Archive for Financial News – Page 124

13 Jun

US Dollar declines as Fed signals potential rate cut and inflation eases

By RoboForex Analytical Department

The EUR/USD pair is holding steady around 1.0805 on Thursday, following a surge in volatility the previous evening. The Federal Reserve concluded its meeting with a neutral stance, maintaining the interest rate at 5.25% per annum as anticipated. The Fed’s comments hinted at a possible interest rate cut by December while projecting more aggressive rate reductions for 2025, which the market viewed positively.

However, it was the US inflation data that significantly impacted the EUR/USD pair, more so than the Fed’s announcement. The Consumer Price Index (CPI) for May showed a year-on-year increase of 3.3%, down from 3.4% in the previous month. On a month-on-month basis, the CPI was flat, compared to a 0.3% increase in April. Core inflation, which excludes volatile food and energy prices, also decreased to 3.4% year-on-year, surpassing expectations. This decline in price pressures followed unexpectedly robust employment market reports.

Investors have been highly reactive to each successive set of statistics, partly because the Fed has emphasised the significance of these data releases in shaping its monetary policy decisions. Following the inflation report, the EUR/USD briefly spiked to 1.0852 before retreating slightly.

EUR/USD technical analysis

On the H4 chart, EUR/USD surged past the consolidation range on the news, executing a correction wave to 1.0851. Currently, a downward impulse has brought it to 1.0800. We anticipate the formation of a consolidation range around this level. A downward breakout could lead to a further decline to 1.0776, potentially extending to 1.0701. The MACD indicator supports this bearish outlook, with its signal line positioned below zero and pointing downward.

On the H1 chart, EUR/USD has completed a decline to 1.0800. A corrective movement to 1.0826 may occur, testing from below. Following this correction, a new downward wave is expected to target 1.0766, with a continuation towards 1.0706 likely. The Stochastic oscillator, with its signal line currently above 20, suggests an upward move to 80, confirming the potential for this bearish trajectory.

Market outlook

As the market digests the implications of the latest US economic data and the Federal Reserve’s statements, fluctuations in the EUR/USD pair will likely continue. Investors should remain vigilant and prepared for further volatility as more economic indicators are released and the Fed’s monetary policy evolves.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Financial News Forex and Currency News
13 Jun

The US Fed has planned only one rate cut this year and four cuts in 2025

By JustMarkets

At Wednesday’s close, the Dow Jones Index (US30) decreased by 0.09%, while the S&P 500 Index (US500) added 0.85%. The NASDAQ Technology Index (US100) closed positive 1.53%. Meanwhile, the S&P 500 (US500) and NASDAQ (US100) indices made new highs.

As expected, the FOMC kept the target range for the federal funds rate unchanged at 5.25%–5.50% and said it would not cut rates until there is more confidence that inflation is moving steadily toward 2%. The FOMC maintained its 2024 US GDP estimate at 2.4%, unchanged from March, but raised its 2024 core PCE prognosis to 2.8% from 2.6% in March. Meanwhile, the dot plot shows that policymakers see only one rate cut this year and four cuts in 2025. Fed Chairman Powell said that inflation has come down significantly but is still too high, and the Fed maintains its restrictive stance to reduce demand relative to supply. He added that the CPI report is “progress” but not enough to justify policy easing. Markets rate the odds of a 25 bps rate cut at 8% at the July 30–31 FOMC meeting and 60% at the next meeting on September 17–18.

Oracle (ORCL) climbed a record 13%, leading the S&P 500 stocks higher after announcing a cloud infrastructure partnership with Google Cloud, Microsoft, and OpenAI. Apple (AAPL) closed up over 2% after unveiling new artificial intelligence features, including operating system updates and a new artificial intelligence platform called Apple Intelligence.

Equity markets in Europe were mostly up on Wednesday. Germany’s DAX (DE40) rose by 1.42%, France’s CAC 40 (FR40) closed up 0.97%, Spain’s IBEX 35 (ES35) added 0.63%, and the UK’s FTSE 100 (UK100) closed positive 0.83%.

