Articles
US Dollar gains cleared out post PCE data
399162 June 29, 2024 00:40 FXStreet Market News
- US Dollar saw a slight dip at the end of the week, clearing daily gains.
- US Dollar finds support amid high US Treasury yields.
- MayÂ’s PCE data showed an unexpected deceleration in US inflation.
The end of the week saw the US Dollar, as benchmarked by the DXY Index, settle near 105.80, after hitting a high of 106.13 earlier in the session. This follows the release of Personal Consumption Expenditures (PCE) data, but the losses are limited by the high US Treasury yields.
The American economy remains resilient with slight inflationary signals, which is just enough to keep the Federal Reserve (Fed) from completely embracing the easing cycle.
Daily digest market movers: US Dollar dips on weak PCE data
- On Friday, MayÂ’s Personal Consumption Expenditures (PCE) showed headline inflation soften to 2.6% YoY, down from the previous monthÂ’s 2.7%.
- Core PCE (which excludes volatile food and energy prices) has also experienced a decline to 2.6% from the previous 2.8% in April.
- US Treasury yields provide resilience to the Dollar, with the 2, 5 and 10-year rates at 4.71%, 4.32%, and 4.33%, respectively.
- Probability of a Fed rate cut in September marginally increased to 66%, up from the pre-release expectation of 64% as per CME Fedwatch Tool.
- Focus will now shift to labor market data from June.
DXY technical outlook: Positive momentum persists, index eyeing higher grounds
Despite the recent data fluctuations, the technical outlook remains positive, with indicators in green but losing some steam. The Relative Strength Index (RSI) continues to be above 50 but appears to point downward, indicating a slight pause in the bullish momentum. The green bars are still developing in the Moving Average Convergence Divergence (MACD), further facilitating the positive view but at a slower pace.
The DXY Index holds above the 20, 100 and 200-day Simple Moving Averages (SMAs), confirming its ongoing positive stance. Despite the IndexÂ’s steadiness at the highs seen since mid-May, there is room for further rise, suggesting the DXY is poised for further upside with the 106.50 zone next in sight. Conversely, 105.50 and 105.00 will be areas to observe in case of a drawdown.
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.
US equities give back all today’s gains as the quarter winds down
399161 June 29, 2024 00:27 Forexlive Latest News Market News
The S&P 500 has given back an early 40-point gain to a record 5523 and is now trading flat on the day at 5484.
SPX daily
Once again, I think bitcoin was the tell here as it sagged before stocks. It’s since stabiliize though, down around 1%.
I have a real hard time parsing here what’s inflation, what’s politics and what’s quarter end.
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Breaking: 21Shares files for spot Solana ETF less than 24 hours after VanEck
399160 June 29, 2024 00:26 FXStreet Market News
- Asset manager 21Shares has filed an S-1 draft with the SEC for a Solana ETF.
- The move follows an earlier SOL ETF filing from Van Eck on Thursday.
Asset manager 21Shares filed an S-1 registration statement with the Securities & Exchange Commission (SEC) on Friday for a spot Solana ETF, about 24 hours after VanEck filed for the same product.
Other asset managers could file for SOL ETF in the coming weeks, especially after many crypto proponents speculated that presidential candidate Donald Trump’s victory in the upcoming US elections could pave the way for the launch of these products.
(This story will be updated as more information becomes avalable)
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US Dollar Weekly Forecast: Attention shifts to Powell and Payrolls
399158 June 29, 2024 00:17 FXStreet Market News
- US Dollar Index (DXY) extended its uptrend further.
- Market participants still see the FedÂ’s first rate cut in September.
- NFP and Powell should dictate the price action next week.
A visit to the 2024 top looms closer
Another positive week finally saw the Greenback surpass the key 106.00 barrier for the first time since early May, according to the US Dollar Index (DXY). Indeed, the Index advanced for the fourth week in a row, once again on the back of the growing divergence in monetary policy between the Federal Reserve (Fed) and most other G10 central banks.
