Following Friday’s uninspiring performance, the US Dollar (USD) holds its ground against its rivals early Monday. Ahead of the ISM Manufacturing PMI report for June, The US Dollar Index clings to small daily gains above 103.00. The European economic docket will feature revisions to HCOB Manufacturing PMIs. Markets will also keep a close eye on comments from central bank officials. It’s worth noting that stock and bond markets in the US will close early on Monday and remain closed on Tuesday in observance of the Independence Day holiday.

Annual inflation in the US, as measured by the change in Personal Consumption Expenditures (PCE) Price Index, fell to 3.8% in May from 4.3% in April, the US Bureau of Economic Analysis reported on Friday. In the same period, the Core PCE Price Index edged slightly lower to 4.6% from 4.7%. The initial reaction to soft inflation readings caused the USD to lose some strength ahead of the weekend.

During the Asian trading hours on Monday, June Caixin Manufacturing PMI in China came in at 50.5, down from 50.9 in May but better than analysts’ forecast of 50.2. The Shanghai Composite Index remains on track to post a daily gain of more than 1% and Hong Kong’s Hang Seng Index is up 2% on the day. Nevertheless, US stock index futures trade flat in the European morning.

Following Friday’s rebound, EUR/USD closed the week virtually unchanged. The pair stays under modest bearish pressure early Monday and trades below 1.0900.

GBP/USD gained nearly 100 pips on Friday and ended the week near 1.2700. With the USD staying resilient on Monday, the pair fluctuates slightly below that level.

USD/JPY staged a downward correction on Friday but regained its traction at the beginning of the week. As of writing, the pair was trading in positive territory near 144.80. “Japanese companies expect consumer prices to rise an average 2.6% a year from now, lower than their 2.8% projections three months ago,” the Bank of Japan’s (BoJ) noted in its quarterly Tankan survey. Meanwhile, the headline Tankan Large Manufacturing Index improved to 5.0 in Q2 from 1.0 and surpassed analysts’ forecast of 3.0.

Australian Trade Minister Don Farrell said early Monday that they will be announcing new measures to improve trade relations with China soon. AUD/USD edged higher in the Asian session but reversed its direction in the European morning. AUD/USD was last seen losing more than 0.3% on the day below 0.6650. On Tuesday, the Reserve Bank of Australia announce its interest rate decision.

Gold snapped a four-day losing streak on Friday and erased a large portion of its weekly losses. XAU/USD stays calm above $1,910 early Monday.

Bitcoin struggled to find direction over the weekend and extended its sideways grind above $30,500 early Monday. Ethereum gathered bullish momentum and reached its strongest level since May above $1,950.

EURUSD

EUR/USD is moving back and forth around 1.0950 in the early European morning. The pair is struggling to find direction as investors are awaiting speeches from Fed Chair Powell and ECB President Lagarde for fresh guidance on interest rates.

 If the pair continues the uptrend to the range of 1.0991, it is expected to continue the uptrend to the range of 1.1022.

On the other hand, If the pair continues the downtrend to the range of 1.0916, it is expected to continue the downtrend to the range of 1.0872.

USDJPY

USD/JPY buyers lack upside momentum during early Wednesday as the Yen pair seesaws near 144.00, printing mild losses heading into the European session. The quote’s latest performance appears interesting as it stays within the weekly rising wedge bearish chart formation while making rounds to the highest levels since November 2022.

if the pair continues the uptrend to the range of 144.72, it is expected to continue the uptrend to the range of 145.28.

On the other hand, If the pair continues the downtrend to 143.52, it is expected to continue the downtrend to 142.96.  

GBPUSD

GBP/USD is trading under pressure, heading toward 1.2700 in early Europe. The pair is undermined by an extended US Dollar rebound and a cautious risk tone, as traders remain on the sidelines ahead of key speeches from Fed Chair Powell and BoE Governor Bailey.

If the pair continues the uptrend to the range of 1.2771, it is expected to continue the uptrend to the range of 1.2794.

On the other hand, if the pair continues the downtrend to 1.2682, it is expected to continue the downtrend to 1.2659.

AUDUSD

AUD/USD is consolidating losses near 0.6650, having hit three-week lows after the Australian CPI rose 5.6% YoY in May vs. 6.1% expected. Softer-than-expected Australian inflation data fanned RBA rate hike pause bets. Focus shifts to Powell’s speech.