ECB executive board representative Schnabel said yesterday that the Eurozone economy is gradually recovering, but the “last mile” of disinflation is proving to be bumpy. His counterpart, ECB governing council spokesman Patsalides, said the ECB’s future actions on interest rates would depend on data, and there is no specific direction the Central Bank is sticking to.

President Macron has denied rumors of resigning if his party performs poorly in the upcoming legislative elections. Macron’s call for snap elections came in response to the far-right’s victory in the European Parliament elections, which has raised investor concerns about France’s economic and financial future.

WTI crude oil prices fell to $78 a barrel on Thursday, retreating from two-week highs, as EIA data showed US crude inventories rose by 3.73 million barrels last week, the highest in six weeks, and defeated market expectations of a 1.55 million barrel decline.

Asian markets were predominantly down yesterday. Japan’s Nikkei 225 (JP225) was down 0.66%, China’s FTSE China A50 (CHA50) lost 0.07%, Hong Kong’s Hang Seng (HK50) was down 1.31% and Australia’s ASX 200 (AU200) was negative 0.51%.

Hong Kong’s stock market rose by 0.50% in morning trading on Thursday after falling more than 1% in the previous session, mainly due to gains in consumer and technology stocks. Electric carmakers rose amid signs that the EU’s tentative decision to raise tariffs on Chinese cars matched market expectations.

In Australia, the unemployment rate fell to 4% in May from a three-month high of 4.1% in April, matching expectations. The Reserve Bank of Australia (RBA) will keep the money rate at 4.35% at next week’s meeting but will likely reiterate that it will not rule out a further rate hike if inflation picks up. Last week, RBA Governor Michele Bullock said she would not hesitate if inflation picks up but noted that the risks to rates and inflation are currently balanced.

S&P 500 (US500) 5,421.03 +45.71 (+0.85%)

Dow Jones (US30) 38,712.21 −35.21 (−0.09%)

DAX (DE40) 18,630.86 +260.92 (+1.42%)

FTSE 100 (UK100) 8,215.48 +67.67 (+0.83%)

USD Index 104.70 −0.53 (−0.56%)

Important events today:
  • – Australia Unemployment Rate (m/m) at 04:30 (GMT+3);
  • – Eurozone Industrial Production (m/m) at 09:00 (GMT+3);
  • – Switzerland Producer Price Index (m/m) at 09:30 (GMT+3);
  • – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
  • – US Producer Price Index (m/m) at 15:30 (GMT+3);
  • – US Natural Gas Storage (w/w) at 17:30 (GMT+3);
  • – US FOMC Williams Speaks at 19:00 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
12 Jun

Euro hits monthly low amid political instability in France

By RoboForex Analytical Department

The EUR/USD pair declined to 1.0740 on Wednesday, nearing the month’s low. This downward movement is primarily driven by the political instability in France following the significant developments in the European Parliament elections.

French President Emmanuel Macron has called for early legislative elections after the far-right party’s strong showing. While Macron retains the presidency and maintains control over foreign policy and defence, the election results could hinder his ability to implement new domestic policies and appoint ministers. There are growing concerns about Macron’s potential loss in the forthcoming elections, adding to worries about France’s financial stability.

The European Central Bank (ECB) met last week and decided to lower interest rates for the first time in five years. Despite this, the ECB adopted a cautious approach towards further monetary easing, contributing to the current economic outlook.

Attention is also focused on the ongoing US Federal Reserve meeting. While no changes in interest rates are expected, the market is eagerly awaiting the Fed’s latest economic assessment and guidance. If signalled, the timing of potential interest rate cuts could substantially impact market movements.

EUR/USD technical analysis

On the H4 chart, the EUR/USD is forming a consolidation range around the 1.0750 level. A potential decline to 1.0700 is considered, after which a rebound to 1.0750 may occur, a test from below. Further declines could target the 1.0660 level, possibly continuing to 1.0600. The MACD indicator supports this bearish outlook, with its signal line below zero and directed downwards.

