The buyers in the NZDUSD tried to break higher on Friday, moving above a key 200 hour MA on the hourly chart and swing level on the daily chart. However, momentum failed and the price rotated lower.

Prior to the rally on Thursday and Friday, the price did break below the 50% midpoint of the range since 2021 low on the daily chart opening the door for lower levels. That break also failed leading the snap back rally higher.

So for the week, the sellers had their chance, and the buyers had their chance. Both failed.

As a result, the price is back in a neutral area in the short term and waiting for the next shove.

Find out the key levels in play that will give traders clues in the new trading week.

This article was written by Greg Michalowski at www.forexlive.com.

The GBPUSD moved higher into the jobs report on Friday, but fell as yields moved higher and so did the USD. The GBPUSD fell to a support level on the hourly chart, but maintained hope for more upside from the look from the daily chart.

Monday should give traders some technical clues on who might win the next battle. The video will outline the key levels in play for the pair.

This article was written by Greg Michalowski at www.forexlive.com.

The AUDUSD made new cycle lows this week, but bottomed midweek and moved higher on Thursday and Friday. The move back to the upside took the pair back into a „red box“ that confined price action for 3-months. The break failed. The buyers returned.

However, the run to the upside on Friday ran into resistance against the high of a swing area on the daily chart, and a key retracement level on the hourly chart (the May trading range).

So as we head into the new week, there is key resistance on the top and key support on the downside as well and both the daily and hourly charts support those levels for different reasons.

Find out why those levels are key and where they are in this video.

Be aware. Be prepared.

This article was written by Greg Michalowski at www.forexlive.com.

Greg Michalowski of Forexlive.com takes a deep into the technicals defining the bias, risk and key targets for the USDJPY heading into the new trading week starting June 5, 2023. In the report, he looks at the daily chart and then drills into the hourly chart.

Get your week started on the right foot by understanding what levels are key and in play for the USDJPY. .

This article was written by Greg Michalowski at www.forexlive.com.

The USDCHF sellers had their shot on Friday on the break of the 200-hour MA, but could not sustain momentum. The better US jobs report started the wheels in motion for a move back to the upside. That took the price back above the 200 and 100-hour MAs in the process (at 0.90564 and 0.90718 respectively).

However, there is also key upside target resistance at 100-day MA and the 50% retracement of the 2023 trading range both at 0.9126. That level will be targeted next week and would need to be broken and stay broken, if the buyers are to take more control.

This article was written by Greg Michalowski at www.forexlive.com.

The key move technically in the USDCAD last week, was the move back below the 100 and 200 day MAs. That tilted the bias more to the downside for the pair from a technical perspective.

The other thing of note from the daily chart is the convergence of the 100/200-day MAs. That is indicative of a non-trending longer-term market which could be a clue for a break outside of the range… soon. Non-trend transitions to trend.

The video will outline the levels that would keep the bearish bias and potentially lead to a break outside the up and down trading range in the USDCAD pair.

This article was written by Greg Michalowski at www.forexlive.com.

• US May non-farm payrolls +339K vs +190K expected
• Fitch says will resolve US negative ratings watch in Q3
• Timiraos: Non-farm payrolls won’t resolve Fed rate scenarios
• OPEC+ is considering an additional output cut of around 1 mbpd – report
• OPEC will debate additional cut among possible options – report
• Iraq oil minister: We will not hesitate to take any decision to create more balance
• Baker Hughes oil rig counts fall -15 to 555 in the current week

Markets:

• Gold down $29 to $1948
• WTI crude oil daily +$1.85 to $71.93
• S&P 500 up 62 points to 4289
• US 10-year yields up 8.3 bps to 3.69%
• US 2-year yields up 16 bps to 4.50%
• AUD leads, JPY lags

Non-farm payrolls beat the consensus estimate for an unprecedented 14th time and it beat it in a big way but

Non-farm payrolls beat the consensus estimate for an unprecedented 14th time and it beat it in a big way but the details told a different story and capped the dollar gains, at least initially. The unemployment rate jumped to 3.7% from 3.4%, wage growth was modest and the household survey showed a large drop in employment, particularly self-employment.

Initially, the dollar gave back almost all its gains but a second dollar bid arrived later as yields rose. Front end yields led the rise and my guess is that represents a dwindling possibility of a Fed overtightening error and a higher possibility of a soft landing.

For months now, the bond market hasn’t been concerned about inflation and has instead been pricing rates and growth. With the Fed set to skip a meeting and perhaps pause, there’s less of a chance of a yo-yo in policy where they hike too high and are forced to quickly cut.
Or at least that’s one way of looking at a market that’s been tough to explain over the turn of the month.

Dollar buying accelerated in the final hours of European trading with the euro, pound and yen falling hard.
The commodity currencies kept pace with the US dollar as stocks – and value stocks in particular – jumped.

Again, that could be an indication that markets are pricing in better global growth outcomes and along with that was the earlier report that China was planning some targeted real estate stimulus. Before NFP, the market was hesitant to react to that report. For me, the details (like cutting real estate commissions) are underwhelming but at least they show that Beijing is paying attention to its disappointing economy.

Later in the day, the loonie found some bids alongside oil as some OPEC reports about the possibility of a 1 mbpd cut on Sunday did the rounds. The market reaction in oil was tepid to those headlines and that shows it’s at least partly priced in already.

Have a great weekend.

This article was written by Adam Button at www.forexlive.com.

It was time for the laggard indices to take control today. Both the Dow industrial average and the Russell 2000 of small-cap stocks outperformed the NASDAQ which is been the big outperformer in 2023.