Monetary policy divergence and inflation
A closer look at the recent performance of the US Dollar (USD) reveals that it has managed to regain further strength against the broad risk-associated space since the FOMC June 12 meeting, in which the Fed largely met investors’ expectations by keeping the Fed Funds Target Range (FFTR) unchanged at 5.25%–5.50%, and the drop in US inflation reflected by the Consumer Price Index (CPI).
Among the G10 central banks, the European Central Bank (ECB) reduced its rates by 25 bps early in June. The Swiss National Bank (SNB) surprised markets with an additional 25 bps cut on June 20, while the Bank of England (BoE) issued a dovish hold on the same day. Similarly, the Bank of Japan (BoJ) conveyed a dovish message on June 14.Â
In contrast, the Reserve Bank of Australia (RBA) is expected to start easing in the first half of next year, while the Fed might begin reducing its rates by the end of this year, according to their latest meeting. It is worth recalling that the Federal Open Market Committee (FOMC) also indicated only one interest rate cut this year, likely at the December 18 event.
However, the reemergence of disinflationary pressure, as per the CPI and FridayÂ’s Personal Consumption Expenditures (PCE) report, along with a slowdown in key areas such as the US labour market in recent weeks, seem to have prompted market participants to start pencilling in two interest rate cuts by the central bank this year, likely in September and December.
One or two interest rate cuts?
A large driver behind the strong performance of the Greenback as of late must be found in the resilient, hawkish tone of the majority of Fed officials. All in all, while policymakers acknowledged the importance of inflation coming down, they still showed a persistent lack of confidence that this downward trend is sustainable.
These past few days, the President of the Federal Reserve Bank of Chicago, Austan Goolsbee, and Mary Daly, President of the San Francisco Federal Reserve Bank, have expressed confidence that inflationary pressure is easing, with Daly not believing the bank should cut rates until they are confident that inflation is moving towards 2%.Â
In addition, Fed Governor Lisa Cook has indicated that the bank is on track for a rate cut if the economy’s performance aligns with her expectations. Her colleague Michelle Bowman believes that inflation will decline further with the policy rate held steady, and rate cuts will be appropriate if inflation moves sustainably towards 2%. Finally, Atlanta Fed President Raphael Bostic believes inflation is narrowing, allowing the Fed to cut interest rates later this year.
Nevertheless, according to the FedWatch Tool by CME Group, there is approximately a 68% chance of lower rates at the September 18 meeting and nearly a 95% likelihood by the end of the year.
US yields do not validate US DollarÂ’s advance yet
The continuation of the intense upward momentum in the Greenback following the FOMC hiccup has not been reflected in US yields so far. In fact, yields have maintained their consolidative mood unchanged since the beginning of June at the lower end of the range.
Fed’s hawkish tone and inflation trends challenge market expectations of rate cuts
To sum up, persistent hawkish Fedspeak favouring extra patience and further evidence of inflationÂ’s path toward the FedÂ’s target maintains its collision course with the marketÂ’s belief of two interest rate cuts in the latter part of the year.
The still unabated constructive bias in the Dollar appears to favour the FedÂ’s option, hence, the likelihood of an extra advance in the currency remains well on the table on the medium-term horizon.
Moving forward, Chief PowellÂ’s participation in the ECB Forum at Sintra (Portugal) is expected to yield the same tone of recent comments, while the publication of the US labour market in the latter part of next week should prove to be more crucial in shedding further details on the FedÂ’s plans to start reducing its interest rates.Â
Upcoming key events
A busy and interesting week lies ahead for the Dollar on the data front. Powell will speak at the ECB Forum early in the week, followed by the ADP report and results from key Manufacturing and Services PMIs by the ISM. In addition, the FOMC will publish its Minutes of the June meeting and JuneÂ’s Nonfarm Payrolls emerge as the salient event towards the end of the week.
Techs on the US Dollar Index
The DXY maintained its firm momentum after bottoming out near 104.00 in early June, managing to finally trespass the key 106.00 hurdle.
