eur vs usd

Summary: After yesterday's press conference by Christine Lagarde, head of the European Central Bank, the exchange rate of the main currency pair EUR/USD fell below the level of 1.08 The pressure on the single currency may continue until the second round of the French elections The market is currently pricing two consecutive 50-basis-point rate hikes in the United States After yesterday's press conference by Christine Lagarde, head of the European Central Bank, the exchange rate of the main currency pair EUR/USD fell below the level of 1.08 for the first time since May 2020. Investors may have felt let down by the ECB's attitude. Prior to the April meeting of the bank's policymakers, the market priced that interest rates in the Eurozone would rise by 70 basis points this year. After yesterday's announcement and the press conference of the head of the ECB, the valuation dropped to 60 points. Related article: DAX, EUR/GBP And EUR/USD Recovered Thanks To ECB Interest Rate Decision!? European Central Bank Makes European Indices Gain The ECB is reluctant to... The ECB's statement implies that interest rate adjustments in the euro area will be gradual and will start "some time after" the end of the APP net asset purchase program, which is expected in Q3 this year. The fall of the euro and investor sentiment may also be affected by the war unleashed by Russia, rising commodity prices, concerns about slowing economic growth, as well as doubts about the outcome of the presidential elections in France. In the first round, the current President Emmanuel Macron won, but the far-right candidate Marine Le Pen came in second with a small loss and a chance to win the presidential seat in the second round on 24 April. EUR/USD: the specter of the 1.00 level All of the above factors may have contributed to EUR/USD falling back towards 1.080 during Thursday's session in an attempt to rebound on Friday. The pressure on the single currency may continue until the second round of the French elections, and if Le Pen wins it could push EUR/USD to the 1.0000 level. The war in Ukraine could makes Europe more vulnerable to economic slowdown than the US, which may also leave its mark on the major currency pair. Another asset of the dollar here seems to be the tendency of the Federal Reserve to raise interest rates faster. The market is currently pricing two consecutive 50-basis-point rate hikes in the United States, which may keep the divergence in monetary policy high and translate into EUR/USD exchange rate. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

US dollar rebounds on risk aversion The US dollar reversed higher, unwinding all its post-FOMC losses as risk aversion swept other asset markets and US 10-year yields rose and closed above 3.0%. Support at 102.50 held beautifully on a closing basis, signalling more US dollar gains ahead. The dollar index rose by 1.01% to 103.55 overnight gaining another 0.11% to 103.66 in Asia. Support at 102.50 remains intact with immediate resistance at a double top just ahead of 104.00. A close above 104.00 will signal rapid gains to 105.00 and in the bigger picture, the technical picture still says a multi-month rally to above 120.00 is possible.   EUR/USD fell by 0.76% to 1.0540 overnight, easing to 1.0530 in Asia. EUR/USD has nearby support at 1.0470 and resistance at 1.0650. Overall, the EUR/USD technical picture remains extremely bearish. It remains well below its multi-decade breakout at 1.0800, and only a weekly close above there would suggest the downtrend is over for now. Rallies above 1.0700 will remain hard to sustain with risks skewed to a resumption lower. A Russian retaliation to the EU oil embargo targeting natural gas exports would see EUR/USD move toward parity very quickly.   Sterling collapsed overnight after the Bank of England hiked rates by 0.25%, but signalled a UK recession next year, marking 2023 growth down to -0.25%. Combined with US dollar strength, GBP/USD fell by 2.21% to 1.2355, edging up to 1.2360 in Asia. GBP/USD has immediate resistance at 1.2400 and then 1.2635. The technical picture is very negative now and failure of the overnight low at 1.2325 will signal another selloff to 1.2200. In the months ahead, GBP/USD could well test its Brexit and then March 2020 lows.   Japan has returned from holidays today, with USD/JPY rising 0.84% to 131.15 overnight as US 10-year yields shot up through 3.0% once again. Today, USD/JPY has gained 0.30$ to 131.60, with the yen getting no solace from higher than expected Tokyo inflation data. With the Bank of Japan showing no signs of adjusting its 0.25% JGB yield cap, and US rates continuing to climb as the Fed gets busy fighting inflation, downside pressure on the yen seems inevitable. A rally by USD/JPY through 132.35 sets the stage for a move to the 135.00 area next week.   Asian currencies, including the offshore yuan, reversed the previous day’s gains plus interest overnight as the risk aversion wave by equities, and higher US yields, saw investors pile into US dollars. With China officials affirming their commitment to covid-zero, China’s growth fears are providing another headwind to regional currencies. With more and more central banks globally capitulating on inflation denial and moving to a rate hiking stance, pressure on Asian currencies is set to ramp up in the months ahead.   A stronger yuan fixing today by the PBOC has had no notable impact on either USD/CNH or USD/CNY. USD/CNH has powered through resistance at 6.7000, on its way to 6.7150 today. USD/CNY has risen to 6.6740. China authorities are showing no signs of concern about the fall of the yuan, and until they do, Asian regional currencies will remain under pressure from a stronger US dollar and diverging monetary policies. Despite the RBI rate hike, USD/INR is testing resistance at 76.60 today, USD/MYR has risen 0.60% to 4.3750 and still has 4.4500 written all over it. ​ Meanwhile, it looks like the central bank in South Korea and the Philippines are around on the topside of USD/KRW and USD/PHP. USD/SGD is testing 1.3900 this morning and failure could see the pair move towards 1.4100 next week.     This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

China concerns boost the US dollar The US dollar booked some modest gains post-Non-Farm Payrolls on Friday, but the dollar index resistance zone at 104.00 held once again. The dollar index finished 0.11% higher at 103.66 having traded in a wide range intra-day. The risk aversion China slowdown price action seen in equities has spilt into currency markets today, lifting the US dollar after US 10-year yields closed comfortably above 3.0% on Friday. The dollar index has risen 0.34% to 104.00 and is, once again, making a determined test of resistance here. Support at 102.50 remains intact. A close above 104.00 will signal rapid gains to 105.00 and in the bigger picture, the technical picture still says a multi-month rally to above 120.00 is possible. EUR/USD and GBP/USD have fallen by 0.35% today to 1.0508 and 1.2290. EUR/USD support at 1.0470 is in jeopardy, while GBP/USD is threatening the Friday lows of 1.2275, having closed on support at 1.2325 last week. EUR/USD rallies above 1.0650 will be challenging to sustain now, with the 45-year trendline at 1.0800 now distant. Similarly, GBP/USD will run into headwinds between 1.2400 and 1.2500. The technical picture signals much lower levels for both and a formal declaration of war from Mr Putin against Ukraine today will signal a test of 1.0300 and 1.2000 in the coming days, if not sooner. USD/JPY has crept higher over the past few sessions, rising 0.30% today to 130.95. With the Bank of Japan showing no signs of adjusting its 0.25% JGB yield cap, and US rates continuing to climb as the Fed gets busy fighting inflation, downside pressure on the yen seems inevitable. Support lies at 128.50, but a rally by USD/JPY through 131.35 sets the stage for a move to the 135.00 area. Plummeting stock markets in Asia appear to be prompting heavy outflows from Asian currencies today, with USD/CNH and USD/CNY over 0.50%, as are the USD/THB and USD/INR. Elsewhere across the region, the US dollar has booked 0.30% plus gains versus the IDR, SGD, MYR, and KRW. Chinese officials have still not made overt noises about the pace of the CNY sell-off to 6.7050, despite setting a slightly stronger fixing today. USD/INR has traded at all-time highs around 77.255 today and has fallen around 1.80% since the RBI’s last week. That does leave the RBI in somewhat of a bind, and it is an issue the Bank Indonesia and others around Asia will be feeling sooner, rather than later. In the first instance, thanks to Asia’s huge FX reserves, I expect some judicious “smoothing” to be the first strategy. Indonesia, the Philippines, and South Korea have already taken this route, I suspect. If international sentiment continues to fall and the US dollar continues to gain, those noises may get louder, but ultimately, regional central banks will fight a losing battle if China remains comfortable with yuan depreciation. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

EURUSD consolidates The US dollar climbed after better-than-expected NFP in April. The euro is licking its wounds after it broke March 2020’s lows near 1.0640. The price is seeking support above March 2017’s lows (1.0500). The previous rebound came to a halt at the support-turned-resistance at 1.0640. A bullish breakout could drive the bears into giving up their chips, reducing the pressure and potentially paving the way for a rally towards 1.0810. A fall below the current consolidation range (1.0480) would send the single currency to 1.0400. USDCAD bounces higher The Canadian dollar softens as April’s labour market performance fell short of expectations. A combination of a break above March’s high (1.2900) and a bullish MA cross on the daily chart confirms the market’s upbeat mood. The latest retracement found support in the major demand zone over 1.2720. A break above 1.2840 may have flushed remaining selling interests out. Last December’s high at 1.2960 is the last hurdle and its breach could open the door for an extended rally above 1.3100. GER 40 struggles for support The Dax 40 tumbles as risk appetite subsides amid global policy tightening. The index has met stiff selling pressure at the origin of the late April sell-off at 14300. A drop below the psychological level of 14000 prompted buyers to bail out, invalidating the latest rebound in the process. A bearish MA cross is another sign that an imminent sell-off could be building up. A deeper correction below 13570 would send the price action to 13300. 13820 is a fresh resistance in case of a rebound.

Economic Sentiment in Germany rose unexpectedly, according to the latest May assessment. The corresponding ZEW indicator rose to -34.3 in May from -41.0 a month earlier against expectations of a dip to -43.0. Germany, for which China is the main export market, is looking with concern at the lockdown in the second world economy Meanwhile, current assessment of the economic situation continues to deteriorate, both under the influence of the situation in Ukraine and due to a slowdown in China. Germany, for which China is the main export market, is looking with concern at the lockdown in the second world economy and the resulting economic slowdown and falling demand for machinery and cars from Germany. The positive surprise helps EURUSD stabilise near 1.0500 Despite the lapse in the current assessment, investors and traders are paying more attention to sentiment. The positive surprise helps EURUSD stabilise near 1.0500 and reinforces bulls' hopes that a straight road below parity is not yet a done deal.

It’s D-day of the week: we will see whether inflation in the US started easing in April after hitting a four-decade high in March, and if yes, by how much. A soft inflation read will come as a relief that the Federal Reserve’s (Fed) efforts to tame inflation start paying off, but any disappointment could send another shock wave to the market. In the FX, the US dollar extended gains, despite the easing yields yesterday, as the risk-off flows continued supporting the greenback For now, activity on Fed funds futures give almost 90% chance for a 50-bp hike in FOMC’s June meeting; there is a lot left to be priced for a 75bp hike, if the data doesn’t please. To avoid pricing in a 75bp hike at next FOMC meeting, we must see an encouraging cooldown in inflation. In the FX, the US dollar extended gains, despite the easing yields yesterday, as the risk-off flows continued supporting the greenback.   The barrel of US crude tipped a toe below the $100 level on news that the Europeans softened their sanctions proposal against the Russian oil The levels against the majors like euro, yen and sterling remained flat, but the positive pressure in the dollar, combined with Turkey’s unconventional monetary policy start giving signs of exhaustion. The dollar-try advanced past the 15 mark, and the government asked institutions to make their FX operations within the most liquid trading hours. Two weeks ago, the bank had revised its regulations on banks' reserve requirements, applying them to the asset side of balance sheets in order to strengthen its macroprudential policy toolkit. The latter required reserves now pressure the overnight rates to the upside – suggesting that the unconventional policy is near limits. Energy are up and down… but mostly up. The barrel of US crude tipped a toe below the $100 level on news that the Europeans softened their sanctions proposal against the Russian oil, but oil is already above the $100 this morning. The upside potential is fading due to slower global growth prospects, and the Chinese lockdown. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM Watch the full episode to find out more! 0:00 Intro 0:24 All eyes on US inflation data! 2:30 Market update 3:50 Strong US dollar threatens lira stability 5:50 Risks in energy markets remain tilted to the upside 6.35 Why Chinese zero Covid policy won’t work 8.07 Coinbase hit hard by crypto meltdown 8:39 Energy, still the best option for investors Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.  

