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อังคาร, มิถุนายน 22, 2021

In opinion of FX Strategists at UOB Group, USD/JPY is likely to navigate within the 109.60-110.80 range for the time being. Key Quotes 24-hour view: “

In opinion of FX Strategists at UOB Group, USD/JPY is likely to navigate within the 109.60-110.80 range for the time being. Key Quotes 24-hour view: “Our expectation for USD to ‘trade between 109.90 and 110.45’ was incorrect as it dropped to 109.70 before rebounding strongly (high has been 110.34). The rebound has scope to extend but any advance is likely limited to a test of 110.55. The major resistance at 110.80 is not expected to come into the picture. Support is at 110.00 followed by 109.80.” Next 1-3 weeks: “There is no change in our view from yesterday (21 Jun, spot at 110.20). As highlighted, the current movement is viewed as part of a consolidation phase and USD is expected to trade within a 109.60/110.80 range for now.”

The US Dollar Index (DXY), which tracks the greenback vs. a bundle of its main competitors, regains some composure and edges higher to the 92.00 area.

DXY leaves behind Monday’s pullback and flirts with 92.00.US 10-year yields remain side-lined around the 1.40% level.Markets’ focus will be on Powell’s testimony later on Tuesday.The US Dollar Index (DXY), which tracks the greenback vs. a bundle of its main competitors, regains some composure and edges higher to the 92.00 area. US Dollar Index now looks to Powell Following Monday’s pessimism in the dollar, the index manages to attract buying interest and looks to retake the area above the key 92.00 the figure so far on turnaround Tuesday. The resurgence of the appetite for the riskier assets at the beginning of the week put the buck under some moderate pressure and forced it to recede from recent peaks near the 92.50 region. Recent comments from FOMC’s Kaplan and Bullard – who somehow defended the Fed’s shift to a more hawkish message – lend extra support to the dollar and helped limit the downside for the time being. In the meantime, yields of the key US 10-year note remain depressed in the lower end of the recent range around the 1.40% zone. In the calendar, all the attention is expected to be on the testimony by Chairman Powell before the Select Subcommittee on Coronavirus Crises on “The Federal Reserve’s Response to the Coronavirus Pandemic”. Additional data will see Existing Home Sales for the month of May, the Richmond Fed Manufacturing Index, the API’s weekly report and the speech by San Francisco Fed M.Daly (voter, centrist). What to look for around USD The index failed once again near 92.50 followed by a moderate pullback to revisit the 92.00 neighbourhood at the beginning of the week, where it is now looking to stabilize. The likeliness that the tapering talk could kick in before anyone had anticipated and the view of higher rates in 2023 (or before) fuelled the sharp bounce in the buck to levels last seen in mid-April and introduced some uncertainty into the debate surrounding the extension of the “transient” inflation. The strong upside in DXY was also supported by higher yields in the shorter end of the curve, while yields of the key 10-year note stay muted around recent lows. In the meantime, further progress on the reopening of the economy, the vaccine rollout and results from key fundamentals remain key for the dollar’s price action/sentiment in the short-term horizon.Key events in the US this week: Chairman Powell’s testimony, Existing Home Sales (Tuesday) – New Home Sales, flash Manufacturing PMI (Wednesday) – Final Q1 GDP, Durable Goods Orders, Initial Claims (Thursday) – Core PCE, final June Consumer Sentiment (Friday).Eminent issues on the back boiler: Biden’s plans to support infrastructure and families, worth nearly $6 trillion. US-China trade conflict under the Biden’s administration. Tapering speculation vs. economic recovery. US real interest rates vs. Europe. Could US fiscal stimulus lead to overheating? US Dollar Index relevant levels Now, the index is gaining 0.20% at 92.02 and a breakout of 92.40 (monthly high Jun.18) would open the door to 92.46 (23.6% Fibo level of the 2020-2021 drop) and finally 93.43 (2021 high Mar.21). On the other hand, the next support is located at 91.50 (200-day SMA) followed by 91.11 (100-day SMA) and finally 89.53 (monthly low May 25).

Italy Industrial Sales n.s.a. (YoY) registered at 105.1% above expectations (25.8%) in April

Italy Industrial Sales s.a. (MoM) came in at 3.3%, above expectations (1.3%) in April

The intraday selling around the sterling picked up pace during the early European session and pushed the EUR/GBP cross to fresh daily tops, around the

EUR/GBP caught some fresh bids on Tuesday amid the emergence of some selling around the GBP.A modest pickup in the USD demand weighed on the euro and might cap the upside for the cross.The market focus will remain glued to the upcoming BoE monetary policy meeting on Thursday.The intraday selling around the sterling picked up pace during the early European session and pushed the EUR/GBP cross to fresh daily tops, around the 0.8575-80 region in the last hour. The cross once again managed to find decent support and attracted some dip-buying near the 0.8545 region on Tuesday. In the absence of any fresh fundamental trigger, the British pound's relative underperformance could be attributed to concerns about the EU-UK collision over Northern Ireland protocol. In the latest developments, Maros Sefcovic, a European Commission vice-president, warned in a speech on Friday that a downward spiral in relations could ensue if Britain continues with unilateral action. Separately, British Brexit minister David Frost said that time is now very pressing if we are to find solutions together. This comes amid worries that the UK government’s decision to delay the final stage of easing lockdown measures to July 19 could hinder the nascent economic recovery. The combination of factors continued acting as a headwind for the sterling and assisted the EUR/GBP cross to erase a major part of the overnight losses. On the other hand, the shared currency was weighed down by the emergence of some fresh buying around the US dollar. This, along with expectations for a hawkish shift by the Bank of England, might hold traders from placing aggressive bullish bets around the EUR/GBP cross and keep a lid on any further gains, at least for now. Hence, the key focus will remain on the upcoming BoE monetary policy meeting on Thursday. Meanwhile, the good two-way price moves over the past one week or so points to indecision over the next leg of a directional move. This, in turn, suggests that investors are likely to wait for a fresh catalyst before positioning for a firm direction. Technical levels to watch  

Sweden Unemployment Rate up to 9.8% in May from previous 9.4%

NZD/USD needs to clear the 0.7070 level to end the negative phase, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “We noted yesterday tha

NZD/USD needs to clear the 0.7070 level to end the negative phase, noted FX Strategists at UOB Group. Key Quotes 24-hour view: “We noted yesterday that ‘the rapid drop appears to be overdone and NZD is unlikely to weaken much further’ and we expected NZD to ‘trade between 0.6930 and 0.6995’. NZD subsequently traded within a range of 0.6935/0.6999 before closing on a firm note at 0.6992 (+0.86%). The movement is viewed as part of an on-going consolidation phase but the firmed underlying tone suggests NZD is likely to trade within a higher range of 0.6945/0.7020.” Next 1-3 weeks: “We noted yesterday (21 Jun, spot at 0.6955) that NZD ‘is still weak but the next support at 0.6870 may not come into the picture so soon’. There is no change in our view and only a break of 0.7050 (‘strong resistance’ level was at 0.7070 yesterday) would indicate that the downward pressure started early last week (see annotations in the chart below) has eased.”

The NZD/USD pair bounced around 20 pips from Asian session lows, albeit lacked follow-through buying interest. The pair was last seen hovering in the

Renewed USD buying failed to assist NZD/USD to build on the overnight positive move.The Fed’s hawkish turn, rebounding US bond yields acted as a tailwind for the greenback.The generally positive risk tone helped limit the downside for the perceived riskier kiwi.The NZD/USD pair bounced around 20 pips from Asian session lows, albeit lacked follow-through buying interest. The pair was last seen hovering in the neutral territory, around the 0.6980-85 region. The pair struggled to capitalize on the overnight recovery move from the lowest level since November 2020 and witnessed a subdued price action through the first half of the trading action on Tuesday. The US dollar was back in demand and remained well supported by the Fed's surprise hawkish turn last week. Apart from this, some follow-through uptick in the US Treasury bond yields acted as a tailwind for the greenback and capped the NZD/USD pair below the key 0.7000 psychological mark. Meanwhile, St. Louis Fed President James Bullard said on Monday that the Fed should be prepared for inflation to surprise on the high end through next year. Adding to this, the Fed Chair Jerome Powell – in prepared testimony for the congressional hearing – also highlighted rising inflation pressures. This, in turn, pushed the yield on the benchmark 10-year US government bond back closer to the 1.50% threshold and was seen another factor that underpinned the greenback. That said, a generally positive tone around the global equity markets held traders from placing any aggressive bullish bets around the safe-haven USD and helped limit losses for the perceived riskier kiwi. The NZD/USD pair attracted some buying near the 0.6935-30 region, though any meaningful upside still seems elusive ahead of the Fed Chair Jerome Powell's testimony before the House Select Subcommittee on the Coronavirus Crisis later this Tuesday. In the meantime, the US economic docket, featuring the second-tier releases of Existing Home Sales and Richmond Manufacturing Index – will be looked upon for some short-term impetus. Traders might further take cues from the US bond yields and the broader market risk sentiment. This might influence the USD price dynamics and produce some trading opportunities around the NZD/USD pair. Technical levels to watch  

USD/CAD is seeing some fresh selling in early European trading, retreating from daily highs of 1.2386. The bulls take a breather ahead of Tuesday’s Fe

USD/CAD retreat, tracking the moves in the US dollar. Rising oil prices also restricts the rebound in USD/CAD.Focus remains on Powell’s testimony, API crude inventory report.USD/CAD is seeing some fresh selling in early European trading, retreating from daily highs of 1.2386. The bulls take a breather ahead of Tuesday’s Fed Chair Jerome Powell’s testimony. The latest leg down in the spot can be attributed to a stalled rebound in the US dollar across the board, as the Fed’s inflation debate picks up pace, driving the last week’s hawkish rhetoric in the back seat. The upbeat market mood also weighs on the US dollar’s safe-haven demand while the Treasury yields hold firmer on the session. On the other hand, surging oil prices also threaten the recovery mode in the major. WTI prices hit the highest levels since October 2018 at $73.33, courtesy of the uncertainty over the return of the Iranian oil supply to the market. All eyes now remain on Powell’s Q&A session during his testimony, as his prepared remarks are already out. Powell once again dismissed inflation as transitory while adding that it should move back toward the central bank’s 2% target once supply imbalances resolve.   more to come ...

USD/JPY has found support along the 2021 uptrend line at 109.72. The pair is now set to consolidate before challenging the 110.97 March high again, Ax

USD/JPY has found support along the 2021 uptrend line at 109.72. The pair is now set to consolidate before challenging the 110.97 March high again, Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, reports. Positive above the 108.56 late May low “Last week, USD/JPY faltered at 110.82, marginally below the 110.97 March high below which it is likely to consolidate further early this week. Once bettered, however, the 111.13/38 October 2018 low and mid-February 2019 high would be next in line.”  “While the currency pair stays above the June 16 and 21 lows as well as the 2021 uptrend line at 109.80/72 immediate upside pressure should remain in play. The cross should maintain an overall positive bias above the 108.56 late May low.”  “Our medium-term target is 112.23/50 which represents the April 2019 high, the 2020 high and a long term Fibonacci retracement.”  

