Headlines:

• USD/JPY knocks on the door of intervention territory
• Japan’s Matsuno says closely watching FX moves with high sense of urgency
• Eurozone June preliminary CPI +5.5 vs +5.6% y/y expected
• France June preliminary CPI +4.5% vs +4.6% y/y expected
• Germany May retail sales +0.4% vs 0.0% m/m expected
• Germany May import price index -1.4% vs -1.4% m/m expected
• UK June Nationwide house prices +0.1% vs -0.3% m/m expected
• China reportedly surveyed some foreign banks about dollar deposit rates
• RBA to raise cash rate by 25 bps to 4.35% next week – Reuters poll
• What is priced in for the RBA policy decision next week?

Markets:

• GBP leads, CAD lags on the day
• European equities higher; S&P 500 futures up 0.3%
• US 10-year yields up 1.6 bps to 3.870%
• Gold down 0.1% to $1,905.63
• WTI crude down 0.1% to $69.76
• Bitcoin up 1.2% to $30,775

And just like that, we’re about to reach the halfway point for the 2023 year.

The session itself was decent as there were some economic releases to digest but nothing too impactful at the end of the day. Of note, euro area headline annual inflation dropped further in June but core annual inflation ticked a little higher. On the balance of things, that still vindicates the more hawkish posture by the ECB at least.

The euro itself is just a touch lower on the day, as the dollar is sitting more mixed across the board. EUR/USD is down 0.1% to 1.0850 with the range for the day still rather narrow.

On the dollar, the currency itself has seen plenty of pushing and pulling in the last six months. But so far this year, the dollar index itself is ending up little changed. And I would argue that speaks to the resilience of the greenback considering how many were calling for its head amid anticipation of a Fed policy pivot.

Looking to today, USD/JPY did rise to just above 145.00 in Asia but is now little changed around 144.70. Traders are having to weigh up intervention risks, so perhaps there is some element of profit-taking as well.

In the equities space, stocks are keeping some enthusiasm towards the end of the week. European indices and US futures are higher but there is still the final month-end/quarter-end stretch to deal with later. Despite last week’s setback on growth worries, equities have enjoyed a good month in June.

Have a pleasant weekend, everyone. And I’ll catch you guys again next week.

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

The US data has been
consistently surprising to the upside since the last FOMC meeting. Coupled with
the Fed’s message of more rate hikes coming in case the data remains strong,
the market started to price in a more hawkish path for interest rates and this
repricing favoured the US Dollar. The RBNZ, on the other hand, paused at the
last meeting, so this is creating a bit of a policy divergence and leading to a
lower NZDUSD rate.

NZDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that NZDUSD has been
falling consistently since the middle of June and the target now looks to be
the 0.5987 low. The moving averages have
crossed to the downside signalling a change in trend. At the moment, it’s a
sellers’ market so it’s more likely to see the pullbacks getting faded as the
market prices in a more hawkish path for the Fed.

NZDUSD Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that eventually
NZDUSD couldn’t break the bullish flag to the
upside and instead broke down, invalidating the bullish setup and opening the
door for a fall into the 0.5987 support. Now, we
should see the sellers stepping in here at the previous support turned resistance with a
defined risk above the resistance zone where we can find a strong confluence from the
red 21 moving average, the 38.2% Fibonacci retracement level
and the broken lower bound of the channel. The buyers, on the other hand, will
need the price to break above the resistance to get some conviction on further
upside and target the upper bound of the channel.

NZDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the resistance zone and notice that there’s also the round 0.61 number giving
further strength to this area. In fact, a break to the upside would be more
meaningful than a rejection because it would show a lot of strength and a rally
will be more likely. Today, we have the US
PCE report and lower than expected figures should weaken the USD in the short
term, while higher than expected reading should strengthen it.

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

• Prior +6.1%
• CPI +0.3% vs +0.2% m/m expected
• Prior -0.1%
• HICP +6.8% vs +6.7% y/y expected
• Prior +6.3%
• HICP +0.4% vs +0.3% m/m expected
• Prior -0.2%

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

Here’s a snapshot of the equities space:

• Eurostoxx +0.6%
• Germany DAX +0.3%
• France CAC 40 +0.8%
• UK FTSE -0.2%
• S&P 500 futures 0.3%
• Nasdaq futures +0.4%
• Dow futures +0.3%

Things are improving after a bit of a tepid and flattish start to the session. And that is helping to pin back the dollar a little as we hit midday in Europe. With month-end and quarter-end in focus though, it is a little tricky to read into the moves here. If the selling last week had much to do with genuine economic concerns, then this little reprieve might not stand the test of time come next week.

