Headlines:

• The UK heads to the polls today
• What has changed after yesterday’s US data?
• Bitcoin drops again, faces mounting technical pressure
• ECB’s Lane: Wage tracker shows much lower wage growth in 2025 and 2026
• ECB accounts show some mixed views on confidence towards inflation outlook
• Germany May industrial orders -1.6% vs +0.5% m/m expected
• Germany June construction PMI 39.7 vs 38.5 prior
• UK June construction PMI 52.2 vs 53.6 expected
• Switzerland June CPI +1.3% vs +1.4% y/y expected

Markets:

• JPY leads, USD lags on the day
• European equities higher; CAC 40 +0.8%
• Gold up 0.1% to $2,358.40
• WTI crude down 0.8% to $83.17
• Bitcoin down 3.1% to $57,667

With it being a US holiday, there wasn’t much for traders to work with as well in European morning trade today.

The dollar remains sluggish, keeping with the mood from yesterday after the softer US ISM services PMI data. The greenback was lightly changed early on but is now down a touch across the board.

The changes in the euro and pound are light but USD/JPY is down 0.4% to test waters back under 161.00 on the day. Besides that, USD/CHF is also down 0.2% to 0.8995 and AUD/USD up 0.4% to 0.6730 currently.

In the equities space, European indices were more tentative early on but are now picking up steam again with French stocks continuing to rally ahead of the second round of the elections this weekend. Regional markets also seem to pass the test of the latest French 10-year bond auction earlier in the day.

Besides that, there is a bit of focus on Bitcoin as it tumbles further to its lowest levels since early May. The cryptocurrency is under pressure on a fall back below $60,000, with key technicals being challenged on the week.

Liquidity conditions will be thin in US trading later, so just be wary of that with the greenback starting to see its resilience crack this week. All this ahead of the non-farm payrolls data tomorrow.

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

• Some members felt that the data available since the last meeting had not increased their confidence that inflation would converge to the 2% target by 2025
• These members also viewed risks to the inflation outlook as being tilted to the upside
• Wage growth had surprised to the upside and inflation seemed to be stickier
• Services inflation momentum was very high, and the pace of domestic disinflation had been overestimated
• It was also suggested that further significant wage pressures were in the pipeline
• All of this suggested that the last mile, as the final phase of disinflation, was the most difficult
• It was argued that a small undershooting of inflation would be much less costly than a continued overshooting
• These considerations suggested that cutting interest rates was not fully in line with the principle of data-dependence
• There was a case for keeping interest rates unchanged at the current meeting
• But willingness to support Lane’s proposal to cut interest rates was expressed, notwithstanding the reservations put forward
• Full accounts

As a reminder, the ECB proceeded with a 25 bps rate cut in their June decision. But evidently, there are certain policymakers that are not quite in agreement with the move. That definitely presents some interesting happenings behind the scenes, even though there was a united front when speaking to the public.

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

It’s not much but the dollar is looking a little sluggish, keeping with the drop from yesterday. EUR/USD is trading closer to 1.0800 still, holding at the upper bound for the week. Meanwhile, USD/JPY is now down 0.4% and dipping just under the 161.00 mark:

What is notable in the chart above is that buyers had put up a defense at the 100-hour moving average (red line) on a drop following the softer US ISM services PMI data yesterday. But in European trading today, that level is giving way for the first time in nearly a month.

That puts the focus on the 200-hour moving average (blue line) at 160.73 as well. A break below that will see sellers seize back near-term control in the pair. For now, that bias is more neutral as price weaves in between the key hourly moving averages.

Overall, it is a light signal that the dollar resilience is starting to crack a little on the week.

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

Fundamental
Overview

The USD yesterday weakened
across the board following soft US Jobless Claims and ISM Services PMI reports. Overall, the data didn’t
change much in terms of interest rates expectations, but it reinforced the view
that the Fed is going to deliver at least two rate cuts by the end of the year.

The NZD, on the other hand,
has been under pressure mainly due to the US Dollar strength last week which
has been influenced more by quarter-end flows rather than something
fundamental. This week, the US Dollar is back on the defensive as the market
continues to trade the soft-landing narrative.

NZDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that NZDUSD probed below the key support around the 0.6082 level last week but
eventually failed to sustain the breakout. The buyers seem now back in control
and the first target should be 0.6217 resistance.

The sellers, on the other
hand, will want to see the price breaking lower again to gain more conviction
and increase the bearish bets into the 0.60 handle next.

NZDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the price yesterday broke above the downward trendline
which was defining the bearish momentum. The buyers increased the bullish bets
as they gained a bit more conviction to position for a rally back into the
0.6217 resistance.

NZDUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a good support zone around the 0.61 handle where we can find
the confluence
of the 50% Fibonacci
retracement level and the upward minor trendline. If we do get a pullback
from the current levels, we can expect the buyers to step in around the support
to position for a rally into the resistance with a better risk to reward setup.

