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United States Goods Trade Balance came in at $-100.6B, below expectations ($-96B) in May

398683   June 27, 2024 20:33   FXStreet   Market News  

Mexico Jobless Rate s.a remains unchanged at 2.6% in May

398682   June 27, 2024 20:05   FXStreet   Market News  

Mexico Jobless Rate below expectations (2.7%) in May: Actual (2.6%)

398681   June 27, 2024 20:05   FXStreet   Market News  

ForexLive European FX news wrap: USD/JPY tentative above 160 mark

398680   June 27, 2024 20:03   Forexlive Latest News   Market News  

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Mexico Trade Balance s/a, $ climbed from previous $-2.578B to $0.971B in May

398679   June 27, 2024 20:02   FXStreet   Market News  

Mexico Trade Balance, $ above expectations ($-2.04B) in May: Actual ($1.991B)

398678   June 27, 2024 20:02   FXStreet   Market News  

JPY: Tolerance band being stretched – ING

398677   June 27, 2024 19:51   FXStreet   Market News  

USD/JPY is trading at 160.54 at the moment of writing after breaking through the levels that had triggered a large-scale FX intervention in April and touching 106.87 (38-year highs) overnight. FX intervention alarms are as loud as they get, but we have to make a couple of considerations, INGÂ’s analyst Francesco Pesole notes.

Intervention to become almost inevitable closer to 165

“Japan’s top currency official Masato Kanda had indicated in February that a 10 Yen (JPY) move in USD/JPY over a month was to be considered as ‘rapid’, implicitly offering some clues on the levels for intervention. The latest moves have been described as ‘rapid’, but not ‘excessive’, which may be the new term for a 10 Yen move in USD/JPY.”

“In April, USD/JPY had risen from a low of 150 to a high of just below 160 over a little less than a month when Japan intervened, which is consistent with Kanda’s hint. In the past 30 days, the low was 154.60, which would by the same logic place the intervention level at 164/165.”

“Should US data fuel more USD strength, then intervention would become almost inevitable – but with the new line in the sand potentially closer to 165, as mentioned. We may well see more verbal intervention and potentially a rate check (the latter will be evident in price action) before any new round of FX intervention is deployed.”

RBA’s Hauser: Would be bad mistake to set policy on one number

398676   June 27, 2024 19:40   FXStreet   Market News  

Reserve Bank of Australia Deputy Governor Andrew Hauser said on Thursday that it would be a bad mistake to set the monetary policy on one number, referring to the latest Consumer Price Index data, per Reuters.

Key takeaways

“Outlook remains uncertain, that has not changed.”

“May take little longer for policy to feed through.”

“Labour market has been performing remarkably well.”

“Whole series of data coming between now and next policy meeting.”

Market reaction

AUD/USD edged lower following these comments. At the time of press, the pair was trading at 0.6655, where it was up 0.1% on the day.

Bitcoin price struggles around $61,000 as German, US government transfers weigh

398673   June 27, 2024 19:35   FXStreet   Market News  

• The US Government transferred 3,940.28 BTC, valued at $241.22 million, to Coinbase Prime.
• The German Government transferred another 750 BTC, valued at $46.35 million, on Wednesday.
• On-chain data shows that the miners’ selling activity is increasing, signaling bearish momentum.

Bitcoin (BTC) encountered resistance near the $62,000 mark on Wednesday and declined 1.5% to trade around $60,777 in ThursdayÂ’s European session. The US and German governments’ transfers of BTC to exchanges in the past week have contributed to market FUD (Fear, Uncertainty, Doubt) among traders. Additionally, on-chain data reveals a rise in miners’ selling activity, suggesting bearish sentiment in the market.

Daily digest market movers: Bitcoin price eases as US and German Authorities transfer BTC to exchanges

• Data from Arkham Intelligence shows that the US Government transferred 3,940.28 BTC, valued at $241.22 million, to Coinbase Prime Deposit on Wednesday. This Bitcoin was initially seized from narcotics trafficker Banmeet Singh and forfeited during a trial in January 2024. This sudden movement of funds could have sparked FUD (Fear, Uncertainty, Doubt) among traders, potentially influencing Bitcoin’s 1.5% price decline on Wednesday.