If the pair continues the uptrend to the range of 0.6663, it is expected to continue the uptrend to the range of 0.6692.        

On the other hand, if the pair continues the downtrend to 0.6610, it is expected to continue the downtrend to 0.6598.

XAUUSD

Gold price stays defensive as traders struggle within jungle to technical levels ahead of key ECB Forum speeches. Upbeat US data, fears of Sino-American tussle prod XAU/USD bulls. Receding fears of recession in US, China allow Gold buyers to remain hopeful.

If the pair continues the uptrend to the range 1926.02, it is expected to continue the uptrend to the range of 1938.29.

On the other hand, if gold continues the downtrend to the range of 1898.65, it is expected to continue the downtrend to the range 1886.38.

Federal Reserve (Fed) Chairman Jerome Powell, European Central Bank (ECB) President Christine Lagarde, Bank of England (BoE) Governor Andrew Bailey and Bank of Japan (BoJ) Kazuo Ueda will be speaking at a panel at the ECB Forum on Central Banking in Sintra on Wednesday. The US economic docket will feature Goods Trade Balance for May and the Fed will release the Bank Stress Test results later in the day.

After the data from the US showed that New Home Sales rose at an impressive pace in May and the CB Consumer Confidence Index improved noticeably in June, the US Dollar (USD) managed to stay resilient against its rivals late Thursday. Nevertheless, the risk-positive market environment didn’t allow the currency to gather bullish momentum. Early Wednesday, the US Dollar Index clings to small daily gains above 102.50 and US stock index futures trade modestly lower on the day.

During the Asian trading hours, the data from Australia showed that the Consumer Price Index (CPI) rose 5.6% on a yearly basis in May. This reading followed the 6.8% increase recorded in April and came in below the market expectation of 6.1%. Pressured by the soft inflation data, AUD/USD fell to its lowest level in three weeks, below 0.6650.

EUR/USD climbed toward 1.1000 and registered strong gains on Tuesday. Ahead of the ECB event, the pair stays in a consolidation channel at around 1.0950.

GBP/USD is having a difficult time holding its ground and trading below 1.2750 on Wednesday after having closed in positive territory on Tuesday.

USD/JPY rally continued and the pair reached a fresh multi-month high of 144.20 on Tuesday. “We are closely watching currency moves with a strong sense of urgency,” Japan’s top currency diplomat Masato Kanda said on Wednesday. “We will respond appropriately if it becomes excessive.” Following these comments, the pair holds steady at around 144.00.

USD/CAD gained traction and climbed above 1.3200 on Tuesday after Statistics Canada reported that the annual CPI declined to 3.4% in May from 4.4% in April. The pair continues to stretch higher early Wednesday and was last seen trading near 1.3230.

Gold failed to benefit from the broad US Dollar weakness on Tuesday as US Treasury bond yields staged a rebound. XAU/USD stays on the back foot and trades at its weakest level since early March near $1,910.

Bitcoin snapped a three-day losing streak on Tuesday but met resistance near $31,000. Early Wednesday, BTC/USD corrects lower and trades below $30,500. Ethereum continues to fluctuate in a narrow channel below $1,900 for the sixth straight day on Wednesday.

There is a positive shift in risk mood early Tuesday as investors, with the US stock index futures trading in positive territory following the sharp decline seen in Wall Street‘s main indexes on Monday. European Central Bank (ECB) President Christine Lagarde will deliver an introductory speech at the 2023 ECB Forum on Central Banking and several ECB policymakers will speak on policy and inflation later in the day. The US economic docket will feature Durable Goods Orders and New Home Sales for May and CB Consumer Confidence Index for June.

During the Asian trading hours, Chinese Premier Li Qiang said that China was still on track to reach its annual growth target of around 5.0% for the year. “China will introduce more pragmatic measures to expand domestic demand and stimulate market vitality,” Li added. Shanghai Composite and Hang Seng indexes both gained more than 1% on Tuesday. Reflecting the negative impact of improving risk mood on the US Dollar’s (USD) performance, the US Dollar Index (DXY) declines toward 102.50.

EUR/USD closed flat near 1.0900 on Monday but regained its traction early Tuesday. The pair was last seen rising toward 1.0950.

Supported by the renewed USD weakness, GBP/USD edges higher toward 1.2750 in the European morning. Bank of England MPC Member Silvana Tenreyro will present a paper titled “Monetary policy in the face of supply shocks: the role of inflation expectations” at the ECB event.

