The USD continues to be
backed by good economic data as we have also seen recently from the US PMIs last Friday and the US Consumer Confidence report this week. Although such
data keeps the interest rates expectations stable around two cuts by the end of
the year, it should also support the risk sentiment amid a pickup in growth.
This could be a headwind for the greenback.

This week the US Dollar has
been in the driving seat, although it looks like the price action is being
influenced more by month-end, quarter-end and half year-end flows rather than
something fundamental. We had also a key breakout in USDJPY yesterday and flows
there might have spilled over to other major pairs.

We got also the Canadian CPI figures this week which surprised
to the upside and trimmed rate cuts expectations for July with the market now
pricing a 65% chance of no change. That was not enough to break out of the
strong support zone around the 1.36 handle as it didn’t change much the bigger picture,
but it might keep the Loonie supported going forward once the quarter-end flows
fade out.

USDCAD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCAD bounced on the key support zone around the 1.36 handle. That’s where the
buyers continue to step in with a defined risk below the support to position
for a rally back into the 1.3785 resistance. The sellers will want to see the
price breaking lower to pile in more aggressively and target a drop into the
1.34 handle next.

USDCAD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the price yesterday broke above the 1.3680 resistance and pulled back
to retest it today. We can also see that we have the 38.2% Fibonacci
retracement level for confluence
there.

This is where the buyers
will likely step in with a defined risk below the level to target an extension
of the rally towards the 1.3785 resistance. The sellers, on the other hand,
will want to see the price falling back below the level to regain some control
and position for a break below the 1.36 support with a better risk to reward
setup.

USDCAD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we had also a downward trendline adding some extra confluence to the
1.3680 resistance. This breakout might give the buyers more conviction for a
rally back into the 1.3785 resistance next. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we get the latest US Jobless Claims figures, while tomorrow we conclude
the week with the Canadian GDP and the US PCE report.

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

The USD continues to be
backed by good economic data as we have also seen recently from the US PMIs last Friday and the US Consumer Confidence report this week. Although such
data keeps the interest rates expectations stable around two cuts by the end of
the year, it should also support the risk sentiment amid a pickup in growth.
This could be a headwind for the greenback.

The GBP, on the other hand,
has been under pressure since the BoE policy decision where the central bank dropped some
dovish signals and kept the door open for a rate
cut in August. This week the Pound has been under pressure mainly due to some
US Dollar strength.

It looks like the price
action is being influenced more by month-end, quarter-end and half year-end
flows though rather than something fundamental. We had also a key breakout in
USDJPY yesterday and flows there might have spilled over to other major pairs.

GBPUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that GBPUSD is testing once again the support
at 1.2635 as the buyers continue to step in around this level to position for a
rally into new highs with a better risk to reward setup. The sellers, on the
other hand, will want to see the price breaking lower to gain more conviction
and increase the bearish bets into the 1.25 handle next.

GBPUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the downside momentum seems to be slowing as the lower lows get
shallower. This might be a signal for a reversal although a break to the
downside could invalidate it.

The buyers will want to see
the price breaking above the downward trendline
to gain more conviction and increase the bullish bets into the 1.28 handle. The
sellers, on the other hand, might lean on the trendline to position for a break
below the support with a better risk to reward setup.

GBPUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have the upper limit of the average daily range for today standing right around the
trendline. It’s unlikely that we will see a break to the upside today, but it
will be something to watch in the next days as quarter-end flows fade out.

Upcoming
Catalysts

Today we get the latest US Jobless Claims figures, while tomorrow we conclude
the week with the US PCE report.

See the video below

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

• USD/JPY slowly testing the waters above the 160.00 mark
• USDJPY Technical Analysis – The market is testing the intervention level again
• Is a rate hike back on the menu for the RBA?
• Equities see early gains fade as the push and pull continues
• ECB’s Panetta says should avoid even „casual forward guidance“ on timing of rate moves
• ECB’s Rehn: I always knew inflation path would be a bumpy road
• Germany July GfK consumer sentiment -21.8 vs -18.9 expected
• France June consumer confidence 89 vs 89 expected
• UK June CBI retailing reported sales -24 vs 8 prior
• Switzerland June UBS investor sentiment 17.5 vs 18.2 prior
• US MBA mortgage applications w.e. 21 June +0.8% vs +0.9% prior

Markets:

• AUD leads, NZD lags on the day
• European equities lower; S&P 500 futures down 0.1%
• US 10-year yields up 4.9 bps to 4.286%
• Gold down 0.3% to $2,310.84
• WTI crude up 0.7% to $81.38
• Bitcoin down 0.9% to $61,329

There were some decent moves in European morning trade today, with the dollar holding firmer across the board helped out by higher bond yields. That saw USD/JPY move up to clip the 160.00 mark once again and is now testing waters above that on the day. The high for the day is at 160.40, matching up to the 1990 high.