If the index breaks above the June top of 106.13 (June 26), it might confront the 2024 high of 106.51 (April 16). Once it clears this region, DXY might embark on a probable visit to the November peak of 107.11 (November 1) ahead of the 2023 top of 107.34 (October 3).
On the other hand, the key 200-day SMA of 104.49 should offer decent initial contention before the June low of 103.99 (June 4). A deeper pullback could put the weekly low of 103.88 (April 9) back on the radar ahead of the March low of 102.35 (March 8) and the December bottom of 100.61 (December 28), all before the psychological contention zone at 100.00.
Meanwhile, the DollarÂ’s bullish outlook should remain intact while above the key 200-day SMA.
Economic Indicator
Nonfarm Payrolls
The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months’ reviews ?and the Unemployment Rate are as relevant as the headline figure. The market’s reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.
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.
Cleveland Fed median PCE inflation +0.2% m/m vs +0.3% prior
399157 June 29, 2024 00:05 Forexlive Latest News Market News
- Median inflation +3.3% y/y vs +3.3% prior
If you don’t know what it is, median PCE inflation is the one-month inflation rate of the component whose expenditure weight is in the 50th percentile of price changes.
According to the Cleveland Fed:
By omitting outliers (small and large price changes) and focusing on the
interior of the distribution of price changes, the median PCE inflation
rate can provide a better signal of the underlying inflation trend than
either the all-items PCE price index or the PCE price index excluding
food and energy (also known as the core PCE price index).
It’s been slower to come down but it’s tracking the drop in PCE.
Median PCE
EUR/USD steadies as US core PCE Inflation declines expectedly
399154 June 28, 2024 23:35 FXStreet Market News
- EUR/USD edges higher near 1.0700 ahead of US core PCE Inflation data for May.
- The US Dollar drops on firm Fed rate-cut prospects.
- The near-term outlook of the Euro is uncertain ahead of French elections and the Eurozone preliminary HICP.
EUR/USD rises to 1.0720 in Friday’s American session after the United States (US) core Personal Consumption Expenditure price index (PCE) data showed that price pressures declined expectedly in May. On a monthly and an annual basis, the US core PCE report grew at a slower pace of 0.1% and 2.6%, respectively. The expected decline in the underlying inflation data will positively influence market speculation on the Federal Reserve (Fed) reducing interest rates from the September meeting, according to the CME FedWatch tool, which also shows that there will be two rate cuts this year. Contrary to market expectations, Fed officials see only one rate cut this year as signaled in the latest dot plot.
On Thursday, Atlanta Fed Bank President Raphael Bostic said rate cuts would become appropriate when they are convinced that inflation is on a clear path towards 2%. When asked about a concrete timeframe for rate cuts, Bostic said “I continue to believe conditions will likely call for a cut in the federal funds rate in the fourth quarter of this year,” Reuters reported.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, falls to 105.80. 10-year US Treasury yields decline to 4.27%. Going forward, the major trigger for the US Dollar (USD) will be the US ISM Manufacturing Purchasing Managers’ Index (PMI) data for June, which will be published on Monday. The data will indicate the current health of the manufacturing sector.
Daily digest market movers: EUR/USD remains on its toes ahead of key Eurozone events
- EUR/USD holds ground near 1.0700 as the US Dollar corrects. The Euro’s outlook appears to be uncertain ahead of the French elections outcome and the Eurozone preliminary Harmonized Index of Consumer Prices (HICP) data for June, which will be published on Tuesday.
- Investors worry that new government formation in France could boost spending plans, which could result in a deepening budget crisis. The uncertainty over French elections deepened after French President Emmanuel Macron called for a snap election when his party suffered defeat in the European elections to Marine Le PenÂ’s far-right National Rally (RN). However, the victory of the National Rally is not inevitable due to the formation of the French left, also known as the Popular Front.