The euro has fallen close to the 1.04 level, which has held since January 2017. In the European session, EUR/USD is trading at 1.0429, down 0.81% on the day. ECB hints at a rate hike in Q3 After years of monetary easing which was fueled by low inflation levels, the ECB is slowly but surely switching gears and talking openly about a rate hike. It wasn’t long ago that ECB President Christine Lagarde was dismissing high CPI numbers as “transitory” and saying that the ECB would remain out of sync with the Fed and its tighter policy. Lagarde has been forced to change her tune, however, as eurozone inflation has soared, hitting 7.5%. Germany’s inflation rate, released today, rose to 7.4%, an all-time high for a second successive month (7.3% prior). Eurozone inflation is being driven by high energy and food prices, both of which are largely due to the war in Ukraine. With no end to the conflict on the horizon, inflation could climb even higher, putting pressure on the ECB to start tightening policy. Read next: Stablecoins In Times Of Crypto Crash. What is Terra (UST)? A Deep Look Into Terra Altcoin. Terra - Leading Decentralised And Open-Source Public Blockchain Protocol | FXMAG.COM Lagarde said on Wednesday that the ECB will end asset purchases in Q3 and follow with a rate hike “some time later”. Other ECB members have been less vague and are calling for a rate hike in July. There is a debate within the ECB whether to raise rates by 0.50%, which would bring the deposit rate to zero, or deliver a modest 0.25% increase. The ECB meeting in June should give the markets a better idea as to whether the July meeting will be live. US inflation dips, but less than expected US inflation slowed in April, but still came in stronger than expected. CPI dropped from 8.5% to 8.3%, higher than the consensus of 8.1%. This slowdown was not enough for the markets to price in “peak-US inflation”, and the dollar managed to hold its own against the major currencies. The Fed’s hawkish stance appears justified after the inflation release, as the markets are digesting the fact that if US inflation is easing, it will be at a slow pace. Read next: (BTC) Bitcoin’s Price Tanks Along With Equities. U.S. Stock Market Awaits CPI Report, Poor Performance From The FTSE 100.  EUR/USD Technical 1.0557 remains a weak resistance line, followed by resistance at 1.0632 There is support at 1.0473 and 1.0398 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

The euro is drifting at the start of the week, as EUR/USD trades slightly above the 1.04 level. The euro remains under pressure, as it continues to weaken against the US dollar. EUR/USD hasn’t mustered a winning week since March and hit a dubious milestone on Thursday, closing below the 1.04 line for the first time since January 2003. If the euro breaks below support at 1.03 it would be on track to fall to parity, a psychologically significant level. EU forecast sees lower growth, higher inflation The EU gave the eurozone a report card on Monday, and the data wasn’t pretty. The report was the EU’s first forecast since the Russian invasion of Ukraine. The forecast stated that eurozone growth would expand by 2.7% in 2022 and 2.3% in 2023. In February, the forecast stood at 4% and 2.7%, respectively. On the inflation front, the forecast was revised upwards to 6.1% in 2022 and 2.7% in 2023, up from the previous forecast of 3.5% and 1.7%, respectively. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM The takeaway from the EU forecast is that as a result of the Ukraine war, the eurozone is experiencing lower growth and higher inflation, raising concerns that the eurozone could soon be gripped by stagflation. The eurozone has been particularly hard-hit by the conflict, due to its heavy reliance on Russian energy and geographical proximity to Ukraine. Unsurprisingly, investors don’t like what they are seeing, and the euro has taken it on the chin. Reports that the EU is trying to garner support for a ban on Russian oil, which would mark the ratcheting up of sanctions against Moscow, is putting further pressure on the wobbly euro. Read next: (TRX) TRON USD Decentralised Blockchain Platform That Focuses On Entertainment And Content Sharing. Altcoins: A Deep Look Into The TRON Network | FXMAG.COM The upheaval caused by the Ukraine war seems to have woken up the ECB from its dovish slumber. After years of monetary easing, ECB members are becoming more vocal about the need for tighter policy, and ECB President Christine Lagarde said earlier this week that QE would end in the third quarter, and a rate hike would follow “some time” after that. We could see the launch of a rate-tightening cycle as early as July. EUR/USD Technical 1.0398 has switched to resistance. It is a weak line and could see further action during the day. Above, there is resistance at 1.0473 There is support at 1.0321 and 1.0246 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Summary:  Market sentiment is mostly stable after a rare, uneventful day for global markets. Crude oil has pulled to a new local high as petrol prices in many countries have risen to record highs. The US dollar is on its back foot, helping to spark a sharp gold rally from capitulation lows after the precious metal had broken down through all major support levels. The mood in Asia brightened overnight on hopes China is set to ease its clampdown on the tech companies.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - S&P 500 futures closed just above the 4,000 level yesterday as US equities failed to extend their gains from Friday’s session. Tesla shares fell 6% as bubble stocks and crypto related companies fell almost 5% suggesting weakness in technology stocks continues. While the Empire State manufacturing PMI figures yesterday were from a little region of the US, they surprised significantly to the downside hitting levels typically consistent with low economic activity or even a mild contraction. S&P 500 futures are pushing higher trading around the 4,024 level with yesterday’s high at 4,043. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) rallied 2% and 1% respectively on prospect of relaxation of Covid restrictions in China.  JPMorgan’s 180-degree reversal to turn overweight in Chinese internet stocks also help the market sentiment. Alibaba (09988), Tencent (00700), Meituan (03690) and JD.COM (09618) gained about 5% to 6%. Auto makers, batteries and semiconductors surged on the prospect of normalization of supply chain from lockdown. Great Wall Motor (02333) rose over 10%. Ganfeng (01772) rose 6.7%. Hua Hong Semiconductor (01347) gained 6%.  Stoxx 50 (EU50.I) - European equities continue to trade at levels lower than a year ago as weakness is still widespread due to the war in Ukraine with BOE chief Bailey warning yesterday of the extreme risks related to galloping food prices and security of supply. Stoxx 50 futures are trading just below the 3,700 level this morning with the 50-day moving average at 3,732 being the key resistance level to watch on the upside. USD pairs – the US dollar weakened rather sharply yesterday as risk sentiment continued to stabilize. Traders should be on the lookout for whether the sell-off could extend sufficiently to trigger a tactical reversal in the USD bull trend. Levels worth watching include the 1.0500 resistance area in EURUSD, 0.7050-0.7100 resistance zone in AUDUSD, and 1.2400 resistance in GBPUSD. The Apr. Retail Sales report up later today could trigger market volatility. JPY pairs – JPY crosses have bounced hard from the steep sell-off late last week as risk sentiment has stabilized since Friday and, to a lesser degree, as bond yields pulled back higher. The volatility looks excessive relative to coincident developments. USDJPY will watch US treasury yields over the US data today with resistance around 130.00, while a break down through the important 128.00-127.50 area and consolidation back toward 125.00 likely needing a significant consolidation lower in US treasury yields. AUDJPY and GBPJPY have been particularly volatile JPY pairs since a one-off meltdown last Thursday that has now largely been erased. Gold (XAUUSD) trades higher supported by a softer dollar, higher oil prices and tailwind from silver (XAGUSD), as the industrial metal sector receives a boost from the prospect of easing lockdowns in China. The recent loss of momentum which helped attract fresh tactical short sellers was driven by the relentless rise of the dollar and the markets belief in the FOMC’s ability to bring down inflation without hurting growth. With the latter increasingly seeing downgrades, the risk of recession has not gone away, and it raises the question of whether real yields may pause following its March to May near 1.5% jump. Further weakness below 0.09% may signal a period of consolidation in US ten-year yields. Gold needs to break above its 200-day moving average at $1838 to force a further improvement in sentiment. Crude oil (OILUKJUL22 & OILUSJUN22) returned to an eight-week high overnight after China signaled it would start unwinding lockdowns in the Shanghai. Also underpinning prices is the continued strength in the price of fuel products, driven by strong demand and restrained refining capacity. Recently led by a record high price of RBOB gasoline future. Global demand has yet to show signs of demand destruction and with Chinese demand starting to recover the risk of higher prices remains, not least considering Europe’s continued efforts to reduce its dependency on Russian oil and gas. HG Copper (COPPERUSJUL22) has bounced back after hitting a seven-month low last week, and as we highlighted in a recent update, the market has been under pressure due to China lockdowns, and with those now starting to ease a bid has returned. If the change in sentiment towards a more favorable outlook takes hold, hedge funds may soon be forced to cover a short position which according to the latest COT report doubled to a two-year high in the week to May 10. The industrial metal sector slumped 25% during since early March as China closed, but with lockdowns now easing, stimulus policies focusing on the property sector and infrastructure will likely support a recovery. What is going on? High yield credit spreads continue to widen, signaling rising stress in corporate debt markets.  One measure of credit spreads, the Bloomberg US Corporate High Yield Average option-adjusted-spread, has widened to above 450 basis to US treasuries, the highest levels since late 2020. Back in late 2018, the spread peaked at 537 basis points just before the Powell Fed pivoted to easing policy. Lockdowns start to ease in Chinese cities. China’s nationwide (excluding Hong Kong) new local cases fell to 1,049 (sharply lower from the April 13 high of 29,317 cases), of which 823 cases from Shanghai and 52 cases from Beijing.  Shanghai reported three consecutive days of zero community (i.e. outside of quarantine) transmission.   The municipality expects to gradually resume public transportation services from May 22.  Starting from today train services and air flights to and from other Chinese cities is gradually resuming services.  The Shanghai government expects that the lockdown will be completely lifted in June.  Chinese tech stocks trade higher on hopes for easing stance from regulators. A symposium hosted by a prominent advisory body today in China has sparked hopes for a revival of tech stocks as executives of prominent companies like Baidu Inc were invited. JP Morgan Chase & Co. analysts yesterday announced upgrades to ratings on major Chinese tech names like Alibaba and Tencent Holdings. Bank of England Governor Bailey fears “apocalyptic” risk from rising food prices. Governor Bailey testified before a parliamentary committee yesterday and said the rise in prices is “a major worry not just for this country but for the developing world.” Bailey bemoaned the series of supply shocks that are driving a cost-of-living crisis for the many UK citizens as the price of food and energy, in particularly have risen sharply, the latter a direct result of the Russian invasion of Ukraine. Bailey also noted a 1.3% fall in the size of the labor market, which also limits economic growth potential. Deputy Governor Ramsden added that “we hear companies telling us that even people on median incomes are overextended.” RBA opening the door for bigger rate hikes. Minutes of the Reserve Bank of Australia's May monetary policy meeting showed that members considered three options, raising the cash rate by 15 basis points, 25 basis points or 40 basis points. The 40bps rate hike was avoided considering that the board meets monthly and would have the opportunity to review the data flowing in to decide on the size of future interest rate hikes. With inflation being seen as a key concern and Q1 inflation hitting 5.1% - the fastest pace in two decades – this likely suggests that there is room for 40bps (or more) of rate hikes in the upcoming meetings. What are we watching next? The European Commission downgraded GDP forecasts for 2022 and 2023. The EU Q1 GDP estimate is out later this morning. Official real GDP growth in both the European Union and the euro area is now forecast at 2.7 % in 2022 and 2.3 % in 2023, down from 4.0 % and 2.8 % (2.7 % in the euro area) in the last forecast released in February 2022. The forecast for 2022 is likely too optimistic. Several countries are facing a very challenging economic environment (stagflation risk in Germany and risk of technical recession in France, for instance). France’s wage negotiations are kicking off. According to a blog article published by the Bank of France last week, wages are likely to increase by 3% this year, on average. From 2014 to 2020, wages barely moved (+1 %). This is still not enough to cope with higher inflation (4.8 % YoY in April). April U.S. retail sales are out today. Expect the positive momentum to remain in place. Several factors are pushing retail sales up: solid auto sales, significant cash savings buffers (built during the pandemic) and rising wages (though they are not keeping pace with the increases in the cost of living). In the short-term, we believe consumer spending will remain robust and the domestic economy will be in a good position. Earnings Watch. As with many earnings release dates for Chinese companies they are postponed and that happened to Meituan yesterday. The Q1 earnings release has been postponed to 23 May. Today’s focus in Europe is Vodafone which could show its qualities as a defensive company during the current declines and then Nibe Industrier which is big on air-to-heat water pumps which are a declared preferred technology by the EU in its quest to become independent of Russian natural gas. In the US session, the focus will be on Walmart, Home Depot, JD.com and Sea Ltd. The two big retailers Walmart and Home Depot will provide great insights into consumer behaviour in their outlook. Today: Engie, Vodafone, Nibe Industrier, Sonova, Walmart, Home Depot, JD.com, Sea Ltd Wednesday: Tencent, Experian, Burberry, Singapore Airlines, Cisco, Lowe’s, Target, Analog Devices, TJX, Synopsys, Copart, Trip.com Thursday: Xiaomi, Generali, National Grid, Applied Materials, Palo Alto Networks, Ross Stores, DiDi Global Economic calendar highlights for today (times GMT) 0900 – Euro zone Q1 GDP forecast 1005 – UK Bank of England’s Cunliffe to speak 1230 – US Apr. Retail Sales 1315 – US Fed’s Harker (non-voter) to speak 1315 – US Apr. Industrial Production and Capacity Utilization 1400 – US May NAHB Housing Market Index 1700 – ECB President Lagarde to speak 1800 – US Fed Chair Powell Interview at event 1830 – US Fed’s Mester (voter) to speak 2030 – API Weekly Report on U.S. oil and fuel inventories 2350 – Japan Q1 GDP estimate 0130 – Australia Q1 Wage Price Index Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Saxo Bank