I wouldn’t underestimate the upside potential of the pair considering that it is clear skies in terms of the technicals. But it’s all a psychological game now and if buyers push it too far, too fast, Tokyo will be ready to step in again.

With equities also surrendering early gains and yields nudging higher, that is keeping the dollar underpinned on the day.

EUR/USD is down 0.3% from 1.0710 to 1.0680 while GBP/USD eased from 0.3% from 1.2680 to 1.2645 on the session. Meanwhile, USD/CAD is up 0.2% to 1.3690 and NZD/USD down 0.4% to 0.6095 on the day.

The aussie is the one leading gains though after hotter inflation numbers earlier. But AUD/USD has eased from 0.6680 to 0.6650 levels now, though still up 0.2% on the day.

As a reminder, month-end and quarter-end is approaching so that will be a factor for consideration in the sessions ahead as well.

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

Easy come, easy go. European indices opened higher but have pared gains on the day with the CAC 40 index in particular now marked down by 0.6%. The nerves are still flowing in the equities space and more so for Europe with the French elections coming up. As for US futures, we are also seeing S&P 500 futures erase early gains to be flat now:

It’s tough to get a grip on the risk mood this week. On Monday, European stocks nudged higher while tech shares dragged the S&P 500 lower. Yesterday, it was more of the opposite instead. And so far today, we’re rocking back and forth and reversing the mood from yesterday again.

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

• Prior +0.9%
• Market index 212.0 vs 210.4 prior
• Purchase index 147.8 v 146.0 prior
• Refinance index 552.4 vs 552.7 prior
• 30-year mortgage rate 6.93% vs 6.94% prior

Mortgage applications were a touch higher in the past week, with a rise in purchase activity helping to offset a marginal decline in refinancing activity. Overall, housing activity remains rather tepid at best – even if there was a significant bump in mortgage applications in the weeks before.

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

The selling of the dollar should be „mild“ this month-end, with their model indicating the strongest sell signal to be against the euro. Meanwhile, the firm also notes that their corporate flow model suggests the euro currency to be in demand this month-end.

Just keep this in your back pocket in case, as we approach the final few trading days of June. As an aside, the time to watch for any of these shenanigans tends to be closer towards the London fix on the final day. But the flows can also crop up in the few sessions before.

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

Copper remains under pressure, albeit the bearish momentum appears to be
slowing. Last week, the FT reported that stockpiles in Shanghai warehouses hit
their highest level since 2020 amid weak demand due to China’s real estate
sector downturn. Given the high prices reached in the previous month,
manufacturers refrained from buying since they had an incentive to deplete
their inventories.

The FT also reported that Chinese copper fabricators appeared to have
resumed buying the metal, with stocks showing minor declines in recent weeks.
All else being equal, if we continue to see the pickup in global growth, we
could see new highs in the coming months, although more policy support from the
Chinese officials would give the market a stronger boost.

Copper
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that after a minor bounce, copper fell back to the 4.35 support
where we can also find the 50% Fibonacci retracement level for confluence. This is where we can expect the
buyers to step in with a defined risk below the level to position for a rally
into a new all-time high. The sellers, on the other hand, will want to see the
price breaking lower to increase the bearish bets into the 4.00 level.

Copper Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the downside momentum seems to be slowing as the lower lows get shallower.
This might be a signal for a reversal although a break to the downside could
invalidate it.

If we do get a rally from these
levels, the first target for the buyers should be around the 4.66 level where
we can find the 38.2% Fibonacci retracement level of the entire correction. That’s
also where we can expect the sellers to step back in with a better risk to
reward setup to target a break below the 4.35 support.

Copper Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a minor downward trendline defining the current downward
momentum. The buyers will want to see the price breaking higher to gain more
conviction and increase the bullish bets into the 4.66 level. The red lines
define the average daily range for today.

Upcoming
Catalysts

Tomorrow we get the latest US Jobless Claims figures, while on Friday we
conclude the week with the US PCE.