On the H1 chart, the consolidation range has expanded between 1.0773 and 1.0717. A movement towards 1.0750 is anticipated, with a forming trend continuation pattern suggesting a further drop. Exiting this range on the downside could initiate a movement towards 1.0600. The Stochastic oscillator, currently below 80, is expected to fall to 20, aligning with the potential for further declines.

Market outlook

Investors are advised to watch monetary policy developments in Europe and the US. Additionally, political events in France, which could significantly impact the EUR/USD trajectory in the near term, should be monitored closely.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Financial News Forex and Currency News
12 Jun

China’s consumer inflation is on the rise. Today, the focus is on the FOMC meeting

By JustMarkets

At Tuesday’s close, the Dow Jones Index (US30) decreased by 0.31%, while the S&P 500 Index (US500) added 0.27%. The NASDAQ Technology Index (US100) closed positive 0.88%. Weakness in bank stocks weighed on the Dow Jones Industrials after Pimco said it expects more bank failures of regional banks in the US due to a “very high” concentration of troubled commercial real estate loans on their balance sheets. Stocks also came under some downward pressure due to caution ahead of Wednesday’s CPI report and the outcome of Wednesday’s FOMC meeting.

The US Central Bank will hold its next monetary policy meeting today. The probability that the US Fed will start cutting rates at the current meeting is almost zero. Therefore, traders should focus on the FOMC estimates and the speech of Fed Chief Jerome Powell at the press conference after the meeting. Consumer inflation data for May will be released a few hours before the Fed meeting on Wednesday. Further signs of weakening inflation could increase expectations for a rate cut, especially given signs of economic weakness. As a result, most factors indicate that the statement and speech will have a hawkish bias. This could give confidence to the dollar, which would negatively impact risk assets (euro, pound), metals, and indices. There is only a small chance that the situation will change. For that, inflation data would have to show significant downward progress.

Apple (AAPL) rose more than 7% to a record high and supported gains in tech stocks when D.A. Davidson upgraded the stock to “buy” from “neutral” with a $230 price target on “expectations of an iPhone refresh cycle.” Shares of PayPal Holdings (PYPL) fell more than 3% and topped the Nasdaq 100 losers list after Apple demonstrated a new tap-to-cash feature that allows for quick payments between individuals.

Equity markets in Europe were mostly down on Tuesday. Germany’s DAX (DE40) fell by 0.68%, France’s CAC 40 (FR40) closed down 1.33%, Spain’s IBEX 35 (ES35) lost 1.60%, and the UK’s FTSE 100 (UK100) closed negative 0.98%. ECB Governing Council spokesman Rehn said yesterday that the ECB is not pre-committing to any interest rate path. This confirms what his colleagues have said that the ECB will not cut rates at its next meeting. Swaps estimate the probability of a 25bp ECB rate cut at 8% for the July 18 meeting and 49% for the September 12 meeting.

French President Macron has called for snap legislative elections in response to the far-right’s success in the European Parliament elections. Although Macron will retain the presidency and powers over foreign policy and defense, his ability to push through legislation could be affected by the outcome of the election and the appointment of a new prime minister. There are also concerns that the president could resign if his party performs poorly in the upcoming elections, raising concerns about France’s financial situation.

WTI crude prices climbed above $78 a barrel on Wednesday, having risen in five of the last six sessions on the back of an improved global demand outlook. The US agency EIA raised its prognosis for global oil demand growth to 1.1 million bpd in 2024 from a previous estimate of 900,000 bpd, with demand in Asian countries, excluding Japan, revised upward. OPEC also maintained its prognosis for solid growth in global oil demand this year due to increased travel and tourism expectations in the second half of the year.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) gained 0.25%, China’s FTSE China A50 (CHA50) declined 1.48%, Hong Kong’s Hang Seng (HK50) fell on -1.04% and Australia’s ASX 200 (AU200) was negative 1.33%.