It is possible that good data could be interpreted as bad news for the US stock market at least in the near-term as strong economic data, especially o

It is possible that good data could be interpreted as bad news for the US stock market at least in the near-term as strong economic data, especially on jobs, could prompt the Fed to unwind earlier. In contrast, good news may remain good news for international stocks, because the rise in inflation has not been seen globally and central bankers in Europe and Japan are not under pressure to communicate tighter policy, economists at Charles Schwab report. Good news may remain good news for international stocks “Now, strong data may suggest tighter policy is forthcoming and weigh on stocks as investors begin to expect an eventual downturn. We believe that the US economy can withstand tighter monetary policy and continue to produce solid growth after achieving ‘escape velocity’ and may no longer need the boost from the Fed’s extraordinary stimulus. But, in the near-term, it is possible that good data could be interpreted as bad news for the US stock market should strong economic data – especially on jobs – prompt the Fed to unwind earlier and faster.” “The rise in inflation seen in the US has not been reflected globally. With inflation running at or below-average and relatively less stimulative policy rates, the European Central Bank (ECB) and Bank of Japan (BOJ) are not under pressure to communicate tighter policy. That means good economic data is likely still good news for these stock markets.”    

Turkey Consumer Confidence up to 81.7 in June from previous 77.3

The US dollar rally is taking a short-term breather. Therefore, the EUR/USD pair should hold off the 1.1836/24 neighborhood, according to Axel Rudolph

The US dollar rally is taking a short-term breather. Therefore, the EUR/USD pair should hold off the 1.1836/24 neighborhood, according to Axel Rudolph, Senior FICC Technical Analyst at Commerzbank. 78.6% Fibonacci retracement sits at 1.1824 “EUR/USD so far dropped to 1.1847, close to the early March low and the 78.6% Fibonacci retracement at 1.1836/24. Short-term consolidation above this area is on the cards for today.” “Further down the April 5 low sits at 1.1738 and the March low can be spotted at 1.1704.” “Minor resistance above the February low at 1.1952 can be seen along the 200-day moving average at 1.1996 and then also at the 1.2052 mid-May low and the 55-day moving average at 1.2084.”

The USD/JPY pair has lifted back above the 110.00 resistance. However, USD/JPY perhaps is not the best expression for USD strength at this juncture gi

The USD/JPY pair has lifted back above the 110.00 resistance. However, USD/JPY perhaps is not the best expression for USD strength at this juncture given the soft back-end UST yields, according to economists at OCBC Bank. Laggard amid USD strength “The bounce higher in back-end UST yields saw the USD/JPY supported amid the USD retracement on Monday. Nevertheless, the 10y UST yield may need to consolidate between the 1.50- 1.70% range for the pair to see more significant upside.”  “Not the preferred expression for USD strength at this point.”  

The sharp drop in EUR/USD is in line with unwinding optimism to reflation. Economists at Danske Bank continue to see EUR/USD towards 1.15 over the com

The sharp drop in EUR/USD is in line with unwinding optimism to reflation. Economists at Danske Bank continue to see EUR/USD towards 1.15 over the coming quarters.  Equities and inflation expectations should hold up, jobs needs to confirm “From here, 1) broad equity indices should continue to do well, 2) jobs data should confirm and 3) inflation expectations (5y5y) should not fall too much. We expect Fed headlines/speeches to be hawkish over the coming weeks. If so, there is scope for further USD upside after the summer.” “The Fed is communicating a strong belief in further US (jobs) recovery and this supports equities. For FX though, such also implies rising rates and a tapering of the reflation trends and the latter has been the dominant theme in FX.”  “We see a clear move away from financials, materials and similar (the equity reflation trade) towards technology and the quality-factor. EUR/USD is especially exposed as spot has been one of the big winners of the reflation theme (less so for e.g. in Latin America). Hence, Fed surprised markets whom are now squaring positions, in a sharp USD-positive move.” “We continue to forecast EUR/USD towards 1.15 over the coming quarters on peak reflation and peak PMIs.”  

The GBP/USD pair maintained its offered tone heading into the European session and was last seen hovering near the lower end of its daily trading rang

GBP/USD witnessed fresh selling on Tuesday and eroded a part of the overnight strong gains.The Fed’s hawkish turn, rebounding US bond yields underpinned the USD and exerted pressure.The downside is likely to remain limited as the focus remains on the BoE meeting on Thursday.The GBP/USD pair maintained its offered tone heading into the European session and was last seen hovering near the lower end of its daily trading range, around the 1.3900 mark. The pair struggled to capitalize on the previous day's strong intraday rally of nearly 150 pips from two-month lows and faced rejection near 100-day SMA on Tuesday. Following the previous day's modest pullback, the US dollar was back in demand and remained well supported by the Fed's sudden hawkish turn last week. This, in turn, was seen as a key factor that exerted some fresh downward pressure on the GBP/USD pair. It is worth recalling that the Fed surprised investors at the end of June policy meeting and brought forward its timetable for the first post-pandemic interest rate hikes. The so-called dot plot pointed to two rate hikes by the end of 2023 as against policymakers projection for no increase until 2024 in the March meeting. This, along with the overnight solid rebound in the US Treasury bond yields, underpinned the USD. On the other hand, concerns about the EU-UK collision over Norther Ireland protocol held traders from placing aggressive bullish bets around the British pound. Adding to this, worries that the decision to delay the final stage of easing lockdown measures could hinder the nascent UK economic recovery further undermined the sterling. That said, expectations for a hawkish tilt from the Bank of England should help limit the downside. Hence, the key focus will remain on the upcoming BoE meeting on Thursday. This makes it prudent to wait for some strong follow-through selling before traders start positioning for any further depreciating move amid absent relevant UK economic data. Meanwhile, the US economic docket – featuring the second-tier releases of Existing Home Sales and Richmond Manufacturing Index, might also do little to provide any impetus to the GBP/USD pair. Technical levels to watch  

US growth has already slowed down in 2021. But there is reason to fear a sharp slowdown in the US economy in 2022, due to the end of the stimulus plan

US growth has already slowed down in 2021. But there is reason to fear a sharp slowdown in the US economy in 2022, due to the end of the stimulus plan and the reduction in the size of the investment plan; monetary policy tightening and negative wealth effect; low participation rate. This reinforces the conviction of economists at Natixis that eurozone growth will outpace US growth in 2022. There are grounds to fear markedly lower growth in 2022 than in 2021 in the US “The stimulus package only covers 2021, and we see that the investment plan (initially $2,300 billion) will ultimately have to be much smaller to be accepted. The fiscal deficit is therefore likely to be significantly smaller in 2022 than in 2021, which of course would slow down growth.”  “The Federal Reserve will probably reduce its debt purchases in 2022 and stabilise the size of its balance sheet. This is unlikely to have much effect on the US long-term interest rate (which depends on the stock of bonds held by the Federal Reserve, not on the flow of purchases), but could push down asset prices, generating a negative wealth effect.” “If it is confirmed that a significant number of Americans will not return to the labour market, the participation rate will fall, as after the subprime crisis, which will obviously slow down growth.”  

The kiwi recovered on Monday as the USD pulled back and equities rebounded. Nonetheless, it is difficult to see the USD softening much amid hawkish Fe

The kiwi recovered on Monday as the USD pulled back and equities rebounded. Nonetheless, it is difficult to see the USD softening much amid hawkish Fed rhetoric, in the opinion of economists at ANZ Bank. NZD/USD at crossroad short-term “The kiwi strengthened as risk appetite improved, equities rebound and bond yields rise. While the move was mostly USD-driven and it’s too soon to say whether it’s just a pull-back off highs (for the USD), NZD price action nonetheless looks a little more encouraging.”  “Fedspeak overnight (Bullard) discussed the possibility of the Fed hiking before tapering was complete; while technical, it was more hawkish and if that’s the tone we get for the remainder of the week, it’s hard to see the USD softening too much or US inflation expectations coming back a long way.”  “At a crossroad short-term, but longer term we still expect it to strengthen, fuelled by decent growth and commodity gains.” “Support 0.6703/0.6800/0.6900 Resistance 0.7100/0.7230”  

The EUR/USD pair regained the 1.1900 handle on Monday but economists at OCBC Bank expect the recovery to be temporary. What’s more, ECB Chief Lagarde

The EUR/USD pair regained the 1.1900 handle on Monday but economists at OCBC Bank expect the recovery to be temporary. What’s more, ECB Chief Lagarde opined that accelerating US inflation should have only a “moderate” impact on the eurozone whose “underlying price pressures are likely to remain subdued”. Use the retracement as better entry levels for USD longs “Comments from Lagarde still lean dovish, especially when set against the Fed, citing that EZ and US are in ‘different situation’ relating to inflation. She also mentioned space to cut interest rates if needed.”  “Relative central bank dynamics should continue to set the EUR softer against the USD.” Near-term, the bounce above 1.1900 eased downward pressure, but we expect the reprieve to be temporary.”  “Multi-session targets at 1.1800 and and the April low of 1.1704.”  

FX option expiries for June 22 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1850 250m 1.2075 400m 1.2175 535m

FX option expiries for June 22 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts         1.1850 250m 1.2075 400m 1.2175 535m - GBP/USD: GBP amounts         1.4150 250m -  USD/JPY: USD amounts          110-10 535m 110.30 480m - AUD/USD: AUD amounts 0.7640 399m - USD/CAD: USD amounts        1.2490-95 445m- EUR/GBP: EUR amounts 0.8575 290m - USD/ZAR: USD amounts 14.50 220m

Gold is consolidating its recovery below $1890, as higher US dollar and yields limit the upside. The focus now remains on Powell’s Q&A session during

Gold is consolidating its recovery below $1890, as higher US dollar and yields limit the upside. The focus now remains on Powell’s Q&A session during his testimony later on Tuesday, FXStreet’s Dhwani Mehta briefs. See – Gold Price Forecast: Bearish pressure may ebb this week – OCBC XAU/USD awaits Powell for a meaningful recovery above 100-DMA “The renewed optimism over the US infrastructure stimulus deal favors gold bulls. Markets also reassess the Fed’s monetary policy goals, especially after the text of Fed Chair Jerome Powel’s testimony released early Tuesday. Powell said inflation had accelerated but should move back toward the central bank’s 2% target once supply imbalances resolve.”  “All eyes remain on the Fed Chair’s Q&A session during his testimony on the Fed’s emergency lending programs and current policies before the House Select Subcommittee on the Coronavirus Crisis.” “Gold’s daily chart shows that the price is fast approaching the critical 100-Daily Moving Average (DMA) at $1794, the previous key support now resistance. Gold bulls need to find a foothold above the 100-DMA on a daily closing basis, in order to unleash recovery gains. The next significant resistance awaits at $1797, the June 18 high. Further up, the $1800 round number could come into play, opening doors towards the June 17 highs of $1825.” “Should the 100-DMA continue to guard the upside, gold price could fall back towards the daily lows of $1782. The $1763-$1760 demand zone will emerge as strong support for the bullish traders.”  