The sellers, on the other
hand, will want to see the price breaking below the trendline and the 0.6080
zone to regain control and increase the bearish bets into the 0.60 handle next.
The red lines define the average daily range for today.

Upcoming
Catalysts

Tomorrow we conclude the week with the US NFP report where the data is expected
to show 180K jobs added in June and the Unemployment Rate to remain unchanged
at 4.0%.

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

Fundamental
Overview

The USD yesterday weakened
across the board following soft US Jobless Claims and ISM Services PMI reports. Overall, the data didn’t
change much in terms of interest rates expectations, but it reinforced the view
that the Fed is going to deliver at least two rate cuts by the end of the year.

The CAD, on the other hand,
has been under pressure mainly due to the US Dollar strength last week which
has been influenced more by quarter-end flows rather than something
fundamental. This week, the US Dollar is back on the defensive as the market
continues to trade the soft-landing narrative.

Last week, the Canadian CPI surprised to the upside, with the
underlying inflation measures rising
but remaining within the 1-3% target band. This made the market to pare back rate cuts
expectations with the probabilities now standing around 57% for no change. We
will get another inflation report before the next BoC policy decision, but if
we see another jump in wage growth tomorrow, then the central bank will likely
need very good CPI figures to deliver a rate cut in July.

USDCAD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that USDCAD is now back at the key 1.36 support zone. Again, we can expect the buyers to step
in with a defined risk below the support to position for a rally back into the
1.3785 resistance. The sellers, on the other hand, 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 action remains rangebound between the 1.36 support and the
1.3785 resistance. There’s not much to do here and the market participants will
likely keep on “playing the range” until we get a breakout.

USDCAD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a downward minor trendline defining the current bearish
momentum. The buyers will want to see the price breaking higher and rally above
the 1.3643 level to increase the bullish bets into the 1.3785 resistance.

The sellers, on the other
hand, will likely lean on the trendline to position for a downside breakout
with a defined risk above the 1.3642 level. The red lines define the average daily range for today.

Upcoming
Catalysts

Tomorrow we conclude the week with the US NFP and the Canadian labour market
report.

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

Headlines:

• Sterling looks to UK general election as next key risk event
• Reminder: US markets will be closed tomorrow
• Japan reportedly to issue new floating-rate bonds to help investors if BOJ hikes rates
• Fed’s Williams casts doubt over rise in neutral rate
• Eurozone May PPI -0.2% vs -0.1% m/m expected
• Eurozone June final services PMI 52.8 vs 52.6 prelim
• UK June final services PMI 52.1 vs. 51.2 prelim
• US June Challenger layoffs 48.79k vs 63.82k prior

Markets:

• EUR and GBP lead, JPY lags on the day
• European equities higher; S&P 500 futures flat
• US 10-year yields down 0.4 bps to 4.431%
• Gold up 0.7% to $2,345.23
• WTI crude flat at $81.93
• Bitcoin down 2.9% to $60,135

It was a relatively slow session with major currencies not up to much. USD/JPY continues to be in focus, extending gains and inching closer towards the 162.00 mark. The dollar itself is trading more mixed, holding in relatively narrow ranges for the most part.

There weren’t any meaningful headlines, with the only stand out perhaps being Japan reportedly looking to issue a new floating-rate type of bond. But that won’t be something that will happen any time soon at least.

Major currencies didn’t really get much help from broader markets as well. European equities are bouncing back strongly today after the gains in Wall Street yesterday. However, US futures are more muted on the day. Meanwhile, the bond market also isn’t offering much of anything.

It’s now over to the US ADP employment roulette report to see how that will shake things up before the holiday tomorrow.

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

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This article was written by Adam Button at www.forexlive.com.

US-based employers announced 47,786 job cuts in June, which is roughly 20% higher than the same month a year ago. The monthly pace of layoffs has been easing a touch since February, so that’s a slight positive.

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

• The value of R-Star is always highly uncertain
• But the case for a sizable increase has yet to meet two important tests
• Recent data reinforce the continuation of pre-pandemic trends in global demographics and productivity growth
• One should not overly rely on estimates of R-Star in determining appropriate monetary policy setting at a given point in time

This is a debate for economists and not really one for traders. There is a camp in the former that argues that the real neutral rate of interest has risen but Williams is downplaying that as you would expect, given that the Fed is looking to cut rates with no actual target floor just yet.

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

• Prior +0.8%
• Market index 206.5 vs 212.0 prior
• Purchase index 142.9 vs 147.8 prior
• Refinance index 544.1 vs 552.4 prior
• 30-year mortgage rate 7.03% vs 6.93% prior

Mortgage applications fell in the past week with both purchases and refinancing activity also declining. It comes as the average rate of the most popular US home loan rises back above the 7% mark. Overall, it still points to rather subdued conditions in the housing market.

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