The offshore yuan rose to 7.26 per dollar as traders reacted to the latest Chinese inflation data. The data showed consumer prices rose steadily in May, and producer price deflation eased slightly. This suggests that the Chinese government’s efforts to stimulate the economy are starting to show positive results. China’s annual inflation rate in May 2024 was 0.3%, holding steady for the second consecutive month and falling short of market estimates of 0.4%. It was the fourth consecutive month of rising consumer inflation. Meanwhile, traders took a cautious stance following a report that the Biden administration may impose further restrictions on China’s access to artificial intelligence technology amid escalating tensions between the US and China.

S&P 500 (US500) 5,375.32 +14.53 (+0.27%)

Dow Jones (US30) 38,747.42 −120.62 (−0.31%)

DAX (DE40) 18,369.94 −124.95 (−0.68%)

FTSE 100 (UK100) 8,147.81 −80.67 (−0.98%)

USD Index 105.26 +0.03 (+0.03%)

Important events today:
  • – Japan Producer Price Index (m/m) at 02:50 (GMT+3);
  • – China Consumer Price Index (q/q) at 04:30 (GMT+3);
  • – China Producer Price Index (q/q) at 04:30 (GMT+3);
  • – UK GDP (m/m) at 09:00 (GMT+3);
  • – UK Industrial Production (m/m) at 09:00 (GMT+3);
  • – UK Trade Balance (m/m) at 09:00 (GMT+3);
  • – German Consumer Price Index (m/m) at 09:00 (GMT+3);
  • – US Consumer Price Index (m/m) at 15:30 (GMT+3);
  • – US Crude Oil Inventories (w/w) at 17:30 (GMT+3);
  • – US Fed Interest Rate Decision at 21:00 (GMT+3);
  • – US FOMC Monetary Policy Statement at 21:00 (GMT+3);
  • – US FOMC Press Conference at 21:30 (GMT+3);
  • – Canada BoC Gov Macklem Speaks at 22:15 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
12 Jun

US500: Braces for mid-week double whammy

By ForexTime 

  • US500 ↑ 13% since start of 2024
  • Index could be rocked by US CPI/Fed combo
  • Over past year Fed meeting triggered moves of ↑ 2% & ↓ 0.8%
  • Prices bullish on D1 but RSI overbought
  • Technical level – 5400

It would be a crime to overlook FXTM’s US500 on such a big day for global markets.

After hitting a new all-time high yesterday, the index could be injected with fresh volatility thanks to a rare US CPI and Fed combo.

Note: US500 tracks the S&P 500 index – the benchmark used to measure the stock performance of the largest listed US companies.

Since last Friday, we have hammered at the importance of these two events and their potential impacts on financial markets. Still, US equities continue to march higher despite the growing sense of caution. This may be based on Apple stocks surging to fresh all-time highs.

But the key question is whether US500 bulls can maintain their hunger for more gains…

The US Consumer Price Index (CPI) is forecast to rise 3.4% in May, unchanged from April. At the same time, the annual core is forecast to have cooled to 3.5% – its lowest since April 2021.

  • Should the inflation report print above expectations, this may further push back Fed cut bets – hitting the US500.

Traders are currently pricing in a 58% probability of a 25-basis point cut in September with this jumping to 89% by November.

Golden nugget: Over the past year, the US CPI report has triggered upside moves of as much as 0.7% or declines of 0.5% in a 6-hour window post-release.

A few hours after the CPI report will be the Fed decision which is widely expected to conclude with rates unchanged. However, all eyes will be on the economic projections including the “dot plot” which could potentially rock markets.

  • The new dot plot is expected to show two 25-basis point cuts in 2024 compared with the three projected in March. If the dot plot shows only one 25 basis point cut or none for this year, US equity bulls could be in trouble.

Golden nugget: Over the past year, the Fed has triggered upside moves of as much as 2% or declines of 0.8% in a 6-hour window post-release.

Looking at the technical picture

The US500 is firmly bullish on the daily charts with prices trading above the 50, 100, and 200-day SMA. However, the Relative Strength Index (RSI) is a whisker away from 70 – indicating that prices are overbought.

  • A solid breakout above 5400 could encourage a move toward the next psychological level at 5500.
  • Should 5400 prove reliable resistance, prices may slip back towards 5320 and 5270.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Financial News Stock Market Ideas
11 Jun

Which cryptos could see biggest moves after US CPI/Fed meeting?

