• US stocks close mixed. Down for the week
• WTi crude oil settles at $107.99 for August delivery
• Coinbase exec says more job cuts cannot be ruled out should the crypto selling continue
• Baker Hughes Oil rigs up 4 rigs to 584
• Putin: Restoration of relations with Ukraine is inevitable
• Major European indices end the day mostly higher (sans UK FTSE100), but lower for the week
• Fed report: Investment may be moderating but consumer spending remains strong
• Fed’s Kashkari: I could support another 75 bps in July
• Fed’s George said she dissented because the 75 bps move added uncertainty
• US May leading indicators -0.4% vs -0.4% expected
• US May industrial production +0.2% vs +0.4% expected
• Fed’s Bullard: Both the FED and ECB have credibility, a soft landing is feasible
• Fed’s Powell: A US digital currency could help maintain US dollar’s standing
• The panic over US 30-year mortgage rates misses a big part of the equation
• Teranet Canada May home price index +2.3% m/m vs +2.7% prior
• Canada May producer price index +15.0% y/y vs +16.4% y/y prior
• The CHF is the strongest and the JPY is the weakest as the NA session begins
• Now we know how much angst was priced into the yen
• ForexLive European FX news wrap: Franc gains extend, dollar steadies on market respite

The USD moved lower yesterday helped by the Swiss National Bank surprise tightening, and a string of weaker data.

Today the story was different. The Bank of Japan kept rates unchanged and said that they would continue the put a ceiling on the 10 year yield by being a buyer.  The industrial production was weaker than expected but Fed’s Kashkari – usually one of the more dovish Fed members – said that he would welcome another 75 basis point.  Giving equal time to another view, KC Pres. George, who dissented against the 75 basis point hike, said she did so because:

„The speed with which we adjust the policy rate is important,  Abrupt changes can be unsettling to households and small businesses.“

Meanwhile the Fed’s semiannual monetary policy report had a little something for everyone

• Recent indicators suggest that private fixed investment may be moderating but consumer spending remains strong
• Our commitment to restoring price stability is unconditional
• Real GDP appears on track to rise moderately in the second quarter
• Further risks to global supply chains abound
• Some measures of wage growth appear to have moderated
• Some signs of easing the labor market have appeared
• High inflation, supply chain disrutpions and the Ukraine war remain substantial sources of uncertainty with the potential to add stress to the system

A positive for inflation this week potentially is the sharp fall in oil prices. The high price this week reached $123.66. The low price for the July contract which tops trading on Tuesday reached $108.33. That was the lowest level May 20. The 100 day MA is at $104.77. That MA will be eyed as a key barometer for the buyers and sellers next week if the price does continue the rotation to the downside.  

The strongest to the weakest of the major currencies

Looking at the strongest to the weakest, the USD is the strongest while the JPY is the weakest at the end of the day

Some technical highlights going into the weekend (and into the new week):

• EURUSD: The EURUSD dipped to and briefly through the 100 hour MA at 1.04576 currently (and moving higher). That came after a break above the 200 hour MA yesterday that failed into the close and stayed below in trading today. The price is trading between the 100 hour MA below at 1.04576 and the 200 hour MA above at 1.05415.  The price near the end of week is at 1.0496. Next week, the MAs will help to define the next bias move for currency pair. Move below the 100 hour MA is more bearish.  Move above the 200 hour MA is more bullish. 
• GBPUSD: The GBPUSD moved down today, and in the process fell back below the 38.2% at 1.2213 and a swing area near that level between 1.22038 and 1.2216. The pair then extended to another swing area between 1.2154 and 1.2173. The 100 hour MA was within that area at 1.21582. The price bounced modestly into the close and is settling just above the 38.2% at 1.2213. Next week, the 100 hour MA below will be a key barometer on the downside. Stay above would be good for buyers.  Move below is more bearish.  On the topside, watch 1.2260 and above that the falling 200 hour MA and 50% of the move down from the May high at 1.22995. That is also near the natural resistance at 1.2300.
• USDJPY: The USDJPY fell yesterday and rose today more than the fall. The price moved back above its 100 and 200 hour MAs at 134.19 area (they are near converged). The price is settling near 134.95. The high for the week reached 135.577 which was the highest level going back to 1998. The buyers remain in control above the 100/200 hour MA.  When speaking of 24 year highs, it is tempting to sell, but there is not technical reason to do so unless those hour MAs can be broken – and remain broken. 
• USDCHF: The USDCHF took a breather today – consolidating in an up and down range. Teh move higher did extend briefly above a swing area at 0.9713 to 0.9723 (swing levels on hourly from June 6 to June 9), but moved back below that area into the close (the price is trading at 0.9700).  IF the price cannot get and stay above 0.9723, the buyers are not winning.  The sellers remain in full control. 
• USDCAD> A new 2022 high was reached in the USDCAD today, but only by 2 pips at 1.3078. The price moved back below a near high swing area between 1.3037 to 1.30515. Those levels are tempting to sell against after the double top, but it is tough picking a top too. Sellers would feel more confident on a move back below a swing area between 1.2949 and 1.29805. The rising 100 hour MA is at 1.29378. The price declines yesterday found dip buyers against the 100 hour MA line.  
• AUDUSD: The AUDUSD stalled on Thursday’s run up against the 200 hour MA and 50% of the move down from the June high at 0.7066. The move down today, stepped back below the lower 100 hour MA at 0.6955 and stayed below. That put the sellers back in control. The price is closing at 0.6934.  Next week, stay below the 100 hour MA keeps the sellers in control.  A swing area comes between 0.6891 to 0.69168 on the downside, ahead of the low this week at 0.68499 and the low from May at 0.6829.  