- Investors will pay close attention to the Eurozone preliminary HICP data, which will provide clues about the European Central BankÂ’s (ECB) subsequent rate cuts. The ECB began its rate-cut cycle from early JuneÂ’s policy meeting, during which it reduced its key rates by 25 basis points (bps).
- Meanwhile, the broader decline in price pressures in major Eurozone nations has boosted expectations of more rate cuts by the ECB. In France, the preliminary annual Consumer Price Index (CPI) declined expectedly to 2.5% from the prior release of 2.6%. Annual HICP in Spain decelerated to 3.5% from the former reading of 3.8% but remained higher than expectations of 3.4%, while price pressures in Italy were mixed.
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 Swiss Franc.
| Â | EUR | USD | GBP | JPY | CAD | AUD | NZD | CHF |
|---|---|---|---|---|---|---|---|---|
| EUR | Â | -0.01% | 0.02% | -0.21% | -0.01% | -0.38% | -0.20% | 0.08% |
| USD | 0.01% | Â | 0.03% | -0.19% | 0.00% | -0.35% | -0.19% | 0.09% |
| GBP | -0.02% | -0.03% | Â | -0.22% | -0.04% | -0.40% | -0.23% | 0.03% |
| JPY | 0.21% | 0.19% | 0.22% | Â | 0.18% | -0.17% | -0.01% | 0.28% |
| CAD | 0.01% | -0.01% | 0.04% | -0.18% | Â | -0.37% | -0.20% | 0.06% |
| AUD | 0.38% | 0.35% | 0.40% | 0.17% | 0.37% | Â | 0.18% | 0.44% |
| NZD | 0.20% | 0.19% | 0.23% | 0.01% | 0.20% | -0.18% | Â | 0.26% |
| CHF | -0.08% | -0.09% | -0.03% | -0.28% | -0.06% | -0.44% | -0.26% | 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 aims for a firm footing above1.0700
EUR/USD trades inside ThursdayÂ’s trading range as investors await the US core PCE inflation reading to make decisive positions. The downward-sloping border of the Symmetrical Triangle pattern formation on a daily time frame continues to remain a major barrier for the Euro bulls. A fresh downside would appear if the asset 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 the same.
Economic Indicator
Harmonized Index of Consumer Prices (YoY)
The Harmonized Index of Consumer Prices (HICP) measures changes in the prices of a representative basket of goods and services in the European Monetary Union. The HICP, released by Eurostat on a monthly basis, is harmonized because the same methodology is used across all member states and their contribution is weighted. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish.
Next release: Tue Jul 02, 2024 09:00 (Prel)
Frequency: Monthly
Consensus: 2.5%
Previous: 2.6%
Source: Eurostat
GBP/USD Price Analysis: Posts weekly losses, directionless beneath 1.2650
399152 June 28, 2024 23:33 FXStreet Market News
- GBP/USD steady following a positive UK GDP report and rising US PCE Index.
- Technicals cap pair below 1.2700, key for buyer momentum.
- Strong support at 1.2634/45 (50 & 100-DMAs); RSI suggests seller dominance, risk of more losses.
The GPB/USD is subdued during the North American session on Friday following a positive UK GDP report, yet an uptick in the FedÂ’s preferred gauge of inflation, the PCE Price Index, capped the major, which trades at 1.2642, virtually unchanged.
GBP/USD Price Analysis: Technical outlook
After bouncing off the weekly lows reached on Wednesday, the GBP/USD capped its losses and remained below the 12700 psychological figures, a crucial level for buyers to regain control.
However, sellers are also pressured as they face strong support at the confluence of the 50 and 100-day moving averages (DMAs) at around 1.2634/45, which, if cleared, could exacerbate further downside.
The Relative Strength Index (RSI) hints sellers remain in control, meaning further losses are expected.
The psychological figure of 1.2600 would be the first support. Once surpassed, the next demand zone to challenge would be the 200-DMA at 1.2555, followed by the 1.2500 mark.
For a bullish continuation, traders must claim 1.2700 and clear a previous support trendline turned resistance at around 1.2730/40.
GBP/USD Price Action – Daily Chart
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.
