Articles
Mexican Peso extends losses ahead of BanxicoÂ’s meeting
398425 June 27, 2024 01:17 FXStreet Market News
- Mexican Peso falls for second consecutive day against US Dollar.
- USD/MXN hits a daily high of 18.33 before trimming gains as Wall Street turns green.
- Banxico expected to keep interest rates unchanged at 11.00% amid sharp Peso depreciation and recent inflation spike.
- Fed Governor Michelle Bowman’s hawkish comments support USD.
The Mexican Peso extended its losses for the second consecutive day against the Greenback after the latter rose sharply. This was boosted by the jump in the USD/JPY pair, which exchanges hands at 38-year high as US Treasury bond yields advance as traders brace for the release of crucial inflation data in the United States (US). The USD/MXN trades at 18.23, up 0.73%.
Sentiment shifted positively as Wall Street turned green during the last hour, trimming the USD/MXM pair gains after hitting a daily high of 18.33. MexicoÂ’s economic docket remains scarce as investors brace for Thursday’s Bank of Mexico (Banxico) monetary policy.
Banxico is expected to keep interest rates unchanged at 11.00% after the Mexican currency experienced a sharp depreciation following the June 2 election, alongside the sudden jump in JuneÂ’s mid-month inflation.
The Citibanamex survey showed that most economists expect rates to be unchanged at 11.00%, yet they expect the central bank to cut rates until August.
Besides that, investors are eyeing President-elect Claudia SheinbaumÂ’s cabinet members on Thursday.
Meanwhile, the USD/MXN experienced back-to-back positive gains sponsored by Federal Reserve (Fed) officials’ hawkish comments, particularly Governor Michelle Bowman. She said that rates will remain steady for “some time” and that if the disinflation process stalls, sheÂ’s open to another interest rate hike.
Daily digest market movers: Mexican Peso falls as traders await Banxico decision
- MexicoÂ’s economic docket will feature the Balance of Trade for May on Thursday, alongside the Unemployment Rate.
- Citibanamex survey showed economists priced out fewer rate cuts by the central bank, estimating rates will be lowered to 10.25% in 2024, up from 10.00%. Regarding the USD/MXN, the consensus estimates the exchange rate will end the year at 18.70, up from 18.00 in the previous report.
- Regarding economic growth, the consensus revised the Gross Domestic Product (GDP) for 2024 downward from 2.2% to 2.1% YoY.
- CME FedWatch Tool shows odds for a 25-basis-point Fed rate cut at 56.3%, lower than TuesdayÂ’s 59.5%.
Technical analysis: Mexican Peso falls as USD/MXN rallies back above 18.20
The USD/MXN uptrend remains in play, but the exotic pair will remain volatile during the rest of the session and Thursday as traders await BanxicoÂ’s decision. Momentum favors buyers, according to the Relative Strength Index (RSI), is bullish.
For a bullish continuation, buyers need to push the USD/MXN exchange rate past the psychological 18.50 level. Once cleared, the next stop would be the year-to-date (YTD) high of 18.99, followed by the March 20, 2023, high of 19.23, followed by an uptick to 19.50.
On the flip side, if USD/MXN tumbles below 18.00, the next key support level would be the 50-day Simple Moving Average (SMA) at 17.37 before testing the 200-day SMA at 17.23. Once those two levels are cleared, the next stop would be the 100-day SMA at 17.06.
Mexican Peso FAQs
The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.
The main objective of MexicoÂ’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.
Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.
As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.
EUR/USD slides below 1.0700 as Fed’s hawkish remarks strengthen US Dollar
398423 June 27, 2024 01:09 FXStreet Market News
- EUR/USD slips below 1.0700 as the Fed maintains hawkish guidance on interest rates.
- FedÂ’s Bowman sees no rate cuts this year.
- Investors will focus on the US core PCE and preliminary inflation data for the major economies of the Eurozone this week.
EUR/USD declines below the round-level support of 1.0700 in Wednesday’s American session. The major currency pair remains on the backfoot as the Euro’s near-term outlook weakens amid uncertainty over European Union (EU) legislative elections and growing speculation that the European Central Bank (ECB) could deliver subsequent rate cuts.