EUR/GBP manages to gather some upside movement following the previous heavy sell-off on Tuesday. At the time of writing, EUR/GBP is trading at 0.8559,

EUR/GBP gathers momentum to trade higher in the European session.Bulls find support at the double bottom formation near the 0.8550 mark.Momentum oscillator holds onto the negative territory.EUR/GBP manages to gather some upside movement following the previous heavy sell-off on Tuesday. At the time of writing, EUR/GBP is trading at 0.8559, up 0.13% for the day. EUR/GBP 4-hour chart On the 4-hour chart, the EUR/GBP cross has been consolidating above the 0.8550 level, with multiple supports making it a critical level to trade. The descending trendline from the high of 0.8647 exerts selling pressure on the pair. If price breaks the intraday high, then it could test the 20-day Simple Moving Average(SMA) at 0.8570 followed by the 0.8585  horizontal resistance level  That said, the Moving Average Convergence Divergence (MACD) indicator which reads below the midline warns EUR/GBP bulls. Any uptick in the MACD would then push price higher toward the previous day’s high at 0.8601. Alternatively, if price reverses, then it could crawl back to the low of June 21 in the vicinity of 0.8550 area. A break below 0.8550 could ignite a fresh round of selling toward the levels last visible in March. The bears would be ready to occupy March 26 low at 0.8534 followed by the low made on March 29 at 0.8505. EUR/GBP additional levels  

United Kingdom Public Sector Net Borrowing dipped from previous £30.962B to £23.605B in May

Denmark Consumer Confidence down to 2.3 in June from previous 2.8

Here is what you need to know on Tuesday, June 22: The upbeat market mood from the US last session extends into Tuesday, as the Asian stocks rebound f

Here is what you need to know on Tuesday, June 22: The upbeat market mood from the US last session extends into Tuesday, as the Asian stocks rebound from monthly lows amid easing Fed’s tightening fears. Fed policymakers James Bullard and Robert Kaplan tempered FOMC’s hawkish rhetoric, as they felt that the economic recovery still has room to improve. Meanwhile, Fed Chair Jerome Powell, in the prepared remarks of his testimony before the House Select Subcommittee on the Coronavirus Crisis, said inflation had accelerated but should move back toward the central bank’s 2% target once supply imbalances resolve. The US dollar extends the bounce after witnessing a sharp corrective pullback on Monday. Meanwhile, the Treasury yields continue to hold the higher ground, as investors rethink the Fed’s monetary policy stance. The renewed expectations over a potential US infrastructure stimulus deal also adds to the market’s optimism. Within the G10 fx basket, AUD//USD remains the main laggard, as it edges lower towards 0.7500. USD/JPY holds the higher ground near 110.00 while USD/CAD remains capped below 1.2400 amid rising oil prices. Brent oil topped $75 for the first time in two years.EUR/USD is defending 1.1900 ahead ECB-speak and Eurozone Consumer Confidence data. GBP/USD is battling 1.3900 after stalled Monday’s impressive recovery amid looming concerns over Brexit and Delta covid strain. Meanwhile, Britain began negotiations to join the trans-Pacific trade deal.Gold is consolidating its recovery below $1890, as higher US dollar and yields limit the upside. The focus now remains on Powell’s Q&A session during his testimony later on Tuesday. Bitcoin takes a hit with the highest bearish sentiment  Like this article? Help us with some feedback by answering this survey:Rate this content (function() { var qs,js,q,s,d=document, gi=d.getElementById, ce=d.createElement, gt=d.getElementsByTagName, id="typef_orm_share", b="https://embed.typeform.com/"; if(!gi.call(d,id)){ js=ce.call(d,"script"); js.id=id; js.src=b+"embed.js"; q=gt.call(d,"script")[0]; q.parentNode.insertBefore(js,q) } })()

Palladium (XPD/USD) holds onto the previous day’s recovery moves from mid-March lows, taking rounds to $2,595 heading into Tuesday’s European session.

Palladium gradually overcomes three-month low, up for second positive day.50% Fibonacci retracement, 100-DMA guards immediate upside, multiple horizontal lines test the bulls afterward.Late March low, 61.8% Fibonacci retracement restrict short-term downside.Palladium (XPD/USD) holds onto the previous day’s recovery moves from mid-March lows, taking rounds to $2,595 heading into Tuesday’s European session. In doing so, the precious metal gains 0.14% intraday as it battles the 50% Fibonacci retracement (Fibo.) of October 2020 to May 2021 upside. Given the receding bearish bias of MACD and the commodity’s sustained trading above the key Fibonacci retracement, namely the 61.8% Fibo., Palladium buyers can cross the immediate hurdle surrounding $2,600. However, the quote's further upside will be probed by 100-day SMA (DMA) level near $2,650. During the XPD/USD upside past $2,650, 38.2% Fibonacci retracement around $2,705 holds the key to the run-up towards two horizontal lines, stretched from late April and March, respectively around $2,730 and $2,760. Alternatively, $2,560 may entertain the intraday sellers ahead of directing them to 61.8% Fibo. retest, near $2,505. If at all the commodity prices fails to stay beyond $2,500, the latest low near $2,460 adds to the downside filters. Overall, palladium remains on the recovery mode but multiple hurdles test the bulls and can offer intermediate pullbacks. Palladium daily chart Trend: Further recovery expected  

In light of preliminary readings from CME Group for natural gas futures markets, traders scaled back their open interest positions by around 10.1K con

In light of preliminary readings from CME Group for natural gas futures markets, traders scaled back their open interest positions by around 10.1K contracts at the beginning of the week, reaching the fourth consecutive daily drop. Volume, instead, extended the choppy performance and went up by around 20.1K contracts. Natural Gas looks supported near $3.15 Monday’s negative price action in natural gas was amidst declining open interest, which is indicative that a move lower appears not favoured in the very near term. That said, a probable recovery now emerges on the cards with the immediate target at the YTD peaks near $3.40 per MMBtu (June 15).

Cable is now expected to trade between 1.3820 and 1.4020 in the next weeks, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “While we

Cable is now expected to trade between 1.3820 and 1.4020 in the next weeks, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “While we held the view yesterday that ‘further sustained weakness in GBP is unlikely’, we expected GBP to ‘trade between 1.3780 and 1.3870’. The strong rebound that sent GBP soaring to 1.3937 came as a surprise. The rapid bounce appears to be running ahead of itself but there is room for GBP to test 1.3960 first before easing. The next resistance at 1.4020 is not expected to come into the picture. Support is at 1.3890 followed by 1.3860.” Next 1-3 weeks: “We have held a negative view in GBP since early last week. After GBP plunged to 1.3791 last Friday, we noted yesterday (21 Jun) that ‘the rapid and sharp drop appears to be running ahead of itself and while there is room for GBP to weaken to 1.3750, this level may not come into the picture so soon’. However, we did not anticipate the sharp rebound in GBP that sent it surging by +1.03% (close of 1.3934), its largest 1-day advance since January. The break of our ‘strong resistance’ level at 1.3920 indicates that the weak phase has run its course. The current movement is viewed as the early stages of a consolidation phase and GBP is likely trade within a 1.3820/1.4020 range for now.”

Copper prices regain upside momentum, up 0.41% intraday around $4.20, ahead of Tuesday’s European session. In doing so, the red metal rises from the s

Copper extends Monday’s recovery moves from mid-April lows.Upbeat MACD, sustained trend line break keep buyers hopeful.Monthly horizontal resistance becomes the key for a trend change.Copper prices regain upside momentum, up 0.41% intraday around $4.20, ahead of Tuesday’s European session. In doing so, the red metal rises from the second consecutive day following its drop to the lowest since April 14. The upside momentum takes clues from the bullish MACD, as well as a clear break of a one-week-old support line, previous resistance. That said, copper buyers are en-route to an immediate horizontal resistance of around $4.31. However, the commodity’s further upside will be capped by the key $4.42-44 area, comprising lows marked since May 24. Should the bulls manage to keep reins beyond $4.44, the monthly high near $4.63 will be in focus. Meanwhile, a downside break of the nearby support line, around $4.16, should recall the bears targeting the mid-April lows near $3.98. During the fall, the $4.00 threshold may entertain the copper bears. To sum up, copper sellers take a breather but the commodity’s further upside had a bumpy road going forward. Price of copper: Four-hour chart Trend: Bearish

Traders added more than 9K contracts to their open interest positions in crude oil futures markets after two daily pullbacks in a row on Monday, consi

Traders added more than 9K contracts to their open interest positions in crude oil futures markets after two daily pullbacks in a row on Monday, considering flash data from CME Group. Volume followed suit and went up by around 400.4K contracts. WTI now targets $76.88 Prices of the WTI briefly probed the $74.00 mark at the beginning of the week, or new 2021 highs. The uptick was accompanied by rising open interest and volume, leaving the door open to the continuation of the rally for the time being. Against this, the next hurdle of note comes in at the 2018 high just below the $77.00 mark per barrel (October 2018).

AUD/USD pared the previous session’s gains on Tuesday. The pair opened higher, albeit fizzling out rather quickly to touch the low of 0.7512. At the t

AUD/USD pares initial gains in the European session.US dollar retreats from the higher levels remain elevated.AUD remains vulnerable to market volatility and trade tensions with China.AUD/USD pared the previous session’s gains on Tuesday. The pair opened higher, albeit fizzling out rather quickly to touch the low of 0.7512. At the time of writing, AUD/USD is trading at 0.7520,  down 0.20% for the day. The US Dollar Index (DXY) stands at 91.96 with 0.10 gains for the day. The US 10-year benchmark yields trade at 1.49%, after falling to a four month low at 1.36% on Monday. Investors continued to digest the twist in the Fed’s approach after the central bank signaled last week that it may raise interest rates twice by 2023.  Meanwhile, Fed Chair Jerome Powell said in testimony prepared for delivery to Congress that the labor market has shown signs of improvement but the pandemic risk remains in the economy. He acknowledged inflation as transitory although it has risen notably. The greenback eased from the recent highs following the mixed comments from the Fed officials. St. Louis Fed President James Bullard said that Fed shout started discussing tapering,  while New York Fed President John Willaims said it would be too soon to shift Fed monetary policy stance. On the other hand, the Australian dollar is weighed down amid escalating trade tensions with China. 
 