USD/CAD stays on the back foot and trades at its lowest level since September below 1.3130. Statistics Canada will publish Consumer Price Index (CPI) data for May in the early NA session.

AUD/USD gathered bullish momentum in the Asian trading hours and climbed above 0.6700, fuelled by China optimism.

USD/JPY continues to move sideways at around 143.50 as the Japanese Yen finds it difficult to find demand in the risk-positive market environment. Japanese Finance Minister Shunichi Suzuki reiterated on Tuesday that they “will respond appropriately if FX moves become excessive.”

Gold price ended the day virtually unchanged on Monday, with the modest rebound witnessed in the US Treasury bond yield limiting XAU/USD’s upside. The pair clings to small recovery gains at around $1,930 early Tuesday.

Bitcoin stays in its tight consolidation channel above $30,000 for the fourth straight day on Tuesday. Following Monday’s 2% decline, Ethereum recovers toward $1,900 in the European morning.

EURUSD

EUR/USD is holding ground above 1.0900, as bulls look to a bunch of ECB policymakers and the US data to defend the previous rebound in Tuesday’s Asian session. The pair is on the front foot, as the US Dollar struggles amid a risk-on market mood.

 If the pair continues the uptrend to the range of 1.0953, it is expected to continue the uptrend to the range of 1.0988.

On the other hand, If the pair continues the downtrend to the range of 1.0904, it is expected to continue the downtrend to the range of 1.0889.

USDJPY

The USD/JPY pair is demonstrating back-and-forth action around 143.50 in the early European session. The asset is expected to deliver a strong upside above 144.00 as investors are hoping that the Bank of Japan (BoJ) will continue to keep the monetary policy dovish in order to attain sustainable 2% inflation.

if the pair continues the uptrend to the range of 143.84, it is expected to continue the uptrend to the range of 144.61.

On the other hand, If the pair continues the downtrend to 143.07, it is expected to continue the downtrend to 142.62. 

GBPUSD

GBP/USD is advancing toward 1.2750, showing some resilience in the European morning this Tuesday. The pair is underpinned by the upbeat market mood and a broadly subdued US Dollar performance. All eyes are now on US Durable Goods and housing data.

If the pair continues the uptrend to the range of 1.2777, it is expected to continue the uptrend to the range of 1.2805.

On the other hand, if the pair continues the downtrend to 1.2716, it is expected to continue the downtrend to 1.2683.

AUDUSD

AUD/USD is edging higher to regain the 0.6700 level in Tuesday’s Asian trading. The US Dollar is losing ground amid an improving risk sentiment, as traders await top-tier US economic and Fedspeak. The Aussie also tracks the Yuan fix after the PBOC set it higher.

If the pair continues the uptrend to the range of 0.6742, it is expected to continue the uptrend to the range of 0.6822.        

On the other hand, if the pair continues the downtrend to 0.6705, it is expected to continue the downtrend to 0.6690.

XAUUSD

Gold clings to mild gains around the intraday high as it prints a three-day winning streak amid cautiously optimistic markets. The precious metal cheers the US Dollar’s positioning for the key data, as well as the risk-positive headlines from China, amid dicey trading hours on Tuesday.

If the pair continues the uptrend to the range 1930.87, it is expected to continue the uptrend to the range of 1943.46.

On the other hand, if gold continues the downtrend to the range of 1918.28, it is expected to continue the downtrend to the range 1905.69.

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Markets remain relatively quiet to start the week as investors turn their attention to the European Central Bank’s annual Forum on Central Banking in Sintra that will kick off with ECB President Christine Lagarde’s speech at 1730 GMT. The US economic docket will feature the Federal Reserve Bank of Dallas’ Texas Manufacturing Survey. Germany’s IFO Institute will also release business sentiment data for June.

Over the weekend, tensions between the Wagner mercenary group and Russian President Vladimir Putin eased after the sides reached an agreement late Saturday. Meanwhile, “China needs to step up measures as soon as possible to bolster a faltering post-COVID recovery in the world’s second-largest economy,” said Ning Jizhe, deputy head of the economic committee of the Chinese People’s Political Consultative Conference (CPPCC). Nevertheless, S&P Global announced that it lowered its forecast for China’s Gross Domestic Product (GDP) growth to 5.2% from 5.5% this year. Following these developments, investors seem to have adopted a cautious stance early Monday, with US stock index futures trading modestly lower on the day.