By ForexTime

  • Bitcoin, Ethereum falling over 3% each today
  • Markets angsty ahead of Wednesday’s US CPI, Fed decision
  • Avalanch has seen biggest up/down moves post-CPI
  • Dogecoin, Solana historically more reactive to Fed meetings
  • Traders could profit from big crypto volatility mid-week

 

The world’s 2 largest cryptos, Bitcoin and Ethereum, are both falling over 3% each!

 

 

These declines come on the eve of some ultra-important US economic events that could rock global financial markets.

 

On Wednesday, June 12th, markets will find out the latest:

  • @12:30 GMT: US consumer price indices (CPI), which measure inflation, for May 2024
  • @18:00 GMT: Fed interest rate decision and “dot plot” (Fed officials’ forecasts for US interest rates)
  • @18:30 GMT: Press conference by Fed Chair Jerome Powell

Note that the monthly CPI releases and the Fed meetings are not often scheduled on the same day.

Hence, markets are set up for what could be a “double-whammy” Wednesday.

 

We’ve already written extensively about why these events impact financial markets worldwide.

This article will focus exclusively on the crypto world.

 

Which crypto could see the biggest moves this week?

Of the 11 different cryptocurrencies offered by FXTM …

Avalanch, Dogecoin and Solana have offered the biggest reactions to the US CPI prints and Fed decisions from the past 12 months.

 

Let’s break this down by the respective marquee events: US CPI and Fed meeting.

 

Using a 6-hour timeframe after the monthly CPI releases from the past 12 months:

  1. Avalanch rose by as much as 16.7%, or fell as much as 7.1%
  2. Solana rose by as much as 7%, or fell as much as 5.2%
  3. Bitcoin Cash rose by as much as 5.7%, or fell as much as 3.4%
  4. Chainlink rose by as much as 4.7%, or fell as much as 4.1%
  5. Bitcoin rose by as much as 4.3%, or fell as much as 2.9%
  6. Litecoin rose by as much as 3.4%, or fell as much as 4.2%
  7. Ethereum rose by as much as 3.4%, or fell as much as 3.1%
  8. Ripple rose by as much as 3.2%, or fell as much as 7.1%
  9. Dogecoin rose by as much as 3%, or fell as much as 3.8%
  10. Polygon rose by as much as 4.1%, or fell as much as 5.9%
  11. Cardano rose by as much as 3.9%, or fallen as much as 4.8%

 

In the 6 hours after each of the FOMC rate decision announcements (the timeframe includes Fed Chair Jerome Powell’s press conference) over the past 12 months:

  1. Dogecoin rose by as much as 14.1%, or fell as much as 2.5%
  2. Solana rose by as much as 11.3%, or fell as much as 6%
  3. Avalanch rose by as much as 9.2%, or fell as much as 6.1%
  4. Bitcoin Cash rose by as much as 8.4%, or fell as much as 3.7%
  5. Cardano rose by as much as 7.9%, or fell as much as 3%
  6. Chainlink rose by as much as 6.9%, or fell as much as 3.3%
  7. Polygon rose by as much as 6.6%, or fell as much as 6.3%
  8. Ethereum rose by as much as 6.6%, or fell as much as 5.3%
  9. Bitcoin rose by as much as 5.8%, or fell as much as 3.4%
  10. Litecoin rose by as much as 4.5%, or fell as much as 6%
  11. Ripple rose by as much as 4.4%, or fell as much as 5%

 

These biggest-in-class moves by Avalanch, Dogecoin, and Solana should produce sizeable opportunities for traders tomorrow.

How might cryptos react to US CPI and Fed meeting?

While markets are certainly complex organisms, here are some simple scenarios that traders could refer to as a guide ahead of tomorrow’s highly-anticipated events.