Fears over Eurozone elections intensified after French President Emmanuel Macron called for a snap election when his party suffered defeat in preliminary results from Marine Le PenÂ’s far-right National Rally (RN). The Euro could face more pressure if the shared continent sees a major policy shift.
Meanwhile, expectations for the ECB to deliver back-to-back rate cuts improve as the German economic outlook appears to be worsening due to weak demand prospects. Data showed on Monday that the German IFO Expectations index unexpectedly dropped to 89.0 from the estimates of 91.0 and the former release of 90.3 (downwardly revised from 90.4). On the data release, IFO President Clemens Fuest said, “The German economy is having difficulty overcoming stagnation.”
This week, investors will focus on preliminary June inflation data for Spain, France, and Italy, which will be published on Friday.Â
Daily digest market movers: EUR/USD tumbles as US Dollar surges
- EUR/USD comes under pressure as the US Dollar (USD) advances due to hawkish guidance on interest rates by Federal Reserve (Fed) policymakers, who continue to argue in favor of maintaining the current interest rate framework as they want to see a decline in inflation for months before considering rate cuts. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, jumps to a crucial resistance of 106.00. The United States (US) inflation declined more than expected in May, however, officials expect that a one-time decline in price pressures will be insufficient to make rate cuts appropriate.
- On Tuesday, Fed Governor Michelle Bowman delivered hawkish guidance on interest rates. Bowman said they are not at a point where rate cuts become appropriate. She pushed back expectations of rate cuts to 2025 and warned of more hikes if disinflation appears to stall or reverse.
- Contrary to the FedÂ’s hawkish outlook on interest rates, investors expect two rate cuts this year, and the policy-easing process will begin in the September meeting. For more cues on the interest rate outlook, investors await the core Personal Consumption Expenditures Price Index (PCE) data for May, which will be published on Friday.
- According to the estimates, the PCE inflation report will show that price pressures grew at a slower pace of 0.1% month-on-month from the prior release of 0.2%. Annually, the underlying inflation is expected to rise modestly by 2.6% from 2.8% in April. Soft inflation data would boost expectations of the Fed reducing interest rates in September, while hotter-than-expected figures would weaken them.
Euro Price Today:
Euro PRICE Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the New Zealand Dollar.
| Â | EUR | USD | GBP | JPY | CAD | AUD | NZD | CHF |
|---|---|---|---|---|---|---|---|---|
| EUR | Â | -0.41% | -0.01% | 0.05% | -0.15% | -0.36% | 0.30% | -0.16% |
| USD | 0.41% | Â | 0.40% | 0.48% | 0.28% | 0.03% | 0.69% | 0.26% |
| GBP | 0.00% | -0.40% | Â | 0.08% | -0.14% | -0.36% | 0.32% | -0.14% |
| JPY | -0.05% | -0.48% | -0.08% | Â | -0.23% | -0.47% | 0.21% | -0.24% |
| CAD | 0.15% | -0.28% | 0.14% | 0.23% | Â | -0.28% | 0.43% | -0.03% |
| AUD | 0.36% | -0.03% | 0.36% | 0.47% | 0.28% | Â | 0.66% | 0.22% |
| NZD | -0.30% | -0.69% | -0.32% | -0.21% | -0.43% | -0.66% | Â | -0.44% |
| CHF | 0.16% | -0.26% | 0.14% | 0.24% | 0.03% | -0.22% | 0.44% | 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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Technical Analysis: EUR/USD establishes below 1.0700
EUR/USD falls slightly below the crucial support of 1.0700. The major currency pair faces selling pressure near the downward-sloping border of a Symmetrical Triangle in the daily chart near 1.0750, which is plotted from 28 December 2023 high around 1.1140. The pair trades below the 50-day Exponential Moving Average (EMA), which indicates that the short-term outlook 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.
Interest rates FAQs
United States 5-Year Note Auction fell from previous 4.553% to 4.331%
398421 June 27, 2024 01:05 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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AUD/USD Forecast: Next target remains at 0.6700
398418 June 27, 2024 01:02 FXStreet Market News
- AUD/USD could not sustain a move to 0.6680 on Wednesday.
- A further advance in the US Dollar weighed on the risk complex.
