Headlines:

• Dollar under pressure as US CPI data looms
• Sterling gets a lift as UK jobs report vindicates another BOE rate hike
• UK May payrolls change 23k vs -135k prior
• BOE appointee Greene: It is reasonable to expect inflation to come down fairly quickly
• China reportedly considering broad stimulus package to bolster economic support
• OPEC maintains demand outlook for the year but warns on economic risks
• Germany June ZEW current conditions -56.5 vs -40.0 expected
• Germany May final CPI +6.1% vs +6.1% y/y prelim
• Spain May final CPI +3.2% vs +3.2% y/y prelim
• US May NFIB small business optimism index 89.4 vs 89.0 prior

Markets:

• GBP leads, USD lags on the day
• European equities mixed; S&P 500 futures up 0.1%
• US 10-year yields down 4.1 bps to 3.724%
• Gold up 0.4% to $1,964.37
• WTI crude up 1.8% to $68.32
• Bitcoin up 0.8% to $26,085

European trading today served more or less as a placeholder ahead of the US CPI data to come later.

The dollar dropped in the build up to the main event as markets seem to be leaning towards a softer report later in the day. EUR/USD briefly clipped the 1.0800 mark and is keeping just below its 100-day moving average of 1.0805 for now. USD/JPY is little changed though around 139.40-50 levels, despite lower Treasury yields.

The pound was a notable gainer after the UK labour market report showed a fall in the jobless rate while wages continue to run hot. That saw GBP/USD push up from 1.2530 to 1.2565 and is now keeping at the highs around 1.2575.

That saw money markets price in an additional rate hike as well for the BOE, with the terminal rate now seen at 5.75%.

Besides that, commodity currencies are also seeing a decent advance with USD/CAD down 0.2% to 1.3345 after rising yesterday on a plunge in oil prices. The key trendline support around 1.3336 is still the big technical level to watch for now.

Then, we have AUD/USD up 0.4% to 0.6780 as buyers are nearing a test of the April and May highs near 0.6800.

Equities were firmer earlier to start the session but have given back nearly all of its gains as traders appear to be squaring positions ahead of the key risk event in around 30 minutes‘ time.

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

Considering the recent hot CPI report and this
morning’s incredibly strong Employment report with
high wage growth, it is anticipated that the Bank of England (BoE) will
continue to raise interest rates in order to address one of the highest
inflation rates among the major economies. On the other hand, the Bank of Japan
(BoJ) is expected to maintain its accommodative monetary policy this week,
which has played a role in the significant depreciation of the Japanese Yen
(JPY) over the past two years.

This divergence in monetary policies has led to a
strong upward movement in the GBPJPY pair. It appears that only concerns about
a potential global economic downturn can cause the pair to decline, otherwise
the BoJ will need to switch to a hawkish stance to defend the JPY depreciation.

GBPJPY Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the buyers keep
leaning on the moving averages to
position for more upside on the GBPJPY pair. The recent hot inflation data from
the UK and the high wage growth should keep the BoE on track to increase
interest rates.

GBPJPY Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we have a big divergence with the
MACD going on,
which is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, we only got some shallow pullbacks, and a reversal is
unlikely to occur at least until we get a fundamental catalyst that points to a
recession or the BoJ becomes hawkish.

GBPJPY Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price has recently bounced from a support near
the 174.50 level where we had also the 38.2% Fibonacci
retracement level for confluence. The
big spike today is because of the strong employment report and unless we get
bad US CPI data today, we should keep seeing the GBPJPY pair rallying.

This article was written by ForexLive at www.forexlive.com.

Market picture

The crypto
market cap rose 1% in 24 hours to $1.06 trillion. Bitcoin adds 1%, while Ethereum
just 0.4%. Meanwhile, the top altcoins try to recover some losses, adding
between 0.2% (Cardano) and 4% (BNB). The cryptocurrency Fear & Greed Index
is in the Fear territory at 45 (-2 points overnight), whereas the Fear &
Greed index for the stock market is at 79 (extreme greed).

Bitcoin is
struggling for a third day to hold above $26K. This struggle away from
meaningful technical levels shows how heavy the crypto market is right now,
despite optimism in equities and a slightly decreased USD rate. Technically, to
break the downtrend, Bitcoin needs to overcome $27K, and a drop below $26.5K is
required to confirm the downtrend. The second scenario seems more likely.

According to
CoinShares, investments in crypto funds fell by $88 million last week, the most
in three months and the eighth consecutive week of outflows. Bitcoin fell by
$52 million and Ethereum by $36 million.

