Articles
NZD/USD: The pair to keep the bearish momentum below 0.6110 – UOB Group
398639 June 27, 2024 18:04 FXStreet Market News
GBP/USD Forecast: Pound Sterling correction could remain short-lived
398637 June 27, 2024 17:58 FXStreet Market News
- GBP/USD edges higher early Thursday after posting large losses on Wednesday.
- The pair could have a hard time discouraging sales until it flips 1.2640 into support.
- The cautious market mood could help the USD hold its ground.
GBP/USD lost 0.5% and touched its lowest level in over a month below 1.2620Â on Wednesday. The pair stages a technical correction toward 1.2650 in the European morning on Thursday but the technical outlook doesn’t offer any convincing signs pointing to an extended rebound.
British Pound PRICE This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the weakest against the Australian Dollar.
| Â | USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF |
|---|---|---|---|---|---|---|---|---|
| USD | Â | -0.05% | -0.01% | 0.47% | -0.08% | -0.41% | 0.28% | 0.37% |
| EUR | 0.05% | Â | 0.06% | 0.57% | 0.02% | -0.34% | 0.41% | 0.49% |
| GBP | 0.01% | -0.06% | Â | 0.45% | -0.04% | -0.40% | 0.33% | 0.41% |
| JPY | -0.47% | -0.57% | -0.45% | Â | -0.53% | -0.83% | -0.13% | -0.11% |
| CAD | 0.08% | -0.02% | 0.04% | 0.53% | Â | -0.32% | 0.36% | 0.45% |
| AUD | 0.41% | 0.34% | 0.40% | 0.83% | 0.32% | Â | 0.72% | 0.82% |
| NZD | -0.28% | -0.41% | -0.33% | 0.13% | -0.36% | -0.72% | Â | 0.09% |
| CHF | -0.37% | -0.49% | -0.41% | 0.11% | -0.45% | -0.82% | -0.09% | 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 British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
The US economic docket will feature the Bureau of Economic Analysis’ (BEA) final revision to the annualized Gross Domestic Product (GDP) growth for the first quarter. The US Department of Labor will also release the weekly Initial Jobless Claims data, which is forecast to come in at 236,000 in the week ending June 22. A reading of 240,000, or higher, in the number of fist-time applications for unemployment benefits could remind investors of loosening labor market conditions and cause the US Dollar (USD) to weaken against its rivals.
In the meantime, US stock index futures trade modestly lower on the day. Market participants could stick to a cautious stance ahead of the first Presidential Debate between Donald Trump and Joe Biden later in the American session.
Although it’s difficult to say how the debate could influence the action in markets, the USD is likely to benefit from risk aversion.
On Friday, the BEA will publish the Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred gauge of inflation, for May.
GBP/USD Technical Analysis
The 100-day and the 50-day Simple Moving Averages (SMA) form a key pivot level at 1.2640. If GBP/USD fails to reclaim this level and starts using it as resistance, technical sellers could remain interested. In this scenario, 1.2600 (psychological level, static level), 1.2580 (Fibonacci 50% retracement) and 1.2550 (200-day SMA) could be seen as next bearish targets.
If GBP/USD manages to flip 1.2640 into support, 1.2675 (50-period SMA on the 4-hour chart) and 1.2710-1.2720 (200-period SMA, Fibonacci 23.6% retracement of the latest downtrend) could be seen as next resistance levels.
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, aka ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
BoJÂ’s Uchida: Closely monitoring Yen movement in conducting monetary policy
398636 June 27, 2024 17:58 FXStreet Market News
Bank of Japan (BoJ) Deputy Governor Shinichi Uchida said on Thursday that he is ”closely monitoring Yen movement in conducting monetary policy.”
He added that “weaker Yen is an upward factor for prices.”
Market reaction
The above comments fail to move the needle around the Japanese Yen, keeping USD/JPY 0.18% lower on the day at 160.50.