- The RBAÂ’s Monthly CPI Indicator surprised to the upside.
AUD/USD partially reversed TuesdayÂ’s drop and advanced marginally despite the continuation of the intense recovery in the US Dollar (USD) on Wednesday.
In fact, the pairÂ’s slight advance came in response to the higher-than-expected inflation figures in Australia tracked by the Reserve Bank of AustraliaÂ’s Monthly CPI Indicator, which further underpinned the insofar hawkish stance by the bank.
The daily gain in the Aussie dollar came in spite of another solid performance of the Greenback and US yields across the curve, which kept price action within the risk-related universe subdued.
Other than the dollarÂ’s gains, the bearish performance of both copper and iron ore prices also contributed to the loss of upside traction in the pair.
Regarding monetary policy, the Reserve Bank of Australia (RBA), like the Federal Reserve, has been among the last major central banks to change its stance. In its latest meeting, the RBA met expectations by maintaining a hawkish approach, keeping the official cash rate (OCR) at 4.35%, and signalling flexibility for future decisions.
During her press conference, Governor Bullock confirmed that the board discussed potential rate hikes while ruling out cuts. The bank remains focused on inflation, showing a reluctance to ease policy unless necessary. The central bank emphasized that inflation is still above target and reiterated its commitment to taking the necessary actions to bring inflation back within the target range.
The contrast between potential Fed easing and the RBA’s likely prolonged restrictive stance could support AUD/USD in the coming months.
However, persistent concerns about the slow momentum in the Chinese economy could hinder a sustained recovery in the Australian currency as China continues to face post-pandemic challenges.
Meanwhile, in Oz, the RBAÂ’s Monthly CPI Indicator (Weighed mean CPI) rose by 4.0% in the year to May (from 3.6%), and the Trimmed mean CPI rose by 4.4% YoY.
AUD/USD daily chart
AUD/USD short-term technical outlook
If bulls assume control, the AUD/USD may hit 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 critical 0.7000 level.
Bearish attempts, on the other hand, may lead the pair lower, first striking the June low of 0.6574 (June 10) and then reaching the key 200-day SMA of 0.6552. A further slide might include 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 AUD/USD remains above the 200-day SMA.
The 4-hour chart shows a lack of convincing upward momentum thus far. However, the initial barrier looks to be 0.6714, ahead of 0.6728 and 0.6759. In contrast, the immediate support is around 0.6574, followed by 0.6558. The RSI decreased to around 48.
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Canadian Dollar hesitates on Wednesday after wholesale trade estimate teases decline
398415 June 27, 2024 00:56 FXStreet Market News
- Canadian Dollar gave a mixed performance, easing against the Greenback.
- Canada reported a potential contraction in wholesale trade in May.
- Fedspeak to continue dominating headlines until high impact data late in the week.
The Canadian Dollar (CAD) is mixed on Wednesday, giving a mediocre performance and settling lower against the US Dollar as Fedspeak continues to weigh on investor focus. Markets await a slew of key economic figures due in the back half of the trading week.Â
US Durable Goods Orders, Initial Jobless Claims, and US Gross Domestic Product (GDP) figures all slated for Thursday. Friday will follow up with Canadian MoM GDP and US Personal Consumption Expenditure Price Index (PCE) inflation for the month of May.
Statistics Canada (Statscan) warned of a contraction in wholesale trade activities in May, which follows a moderate increase in AprilÂ’s figures. The Statscan flash estimate is a preview of the final figure that will be published on July 15.
Daily digest market movers: Canadian Dollar churns on Wednesday, eases against Greenback
- Canadian Wholesale Sales likely contracted by 0.9% in May, according to a Statscan flash estimate.
- A decline in upstream business activity will put renewed pressure on FridayÂ’s upcoming Canadian GDP print, which is forecast to rise to 0.3% MoM in April after the previous 0.0%.
- US New Home Sales in May also declined on Wednesday, coming in at -11.3% MoM. This is the sharpest downside correction since July 2022 as housing activity remains subdued.
- US Bank Stress Test information is due later on Wednesday.
- Markets look ahead to ThursdayÂ’s US GDP revision for the first quarter, which is expected to hold steady at 1.3% QoQ.