The ECB’s forum is entitled “Macroeconomic stabilisation in a volatile inflation environment.” Many prominent central bankers, including FOMC Chairman Jerome Powell and Bank of England President Andrew Bailey, will be speaking at this event later in the week.

The US Dollar Index, which snapped a three-week losing streak on the back of a strong rebound seen in the second half of the week, stays in a consolidation phase below 103.00 and the 10-year US Treasury bond yield is down more than 1% below 3.7% in the European morning.

EUR/USD holds steady at around 1.0900 early Monday after having registered small losses last week.

GBP/USD came within a touching distance of 1.2700 during the Asian trading hours on Monday but managed to stage a rebound toward 1.2750.

The Summary of Opinions of Bank of Japan’s (BoJ) June policy meeting showed that policymakers thought that the BoJ must consider reviewing the Yield Curve Control strategy at an early stage, while maintaining easy monetary policy. USD/JPY stays under modest bearish pressure early Monday and trades in negative territory at around 143.00.

Gold price benefits from retreating US yields and rises toward $1,930 in the European session after having lost nearly 2% last week.

Bitcoin edged lower over the weekend but managed to hold comfortably above $30,000. Ethereum stays in a consolidation phase near $1,900 on Monday following last week’s rally that saw ETH/USD gain more than 10%

EURUSD

EUR/USD is hovering around 1.0900 at the start of the new trading week on Monday. The pair is holding last week’s corrective downside, allowing traders to take a sigh of relief amid a broad US Dollar retreat. Focus shifts to Germany’s IFO survey for fresh trading impetus.

 If the pair continues the uptrend to the range of 1.0960, it is expected to continue the uptrend to the range of 1.1028.

On the other hand, If the pair continues the downtrend to the range of 1.0835, it is expected to continue the downtrend to the range of 1.0778.

USDJPY

USD/JPY rebounds from intraday low but fails to gain upside momentum around 143.50 during early Monday. In doing so, the Yen pair prints the first daily loss in three while retreating from the highest levels since November 2022.

if the pair continues the uptrend to the range of 144.14, it is expected to continue the uptrend to the range of 145.25.

On the other hand, If the pair continues the downtrend to 142.34, it is expected to continue the downtrend to 141.92.   

GBPUSD

GBP/USD keeps the late Friday’s corrective bounce off the short-term key support line near 1.2730 amid early Monday in London. In doing so, the Pound Sterling cheers the broad US Dollar retreat during sluggish markets with mixed catalysts.

If the pair continues the uptrend to the range of 1.2789, it is expected to continue the uptrend to the range of 1.2823.

On the other hand, if the pair continues the downtrend to 1.2683, it is expected to continue the downtrend to 1.2649.

AUDUSD

The AUD/USD pair attracts some buying on the first day of a new week and recovers a part of Friday’s heavy losses to its lowest level since June 8. Spot prices climb back closer to the 0.6700 round-figure mark during the Asian session, though the uptick lacks bullish conviction.

If the pair continues the uptrend to the range of 0.6703, it is expected to continue the uptrend to the range of 0.6742.  

On the other hand, if the pair continues the downtrend to 0.6637, it is expected to continue the downtrend to 0.6598.

XAUUSD

Gold struggles to defend the corrective bounce off a three-month low marked in the last week, retreating from intraday top of late, amid mixed concerns about Russia and China.

If the pair continues the uptrend to the range 1935.44, it is expected to continue the uptrend to the range of 1950.08.

On the other hand, if gold continues the downtrend to the range of 1908.17, it is expected to continue the downtrend to the range 1895.54.

The US Dollar holds its ground against its major rivals at the beginning of the new week with the US Dollar Index (DXY) building on Friday’s gains. Nevertheless, US stock index futures trade mixed, reflecting a cautious stance. April Producer Price Index (PPI) and June Sentix Investors Confidence Index data will be featured in the European economic docket ahead of April Factory Orders and May ISM Services PMI releases from the US.

 

On Friday, the US Bureau of Labor Statistics reported that Nonfarm Payrolls (NFP) in the US rose 339,000 in May, surpassing the market expectation of 190,000 by a wide margin. Further details of the publication revealed that the Unemployment Rate edged higher to 3.7% from 3.4% in April. The DXY regained its traction on the strong NFP reading and retraced a portion of its weekly decline. Early Monday, the index continues to stretch higher and stays in positive territory above 104.00. In the meantime, the benchmark 10-year US Treasury bond yield is already up more than 1% on the day above 3.7%. Nevertheless, the CME Group FedWatch Tool shows that markets are still pricing in a more than 70% possibility that the Fed will leave its policy rate unchanged at the upcoming meeting.