In addition to that, the sentiment also soured after a Chinese government agency announced to release reserves of key metals, including copper and aluminium to sustain the rising commodity prices. The antipodean loses its valuation against the falling commodity prices. As for now, the dynamics around the US dollar continue to influence the pair’s performance in the short term.
  AUD/USD additional levels  

FX Strategists at UOB Group noted EUR/USD still risks further declines in the next weeks. Key Quotes 24-hour view: “We highlighted yesterday that ‘des

FX Strategists at UOB Group noted EUR/USD still risks further declines in the next weeks. Key Quotes 24-hour view: “We highlighted yesterday that ‘despite the breach of 1.1855, downward momentum has not improved by all that much’ and we held the view that ‘there is room for EUR to dip to 1.1835’. Our expectation did not materialize as EUR dipped to 1.1846 before rebounding smartly (high has been 1.1921). Downward pressure has dissipated and the current movement is deemed as part of a consolidation phase and EUR is likely to trade within a 1.1875/1.1935 range for today.” Next 1-3 weeks: “There is not much to add to our update from yesterday (21 Jun, spot at 1.1875). As highlighted, EUR is still week but oversold conditions suggest it may take a while before the next support at 1.1800 comes into the picture. On a shorter-term note, 1.1845 is already quite a strong support level (note that EUR tried but failed to move clearly below this level the past two days). On the upside, a break of 1.1970 (no change in ‘strong resistance’ level) would indicate that the weak phase in EUR that started early last week has run its course.”

CME Group’s advanced figures for gold futures markets noted open interest extended the downtrend for yet another session on Monday, this time by aroun

CME Group’s advanced figures for gold futures markets noted open interest extended the downtrend for yet another session on Monday, this time by around 6.1K contracts. In the same line, volume shrank for the second session in a row, now by around 71.8K contracts. Gold faces the next hurdle at $1,800Gold prices managed to rebound from the $1,760 region. The move, however, was on the back of shrinking open interest and volume, leaving the upside somewhat contained. That said, the yellow metal still faces a key resistance at the $1,800 mark per ounce troy for the time being.  

Asian shares remain on the front-foot amid early Tuesday as investors turn optimistic following the latest Fedspeak. Also favoring the market bulls co

Asian equities recover amid a quiet session, receding fears of Fed’s tapering.US-China trade story, covid headlines fail to entertain traders ahead of Powell’s testimony.Asian shares remain on the front-foot amid early Tuesday as investors turn optimistic following the latest Fedspeak. Also favoring the market bulls could be firmer US Treasury yields and easing covid woes in Asia. Amid these plays, MSCI’s index of Asia-Pacific shares outside Japan gains 0.18% intraday whereas Japan’s Nikkei 225 snaps a four-day downtrend, up 3.0% by the press time. Australia’s ASX 200 gains 1.62% as downbeat prints of second-tier Aussie data defies challenges to the RBA’s easy money policies. It’s worth noting that a strong print of New Zealand’s Westpac Consumer Survey for Q2 2021 stops NZX 50 to follow the regional friends. Chinese indices seesaw between gains and losses as Beijing’s ability to deliver trade deal promises risks fresh tensions despite Global Times’ terming the conditions as “make-or-break”. Elsewhere, South Korea’s KOSPI benefits from the upbeat Producer Price Index whereas Indonesia’s IDX follows the broad market conditions even as the Indonesian government battles the virus resurgence. Moving on, India’s BSE Sensex prints 0.80% intraday gains to refresh record top as officials fasten the jabbing. On a broader front, S&P 500 Futures print mild gains following Wall Street gains while the US 10-year Treasury yields stay firmer after bouncing off a four-month low the previous day. As global traders brace for Fed Chair Jerome Powell’s testimony to confirm no threats to the easy money policies, markets are likely to remain sluggish ahead of the event. Though, the cautious sentiment may help the US dollar stay mild bid but could risk further declines if Powell matches the upbeat forecasts. Read: S&P 500 Futures: On defensive above 4,200 amid steady Treasury yields, Jerome Powell eyed

Quek Ser Leang at UOB Group’s Global Economics & Markets Research noted DXY could see its upside accelerated on a breakout of the 92.55 level. Key Quo

Quek Ser Leang at UOB Group’s Global Economics & Markets Research noted DXY could see its upside accelerated on a breakout of the 92.55 level. Key Quotes “In our Chart of the Day from 19 May 2021 (when USD Index was trading at 89.75), we expected USD Index to ‘head towards the early January low of 89.21’. We highlighted, ‘for USD Index to move to 89.21, it has to maintain the current rapid pace decline and should not move above the declining trend-line resistance (currently at 90.65)’.” “While USD Index subsequently dropped to 89.54, it turned around and not only broke the trend-line mentioned above but last week, it also cracked the major trend-line connecting March 2020 high (102.99) and this April’s high of 93.44. The strong surge resulted in a whopping weekly gain of +1.84%, its largest 1-week advance in about 9 months.” “Weekly MACD has flipped back into positive, and USD Index is currently holding not far below the 55-week exponential moving average (currently at 92.55). While the moving average thwarted the advance in USD Index in April, the strong surge in momentum this time around suggests that a break of 92.55 is likely. A weekly closing above 92.55 would greatly increase the odds for USD Index to advance further to 93.44 within this couple of months. Note that USD Index has stayed below the 55-week exponential moving since June last year. Support is at 91.50 but only a breach of 90.85 would indicate that our expectation for a stronger USD Index is wrong.”

Netherlands, The Consumer Confidence Adj climbed from previous -9 to -3 in June

Netherlands, The Consumer Spending Volume up to 9.4% in April from previous -0.4%

USD/INR defends the 74.00 threshold, snapping a two-day pullback from late-April top amid the initial Indian trading session on Tuesday. That said, th

USD/INR steps back from intraday top after two-day downtrend.Mildly upbeat sentiment weighs on USD ahead of Powell’s testimony.US-China jitters, covid updates and second-tier data add filters to the moves.USD/INR defends the 74.00 threshold, snapping a two-day pullback from late-April top amid the initial Indian trading session on Tuesday. That said, the Indian rupee (INR) pair is up 0.07% intraday around 74.17 by the press time. Although risk barometers are mildly positive and exert downside pressure on the US dollar, indirectly favoring the USD/INR bulls, uncertainty over the Fed’s outlook probe the pair buyers after declining for two consecutive days. The Fed policymakers’ ability to convince markets of no immediate risk to the current rates and bond purchases seem to have dragged the greenback recently. Though, mixed comments from the US bankers keep traders on the edge. Early in Asia, remarks of the Fed Chairman Jerome Powell crossed wires, via Reuters, suggesting inflation risk as transitory whereas comments from New York Fed President John C. Williams take multiple turns in his latest speech that recently mentioned that Fed is talking about talking tapering. Dallas Fed President Robert Kaplan was on the same line while favoring “taking the foot off the accelerator sooner rather than later.” The sino-American story also regains the market’s attention as Beijing’s ability to deliver trade deal promises risks fresh tensions even as Global Times terms the conditions as “make-or-break”. Elsewhere, improvement in the coronavirus (COVID-19) conditions in India and the US add to the market’s optimism and keep USD/INR pair sellers hopeful. Amid these plays, US stock futures and Treasury yields remain mildly bid whereas the US dollar index (DXY) struggles to keep early Asian recovery moves. Looking forward, US Existing Home Sales and Richmond Fed Manufacturing Index may entertain USD/INR traders, mostly teasing the bears, ahead of Fed Chairman Powell’s testimony. Although Powell is up for taming the tapering and rate hike woes, any negative surprises, should justify the USD/INR pair’s defensive performance above the 74.00 round figure and can aim to refresh the monthly high. Technical analysis Pullbacks from the mid-April tops join receding bullish bias of the MACD histogram to direct USD/INR towards 50-day SMA retest, around 73.65.  

USD/CHF edges higher on Tuesday morning in the initial European trading hours. The pair moves in a close trading range with almost 10 pips movement an

USD/CHF locks in some gains in the early European session.Pair looks for additional gains, stays comfortable above 20-hour SMA.Momentum oscillators hold onto overbought zone and adopt a wait-and-watch approach.USD/CHF edges higher on Tuesday morning in the initial European trading hours. The pair moves in a close trading range with almost 10 pips movement and awaits confirmation before any directional bet. At the time of writing, USD/CHF is trading at 0.9190, up 0.10% for the day. USD/CHF 4-hour chart On the 4-hour chart, the pair has been well supported above the 20-hour Simple Moving Average (SMA) at 0.9185. The upward trendline from the low of 0.8981 remains defensive for the bulls. If the pair sustains above the session’s high at 0.9196,  then it has the potential to move back to the 0.9220 horizontal resistance level. The Moving Average Convergence Divergence (MACD) indicator trades in an overbought zone, with a bearish crossover. As per the formation, price has retracted from the highs of 0.9230 to the lows of 0.9176. Any uptick in the MACD could prompt USD/CHF bulls to retest the previous day’s high in the vicinity of 0.9240 area. The price action would then open the gates for the levels last seen in April. The bulls would capture the high of April 15 at 0.9246. Alternatively, if price reverses direction, then the first target for USD/CHF bears could be the previous day’s low at 0.9175 followed by the 0.9140 horizontal support area. Next, the market participants would set their eyes on the 0.9100 key psychological mark. USD/CHF additional levels
 

Analysts at Scotiabank offer a sneak peek at what to expect from the Bank of England’s (BOE) monetary policy announcement due this Thursday. Key quote

Analysts at Scotiabank offer a sneak peek at what to expect from the Bank of England’s (BOE) monetary policy announcement due this Thursday. Key quotes “Recall that the MPC decided to reduce the flow of gilts purchases to £3.4B/week while leaving the size of the gilt purchase program unchanged at £875B so that they could stick to prior guidance that they will keep buying until the end of 2021.”  “It's unclear that the BoE would view it as being worthwhile to offer further adjustments to the stock and flow of its gilts purchase program given its expiration by year-end anyway.”  “The more meaningful debate concerns when the policy rate may begin to lift off. Markets are sensibly pricing rate hikes into Q2 of next year which roughly coincides with the BoE's forecast for spare capacity to shut.” 