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 Japanese Yen.
| Â | USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF |
| USD | Â | 0.22% | 0.41% | 0.26% | -0.09% | 0.61% | 0.61% | 0.21% |
| EUR | -0.22% | Â | 0.19% | 0.04% | -0.31% | 0.41% | 0.40% | 0.00% |
| GBP | -0.41% | -0.19% | Â | -0.16% | -0.49% | 0.22% | 0.20% | -0.16% |
| CAD | -0.26% | -0.04% | 0.15% | Â | -0.34% | 0.37% | 0.36% | -0.02% |
| AUD | 0.09% | 0.30% | 0.48% | 0.34% | Â | 0.71% | 0.71% | 0.35% |
| JPY | -0.62% | -0.41% | -0.22% | -0.38% | -0.71% | Â | -0.01% | -0.41% |
| NZD | -0.62% | -0.40% | -0.21% | -0.36% | -0.72% | 0.03% | Â | -0.37% |
| CHF | -0.24% | -0.02% | 0.17% | 0.02% | -0.32% | 0.39% | 0.39% | 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 Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Technical analysis: Canadian Dollar slumps back to 1.3700 against Greenback
The Canadian Dollar (CAD) was mixed on Wednesday. It rose around four-tenths of one percent against the Japanese Yen and the New Zealand Dollar. However, it shed a third of a percent against the Australian Dollar and backslid a quarter of a percent against the US Dollar.
USD/CAD rose to the 1.3700 handle on Wednesday as the Canadian Dollar recedes against the Greenback. The pair briefly set a multi-week low this week before returning to a familiar congestion zone.
Intraday price action is hung up on the 200-hour Exponential Moving Average (EMA) at 1.3692, and daily candlesticks have snapped a near-term losing streak. The 50-day EMA at 1.3675 provides technical support, and the pair continues to grind out a medium-term consolidation pattern north of the 200-day EMA at 1.3582.
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.
US Dollar rises to new high, underpinned by rising Treasury yields
398414 June 27, 2024 00:49 FXStreet Market News
- US Dollar extended recovery to Wednesday, reaching 106.00, its highest level since early May.
- Rising US Treasury yields lent support to the US currency.
- Week’s highlight remains JuneÂ’s PCE inflation data due on Friday.
WednesdayÂ’s session witnessed the US Dollar, as represented by the Dollar Index (DXY), climb to 106.00, a level last observed in early May.
The economic landscape in the US continues to portray resilience. A few signals of disinflation are noticeable, but it still holds on which makes the Federal Reserve (Fed) not fully embrace the easing cycle.
Daily digest market movers: US Dollar elevated by rising Treasury yields, eyes on PCE
- Wednesday’s standout data was the New Home Sales for May, which demonstrated a decline of about 11.3% to 619K units from 698K units in the prior release and beneath the 640K expected.
- Simultaneously, US Treasury yields are rising, with the 2, 5 and 10-year rates reported at 4.74%, 4.33%, and 4.31%, respectively.
- Expectations of a potential Fed rate cut in September continue to be high, odds from CME Fedwatch Tool are 60% for 25 bps cut.
- Thursday holds the Gross Domestic Product (GDP) revision for Q1, which is anticipated to hold steady at 1.3%.
- Friday’s significant event will still be the May Personal Consumption Expenditures (PCE) report, an inflation gauge favored by the Fed.
- Both headline and core PCE are projected to soften to 2.6% YoY, dropping from 2.7% and 2.8%, respectively, in April.
DXY technical analysis: Bullish momentum continues, index aims high
The technical outlook remains solidly optimistic with indicators firmly in the green. The Relative Strength Index (RSI) preserves a level above 50, while green bars are developing in the Moving Average Convergence Divergence (MACD), suggesting a gathering of strength among bulls. The progressive incline of these indicators demonstrating that the DXY may be preparing for additional upside.
Furthermore, the DXY Index maintains a standing position above the 20, 100 and 200-day Simple Moving Averages (SMAs), confirming a persistently positive outlook. With the Index reaching levels not seen since early May and with indicators showing a propensity for further increment, the DXY is oriented toward further gains. The 106.50 level is the next target for bulls.
