JPY pair, at least for now. Considering these factors, it is advisable for aggressive bullish traders to exercise caution and carefully evaluate before taking any further intraday bullish positions. Nonetheless, the overall fundamental backdrop suggests that the path of least resistance for the USD/JPY pair is upward. Traders are now keeping an eye on the US ISM Services PMI, scheduled for release later during the early North American session. Additionally, the movement of US bond yields, along with the broader risk sentiment, is expected to provide fresh momentum to the major currency pair.
by FOREXN1
6
EUR/USD Gains Momentum on ECB's Hawkish Stance and USD WeaknessFrom a technical perspective, the EUR/USD is currently trading within a bullish channel, and in the last hour, the price has been attempting to establish a new swing high. There is an identifiable ABCD pattern, with the D point serving as our target. The D leg corresponds to the 1.217% Fibonacci extension, located at the 1.0800 level. We are observing a potential setup for a bullish move. On the fundamental side, the Euro received a slight boost after Christine Lagarde, the President of the European Central Bank (ECB), hinted at the likelihood of further interest rate increases. This statement was prompted by the absence of clear evidence indicating that underlying inflation has reached its peak. Lagarde's remarks, coupled with recent hawkish comments from various ECB officials, have reinforced market expectations that the central bank will continue raising rates despite a decrease in inflationary pressures. It is important to note that Eurozone Consumer Price Index (CPI) figures for May showed a greater deceleration than anticipated, with a year-on-year rate of 6.1% compared to the previous 7.0%. Additionally, Core CPI declined from 5.6% to 5.3% last month. Moreover, the emergence of USD selling has contributed to a moderate intraday rebound of approximately 50 pips for the EUR/USD pair. In fact, the US Dollar Index (DXY), which tracks the performance of the Greenback against a basket of currencies, lost momentum and relinquished its modest intraday gains following the disappointing release of the US ISM Services Purchasing Managers' Index (PMI) for May, which fell to 50.3. This data, coupled with dovish rhetoric from several Federal Open Market Committee (FOMC) officials last week, has reinforced market expectations for an imminent pause in the Federal Reserve's tightening cycle. Market participants are now pricing in a higher probability of the US central bank keeping interest rates unchanged at the conclusion of its upcoming two-day policy meeting on June 14. Consequently, US Treasury bond yields experienced a significant overnight decline, keeping USD bulls on the defensive during the Asian session on Tuesday and providing support to the EUR/USD pair. However, it is worth noting that a cautious market sentiment could strengthen the safe-haven demand for the US dollar and limit gains for the Euro. Nevertheless, the aforementioned fundamental backdrop appears to favor the bulls and supports the potential for an intraday appreciation in the EUR/USD pair. Investors are now awaiting the release of German Factory Orders data and Eurozone Retail Sales figures, which could provide fresh impetus. Meanwhile, there are no significant market-moving economic data releases expected from the US, which leaves the Greenback influenced by US bond yields and overall risk sentiment.
by FOREXN1
8
GBP/JPY Maintains Bullish Momentum, Targets Higher LevelsDuring the early stages of the Asian session, the GBP/JPY currency pair experienced a modest retreat towards the 167.00 level, putting an end to its two-day streak of gains. The current exchange rate for GBP/JPY is approximately 167.16, reflecting a decline of 0.16%. Analyzing the price action, the daily chart indicates that the GBP/JPY pair maintains an overall upward bias. However, it encountered a significant resistance barrier around the 168.00 level. Despite registering consecutive days of gains, the failure to extend its rally beyond 168.00 raises concerns of potential downward pressure. Taking these factors into consideration, our analysis suggests a bullish continuation for the GBP/JPY pair, with a target set at 176.500.
Long
by DAY_PROFITS
2
EUR/USD Slips as Investors Await US Jobs Report 1.06400 TargetEUR/USD slipped slightly lower after briefly touching the 1.0800 level on Thursday as investors adopted a cautious approach before the eagerly-awaited May jobs report from the US. This report carries significant weight as it has the potential to impact the market's assessment of the next interest rate decision by the Federal Reserve (Fed). The currency pair remains within a bearish channel, and our next target for EUR could be the support area around 1.06400. On Thursday, the financial markets continued to be influenced by dovish expectations surrounding the Fed, leading to downward pressure on US Treasury bond yields and the US Dollar (USD). The US Bureau of Labor Statistics revised the initial estimate of first-quarter Unit Labor Costs, lowering it from 6.3% to 4.2%. Additionally, Patrick Harker, President of the Philadelphia Federal Reserve Bank, reiterated his belief that it is time for the central bank to take a pause in its monetary policy. The forecast for Nonfarm Payrolls in May is an increase of 190,000, following the better-than-expected rise of 253,000 recorded in April. The Unemployment Rate is expected to rise slightly from 3.4% to 3.5%, while the annual wage inflation, measured by the change in Average Hourly Earnings, is anticipated to remain steady at 4.4%. According to the CME Group FedWatch Tool, the market currently assigns a 71.5% probability to the Fed maintaining the key rate at 5%-5.25% in June. This positioning suggests that if the labor market data confirms a pause in the Fed's tightening cycle at the upcoming meeting, the USD is likely to weaken further. To realize this scenario, a disappointing NFP figure at or below 150,000 and softer wage inflation data may be necessary. Conversely, if NFP shows a rise of 250,000 or more in May, investors could reconsider the possibility of another 25 basis points rate hike. In that case, the USD could strengthen, resulting in a bearish turn for EUR/USD. It is important to note that the Fed's blackout period will commence on Saturday, during which Fed policymakers may make statements to guide market expectations, potentially increasing volatility leading up to the weekend.
Short
by FOREXN1
13
USD/JPY Eyes Fresh Sprint as Pullback Presents New OpportunitiesDuring the early North American session, the USD/JPY currency pair witnessed a surge, reaching a new high for the day around the 139.45 region. However, as it climbed to higher levels, it encountered a fresh wave of selling pressure. Consequently, spot prices swiftly retreated towards the lower end of the daily range, currently trading just above the 139.00 mark. This retreat followed the release of the monthly jobs data from the United States, which presented a mixed picture. USD/JPY pair remains within a bullish trend. and is notably a retracement in the vicinity of the 138.500 area has served as a fresh impetus for the pair's upward movement. Traders are now eyeing the D Leg extension of the ABCD pattern, which is projected to occur around the 141.500 level. This target represents the next significant milestone for the pair's upward trajectory, and investors are closely monitoring developments to assess the likelihood of reaching this level.
Long
by FOREXN1
16