• According to data from Lookonchain, the German Government transferred 750 BTC, valued at $46.35 million, on Wednesday. Additionally, a smaller transfer of 0.001 BTC to Flow Traders suggests a possible test transaction or intention to sell BTC through that entity. Recent movements indicate that German authorities have transferred a total of 2,100 BTC, amounting to $135.22 million, to platforms including Coinbase, Bitstamp, and Kraken over the past few days. The German Government currently holds 45,609 BTC, valued at $2.81 billion.

• Strike, a company specializing in Bitcoin payments, announced via its Twitter account that it is entering the United Kingdom market. This expansion enables individuals and businesses in the UK to utilize Strike’s services related to Bitcoin and the Lightning Network. With this step, Strike’s services are now accessible in 100 countries and regions worldwide, encompassing the US, Europe, Latin America, and Africa. Given the UK’s status as the second-largest economy in Europe and the sixth-largest globally, this move presents substantial prospects for increasing Bitcoin adoption.

• According to CryptoQuant data, the Bitcoin Miner to Exchange Flow (Total) metric shows the total amount of BTC transferred from a mining pool to exchange wallets. Increases in the metric indicate that many miners’ coins are exposed to selling, suggesting a bearish trend, and decreases indicate that only a few miners’ coins are exposed to selling, signaling less sell pressure.
•  In the last three days, the miners have sent their BTC to the exchanges at an average daily rate of 8,702.18 BTC. This transfer could include the immediate need to cover the cost or to gain excess gains by selling at the price they consider to be overvalued. Both cases are correlated to sell action, which naturally leads to interpreting this reason as a price drop, which indicates a bearish sign.

Bitcoin Miner to Exchange Flow (Total) chart

Technical analysis: BTC faces resistance at the lower band of the descending wedge

Bitcoin’s price broke below the descending wedge on Monday, declining approximately 7.5% to retest its crucial weekly support near $58,375 and rebounded by 5.8% on Tuesday.

BTC was rejected by the lower band of the broken descending wedge on Wednesday. Since then, it has edged down approximately 1.75% to trade around $60,777.

If the lower boundary of the descending wedge around $62,000 holds as resistance, BTC could decline roughly 4% to reach its weekly support near $58,375.

On the daily chart, the Relative Strength Index (RSI) and the Awesome Oscillator (AO) are below their respective mean levels of 50 and zero. This indicates that, according to these momentum indicators, the bearish sentiment prevails, suggesting the potential for further decline in BTCÂ’s price.

BTC/USDT daily chart

However, if BTC closes above the $63,956 level and forms a higher high in the daily time frame, it could indicate that bullish sentiment persists. Such a development may trigger a 5% rise in Bitcoin’s price, revisiting its next weekly resistance at $67,147.

EUR: Waiting for a PCE lift-up – ING

398672   June 27, 2024 19:35   FXStreet   Market News  

In yesterdayÂ’s FX Daily we discussed how EUR/USD could have tested the 1.0670 June lows before the US core PCE event. The pair traded as low as 1.0666 in yesterdayÂ’s trading, and in our view retains a general bearish bias for ThursdayÂ’s session too, INGÂ’s analyst Francesco Pesole notes.

US PCE to send EUR/USD closer to 1.0700

“The Euro (EUR) remains unappealing before clarity on the French vote (mind that this may not come before the 7 July second round results), and speculative yen selling is probably fueling a broader USD rally.”

“The next key levels are 1.0650 and 1.0600 for EUR/USD. Those may be reached on the back of some moves after the US debate overnight, although we expect a US core PCE at 0.1% month-on-month tomorrow to send EUR/USD into the weekend closer to 1.0700 than 1.0600.”

“Today’s eurozone calendar only includes final consumer confidence data for June, although tomorrow we’ll start seeing some June inflation prints for France, Spain and Italy. The European Central Bank calendar sees speeches by Madis Muller and Peter Kazimir, both hawkish-leaning members.”