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

Headlines:

• Fed’s Powell says expects moderate pace of interest rate decisions to continue
• Fed’s Powell: Process of getting to 2% inflation target has a long way to go
• Fed’s Bostic: I don’t see as much urgency to move as stated by others
• Fed’s Bostic: Nobody should take a signal from my view that we should pause
• Japan finance minister says closely watching FX moves
• China state banks reportedly seen selling dollars to prop up the yuan
• ECB’s de Cos: September meeting decision is „absolutely open“
• Spain June preliminary CPI +1.9% vs +1.7% y/y expected
• North Rhine Westphalia June CPI +6.2% vs +5.7% y/y prior
• Bavaria June CPI +6.2% vs +6.1% y/y prior
• Saxony June CPI +6.8% vs +6.5% y/y prior
• Eurozone June final consumer confidence -16.1 vs -16.1 prelim
• UK May mortgage approvals 50.52k vs 49.70k expected

Markets:

• AUD leads, USD lags on the day
• European equities higher; S&P 500 futures up 0.3%
• US 10-year yields up 3.3 bps to 3.744%
• Gold up 0.2% to $1,910.13
• WTI crude up 0.5% to $69.89
• Bitcoin up 1.8% to $30,653

There was plenty of central bank talk during the session but none of which are anything new in my view, to shift the dial ahead of the upcoming meetings in July.

Market players had little to work with early on and there wasn’t much appetite but things are gradually picking up now ahead of US trading. Equities were flat and tepid earlier but have pushed a little higher, with the slight optimism flowing to FX as well.

The dollar was little changed mostly in the handover from Asia, but is now seen slightly lower on the day. EUR/USD is up 0.2% to 1.0930 from around 1.0900 at the start of the session. Meanwhile, USD/JPY did move to a high of 144.70 before a quick check back to 144.20 now as intervention risks are building.

The antipodeans are the notable gainers, helped out by China’s intervention in the yuan again early on. The aussie is also bolstered by stronger Australia retail sales data and AUD/USD is up 0.5% to 0.6635 currently. The better risk mood in markets at the moment is also helping with that at least.

It will be interesting to see if the optimism can keep up ahead of month-end and quarter-end tomorrow. Perhaps we’re due for some window dressing after the selling in the past week and a half?

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

The recent US economic data surprised expectations to
the upside and pressured gold as the prospects of more rate hikes weigh on the
precious metal. In fact, since the FOMC meeting where Fed Chair Powell said
that they expect two more rate hikes this year if the economy performs as
expected, we had very strong housing market data, solid
US Jobless Claims, US Services PMI in
expansion and an incredibly strong Consumer Confidence report. If
the data remains strong, we can expect the Fed to keep hiking and lead to a
sustained depreciation in gold.

Gold Technical Analysis –
Daily Timeframe

On the daily chart, we can see that gold has been
on a steady downtrend as the US data keeps on surprising to the upside and the
Fed remains hawkish. The break of the key 1934 support should
have led to a more aggressive selloff, but we are seeing some resistance from
gold. In fact, the bearish momentum looks weak, and this is probably because
the market is waiting for the next NFP and CPI reports as they will be pivotal
for the Fed’s decision. The moving averages are
crossed to the downside, so the bearish trend is clear and, all else being
equal, we can expect a fall into the support level at 1805.

Gold Technical Analysis – 4
hour Timeframe

On the 4 hour chart, we can see that the price has
been moving very slowly to the downside as the bearish momentum looks weak. In
fact, the price is diverging with the
MACD, and the
sellers would be better off leaning on the downward trendline where
they will also encounter the daily 21 moving average. If the price breaks above
the trendline, we should see more buyers coming in and extend the rally into
the 1984 resistance.

Gold Technical Analysis – 1
hour Timeframe

On the 1 hour chart, we can see that the sellers
at the moment are leaning on the 21 moving average to enter the market as they
target a break below the recent low at 1902. Today’s US Jobless Claims
report will be important for the next move as strong data should lead to more
downside, while weak figures should provide the pullback into the trendline.

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

• There are undoubtedly scenarios where we could move at two meetings in a row
• I’m not expecting that will happen but if it is what is needed, we’ll do it
• Nobody should take a signal from my view that we should pause
• I’m less concerned about high inflation

Dude.. That’s quite a careless statement to be making and to be casually throwing around words that no more rate hikes are needed. Not especially at a time when markets are still trying to sort out exactly what the Fed consensus is and what they will do next month in July. And he says that we „should not take it as a signal“. Pfft.

As Eli pointed out in the comments, good thing he isn’t on the voting committee rotation for the year.