Summary:  In today’s ‘Macro Chartmania’, we focus on the Real Effective Exchange Rate (REER). All the data are collected from Macrobond and updated each week. Click to download this week's full edition of Macro Chartmania composed of more than 100 charts to track the latest macroeconomic and market developments. The below chart shows the Real Effective Exchange Rate (REER) for the euro and the U.S. dollar. This is the weighted average of a country’s currency against a basket of other major currencies. It is used for international comparisons, especially by the International Monetary Fund and the World Bank, for instance. Currently, the U.S. dollar is 27 % too high compared to the euro, based on the REER. The last time the gap was so wide was when the outbreak started in 2020. This is only the beginning, in our view. U.S. dollar net speculative positioning continues to increase at a speedy pace. Several factors are pushing investors to look for the default safe haven : risk of technical recession or stagflation in several developed economies (France, Germany and the United Kingdom, for instance), skyrocketing commodity prices (especially for agricultural goods due to the Ukraine war and the drought in India), equity bear market, lockdowns in China which will push down global GDP growth this year, persistent inflationary pressures (resulting from supply chain disruptions and higher wage compensations, amongst other things) etc. From a technical point of view, the USD is likely to move upward in the short-term. We expect that risk-off waves will push the DXY index well above 105.00. The EUR/USD is likely to remain under pressure too. How long do you think this can go on before something snaps ? My bet : the European Central Bank (ECB) will have no other options but to increase interest rates at the July meeting to bring support to the EUR and close the gap with the U.S. dollar. Timing is everything : the July meeting will take place just one day after the release of the first estimate of the eurozone Q2 GDP. If the Governing Council decides to move forward with a rate hike, this would reduce imported inflation, in theory. The ECB is caught between a rising dollar and a weak euro. This is simply intolerable. Several governing council members, including those considered as the most pragmatic, are now leaning in favor of a rate increase and exiting negative rates by the end of the year (Banque de France’s Villeroy de Galhau, for instance). This will certainly not solve from one day to another inflationary pressures within the eurozone (inflation is partially driven by external forces such as commodity prices). But it will at least reduce the FX-passthrough into inflation which is becoming problematic. Source: Saxo Bank

Summary:  Risk sentiment remained strong in the US yesterday, as the major indices closed strongly at a more than one-week high on a day that saw both a strong US Retail Sales report for April and largest US retailer Walmart’s stock punished by the most in a single day since 1987 on a weak profit forecast. Fed Chair Powell said that the Fed won't hesitate to raise rates above neutral if necessary, helping to lift the entire US yield curve and perhaps helping to cool sentiment overnight.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) - S&P 500 futures pushed higher yesterday closing the recent short-term selloff cycle that started last Monday but are trading a bit softer this morning around the 4,075 level. US retail sales yesterday showed that the US consumer is still alive and comments from Home Depot’s CEO suggest that the US housing market is still strong despite recent higher mortgage rates with tight supply of homes to last several years. Overall, the dynamics are still the same with tighter financial conditions ahead and hawkish comments yesterday from several Fed members suggest our defensive stance on US equities is correct. Stoxx 50 (EU50.I) - Stoxx 50 futures closed above its 50-day moving average that we highlighted as the key focus point for the market in yesterday’s quick take. This is the first time since 20 April when technology stocks were staging a comeback with risk appetite before everything turned lower again. If Stoxx 50 futures can manage to stay above this moving average, there might be enough energy for a test of the 3,800. European car sales figures are out this morning and they are still weak which might add a bit of negative pressure among carmakers and car parts suppliers. EURUSD – strong risk sentiment and a weaker US dollar clearly go hand in hand, as yesterday’s market action demonstrated, but the euro got an extra boost from ECB governing council member Klaas Knot saying that the ECB shouldn’t exclude 50-basis point hikes from the menu of options. This drove a strong boost in ECB rate expectations, with end-2022 now priced for a +0.45% policy rate, 10 bps higher than the previous day. EURUSD traded up through 1.0500, a bullish reversal as that was a sticking point on the way down. Still, very heavy lifting would be needed to turn the bearish tide, with next resistance at the prior pivot higher near 1.0640, while more like 1.0800-1.0850+ would be needed to suggest a structural reversal. A new sell-off in risk sentiment will test the degree to which the latest hawkish tile from a growing number of ECB members weighs on the EURUSD exchange rate. USDJPY and JPY pairs – watching JPY crosses and USDJPY closely after US treasury yields jumped yesterday, especially at the long end of the curve, to which the JPY is traditionally most sensitive. Japan’s Q1 GDP estimate out overnight was better than anticipated as nominal GDP rose +0.1% and the economy (in real terms) contracted less than expected. In the JPY crosses, we have seen a wild ride on the recent swings in risk sentiment that now have pairs like EURJPY, AUDJPY and GBPJPY back near important retracement levels after steep sell-offs last week. These will likely tilt lower if bond yields stay calm and we see renewed risk aversion. Otherwise, the Bank of Japan will likely only come under fresh pressure to alter its policy if the USDJPY rate jumps to strong new highs and, for example, if global oil prices do likewise, increasing cost-of-living in Japan, etc. Gold (XAUUSD) trades lower after Fed chair Powell said the Fed will keep raising rates until inflation is brought under control. His comments helped lift inflation adjusted US Treasury yields with the 10-year real yield rising to 0.25%. The weaker dollar yesterday also helped boost risk appetite with stocks being the main recipients of these flows. For now, the bears remain in control, especially after the rejection yesterday at $1838, the 200-day moving average on XAUUSD. Silver (XAGUSD) meanwhile enjoyed some tailwind from recovering industrial metals with the XAUXAG falling to 83.90 after hitting a 22-month high of 88.5 last week. Crude oil (OILUKJUL22 & OILUSJUN22) tried but failed to break higher on Tuesday after the tailwind from a potential pickup in Chinese demand, as lockdowns begin to lift, was being offset by hawkish comments on interest rates from Fed chair Powell, and news that the US may ease some economic sanctions on Venezuela, a 2m b/d producer in 2017 reduced to just 0.7m b/d at present. The bid, however, returned late in the day when the API published a bullish inventory report that pointed to a continued and worsening tightness in the US crude and gasoline market after they saw stocks falling by 2.4m barrels and 5.1m barrels, respectively. The EIA will release its official report later Wednesday. Dutch TTF benchmark gas (TTFMM2) remains rangebound within a €85 to €110 range despite the fact Europe's gas inventories are rebuilding at the fastest rate on record as the region's buyers outbid competitors from Asia to acquire as much gas as possible at any price. According to Gas Infrastructure Europe total stocks have since the March low climbed by 202 TWh to 446 TWh, and at this rate will surpass the five-year average within the next few weeks. Asia’s LNG buyers have been less active than normal, driven by a combination of stocks being allowed to run down due to soaring prices and lower Chinese demand as its coronavirus outbreaks and lockdowns take its toll on demand for gas. US Treasuries (TLT, IEF) - sold off yesterday and took the 10-year Treasury benchmark yield sharply back higher toward 3.00% in the wake of strong US Retail Sales data and amidst positive risk sentiment. If the 10-year yield continues higher after yesterday’s 10 basis point jump, it is worth nothing that the recent top of 3.2% was within a few basis points of the 2018 high for the cycle at 3.26%. Meanwhile, the 30-year T-bond yield closed at 3.185, the second-highest daily close for the cycle, with an intraday cycle high of 3.31%. The US Treasury is set to auction 20-year T-notes later today. What is going on? Fed Chair Powell says “won’t hesitate at all” to take Fed Funds rate above neutral after saying that “what we need to see is inflation coming down in a clear and convincing way, and we’re going to keep pushing until we see that.” Powell admitted that taking levels above neutral could bring some pain and a rise in the unemployment rate. End-2022 Fed expectations rose about 10 basis points yesterday and sit at 2.82”, just shy of the 2.88% cycle highs from before the May 4 FOMC meeting, at which Powell discouraged the idea of hiking more than 50 basis points at a time. UK Apr. CPI out this morning in line with expectations. The headline year-on-year reading was 9.0% vs. 9.1% expected and 7.0% in March, while the Core CPI was 6.2% as expected and vs.5.7% in Mar. The month-on-month headline CPI was 2.5% vs. 2.6% expected and 1.1% in March. Walmart, the world’s largest retailer, suffers worst single-day price drop since 1987 as it cut its profit forecast, citing margin pressure concerns due to inflation, and the CEO vowing that “price leadership is especially important right now.” Home Depot gains on strong Q1 and better than expected Q2 outlook. The US home improvement retailer gained yesterday on a surprise Q1 comp sales of +2.2% y/y vs est. -2.4% y/y and saying on the conference call that Q2 was off to a strong start; the company says it is not seeing the consumer holding back and sees tight housing inventory lasting for five years. Japan Q1 GDP contracted less than expected. Japan’s Q1 GDP showed a contraction of 1% q/q sa following a 3.8% expansion in Q4, but it was still better than expected. The omicron wave and supply drags created pressures, but the outlook for Q2 is appears to be improving as the economy reopens and pent-up demand boosts consumer spending. UK unemployment drops to a 50-year low of 3.7%. For the first time since records, job openings (1.3 million) outnumber those out of work. In addition, the number of payrolled employees grew by 121,000 between March and April, to 29.5 million. A lot of people have chosen salaried employment over self-employment due to fear of recession and higher cost of living. Wages continue to move upward. But this is not enough to cope with inflation. Pay, excluding bonuses, rose by 4.2 % between January and March while cost of living was at 7 % in March and is expected to jump to 9 % in April. The situation is becoming unbearable for many households. We believe that the Bank of England will have no other choice but to speed up the interest rate hike cycle before pausing perhaps after the summer. As expected, U.S. April retail sales show the U.S. domestic economy is very resilient. Retail sales were out at 0.9 % versus the expected 1 %. After adjusting for monthly inflation, it was at 0.6 %. This is still very solid. There is no sign of imminent recession in the United States when we look at the U.S. consumer. Peloton sees twice the demand for its $750 bond offering. The struggling health company has seen strong demand for its bonds in a sign that risk appetite is still intact in the high yield debt market in the US. Australian wage growth in Q1 slightly softer than expected. The report showed Australian wages rising only +0.7% QoQ and +2.4% YoY vs. +0.8%/+2.5% expected, respectively and vs. +2.3% YoY in Q4. What are we watching next? Earnings Watch. Today’s focus is Tencent given the latest support from the Chinese government including comments yesterday from the Vice Premier signaling support for platform companies. Consensus is looking for Q1 revenue of CNY 141.1bn up 4% y/y and EPS of CNY 2.77 down 5% y/y. SQM is also reporting today and is one of the world’s leading lithium miners earning 41% of its profits from lithium and 59% from fertilizers and plant nutrients including potassium, and as well as other agricultural sector products. Both lithium and fertilizers are seeing high prices due to tight supply-demand situation. Today: Tencent, Experian, Burberry, Singapore Airlines, Cisco, Lowe’s, Target, Analog Devices, TJX, Synopsys, Copart, Trip.com, SQM Thursday: Xiaomi, Generali, National Grid, Applied Materials, Palo Alto Networks, Ross Stores, DiDi Global Economic calendar highlights for today (times GMT) 0800 – South Africa 1230 – US Apr. Housing Starts and Building Permits 1230 – Canada Apr. CPI 1230 – Canada Apr. Home Price Index 1430 – EIA's Weekly Crude and Fuel Stock Report 2000 – US Fed’ Harker (Non-voter) to speak 2350 – Japan Apr. Trade Balance 0130 – Australia Apr. Employment Data Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Saxo Bank

