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United States 7-Year Note Auction declined to 4.276% from previous 4.65%
398799 June 28, 2024 01:09 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
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Canadian Dollar mixed on Thursday as CAD traders await Canadian GDP
398794 June 28, 2024 00:56 FXStreet Market News
- Canadian Dollar went in both directions on ThursdayÂ’s mixed US data.
- Canada is absent from economic calendar until FridayÂ’s GDP update.
- US PCE Price Index inflation also looms ahead on Friday.
The Canadian Dollar (CAD) gave a mixed performance on Thursday after a data-light economic calendar on the Canadian side left the CAD to twist amid a mixed print in key US figures. Markets are gearing up for FridayÂ’s US Personal Consumption Expenditure Price Index (PCE) inflation release after ThursdayÂ’s burgeoning US release schedule ran the gamut.
Canada is absent from the economic calendar on Thursday, leaving CAD traders to shuffle in place until FridayÂ’s Canadian Gross Domestic Product (GDP) update for April.
However, FridayÂ’s US PCE Price Index inflation is set to eclipse Canadian GDP figures entirely. As a key reading of inflation for the Federal Reserve (Fed), significant market attention will be focused squarely on US price growth figures to cap off the trading week.
Daily digest market movers: US data comes in mixed, Canadian Dollar follows suit
- US Durable Goods Orders contracted in May, clocking in -0.1% MoM versus the forecast 0.2%, falling further than expected from the previous 0.4%.Â
- US Q1 GDP came in exactly as expected with first-quarter GDP slightly revised to 1.4% from the initial print of 1.3%.
- US Initial Jobless Claims beat expectations with 233K net new jobless benefits seekers for the week ended June 21. Median market forecasts had expected a print of 236K compared to the previous weekÂ’s 238K.
- US Core Personal Consumption Expenditures, a preview of FridayÂ’s PCE Price Index, ticked upwards to 3.7% in the first quarter versus the expected hold at 3.6%.
- FridayÂ’s Canadian MoM GDP in May is expected to rebound to 0.3% from the previous flat print.
- US core PCE Price Index inflation is expected to ease to 0.1% in May from the previous 0.2%.
Canadian Dollar PRICE Today
The table below shows the percentage change of Canadian Dollar (CAD) against listed major currencies today. Canadian Dollar was the strongest against the Swiss Franc.
| Â | USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF |
|---|---|---|---|---|---|---|---|---|
| USD | Â | -0.24% | -0.22% | -0.06% | -0.11% | -0.02% | -0.12% | 0.07% |
| EUR | 0.24% | Â | 0.00% | 0.15% | 0.11% | 0.23% | 0.09% | 0.31% |
| GBP | 0.22% | -0.00% | Â | 0.18% | 0.11% | 0.23% | 0.12% | 0.32% |
| JPY | 0.06% | -0.15% | -0.18% | Â | -0.05% | 0.04% | -0.09% | 0.15% |
| CAD | 0.11% | -0.11% | -0.11% | 0.05% | Â | 0.08% | -0.01% | 0.19% |
| AUD | 0.02% | -0.23% | -0.23% | -0.04% | -0.08% | Â | -0.10% | 0.08% |
| NZD | 0.12% | -0.09% | -0.12% | 0.09% | 0.01% | 0.10% | Â | 0.20% |
| CHF | -0.07% | -0.31% | -0.32% | -0.15% | -0.19% | -0.08% | -0.20% | Â |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Canadian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent CAD (base)/USD (quote).
Technical analysis: Canadian Dollar churns on data-light Thursday, but gains remain thin
The Canadian Dollar (CAD) is mixed on Thursday, giving a middling performance in overall quiet markets. The CAD is up over a tenth of a percent against the Swiss Franc (CHF) and the Japanese Yen (JPY), but falling back a fifth of a percent against the Euro (EUR) and the Pound Sterling (GBP).