 

Cryptos may fall if:

  • US inflation comes in higher-than-expected
  • Fed dot plot points to just 1 or zero rate cuts for 2024
  • Fed Chair Jerome Powell signals to the world that the intended US rate cuts have to be delayed

 

Cryptos may rise if:

  • US inflation comes in lower-than-expected
  • Fed dot plot sticks to its March 2024 forecasts for 3 rate cuts this year
  • Fed Chair Jerome Powell refuses to sound “hawkish” but instead assures the world that rate cuts are indeed on the way

 

Either way, cryptocurrencies are set to deliver big moves, depending on how much markets are surprised tomorrow.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Cryptocurrencies Financial News
11 Jun

Brent Crude Oil stabilises around 81.50 USD amid demand optimism

By RoboForex Analytical Department

Brent crude oil is holding steady at 81.50 USD per barrel on Tuesday, following a significant surge of over 2.5% the previous day. The price increase was driven by optimistic market expectations about fuel demand this coming summer and news that the US government is seizing the opportunity to replenish its strategic oil reserves at relatively low prices, with a particular focus on oil priced around 79 USD per barrel.

As the US Federal Reserve meeting commences today, market caution is expected. The recent robust employment data for May from the US suggests that the Fed might maintain a tight monetary policy longer than anticipated. This potential shift in policy could dampen US economic growth prospects and impact energy demand, making the Fed’s forthcoming statements highly significant for the oil market.

Additionally, market participants eagerly await the release of the American Petroleum Institute (API) report on crude oil and petroleum product inventories today and the Department of Energy’s similar report on Wednesday. These data releases, along with the monthly market reports from the Energy Information Administration (EIA), OPEC, and the International Energy Agency (IEA) later in the week, could further influence oil price dynamics.

Brent technical analysis

On the H4 chart, Brent has completed the initial wave of growth to 81.79. Currently, a consolidation range is expected to form below this level. Should there be a downward breakout, a correction towards 79.30 could occur, followed by a potential new wave of growth aiming for 83.30. Breaking this level could open the pathway to 87.50, the local target of the upward trend. The MACD indicator supports this bullish scenario, with its signal line below zero but directed sharply upwards.

On the H1 chart, after reaching 81.79, Brent is forming a consolidation range beneath this level. A downward exit could initiate a decline to 80.50, and further breaking this level could extend the correction to 79.30. Upon reaching this level, an upward movement to 81.80 is anticipated, potentially leading to further growth towards 83.30. This scenario is technically supported by the Stochastic oscillator, indicating a potential upward movement, as its signal line is currently poised at 20.

Market outlook

As investors navigate a week packed with significant data releases and central bank meetings, Brent crude prices will likely exhibit volatility. The outcome of the US Federal Reserve’s deliberations will be particularly pivotal, given its potential implications for economic activity and energy demand. Additionally, inventory data and global market reports from major energy agencies will provide further clues about supply and demand trends, which could either support the current price levels or drive further adjustments.

 

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Energy Financial News
10 Jun

Euro falls to four-week low: politicians to blame

By RoboForex Analytical Department

EUR/USD plummeted below 1.0800 and is currently hovering around 1.0796 on Monday morning. This development came amid heightened political tensions in France. President Emmanuel Macron called for early elections on Sunday in the wake of his party’s crushing defeat and Marine Le Pen’s party’s resounding victory in the European Parliament elections. The far-right, which secured twice as many votes as its closest competitors, has won and now has significant influence in France. The defeat of the country’s pro-presidential forces has profoundly impacted the euro’s position.

Furthermore, the euro was also under pressure from the US dollar ahead of this week’s Federal Reserve meeting. Robust employment statistics in the US for May had already led the market to lower its expectations of a Fed interest rate cut.

Last week, the European Central Bank lowered its interest rate for the first time in five years. However, it is adopting an overly cautious stance on further rate cuts. In its comments, the ECB acknowledged the continued price pressures and projected that inflation will exceed targets this year and next. The regulator is refraining from making any specific commitments on a clear rate trajectory, indicating that all future ECB actions will have to be based on incoming statistics one way or another.