Japanese Yen PRICE Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the US Dollar.
| Â | USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF |
|---|---|---|---|---|---|---|---|---|
| USD | Â | -0.17% | -0.19% | -0.19% | -0.17% | -0.32% | -0.31% | -0.03% |
| EUR | 0.17% | Â | -0.03% | -0.03% | 0.00% | -0.15% | -0.18% | 0.13% |
| GBP | 0.19% | 0.03% | Â | 0.02% | 0.01% | -0.11% | -0.12% | 0.15% |
| JPY | 0.19% | 0.03% | -0.02% | Â | 0.03% | -0.12% | -0.15% | 0.16% |
| CAD | 0.17% | 0.00% | -0.01% | -0.03% | Â | -0.16% | -0.15% | 0.11% |
| AUD | 0.32% | 0.15% | 0.11% | 0.12% | 0.16% | Â | 0.00% | 0.26% |
| NZD | 0.31% | 0.18% | 0.12% | 0.15% | 0.15% | -0.00% | Â | 0.27% |
| CHF | 0.03% | -0.13% | -0.15% | -0.16% | -0.11% | -0.26% | -0.27% | 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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
USD/CAD moves below 1.3700 as Oil prices rise on potential spread of Gaza war to Lebanon
398635 June 27, 2024 17:51 FXStreet Market News
- USD/CAD losses ground as the commodity-linked Canadian Dollar receives support from the upside of the crude Oil prices.
- Oil prices appreciate due to escalated Cross-border tensions between Israel and Lebanon’s Hezbollah.
- US GDP Annualized (Q1) is expected to slightly increase by 1.4%, against the previous growth of 1.3%.
USD/CAD halts its two days of gains, trading around 1.3680 during the European hours on Thursday. The USD/CAD pair struggles as the commodity-linked Canadian Dollar (CAD) receives support from the upside of the crude Oil prices. Noting the fact, Canada is the largest Oil exporter to the United States.
Concerns over the potential spread of the Israel-Hamas war in Gaza to Lebanon have driven up Oil prices. Cross-border tensions between Israel and Lebanon’s Hezbollah have been escalating in recent weeks, fueling fears of a conflict that could involve other regional powers, including major Oil producer Iran, according to Reuters.
Headline inflation in Canada rose to 2.9% in May, surpassing estimates that it would drop to a three-year low of 2.6% from AprilÂ’s 2.7% reading. Additionally, the Bank of CanadaÂ’s (BoC) measures of underlying inflation unexpectedly increased to 0.6%, contrary to expectations of staying at 0.2%. This inflation rise is likely to prompt the central bank to proceed cautiously with further rate cuts.
On Friday, Statistics Canada will release the country’s GDP (MoM) data, which is expected to show a 0.3% growth for April, compared to the neutral growth observed in March. On the US Dollar’s (USD) side, traders await the release of the US GDP Annualized (Q1) due later in the North American session. The report is expected to show a slight increase of 1.4% from the previous growth of 1.3%.
The US Dollar struggles possibly due to tradersÂ’ anticipation of FridayÂ’s Core PCE Price Index inflation, projected to decrease year-over-year to 2.6% from the previous 2.8%. This data is seen as the Federal Reserve’s (Fed) preferred inflation gauge. Market participants are likely to hope that signs of easing inflation will encourage the Federal Reserve (Fed) to consider rate cuts sooner rather than later.
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.
AUD/USD edges higher to 0.6660 as US Dollar eases ahead of US core PCE Inflation
398634 June 27, 2024 17:51 FXStreet Market News
- AUD/USD finds bids near 0.6625 but remains sideways for more than a week.
- The US core PCE inflation for May will guide the next move in the US Dollar.
- Hot Australian CPI boosts prospects of more rate hikes by the RBA.
The AUD/USD pair is slightly higher at 0.6660 in ThursdayÂ’s European session. The Aussie asset finds modest buying interest as the US Dollar (US) edges down with United States (US) core Personal Consumption Expenditure Price Index (PCE) data for May in focus, which will be published on Friday. Broadly, the Aussie asset has been oscillating in the range of 0.6625-0.6690 from more than a week.
Investors will pay close attention to the US core PCE inflation data as it provides fresh cues over the interest rate outlook. Annually, the underlying inflation data is estimated to have softened to 2.6% from the prior release of 2.8%, with monthly figures growing at a slower pace of 0.1% from 0.2% in April.
Soft inflation numbers would boost expectations of early rate cuts by the Federal Reserve (Fed), while hot figures would provide more room for the Fed to maintain the current interest rate framework for a longer period. The scenario would be favorable for the US Dollar. Currently, the US Dollar Index (DXY), which tracks the GreenbackÂ’s value against six major currencies, has corrected modestly to near 105.90.
Meanwhile, traders have priced in two rate cuts this year and see the Fed choosing the September meeting as the earliest point to begin lowering interest rates. However, Fed policymakers singled out only one rate cut this year in the latest dot plot.
