To find out all about it, click on the video link above.
This article was written by Greg Michalowski at www.forexlive.com.
This article was written by Greg Michalowski at www.forexlive.com.
However, the close support at the 61.8% of the move down from the April/May 2024 high is stalling the decline today at 0.9133.
So going into the new week, both those levels are setting up as close support and close resistance. Move below 0.9133, and I would expect the sellers to take more control with the first target near 0.9105.
If the 0.9156 is broken, that opens the door with traders thinking about a retest of the May 1 high at 0.92237. PS that high is also near other highs going back in to 2023.
Find all about it, in the video above. Be aware. Be prepared.
This article was written by Greg Michalowski at www.forexlive.com.
That’s a bit of a late revision as markets have ruled out both June and July for quite some time now. As of today, the odds of a September move are priced at a ~58% probability with just ~36 bps of rate cuts for the year.
This article was written by Justin Low at www.forexlive.com.
The USD got a boost
yesterday from the strong US
PMIs which lifted Treasury yields and put in question the rate cut in
September with the probability falling to roughly 60%. I would argue
that the details weren’t that bad on the inflation front but overall good for
the growth side. If the market digest it as good news today, we should see the
risk-on sentiment returning which is generally negative for the greenback.
The NZD,
on the other hand, remains supported from the hawkish RBNZ decision
where the central bank pushed further out the timing for a rate cut and even
added that they considered a rate hike. If the risk-on sentiment returns, the Kiwi
will likely rise to new highs.
NZDUSD Technical
Analysis – Daily Timeframe
On the daily chart, On the
daily chart, we can see that NZDUSD broke above the trendline
recently following the US CPI report and consolidated around the highs. This breakout
opened the door for a rally into the 0.6217 swing level.
NZDUSD Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can
see that the buyers continue to step in around the upward trendline where they
will also have the 50% Fibonacci retracement level for confluence.
The sellers, on the other hand, will need to see the price breaking below the
trendline to invalidate the bullish setup and position for a drop into the 0.60
handle.
NZDUSD Technical Analysis
– 1 hour Timeframe
On the 1 hour chart, we can
see that we’ve been stuck in a range between the 0.6095 support and
0.6140 resistance. A breakout on either side should trigger a bigger move as
the momentum will likely pick up.
It’s unlikely that we will
see it to the upside today though given that the upper limit of the average daily range stands right at the resistance and we don’t have any catalyst that
could lead to a bigger move. Therefore, the risk for the buyers is a breakout
to the downside which could happen if the market interprets yesterday’s data
as bad news for inflation.
Upcoming
Catalysts
There are no
catalysts today so the market should trade based on the yesterday’s US PMI by
either fading the moves or print new lows.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
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This article was written by FL Contributors at www.forexlive.com.
Barclays notes that: „Markets had reacted to slightly softer US data in May, as seen in outsized moves to PPI, CPI, and retail sales, with bonds rallying and stocks reaching new highs. This will likely trigger more rebalancing needs to sell dollars at month-end.“ Adding that „although the broad rally extended to other G10s, the large market cap in US equity markets has dominated hedging flows“ on the month. Taking that into consideration, their model „suggests this dollar-selling signal is consistent across G10s“.
This article was written by Justin Low at www.forexlive.com.
For one of the more hawkish members, the headline comment is pretty much a concession that they will cut rates in two weeks‘ time.
This article was written by Justin Low at www.forexlive.com.
Markets:
The dollar is lagging in trading today as the overall risk mood is propped up by Nvidia’s earnings beat after the close yesterday. US futures are pointing higher with tech shares leading the way. And that is helping to boost risk assets as well.
During the session, we also got euro area and UK PMI data. The former was a mixed bag but the sluggish French readings were offset by slightly better readings in Germany. EUR/USD fell initially to 1.0813 before finding a bounce off its 100-day moving average as well to 1.0840 levels now.
Meanwhile, the UK figures were less than ideal but GBP/USD is still seen up 0.1% to 1.2727 after a brief drop to test its 100-hour moving average at 1.2708.
Overall, the dollar is looking sluggish as the push and pull this week continues to play out. AUD/USD is up 0.2% to 0.6633 while NZD/USD is up 0.4% to 0.6121, buoyed by the better risk sentiment.
In other markets, commodities are continuing to struggle after yesterday’s rough showing. Gold is down 0.5% to $2,367 with the low earlier touching $2,355. Meanwhile, copper futures fell to a low of $4.74 earlier but is now back to $4.81 after a 6% drop yesterday – its worst showing since the pandemic.
Let’s see what the US PMI data later has to offer next.
This article was written by Justin Low at www.forexlive.com.
The euro area PMI data was a bit mixed but at the balance, it was salvaged by the better German PMI figures. That continues to give the ECB a bit of breathing room after their impending June rate cut at least. That is helping the euro a tiny bit with the dollar also looking sluggish amid a better risk mood today.
Equities are keeping higher as the mood music is buoyed by Nvidia’s earnings beat after the close yesterday. That is helping to see the aussie and kiwi hold higher against the dollar as well.
Going back to EUR/USD, the pair fell to test its 100-day moving average (red line) after the French PMI data earlier. But since then, it has caught a bounce to trade back up to 1.0845 currently.
So, what’s next for the pair?
From a technical perspective, the pair is seeing layers of support from 1.0800-14 with the 200-day moving average (blue line) just under that as well as 1.0787. Those will be crucial in keeping any downside momentum from gathering pace for the time being.
As for the upside, there is modest daily resistance from the April high at 1.0885. And that is limiting any upside momentum for now.
So, something has to give on either side of those levels in order for the next trending leg to come by.
From a fundamental perspective though, the euro still has to figure things out on what the ECB is going to do after June. And that might take a while to sort out depending on inflation developments in the months ahead.
On the dollar side of the equation, it’s all about big data. And there is the US PMI readings to watch later at least.
That aside, it’s a tall order for traders to price in anything beyond two rate cuts for the Fed this year. That is likely to put a floor on any dollar declines until the Fed narrative changes. Currently, traders are back to pricing in ~40 bps of rate cuts for the year.
This article was written by Justin Low at www.forexlive.com.