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

The major US stock indices are closing the day with mixed results:

• Dow industrial average is down -38.31 points or -0.13% at 29888.79
• S&P index is up 8.09 points or 0.22% at 3674.85
• NASDAQ index is up 152.26 points or 1.42% at 10798.36
• Russell 2000 is up 15.85 points or 0.96% at 1665.69

Some details for the day:

• Major indices are down for the 3rd straight week
• The Dow was down -274 point at the session low
• The S&P was down -29.95 points at the session lows
• The Nasdaq was down only -7.3 points that the session lows
• NASDAQ index trades -33.4% below its record high
• S&P is -23.7% below its record high
• Dow is down -19.12% below its record high. At the lows week the Dow industrial average was down -19.75% from its all-time high just short of bear market territory.
• The NASDAQ index closed just above its 200 week moving average at 10795.92 averting the first close below that level since the week of March 16.

For the week:

• Dow industrial average fell -4.7%
• S&P index fell -5.78%
• NASDAQ index-4.68%
• Russell 2000 fell -7.48%

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

NZDUSD trades between the 100/200 hour MAs

The NZDUSD – like other pairs vs the USD yesterday – saw the pair shoot higher. The move extended above the 100 and 200 hour MAs, and for this pair also extended briefly above the 50% retracement at 0.63857.

However, going into the close yesterday, the price rotated lower to the 200 hour MA closing near that MA barometer.

In the US session today, the price moved lower. After initially finding support near a swing area neat 0.6311, the pair bounced, before rotating back down through the 0.6311 level toward the lower 100 hour MA (blue line) at 0.6277.

The low moved through that MA , but rebounded back above and is currently trading between the 100 hour MA below and the 200 hour MA above and near the 0.6311 swing level. The price is within a neutral technical area, awaiting the next shove.

Next week, traders will be eying the MAs for bias clues. Move above the 200 hour MA is more bullish. Move below the 100 hour MA is more bearish.

With focus mostly driven by what the USD does of late, on the calendar is existing home sales on Tuesday. Existing home sales account for 80% or so of home sales. So it will be an important barometer for the health of that sector as rates soar. This week Housing starts and building permits all declined sharply.

Fed speak will also be a focus, with Fed Chair Powell. testifying on Capitol Hill on Wednesday and Thursday being the highlight. .

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

The price of WTI crude oil is settling -$7.26 lower at $107.99. That is for the August contract.

For the July contract has its last day of trading on June 21. It settled at $109.56 down -$8.03 or -6.83%.

The move lower has been helped by the stronger dollar, but is also be reflective of a falling of global demand. Industrial production was weaker than expected today. The housing market is under pressure as higher rates and prices start to sap demand. People are starting to feel the pain from stocks declining, inflation sapping purchasing power, and the potential for a decline in housing prices as well. The employment cycle is transitioning from hiring, to not hiring, to cutting jobs in certain industries. Employment is a lagging indicator, but it is showing some signs of a slowdown.

Driving is a necessity for many, but on the margin, if driving can be cut back to squeeze an extra few days or so for some, and a week for others, it will be done.

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

Headlines:

• Swiss franc continues to flex its muscles after SNB policy pivot
• US futures point to a light respite amid a very tough week for equities
• 10-year Italian and German bond yields spread fall back below 200 bps
• ECB’s Knot says several 50 bps rate hikes are possible if inflation worsens
• BOE’s Pill: It is up to markets to decide if we are considering a 50 bps rate hike
• BOE’s Pill: If we act too aggressively, we could cause an undesirable slowdown
• BOJ’s Kuroda says will not hesitate to ease monetary policy further if necessary
• BOJ’s Kuroda: There is no limit to yield curve control

Markets:

• CHF leads, JPY lags on the day
• European equities higher; S&P 500 futures up 0.8%
• US 10-year yields down 8.5 bps to 3.220%
• Gold down 0.5% to $1,847.33
• WTI crude down 0.4% to $117.14
• Bitcoin up 1.5% to $20,984

The day started with the BOJ announcing that it will be the last man standing in keeping easy monetary policy and that saw the yen fall as markets also breathed a sigh of relief amid the central bank bonanza this week.