Silver buyers attack the $26.00 threshold, up 0.13% intraday, ahead of Tuesday’s European session. In doing so, the quote keeps the previous day’s bou

Silver keeps Monday’s rebound from 200-day SMA, picks up bids of late.100-day SMA, multiple highs since March probe buyers.RSI conditions, sustained trading above the key SMA favor bulls.Silver buyers attack the $26.00 threshold, up 0.13% intraday, ahead of Tuesday’s European session. In doing so, the quote keeps the previous day’s bounce off 200-day SMA amid RSI recovery from oversold conditions. Silver bulls eyeing further consolidation from important SMA, amid favorable RSI conditions, require a clear upside break of the $26.60-65 horizontal hurdle, comprising 100-day SMA and multiple tops marked since March 18 to regain the throne. Following that, the early-month low near the $27.00, the $28.00 and another horizontal hurdle around $28.30 will be in the spotlight. Meanwhile, pullback moves remain less worrisome until staying beyond the 200-day SMA level of $25.70. Also defending the silver buyers is an ascending support line from November 30, 2020, around $25.00. In a case where the precious metal fails to stay above the $25.00 round–figure, the yearly bottom surrounding $23.75 should lure the silver bears. Silver daily chart Trend: Further recovery expected  

The appreciative move in the US dollar keeps GBP/USD gains under check. The pair accumulated stellar gains on Monday after the heavy losses incurred i

GBP/USD stalls after the previous day’s sharp rise. Uptick in US treasury yields lift demand for the US dollarGBP remains under pressure amid Brexit chaos and delayed economic reopening.The appreciative move in the US dollar keeps GBP/USD gains under check. The pair accumulated stellar gains on Monday after the heavy losses incurred in the previous weeks. However, it lacks the strength to hold onto the gains. At the time of writing, GBP/USD trades at 1.3916, down 0.10% for the day. The US Dollar Index (DXY), which tracks the performance of the greenback against its six major rivals, is little changed at 91.93 with 0.03% gains. The DXY declined 0.52% in the previous session after retracing from two months high. The US 10-year benchmark yields stood at 1.49% with 0.59% gains as investors continued to digest the impact of the  Fed’s hawkish tone in the last week and as pressure mounted due to reflation trades. In the meantime, Fed Chair Jerome Powell in his remark prepared ahead of a House hearing today stated that the central bank will continue to support the economy. In addition to that, St. Louis Fed President James Bullard commented that the first increase could come as soon as next year. New York Fed President John Williams said economic data and conditions have not progressed much to shift FOMC’s monetary policy stance. The dollar gained on the volatility following mixed comments from Fed officials.
On the other hand, the British pound remains pressurized due to the delay in ending all COVID-19 restrictions on June 21. The decision could impact sterling's valuation negatively for the time being. Meanwhile, UK Prime Minister Boris Johnson said at a news conference that he is now looking to July 19 as the next date to uplift all the restrictions. In addition, the Brexit saga continues to weigh on the performance of the cable as there was no breakthrough on the deadlock following the G7 summit. UK Brexit Minister David Frost is due to meet his EU counterpart Maros Sefcovic this week. Market participants look forward to the US Existing Home Sales data, Richmond Fed Manufacturing Index, and Fed Chair Powell Testimony to gain some fresh trading impetus. GBP/USD additional levels  

EUR/USD recovers from intraday low, pares daily losses to 0.07%, around 1.1910 heading into Tuesday’s European session. The major currency pair consol

EUR/USD trims early Asian losses amid subdued session.DXY struggles to keep rebound amid sluggish yields, light calendar.Powell’s prepared remark pose upside risk but Fed policymakers’ divide keeps traders on the edge.Eurozone Consumer Confidence, ECB members comments could offer intermediate moves.EUR/USD recovers from intraday low, pares daily losses to 0.07%, around 1.1910 heading into Tuesday’s European session. The major currency pair consolidated the previous day’s heavy bounce off early April levels as market sentiment dwindled amid mixed clues in Asia. However, broad optimism towards global economic recovery and receding fears of the Fed’s rate hike and/or tapering woes seem to back the latest run-up. The Fed policymakers’ ability to convince traders of no immediate risks to the current monetary policy favored market sentiment on Monday. The risk-on mood dragged the US dollar index (DXY) amid a lack of major catalyst before the prepared remarks of the Fed Chairman Jerome Powell crossed wires. It should be observed that ECB President Christine Lagarde’s rejection of the bond purchase tapering also favored the EUR/USD buyers. Fed Chairman Jerome Powell terms the inflation risk as transitory, suggesting no major challenges to the present monetary policies, per the published remarks. On the same line were comments from St. Louis Fed President James Bullard who sounded a bit calmer while saying that the low interest rates and low inflation rate era are not ending any time soon. Alternatively, New York Fed President John C. Williams takes multiple turns in his latest speech that recently mentioned that Fed is talking about talking tapering. Dallas Fed President Robert Kaplan was on the same line while favoring “taking the foot off the accelerator sooner rather than later.” It’s worth noting updates over the US-China trade relations also add to the pair’s momentum of late. Following Bloomberg’s piece citing threats to the phase one deal due to Beijing's inability to import pre-agreed US goods, China’s Global Times termed the Sino-American talks at the make-or-break level. Chatters over the coronavirus (COVID-19) variant and escalating economic recovery from the pandemic, not to forget cautious sentiment ahead of Powell’s testimony, act as extra catalysts for the market. Against this backdrop, stock futures and US Treasury yields remain directionless, struggling to keep the previous daily gains, whereas the DXY bears take a breather. Moving on, preliminary readings of the Eurozone Consumer Confidence for June, expected -3.0 versus -5.1 prior, will precede speeches from ECB’s executive board members, namely Philip Richard Lane and Isabel Schnabel, to direct immediate moves. The policymakers may confirm Lagarde’s cautious optimism and can favor EUR/USD bulls, together with upbeat data. On the other hand, US Existing Home Sales and Richmond Fed Manufacturing could also offer intraday moves to the pair ahead of Powell’s testimony. Although Fed Chair Powell is capable to convince markets of no need for immediate policy action, any negative surprises won’t hesitate to recall the EUR/USD bears. Technical analysis EUR/USD pulls back from 61.8% Fibonacci retracement of the March-May upside, around 1.1930, amid a receding bearish bias of the MACD signals, which in turn favor further weakness of the currency pair.  

USD/CAD edges higher in the Asian trading hours The pair rose near to the multi-month high on Monday, however, failed to sustain the gains. At the tim

USD/CAD posts some gains after the previous day's steep fall.Bulls are facing stiff resistance near the 1.2490 mark.Overbought MACD looks exhaustive, warns against aggressive bids.USD/CAD edges higher in the Asian trading hours The pair rose near to the multi-month high on Monday, however,  failed to sustain the gains. At the time of writing, USD/CAD trades at 1.2375, up 0.12% for the day. USD/CAD 4-hour chart On the 4-hour chart, after testing the daily high near the 1.2490 level, USD/CAD fell sharply and took shelter at 38.2% Fibonacci retracement, which extends from the lows of 1.2157. The pair now consolidates near the 1.2370 level.  USD/CAD bulls making an effort to dominate the trade over here. The formation of three small Doji candlesticks suggests traders are reluctant to place aggressive selling bids at this level. In doing so, the USD/CAD pair would first attempt to touch the 23.6% Fibonacci retracement level at 1.2410 followed by the 1.2450 horizontal resistance level. The  Moving Average Convergence Divergence (MACD) indicator trades in the overbought zone signaling stretched buying opportunities. Any uptick in the MACD would continue to push USD/CAD higher to test the previous day’s high at 1.2487. Alternatively, if price moves and sustains below the session’s low, then the bears could come back in action. The first target on the bear's radar would be the 50% Fibonacci retracement level at 1.2325. Market participants would then aim for the 1.2270 and the 1.2220 horizontal support levels. USD/CAD additional levels
 

The data has been so strong, it would be naive not to think the Fed wasn't moving closer to tapering over the past several months. It's all part of th

The data has been so strong, it would be naive not to think the Fed wasn't moving closer to tapering over the past several months. It's all part of the mid-cycle transition that has been ongoing for months. Another classic signal the market gets it. more to come ...

NZD/USD bounces off an intraday low of 0.6970 while licking its wounds, down 0.13% on the day, amid early Tuesday. The kiwi pair’s recovery from a sev

NZD/USD reverses Monday’s recovery moves with mild losses.Strong Momentum line may tease bears but bulls will refrain to enter below 100-HMA.NZD/USD bounces off an intraday low of 0.6970 while licking its wounds, down 0.13% on the day, amid early Tuesday. The kiwi pair’s recovery from a seven-month low failed to cross the 0.7000 threshold, which in turn portrays a bearish chart pattern on the hourly (1H) play. It should, however, be noted that the 50-HMA level teases the sellers amid an upbeat Momentum line, around 0.6970, near to the confirmation of the bearish flag. While the buyers are likely to print on-and-off moves around 0.6970, the sellers’ ability to conquer the key support will make the pair vulnerable to decline towards the September 2020 tops surrounding the 0.6800 theshold. During the fall, the recent low of around 0.6920 may act as a buffer. Alternatively, the corrective pullback may remain below the flag’s resistance line, near 0.7012, while the 0.7000 psychological magnet can offer immediate resistance. Also acting as the upside filter is 100-HMA level of 0.7025. NZD/USD hourly chart Trend: Further weakness expected  

At the time of writing, DXY is higher by over 0.1% and is finding support following the prior bearish correction from 92.40. The US dollar is being he

USD is back on the front foot in Asia, but the tide could quickly turn.The technical basis for a continuation to the downside is compelling, at least until the 38.2% Fibo.Fed speakers are the focus for the week while traders await US economic data.At the time of writing, DXY is higher by over 0.1% and is finding support following the prior bearish correction from 92.40.  The US dollar is being held up on Tuesday in Asian markets while traders await the Q&A session as the US Federal Reserve chair Jerome Powell is expected to give guidance in his testimony to US Congress. Fed's Powell: Inflation has increased notably in recent months The greenback had been on the march in a  sharp rally following the Fed's surprise hawkish hold last week that flagged sooner-than-expected interest rate hikes. In the US session, New York Fed President Williams said the economy hasn't improved enough to pare policy stimulus.  St. Louis Fed President James Bullard also spoke and said that the central bank will have to stay "nimble" as the US economy reopens after the COVID pandemic. In prepared remarks, Powell has noted sustained labour market improvement and the recent increase in inflation. For the Q&A, analysts are expecting him to attempt to impose his assessment that the very strong inflation prints we’ve seen recently will fade. DXY technical analysis Bears are targeting a 38.2% Fibonacci correction ahead of the deeper support structure.   

S&P 500 Futures remain mildly bid around 4,217, up 0.08% intraday, during early Tuesday. The risk barometer jumped the most in three months the previo

S&P 500 Futures fail to extend Wall Street’s gains amid cautious sentiment, lack of data/events.Powell’s prepared remarks repeat the old tunes, US inflation expectations improved on Monday.US bond traders take a breather following the rebound from four-month low.S&P 500 Futures remain mildly bid around 4,217, up 0.08% intraday, during early Tuesday. The risk barometer jumped the most in three months the previous day after the market sentiment improved on Fed’s efforts to tame rate-hike and tapering concerns. However, a light calendar in Asia and market fears ahead of Fed Chairman Jerome Powell’s testimony probe bulls. In doing so, the investors fail to stretch the previous day’s upbeat performance of the US equities. Dow Jones jumped the most since March whereas S&P 500 and Nasdaq also posted gains on Monday as comments from the policymakers, including prepared remarks of Chairman Powell, keep rejecting immediate risks to the Fed’s easy-money policies. Even so, hawkish rhetoric by New York Fed President John C. Williams and Dallas Fed President Robert Kaplan seem to test the risk appetite of late. Read: Wall Street Close: Dow jumps the most in three months as bulls battle the Fed Also on the negative side could be doubts over the US-China phase one deal, spotted by Bloomberg. The news piece cites Beijing’s inability to import the agreed American goods to indicate risks to the much-awaited trade deal among the world’s largest two economies. Additionally, the covid struggle of the UK and Japan add to the upside filters for the markets. It’s worth noting that the US Treasury yields remain subdued even as the inflation expectations rebound from a three-month low, following the bond bears’ return from a four-month low of yields. Moving on, second-tier data from the US may entertain traders ahead of Powell’s testimony. While most market players are optimistic over the Fed Chair’s defensive tactics to favor the current monetary policy, failures to offer convincing answers to the jury may renew the risk-off mood and recall the US dollar buyers.