EURUSD goes sideways The euro edged higher after an ECB official supported the idea of a stronger currency to combat inflation. The pair is bouncing off December 2017’s lows at 1.0350. The RSI’s oversold situation on both daily and hourly charts led some sellers to cover as a wave of profit-taking could help the euro snap back from this demand zone. The bias remains down unless the bulls lift the first hurdle (1.0530) from the latest sell-off. 1.0640 on the 30-day moving average is a major resistance to clear before a bullish reversal could happen. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM NZDUSD stays under pressure The New Zealand dollar recovers as weak data from China may trigger more policy support. The RSI’s double dip into the oversold territory shows an overextension. The sell-off has become such a crowded one-way trade and the kiwi could use some breathing room. A bullish RSI divergence suggests a slowdown in the downtrend but needs a breakout to confirm buying interest. 0.6380 is a fresh resistance and 0.6450 on the 20-day moving average a major obstacle. A drop below 0.6220 would further extend the kiwi’s losses. US 30 tests resistance The Dow Jones 30 struggles as investors still ponder a recession scenario. A break below the daily support at 32600 has put the bulls on the defensive. Bargain hunting may cause limited rebounds, but the lack of buying momentum means that the mood is still extremely cautious. 32600 has become a resistance and its breach could extend the recovery to 34000, where sell orders could be expected from trend followers. 31250 is the closest support and a breakout may send the index to the psychological level of 30000. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM

Summary:  After the odd tapping on the brakes at the May 4 FOMC meeting, when the Fed wanted to take the idea of 75-basis point rates off the table, Fed Chair Powell reminded the market of its mission to ensure that it will not let up on policy tightening until it has achieved a sustained drop in inflation. Elsewhere, the sterling squeeze is fading fast and the status of key USD charts is pivotal. FX Trading focus: Powell puts back on the hawkish hat, GBP squeeze fading fast, USDCAD spotlight Fed Chair Powell reminds us of the Fed’s mission in saying that the Fed “won’t hesitate at all” to take the Fed Funds rate above neutral, and that “what we need to see is inflation coming down in a clear and convincing way, and we’re going to keep pushing until we see that.” Powell admitted that taking levels above neutral could bring some pain and a rise in the unemployment rate. End-2022 Fed expectations rose about 10 basis points yesterday and this morning were at 2.82%, just shy of the 2.88% cycle highs from before the May 4 FOMC meeting, at which Powell discouraged the idea of hiking more than 50 basis points at a time (why?). This only offered the USD a modicum of support overnight as risk sentiment absorbed the news without much fuss. GBP shorts caught in quite the squeeze yesterday, likely aggravated badly by positioning, which is quite heavily bearish in the US futures market and in general. Yesterday I mentioned the very strong payrolls data as a driver, but there was also the news that the UK government may be considering tax cuts, including a lowering of the VAT, as well as cost-of-living support for the most vulnerable citizens. In the first instance, this could eventually help ease inflation levels and thus allow the Bank of England to hike more than previously expected, but the follow-on thinking is that it could also keep demand higher than it would be otherwise and continue to driver extreme external deficits for the UK, eroding the sovereign UK balance sheet and therefore possibly trust in sterling as well. Sterling has surrendered much of yesterday’s gains – watching for a capitulation again in GBPUSD, while the EURGBP has bounced back above the existential 0.8450 area that  was pivotal on the way up. A very choppy chart there. USDCAD and US vs. Canada Housing spotlightThe CAD has received a double dose of support from the recent strong bounce in risk sentiment and crude oil prices pulling into the top of the range and beyond at times recently. But let’s look a bit further ahead at the inevitable gathering storm that is set to hit the housing market in coming months, after yields have lurched sharply higher. The headline is that if an ugly housing slowdown lies ahead, it will hit Canada’s economy with far more force than it will the US economy. Construction itself contributes about 75% more to GDP in Canada than the US (about 7.5% vs. 4.3%), and private balance sheets in Canada are far more levered, with notable local housing bubbles in Toronto and Vancouver making UBS world top ten list (at #2 and #6) of worst housing bubbles in 2021. The Greater Toronto area, by the way, represents over 17% of the Canadian population. I have better data on the US market and can see solidifying signs in leading indicators that the US housing market is set for a slowdown, including yesterday’s worst of the cycle drop in the NAHB for the May data point, which fell 8 points to 69 versus 75 expected and 77 in April. The latest Housing Starts and Building Permits data is up today (for April), although this lags the NAHB historically by about six months in directional terms. US Pending home sales have also rolled over as discussed in today’s Saxo Market Call podcast and are another leading indicator. So, while near term, an additional boost to sentiment and energy prices could see a break-down in USDCAD, the Canadian economy will face disproportionately large end-of-cycle pressures once the recession arrives, so clouds remain over the cycle outlook for the loonie. Chart thoughts below for USDCAD Chart: USDCADThe USDCAD chart has retreated to critical levels for bulls, as a significant punch below 1.2800 makes the chart look a lost cause for the bulls (arguably, the last, last gasp area is just ahead of 1.2700 at the prior pivot lows or even 1.2660 if using the 61.8% retracement and the 200-day moving average, although the reversal back down through 1.2900-50 has already been a disappointment after that level to the upside was broken. An impulsive recovery back above 1.3000 to put the momentum back on track higher. Source: Saxo Group Underwhelming wage price data for Q1 from Australia overnight, which rose a mere 0.7% QoQ and 2.4% YoY, both 0.1% below expectations. This is meant to be the key data that would drive the RBA to accelerate its tightening regime if it provided evidence of a wage price spiral. Alas, the AUD seems more focused on hopes for China lifting Covid restrictions and swings in risk sentiment. The 0.7000-0.7050 zone remains the tactical resistance focus, with bears possibly needing to retreat back to 0.7200-50 if it does not hold. Table: FX Board of G10 and CNH trend evolution and strength.The USD is losing steam in a trending sense, and would need a solid new impulsive move higher soon to avoid a further breakdown in key pairs, and versus the G10 currencies generally. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.USDCAD is on the verge of flipping into a positive territory on the trend readings if it can’t rally soon. Also note the EURGBP rally hanging on by a thread here. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1230 – US Apr. Housing Starts and Building Permits 1230 – Canada Apr. CPI 1230 – Canada Apr. Home Price Index 2000 – US Fed’ Harker (Non-voter) to speak 2350 – Japan Apr. Trade Balance 0130 – Australia Apr. Employment Data Source: Saxo Bank