USD/CAD is stuck close to ThursdayÂ’s opening bids after an early dip to 1.3680. The pair remains stuck in a price action trap near the 1.3700 handle as intraday bids get hung up on the 200-hour Exponential Moving Average (EMA) at 1.3692.
Daily candlesticks are forming a bullish bounce after running aground of the 50-day EMA at 1.3676 and is set to snap a near-term losing streak after the pair flubbed a bullish recovery of the 1.3800 handle earlier in June.
USD/CAD hourly chart
USD/CAD daily chart
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is CanadaÂ’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in CanadaÂ’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
EUR/USD Forecast: Future price action hinges on US PCE
398792 June 28, 2024 00:33 FXStreet Market News
- EUR/USD reclaimed the area beyond 1.0700.
- The US Dollar faced renewed downside pressure.
- Markets now look at the release of US PCE.
The irruption of selling interest in the US Dollar (USD) prompted the USD Index (DXY) to give away part of the recent advance beyond the 106.00 level and refocus on the downside instead, allowing EUR/USD to regain balance and reclaim levels above 1.0700 the figure on Thursday.
In fact, the euro (EUR) managed to set aside some of the recent negative sentiment amidst reduced political concerns in France ahead of the June 30 snap elections.
The macroeconomic situation on both sides of the Atlantic remained steady, with the European Central Bank (ECB) contemplating further rate cuts beyond summer. Market expectations suggest two more ECB rate cuts later in the year.
On this, ECBÂ’s rate-setter Peter Kazimir said the bank might consider another interest rate cut later this year after the reduction implemented this month, although not during the summer.
On the other side of the road, market participants were still debating whether the Federal Reserve (Fed) would implement one or two rate cuts this year, despite the Fed forecasting just one cut, likely in December.
It is worth recalling that part of the recent uptick in the US Dollar came in response to hawkish comments from Fed officials, while the widening monetary policy gap between the Fed and other major central banks also contributed to the euro’s decline.
On Wednesday, FOMC Governor Michelle Bowman reiterated that her primary view is that inflation will fall further if the policy rate remains unchanged. She stated that rate cuts would be necessary if inflation stabilised around 2%. Her colleague Raphael Bostic, President of the Atlanta Fed, argued that inflation in the US “seems to be decreasing,” potentially paving the way for the Fed to reduce interest rates later this year.
The CME Group’s FedWatch Tool maintains a probability of around 65% of lower interest rates in September vs. a nearly 93% chance at the December 18 gathering.
In the short term, the recent ECB rate cut, compared to the Fed’s decision to maintain rates, has widened the policy gap between the two central banks. This could lead to further weakness in EUR/USD.
However, the Eurozone’s emerging economic recovery and perceived weakening of US fundamentals are expected to reduce this disparity, potentially providing occasional support for the pair in the near future.
EUR/USD daily chart
EUR/USD short-term technical outlook
If bears maintain control, EUR/USD may revisit the June low of 1.0666 (June 26), then the May low of 1.0649 (May 1), and lastly the 2024 bottom of 1.0601 (April 16).
Meanwhile, occasional bouts of strength may put the pair on track to revisit the 200-day SMA at 1.0789, prior to the weekly high of 1.0852 (June 12) and the June top of 1.0916 (June 4). The breakout of this level could put the March peak of 1.0981 (March 8) back on the radar ahead of the weekly high of 1.0998 (January 11) and the psychological 1.1000 yardstick.
So far, the 4-hour chart shows some evidence of ongoing recovery. The initial resistance is at 1.0746, then 1.0761, and finally 1.0800. The initial support is at 1.0666, ahead of 1.0649 and 1.0601. The Relative Strength Index (RSI) rebounded to around 50.
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VanEck files for Solana ETF in the US
398790 June 28, 2024 00:17 FXStreet Market News
- VanEck filed to list a Solana spot exchange-traded fund in the US after the approval in January of Bitcoin ETFs.
- The asset manager says it considers Solana “a commodity, like Bitcoin or Ether.”