Equities are able to seek some respite after the heavy selloff yesterday while bond yields are keeping on the retreat, with European spreads also tightening as traders heeded the ECB’s pledge on anti-fragmentation.

USD/JPY pushed higher from the end of Asia trading around 133.80 to 134.90 as the yen is offered amid the ongoing policy divergence. That also provided some relief for the dollar after the blip yesterday with EUR/USD coming back down to 1.0500 and GBP/USD slipping by 0.6% to 1.2280 at the moment.

The aussie and kiwi also came back down, with the former dropping back below 0.7000 against the dollar despite better risk sentiment. That’s indicative of the fact that it is all about flows (the angst kind) at the moment in the market.

But it was the Swiss franc that shone brightly once again with EUR/CHF falling towards 1.0100 and CHF/JPY rising towards 140.00 – its highest since 1980 – as the currency continues to flex its muscles after the SNB policy pivot yesterday.

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

The SNB policy pivot has changed up the FX landscape and the franc is arguably the hot pick (at least mine) in the major currencies space at the moment. The market was caught off guard by the Swiss central bank and now we are having to price in potentially more rate hikes and also the fact that policymakers now no longer see the franc as being „highly valued“.

What a time to be alive.

EUR/CHF is down another 0.8% on the day to 1.0114 and USD/CHF down 0.5% to 0.9620 at the moment. Meanwhile, CHF/JPY is on a runaway train as it now nears 140.00 on the day.

• Parity beckons for EUR/CHF
• It’s looking line sunny skies for CHF/JPY

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

This will be in observance of Juneteenth, so that could play into some positioning or profit-taking to wrap up the selling pressure this week. After the central bank bonanza this week, markets in general may look for a bit of a breather but the bigger picture remains tough for equities and the franc is arguably now the hot pick (at least mine) in the major currencies space.

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

It has been an awful week for equities as the central bank bonanza brought about jitters all across markets. A quick repricing towards a 75 bps rate hike for the Fed kicked things off before we got a surprise policy pivot by the SNB.

The only relief is that the BOJ decided to play its cards straight or else all hell would break loose ahead of the weekend. Here’s a snapshot of US futures at the moment:

• S&P 500 futures +0.8%
• Nasdaq futures +1.1%
• Dow futures +0.6%

It isn’t much when you put into context the sharp selloff from yesterday but it is a bit of a respite after an extremely tough week. The weekly charts are the ones telling the story for US indices at the moment:

The S&P 500 is breaking below the 38.2 Fib retracement level support and is headed towards a look at the 200-week moving average (blue line) at 3,502. That sits close to the 50.0 Fib retracement level at 3,505 and will be a key support region to watch for any potential reprieve as the bears sharpen their claws.

Meanwhile, the Nasdaq is threatening a break below its own 200-week moving average (blue line) at 10,795 and that will keep sellers poised to extend the downside momentum towards the next leg. The 61.8 Fib retracement level at 10,291 might offer some light support before the 10,000 mark comes into play.

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

• I don’t think we are behind the curve, we are balancing risks

So, he’s suggesting that the central bank is not behind the curve on inflation and aren’t able to go with bigger rate hikes in case of an economic backlash, yet still wants markets to guess about a 50 bps rate hike? It sounds like all they want is to have their cake and eat it too. That’s awfully greedy when it comes to policy guidance at this point in time.

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

The BOE may be sticking with a more gradual approach for now but money market bets on a more aggressive push by the central bank are not letting up just yet. With just four more policy meetings left for the year, traders are ramping up bets that the BOE will hike to 3% by year-end.

To put it in simpler terms, that’s at least seven 25 bps rate hikes. That alludes to the fact that traders are expecting a more aggressive BOE in September and October i.e. at least 50 bps rate hikes in both meetings.

The pricing is sparking a bit of a turnaround in the pound, with cable recovering back to test its 100-hour moving average (red line) again at 1.2160 on the day.

As much as it looks like the BOE may push through in its battle against inflation, they haven’t quite offered up much in terms of their pain threshold when tightening policy into a likely recession. I think that predicament could see market pricing backtrack in the months ahead as UK economic data worsens. In turn, that will add more uncertainty and downside potential for the pound.

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