Copper is under selling pressure – TDS
399151 June 28, 2024 23:33 FXStreet Market News
Price action in the base metal complex is staving off Commodity Trading Advisor (CTA) selling pressure in Copper, however the higher selling trigger, now at $9,350/t, is becoming more of an entrenched risk for the red metal, TDS commodity strategists note. Â
Demand for base metals in China is weakening
“Indeed, with our gauge of global commodity demand continuing to weaken, while depressed premiums and surging inventories in the Middle Kingdom argue against fundamental tightness, there are plenty of potential catalysts that could see prices ease further from here, particularly given still bloated money manager positioning.”
“While the fundamental situation certainly looks promising in the years to come, the lack of evidence supporting current physical tightness can continue to see these money manager positions unwind.”
“Elsewhere, CTAs are modest buyers of Aluminum and Zinc but prices are close to levels that would see the buying quickly halted or reversed as current momentum signals are on the weaker side.”
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EUR/USD Weekly Forecast: US employment data and FOMC Minutes under the spotlight
399148 June 28, 2024 23:29 FXStreet Market News
- A sour market mood and central banksÂ’ imbalances kept EUR/USD under pressure.
- The FOMC meeting Minutes and US employment-related figures stand out next week.
- EUR/USD is at risk of retesting the yearÂ’s low at 1.0600 and even falling further.
The EUR/USD pair traded lifeless for most of the week around 1.0700, barely reacting on Friday following the release of the United States (US) Personal Consumption Expenditures (PCE) Price Index.
The Federal Reserve (Fed) favorite inflation gauge came largely in line with expectations, as the PCE Price Index rate edged lower to 2.6% YoY in May from 2.7% in April, while the monthly reading matched the 0.0% expected, according to the US Bureau of Economic Analysis (BEA). As forecasted, the core annual inflation printed at 2.6%, while the monthly core PCE Price Index rose 0.1%. The US Dollar shed some ground with the news, but losses were limited, and EUR/USD quickly returned to hover around the 1.0700 mark.
Sentiment leads the way
Generally speaking, financial markets stayed in a risk-off mood, although the absence of first-tier macroeconomic data kept major pairs within familiar levels. Speculative interest sought safety amid political turmoil in the Eurozone, particularly focused on France and the upcoming snap elections. Meanwhile, central banksÂ’ imbalances continue to favor the US Dollar, as the Fed maintains a firmly hawkish stance against the dovish lean of its major counterparts. Monetary easing has begun in Europe and Canada, but the US central bank seems determined to delay an interest rate cut for as long as possible. Hawkish comments from Fed officials these last few days suggest the central bank will deliver just one 25 basis points (bps) interest rate cut this year.
Macroeconomic data further limited the Euro. Germany released the IFO Survey on Business Climate, which unexpectedly contracted to 88.6 in June from 89.3 previously. Expectations and the Current Assessment also missed expectations. The countryÂ’s GfK Consumer Confidence Survey also missed the forecast, down to -21.8 in July. Finally, the Eurozone Economic Sentiment Indicator posted 95.9 in June, easing from 96.0 in May.
Across the pond, the US confirmed that the Gross Domestic Product (GDP) rose at an annualized pace of 1.4% in the first quarter of the year, slightly better than the preliminary estimate of 1.3%. Also, Durable Goods Orders were up 0.1% in May.
Policymakers and US employment-related data in focus
The upcoming week will be quite a busy one in terms of macroeconomic data. On Monday, Germany will release the preliminary estimate of the June Harmonized Index of Consumer Prices (HICP), while the US will publish the June ISM Manufacturing PMI. The Eurozone will also publish the preliminary estimate for the June HICP and May Retail Sales.
Fed speakers will flood the news next week, while on Tuesday, European Central Bank (ECB) President Christine Lagarde and Fed Chairman Jerome Powell will speak at a panel at the ECB Forum on Central Banking and may comment on future monetary policy. More relevantly, the Federal Open Market Committee (FOMC) will release the Minutes of its latest meeting on Wednesday. The document will likely bring no big surprises but could provide some insights into policymakersÂ’ views.
