• Nvidia earnings boost the S&P 500. What’s next?
• Eurozone Q1 wages come in hotter than the previous quarter
• Eurozone May flash services PMI 53.3 vs 53.5 expected
• Germany May flash services PMI 53.9 vs. 53.5 expected
• France May flash services PMI 49.4 vs 51.7 expected
• UK May flash services PMI 52.9 vs 54.7 expected
• HSBC, Deutsche now expects BOE to only start cutting rates in August
• Morgan Stanley the next to revise BOE rate cut call to August from June previously
• Commodities brace for a stronger pullback after the rough showing yesterday

Markets:

• NZD leads, USD lags on the day
• European equities higher; S&P 500 futures up 0.6%
• US 10-year yields down 1.2 bps to 4.421%
• Gold down 0.4% to $2,368.01
• WTI crude up 0.8% to $78.20
• Bitcoin up 0.5% to $69,730

The dollar is lagging in trading today as the overall risk mood is propped up by Nvidia’s earnings beat after the close yesterday. US futures are pointing higher with tech shares leading the way. And that is helping to boost risk assets as well.

During the session, we also got euro area and UK PMI data. The former was a mixed bag but the sluggish French readings were offset by slightly better readings in Germany. EUR/USD fell initially to 1.0813 before finding a bounce off its 100-day moving average as well to 1.0840 levels now.

Meanwhile, the UK figures were less than ideal but GBP/USD is still seen up 0.1% to 1.2727 after a brief drop to test its 100-hour moving average at 1.2708.

Overall, the dollar is looking sluggish as the push and pull this week continues to play out. AUD/USD is up 0.2% to 0.6633 while NZD/USD is up 0.4% to 0.6121, buoyed by the better risk sentiment.

In other markets, commodities are continuing to struggle after yesterday’s rough showing. Gold is down 0.5% to $2,367 with the low earlier touching $2,355. Meanwhile, copper futures fell to a low of $4.74 earlier but is now back to $4.81 after a 6% drop yesterday – its worst showing since the pandemic.

Let’s see what the US PMI data later has to offer next.

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

The euro area PMI data was a bit mixed but at the balance, it was salvaged by the better German PMI figures. That continues to give the ECB a bit of breathing room after their impending June rate cut at least. That is helping the euro a tiny bit with the dollar also looking sluggish amid a better risk mood today.

Equities are keeping higher as the mood music is buoyed by Nvidia’s earnings beat after the close yesterday. That is helping to see the aussie and kiwi hold higher against the dollar as well.

Going back to EUR/USD, the pair fell to test its 100-day moving average (red line) after the French PMI data earlier. But since then, it has caught a bounce to trade back up to 1.0845 currently.

So, what’s next for the pair?

From a technical perspective, the pair is seeing layers of support from 1.0800-14 with the 200-day moving average (blue line) just under that as well as 1.0787. Those will be crucial in keeping any downside momentum from gathering pace for the time being.

As for the upside, there is modest daily resistance from the April high at 1.0885. And that is limiting any upside momentum for now.

So, something has to give on either side of those levels in order for the next trending leg to come by.

From a fundamental perspective though, the euro still has to figure things out on what the ECB is going to do after June. And that might take a while to sort out depending on inflation developments in the months ahead.

On the dollar side of the equation, it’s all about big data. And there is the US PMI readings to watch later at least.

That aside, it’s a tall order for traders to price in anything beyond two rate cuts for the Fed this year. That is likely to put a floor on any dollar declines until the Fed narrative changes. Currently, traders are back to pricing in ~40 bps of rate cuts for the year.

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