- Solana jumps more than 10% following the news of the filing.
Solana (SOL) price surged by 8.2% on Thursday following the announcement of Van Eck filing the first Solana exchange-traded fund (ETF) in the US.Â
Matthew Sigel, the firm’s head of digital assets research, announced the decision on Twitter, attaching an image of an S-1 registration form for an investment trust with the US Securities and Exchange Commission (SEC).
I am excited to announce that VanEck just filed for the FIRST Solana exchange-traded fund (ETF) in the US.
Some thoughts on why we believe SOL is a commodity are below.
Why did we file for it?
A competitor to Ethereum, Solana is open-source blockchain software designed to… pic.twitter.com/XwwPy8BXV2— matthew sigel, recovering CFA (@matthew_sigel) June 27, 2024
Van Eck, known for filing the first Ethereum ETF in 2021, may signal a broader trend as the approval of spot Bitcoin and Ethereum ETFs potentially paves the way for more crypto ETFs in the US. Previously, the SEC had categorized SOL as a security.
“SOL’s decentralized nature, high utility, and economic feasibility align with the characteristics of other established digital commodities, reinforcing our belief that SOL may be a valuable commodity with use cases for investors, builders, and entrepreneurs looking for alternatives to the duopoly app stores,” Sigel said.
Solana trades at $147.96Â at the time of writing, up more than 8.2% on Thursday.
Solana price outlook improves following ETF news
Solana price broke out of a descending channel pattern on Tuesday, rallying 8.2% on Thursday to reach $147.96, spurred by news of Van Eck filing the first Solana ETF. This channel pattern was identified using swing lows and highs between June 6 and June 25.
If SOL could close above $151.79, the daily high on June 17, then it could extend an additional 14% rally to retest its weekly resistance level at $172.93.
The Relative Strength Index (RSI) on the daily chart is rising from an oversold condition and looking to break above the mean value of 50. However, the Awesome Oscillator (AO) indicator is still below the mean zero level. If bulls are indeed making a comeback, then both momentum indicators must maintain their positions above their respective neutrality levels. This development would provide additional momentum to the ongoing recovery rally.
SOL/USDT daily chart
However, if SolanaÂ’s price makes a daily candlestick close below $122.00, the bullish thesis would be invalidated by creating a lower low on the daily chart. This development could see SOL’s price decline by 5% to retest the weekly support level at $115.83.
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AUD/USD Forecast: Stuck within the consolidative range
398788 June 28, 2024 00:12 FXStreet Market News
- AUD/USD alternated gains with losses around 0.6650.
- Renewed selling pressure in the US Dollar failed to lift AUD.
- AustraliaÂ’s Consumer Inflation Expectations rose in May.
AUD/USD ended ThursdayÂ’s session barely changing around the mid-0.6600s, despite the resurgence of the corrective decline in the US Dollar (USD).
The pair’s irresolute price action was accompanied by tepid weakness in the Greenback, while another print suggesting inflation in the country is expected to remain elevated should reinforce the hawkish stance by the Reserve Bank of Australia (RBA).
Also contributing to the downbeat tone around the Aussie dollar emerged another bearish session from both copper and iron ore prices.
On the monetary policy front, the RBA, similar to the Federal Reserve, has been slow to change its stance. In its latest meeting, the RBA maintained a hawkish approach, keeping the official cash rate at 4.35% and signalling flexibility for future decisions.
At that event, Governor Bullock confirmed that the board discussed potential rate hikes but ruled out cuts. The bank remains focused on inflation and is reluctant to ease policy unless necessary, emphasizing that inflation is still above target and reiterating its commitment to bring inflation within the target range.
The contrast between the potential easing by the Fed and the RBA’s likely prolonged restrictive stance could support AUD/USD in the coming months. However, concerns about the slow momentum in the Chinese economy may hinder a sustained recovery in the Australian currency as China continues to face post-pandemic challenges.