On the Aussie front, higher-than-expected growth in price pressures has prompted expectations of more rate hikes by the Reserve Bank of Australia (RBA). The monthly Consumer Price Index (CPI) report for May showed that rising prices of fuel, food, electricity, and rentals accelerated inflation to 4.0%, which was higher than expectations of 3.8% and the prior release of 4.0%.
Economic Indicator
Monthly Consumer Price Index (YoY)
The Monthly Consumer Price Index (CPI), released by the Australian Bureau of Statistics on a monthly basis, measures the changes in the price of a fixed basket of goods and services acquired by household consumers. The indicator was developed to provide inflation data at a higher frequency than the quarterly CPI. The YoY reading compares prices in the reference month to the same month a year earlier. A high reading is seen as bullish for the Australian Dollar (AUD), while a low reading is seen as bearish.
Belgium Consumer Price Index (YoY) increased to 3.74% in June from previous 3.36%
398633 June 27, 2024 17:40 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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Meme coins, AI and RWA crypto tokens could drive profitability in 2024
398628 June 27, 2024 17:40 FXStreet Market News
- Meme coins have emerged as the most profitable sector in 2024, averaging returns of over 2,400%.Â
- AI tokens and RWA are two other key narratives driving profitability for holders.
- Meme coins WIF, BONK, BOME, AI tokens NEAR, FET, and RWAÂ’s ONDO and PENDLE pose a buy-the-dip opportunity to traders.
Meme coins, Artificial Intelligence (AI) and Real World Asset tokenization (RWA) are the dominant narratives as the first half of 2024 draws to a close. A report by analysts at Biteye shows that the three sectors have emerged as the most profitable ones in 2024.Â
According to the average year-till-date return rate of the top 10 tokens in each of the three sectors, the performance is as follows:
Ranking of crypto sector returns in the first half of 2024Â
Most profitable sector in H1 2024 is meme coins
The shift in narrative from value investing to going “all-in” on meme coins happened in the first half of 2024. This gradual shift made the meme coin sector one of the most profitable compared to Layer 1, Gaming Finance, DeFi, Layer 2, Ethereum, Bitcoin, Real World Assets (RWA) and Artificial Intelligence (AI).
As of June 19, three of the top 10 meme coins ranked by market capitalization were launched in March or April 2024: Brett (BRETT), Book of MEME (BOME), and Dog go to the moon (DOG).Â
The report shows that BRETT had the highest return at 14,353% from its issuance price, WIF rallied over 933% year-to-date (YTD), and meme coin profitability is over 500 times that of the least profitable sector, DeFi.
Among top meme coins, Dogwifhat (WIF), BOME, and Bonk (BONK) are down between 2% and 4% in the 24-hour timeframe, and their market capitalization is upwards of $625 million. The top three meme tokens offer a “buy the dip” opportunity to traders before the next imoulse in the narrative.Â
Average returns of the top 10 tokens by market value in each sectorÂ
AI and RWA tokens among top-gaining sectors in 2024
The second most profitable sector, RWA, has offered traders 213% returns in 2024. The concept of RWA has made headlines, and institutional investors like BlackRock have discussed the narrative in H1 2024.Â
In February 2024, RWA was briefly the most profitable sector among the three, but meme tokens and AI surpassed it after that.Â
The top token in the RWA narrative is Ondo Finance (ONDO), with YTD gains of 451%. Among the top three tokens in the sector, ONDO, Pendle (PENDLE), and Mantra (OM) wiped out between 3% and 6% of their value in the past 24 hours. This offers traders a buy-the-dip opportunity on Thursday.Â
RWA narrative assets
The AI sector offered traders over 71% gains. Among the top tokens of the sector, Arkham (ARKM) rallied 215%, and AIOZ Network added 192% to its value. NEAR Protocol (NEAR), Fetch.ai (FET), Internet Computer (ICP) prices are down between 2% and 5% in the past 24 hours. The three AI tokens pose an opportunity for traders to “buy the dip.”
AI tokensÂ
The market capitalization of the three sectors is down nearly 3% in the past 24 hours, per CoinGecko data.Â
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Bitcoin price struggles around $61,000 as miners’ sell-off intensifies
398625 June 27, 2024 17:35 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.
Update: US Government Sends $240M BTC to Coinbase Prime
The US Government just moved 3,940 BTC ($240M) to Coinbase Prime.
This BTC was originally seized from narcotics trafficker Banmeet Singh, and forfeited at trial in January 2024.
Transaction: https://t.co/hZ1CwqWCmF pic.twitter.com/9t6k8Wdizq
— Arkham (@ArkhamIntel) June 26, 2024
- 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.
