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US Dollar retreats and gives up Wednesday’s gains
398712 June 27, 2024 21:05 FXStreet Market News
- The US Dollar trades in deep red against nearly all major peers.Â
- The data dumpt with US GDP, Durable Goods, and weekly Jobless Claims did not go down well with markets.Â
- The US Dollar index says goodbey to 106.00 and heads lower.Â
The US Dollar (USD) falls and in the process is erasing all gains from past Wednesday. The big batch of data points that came out made traders cherry pick which elements they would take for their assessment on where to position the US Dollar. Elements such as the uptick in Continuing Claims, the soaring Wholesales Inventory number and the flat fall of Durable Goods was enough to send the US Dollar lower.Â
On the US economic calendar front, all data is out of the way and markets will now be on the lookout for the Federal Reserve’s preferred inflation Gauge: the Personal Consumption Expenditures on Friday. Should those fade as well, as a sign of further disinflation, markets might challenge the current hawkish stance of the Fed with a weaker US Dollar at hand. That would mean in the US Dollar Index, that a fall back to 105.00 or lower could be in the cards.Â
Daily digest market movers: That’s all folks
- At 12:30 GMT, nearly all important data points were released for this Thursday:
- US Gross Domestic Product for the third quarter:
- Headline GDP grew at an annualized rate of 1.4%, more than the 1.3% previously estimated.
- GDP Price Index remained stable at 3.1%.
- The Headline Personal Consumption Expenditure Price index went from 3.3% to 3.4%, while the core reading also ticked higher from 3.6% to 3.7%.
- US Durable Goods for May:
- Headline Durable Goods orders fell flat to 0.1%, from a revised 0.6% to only 0.2%.
- Durable Goods without Cars and Transportation missed estimates and fell lower from 0.4% to -0.1%.
- Weekly Jobless Claims for the week ending June 14th:
- Initial Jobless Claims came in stronger, from 238,000 to 233,000..
- Continuing Claims were an issue, as they jumped from 1,821,000 to 1,839,000.
- Pending Home Sales for May, due at 14:00 GMT, should jump out of contraction, from -7.7% to 2.5%.
- US Gross Domestic Product for the third quarter:
- At 15:00 GMT, the Kansas Fed Manufacturing Activity Index for June will be released. The previous print was at -1.Â
- Equities are trying to recover ahead of the US Opening Bell, with US futures erasing their intraday losses and trading flat.Â
- The CME Fedwatch Tool is broadly backing a rate cut in September despite recent comments from Fed officials. The odds now stand at 56.3% for a 25-basis-point cut. A rate pause stands at a 37.7% chance, while a 50-basis-point rate cut has a slim 6.0% possibility.
- The US 10-year benchmark rate trades near the weekly high at 4.30%.
US Dollar Index Technical Analysis: Easing ahead of PCE
The US Dollar Index (DXY) has been strolling through markets with a big thanks to some outside effects. Although for now the near support level at 105.89 looks to be holding, expect with the mixture of data this Thursday and Friday to cause some whipsaw moves. Rather look for the dust to settle late Friday to see where the US Dollar will be heading once a clear picture has been revealed.Â
On the upside, the biggest challenge remains 106.52, the year-to-date high from April 16. A rally to 107.35, a level not seen since October 2023, would need to be driven by a surprise uptick in US inflation or a further hawkish shift from the Fed.Â
On the downside, 105.53 is the first support ahead of a trifecta of Simple Moving Averages (SMA). First is the 55-day SMA at 105.27, safeguarding the 105.00 round figure. A touch lower, near 104.70 and 104.46, both the 100-day and the 200-day SMA form a double layer of protection to support any declines. Should this area be broken, look for 104.00 to salvage the situation.Â
US Dollar Index: Daily Chart
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the FedÂ’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the FedÂ’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
USD/JPY edges down from multi-decade high near 161.00 on JapanÂ’s intervention buzz
398711 June 27, 2024 21:05 FXStreet Market News
- USD/JPY corrects modestly from multi-decade highs as fears of JapanÂ’s intervention deepen.