Fed FAQs
Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the FedÂ’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.
The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.
In extreme situations, the Federal Reserve may resort to a policy named 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 during crises or when inflation is extremely low. It was the FedÂ’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.
Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.
Gold Price Forecast: XAU/USD battles to retain the $2,300 mark
398412 June 27, 2024 00:33 FXStreet Market News
XAU/USD Current price: $2,301.49
- Firmer US Treasury yields provide an additional impulse to the US Dollar.
- Stock markets remain in the red, reflecting the dismal market mood.
- XAU/USD maintains the downward route and challenges the $2,300 threshold.
XAU/USD bearish momentum accelerated on Wednesday, and the bright metal trades at around $2,300.00 a troy ounce mid-American afternoon, with the US Dollar firmer against all major rivals. As reflected by stock markets, a poor market mood remains behind the GreenbackÂ’s broad strength. European indexes closed in the red, while Wall Street is also in a bearish route. The Nasdaq Composite is an exception, posting modest gains amid NVIDIA’s comeback, underpinning the tech sector since the beginning of the day.
Firmer government bond yields contributed to the XAU/USD slide. The United States (US) 10-year Treasury note currently offers 4.31%, up 7 basis points (bps) in the day, while the 2-year note yields 4.74%, up 5 bps.
Regarding the US Dollar, it also found strength in market talks, suggesting the Federal Reserve (Fed) will likely deliver just a 25 bps interest rate cut before year-end, far from the roughly 100 bps trim anticipated earlier in the year.
Data-wise, US figures kept disappointing. The country released May New Home Sales, which fell a whopping 11.3% in the month. The country will release more interesting macroeconomic figures on Thursday, as the calendar includes May Durable Goods Orders, the final estimate of Q1 Gross Domestic Product (GDP), weekly unemployment figures and the May Goods Trade Balance.
XAU/USD short-term technical outlook
XAU/USD slid for a second consecutive day, reaching an intraday low of $2,293.54 during US trading hours. From a technical point of view, the risk of a bearish extension has increased. The daily chart shows the pair is below a mildly bearish 20 Simple Moving Average (SMA) Â while slowly but steadily getting closer to a bullish 100 SMA, currently at $2,249.60. At the same time, technical indicators head firmly south within negative levels and far from signaling downward exhaustion, supporting the case of another leg south.
The case for a bearish continuation is even stronger in the near term. The 4-hour chart shows XAU/USD has fallen below all its moving averages, while a firmly bearish 20 SMA crossed below a flat 100 SMA, usually a sign of persistent selling interest. At the same time, the Momentum indicator turned south after failing to overcome its midline, maintaining a clear downward slope. Finally, the Relative Strength Index (RSI) indicator accelerated south, now hovering around 30 with no signs of changing course.
Support levels: 2,293.50 2,279.60 2,265.60
Resistance levels: 2,316.60 2,329.50 2,337.00
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Russia Industrial Output came in at 5.3%, above forecasts (2.5%) in May
398411 June 27, 2024 00:02 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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Tokyo is sleeping and the market is pushing
398410 June 26, 2024 23:56 Forexlive Latest News Market News
Japanese chief currency diplomat Kanda dropped all the warnings just before Tokyo went to bed but there was no intervention. It’s now nearly 1 am in Tokyo and the market is sensing that it’s safe for a least a few hours.
I imagine there’s some element of short-covering here as those expecting a line in the sand at 160.00 bow out. That said, two months ago the MoF let the pair run one way from 158.00 to 160.20 before knocking the pair down 800 pips. They might be trying to pull in spec longs again before blowing them out.
USDJPY 10 minutes
I admire anyone willing to do this dance with Japan but it’s a real game of chicken. Keep an eye out for the US 5-year auction at 1 pm ET. Yields are 6-7 bps higher across the curve at the moment and pressing. A soft/strong auction would have knock-ons for USD/JPY, though I wouldn’t expect more than 20 pips under any circumstance.