Commenting on the European Central Bank’s (ECB) exit timetable, Sven Jari Stehn, Chief European Economist at Goldman Sachs said that the central bank

Commenting on the European Central Bank’s (ECB) exit timetable,  Sven Jari Stehn, Chief European Economist at Goldman Sachs said that the central bank could start stimulus withdrawal towards the end of 2021. Key quotes Given where the FOMC is placed in regards to adjusting policy this "should make the [ECB] Governing Council more confident that it can start to reduce the PEPP purchases later in the year.” “We do think they will step down the PEPP purchase program at the September meeting going into Q4.” The ECB is not "in a rush to follow the Fed in accelerating the exit timetable." “We have four fiscal reasons for thinking that the return to fiscal consolidation will not be as abrupt as after the GFC and during the eurozone crisis.”

USD/ZAR remains sidelined around 14.20-25, trimming the previous day’s losses with a 0.07% intraday run-up, amid Tuesday’s Asian session. The quote to

USD/ZAR struggles to keep bounce off short-term key support line.Bullish MACD backs rebound towards four-month-long horizontal hurdle.100-day SMA adds to the upside filters, 14.00 threshold offers extra support.USD/ZAR remains sidelined around 14.20-25, trimming the previous day’s losses with a 0.07% intraday run-up, amid Tuesday’s Asian session. The quote took a U-turn from 100-day SMA the previous day before recently bouncing off a horizontal line from mid-April. Although the bullish MACD signals back the latest recovery, multiple levels marked since February offer strong immediate resistance to USD/ZAR, around 14.40, ahead of directing the bulls to 100-day SMA close to 14.45. During the pair’s recovery past 14.45, May’s high near 14.55 will be important to watch. On the flip side, a daily closing below 14.14 horizontal support may aim for the six-week low near 13.95 prior to highlighting the 13.80-78 region for the USD/ZAR bears. In a case where the pair sellers dominate below 13.78, the yearly low of around 13.40 will be in focus. Overall, USD/ZAR remains range-bound during the recovery mode. USD/ZAR daily chart Trend: Sideways  

In recent trade today, the People’s Bank of China (PBOC) set the yuan (CNY) reference rate at 6.4613 (est 6.4654; prev 6.4546) About the fix China mai

In recent trade today, the People’s Bank of China (PBOC) set the yuan (CNY) reference rate at 6.4613 (est 6.4654; prev 6.4546) About the fix China maintains strict control of the yuan’s rate on the mainland. The onshore yuan (CNY) differs from the offshore one (CNH) in trading restrictions, this last one is not as tightly controlled. Each morning, the People’s Bank of China (PBOC) sets a so-called daily midpoint fix, based on the yuan’s previous day closing level and quotations taken from the inter-bank dealer.   

One-month risk reversal for the EUR/USD, a gauge of calls to puts, snapped a two-day downtrend, jumping the most since May 07, for Monday, per the lat

One-month risk reversal for the EUR/USD, a gauge of calls to puts, snapped a two-day downtrend, jumping the most since May 07, for Monday, per the latest data from Reuters. The pair bulls seem to cheer the Fed’s efforts tame rate-hike concerns ahead of Chairman Jerome Powell’s testimony. That said, the risk reversal flashes the +0.079 level, favoring EUR/USD bulls by the press time. The positive reading indicates call options are drawing a higher premium (option price) than put or bearish bets. Technically, EUR/USD pulls back from 61.8% Fibonacci retracement of the March-May upside amid a receding bearish bias of the MACD signals, which in turn favor further weakness on the currency major. Read: EUR/USD Price Analysis: Further upside appears elusive whilst below 1.1930

EUR/JPY trades cautiously on Tuesday morning in the Asian trading hours. The cross constitutes a 20 pips movement with a negative bias. As of writing

EUR/JPY pares gains in the Asian session.Cross fell sharply from the high of 133.68 in the previous week.Momentum oscillator in overbought zone warns of aggressive bets. EUR/JPY trades cautiously on Tuesday morning in the Asian trading hours. The cross constitutes a 20 pips movement with a negative bias. As of writing, EUR/JPY trades at 131.26 with 0.09% losses on the day. EUR/JPY daily chart On the daily chart, the  EUR/JPY pair has fallen sharply in the previous week after consolidating in the range of 133.00-134.10.  If price sustains above the session’s high at 131.54, then it has the potential to reach the 131.85 horizontal resistance level followed by the high of May 12 at 132.47. The Moving Average Convergence (MACD) indicator holds onto overbought trajectory with bearish momentum. Any uptick in the MACD would prompt EUR/JPY bulls to aim for May 14 high at 132.84. Alternatively, if price moves lower, then it could first target the 130.95 horizontal support level. The cross would spot the next target at the 100-day Simple Moving Average (SMA) at 130.51. A sustained move below the above mentioned 100-day SMA would prompt EUR bears to attract  April 26 low at 130.21. EUR/JPY additional levels  

USD/JPY is on the verge of an upside continuation having pulled back to expected daily support. The following is an illustration of how the time frame

The yen is under pressure vs the greenback with bulls pressing ahead.The bulls are targeting a break of daily resistance for a monthly upside continuation.USD/JPY is on the verge of an upside continuation having pulled back to expected daily support. The following is an illustration of how the time frames are coinciding with a bullish bias.   The monthly chart offers a bullish bias and the lower time frames will offer further conviction as follows:  Weekly chart There are a few resistance layers for the price to cross. Daily chart The daily chart has completed its range of downside potential according to the retracement o that enose of the W-formation.  The 38.2% Fibonacci is now acting as support. 

In its latest update on the US dollar, following the greenback’s recovery post-Federal Open Market Committee (FOMC) meeting, Goldman Sachs reiterates

In its latest update on the US dollar, following the greenback’s recovery post-Federal Open Market Committee (FOMC) meeting, Goldman Sachs reiterates its bearish bias for the US dollar. Key quotes From its October 2013 low to the end of 2013 the trade-weighted Dollar appreciated 1.5%. Based on these guideposts, we would see roughly 1.5-3.0% additional near-term upside risk to the broad Dollar, assuming US activity data remains firm and markets continue to reprice Fed expectations in a hawkish direction. However, despite the hawkish June FOMC meeting, we do not see a case for sustained Dollar appreciation. Most importantly, our own Fed expectations are more dovish than current market pricing: our economists forecast one rate hike by end-2023 compared to the roughly three currently priced in. It’s worth noting that the US dollar index (DXY) consolidates the previous day’s pullback from early April tops while flashing 91.93 as a quote during Tuesday’s Asian session. Also read: Dollar on the backfoot, DXY trades south of 92.00

AUD/USD refreshes intraday low near 0.7520, down 0.11% on a day, while consolidating the previous day’s gains amid Tuesday’s Asian session. In doing s

AUD/USD fades the previous day’s rebound from yearly low.RSI recovery from oversold area favors the pullback moves.Horizontal line around 0.7590 becomes the key hurdle, bears may have 61.8% Fibonacci retracement level on the radar.AUD/USD refreshes intraday low near 0.7520, down 0.11% on a day, while consolidating the previous day’s gains amid Tuesday’s Asian session. In doing so, the quote justifies the last week’s bearish momentum on the break of the 200-day SMA (DMA). Given the absence of oversold RSI, the pair’s failures to cross the crucial DMA hurdle during Monday’s recovery enable the bears to again aim for the late December lows near 0.7460. During the fall, the 50% Fibonacci retracement of November 2020 to February 2021 upside, near the 0.7500 threshold, as well as the recent low of 0.7477, can test the AUD/USD bears. Although RSI conditions may trigger another bounce off 0.7460, any further downside may not hesitate to challenge the 61.8% Fibonacci retracement level of 0.7378. Meanwhile, the 200-DMA level of 0.7556 isn’t the only barrier for AUD/USD bulls as the yearly horizontal line surrounding 0.7590 becomes a tough nut to crack for them. Also acting as the upside hurdle is the early month’s low around 0.7645 and May’s bottom of 0.7674. AUD/USD daily chart Trend: Further weakness expected  

GBP/JPY eases to 153.50, down 0.12% intraday, in the latest pullback moves amid the initial hour of Tokyo open on Tuesday. It’s worth noting that the

GBP/JPY steps back from weekly top, probes the previous day’s positive performance.Market sentiment dwindles amid quiet session, Fedspeak, covid are the key catalysts.Japanese stocks open higher but S&P 500 Futures struggle, US Treasury yields stay quiet.Risk catalysts become crucial for fresh impulse amid a light calendar.GBP/JPY eases to 153.50, down 0.12% intraday, in the latest pullback moves amid the initial hour of Tokyo open on Tuesday. It’s worth noting that the lack of major catalysts and cautious sentiment ahead of the day’s, as well as the week’s, key data/events probe the bulls after posting the heaviest recovery moves since late May. Although a majority of the Fed policymakers tried to tame the tapering and rate hike concerns, indecision among the US central bank board members couldn’t be ruled out. This joins the escalating inflation pressure from strong data and hopes of more stimulus to keep traders divided. Additionally, fears of the covid’s Delta variant and criticism over Japan’s holding of Olympics join the Brexit woes to weigh on the quote. The UK and Japan both suffer from the virus resurgence wherein Britain recently pushed back the unlock date. Furthermore, tussles concerning the Northern Ireland (NI) border become a tough nut to crack for the British and the European Brexit negotiators of late. On the contrary, the UK is up for signing the trans-Pacific trade deal. Even so, Japan’s Nikkei jumps over 2.0% and the US S&P 500 Futures also print mild gains. However, the US 10-year Treasury yields struggle to keep the previous day’s recovery from the four-month low. Moving on, a lack of major data/events can keep troubling GBP/JPY traders, which in turn helps intraday sellers amid UK’s covid and Brexit woes. It’s worth noting that Wednesday’s preliminary PMIs for June and Thursday’s BOE become the week’s key events while Fed Chairman Jerome Powell’s testimony will be important to watch for today’s moves. Technical analysis GBP/JPY bulls need a clear break of 154.85 to defy the downside risk to retest 100-day SMA near 151.25. 

