The
recent regulatory attacks and the more hawkish repricing for the Fed interest
rates path weighed a lot on the Bitcoin price, but the cryptocurrency showed a
surprising resilience and rallied back strongly as soon as the hawkish
expectations waned, and the dust settled on the regulatory front. All else
being equal, the recent strong bounce from a key support level may also suggest
that we are about to see another extension to the upside, with a break of the
31K high being likely.

Bitcoin Technical Analysis
– Daily Timeframe

On the daily chart, we can see that the big divergence with the
MACD
eventually led to a sizeable pullback into the 25231 support where we
had also the 50% Fibonacci retracement level.
Since then, the price has rallied strongly into the trendline and yesterday
we got a breakout that led to a fast move upwards as more momentum buyers
jumped onboard. Now we can expect a pullback from the 28500 swing high level,
which from a risk management perspective would be better for the buyers.

Bitcoin Technical Analysis
– 4 hour Timeframe

On the 4 hour chart, we can see that we are
starting to get some long candlestick wicks as the sellers fight back and the
buyers take some profits off the table. A good support level where the buyers
can lean onto is the upward trendline. In fact, we can find confluence with the
50% or 61.8% Fibonacci retracement level, the red 21 moving average, a
previous swing point and possibly even the broken downward trendline that may
act as support now.

Bitcoin Technical Analysis
– 1 hour Timeframe

On the 1 hour chart, we can see more
closely the quick rally since the break of the downward trendline into the
29000 level. Here is where we should start to see the pullback and we can see
even better how strong the support at the trendline is with so many confluences
in one spot. Aggressive sellers may want to pile in as soon as the price breaks
below the 28500 level to target the trendline. More conservative sellers should
wait for the price to break below the upward trendline to target the 25200
support.

Today, we have the Fed
Chair Powell’s Testimony to Congress and if he delivers very hawkish comments,
we can expect some selling in Bitcoin. Tomorrow we will see the US Jobless
Claims and on Friday we conclude with the US PMIs. If the data misses
expectations, we can expect more upside for Bitcoin, while if it beats, it
would put some pressure on the cryptocurrency.

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

Headlines:

• Risk tones stay more cautious in European morning trade
• ECB’s Vujčić: Core inflation pressures remain in the euro area
• Germany May PPI -1.4% vs -0.7% m/m expected
• Eurozone April current account balance €4.0 billion vs €31.2 billion prior
• HSBC slashes China 2023 GDP forecast to 5.3% from 6.3% previously
• Citi cuts its China GDP forecast for 2023 to 5.5%, from 6.1%
• ForexLive Asia-Pacific FX news wrap: The PBOC cut rates, as expected

Markets:

• JPY leads, AUD lags on the day
• European equities mostly lower; S&P 500 futures down 0.4%
• US 10-year yields down 0.4 bps to 3.765%
• Gold flat at $1,950.43
• WTI crude flat at $71.75
• Bitcoin up 0.3% to $26,795

It looks like European traders are waiting on Wall Street before firming up any market moves but it was a session where risk tones remained on the defensive.

China’s rate cuts were greeted with disappointment in Europe, as equities are looking fairly sluggish and kept that way throughout the session. That is pinning the antipodeans lower, with the aussie leading losses in the major currencies space.

AUD/USD was already down to 0.6800 in Asia before extending that drop to 0.6785 – now down 0.9% on the day. The aussie’s plight is not helped by the softer risk mood, a weaker yuan, and some mixed language in the RBA minutes earlier.

The US dollar traded more mixed, keeping relatively steady against the euro while holding a light advance against the pound. But the yen is recovering from last week’s plunge a little, with USD/JPY falling today from 142.00 to 141.40 as Treasury yields also retreat after an early advance.

That might be a sign that we are seeing some risk aversion and perhaps some rotation from stocks to bonds ahead of month-end and quarter-end.

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

The recent expectations and
eventually the pause in its tightening cycle from the Fed led to a big weakness
in the USD that helped the other major currencies to rally. Although the Fed
has signalled that two more rate hikes might come in the Dot Plot, the market
doesn’t see such a chance due to the recent weakness in the economic data. All
else being equal, the Fed might even skip the July hike if the disinflationary
trend continues, and the labour market data keeps on weakening.

NZDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the NZDUSD had
a pretty strong rally since the first hints of a pause in June from a couple of
Fed members. The price has recently broken above the 0.6182 resistance but
pulled back as the rally got overstretched. We may now see a classic “break and
retest” of the broken resistance turned support and
another rally into the 0.63 handle.

NZDUSD Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price has
pulled back into support where we can also find confluence with the
38.2% Fibonacci retracement level
and the lower bound of the regression channel. This is where we should see the
buyers piling in with a defined risk below the Fibonacci level and target the
0.63 level. The sellers, on the other hand, may want to wait for the price to
break below the Fibonacci level to get more conviction and target the 0.6085
support.

NZDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
have a downtrend on this timeframe as the moving averages are
crossed to the downside and the price is making lower lows and lowers highs.
The price has recently pulled back into a previous swing low level where there
is also confluence of the red 21 moving average and the trendline. This
is where more aggressive sellers should enter the market targeting a break
below the support zone and new lows. The buyers, will need to break above this
trendline to switch the momentum to the upside and target the 0.63 handle.

This week
is pretty bare on the data front with just the US Jobless Claims on Thursday
and the US PMIs on Friday. We will also hear from many Fed officials including
Fed Chair Powell who’s expected to testify to Congress on Wednesday and
Thursday.

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

• Sometimes a soft landing is not possible
• Have to consider risks of doing too much versus doing too little

By his words, they are taking the view that it is more important to counter inflation pressures than to provide a cushion for the economy. That speaks to added conviction to hike further next month and perhaps even in September.

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

The Fed last week paused
its tightening cycle leaving rates unchanged at 5.00-5.25%. Their rationale for
such move is that they need to see more economic data before deciding on
further rate hikes as they are trying to find an optimal level of policy restraint
to bring inflation down to their 2% target without a bad recession. The RBA, on
the other hand, recently surprised with another rate hike leading to a bit of
policy divergence between the two central banks and favouring the Australian
Dollar.

AUDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that AUDUSD has
pulled back into the blue 8 moving average as it
generally happens when the price rallies too far from the moving average. The
price is now back at the previous resistance that now may turn
support. All else being equal, we can expect the pair to continue the bullish
trend.

AUDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the price
recently broke out of the rising channel and sold off into the 0.6781 support. The red
21 moving average was acting as dynamic support for the buyers that kept on
leaning on it for their entries. Now that the moving averages have crossed to
the downside, we might have an early signal of a change in trend, so this is
something to keep an eye on.

AUDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that from
a risk management perspective, a good level for the sellers would be the
resistance at 0.6835 where we can also find the 61.8% Fibonacci
retracement level, the red 21 moving average and the trendline. The
stop would be a bit above the trendline and the target the 0.6781 support first
and ultimately a breakout with more lower lows. The buyers, on the other hand,
may lean on this 0.6781 support to target a new higher high or wait for the
price to break above the trendline to pile in and target the 0.70 handle.

This week
the market is likely to focus on the US Jobless Claims on Thursday and US PMIs
on Friday with some Fed speakers also on the agenda including Fed Chair Powell,
who’s going to testify to Congress on Wednesday and Thursday.

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

• Prior -2.4%; revised to -1.7%

Looking at the details, building construction decreased by 0.6% while civil
engineering increased by 0.4% on the month as overall activity remains on the softer side still.

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

ECB’s Schnabel: Risks To The Inflation Outlook Are Tilted To The Upside

**THE PATH TOWARDS SUSTAINED PRICE STABILITY REMAINS UNCERTAIN AND FRAUGHT WITH RISKS

**PROFIT MARGINS EXPECTED TO ABSORB RISING LABOUR COSTS

**A MONETARY POLICY STANCE THAT ERRS ON THE SIDE OF DETERMINATION INSURES AGAINST COSTLY POLICY MISTAKES

**RULES SUGGEST THAT THE OPTIMAL INTEREST RATE PATH WOULD HAVE BEEN STEEPER

**THE FACT THAT WE UNDERESTIMATED INFLATION PERSISTENCE LAST YEAR RAISES THE PROBABILITY THAT WE ARE ALSO UNDERESTIMATING INFLATION TODAY

**GIVING MORE WEIGHT TO OBSERVABLE DATA, IN PARTICULAR AT TIMES OF HIGH UNCERTAINTY, CAN IMPROVE THE QUALITY OF POLICY DECISIONS

