BoJ Quarterly Survey Shows Households Pessimistic on Inflation

German CPI m/m 0.4% vs 0.4% expected

U.K. GDP m/m 0.1 vs 0.1% expected

ECB’s Stournaras Supports Divergence from the Fed’s Policies

French CPI m/m 0.2 vs 0.2% expected

Spanish CPI m/m 0.8% vs 0.8% expected

USD/JPY hits highest level since mid-1990 at 153.34

ECB’s Muller says Slower Inflation Rises the Chances of a June Rate Cut

ECB survey shows inflation expectations unchanged across all horizons.

Fed Collins: Rate Hike not Part of Baseline but Not Fully Ruled Out

Markets:

The Dollar continued its strengthening during the European session, but a correction is likely.

Crude oil also rises due to geopolitical events.

Gold reached record highs.

USD/JPY trading near 153.30.

European bourses were in the green today.

This article was written by Gina Constantin at www.forexlive.com.

BoE should de-emphasise the central forecast based on market interest rate expectations.

Fan charts should be eliminated and uncertainty conveyed in a more qualitative way.

Central forecasts should be augmented with topical scenarios.

Bank of England’s main forecast model should be replaced or thoroughly revamped.

Incremental quarterly updates to BoE forecasts may slow recognition of bigger structural changes.

This article was written by Gina Constantin at www.forexlive.com.

New Loans 3,090.0B vs 3,700.0B expected; prior 1,450.0 trillion yuan ($201.5 billion).

Outstanding Loan Growth y/y 9.6% vs 9.9% expected; prior 10.1%.

Chinese Total Social Financing 4,870.0B vs 4,700.0B expected; prior 1,560.0B.

This article was written by Gina Constantin at www.forexlive.com.

• The Fed left interest rates unchanged as expected at the last meeting with basically no
  change to the statement. The Dot Plot still showed three rate cuts for 2024 and
  the economic projections were upgraded with growth and inflation higher and the
  unemployment rate lower.
• The US CPI beat expectations for the third
  consecutive month, while the US PPI came in line with forecasts.
• The US NFP beat expectations across the board
  although the average hourly earnings came in line with forecasts.
• The US ISM Manufacturing PMI beat expectations by a big margin with
  the prices component continuing to increase, while the US ISM Services PMI missed with the price index dropping to
  the lowest level in 4 years.
• The market now expects the first rate cut in
  September.

AUD

• The
  RBA left interest rates unchanged as expected at the last meeting and
  finally dropped the tightening bias.
• The
  last Monthly CPI report came in line with
  expectations although the underlying inflation measure increased from the prior
  month.
• The
  latest labour market report missed expectations by a big
  margin.
• The
  wage price index surprised to the upside as wage
  growth in Australia remains strong.
• The
  latest Australian PMIs showed the Manufacturing PMI falling
  further into contraction while the Services PMI continue to increase and remain
  in expansion.
• The
  market expects the first rate cut in August.

AUDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that AUDUSD got
rejected by the key 0.6623 resistance and sold
off all the way back to the key support zone around the 0.65 handle. Today the
price broke down and the sellers are now targeting the 0.6443 low. That’s where
we will likely find the buyers stepping in with a defined risk below the level
to position for a rally back into the 0.6623 resistance.

AUDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price
yesterday bounced on the 0.65 support zone but got rejected by the minor
resistance zone around the 0.6550 level where we had also the 38.2% Fibonacci retracement level
for confluence. The
sellers stepped in with a defined risk above the zone to position for a drop
into the 0.6443 low and increase the bearish bets as soon as the price broke
down. The buyers might try to step in around the recent low at 0.6480, although
the 0.6443 level looks much better from a risk management perspective.

AUDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price is starting to diverge
with the MACD
as it approaches the 0.6480 low. This is generally a sign of weakening momentum
often followed by pullbacks or reversals. In this case, it might be a signal
for a bounce on the low, but the sellers will likely sell an eventual rally
into the trendline to position for a break into new lows.

Upcoming Events

Today we conclude the week with the University of
Michigan Consumer Sentiment Survey.

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

This article was written by Gina Constantin at www.forexlive.com.