Technical analysis of EUR/USD

On the H4 chart of EUR/USD, the market completed the correction at 1.0901 and started the development of a new wave of decline. The downward impulse to the level of 1.0835 is fulfilled at the moment. A consolidation range around this level was formed, and the structure of the wave to 1.0747 was worked out with a downward exit. Today, we will consider the probability of a decline to 1.0735. After working off this level, the growth link to 1.0785 (test from below) is possible, with a further decline to 1.0672, representing the local target. Technically, this scenario is confirmed by the MACD indicator, whose signal line is below zero and is directed strictly downwards.

On the H1 EUR/USD chart, the market continues to develop a structure of decline to 1.0734. After working off this level, a correction to 1.0785 is possible. Further, we will consider the probability of a decline to 1.0672, the first target of the downward trend. Technically, this scenario is confirmed by the Stochastic oscillator, whose signal line is under the level of 20. We expect the beginning of growth to the level of 50.

 

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Financial News Forex and Currency News
10 Jun

Trade of the Week: EURGBP bears ready pounce?

By ForexTime

  • Euro ↓ on political jitters
  • EURGBP hits 22-month low  
  • UK Jobs report & EU data in focus
  • Technical level –  0.8500
  • Bloomberg FX model – 80% – EURGBP – (0.84065 – 0.85327)

Euro bears are back in action thanks to political uncertainty linked to the European Parliament elections.

The second most traded currency in the world is down against most of its major counterparts as of writing.

But our attention falls on the EURGBP which gapped to its lowest level since August 2022 at Monday’s Asian open!

The lowdown…

The euro seems to be gripped by political jitters in Europe.

Over the weekend, French President Emmanual Macron dissolved parliament and called for snap elections by the end of this month after his big defeat by the far right. Given how far-right parties have made big gains in the EU elections, this development has raised questions about Parliament’s ability to form the majorities needed to drive policy.

Looking beyond politics, here are 3 factors that could move the EURGBP this week:

    1) UK data dump

In the United Kingdom, the latest jobs data and industrial production figures could influence expectations about when the Bank of England will cut rates.

  • Tuesday 11th June: UK May jobless claims, April unemployment rate
  • Wednesday 12th June:  UK Industrial & manufacturing production

Traders are currently pricing in a 64% probability of a 25-basis point cut by September with a move fully priced in by November.

  • Should overall data from the UK exceed market forecasts, this could push back BoE rate cut bets – dragging the EURGBP lower.
  • Weaker-than-expected data may fuel BoE rate cut expectations that send the EURGBP higher.

Golden nugget: Over the past year, the UK jobs report has triggered upside moves of as much as 0.25% or declines of 0.23% in a 6-hour window post-release.

 

    2) EU data

Last week, the European Central Bank (ECB) cut interest rates for the first time since 2019.

The central bank clarified that a “data-dependent” approach will be adopted when considering future policy moves. This could increase the euro’s sensitivity to economic data, especially if it impacts ECB cut bets.

It may be worth keeping a tab on the Germany CPI (final) and Eurozone industrial production figures this week.

Traders are currently pricing in a 57% probability of a 25-basis point cut in September with this jumping to 77% by October.

  • The EURGBP could close the gap if data from Europe prints above market forecasts.
  • Should overall data disappoint, the EURGBP could extend losses as ECB cut bets rise.

 

    3) Technical forces

The EURGBP is under pressure on the daily charts with prices trading below the 50, 100, and 200-day SMA. However, the Relative Strength Index (RSI) has hit 30 – signalling that prices are oversold.

  • Sustained weakness below 0.8500 may encourage a decline towards 0.8400.
  • Should prices push back above 0.8500, this may open a path towards 0.8530.

Bloomberg’s FX model points to an 80% chance that EURGBP will trade within the 0.84065 – 0.85327 range over the next one-week period.