**THIS MEANS THAT WE NEED TO REMAIN HIGHLY DATA-DEPENDENT AND ERR ON THE SIDE OF DOING TOO MUCH RATHER THAN TOO LITTLE

**RISKS OF BOTH A DE-ANCHORING OF INFLATION EXPECTATIONS AND WEAKER MONETARY POLICY TRANSMISSION SUGGEST THAT THERE IS A LIMIT TO HOW LONG INFLATION CAN STAY ABOVE 2%

**WE THUS NEED TO KEEP RAISING INTEREST RATES UNTIL WE SEE CONVINCING EVIDENCE THAT DEVELOPMENTS IN UNDERLYING INFLATION ARE CONSISTENT WITH A RETURN OF HEADLINE INFLATION TO OUR 2%

**A MONETARY POLICY STANCE THAT ERRS ON THE SIDE OF DETERMINATION “INSURES” AGAINST COSTLY POLICY MISTAKES

This article was written by Ryan Paisey at www.forexlive.com.

**SAYS ANOTHER HIKE IN JULY SEEMS APPROPRIATE AND THEN WE WILL SEE IN SEPTEMBER

**ECB’S LANE SAYS INFLATION WILL COME DOWN FAIRLY QUICKLY IN NEXT COUPLE OF YEARS TO THE ECB’S 2% TARGET

**LANE SAYS ECB NEEDS TO BE DATA-DEPENDENT ABOUT INFLATION OUTLOOK

**LANE SAYS ECB IS LOOKING AT A VARIATY OF MEASURES TO ANALYZE SHOCKS TO PRICES

**SAYS AT THIS POINT WE ARE DATA-DRIVEN, SEPTEMBER IS STILL FAR AWAY

– I can imagine a LOT of people have some STRONG feelings about this!

This article was written by Ryan Paisey at www.forexlive.com.

The Fed last week
made the decision to pause its tightening cycle, settling at a range of
5.00-5.25%. Their reason was the need for additional economic data before
proceeding with further rate hikes. Their objective is to carefully adjust the
level of monetary restraint necessary to reduce inflation to the 2% target without
inflicting excessive hardship on the economy. The Russell 2000 responded
positively the day after the FOMC decision, rallying, but experienced a slight
retracement just before the extended Juneteenth weekend.

Russell 2000 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the strong
Russell 2000’s rally since the breakout of the 1723-1820 range, has stalled at
the key 1920 resistance zone. If
the price breaks above the level, it will open the door for a rally towards the
2030 resistance. The sellers are likely to lean on this strong level to target
a pullback into the 1820 resistance turned support, while
the buyers may want to wait for a break higher before piling in with more
conviction.

Russell 2000 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the last tap
into the 1920 resistance was diverging with the
MACD. This is
generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, we might see just a pullback as long as the
disinflationary trend continues and the labour market doesn’t weaken too much.

Russell 2000 Technical Analysis
– 1 hour Timeframe

On the 1 hour chart, we can see that from
a risk management perspective, the buyers would be better off to lean on the
support area at 1860 where we can find a previous swing low level and the 38.2%
Fibonacci
retracement level of the entire rally into the 1920
resistance. The sellers, on the other hand, will pile in even more aggressively
if the price breaks below that support zone to extend the selloff into the 1820
support.

There’s not much economic
data to be released this week; however, we will hear from various
Fed members, including Fed Chair Powell, who will testify before Congress on
both Wednesday and Thursday. As the week progresses, we will also get the US Jobless
Claims report on Thursday, followed by the US PMIs on Friday.

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

The Swiss National Bank will raise interest rates by 25 basis points on June 22, defying market expectations for a larger move, according to economists polled by Reuters who said the bigger risk was rates will peak higher than they expect.

An overwhelming majority of economists, 30 of 33, polled June 15-19 said the SNB will raise its key policy rate by 25 basis points to 1.75%, less than the 50 basis points it delivered in March

„We think the SNB will deliver another 25bp hike in June, with a risk for 50bp…and, while still data dependent, this is probably the last hike in this cycle,“ noted Ruben Segura-Cayuela, head of Europe economics research at BofA

This article was written by Ryan Paisey at www.forexlive.com.