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Crypto today: Bitcoin, EthereumÂ’s upcoming $10 billion options expiry renews optimism among traders
398405 June 26, 2024 23:21 FXStreet Market News
- Bitcoin, EthereumÂ’s 25% options are set to expire in the money on Friday, setting the tone for a bullish July.Â
- Bitcoin is struggling to break past the resistance at $62,500, trading at $61,442 on Wednesday.Â
- Ethereum and XRP prices are nearly unchanged in the past 24 hours, trading at $3,377 and $0.4739 respectively.Â
Crypto update:
- BTC/USDT is trading at $61,442 early on Wednesday, nearly unchanged in the past 24 hours. The largest asset by market capitalization has wiped out nearly 6% in the past seven days. Bitcoin has been in a choppy zone, directionless, and traders look to FridayÂ’s option expiry for hints on what to expect from BTC.Â
Bitcoin steadies around $61,000 after liquidations on Defi platforms exceed $1 million
- ETH/USDT is trading at $3,377, up nearly 0.2% on the day. The altcoin has sustained above key support with the optimism surrounding the expected approval of the Spot Ethereum ETF.Â
Analysis shows Ethereum ETFs could impact the market with $15 billion net flows by 2025
- XRP/USDT is trading at $0.4739 at the time of writing. The altcoin is down nearly 0.40% in the past 24 hours. XRPÂ’s social dominance is at its highest level since April 2024, as the altcoinÂ’s relevance has increased among traders.
Ripple CEO Brad Garlinghouse slams SEC Gary Gensler for his remarks on crypto, XRP extends losses
- Meme coins and Artificial Intelligence (AI) categories of tokens noted surges in their market capitalization. Meme coins added nearly 6% to their market capitalization, pushing it to $50.89 billion. AI tokens added 3% to their market cap in the same timeframe, up to $29.54 billion.Â
- Luuk Strijers, CEO at Deribit, told Coindesk that over 25% of Deribit’s open interest is set to expire this Friday, “in the money,” meaning the asset has already surpassed the strike price.Â
Chart of the day:
WIF/USDT daily chartÂ
Dogwifhat (WIF) is trading at $2.0484, down 1% in the past seven days. The Moving Average Convergence Divergence (MACD) shows decreasingly shorter red histogram bars, and MACD is close to crossing above the signal line, a bullish sign for WIF.Â
WIF is likely to rally towards the lower boundary of the Fair Value Gap at $2.3281, a 14% rally. The meme coin could drop to support at $1.699.Â
Market updates:
- German government Bitcoin transfers continue, with another 750 BTC moving early on Wednesday. The following transfers were tracked by Spotonchain:
- 125 BTC moved to Kraken
- 125 BTC moved to Bitstamp
- 500 BTC moved to wallet “139PoPE1bK”
- 0.001 BTC sent to Flow Traders (likely a test transaction)
- In the past week, the German government has transferred 4,250 BTC worth $271.3 million at an average price of $63,828.Â
- Bitcoin ETF net inflow turned positive after seven consecutive days of outflows. $31 million flowed into Bitcoin ETFs.Â
30-day net inflow of Bitcoin ETFsÂ
- Bitcoin Fear and Greed Index climbed from 30 to 46, but still remains within the “fear” zone.Â
Fear and Greed IndexÂ
Industry updates:
- zkSync, a Layer 2 network, announces the launch of the interoperability layer Elastic Chain to compete with PolygonÂ’s AggLayer. Polygon is currently the largest Ethereum scaling solution in the ecosystem.Â
- Coin98 wallet announces support for .shib names from an identity service for the top web3 communities.Â
- DEXScreener, a DeFi analytics tool, announced the launch of its meme coin decentralized application (DApp) Moonshot.Â
Moonshot does not have an X account, don’t fall for scams. Steady lads, more to come!
— DEX Screener (@dexscreener) June 24, 2024
DEX Screener just launched their own Memecoin dApp!
Missed the early days of PumpFun? Don’t waste your second chance to make millions on Moonshot!
The most complete guide on how to find the next x100 before everyone else pic.twitter.com/FVTiMEzHe5
— 0xNobler (@CryptoNobler) June 25, 2024
The top 3 gainers on Wednesday are Fetch.ai (FET), Notcoin (NOT) and SingularityNET (AGIX), up 10%, 8.5% and 9%, respectively, in the past 24 hours, per CoinGecko data.Â
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