Forex-Time-LogoArticle by ForexTime

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Financial News Forex and Currency News
10 Jun

Traders further lowered their expectations for a Fed interest rate cut this year

By JustMarkets

At Tuesday’s close, the Dow Jones Index (US30) decreased by 1.06% and fell to a 3-week low. The S&P 500 index (US500) was down 1.06%. The NASDAQ Technology Index (US100) closed negative 0.58%. Stocks declined amid rising bond yields driven by hawkish remarks from Fed officials. On Wednesday, Atlanta Fed President Bostic said that the path to 2% inflation is not guaranteed and that the scope for price increases is still significant. This came from recent comments from Minneapolis FRB President Kashkari, who said the US Central Bank should hold off on cutting rates until inflation improves significantly. Markets are pricing in a 25 bps chance of a rate cut to 0% at the June 12 FOMC meeting and 10% at the next meeting on July 31.

The Richmond Fed’s May survey of the US manufacturing outlook rose 7 to a 7-month high, beating expectations of no change at negative 7. The Fed’s Beige Book was neutral for stocks, showing that the US economy has grown at a “slight to moderate” pace in most regions since early April. Employment grew at a modest pace, with eight of twelve counties reporting “slight to moderate job growth,” and prices rose at a “moderate pace,” with business officials noting that consumers are resisting additional price increases.

Equity markets in Europe mostly fell yesterday. Germany’s DAX (DE40) fell by 1.10%, France’s CAC 40 (FR40) closed down 1.52%, Spain’s IBEX 35 (ES35) lost 1.16%, and the UK’s FTSE 100 (UK100) closed negative 0.86%.

The German GfK Consumer Confidence Index for June rose by 3.1 to a 2-year high of negative 20.9, which was stronger than expectations of negative 22.5. May German CPI (EU harmonized) rose to 2.8% y/y, beating expectations of 2.7% y/y and the largest increase in 4 months. ECB Governing Council spokesman Kazaks said the ECB should not go on “autopilot” when cutting interest rates after the expected rate cut next week.

WTI crude oil prices held near $79 a barrel on Thursday after losing nearly 1% in the previous session, weakened by growing expectations that borrowing costs could remain high for longer, dampening the demand outlook. Commodities and other risk assets sold off on Wednesday, and bond yields rose as traders bet that the US Federal Reserve may delay the start of its easing cycle or even decide not to cut rates at all this year. Today, the EIA will release last week’s crude oil inventories report. A decline of 1.6m barrels is expected, which may support oil prices.

Asian markets were mostly rising on Monday. Japan’s Nikkei 225 (JP225) was down 0.77%, China’s FTSE China A50 (CHA50) added 0.20%, Hong Kong’s Hang Seng (HK50) was down 1.83% for the day, and Australia’s ASX 200 (AU200) was negative 1.30%. In Asia, investors are awaiting the release of China’s PMI data for May on Friday to gauge the state of the world’s second-largest economy. On Wednesday, Chinese stocks rose after the IMF raised its growth prognoses to 5% from 4.6% this year thanks to strong first-quarter data and supportive policy measures.

The Australian dollar slid to $0.66, hitting its lowest level in two weeks, amid pressure from a strong US dollar and Treasury yields. Investors await the US PCE Price Index report later this week. Risk-sensitive currencies also followed broad declines in commodity prices and other risk assets.

S&P 500 (US500) 5,266.95 −39.09 (−0.74%)

Dow Jones (US30) 38,441.54 −411.32 (−1.06%)

DAX (DE40) 18,473.29 −204.58 (−1.10%)

FTSE 100 (UK100) 8,183.07 −71.11 (−0.86%)

USD Index 105.14 +0.52 (+0.50%)

Important events today:
  • – US FOMC Member Bostic Speaks at 02:00 (GMT+3);
  • – Switzerland GDP (q/q) at 10:00 (GMT+3);
  • – Switzerland KOF Leading Indicators (m/m) at 10:00 (GMT+3);
  • – Eurozone Unemployment Rate (m/m) at 12:00 (GMT+3);
  • – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
  • – US GDP (q/q) at 15:30 (GMT+3);
  • – US Pending Home Sales (m/m) at 17:00 (GMT+3);
  • – US Natural Gas Storage (w/w) at 17:30 (GMT+3);
  • – US Crude Oil Reserves (w/w) at 18:00 (GMT+3);
  • – US FOMC Member Williams Speaks at 19:05 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
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