The USD last week got a
boost from the strong US Consumer Confidence data which triggered an aggressive
rise in long term Treasury yields. The report however just showed that the
labour market remains resilient which is good news for growth and not
necessarily bad news for inflation. Eventually, both the Treasury yields and
the greenback gave back the gains as it became clearer that the price action got
impacted more by the month-end flows rather than a fundamental driver.

The CHF, on the other hand,
got a boost from SNB’s
Jordan comments where he said that if upward risks to Swiss inflation were
to materialise, these would most likely be associated with a weaker franc,
which could be counteracted by selling foreign exchange reserves (buying CHF).
On top of that, we got a selloff in the US Dollar across the board as the risk-on
sentiment returned.

USDCHF
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCHF sold off all the way back to the key support
around the 0.90 handle. This is where we can expect the buyers to step in with
a defined risk below the support to position for a rally into the 0.9250 level.
The sellers, on the other hand, will want to see the price breaking lower to
invalidate the bullish bias and increase the bearish bets into the 0.88 handle.

USDCHF Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have an important zone around the 0.91 handle where the price reacted
to several times in the past few weeks. If the pair gets there, we can expect
the sellers to lean on that resistance zone with a defined risk above it to
position for a break below the 0.90 support with a better risk to reward setup.
The buyers, on the other hand, will want to see the price breaking higher to
increase the bullish bets into the 0.9250 level.

USDCHF Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have the upper limit of the average
daily range right around the most recent swing high level at 0.9070. This
should strengthen the case for a strong resistance around the 0.9070 and 0.9100
price region ahead of the Swiss CPI release and give the sellers a good point
where to lean on. The buyers will need to break above that zone to turn the
bias around and extend the rally into new highs.

Upcoming
Catalysts

Today we have the US ISM Manufacturing PMI. Tomorrow, we get the Swiss CPI
and the US Job Openings data. On Wednesday, we have the US ADP and the US ISM
Services PMI. On Thursday, we get the latest US Jobless Claims figures, while
on Friday we conclude the week with the US NFP report.

A downside
surprise in the Swiss CPI should see the market getting a bit more confident
for another rate cut in June and might weigh on the currency in the short-term.
On the other hand, an upside surprise might give the Swiss Franc a bigger boost
as the market should price out both the chances of a rate cut in June and
expect the central bank to prop up the currency.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Commodities have been some of the best trades so far this year, especially when it comes to metals. In the precious metals space, we have seen gold and silver especially rip higher in recent months. But can they continue their form into June? Here is what the seasonal pattern has to say.

In the case of gold, there isn’t anything too interesting. But for silver, this is how the precious metal has fared over the last 20 years:

June has been the worst performing month for silver during this period, with it falling in 15 out of the last 20 June months. That is typically followed by a stronger July though.

So, how does that play out against what we’re seeing on the charts?

Silver has recently struggled to firmly seal a firm break above the $32 mark. Since then, it has been dragged lower but buyers are holding at support around the $30 mark. The precious metal is down 0.5% to start the month today, with the low earlier hitting $29.78.

As things stand, support at $30 alongside the 38.2 Fib retracement level of the run higher in May at $30.03 is the key level to watch right now. Break below that and there is scope for the pullback in silver to run much deeper, accompanying what we’re seeing in the seasonal pattern.

Besides silver, oil is also one that has a more interesting seasonal pattern for June.

Historically, oil tends to enjoy a modest string of gains from April to June. And after, that sees oil get dragged into more of a bump road until the end of the year. So, this gives the commodity a more interesting outlook for the month ahead.

Over the weekend, OPEC+ surprised with a clear and concise plan of how they are going to go about with their current production cuts. The plan now is to extend those cuts through to the end of next year and to slowly taper them starting from October. Eamonn had the details earlier here.

It’s a rare occasion that the cartel managed to come together but the bottom line is that the big boys are planning to get more production back on the market in due time. That’s not too bullish for oil prices but OPEC+ might be overestimating the outlook for the global economy for now. They have been the only one with such a view but that has been vindicated by a stronger performance in Q1 at least.

From a technical standpoint, oil has been trading within a bit of a range since May. The range is holding around $76.50 to $80.00 with the 200-day moving average at $79.80 currently also one that is limiting stronger upside. The next trending move for oil will come on a break of that range as such. So, we’ll see if prices will keep with the seasonal suggestion or buck the trend.

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

• Final Manufacturing PMI 51.2 vs.51.3 expected and 49.1 prior.

Key findings:

• Manufacturing PMI at 51.2 in May.
• Output rises across all main sub-sectors and
  size categories.
• Business optimism springs to 27-month high.

Comment:

Commenting on the latest survey results, Rob Dobson,
Director at S&P Global Market Intelligence, said:

“May saw a solid revival of activity in the UK manufacturing
sector, with levels of production and new business both
rising at the quickest rates since early-2022. The breadth
of the recovery was also a positive, with concurrent output
and new order growth registered for all of the main sub-
industries (consumer, intermediate and investment goods)
and all company size categories for the first time in over two
years.“

„While the latest upturn was dependent on a strengthening
domestic market, there were signs of overseas demand
also moving closer to stabilisation. Business optimism rose
in tandem with the improvement in current conditions, with
63% of manufacturers forecasting their output to be higher
one year from now.“

“The latest PMI survey data provided a mixed picture for
price pressures at manufacturers, however. At the factory
gate, output charge inflation strengthened for the fifth
successive month and to its highest level in a year. That said,
a solid easing in the rate of increase in input costs should
help prevent price pressures from becoming embedded.”

This article was written by Giuseppe Dellamotta at www.forexlive.com.