The final numbers for the day are showing:

• Dow industrial average rose 797 points or 2.12% at 33762.59. That was the strongest percentage gain since January 6 when that index rose 2.13%
• S&P index rose 61.34 points or 1.45% at 4282.35. The S&P is closing the 2nd week in a row above its 100-week moving average (at 4199.50). The gain today was the largest sense May 5.Bullish.
• NASDAQ index rose 139.77 points or 1.07% at 13240.76. The low price this week in the NASDAQ stalled right against its 100-week moving average at 12889.20. The high price and close extended above the fit percent midpoint of the move down from the all-time high in 2022 at 13150.53. Bullish.
• Russell 2000 index of small-cap stocks surged 62.96 points or 3.56% to 1830.905. That gain was the largest since November 10, 2022 when the index soared by 6.108%

Year to date, the Russell 2000 and Dow Industrial Average have lagged the other broader and tech heavy indices. For the 2023 trading year

• Dow Jones industrial average is up 1.86%
• S&P index is up 11.54%
• NASDAQ index is up 26.51%
• Russell 2000 is up 3.95%

For the trading week, the snapshot shows:

• Dow Jones industrial average up 2.02%
• S&P index up 1.83%
• Nasdaq up 2.04% and up for the 6th consecutive week.
• Russell 2000 up 3.26%

A good day for all US indices and a good week as well.

This article was written by Greg Michalowski at www.forexlive.com.

On the
daily chart below, we can see that the big bullish wave in USDJPY stalled a few
days ago as we reached peak hawkishness and then got an unwind due to some Fed members hinting to a pause in
June. The bias remains bullish though as the price would need to break below
the upward trendline to change the trend and make the moving average to cross
downwards. Right now, we can see that USDJPY is approaching a nice support
level at 138.16 where we can also find the red 21 moving average.

USDJPY Technical
Analysis

On the 4
hour chart below, we can see that the price was already signalling weakness in
the bullish momentum as the price started to diverge with the
MACD into the
140 handle. Once we got the breakout of the rising channel and the moving
averages crossed to the downside, USDJPY just kept on falling also helped by yesterday’s
softness in the ISM Manufacturing PMI and Unit Labour Cost reports.

The
buyers are likely to lean on the 138.16 support where we can find the 38.2% Fibonacci retracement level.
However, if we get a break to the downside and the price falls more, we will
have an even stronger support near the 137 handle where we have the confluence of the
trendline and the 61.8% Fibonacci retracement level.

On the 1
hour chart below, we can see that the short-term trend is bearish as we are
making lower lows and lower highs. As long as USDJPY doesn’t break above the
downward trendline, the bearish trend remains intact. So, as highlighted
before, we have 3 different entry opportunities for the buyers:

• More
  aggressive buyers should lean on the 138.16 support and the
  38.2% Fibonacci retracement level with a defined risk just below it.
• If this
  support fails, they can try again at the upward trendline and the
  61.8% Fibonacci retracement level.
• More
  conservative buyers, may want to wait for the price breaking above the downward
  trendline to join the bullish wave and target the 142 handle.

The
sellers, on the other hand, are likely to pile in at every breakout:

• If the
  price breaks below the 138.16 support, the sellers will jump onboard to ride
  the selloff into the trendline.
• On a
  break below the upward trendline, the sellers will pile in more aggressively as
  the trend is likely to change at that point and the target will be the 127.20
  low.

The spotlight today will be
on the US NFP report, with various potential scenarios that could unfold:

• If
  the data surpasses expectations, along with higher-than-anticipated average
  hourly earnings, it is likely to increase the chances of a rate hike in June
  and perhaps even price in some probability of a rate hike in July. This
  particular scenario may raise concerns within the market regarding a possible wage
  price spiral.
• Conversely,
  if the data is positive but falls short of expectations in terms of average
  hourly earnings, it is expected to further weaken the USD, as it would not have
  a significant impact on rate expectations and could even trigger soft landing
  vibes.
• If
  the data falls short of expectations across the board, it will be viewed as
  negative news and could potentially induce risk aversion in the markets,
  leading to lower Treasury yields and more bids in JPY. Moreover, based on
  recent comments from Fed officials, we might witness the USD weakening also due
  to diminished expectations of future interest rate hikes.

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

Fed funds futures are showing roughly 71% odds of the central bank not hiking rates in June now. Mind you, it was roughly 70% in favour of a rate hike at the start of the week. That’s a complete U-turn in terms of pricing as Fed policymakers delivered a somewhat coordinated message that they might very well „skip“ a rate hike this month.

And when you consider the balance of the situation now, the risks seem to be favouring further downside for the dollar rather than any major upside as we head into the US jobs report later today.

In the event that the numbers are strong and we get a solid report, it just once again reaffirms that labour market conditions are holding up well. That doesn’t really take away from the messaging that policymakers might „skip“ a 25 bps move in two weeks‘ time.

In case there is some reason that the labour market is running extremely hot, perhaps we might see some last-minute message by Fed speakers before the blackout period tomorrow. But barring any major surprise, the data should just reaffirm that things are solid and the Fed already knows that by now.

So, to deliver a message as they did in the past two days, does say a lot about what the line of thinking is. Of course, we could see other policymakers besides Harker come out to provide a rebuttal later today but then that will come after the jobs data.

Going back to the report, if there is going to be a downside miss on the numbers and wage pressures ease, that will likely pile on the misery for the dollar. If policymakers are now talking about a „skip“, such data might even turn that into talk of a „pause“.

In other words, it’s all about measuring the strength of the Fed pivot now.

Even with a decent set of numbers, the Fed is still going to move to the sidelines and reassess the situation again in a month’s time. But if there is some shakiness in the jobs report and then softer CPI figures later this month, that could really set off some alarm bells for dollar bulls to go cowering.

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