US dollar retreats on higher risk appetite The US dollar weakened overnight despite US yields moving higher and hawkish Fed officials. Like equity markets, currency markets concentrated on positive US data, and a fall in oil prices which lifted risk-seeking sentiment, although I believe this is all part of a bull market correction. The dollar index slumped by 0.85% to 103.30, edging higher to 103.40 in Asia as US index futures fell. Resistance remains at 105.00, and the daily close below 104.00 suggests support at 102.50 could be tested. Failure suggests a deeper correction still. EUR/USD was one of the main beneficiaries of the swing in risk sentiment, jumping 1.15% to 1.0555 before edging lower to 1.0535 in Asia. Having based at 1.0350 on Friday, EUR/USD has rallied through 1.0500 overnight and could test 1.0650 and possibly even the 1.0800 37-year breakout line. I continue to believe that any rally above 1.0700 will be hard to sustain in the medium term. In a similar vein, GBP/USD has traced out a low at 1.2155 last week and leapt 1.40% higher to 1.2490 overnight, where it remains in Asia. The next resistance is at 1.2650; however, like Europe, the United Kingdom’s structural headwinds leave the longer-term picture still bearish. The rise in US yields overnight has left USD/JPY trading sideways at 129.20 in Asia, barely changed over the past few days. If US yields remain at these levels, a deeper correction to 127.00 becomes unlikely. In the bigger picture, USD/JPY remains at the mercy of the US/Japan rate differential. The rally in global sentiment has allowed AUD/USD and NZD/USD to book 0.85% gains once again overnight, rising to 0.7030 and 0.6360 respectively, where they remain in Asia. Any rally to 0.7200 or 0.6500 is likely to see sellers lining up though as both will continue to be buffeted by swings in investor sentiment, especially in China. Likewise, Asian currencies had a good night overnight, with CNY, CNH, KRW, and SGD the standout performers. USD/CNY at 6.8000 and USD/CNH at 6.8500 have proved formidable barriers, and if both USD/Yuans remain below these levels, more Asia FX strength is possible. Lower oil prices will also help, but if US yields continue to track higher from here, then the US dollar correction versus Asia is likely to quickly run out of steam. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Summary:  The backdrop has increasingly weighed in support of the JPY as safe haven seeking in sovereign bonds has eroded the negative implications of the Bank of Japan’s yield-curve-control policy. And speculative positioning is very short the Japanese currency. Last week’s brief blow-up in the JPY crosses may have been a trial balloon for a far larger squeeze on JPY shorts. FX Trading focus: JPY focus on supportive backdrop The market action yesterday and overnight was at times rather out of synch with recent cross-market correlations. Yes, the worst day in two years for US stocks did see the US dollar rallying in most places, but only modestly so relative to the negative energy in risk sentiment that has been the "norm" in recent months. One possibly source of this was the big mark-down in USDJPY intraday yesterday, which shows that attention may be shifting more towards the old safe-haven role of the Japanese yen on the latter’s traditional sensitivity to the strength in safe-haven bonds, which picked up a powerful bid yesterday, flattening the US yield curve and suggesting a weaker economic growth/inflation outlook. Since much of the early USD buying in the aggravated rally in the greenback since late February was in USDJPY due to the rise in US long treasury yields, any further fall in these yields will likely continue to support the JPY the most among major currencies. A potential “after-burner” for the risk of a tremendous bout of JPY volatility here is market positioning, with the US futures speculative positioning at historically stretched levels.  That’s it for today’s update – JPY volatility is likely to dominate for the coming sessions if it is properly unleashed. Chart: USDJPYUSDJPY poking at the important local 127.50 support and other JPY crosses on the verge of (EURJPY and AUDJPY) or already having broken down (GBPJPY and NZDJPY) through some key support levels. The next obvious focus here could be the 125.00 round-level area, but when the yen works up a head of steam, it has a tendency to overshoot – so potential to 120.00 can’t be ruled out if equity markets are suffering a real liquidity event and safe-haven seeking in US treasuries sends the US 10-year yield benchmark, for example, back to 2.50%. Source: Saxo Group Table: FX Board of G10 and CNH trend evolution and strength.Holding breath here for JPY volatility potential – and with USDJPY under so much pressure, it could block the USD from serving as a safe haven in the crosses. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Apropos JPY crosses – USDJPY is on the verge of crossing over to negative finally if it closes near or below the 127.50 trigger level. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1130 – ECB publishes minutes of April ECB meeting 1230 – ECB’s Guindos to speak 1230 – US May Philadelphia Fed survey 1230 – US Weekly Initial Jobless Claims 1400 – US Apr. Existing Home Sales 1500 – Sweden Riksbank’s Floden to speak Source: Saxo Bank

Wednesday was another bad day for equities where the MSCI World equity index fell another 3%. The fact that expectations for Fed policy tightening remain intact is a sign that investors appreciate that tackling inflation is now the priority for central banks. This continues to favour the anti-cyclical dollar, but also now the Japanese yen Source: Shutterstock USD: The cavalry ain't coming Yesterday saw the S&P 500 sell off 4%, led by consumer stocks. The fact that some of the biggest main street names are under pressure on the back of profit warnings is a reminder that the squeeze on real incomes is starting to hit home. Over prior decades, decades associated with very dovish Fed policy, one might have expected this magnitude of an equity market sell-off to put a dent in Fed tightening expectations - or expectations that the Fed would come to the equity market's rescue. In fact, the Fed funds futures strip barely budged yesterday. We read this as a sign that investors now appreciate that tackling inflation is the number one priority of the Fed - and the Fed will not easily be blown off course. At the same time, we are still only hearing concerns from Chinese policymakers about the slowdown, rather than any promise of major fiscal support. And one could argue what would be the use of major fiscal support if workers and residents remain trapped in Covid lockdowns? For that reason, it seems very difficult to argue that renminbi depreciation has run its course and we cannot rule out USD/CNY pushing through the 6.80 area over coming weeks and months. This all leaves the anti-cyclical dollar quite well supported. We had made the case on Tuesday for a bounce in the oversold dollar. That bounce did not last long and again it is hard to rule out the dollar edging back to recent highs. Not until the Fed blinks on policy tightening or the rest of the world's growth prospects start to look attractive - neither of which seem likely over coming months - will the dollar put in an important top.  For today, the US calendar is light with just initial claims and existing home sales for April. Housing looks to be one of the most vulnerable sectors of the US economy, but its slowdown (and its effect on dragging core inflation lower) looks a story for much later in the year. DXY has seen a modest bull market correction this week, but can probably edge higher to 104.10 today. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM EUR: ECB will have to talk a good game Providing the euro a little support this week has been even more hawkish commentary from the European Central Bank. We had felt that the market would struggle to price in more than 75bp of ECB tightening this year, but central bank hawks such as Klaas Knot have introduced the idea of the ECB moving in 50bp increments. This has helped narrow the two-year German Schatz-US Treasury spread to 225bp from recent wides at 250bp and provided some modest support for the dollar. This can be seen as verbal intervention from the ECB to support the euro. An important policy paper from the ECB a few years ago concluded that two-year rate differentials were the most significant driver of EUR/USD and the ECB's best hope of stablising EUR/USD may indeed be to talk up prospects of the forthcoming tightening cycle. For today, look out for the minutes of the April ECB meeting, where again it might choose to emphasise the more hawkish elements. EUR/USD has had its oversold bounce to 1.0550 and with the global environment remaining challenged, EUR/USD could today drift back through 1.0450/60 to 1.0400. Elsewhere, we note some short-term similarities between both the Swiss franc and the Czech koruna. The central banks behind both currencies would prefer stronger currencies to play their role in delivering stable/tighter monetary conditions. We conclude that EUR/CHF upside may be more limited - and the downside more open - than most believe. While for EUR/CZK, the Czech National Bank (CNB) will want EUR/CZK to continue trading under 25.00 and perhaps lower still - until at least 1 July when a new CNB governor takes over.  GBP: One month realised volatility at 8%! EUR/GBP one month realised volatility is back at 8% - which is very high for a European FX pair. Expect this volatility to continue given much uncertainty about the policy path for both the Bank of England (BoE) and the ECB. Here, we happen to think that tightening cycles in both are over-priced and one would probably think that the BoE cycle gets repriced lower first. Expect EUR/GBP to continue to trade in a very wide 0.8400-0.8600 range, while cable looks more one-way traffic. We have seen the bear market bounce to 1.2500 this week and the difficult external environment would favour a break of 1.2330 support in a move back to the 1.22 lows.  Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM ZAR: SARB expected to hike 50bp today The South African Reserve Bank (SARB) is widely expected to hike 50bp to 4.75% today. The policy rate is quite low by emerging market standards, but that is because core inflation is only running at 3.9% year-on-year. A 50bp hike looks unlikely to generate much support to the rand, which is currently being re-priced off of the Chinese growth cycle. With $70bn of portfolio capital having left emerging markets since Russia invaded Ukraine - and with South Africa having large weights in emerging market debt and equity benchmarks - we expect the rand to stay under pressure for the time being.  16.35 is big resistance for USD/ZAR, above which 17.00 beckons for later in the year. Rising US real yields and the China slowdown continue to make the bear case for emerging markets.   Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Plunging US equities set the tone for Asian markets  Source: shutterstock Macro outlook Global: Yesterday was a horrible session for US stocks. Selling pressure was evident from the starting bell, and equity futures today are signalling no sign of buying the dip either. The S&P500 fell more than 4% and the NASDAQ was down 4.73%. The S&P now stands just one bad day away from an official bear market. The NASDAQ is already there. Benchmark FX markets reflected the risk-off tone and reversed yesterday’s moves and more. The EURUSD is now back down to 1.0474, and this has helped pull the AUD back below 70 cents. The JPY has begun to appreciate again and is now at 128.24 whilst the KRW also made gains on a day when most Asian FX was looking fairly weak. US Treasuries too were benefiting from the fall in risk sentiment. Yields on the 2Y US Treasury note fell 3.1bp to 2.669%, while those on the 10Y bond fell 10.2bp to take the yield to 2.884%. There’s not much on the macro calendar today. US existing home sales may just be worth a second or two’s glance. With growing talk of recession vs soft-landing, the interest-sensitive housing sectors may provide a sneak preview of any turn in the economic cycle. Australia: Australia releases its April employment report shortly, and the market is looking for employment growth of about 30,000 and a further slight fall in the unemployment rate to 3.9% from 4.0%. We don’t have any issues with these assumptions. A 3.9% or lower unemployment rate would be a new record low, but we don’t think it particularly changes the story for the RBA, now that they have accepted that inflation is sustainably above their target. Likewise, yesterday’s slightly lower than expected wage price index is not particularly binding right now. All that a very strong labour report may do is raise the prospects of greater than 25bp hikes at forthcoming meetings. China: The Shanghai lockdown is unwinding gradually. The government expects the end of the lockdown will be in early June. For now, Beijing and Tianjin both have districts under lockdown. We expect more districts will be locked down as more Covid clusters are found. The port of Tianjin is important for hard commodity trade. Though we have not seen disruption in Tianjin’s port yet, this could become an issue if stricter social distancing measures are applied. Domestic prices of commodities could increase in this case. Japan: The trade deficit widened to -JPY839bn in April (vs -JPY412.4bn in March), recording the 9th consecutive month of deficit. Exports grew 12.5% YoY while imports rose by 28.2%. Import growth remained rapid, but probably peaked last November (+ 43.8%). Meanwhile, March core machinery orders rebounded by 7.1%MoM (vs 3.9% market consensus), partially offsetting the previous month’s loss of -9.8%.  Yesterday’s 1Q22 GDP was better than expected. But this means that the 2Q rebound will probably be weaker than we previously thought. Pent-up demand-driven consumer spending will lead growth in 2Q, but higher inflation will dampen household purchasing power and moderate any bounce. Today’s data suggest that trade will remain the main drag on 2Q growth, while investment spending will decelerate further. We are planning to revise down 2Q22 GDP soon. Philippines: Bangko Sentral ng Pilipinas (BSP) meets to decide on policy today.  Governor, Diokno, who previously vowed to keep rates untouched through to the second half of the year now indicates that the space to keep accommodation has “narrowed significantly”.  We expect BSP to hike policy rates by 25 bps and possibly hint at additional tightening at the 23 June meeting.  What to look out for: US initial jobless claims Japan trade balance (19 May) Australia unemployment (19 May) Philippines BSP policy meeting (19 May) Singapore 1Q GDP final (19 May) US initial jobless claims (19 May) Japan CPI inflation (20 May) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Curves pivoting flatter fits a narrative further shifting towards growth concerns. As European Central Bank pricing gets more hawkish there is more than just the possibility of 50bp moves that could explain how 100bp in four meetings after June could come to pass, even if that is not our view    USD and EUR curves pivoting flatter around the belly of the curve amid weaker risk assets is a pattern that fits the narrative of market concerns having shifted toward rising risks to the growth outlook as central banks tighten policies amid high inflation. Continuing to lean more hawkish on the hawk-dove seesaw In EUR, markets have further ratcheted up their ECB rate hike expectations. By the end of the year they expect an overnight rate more than 100bp higher from now. If one assumes that the ECB will use the June meeting to prepare the grounds for rate hikes by announcing also the end of all net asset purchases, then this would imply an expectation of 25bp hikes at each of the other four remaining policy setting meetings in 2022 – and a bit more. 25bp hikes at the four ECB meetings starting with July – and a bit more Does that mean the possibility of a 50bp hike by the ECB is catching on?  After all it had been floated by the ECB’s Klaas Knot earlier this week, but his remarks may have been more about signaling a commitment to act forcefully. A sources article published yesterday outlined that a majority of the Council supported at least two 25bp hikes this year, but downplayed the notion of a 50bp move. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM Curve flattening fits a pattern of growth concerns and tightening central banks Source: Refinitiv, ING Other factors driving aggressive market pricing The aggressive market pricing will to a degree also reflect a higher risk premium amid volatile times, but we would also not exclude some uncertainty being reflected about the evolution of excess reserves in the banking system and how the ECB proceeds with the tiered deposit rate. The expectation is still that larger early repayments of banks’ targeted longer-term refinancing operations borrowings loom in the months ahead, although higher comparable market rates may have now made it more compelling for banks to hold on to the funds beyond June until the September repayment date. On the forwards strip for the ECB meeting periods markets see c.4bp higher overnight rates for the upcoming June meeting, though it may also include outside chances for an immediate ECB rate hike. It is conspicuous that the market prices the largest increase for September, a rise of noticeably more than 30bp while it is below 25bp for the other meetings this year save July. More than 100bp from the ECB in the four 2022 meetings after June Source: Refinitiv, ING   For September the market prices an increase of more than 30bp Perhaps the ECB minutes to be released today will shed more light on the ECB’s internal deliberations on what needs to be done in the face of rising inflation and the balance of risks tilting less favourably. But given how far official communication has already evolved since the April meeting to converge with the market view, the minutes should look dovish, not to say outdated. It was a meeting that still signaled a very gradual move. To be sure, our own expectation is also that aggressive market pricing will likely not be realised with our economists looking for three ECB hikes by the turn of the year. Today's events and market view In the Eurozone the ECB minutes of the 14 April meeting will take the spotlight amid an otherwise quiet data calendar. The minutes have seldomly been market moving, and they should appear especially outdated this time around as ECB communication has evolved quickly since then. We will also hear from the ECB's de Guindos and de Cos today. The other market focus will be today’s busy supply slate. France sells up to €13bn across shorter dated bond lines, including a new 6Y, and linkers. Spain reopens four bond lines including its 20Y green bond for up to €6bn in total.   The US sees publication of initial jobless claims and existing home sales. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Completing the shift of the market narrative towards growth concerns, bonds are reasserting their role as safe havens. The European Central Bank minutes confirmed the Council's desire to act faster, also with an eye on still ultra low real yields  Risks remain to the upside for rates Bonds' negative correlations with risk assets consolidates amid growth concerns As markets continue to trade in a risk-off fashion, bonds have managed to reassert their role as safe havens. The pattern of bond curves consistently rallying flatter as risk assets sell off has only reestablished itself over the past few sessions. In a way this dynamic completes the transition of the market narrative toward growth concerns, away from being dominated by central banks' prospective tightening lifting market rates out the entire curves. bonds have managed to reassert their role as safe havens This does not mean that data releases couldn't shift the focus again. Next week will offer some opportunities with the release of the flash PMI surveys for instance. And if the Fed deems inflation (expectations) are not coming down fast enough, it may well use the FOMC minutes next week to signal more hawkish moves. The 75bp-hike discussion is not entirely off the table. Unlike the ECB, the Fed has used its meeting minutes as a more active communications tool, such as outlining its plans for the balance sheet run-off. We will also watch the PCE deflator, the Fed's preferred inflation gauge at the end of next week. Risk-off drives curves flatter Source: Refinitiv, ING ECB minutes, outdated but also highlighting the upside in rates The ECB minutes have been overtaken by the quick evolution of ECB communication since the last meeting. The indication now is that a majority of the Council is backing ending net asset purchases in June and hiking for a first time in July is already common place. And markets are attaching some probability to hikes larger than 25bp. The ECB has to increasingly grapple with potential de-anchoring of inflation expectations That does not mean that the known objections of the Council’s doves are invalid: too fast tightening being counterproductive, weighing on growth without being able to do anything about inflation driven by supply shocks. The line of reasoning still holds and explains market concerns reflected in current curve flattening. But the ECB has to increasingly grapple with potential de-anchoring of inflation expectations with some of the related measures already displaying notable shifts. This shift in some inflation expectation measures had been outlined by Isabel Schnabel in one of her more recent speeches. She had also highlighted the still very low level of real yields. This hawkish argument was also found in yesterday’s minutes, with real yields remaining low while the rise in nominal yields was not enough to dampen aggregate demand and bring down inflation in the medium term. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM EUR real rates have a long way to go Source: Refinitiv, ING   It is worth noting that back around the April ECB meeting the 10Y swap rate was just below 1.6% versus a current level of 1.65%, although following a decent rally after a brief excursion above 2% earlier this month. Real rates remain deeply negative regardless of the maturity, and if this is a measure considered instrumental at reining in inflation over the medium term, then we may have to reckon with more upside to rates. The important question is whether the ECB will have enough time to realize its goals.   The ECB's "separation principle" is still lacking detail The "separation principle" referenced in the ECB accounts states the idea that monetary policy could be set independently from any measures designed to avoid disruptions triggered by any such policy tightening. More specifically to the current situation, Eurozone sovereign bond spreads could be managed while the ECB starts hiking. However, as of now the ECB has still not provided any details on how such a tool could look in practice. Beyond stating the need to keep flexibility and pointing to the potential use of pandemic emergency purchase programme reinvestments, it appears there is no desire to have a broader discussion on the topic just yet. With ECB plans still vague, Italian bonds especially remain vulnerable With ECB plans still vague, Italian government bonds especially remain vulnerable. In the current risk-off environment Italian bonds are still positively correlated with Bunds, ie, they do not trade as risk assets, but the spreads have started to rewiden towards 195bp in 10-year maturities. We still think the market could test out widening this spread towards 250bp before the ECB steps in. ECB plans remain vague, leaving Italian bond spreads vulnerable to further widening Source: Refinitiv, ING Today's events and market views In terms of data and events it will be a quieter session today. The main focus will be on central bank speakers with the ECB's Muller, Kazaks Lane, and Centeno all scheduled for the day. In the UK we will hear from the Bank of England's Chief Economist Huw Pill. Main data of note is the Eurozone consumer confidence. In this shaky risk environment, we expect bonds to retain their poise. It would take a lot of good news for yield upside to resume at the long-end, but central bankers should keep the heat on shorter rates. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Follow FXMAG.COM on Google News