In Australia, Consumer Inflation Expectations rose to 4.4% in June (from 4.1%), according to the Melbourne Institute.
AUD/USD daily chart
AUD/USD short-term technical outlook
If bulls take control, the AUD/USD may reach its May peak of 0.6714 (May 16), followed by the December 2023 high of 0.6871 and the July 2023 top of 0.6894 (July 14), all before the key 0.7000 level.
Bearish efforts, on the other side, may push the pair lower, first to the June low of 0.6574 (June 10) and subsequently to the important 200-day SMA of 0.6553. A further decline might result in a return to the May low of 0.6465 and the 2024 bottom of 0.6362 (April 19).
Overall, the uptrend should continue as long as the AUD/USD trades above the 200-day SMA.
The 4-hour chart demonstrates a lack of strong rising momentum thus far. However, the initial barrier appears to be 0.6714, which is ahead of 0.6728 and 0.6759. In contrast, the immediate support is about 0.6574, followed by 0.6558. The RSI dropped below 47.
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USD/JPY: The pair visits a 37y high – OCBC
398785 June 27, 2024 23:56 FXStreet Market News
USD/JPY rises to 37y high of 160.87 overnight. Next resistance is at 161.20, OCBC analysts Frances Cheung and Christopher Wong note.
Markets eye intervention
“USDJPY rose to 37y high of 160.87 overnight. Higher UST yields was the latest trigger to push USD/JPY higher, in line with our caution that USDJPY should continue to mount a challenge above 160. We also expect the rise past 2024 high to test the resolve of Japanese authorities.”
“That said, intervention is at best an option to slow the pace of depreciation and not a tool to reverse the trend. For USDJPY to turn lower, that would require the USD to turn/Fed to cut or for BoJ to signal an intent to normalise urgently. None of the above appears to be taking place, so the path of least resistance for USD/JPY may still be to the upside.”
“Pair was last at 160.41. Bullish momentum on daily chart intact though RSI shows signs of turning lower from near overbought conditions. Next resistance at 161.20 (138.2% fibo projection of 2023 low to 2023), 164 levels. Support at 157.70 (21 DMA), 156.60 (50 DMA).”
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United States 4-Week Bill Auction rose from previous 5.23%Â to 5.27%
398784 June 27, 2024 23:35 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
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EUR/USD: 2-way risks persist – OCBC
398783 June 27, 2024 23:33 FXStreet Market News
EUR slipped overnight but losses remain confined to recent range, OCBC analysts Frances Cheung and Christopher Wong note.
Bearish momentum slowly fades away
“Pair was last at 1.0703 levels. Bearish momentum on daily chart shows signs of fading while RSI rose slightly. Some risks to the upside but 2-way trades still likely ahead of French election on Sunday.”
“Support at 1.0660/70 levels (recent low) before 1.06 levels. Resistance at 1.0770 (50 DMA), 1.0810 (38.2% fibo retracement of 2024 high to low, 100 DMA).”
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DXY: Bullish momentum on daily chart intact – OCBC
398781 June 27, 2024 23:29 FXStreet Market News
The Dollar Index (DXY) rose, taking cues from higher UST yields and the run-up in USD/JPY above 160-mark. Elsewhere, slippage in EUR also added to gains in the DXY. This week, the focus is on PCE core (Fri), OCBC analysts Frances Cheung and Christopher Wong note.
DXY seems bullish ahead of US PCE
“Softer core CPI, PPI readings in May should see core PCE print softer. A weaker than expected print should raise hopes for Federal Reserve (Fed) rate cut. This should also tamper USD gains, but hotter print may continue to fuel USD momentum.”
“DXY was last at 105.84 levels. c while RSI is near overbought conditions. Resistance at 106.20. Support at 105.20 (21, 50 DMAs), 104.80 (61.8% fibo retracement of Oct high to 2024 low).”
“We also note that ½-yearly end and month-end flows may have the potential to distort price action later this week. US presidential debate on Fri may also be of interest to FX and rates markets.”
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