AUD/JPY edges lower on Tuesday morning in the Asian session. After posting strong gains in the previous session, the pair seems to be consolidating ga

AUD/JPY remains muted in the Asian session.AUD limit gains amid risk-off mood and trade dispute with China.Yen suffers from a fragile economic outlook and BOJ measures.AUD/JPY edges lower on Tuesday morning in the Asian session. After posting strong gains in the previous session, the pair seems to be consolidating gains near the higher levels. At the time of writing, AUD/JPY trades at 83.04, down 0.10% for the day. Investors continued to digest the US Fed’s higher inflation and interest rate forecast, which came as a surprise to the market in the central bank’s latest monetary policy meeting.  On the economic side, the Retail Sales rose 0.1% in May, much below the market expectations at 0.5%. However, the readings pointed out a slower growth rate in the previous three months. Meanwhile, the escalating tensions between Australia and China prove to be a negative factor for the aussie. As reported, Canberra has dragged Beijing to WTO, after latter slap tariffs on Australind wine imports. Rebound in commodity prices helped limit the downside for the pair. The higher commodity prices help commodity-linked AUD to gain against the majors. It is worth noting that S&P 500 Futures were trading at 4,217, up 0.09% for the day. On the other hand, the yen remained grounded by the mixed Fed's official voices over taper talks. However, on the domestic front, a slower vaccination rollout program and lockdown restriction kept the currency pressurized. The market dynamics continue to influence the pair’s performance in the absence of any major fundamental news. AUD/JPY additional levels  

At the time of writing, XAG/USD is trading at $25.94 and is virtually flat on the session following a strong start to the week where it ended higher b

Bulls are attempting to correct the strong downward pressures imposed by the greenback.Silver traders will be looking to the Fed's chair today for insight into the central bank's policy roadmap.At the time of writing, XAG/USD is trading at $25.94 and is virtually flat on the session following a strong start to the week where it ended higher by 0.65%. Silver travelled from a low of $25.55 to a high of $26.08. All in all, it was a solid day for commodities that were recovering on weakness in the greenback and within a risk-on environment. Financial and commodities markets steadied in the aftermath of last week’s Fed hawkish hold announcement and Fed speakers are in focus. Traders are paying special attention to Fed speakers this week. Overnight, we heard from NY Fed President Williams who said the economy hasn't improved enough to pare policy stimulus. His comments were accompanied today by those of St. Louis Fed President James Bullard who has cited the "upside risk" of potential inflation and said that the central bank will have to stay "nimble" as the US economy reopens after the COVID pandemic. Meanwhile, the chair, Jerome Powell, is testifying to Congress where analysts are expecting him to attempt to impose his assessment that the very strong inflation prints we’ve seen recently will fade. This could be a weight on the greenback and support precious metals, especially if he explicitly pushes back against the idea of a 2022 rate rise and ensuring that financial market conditions remain orderly. Silver technical analysis Technically, silver is attempting a recovery but so far, the price is falling well short of a significant retracement. A 38.2% Fibo comes in at $26.60. On failures at the current level, there are prospects of another bearish leg towards a test of $ 25.00. 
 

USD/CAD remains sidelined around 1.2370, reverses the previous day’s pullback moves, amid Tuesday’s Asian session. The loonie pair stepped back from a

USD/CAD battles intraday top to consolidate recent losses.Strong support, upbeat Momentum line keep buyers hopeful.100-day SMA guards immediate upside, descending trend line from January becomes the key hurdle.USD/CAD remains sidelined around 1.2370, reverses the previous day’s pullback moves, amid Tuesday’s Asian session. The loonie pair stepped back from a four-month-old resistance line the previous day but the pair buyers return from a horizontal area comprising multiple levels marked since late April. Given the strong Momentum and the pair’s bounce off the key support zone, USD/CAD may extend the recovery moves toward the immediate hurdle, namely 100-day SMA level of 1.2420. During the quote’s further upside, the 1.2200 and the stated resistance line from late January, close to 1.2485, will crucial to watch. Meanwhile, a downside break of 1.2350-25 support area may seek confirmation around 1.2270 before dragging the quote to the mid-May tops surrounding the 1.2200 mark. It’s worth noting that there prevail multiple stops between the USD/CAD south-run below 1.2200 and the yearly low close to the 1.2000 psychological magnet. USD/CAD daily chart Trend: Further recovery expected  

GBP/USD bulls take a breather around 1.3925, following the heaviest rebound in two months, amid Tuesday’s Asian session. The cable pair benefited from

GBP/USD retreats above 1.3900, fades recovery from two-month low.Italy backs Euro 2020 final off the UK, British PM Johnson warns over rough winter on Delta variant fears.Quarantine rules will be easy for fully jabbed but uncertainty over unlock prevails.UK PMIs, BOE become the key, Powell’s testimony eyed for immediate direction.GBP/USD bulls take a breather around 1.3925, following the heaviest rebound in two months, amid Tuesday’s Asian session. The cable pair benefited from the risk-on mood the previous day while the latest inaction could be linked to mixed headlines from the Fed and concerning the UK’s covid conditions, as well as cautious sentiment ahead of the key data/events. With the latest Fedspeak marking a sustained battle to tame reflation and rage hike woes, coupled with the reduction in the US inflation expectations, market sentiment improved the previous day. Upbeat mood pulled the US dollar index (DXY) back from April levels while also favoring the US Treasury yields’ rebound from four-month lows. Fed Chairman Jerome Powell’s prepared remarks for Tuesday’s Testimony, published recently, term the inflation risk as transitory, suggesting no major challenges to the present monetary policies. Furthermore, St. Louis Fed President James Bullard sounded a bit calmer while saying that the low interest rates and low inflation rate era are not ending any time soon. Alternatively, New York Fed President John C. Williams takes multiple turns in his latest speech that recently mentioned that Fed is talking about talking tapering. Dallas Fed President Robert Kaplan was on the same line while favoring “taking the foot off the accelerator sooner rather than later.” On the other hand, Britain’s covid conditions remain grim amid faster spread of the Delta variant raising doubts over the unlock even as The Times said quarantine rules for the fully jabbed will be dropped. Reuters said, “The United Kingdom recorded 10,633 new cases of COVID-19 on Monday, up from the 9,284 the day before, the government said in its daily statistical update.” Due to the rising fears of Delta strain, Italy pushes for the Euro 2020 final to hold in Rome rather than the UK. Elsewhere, Britain prepares for the trans-Pacific partnership while Brexit drama with the European Union continues. Amid these plays, S&P 500 Futures print mild gains and the US 10-year Treasury yield keeps the previous day’s recovery moves, after dropping to the four-month low. Moving on, Testimony by Fed’s Powell will be the key event of the day whereas preliminary readings of the UK’s PMIs and the BOE should be important afterward. Given the likelihood of Powell’s sustained efforts to reject tapering and rate hike fears, GBP/USD may have further upside to go. Technical analysis The lows marked during late April, as well as recently, restrict short-term GBP/USD downside around 1.3800. However, the upside moves need a sustained break of 100-day SMA level of 1.3945 to battle the key resistance surrounding 1.4000–4010.  

AUD/NZD edges higher in the initial Asian session. The pair makes a consolidative move for the fifth straight session. At the time of writing, AUD/NZD

AUD/NZD continues to move in a range bound manner on Tuesday.Bulls need to breach the 1.0800 mark for a sustainable upside trend.Momentum oscillator holds onto the positive territory with a neutral outlook.AUD/NZD edges higher in the initial Asian session. The pair makes a consolidative move for the fifth straight session.  At the time of writing, AUD/NZD is trading at 1.0787, up 0.07% gains. AUD/NZD daily chart On the daily chart, the AUD/NZD has been consolidating near the 1.0800 mark with multiple top formations. The downward trendline from the high of 1.0947 acts as a strong resistance barrier for the bulls. A sustained move above the 1.0800 mark could push AUD/NZD higher towards the June 18 high in the vicinity of the 1.0815 area, which also coincides with the bearish sloping line. Next, the AUD/NZD bull’s target could be located at the 1.0825 horizontal resistance level. The Relative Strength Index (RSI) indicator reads above 50. The reading signifies underlying bullish sentiment for the pair while keeping the level last seen in April in its sight.
  
The next area of resistance would be the high of April 19 at 1.0851. Alternatively, any downtick in the RSI could invalid the previous price action The cross could test the 1.0750 horizontal support level followed by the June 8 low at 1.0714. Market participants would then aim for the low of June 4 near the 1.0700 level. AUD/NZD additional levels  

A weaker USD boosted its appeal of commodities among investors and for oil in particular, negotiations between the United States to the Iran nuclear a

WTI ended the New York day higher by over 2.9%.The combination of demand expectations, stockpiles and Iran headlines boosted oil overnight. A weaker USD boosted its appeal of commodities among investors and for oil in particular, negotiations between the United States to the Iran nuclear accord have been suspended following the election of hardliner Ebrahim Raisi in Iran's presidential elections. West Texas Intermediate (WTI) crude oil rallied to a new 32-month high on Monday while rising expectations of further declines in inventories also boosted sentiment. WTI crude for July delivery settled up US$2.02 to US$73.66 per barrel, Marketwatch reported. August Brent crude, the global benchmark, was last seen up US$1.30 to US$74.81. On a spot basis, WTI ended the New York day higher by over 2.9% after rallying from a low of $71.17 and to a high of $73.94bbls.  Meanwhile, a Bloomberg survey that was released has suggested that the market is expecting stockpiles fell by 4,386kbbls last week. ''Data-provider Genscape reported a 2.6mbbl drop in stockpiles at Cushing, Oklahoma. Inventories there are already at their lowest level since March 2020. This is being driven by strong travel data,'' analysts at ANZ bank said.  The combination of demand expectations and the prospects whereby otherwise, successful talks could see the return of a million barrels per day or more of Iranian exports to the world markets, has supported the price at the start of the week.  WTI technical analysis Technically, bulls have moved in on the dynamic counter trendline which has subsequently buckled. In doing so, the price is above the old resistance of 72.96. This old resistance would now be expected to act as support. On the upside, bulls will have their eyes on the psychological $75 level. On the downside, another test of 70 opens risk to the early summer highs.

“Britain will begin negotiations on Tuesday to join a trans-Pacific trade deal that it sees as crucial to its post-Brexit pivot away from Europe and t

“Britain will begin negotiations on Tuesday to join a trans-Pacific trade deal that it sees as crucial to its post-Brexit pivot away from Europe and towards geographically more distant but faster-growing economies,” said Reuters during early Tuesday morning in Asia. The deal becomes crucial for the UK as the partnership, known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), removes 95% of tariffs between its members: Japan, Canada, Australia, Vietnam, New Zealand, Singapore, Mexico, Peru, Brunei, Chile and Malaysia per Reuters. The news also quotes UK Trade Minister Liz Truss saying, “This part of the world is where Britain’s greatest opportunities lie. We left the EU with the promise of deepening links with old allies and fast-growing consumer markets beyond Europe". The British diplomat also said, "It is a glittering post-Brexit prize that I want us to seize." The possibilities of the US joining back the trade partnership were also cited in the news. Market implications Given the market’s attention to Fed Chair Jerome Powell’s testimony, the news failed to entertain traders. That said, GBP/USD fades rebound from the two-month lows while taking rounds to 1.3930 by the press time.