Announcing Strike UK
Today, we’re launching Strike UK, expanding our full suite of Bitcoin services to all eligible customers in the UK
Buy #bitcoin, free on-chain withdrawals, a full-featured Lightning wallet and more. Get the best of #Bitcoin with @Strike
Wen UK? Now Â… pic.twitter.com/anVV3brJAR
— Strike UK (@strikebtc_uk) June 25, 2024
- 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.
- Â 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.
Crypto ETF FAQs
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Belgium Consumer Price Index (MoM) dipped from previous 0.37%Â to 0.22% in June
398624 June 27, 2024 17:35 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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South Africa Producer Price Index (MoM) dipped from previous 0.5%Â to 0.1% in May
398623 June 27, 2024 17:33 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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South Africa Producer Price Index (YoY) down to 4.6% in May from previous 5.1%
398622 June 27, 2024 17:33 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 finds temporary cushion near 1.0660, downside remains unabated
398620 June 27, 2024 17:29 FXStreet Market News
- EUR/USD finds interim support near 1.0660 while uncertainty ahead of US core PCE inflation keeps the outlook vulnerable.
- Investors see the Fed reducing interest rates twice this year.
- The Euro will dance to the tunes of the preliminary June HICP data for France, Italy, and Spain on Friday.
EUR/USD rebounds slightly on ThursdayÂ’s European session after declining to a seven-week low near 1.0665 the day before. The major currency pair finds support as the US Dollar (USD) struggles to extend its upside amid uncertainty ahead of the United States (US) core Personal Consumption Expenditures (PCE) Price Index data for May, which will be published on Friday. However, the near-term demand remains vulnerable amid fears of widening policy divergence between the US Federal Reserve (Fed) and the European Central Bank (ECB).
The US Dollar Index (DXY), which tracks the GreenbackÂ’s value against six major peers, faces pressure in an attempt to move above the crucial resistance of 106.00.Â
Investors will pay close attention to the US core PCE inflation data, which will provide cues about when and how much the Fed will reduce interest rates this year. The US PCE report is expected to show that core price pressures grew at a slower pace of 0.1% month-on-month in May against 0.2% in April. Annually, the underlying inflation is projected to decelerate to 2.6% from 2.8% in April.Â
Softer-than-expected inflation figures would boost expectations of early Fed rate cuts, which would be unfavorable for the US Dollar. On the contrary, hot numbers will diminish Fed rate-cut prospects.
Currently, financial markets expect that the Fed will start reducing interest rates at the September meeting and deliver subsequent rate cuts in November or December.
Daily digest market movers: EUR/USD remains on tenterhooks ahead of key events
- EUR/USD continues to face selling pressure near the round-level resistance of 1.0700. The EuroÂ’s near-term outlook is uncertain ahead of the EurozoneÂ’s election outcome and growing speculation that the ECB will deliver back-to-back rate cuts.
- Investors remain cautious over the outcome of the French election amid speculation that the new government would make significant fiscal policy shifts, which would widen the financial crisis. The uncertainty over the French elections was triggered after French President Emmanuel Macron called for a snap election after his party suffered defeat in preliminary results from Marine Le PenÂ’s far-right National Rally (RN).
- On the monetary policy front, ECB policymakers refrained from committing to any pre-defined interest rate path after the central bank commenced the rate-cutting cycle in its policy meeting in early June amid concerns over wage inflation. However, higher interest rates weigh heavily on overall demand, which impacts activities in manufacturing as well as the service sector.
- Going forward, preliminary Eurozone Harmonized Index of Consumer Prices (HICP) data for June will be under the spotlight next week, as it will provide major cues about the interest rate outlook. Currently, investors expect that the ECB will deliver one more rate cut this year.
Technical Analysis: EUR/USD hovers below 1.0700
EUR/USD trades inside WednesdayÂ’s range as investors sidelined ahead of the US core PCE inflation reading. The downward-sloping border of the Symmetrical Triangle pattern formation on a daily timeframe remains a major barrier for the Euro bulls. A fresh downside would appear if the pair delivers a decisive breakdown of the above-mentioned chart pattern.
The shared currency pair establishes below the 200-day Exponential Moving Average (EMA) near 1.0780, suggesting that the overall trend is bearish.
The 14-period Relative Strength Index (RSI) hovers near 40.00. A bearish momentum would trigger if the oscillator slips below this level.
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECBÂ’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the EurozoneÂ’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.