- The BoE will likely reduce the amount of bond-buying in upcoming policy meetings.
- US Durable Goods Orders unexpectedly grew by 0.1% in May.
The USD/JPY pair delivers a slight corrective move in ThursdayÂ’s New York session after posting a fresh multi-decade high at 160.87. The pair falls slightly as fears of JapanÂ’s intervention have intensified to cushion the weak Japanese Yen.
Sheer weakness in the Yen is resulting in higher exports and a sharp increase in import costs, which is boosting inflationary pressures. The Japanese administration has been reiterating that they are ready to intervene against excessive FX moves. The 160.00 resistance appears to be a crucial price level at which the administration could purchase Yen. Also, the administration was expected to have intervened near these levels two months ago.
On the monetary policy front, investors expect that the Bank of Japan (BoJ) could deliver an early rate hike move due to stubborn inflation expectations. The BoJ is also expected to cut down the scale of its bond-buying operations in the upcoming policy meeting.
Meanwhile, the US Dollar (USD) is under pressure with United States (US) core Personal Consumption Expenditure price index (PCE) data for May, which will be published on Friday. The core PCE inflation data, a Federal ReserveÂ’s (Fed) preferred inflation measure, is estimated to have grown at a slower pace of 0.1% against 0.2% in April month-on-month. Annually, the underlying inflation is projected to have decelerated to 2.6% from the former release of 2.8%.
On the economic data front, US Durable Goods Orders for May unexpectedly rose by 0.1%. Economists forecasted them to have declined by 0.1% after an expansion of 0.6%, downwardly revised from 0.7%. Fresh orders for Durable Goods are a leading indicator of core Consumer Price Index (CPI) data. Meager growth in New Orders for Durable Goods doesnÂ’t pose major upside risks to price pressures.
Economic Indicator
Core Personal Consumption Expenditures – Price Index (YoY)
The Core Personal Consumption Expenditures (PCE), released by the US Bureau of Economic Analysis on a monthly basis, measures the changes in the prices of goods and services purchased by consumers in the United States (US). The PCE Price Index is also the Federal ReserveÂ’s (Fed) preferred gauge of inflation. The YoY reading compares the prices of goods in the reference month to the same month a year earlier. The core reading excludes the so-called more volatile food and energy components to give a more accurate measurement of price pressures.” Generally, a high reading is bullish for the US Dollar (USD), while a low reading is bearish.
US pharmacy giant offers up a big warning on the US consumer
398710 June 27, 2024 21:04 Forexlive Latest News Market News
The second-largest US pharmacy chain doesn’t like what it’s seeing from the US consumer.
The company lowered its guidance in what it said was “reflecting challenging pharmacy industry trends and a worse-than-expected US consumer environment.”
Oftentimes, companies blame macro for poor execution but at other times they can offer an early sign of trouble. We have also heard warnings from housing-related companies POOL and RH recently.
Shares of Wallgreens Boots Alliance (WBA) are down 19.7% premarket.
In the conference call, the company said it saw a “sustained pullback in discretionary spending in the quarter” and it responded by lower prices. The company also said changes are imminent for 25% of its 9000 stores and that it will close a ‘significant portion’ over the next three years.
That’s a lot of layoffs and empty storefronts.
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Toncoin price poised to break the all-time high
398705 June 27, 2024 21:02 FXStreet Market News
- Toncoin price tested the ascending trendline support on Monday, trades at fresh weekly highs on Thursday.Â
- On-chain data suggests growing activity and interest within the TONÂ’s ecosystem.
- A daily candlestick close below $6.88 would invalidate the bullish thesis.
ToncoinÂ’s (TON) price tested the ascending trendline support on Monday, rebounding by 10% and currently trading at fresh weekly highs around $7.65 as of Thursday. Increasing activity and interest within the TONÂ’s ecosystem indicate a potential setup for Toncoin to surpass its previous all-time high.