According to
Glassnode, outflows from Coinbase and Binance reached $4 billion during the
week. Crypto traders, spooked by SEC lawsuits, are withdrawing assets from exchanges
en masse.

News background

According to
CryptoQuant, bitcoin reserves on US crypto exchanges have fallen below the 50%
– levels last seen in 2017. Assets are flowing to overseas exchanges due to
regulatory uncertainty and recent SEC actions against Binance and Coinbase.

Binance’s
share of the cryptocurrency market has fallen to 43%, according to analyst firm
CCData. Trading volume in the crypto market fell 15.7% m/m in May.

Polygon
developers defended their MATIC cryptocurrency, disagreeing with the SEC’s
characterisation of it as an unregistered security. The Solana Foundation also
criticised the SEC’s decision. Robinhood had previously announced its intention
to delist MATIC, ADA, and SOL.

North Korean
hackers have stolen $3 billion in cryptocurrency over the past five years to
fund the country’s nuclear programme, the Wall Street Journal reported.

This article was written by FxPro’s Senior Market Analyst Alex
Kuptsikevich.

This article was written by FxPro FXPro at www.forexlive.com.

• World oil demand to rise by 2.35 mil bpd in 2023 (no change to previous forecast)
• China oil demand to rise to 840k bpd (up from 800k bpd previously)
• Sees world economic growth at 2.6% this year
• But there are rising uncertainties amid high inflation, rising interest rates
• It is also still unclear how and when Easter Europe geopolitics might be resolved

After the surprise output cuts, oil prices suffered a bit of a hangover and then a big plunge yesterday. It is making up for some lost ground today though, with WTI now up 1.9% to $68.40. That comes off a bounce of its 200-week moving average again, seen at $67.31 currently. That remains the key technical support level for oil since March.

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

The recent beat in the non-farm payrolls (NFP) data, followed by concerning
factors like a higher unemployment rate and fewer average weekly hours, has
resulted in a weakening of the USD. The market has adjusted its hawkish
expectations to less hawkish ones because a looser job market can help reduce
inflation. Additionally, the disappointment in the ISM Services Purchasing Managers‘
Index (PMI),
particularly in the lower prices paid sub-index, has further contributed to the
expectations that core inflation may soon start to normalise.

The significant miss in US jobless claims was taken with a grain of salt due
to seasonal adjustments. Continuing claims have shown even greater improvement,
indicating that people are finding jobs relatively quickly after being
unemployed. Overall, the strong hawkish sentiment observed in May due to
positive economic data has recently started to reverse. This change in
sentiment occurred as Federal Reserve members expressed a preference to hold
off on major actions during the upcoming Federal Open Market Committee (FOMC)
meeting and the misses in the data.

NZDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the big
reversal in hawkish expectations for the June FOMC meeting led the NZDUSD to
pullback into the downward trendline where we
can also find the red 21 moving average. This is
a key resistance level
and we will likely see the sellers leaning on this trendline to position for a
selloff towards the previous low at 0.6000. The buyers will need to break above
the trendline to extend the rally to new highs.

NZDUSD Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we also have
some confluence from the
50% Fibonacci retracement level
and the psychological 0.6150
level. This is a good spot for the sellers to position for more downside from
here. The buyers will need to break above the trendline to get the conviction
to target new highs.

NZDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price is diverging with
the MACD
trading into the trendline. This is generally a sign of weakening momentum
often followed by pullbacks or reversals. In this case, a divergence here may
be significant and increases the odds of the bearish setup. Anyway, today’s
data will decide where the NZDUSD will go next.

This week is packed with many significant events,
starting with the release of the US Consumer Price Index (CPI) report today.
This report is expected to strongly influence expectations for tomorrow’s
Federal Open Market Committee (FOMC) rate decision and the next meetings. The most
straightforward scenarios are likely to be a rally in the NZDUSD pair if the
CPI data misses across the board and a selloff in case the data beats on all
fronts. The market is likely to pay more attention to the Core CPI, making it
the most critical measure to monitor.

Moving on to later in the
week, we have the release of the Jobless Claims report and the University of
Michigan consumer sentiment survey. During the previous release of the consumer
sentiment survey, there was a substantial rise in long-term inflation
expectations, which significantly impacted the market. Consequently, if this
survey fails to meet expectations, it would be viewed as positive news for NZDUSD.

This article was written by ForexLive at www.forexlive.com.