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.
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 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.
Markets:
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.
The final numbers for the day are showing:
Year to date, the Russell 2000 and Dow Industrial Average have lagged the other broader and tech heavy indices. For the 2023 trading year
For the trading week, the snapshot shows:
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:
The
sellers, on the other hand, are likely to pile in at every breakout:
The spotlight today will be
on the US NFP report, with various potential scenarios that could unfold:
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.
On the
daily chart below, we can see that May was a great month for the USD as the
strong economic data made the market to reprice interest rates expectations on
the more hawkish side. We even got a breakout of the March low recently, but
the sellers couldn’t sustain the momentum as they started to get big headwinds.
In fact, NZDUSD rallied in the past two days as the market started to unwind
hawkish bets due to some Fed officials
talking about a pause in June to wait for more data and decide in July.
Moreover,
yesterday’s soft data in the ISM
Manufacturing PMI and Unit
Labour Cost reports supported the idea of a pause in June. If the next set
of data doesn’t surprise to the upside, then we should see NZDUSD rallying all
the way towards the 0.6181 level where we can find confluence
from the trendline,
the 61.8% Fibonacci
retracement level and the red 21 moving
average.
NZDUSD Technical
Analysis
On the 4
hour chart below, we can see that we had already some signals of a weakening
bearish momentum from the price divergence
with the MACD.
Sure enough, we got a pullback, that may even become a reversal if the data
starts to disappoint.
The
buyers’ target is of course the 0.6181 resistance
and the cross to the upside of the moving averages is currently supporting the
idea of another wave of buying pressure to come. If NZDUSD reaches the 0.6181
resistance, we can expect the sellers leaning on that level with a defined risk
just above the resistance to target a break below the 0.5985 low.
On the 1
hour chart below, we can see that we have a bullish structure at the moment
with the last higher low standing at the 0.6058 level. This zone between the
0.6058 and 0.6084 coupled with the red 21 moving average will be the buying
area for the buyers with a stop just below it. The sellers, on the other hand,
will want to see the price to break through that zone to pile in and extend the
selloff into the 0.5985 low first and the 0.5820 level next.
Today, the attention will
be on the NFP report, and there are several potential outcomes to consider:
This article was written by ForexLive at www.forexlive.com.
With the ECB still on the tightening path, the SNB is also maintaining its approach for the time being. The next policy decision for the Swiss central bank will be on 22 June, so mark that down on your calendars.
This article was written by Justin Low at www.forexlive.com.
He also says that they have not yet reached the moment where they can put a stop to rate hikes just yet. Once again, it’s a relatively consistent message all around from the ECB so far this week.
This article was written by Justin Low at www.forexlive.com.