Throughout the previous
week, we heard from central bank speakers. The prevailing consensus remains the
same: a cautious approach awaiting further data before determining the extent
of additional tightening. While the majority of the FOMC members expect two
additional rate hikes in the current year, they consistently highlight their
data-dependent approach. The data from last week leans towards supporting a
rate hike, as the housing market indicators surprised to the upside, the US Jobless Claims remained stable, and the US Services PMI were stronger than expected. Naturally,
the upcoming NFP and CPI reports will have a crucial role in shaping future expectations
but if we continue to see positive data, the market’s expectation of a rate
increase by the Fed in July appears highly likely.

AUDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that since tapping
into the 0.69 handle, AUDUSD sold off pretty heavily into the 0.67 handle where
we can also find the red 21 moving average and the
50% Fibonacci retracement level.
This is where we should expect buyers to come in to try another rally towards
the 0.69 high. A failure to do so, should lead to a depreciation into the
0.6563 support.

AUDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that after breaking
below the rising channel, the bullish trend switched to a bearish one as the
moving averages have also crossed to the downside. At the moment, the price is
getting rejected by the strong resistance near the trendline as there
is confluence with the
38.2% Fibonacci retracement level and the red 21 moving average.

AUDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the current price action and the clean rejection from the Fibonacci
level. The buyers are likely to lean on the support zone near the 0.6680 level
with a defined stop below the low and target the 0.69 handle again. More
conservative buyers may want to wait for the price to first break above the
trendline before piling in and extend the rally towards the 0.69 high. On the
other hand, the sellers should pile in even more aggressively if the price
break below the 0.6660 level and target the 0.6560 support.

The data calendar
for this week is relatively light, featuring only the US Jobless Claims on
Thursday, followed by the US PCE on Friday. However, despite the limited data
releases, we will still hear from many central bank members throughout the
week.

This article was written by FL Contributors at www.forexlive.com.

Headlines:

• ECB turns a blind eye to recession risks for now
• ECB’s Lagarde: Inflation remains too high
• ECB’s Kazaks: Market bets on rate cuts in early 2024 are wrong
• ECB’s Simkus: Should not rule out the option of a September rate hike
• BOE’s Dhingra: UK wages are responding to inflation with a lag
• Morgan Stanley sees Fed hiking rates by 25 bps in July

Markets:

• EUR leads, JPY lags on the day
• European equities mixed; S&P 500 futures up 0.1%
• US 10-year yields flat at 3.721%
• Gold down 0.1% to $1,921.59
• WTI crude down 1.8% to $68.15
• Bitcoin up 1.7% to $30,668

It was a relatively quiet session as there wasn’t any economic data for market players to work with. But we did hear from some ECB speakers, and they continued to push through with a more hawkish rhetoric as they reaffirmed the rate hike for July.

That more or less is akin to brushing aside the poor economic data since Friday and that is seeing the euro gain some modest ground on the day. EUR/USD is up 0.4% to 1.0945 but the rest of the major currencies bloc is looking more subdued.

USD/JPY and GBP/USD are keeping in narrow ranges with the former flat at 143.55 with the latter up just 0.1% to 1.2725 currently.

EUR/JPY though is among the standout today as it jumps up to above 157.00 to its highest since 2008.

Meanwhile, the aussie and kiwi were initially upbeat in Asia, after China decided to intervene to prop up the yuan today. AUD/USD was up to around 0.6720 in the handover to Europe but is now trading just up 0.2% at 0.6680.

This comes as risk tones are also keeping more stale after a bit of an optimistic start. It looked like markets were wanting to take a bit of a breather but European stocks are now trading mixed with some major indices sitting lower. Treasury yields have also pared their early advance and that hints at more caution ahead of US trading again.

This article was written by Justin Low at www.forexlive.com.

In case you missed the headlines from yesterday and today:

• ECB’s Kazaks: Market bets on rate cuts in early 2024 are wrong
• ECB’s de Cos: We will raise interest rates again in July
• ECB’s Simkus: At least one more rate hike required
• ECB’s Simkus: Should not rule out the option of a September rate hike
• ECB’s Lagarde: Inflation remains too high

Given the circumstances, it is not too surprising to see policymakers brush off the weaker economic performance towards the end of Q2. They have already signaled a rate hike for July, so there is no backing down now.

If you recall, the euro fell on Friday after the poor PMI figures for June here. And as the ECB brushes off those risks, we are seeing the single currency regather some poise this week. EUR/USD is up 0.4% to 1.0945 currently, also helped out by a calmer market mood and a marginally softer dollar.

But if you want a clear signal of policy conviction, you only have to look towards EUR/JPY as the divergence between the ECB and BOJ has sent the pair higher again to fresh highs since 2008:

This also comes as yen bulls have grown increasingly frustrated awaiting a pivot under the Ueda regime, which hasn’t come whatsoever since April.

This article was written by Justin Low at www.forexlive.com.

Over the past week, many central
bank speakers have shared their perspectives. The prevailing consensus remains
unchanged: a wait-and-see approach is favoured to gauge the necessity of
further tightening. While the majority of the FOMC expects two additional rate
hikes this year, they consistently highlight that such decisions are subject to
the data. The latest data from last week leans towards a hike though as the housing market indicators surprised to the upside, the US Jobless Claims remained pretty stable, and the US Services PMI beat forecasts.

Naturally, the upcoming
release of the NFP and CPI reports will have a pivotal role in shaping future
actions but as long as we keep seeing positive data, it is likely that the
market’s current expectation of a rate increase by the Fed in July will be
realized. On a different note, the BoC surprised with a rate hike at the last meeting citing
stubbornly high inflation with the market expecting another hike from the BoC
all else being equal.

USDCAD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that after breaking
below the key 1.3225 support, USDCAD
kept on falling with the 1.30 handle being the likely target for the sellers.
The trend has been really strong as the price couldn’t even probe above the
short-term blue 8 moving average. The
trend is clearly bearish, so it’s a tricky environment for the buyers. In fact,
they should have much more conviction if the price rises above the 1.3225 level
again.

USDCAD Technical Analysis –
4 hour Timeframe

On the 4
hour chart, we can see that the price has been diverging with the
MACD for a
long time. This is generally a sign of a weakening momentum often followed by
pullbacks or reversals. In fact, USDCAD kept on pulling back into the trendline and
continuing its downtrend. We can expect the price to pull back again into the
trendline soon which will be another opportunity for the sellers to re-enter
the market or an opportunity for the buyers to ride a reversal in case the
price breaks above the trendline.

USDCAD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
last pullback got rejected at the 1.3225 support turned resistance and the
61.8% Fibonacci
retracement level. Today we have the Canadian CPI and
if we see a miss, we should see USDCAD rally towards the trendline and possibly
even higher. On the other hand, if we see a beat, we may see another push to
the downside.

This week is a
bit bare on the data front but today we have the Canadian CPI that may have a
big impact on the pair depending on the outcome. Later in the week we have the
US Jobless Claims on Thursday and the US PCE scheduled for Friday. We will also
hear again from many central bank members.

This article was written by FL Contributors at www.forexlive.com.

There was a report yesterday stating that OPEC were had invited Guyana, one of the more faster growing oil producers globally at the moment, to join its cartel. However, that was swiftly denied by the country itself:

„We were not formally invited to join OPEC. That is not something we are interested in. We have been invited, however, to participate in OPEC meetings.“

I guess there might be some words lost in translation but for now, it is clear that there is no change to the status quo just yet.

This article was written by Justin Low at www.forexlive.com.