The selling interest in the US dollar keeps gains limited for USD/JPY. The pair moves in a narrow trade band with no meaningful traction. At the time

USD/JPY remains subdued on Tuesday.Rebound in US Treasury yields fails to uplifts the demand for the US dollar.Yen gains on its safe haven appeal despite the economic struggle.The selling interest in the US dollar keeps gains limited for USD/JPY. The pair moves in a narrow trade band with no meaningful traction. At the time of writing, USD/JPY trades at 110.28, down 0.01% for the day. The move was primarily sponsored by the depreciative move in the US Dollar. The US Dollar Index( DXY), which measures the performance of the greenback against its six major rivals, eased from the high of 92.30 toward 91.85 with 0.38% losses. Investors continued to digest the Fed’s surprise move on Wednesday. The central bank raised the inflation forecast very sharply with the forward guidance on the time to work on it. The Policymakers signaled two increases by the end of 2023. This, in turn, added to the demand for the US dollar. The US Treasury yields traded at 1.48% on Tuesday, after falling to a four month low of 1.36% on the previous day. The yield curve flattens, while long dated Treasury yields fall considerably more as compared to the short term yields. Meanwhile, New York Fed President John Williams said that the US economy is way far from achieving its job and inflation goals. The comments weigh on the US dollar. In addition to that, Fed Chair Jerome Powell said in prepared testimony for a congressional hearing on Tuesday that the US economy continued to show signs of economic recovery and remained concerned about the notable increase in inflation. The division between US President Joe Biden and Congress on the infrastructure bill funding plan also sour the sentiment around the greenback.  On the other hand, the Japanese yen remains pressurized on the submissive economic outlook. However, weaker equity markets make the yen an attractive safe-haven bet. The growth differentials in the US and Japan weigh on the prospects of the yen. As for now, investors are waiting for the US Existing Home Sales Data, Richmond Fed Manufacturing Index, and Fed Chair Powell Testimony to gauge the market sentiment. USD/JPY additional levels  

EUR/USD fades recovery from early April around 1.1920 during the initial Asian session on Tuesday. In doing to bouncing off a two-month low, the curre

EUR/USD rebound pauses around the key Fibonacci retracement.Receding bearish bias of MACD, improving risk sentiment favor bulls.Sellers await clear break of three-month-old support for fresh entries.EUR/USD fades recovery from early April around 1.1920 during the initial Asian session on Tuesday. In doing to bouncing off a two-month low, the currency major pair snapped a three-day losing streak, also posted the heaviest gains since late May, the previous day. The rebound battles 61.8% Fibonacci retracement of the March-May upside amid a receding bearish bias of the MACD signals. Hence, the quote may extend the latest run-up but the bulls await a clear break of 1.1930 before targeting the mid-April lows near 1.1940-45. It should, however, be noted that 50% Fibonacci retracement, March’s top and 200-day SMA, together offer a tough nut to crack for the EUR/USD bulls around 1.1990–2000. Meanwhile, pullback moves may initially aim for the 1.1900 threshold before eyeing the 1.1875 and the horizontal line around 1.1845. Though, a clear downside past 1.1845 may not hesitate to challenge the 1.1800 and 1.1760 supports ahead of directing EUR/USD bears to the yearly low near the 1.1700 round figure. EUR/USD daily chart Trend: Further recovery expected  

Bloomberg’s latest update on the Sino-American phase one trade deal, published late Monday, sounds grim amid China’s failures to reach purchase target

Bloomberg’s latest update on the Sino-American phase one trade deal, published late Monday, sounds grim amid China’s failures to reach purchase targets of the US goods. “China bought almost $10 billion worth of manufactured, agricultural and energy goods from the U.S. in May, the lowest monthly total since October 2020. That took total imports to almost $157 billion since January 2020, 41.4% of the targets the two nations agreed at that time,” the news said. Details of Beijing’s trade with Washington suggest the record import of corn even as the ships carrying the crop stuck waiting for weeks off China’s coast before they could offload, per the news. FX implications The news adds to the market’s latest confusion over Monday’s risk-on mood, following mixed comments from the Fed policymakers, which in turn adds filters to the AUD/USD recovery. Read: AUD/USD: Rebound from yearly low pauses around 0.7550 amid mixed Fedspeak

US shares rally on Monday, led by the Dow Jones Industrial Average (DJI), as recovery hopes regain the market’s attention amid Fed policymakers’ susta

US equities post notable gains as markets overcome Fed’s bearish rhetoric amid mixed signals from the latest Fedspeak.Crypto-linked firms lose on China’s crackdown, Microsoft reached intraday record high.US Treasury yields rebound from the four-month low, Crude oil refresh multi-month top.Fed Chair Powell’s testimony poised to strengthen recovery moves.US shares rally on Monday, led by the Dow Jones Industrial Average (DJI), as recovery hopes regain the market’s attention amid Fed policymakers’ sustained efforts to tame the tapering woes. Markets cheer recovery in the US Treasury yields from the lowest since February, as well as upbeat data and a run-up in oil prices, to portray an upbeat start of the week. Fed Chairman Jerome Powell’s prepared remarks for Tuesday Testimony keep terming the inflation risk as transitory, causing no major challenges to the present monetary policies. The Fed Boss also flaunts the availability of tools with the US central bank if needed to use. Alternatively, New York Fed President John C. Williams takes multiple turns in his latest speech that recently mentioned that Fed is talking about talking tapering. Dallas Fed President Robert Kaplan was on the same line while favoring “taking the foot off the accelerator sooner rather than later.” Furthermore, St. Louis Fed President James Bullard sounded a bit calmer while saying that the low interest rates and low inflation rate era are not ending any time soon. Additionally, the upbeat Chicago Fed National Activity Index, from downwardly revised -0.09 to +0.29 in May, joins WTI’s fresh high since October 2018 to keep markets optimistic. Amid these plays, DJI marks the heaviest jump since early March, up 1.76% or 586.39 points, to 33,876.97 whereas S&P 500 Futures came in second while rising 58.34 points, or 1.40%, to 4,224.79. It’s worth noting that technology shares were the laggards, weigh on the Nasdaq. That said, the tech-heavy index posts 111.10 points of a rise, or 0.79% upside, to end Monday’s North American trading session around 14,141. It’s worth noting that a jump in the US Treasury yields and drawdown in Cryptocurrencies, due to China’s crackdown on mining these volatile e-currencies, weighed on the technology shares but Microsoft posted the record intraday top. Shares of RIOT Blockchain and Coinbase Global dropped while Moderna shares benefited from the news of adding two new production lines. MicroStrategy lost nearly 10% as the firm added cryptocurrencies to its holdings despite the latest fall. Having witnessed an upbeat start to the week, investors may wait for Fed Chair Powell’s testimony to reconfirm his initial remarks suggesting no immediate challenges to the easy money policies. Also likely to entertain the markets could be the updates on US President Joe Biden’s infrastructure spending plan as well as second-tier US data.  

AUD/USD bulls await fresh clues to extend the recovery moves from the yearly low around 0.7550 during the early Tuesday morning in Asia. The Aussie pa

AUD/USD struggles to keep corrective pullback from year’s low.Market sentiment remained positive as Fed policymakers jostle reflation, rate hike woes.US Treasury yields recover from four-month low, Wall Street benchmarks gain as well.Light calendar in Asia highlights risk catalyst for fresh impulse, US data, Powell’s testimony will be the key.AUD/USD bulls await fresh clues to extend the recovery moves from the yearly low around 0.7550 during the early Tuesday morning in Asia. The Aussie pair not only began the week on the front foot to rebound from a six-month low but also snapped a four-day downtrend, not to forget posting the heaviest daily gains in two weeks, amid risk-on mood. While the economic calendar wasn’t so encouraging its seems the Federal Reserve (Fed) speakers, commonly known as Fedspeak, played their part to restore the market’s optimism. Fedspeak is the key… Fed Chairman Jerome Powell’s prepared remarks for today’s Testimony confirm the market expectations that the policymaker terms inflation risk as transitory and causing no major challenges to the present monetary policies. The Fed Boss also flaunts the availability of tools with the US central bank if needed to use. On the other hand, New York Fed President John C. Williams takes multiple turns in his latest speech that recently mentioned that Fed is talking about talking tapering. Dallas Fed President Robert Kaplan was on the same line while favoring “taking the foot off the accelerator sooner rather than later.” Furthermore, St. Louis Fed President James Bullard sounded a bit calmer while saying that the low interest rates and low inflation rate era are not ending any time soon. Global markets cheered the Fed policymakers’ efforts to placate rate hike woes during the first day of the week. The upbeat market mood also gained support from progressing talks over the US President Joe Biden’s infrastructure spending and upbeat Chicago Fed National Activity Index, from downwardly revised -0.09 to +0.29 in May. It’s worth noting that the preliminary readings of Aussie Retail Sales for May eased below market consensus and prior to 0.1% whereas the People’s Bank of China (PBOC) kept its benchmark rate unchanged the previous day. Both these events failed to offer any notable moves of the AUD/USD prices. Against this backdrop, US Treasury yields mark a stellar rebound from a four-month low whereas the US equities also posted notable gains by the end of Monday’s North American trading session. Looking forward, a lack of major data will push AUD/USD traders to recall Fedspeak and search for sentiment-related headlines for fresh impulse ahead of the US session. Following that, US Existing Home Sales for May and Richmond Fed Manufacturing Index for June may entertain market players ahead of Fed Chair Powell’s testimony. As the prepared remarks have already backed the major consensus of no surprises, the US dollar pullback may extend should Powell chose to keep taming the policy hawks. Technical analysis AUD/USD pair’s corrective pullback needs to cross the 200-day SMA level around 0.7560 to restore the bull’s confidence.  

New York Fed President John Williams said on Monday that the record demand for a Federal Reserve program that lets money market funds and other firms

New York Fed President John Williams said on Monday that the record demand for a Federal Reserve program that lets money market funds and other firms park cash with the Federal Reserve overnight is not concerning and the tool is working as intended to help set a floor on short-term rates. Key notes He would not describe market reaction to last week’s fed meeting as a taper tantrum. There are risks to both sides of Fed’s employment and price stability goals and the outlook is still uncertain. Fed chose not to have a formula for average inflation targeting. Core principle of Fed’s approach is that inflation expectations should be anchored at 2%. There are upside risks to inflation, which has come in stronger than people expected. There is a good understanding of the fed’s framework and the understanding that some inflation overshoot is part of the goal. Labor market is matching workers at a really good clip and wages are picking up. There is a tight labor market in the short run because we’re in this extraordinary period of churn. Most important thing is watching the data and seeing how things play out in terms of employment gains and inflation. Expects the economy to continue to grow nicely in the next couple of years, unemployment to continue to come down and inflation to come out close to 2%. Overnight reverse repo facility is working exactly as designed in terms of providing a floor to interest rates. He is not concerned about high usage of overnight reverse repo facility or if it should continue to increase Fedhas the tools to make sure that interest rates are within the target range. Fed’s adjustments to administered rates were about keeping the fed funds rate within the target range because the downward pressure on short-term rates is growing. Money market funds have come under distress in the past and should have the attention of regulators.

South Korea Producer Price Index Growth (MoM) above forecasts (0.2%) in May: Actual (0.4%)

South Korea Producer Price Index Growth (YoY) above expectations (6%) in May: Actual (6.4%)

New Zealand Westpac Consumer Survey came in at 107.1, above forecasts (99.5) in 2Q

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