 

Over the weekend, Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman said that Saudi Arabia will make an extra output cut of 1 million barrels per day from July. Moreover, OPEC and its allies (OPEC+) announced in a statement that they have reached a deal to target total output of 40.46 million barrels per day from 2024. Following this development, crude oil prices rise on Monday and the barrel of West Texas Intermediate was last seen rising nearly 2% on the day at $73.20. The commodity sensitive Canadian Dollar stays resilient early Monday and USD/CAD trades flat on the day slightly below 1.3450.

 

During the Asian trading hours, the data from Japan revealed that the Jibun Bank Services PMI declined to 55.9 in May from 56.3 in April. USD/JPY largely ignored this report and started the new week on a bullish note. At the time of press, the pair was trading in positive territory at around 140.50.

 

EUR/USD registered big losses on Friday and extended its decline early Monday. The pair was last seen trading below 1.0700.

 

Despite Friday’s pullback, GBP/USD ended up posting small gains last week. The pair stays on the back foot in the European morning and tests 1.2400.

 

In the early trading hours of the Asian session on Tuesday, the Reserve Bank of Australia (RBA) will announce its monetary policy decisions. The RBA is expected to leave its key interest rate unchanged at 3.85%. Ahead of this important event, AUD/USD stays in the red at around 0.6600.

 

Reserve Bank of Australia Preview: AUD/USD ready for another hike?

 

Gold price fell sharply on Friday and erased all of its weekly gains. XAU/USD stays under modest bearish pressure amid rising US yields and trades below $1,950.

 

Following an indecisive weekend, Bitcoin continues to move up and down in a tight channel slightly below $27,000. Ethereum failed to make a daily close above $1,900 despite having advanced above that level over the weekend. ETH/USD edges lower early Monday and was last seen losing nearly 1% on the day at $1,870.

The Australian Dollar outperforms its rivals early Tuesday following the Reserve Bank of Australia’s (RBA) unexpected decision to raise the policy rate by 25 basis points to 4.1%. The US Dollar struggles to find demand as markets see a growing possibility of the Federal Reserve (Fed) leaving its key rate unchanged at the next meeting. Retail Sales from the Euro area and the IBD/TIPP Economic Optimism Index from the US will be featured in the economic calendar.

 

For the second meeting in a row, the RBA went against the market expectation and opted for an increase in its policy rate. In its policy statement, the RBA reiterated that the board remains resolute in its determination to return inflation to target and added that some further tightening of monetary policy may be required. AUD/USD rose sharply during the Asian trading hours and was last seen rising more than 0.5% on the day above 0.6650.

 

RBA: Some further tightening of monetary policy may be required.

 

On Monday, the ISM Services PMI report revealed a loss of momentum in the service sector’s growth in May. Additionally, the publication showed a contraction in the sector’s employment alongside a softening of input inflation. In turn, the US Dollar Index (DXY) came under renewed bearish pressure and erased its gains to close the day flat. In the European morning, DXY stays in negative territory slightly below 104.00 and the benchmark 10-year US Treasury bond yield consolidates Monday’s losses at around 3.7%.

 

EUR/USD stage a late rebound on Monday and closed the day above 1.0700. Early Tuesday, the pair moves up and down in a tight range amid a lack of fresh catalysts. While speaking before the European Parliament in Brussels on Monday, European Central Bank (ECB) President Christine Lagarde reiterated that there was no clear evidence that underlying inflation has peaked.

 

GBP/USD erased the majority of its daily losses in the American session on Monday. The pair stays flat slightly below 1.2450 in the European session.

 

Gold price benefited from falling US yields on Monday and registered modest daily gains. Early Tuesday, XAU/USD fluctuate in a narrow channel near $1,960.

 

USD/JPY broke below 140.00 on Monday and extended its slide toward 139.00 during the Asian trading hours on Tuesday. Bank of Japan Governor Kazuo Ueda said earlier in the day that the Quantitative and Qualitative Monetary Easing (QQE) will continue until they achieve the inflation target.

 

Bitcoin came under heavy selling pressure and lost more than 5% on Monday. BTC/USD consolidates its losses near $25,800 on Tuesday. Ethereum stays dangerously close to $1,800 in the European morning after having decline 4% on Monday.