Some support measures for the Chinese economy and some stability in the Chinese renminbi have helped usher in a period of consolidation in FX markets. This may well last into next week, although we would consider this a pause not a reversal in the dollar's bull trend. The stronger dollar is also exporting Fed hikes around the world Not until the Fed pours cold water on tightening expectations should the dollar build a top USD: Some consolidation is in order The dollar is now about 2% off its highs seen late last week. Driving that move has probably been some position liquidation and a preference for currencies like the Japanese yen (JPY) and the Swiss franc (CHF) during turbulent times in global equity markets. In fact, yesterday's FX activity looked like the big sell-off in EUR/CHF on Swiss National Bank (SNB) comments which triggered downside stops in USD/CHF and prompted a slightly broader dollar adjustment. Also helping this period of consolidation has been this week's stability in the Chinese renminbi (CNY). The overnight 15bp cut in the 5-year Loan Prime Rate – aimed at supporting the property sector – has instilled a little more confidence in Chinese assets markets. However, we cannot see USD/CNY heading straight back to 6.50. Instead, a 6.65-6.80 trading range may be developing after the recent CNY devaluation.  However, the emerging market environment still looks challenged given that the stronger dollar is effectively exporting tighter Fed policy around the world. Yesterday we saw rate hikes in Egypt, South Africa, and the Philippines. After devaluing the Egyptian pound by 15% in March, authorities there are very much struggling with the external environment. This has seen Egypt's 5-year Sovereign Credit Default swap rise to news highs of 940bp and is a reminder of the challenge North Africa faces from surging food prices. For today, the data calendar is relatively quiet and there may be some interest in what G7 finance ministers and central bank governors have to say after their meeting in Bonn. Reports suggest Japan would like some tweaks to the final G7 communique, but we very much doubt there will be any change in the core FX language that FX rates be market-determined and that excessive volatility and disorderly moves be avoided. DXY could correct a little lower to 102.30, but we see this as bull market consolidation, rather than top-building activity. Not until the Fed pours cold water on tightening expectations should the dollar build a top. And yesterday Fed hawk, Esther George, said that even this 'rough week' in equity markets would not blow the Fed off course.  EUR: ECB hawks in control Minutes of the April ECB meeting released yesterday show that the hawks are calling the shots. The market now prices a 31/32bp ECB rate hike at the 21 July ECB meeting – pricing which has plenty of scope to bounce between +25bp and +50bp over the next two months. This could drag EUR/USD back to the 1.0650/70 area over the coming days – helped by brief periods of calm in the external environment – but as above we would see this as a bear market bounce. Our core EUR/USD view for 2H22 is one of heightened volatility and probably EUR/USD getting close to parity in 3Q22 when expectations of the Fed tightening cycle could be at their zenith. Read next: Altcoins: What Is PancakeSwap (CAKE)? A Deeper Look Into The PancakeSwap Platform| FXMAG.COM GBP: April retail sales provide a reprieve UK retail sales have come in a little better than expected and break/suspend the narrative that the cost of living squeeze is large enough to derail the Bank of England tightening cycle. We would not get carried away with the sterling recovery, however. Sterling is showing a high correlation with risk assets – trading as a growth currency – and the outlook for risk assets will remain challenging for the next three to six months probably. Here's what our credit strategy team thinks of the European outlook.  Cable may struggle to breach the 1.2500/2550 area and 1.20 levels are very possible over the coming months. New-found hawkishness at the ECB means that EUR/GBP may struggle to sustain a move below 0.8450 before returning to 0.8600. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM CHF: SNB policy makes the case for EUR/CHF sub 1.00 next year As we discuss in an article released yesterday, it looks like the SNB is targeting a stable real exchange rate to fight inflation. Given that Switzerland's inflation is roughly 4% lower than key trading partners, a stable real exchange rate means that the nominal exchange rate needs to be 4% stronger. This will be an added factor supporting the CHF over the coming months and may start to generate interest in trades positioning for a lower GBP/CHF. 1.2080 is a big support level but 1.1860 looks like the near-term target. Read this article on THINK TagsGBP FX Daily ECB CHF Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The British pound is drifting on Friday, after showing unusually strong volatility this week. The pound rebounded on Thursday, racking up gains of 1.06% and briefly breaking above the symbolic 1.25 line. UK retail sales showed a strong gain in April, with a gain of 1.4% MoM. This followed a decline of 1.2% in March. However, on a yearly basis, sales volumes were 4.9% lower, as the broader picture looks grim. The monthly gain for March may have been a blip, as consumers were hit with higher household energy costs as well as an increase in taxes. Add into the mix inflation at 9.0% and possibly heading into double-digits, and it’s difficult to envision retail sales moving higher. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM Consumer confidence hits record low The GfK consumer confidence index remains deep in negative territory. The index dropped to -40 in May, down from -38 in April. How pessimistic are consumers about the economy? The previous record of -39 was set in July 2008, at the height of the global financial crisis.  Consumer confidence is considered an early, reliable signal of economic activity, and these massively poor numbers could well indicate that the UK economy is falling into recession. A GfK note summed up the grim situation, saying that the BoE is pessimistic about inflation, consumer confidence is gloomy, and there aren’t any reasons for optimism anytime soon. This certainly does not bode well for the British pound, which has plunged over 7% since the start of the year. Read next: Altcoins: What Is Litecoin (LTC)? A Deeper Look Into The Litecoin Platform| FXMAG.COM The BoE finds itself playing catch-up with the inflation curve. There have been voices calling for more aggressive rate hikes than the 25-bps increments we’ve seen over the past three meetings, especially with inflation hitting 9%. The central bank has a daunting challenge, as it must raise rates to curb inflation but also needs to be mindful that the economy is still recovering from Covid and could tip into a recession due to high interest rates. GBP/USD Technical 1.2393 has switched back to support. Below, there is support at 1.2275 There is resistance at 1.2525 and 1.2643   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