Toncoin price shows potential
Toncoin price has established three consecutive higher lows and four nearly equal highs since April 11, forming an ascending triangle pattern on the daily chart when connecting these swing points with a trendline. This technical formation typically indicates a bullish bias.
However, TON broke out of the ascending triangle pattern on June 14, reaching a new all-time high of $8.29 on June 15. This breakout was short-lived and turned out to be a fakeout, trapping long-position traders. Subsequently, TON experienced a sharp decline of approximately 15%, to test the ascending trendline support, which coincided with the 61.8% Fibonacci retracement level at $6.886. This event led to the liquidation of leveraged long positions, followed by the opening of new long positions. Currently, TON is trading around the $7.65 mark at the time of writing.
If Toncoin surpasses the $8.29 level, it could rally by 19%, aiming for a new all-time high of $9.82. This target corresponds to the 141.40% Fibonacci extension level, drawn from the swing low of $4.60 on May 1 to the swing high of $8.29 on June 15.
The Relative Strength Index (RSI) and Awesome Oscillator (AO) indicators are firmly above their respective mean values of 50 and zero, indicating that the bullish momentum is still in control.
TON/USDT daily chart
According to data from the Coinglass Total Liquidations chart, on June 18, long positions totaling $1.34 million were liquidated, significantly higher than the $155,890 in short positions. This data corresponds with the technical analysis previously outlined.
TON Total Liquidations chart
TON’s Open Interest data shows a notable increase, rising from $255.28 million on June 20 to $305.16 million on June 27, marking a 19.5% surge. This uptick, coupled with the price appreciation, suggests an influx of new capital and heightened buying activity in the market. This data further corroborates the technical analysis discussed earlier.
TON Open Interest chart
Additionally, crypto intelligence tracker DefiLlama data shows that TONÂ’s Total Value Locked (TVL) has increased from $582.36 million on June 19 to an all-time high of $678.79 million on June 14.
This 17% increase in TVL indicates growing activity and interest within the TONÂ’s ecosystem. It suggests that more users are depositing or utilizing assets within TON-based protocols, adding further credence to the bullish outlook.
TON TVL chart
Despite the bullish thesis signaled by both on-chain data and technical analysis, if TON breaks the upward trendline of the triangle and closes below $6.88, the outlook would shift to bearish. This scenario could lead to a crash of 13% to $6.00, the daily low from May 23.Â
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EUR/USD Forecast: Bulls give it another try
398703 June 27, 2024 21:02 FXStreet Market News
EUR/USD Current price: 1.0719
- Upbeat United States data fueled marketÂ’s optimism and pushed the USD lower.
- European Economic Sentiment contracted in June to 95.9, also missing expectations.
- EUR/USD en route to extend its recovery, critical resistance at 1.0750.
The EUR/USD pair recovered the 1.0700 mark and trimmed its Wednesday losses when it bottomed at 1.0665. Demand for the US Dollar lost steam throughout the first half of the day despite the market mood remaining sour. Asian and European indexes edged lower following Wall Street’s poor performance, unable to take advantage of the tech sector recovery and limiting USD intraday weakness. The Greenback, however, accelerated its slump after the release of generally encouraging United States (US) figures.
Earlier in the day, the Eurozone published the June Economic Sentiment Indicator, which contracted to 95.9 from 96 in May, missing expectations of 96.2, which failed to trigger an EUR/USD reaction.
US data, on the contrary, spurred optimism. On the one hand, Durable Goods Orders were up 0.1% MoM, better than the -0.1% expected. On the other hand, the US confirmed the Gross Domestic Product (GDP) to be at 1.4% as expected, slightly above the previous estimate of 1.3%. At the same time, the country reported that Initial Jobless Claims for the week ended June 21 at 233K, better than the 236K expected. The US will later release May Pending Home Sales and the June Kansas Fed Manufacturing Activity Index.