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

Headlines:

• Aussie thrown a bit of a curveball via inflation data today
• Japan finance minister says exchange rate should move stably
• ECB’s de Guindos: July rate hike is set
• ECB’s Centeno: Inflation is easing as quickly as it went up
• ECB’s Muller: Need to look at the data for rate hike beyond July
• ECB’s Vujčić: There is a good chance of a September rate hike
• ECB’s Vasle: We need to keep tightening policy at our next meeting
• Italy June preliminary CPI +6.4% vs +6.8% y/y expected
• France June consumer confidence 85 vs 83 prior
• Germany July GfK consumer confidence -25.4 vs -23.0 expected
• Eurozone May M3 money supply +1.4% vs +1.5% y/y expected
• US MBA mortgage applications w.e. 23 June +3.0% vs +0.5% prior

Markets:

• USD leads, NZD lags on the day
• European equities higher; S&P 500 futures down 0.1%
• US 10-year yields down 2.9 bps to 3.738%
• Gold down 0.4% to $1,906.01
• WTI crude flat at $67.73
• Bitcoin down 1.1% to $30,335

There weren’t much meaningful headlines on the session but there were some interesting developments to take note of at least.

The yen continues to stay on the softer side with USD/JPY above 144.00 and that is still prompting verbal intervention by Japanese officials.

Meanwhile, there were some slightly mixed messaging by the ECB (the first case this week) with Centeno casting doubts over a September rate hike. Other officials were either on the fence or maintained a more hawkish view but it is a small glimpse that perhaps we are reaching a point where there might be more differing views in the central bank.

A drop in Italian inflation is also a reason for slightly lower bond yields on the day, though Treasury yields have looked heavy since Asia trading in any case.

The dollar is holding steady and mostly firmer across the board, with the big gains mostly against the antipodeans today. That owes much to a weaker aussie after a softer Australia monthly CPI data here. AUD/USD is down 0.7% to 0.6635 but the kiwi is the one bearing the brunt of today’s selling, with NZD/USD down 1.2% to 0.6090 currently.

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

There aren’t any major headlines to have dragged the pair lower but it comes against the backdrop of a modest performance by the dollar today. Of note, the antipodeans are dragged much lower after Australia’s softer monthly CPI data – which surprisingly saw a strong bounce in AUD/NZD off its 100-day moving average and 1.0800 mark.

Anyway, going back to cable, things are certainly getting interesting now as the near-term chart would suggest below:

The recent upside move has stalled just at around 1.2800 and there has been a bit of consolidation since. However, price action has slipped back below its key hourly moving averages and that is giving sellers some incentive to search for a push lower next.

The 200-hour moving average (blue line) in particular is limiting the upside move over the past week, with some help from the 100-hour moving average (red line) at times. But in essence, sellers are leaning on either one or the other to keep the downside momentum going.

However, they are unable to breach the near-term support around 1.2685-90 and that will be a pivotal line in the sand to watch out for in the second half of the week.

If that gives way, there could be added downside for cable to come. But keep above that and buyers will still have some stake in the game to work with before seeing the move higher earlier this month completely unravel.

As an aside, do keep an eye out on risk sentiment in broader markets as that also tends to have some impact on the mood in cable more often than not.

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

Ethereum faced significant pressure due to recent
regulatory actions and a shift towards a more hawkish repricing of Fed interest
rates. However, the cryptocurrency showed a remarkable resilience and staged a
strong rally once the hawkish expectations subsided, and regulatory
uncertainties settled. All else being equal, the recent strong bounce from a
key support level indicates that Ethereum’s pullback may have ended,
potentially paving the way for new higher highs. However, if we get another
round of hawkish repricing triggered by strong economic data, or even a
recession, we could see more downside for Ethereum.

Ethereum Technical Analysis
– Daily Timeframe

On the daily chart, we can see that Ethereum has
bounced right from the upward trendline and the
61.8% Fibonacci retracement level.
The price since then rallied strongly and even broke out of a key downward
trendline before stalling at the 1930 swing high level. We are now seeing some
consolidation beneath the resistance but the
bias for now remains bullish.

Ethereum Technical Analysis
– 4 hour Timeframe

On the 4 hour chart, we can see that the price has
pulled back into the upward trendline where we can also find the 38.2%
Fibonacci retracement level. This is where we should see the buyers stepping in
with a defined risk below the trendline and target a break above the 1930
resistance to reach eventually the 2100 high. The sellers, on the other hand,
will want to see the price breaking lower to pile in and extend the selloff
into the 1681 support.

Ethereum Technical Analysis
– 1 hour Timeframe

On the 1 hour chart, we can see more
closely the current bullish setup with the price reacting to the trendline.
From here we should expect the price rallying towards the 1930 resistance. If
the bounce fails and the price breaks lower, then we should expect the price to
fall into the broken downward trendline first and then possibly extending the
selloff into the 1681 support.

This week is
relatively calm on the data front with only the US Jobless Claims tomorrow and
the US PCE on Friday. However, we will hear from many central bank members,
including Fed Chair Powell today.

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