US dollar eases in Asia after firm CNY fixing The US dollar posted modest gains on Friday, despite weaker US bond yields, as traders reduced US dollar shorts into the weekend. The dollar index rose 0.15% to 103.05. A firm CNY fixing by the PBOC seems to have been the catalyst for more US dollar weakening today, along with a slow newsreel over the weekend. That has allowed risk sentiment to reassert itself modestly, pushing the dollar index 0.33% lower to 102.69 today. It seems US recession fears are weighing on sentiment ever more heavily for now, and the technical picture suggests the US dollar correction has more to go. A close below support at 102.50 could see the dollar index test 101.00 before the reality of a hawkish Fed reasserts itself. GBP/USD has traced out a low at 1.2155 last week and has risen 0.40% to 1.2545 in Asia EUR/USD has risen by 0.35% to 1.0590 today, continuing its recovery from its 1.0350 lows last week. A test of 1.0650 and possibly even the 1.0800 37-year breakout line remain possible, but this is a weak US dollar story and I believe that any rally above 1.0700 will be hard to sustain in the medium-term. In a similar vein, GBP/USD has traced out a low at 1.2155 last week and has risen 0.40% to 1.2545 in Asia. A test of 1.2650 is possible this week but like Europe, the United Kingdom’s structural headwinds leave the longer-term picture still bearish. The fall in US long-dated yields on Friday has pushed USD/JPY down to 127.35 this morning. Given the weight of long USD/JPY positioning, failure of support at 127.00 could trigger a capitulation trade potentially targeting the 125.00 support area. At those levels though, given the trajectory of US and Japan interest rates, being short becomes a dangerous game. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Beware of a dovishly hawkish RBNZ statement on Wednesday though AUD/USD and NZD/USD have resumed their recoveries after a quiet weekend news-wise green-lighted the sentimentalists to resume buying. AUD/USD has risen 0.60% to 0.7090, and NZD/USD has risen 0.70% to 0.6455. ​ Any rally above 0.7200 or 0.6500 will be challenging though as both currencies remain at the mercy of sudden negative swings in investor sentiment, especially from China. An RBNZ rate hike on Wednesday should allow the NZD to outperform AUD in the earlier part of the week. Beware of a dovishly hawkish RBNZ statement on Wednesday though. If US yields resume their move higher, I expect Asian currency weakness to reassert itself The PBOC has helped the recovery in risk sentiment rally by Asian currencies along today, setting the CNY at a much stronger than expected 6.6756. Most of USD/Asia is lower by around 0.25% today, although USD/MYR and USD/IDR are unchanged. It seems that USD/CNY above 6.8000 is a bridge too far now for the PBOC. But overall, they are probably more concerned about how fast it moved there, and not the overall direction of travel. In the short term, the PBOC’s actions will be supportive of Asian currencies in general. USD/INR and USD/KRW have put in decent tops at 77.80 and 1290.00 respectively. If US yields resume their move higher, I expect Asian currency weakness to reassert itself, although with regional central banks starting to hike now, we should see a slow grind and not an abrupt sell-off. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Learn more on Oanda Follow FXMAG.COM on Google News

The euro has jumped out of the gates on Monday with sharp gains. In the European session, EUR/USD is trading at 1.0673, up 1.12% on the day. Euro rebounds The euro looked hopelessly lost earlier this month, when it dropped to 1.0349, its lowest level since January 2017. There was increasing speculation that the euro was heading to parity with the US dollar. EUR/USD has rebounded back in impressive style, gaining 1.42% last week and extending the rally today. However, the upswing will be difficult to sustain above the 1.07 line, as the euro’s rally is more a story of US dollar weakness rather than euro strength. The dollar has fallen out of favour as fears of a US recession are weighing on sentiment towards the dollar. US yields were above the lofty 3% threshold just two weeks ago, but nervous investors have snapped up US Treasury bonds, sending yields lower. In turn, the US dollar has also retreated. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Despite the euro’s turnaround, the medium and long-term picture is bearish for the currency. The ECB remains in dovish mode, and upcoming Fed rate hikes will widen the US/Europe rate differential and weigh on the US dollar. The ECB might raise rates in July, but will clearly lag behind an aggressive Fed, which is likely to deliver 50-bps hikes at the July and August meetings. The euro faces a persistent headwind coming out of Ukraine, as the war between Russia and Ukraine continues. Heavy fighting has been reported in the east of the country, and a ceasefire, let alone an end to the fighting, appears unlikely anytime soon. That means oil and wheat prices will remain elevated, contributing to high global inflation and weighing on risk appetite, which is bearish for the euro. Follow FXMAG.COM on Google News EUR/USD Technical EUR/USD is testing resistance at 1.0648. Above, there is resistance at 1.0736 There is support at 1.0519 and 1.0431 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Learn more on Oanda

ECB President Lagarde's hawkish comments have dragged the pound higher. BOE's Bailey is set to cool expectations with potential recession warnings. The four-hour chart shows that GBP/USD is entering overbought territory. GBP/USD’s short-term bullishness looks like a selling opportunity – the currency pair has been extending its gains, somewhat influenced by the strengthening euro, which got a boost from ECB President Christine Lagarde. She said that the bank could raise rates by 50 bps by September, a relatively aggressive timeline. There is a feeling that central banks are catching up with the hawkish US Federal Reserve and raising rates quickly. The ECB's determination is boosting the euro and also dragging the pound higher on the way. But is it justified? Recession warnings Later in the day, Bank of England Governor Andrew Bailey is set to speak about monetary policy, and he will likely reiterate his stance that the BOE is ready to tighten its policy to curb inflation. We know that another 50 bps or so of rate hikes are coming. On the other hand, Bailey warned that price shocks could already send the British economy into recession, The cost-of-living crisis is, therefore, self–correcting. Higher prices curb expenditure, lower growth, raise unemployment and eventually push inflation lower. That means the scope for the BOE to further hike rates is limited. My analysis above implies that if Bailey merely repeats his warnings – if so the current upside move of the pound could be reversed. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM GBP/USD Technical Analysis The technicals back it up. Initially, they give GBP/USD scope to rise toward 1.2640, May's high, but not to the next big round level at 1.27. The 4h-RSI is almost at 70, and moving some 100 pips from current levels would put it in overbought territory. There is a greater chance of a climb down to support at 1.2545 than an upside move. Follow FXMAG.COM on Google News

EURUSD longs at support at 1.0560/40 worked perfectly & so did buying a break above 1.0600 as we hit the 1.0670/80 target, reaching 1.0697. This week we could reach as far as 1.0800. I think the downside should be limited with minor support at 1.0650/40 & strong support at 1.0620/00. AUDUSD rallied from 7036 targeting 7095/99, with a high for the day just 8 pips from very strong resistance at 7135/55. Shorts need stops above 7175. Minor support at 7050/45, strong support at 7030/20. Longs need stops below Holding below 7000. A break lower however targets 6940/30. NZDUSD broke higher for a buy signal targeting 6490/6500, with a high for the day here. First support at 6420/00 on this dip. Longs need stops below 6385. Longs at 6420/00 target 6470 & 6490. Above 6500 look for 6520/30. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk

Every Tuesday our Global Macro Strategist Luke Suddards will be analysing the charts of key global asset classes such as FX, commodities and more. Catch him on Twitter - @lukesuddards Also, he produces The Weekly Close Out every Friday, which provides key insights into the main catalysts for all the major global macro assets throughout the week. The analysis takes a hybrid approach - combining fundamental and technical analysis with charts to enhance your trading experience. Sign up here to receive it directly in your inbox: https://cloud.go.pepperstone.com/week ➡️ Follow us on Telegram for daily market news and insights: https://t.me/s/PepperstoneFX Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Follow FXMAG.COM on Google News

Hawkish Lagarde sends dollar lower EUR/USD leapt 1.30% higher to 1.0690 overnight after the Lagarde comments The US dollar slumped overnight, losing ground against both the G-10 and EM space. That contrasted with a rise in US yields, but equities, bonds and currencies seem to be running their own separate races now. ​ The catalyst was a hawkish blog post by ECB head Christine Lagarde who said rate hikes were on the way in the next few months. That prompted a massive rally by EUR/USD which spread to other currencies. The dollar index slumped 0.90% to 102.09, closing below support at 102.50. That should see the dollar index test 101.00 before the reality of a hawkish Fed reasserts itself. In Asia, China concerns have seen equities fall and some short-covering come into the US dollar, pushing the index back up to 102.25. EUR/USD leapt 1.30% higher to 1.0690 overnight after the Lagarde comments. It has eased back to 1.0665 in Asia but has nearby support now at 1.0650. Initial resistance lies at 1.0700 and then 1.0750 followed by 1.0820, the multi-decade breakout line. A weekly close above the latter is needed to suggest a medium-term low is in place. I believe sustaining rallies above 1.0700 will be challenging though. GBP/USD coat-tailed EUR/USD higher by 0.77% to 1.2585 overnight, easing to 1.2865 in Asia. It now has support at 1.2500, with resistance at 1.2600 and then 1.2650. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM AUD/USD and NZD/USD booked another night of gains, rising the sentiment wave 0.90% higher overnight Higher US yields have kept USD/JPY steady at 127.60 today with initial resistance at 128.00. We would need a large rise in US yields now to offset the weight of long USD/JPY positioning in the nearer term. Failure of support at 127.00 could trigger a capitulation trade potentially targeting the 125.00 support area. Once again, at those levels though, given the trajectory of US and Japan interest rates, being short becomes a dangerous game. AUD/USD and NZD/USD booked another night of gains, rising the sentiment wave 0.90% higher overnight. In Asia, China’s nerves have seen AUD/USD fall 0.40% to 0.7080, and NZD/USD fall by 0.50% to 0.6435. Any rally above 0.7200 or 0.6500 will be challenging though as both currencies remain at the mercy of sudden negative swings in investor sentiment, especially from China. Asian currencies have rallied powerfully overnight, led by a 1.25% gain by the KRW, and 0.75% gains by the THB and TWD. Both USD/CNH and USD/CNY have fallen by 0.50% also overnight. Notably, the MYR and IDR had little to show for the US dollar sell-off. China nerves have already reversed some of those overnight gains by Asia FX, highlighting the low risk appetite and fragile sentiment typifying currency markets and others now. USD/KRW has risen by 0.50% to 1264.50, making the won the worst performer in Asia today. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM The recovery in Asian currencies has been led by stronger CNY fixings from China but is overall, a weak US dollar story. A reassertion of risk aversion, or a jump in US yields, will have the recovery back to square one as quickly as it began. I believe Asian central banks will need to accelerate tightening to stave off medium-term weakness. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News