EUR/USD short-term technical outlook
The EUR/USD pair hovers around 1.0720, and although the bearish momentum has receded, it is still at risk of falling. In the daily chart, the pair keeps trading below all its moving averages, with the 20 Simple Moving Average (SMA) heading firmly south below directionless 100 and 200 SMAs. Technical indicators, however, aim higher but remain within negative levels, somehow limiting the bullish scope.
The 4-hour chart offers a similar picture. Technical indicators head firmly higher, although the Momentum indicator remains below its 100 line. The Relative Strength Index (RSI) indicator, on the contrary, stands at 55, suggesting the pair may extend its near-term gains. At the same time, the current candle reflects strong buying interest, pushing EUR/USD above a flat 20 SMA, also supporting additional gains. Finally, a bearish 100 SMA provides dynamic resistance in the 1.0750 price zone. A clear break above the latter should support steady gains in the upcoming sessions.
 Support levels: 1.0665 1.0620 1.0580
Resistance levels: 1.0750 1.0800 1.0845
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United States Durable Goods Orders ex Defense down to -0.2% in May from previous 0%
398702 June 27, 2024 20:56 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.
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United States Durable Goods Orders ex Transportation came in at -0.1%, below expectations (0.2%) in May
398701 June 27, 2024 20:56 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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US dollar edges lower after a wave of economic data
398700 June 27, 2024 20:52 Forexlive Latest News Market News
EURUSD 10 mins
Whenever there are five economic data releases at the same time, there will also be a mixed picture. That was the case today with Q1 GDP revised a tad higher, along with higher inflationary numbers. At the same time, corporate profits in the report were taken down and durable goods orders non-defense ex-air (a good forward-looking metric) were soft at -0.6% vs +0.1% expected.
The latter numbers appears to have stuck with the market with initial jobless claims relatively in line and trade balance set to be a small drag on Q2.
The result was a 15-pip rise in the euro against the US dollar and minor US dollar selling elsewhere.
The Fed funds futures market is pricing in 45 bps of cuts this year and that number has edged down this week with some citing hotter Australian and Canadian CPI numbers as a sign that central banks will have to be patient as they fight sticky inflation, particularly in housing and rents.
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United States Initial Jobless Claims 4-week average up to 236K in June 21 from previous 232.75K
398699 June 27, 2024 20:51 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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United States Initial Jobless Claims came in at 233K, below expectations (236K) in June 21
398698 June 27, 2024 20:51 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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US initial jobless claims 233K vs. 236K expected
398697 June 27, 2024 20:50 Forexlive Latest News Market News
- Initial jobless claims 233K vs. 236K expected and 238K prior (revised to 239K).
- Continuing Claims 1839K vs. 1824K expected and 1828K prior (revised to 1821K).
The data is within the range of estimates and shouldn’t get the market to fret over it too much. Of note, Continuing Claims just set a new cycle high, which shows that the labour market continues to rebalance via less jobs availability rather than more layoffs for now.
That’s a good thing for the Fed as inflationary pressures should keep abating. On the other hand, the labour market is a spot to keep an eye on carefully in this part of the cycle.
US Jobless Claims
US Durable Goods Orders rise 0.1% in May vs. -0.1% expected
398696 June 27, 2024 20:50 FXStreet Market News
- Durable Goods Orders in the US rose 0.1% in May.
- US Dollar Index stays in negative territory below 106.00.
Durable Goods Orders in the US increased $0.3Â billion, or 0.1%, to $283.1 billion in May, the US Census Bureau reported on Thursday. This reading followed the 0.6% growth recorded in April (revised from +0.7%) and came in better than the market expectation for a decrease of 0.1%.
“Excluding transportation, new orders decreased 0.1%,” the press release read. “Excluding defense, new orders decreased 0.2%. Transportation equipment, up three of the last four months, drove the increase, $0.5 billion, or 0.6%, to $95.4 billion.”
Market reaction
The US Dollar stays under modest bearish pressure in the early American session on Thursday. As of writing, the USD Index was down 0.25% on the day at 105.79.
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