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

• Fed’s Bowman: not yet at the point where it is appropriate to cut rates
• Major currencies not showing much appetite on the day
• France on the verge of a political standstill?
• Japan finance minister says will closely monitor currency movements
• European equities on the backfoot again after the gains yesterday
• Spain Q1 final GDP +0.8% vs +0.7% q/q prelim
• What are the main events for today?
• Eurostoxx futures -0.4% in early European trading
• Little on the agenda in the session ahead
• Japan April revised leading indicator index 110.9 vs 111.7 prior
• FX stays little changed ahead of European morning trade

The
European session was pretty uneventful. On the data front, we just saw the
Spain Final Q1 GDP which beat expectations slightly. We also got the usual
jawboning comments from the Japanese Finance Minister as USD/JPY continues to trade
near the previous intervention level at 160.00.

Near the
end of the session, we got the comments from Fed Governor Bowman (hawk – voter)
who continues to maintain her hawkish stance as she wants to see more progress
before easing the policy rate.

Looking at
the markets, we’ve seen a pretty rangebound price action almost across the
board. The major currency pairs are mostly flat on the day although the US Dollar is picking up some pace going into the American session. In the equity
space, after an early morning weakness, we saw a bit of a bounce.

Gold and US
Treasuries are mostly flat. The biggest mover has been Bitcoin which has
already erased all the late yesterday’s losses and it looks like the bullish
momentum could have further legs. Crude oil is down roughly 0.6% on the day but it’s
still above the key $80 level.

The focus
will now switch to the American session as we get the Canadian CPI and the US
Consumer Confidence reports. Some further easing in the Canadian underlying
inflation figures should seal the rate cut in July with the market assigning a
65% probability at the moment.

The US
Consumer Confidence will be something to watch, especially the labour market
details given the recent weakness in US Jobless Claims.

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

• Not yet at the point where it is appropriate to cut rates.
• Should data show inflation moving sustainably to 2%, it will eventually become appropriate to gradually lower policy rate.
• Baseline outlook continues to be inflation will return to 2% with policy rate held steady for some time.
• Willing to raise the target rate at a future meeting if inflation progress stalls or reverses.
• Will remain cautious in approach to future changes in policy stance.
• Other central banks may ease monetary policy sooner or more quickly that the Fed.
• Only modest further progress on US inflation seen this year.
• Expect US inflation to remain elevated for some time.
• Still see a number of upside inflation risks.
• US labour market remains tight despite some further rebalancing.

Q&A session:

• Central bank independence is very important and the Fed is apolitical.
• Began to shift view on policy to be more scenario-based.
• Need to see how subcategories of inflation evolve.
• Closely monitoring the labour market for deterioration.
• Doesn’t see any rate cut in 2024. Shifted cuts to 2025.

Bowman is a known hawk, so these comments are not surprising. The market sees a total of 48.8 bps of easing by the end of the year (basically 2 cuts) with 90% probability of no change at the upcoming meeting at the end of July.

A lot will depend on the next inflation data. I think the Fed will be more dovish if we get a good inflation report in July. Then, if we get some more good figures in August, Fed Chair Powell will likely pre-commit to a rate cut in September at the Jackson Hole Symposium.

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

The USD last week finished
slightly positive but overall, it was a pretty flat week. We got some great US PMIs on Friday which showed growth without
inflationary pressures. In fact, despite the strong PMIs the market pricing for
interest rates remained unchanged. That should be generally positive for risk
sentiment going forward.

The NZD, on the other hand,
got pressured mainly because of the bouts of risk-off flows here and there. The
mood in the market seems to be gradually improving though and that should
support the Kiwi going forward.

NZDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that NZDUSD bounced and consolidated near the key support around the 0.6082 level where we have also the
38.2% Fibonacci retracement level for confluence.

The buyers continue to step
in around the lows to position for a rally back into the 0.6217 resistance. The
sellers, on the other hand, will want to see the price breaking lower to
increase the bearish momentum and position for a drop into the 0.60 handle
next.

NZDUSD Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the price action has been mostly rangebound between the 0.6082 support
and the 0.6217 resistance. These will be the key levels that the market will
need to break to start a more sustained trend. For now, we could keep bouncing
around as the market participants continue to “play the range”.

NZDUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a strong resistance zone around the 0.6145 level where the
price got rejected from several times. The buyers will want to see the price
breaking higher to gain more conviction and increase the bullish bets into the
0.6217 level.

The sellers, on the other
hand, will likely keep on leaning on that resistance to position for a drop
back into the 0.6082 support targeting a break below it. The red lines define
the average daily range for today.

Upcoming
Catalysts

Today we have the US Consumer Confidence report where the market will be
focused on the labour market details. On Thursday, we get the latest US Jobless
Claims figures, while on Friday we conclude the week with the US PCE.

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