US employment-related figures will take centre stage, as the country will publish JOLTs Job Openings for May (Tuesday), the June ADP survey on private job creation (Wednesday), and, finally, on Friday, the Nonfarm Payrolls (NFP) report for the same month.
EUR/USD technical outlook Â
The EUR/USD pair ends June with losses and barely holds above its monthly low set at 1.0665. The weekly chart shows a directionless 100 Simple Moving Average (SMA) reinforces the support area, limiting the downside for a third consecutive week. At the same time, the 20 SMA grinds lower above the current level with limited downward strength. Finally, technical indicators consolidate within negative levels, failing to provide clear directional clues, albeit skewing the risk to the downside.
The case for a EUR/USD bearish extension is a bit clearer in the daily chart as the pair develops below all its moving averages. The 20 SMA has accelerated south and crossed below directionless 100 and 200 SMAs, maintaining its downward slope and providing dynamic resistance at around 1.0760. At the same time, the Momentum indicator aims modestly higher below its 100 line, while the Relative Strength Index (RSI) indicator turned marginally lower at around 41, anticipating a potential slide through the 1.0660 support area.
Once below it, the pair may extend its slump towards the year-low at 1.0600, while beyond the latter, the next relevant support level comes at 1.0520. Resistance beyond the 1.0760 area is seen at 1.0800, while stronger selling interest may surge if the pair nears the 1.0850 price zone.
There are all kinds of political rumors on Biden but it will be an interesting weekend
399147 June 28, 2024 23:27 Forexlive Latest News Market News
The US political landscape could look far different when markets re-open on Monday.
There are all kinds of rumors and reporting after Biden’s disastrous debate performance. The main ones indicate that Biden and his team plan to continue but I don’t really see those as insightful — people always want to continue.
The question is whether there are enough concerned senior Democratic officials and donors who can convince him to drop out.
One report that caught my attention is from Doug Kass, who is a money manager not a reporter but it has a ring of truth.
What I am hearing regarding Joe Biden. Ron Klain and Barack Obama are having a sit down with the President today. Jill Biden is insistent that Joe runs. Kamala is furious that she is not being considered as a replacement (Whitmer and Newsom are). Interestingly my neighbor in East Hampton is hosting the Bidens tomorrow. It will be an important tell if the fundraiser is cancelled
Ron Klain was Biden’s former chief of staff.
I think that if you read between the lines on a comment like this from Nancy Pelosi, it’s certainly concerning.
“The President of the United States has been a great president. He got off to a bad start. I thought he came through okay.”
That’s hardly a ringing endorsement.
The thing is: If he drops out, what happens next? Eyes would be on Gavin Newsom and Gretchen Whitmer but can you just drop a candidate in without anyone voting? That’s certainly problematic.
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Traders drop their XAU/USD and XAG/USD positions – TDS
399146 June 28, 2024 23:26 FXStreet Market News
Top traders on the Shanghai Futures Exchange (SHFE) have reduced their net Gold (XAU/USD) and Silver (XAG/USD) positions. Precious metals investors are likely to remain on the sidelines for the time being, TDS commodity strategists note.
Precious metals remain on the sidelines
“Top traders on the SHFE have reduced their net Gold and Silver positions by 8.6k and 11.6k lots respectively over the course of this past week. This, along with a macro cohort that has yet to find their bullish conviction on the Yellow Metal, helps explain the relatively weaker price action this week.”
“Elsewhere, the PCE data came in roughly in line with expectations, and the pace represents the lowest level of the cycle. Overall, inflation data continues to gradually normalize back to the trend the Fed would like to see, but it is still not enough evidence for officials to pound the table on policy easing.”
“In this sense, precious metals investors are likely to remain on the sidelines for the time being, however there has been nascent signs the ETF positions could be starting to turn a corner with holdings on course to post their first monthly increase since May 2023.”
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