US Dollar clings onto recent gains despite soft opening in Asia

398670   June 27, 2024 19:33   FXStreet   Market News  

• The US Dollar trades overall in the red against most major peers. 
• A massive data dump is expected at 12:30 GMT with US GDP, Durable Goods, and weekly Jobless Claims. 
• The US Dollar index hovers around 106.00, clinging onto WednesdayÂ’s gains.

The US Dollar (USD) trades a touch softer on Thursday following Wednesday’s significant increase and as the Japanese Yen (JPY) seems to be recovering slightly from the recent losses. Japanese Finance Minister Shunichi Suzuki said that the government is watching closely the forex market and is standing ready to act when needed, prompting the Yen to rise from its fresh multi-decade low and gaining intraday against the US Dollar. The question is how long the impact of these words will last as the recovery is starting to lose momentum already in the European trading session. 

On the US economic calendar front, all important data points will be released at 14:30 GMT:  the US Gross Domestic Product final reading for Q1, US Durable Goods and weekly Jobless Claims. Expect thus to see a surge in volatility, particularly if the data does not support a stronger Greenback. 

Daily digest market movers: Data-driven Thursday

• At 12:30 GMT, nearly all important data points will be released:
  • US Gross Domestic Product for the third quarter:
    • Headline GDP is expected to grow at an annualized rate of 1.4%, more than the 1.3% previously estimated.
    • GDP Price Index should remain stable at 3.1%.
    • The Headline Personal Consumption Expenditure  Price index is seen unchanged at 3.3%, while the core reading is also seen stable at 3.6%.
  • US Durable Goods for May:
    • Headline Durable Goods orders are expected to fall by a marginal 0.1%, swinging from a 0.6% rise a month earlier. to -0.1%.
    • Durable Goods without Cars and Transportation are expected to grow by 0.2%, slower than the 0.4% increase in April.
  • Weekly Jobless Claims for the week ending June 14th:
    • Initial Jobless Claims are expected to decline slightly to 236,000 from 238,000.
    • Continuing Claims are seen heading to 1,820,000 from 1,828,000.
  • Pending Home Sales for May, due at 14:00 GMT, should jump out of contraction, from -7.7% to 2.5%.
• At 15:00 GMT, the Kansas Fed Manufacturing Activity Index for June will be released. The previous print was at -1. 
• Equities are struggling yet again. In Asia, all major indices are set to close in deep red numbers, while US futures are down by less than 0.50%. European equities are trading broadly flat. 
• 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 4.33%.

US Dollar Index Technical Analysis: Wait for dust to settle

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. 

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. 

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. 

US Dollar Index: Daily Chart

USD: Markets hold their breath ahead of Biden-Trump debate – ING

398669   June 27, 2024 19:29   FXStreet   Market News  

Defensive positioning has largely dominated the currency market this week, and with the exception of an inflation-boosted Australian Dollar (AUD). The US Dollar (USD) is trading firmly against all of G10, FX strategist Francesco Pesole at ING notes.  

US PCE and Biden-Trump debate shape the FX landscape

“In the emerging markets space, heavy jitters in carry MXN, BRL and ZAR are taking the biggest hit. On the contrary, a weaker Yen remains the biggest story in FX. Japanese authorities may let USD/JPY rise further before intervening, which can offer broader support to the Greenback into tomorrow’s core PCE event.”

“Today’s US calendar includes the hardly market-moving third release of first quarter GDP and PCE, while some focus will be on May durable goods orders (which are expected to decline) and jobless claims. Despite an expected contraction in initial claims last week, the surprise stickiness in continuing claims is a trend to watch.”

“The USD may stay generally supported today. We’ll be very interested to see if and how the USD reacts to tonight’s first TV debate between President Joe Biden and Donald Trump (02:00 BST). Our baseline assumption is that Trump is the most dollar-positive candidate due to protectionism pledges, geopolitical stance and plans for lower taxes.”