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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