The euro has extended its gains on Tuesday. EUR/USD has broken above the 1.07 line for the first time since April 26th. ECB’s Lagarde sends euro soaring The euro was red hot on Monday, as EUR/USD jumped 1.29%, its best one-day showing this year. The upswing was courtesy of ECB President Christine Lagarde, who detailed the Bank’s rate plans in a blog post. This unusual move certainly caught the attention of the markets, who gave the euro a massive thumbs-up. Lagarde has been a strong supporter of an accommodative policy and rather dismissive about inflationary pressures. However, Lagarde has had to recalibrate as eurozone inflation continues to accelerate. The war in Ukraine has resulted in soaring oil and food prices, and there are no indications that the conflict will end anytime soon. The ECB has been sending signals that it planned to tighten policy, and Lagarde’s post confirms the shift in policy. The ECB will embark on its rate-tightening cycle in July and will exit negative rates in September. Interestingly, the Bank will continue its QE programme, which raises the question of whether the ECB’s moves are really that aggressive. Perhaps the new stance is mostly symbolic until we see a significant increase in rates. Judging by the euro’s sharp climb, however, the markets sense that Lagarde is signalling a significant shift from the ECB. The euro is flexing some muscle, but I would maintain that risk is tilted to the downside in the medium term. The US dollar has lost ground against most of the majors over the past few days, as fears of a US recession have escalated. Still, the Fed is committed to significant tightening in the next few months, and higher US rates should provide a boost for the greenback. . EUR/USD Technical The euro is putting pressure on resistance at 1.0736. Above, 1.0820 is a multi-decade breakout line There is support at 1.0648 and 1.0519 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Recession jitters send US dollar lower The US dollar eased once again overnight, as US recession fears continue to lead to a repricing lower of Fed tightening expectations. With quantitative tightening starting next week and no signs of inflation falling, that may be more hope than reality. Nevertheless, one must respect the momentum in the short term, and the US dollar bull market correction still looks to have legs in it. ​ The dollar index fell by 0.32% to 101.77 overnight, but Asia is doing its usual countertrend moves today, pushing the dollar index back up to 101.95. The multi-year breakout line is at 102.40 today, forming initial resistance, while 101.50 and 101.00 loom as immediate supports. EUR/USD continued edging higher overnight, rising 0.42% to 1.0735 before falling by 0.28% to 1.0705 in Asia. Momentum already appears to be waning for EUR/USD, but I do not rule out at least a test of 1.0750 and 1.0825, the multi-decade breakout line. A weekly close above the latter is needed to suggest a medium-term low is in place. GBP/USD fell overnight, crushed by EUR/GBP buying, poor data and tax and political risk. It finished 0.42% lower at 1.2535 where it remains in Asia today. Sterling faces political risks, outlined above, today, and these will limit gains. It now has support at 1.2470, with a double top now at 1.2600. Even if the US dollar sell-off continues, sterling will remain euro’s poor cousin. AUD/USD remains steady at 0.7100 today, having probed the downside overnight Lower US yields saw USD/JPY fall 0.85% to 126.85 overnight where it remains in Asia, just below support, now resistance, at 127.00. A deeper selloff, potentially targeting the 125.00 support area, remains entirely possible given the market is still clearly very long USD/JPY. Once again, at those levels though, given the trajectory of US and Japan interest rates, being short becomes a dangerous game. AUD/USD remains steady at 0.7100 today, having probed the downside overnight. AUD/NZD buying is capping gains for now. A hawkish RBNZ today has sent the Kiwi dollar flying, NZD/USD jumping 0.65% to 0.6500. The rally is already showing signs of fatigue and a weekly close above 0.6550 is required to signal a potential medium-term low. Support is distant at 0.6420. Asian FX continued gaining against the US dollar overnight, but a stronger greenback in Asian time has erased those gains. A neutral USD/CNY fixing by the PBOC has given Asian markets little to go on today, with USD/CNY, USD/CNH and USD/THB rising by around 0.30%, while USD/KRW has risen by 0.10%. An impending Bank of Korea hike on Friday should limit the won’s weakness. The Malaysian ringgit looks like the most vulnerable regional currency right now, USD/MYR trading near 4.4000 today. With policy tightening gaining momentum among other Asian central banks, today’s benign inflation data reinforced that outlook. USD/MYR could potentially test 4.4500 by early next week. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News

Euro falls sharply The euro has reversed directions on Wednesday and is sharply lower. In the European session, EUR/USD is trading at 1.0663, down 0.67% on the day. The euro was up 1.29% on Monday and extended its gains on Tuesday, hitting a 4-week high, after ECB President Lagarde announced that the ECB would raise interest rates in July. On the data front, there weren’t any surprises out of Germany. GDP in Q1 rose by 0.2% QoQ, as expected. Compared to Q4 of 2019, the quarter prior to the Covid-19 pandemic, growth was 0.9% smaller, which means that the economy is yet to fully recover from the Covid crisis. The war in Ukraine and Covid-19 have resulted in supply chain disruptions and accelerating inflation, which has hampered economic growth. German confidence remains in deep-freeze German GfK Consumer Sentiment came in at -26.0 in May, a slight improvement from the April reading of -26.6, which marked a record low. Not surprisingly, consumers put the blame for their deep pessimism on two key factors – the conflict in Ukraine and spiralling inflation. The GfK survey also found that consumer spending has weakened, as high costs for food and energy have reduced spending on non-essential items. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM The ECB Financial Stability Review, published twice a year, echoed what German consumers are saying. The report bluntly stated that financial stability conditions have deteriorated in the eurozone, as the post-Covid recovery has been tested by higher inflation and Russia’s invasion of Ukraine. The report noted that the economic outlook for the eurozone had weakened, with inflation and supply disruptions representing significant headwinds for the eurozone economy. Given this challenging economic landscape, the euro will be hard-pressed to keep pace with the US dollar. EUR/USD Technical There is resistance at 1.0736 and 1.0865 EUR/USD is testing support at 1.0648. The next support line is at 1.0519 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

RBNZ hikes by 50-bps The Reserve Bank of New Zealand has raised policy rates by 0.50% to 2.0% this morning, with Governor Orr setting a hawkish tone in the press conference afterwards. In the statement itself, the RBNZ’s “least worst choices” policy seemed to imply that although external risks remained, the domestic economy was strong and could tolerate tighter monetary conditions. Mr Orr seemed to be saying much the same, suggesting that terminal rates could go above 3.0% and would get there sooner, rather than later. We’ll see just how strong the New Zealand economy is in due course, but a hawkish RBNZ has seen the New Zealand dollar rally by 0.70% to 0.6505 today, making it the biggest currency gainer in Asia today. Elsewhere, Singapore’s GDP growth came in tight on expectations, rising by 3.70% YoY for Q1. With inflation data yesterday also less worse than expected, expectations for another unscheduled tightening by the Monetary Authority of Singapore have receded for now. That may bring some relief to the Malaysian ringgit, which has fallen to 3.20 against the Singapore dollar. Snap Has Fallen In Malaysia itself, Inflation data for April continues to remain benign as domestic demand stays subdued. Inflation YoY rose by just 2.30% and will leave Bank Negara, like Bank Indonesia yesterday, in no hurry to tighten monetary policy. Ominously though, the Malaysian ringgit has shown no strength versus the US dollar. USD/MYR remains at recent highs at 4.4000 even as the greenback is experiencing an extended bull market correction versus the G-10 and EMFX elsewhere. If the US dollar turns higher once again, and the MYR resumes its sell-off, Bank Negara’s hand might be forced. Overnight, the recession word weighed on stock markets once again. European PMI data was a mixed bag. Manufacturing PMIs held steady, while Services PMIs fell as consumer demand takes a hit from the rise in the cost of living. That wasn’t enough to stop the euro rally, powered by suddenly hawkish ECB heavyweights. Bank of England, has already signalled a white flag on bringing down inflation The picture was rather grimmer in the United Kingdom where the most honest central bank in the world, the Bank of England, has already signalled a white flag on bringing down inflation and pencilled in a recession next year. UK Manufacturing PMI held steady at 54.6, but Services PMIs plummeted to 51.8. The UK is facing a winter of discontent as the cost of living soars, with the railways RMT union voting to strike over pay negotiations. Expect more of this going forward. Additionally, the Chancellor is apparently preparing to widen the scope of the windfall tax on energy companies, probably to help pay for his cost of living mini-budget. UK stock markets didn’t like that. Finally, the “party gate” report on those lockdown wine frenzies in the No 10 garden is due for release today, potentially putting more pressure on PM Johnson’s leadership. ​ Little surprise that the sterling slumped versus the euro and the US dollar overnight. In the United States, the recession world hit particularly hard after the Snap Inc. induced meltdown by Nasdaq stocks overnight. US New Home Sales plummeted to 591,000 in April, while Richmond Fed Manufacturing slumped to -9 in May. The S&P Global Services Flash PMI for May fell to 53.5, with Flash Manufacturing easing to 57.5. It was the new home sales that really frightened the street, though, as house building, and its ancillary services and suppliers are a good chunk of US domestic GDP. Soaring mortgage interest rates and petrol prices appear to be doing a lot of the Fed’s work for it before it even gets started. Read next: (TRX) TRON USD Decentralised Blockchain Platform That Focuses On Entertainment And Content Sharing. Altcoins: A Deep Look Into The TRON Network | FXMAG.COM If there is one takeout from all of this for me, it is that rising inflation and borrowing rates are already crimping the demand side of the equation. Unfortunately, we are seeing very little sign of price pressures reducing due to a combination of factors, all of which have been thrashed to death here and in research everywhere. The uncomfortable reality is that central banks are going to be forced to continue the tightening path, even as growth slows around the world, because inflation has proven sticky and not transitory. That is the least worst choice central banks need to make in a stagflationary environment. I am asked every day if we have seen the low in the equity market sell-off. Hopefully, I have answered the question. US President Joe Biden’s trip around Asia continues Finally, US President Joe Biden’s trip around Asia continues. Unfortunately, with its emphasis on containing China and hawking a trade agreement empty of potential access to the US domestic market (Congress needs to approve that), the trip is not going to make much headway in re-establishing US leadership in the region. Asia really needs to see the colour of America’s money. Furthermore, the reliability of the US as a partner has taken a further hit today, with White House officials explicitly refusing to rule out the possibility that the US could enact crude oil export restrictions to help cap energy prices domestically. The US doesn’t have a crude oil problem, it has a refining and transportation problem, but let’s not let facts get in the way. I have warned about food nationalism previously, but if President Biden prioritises November’s mid-term elections over the economic war with Russia, and supporting Europe, it really is every man for himself globally. I can’t see that being positive for equities anywhere, or European asset markets full stop, or for Ukraine. Only the Kremlin is likely to be popping champagne as the US does Russia’s divide and conquer for them. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Follow FXMAG.COM on Google News

We think that the combination of a material improvement in the global risk environment and further USD-adverse widening of short-term rate differentials is unlikely, and therefore expect the (now less overbought) dollar to find a floor soon. This means that a EUR/USD return below 1.0700 in the coming days looks more plausible than another rally USD: Bearish arguments are not very strong The dollar is set to face a second consecutive week of losses against all G10 currencies, as yesterday’s very positive session in US equities helped Asian equities trade in the green along with most European stock index futures. While the risk sentiment channel has, by and large, remained the primary driver of FX moves, the market’s tentative speculation about a pause in the Fed’s tightening cycle in September is surely contributing to keeping the dollar soft. In the past week, we have seen around 10bp of tightening being priced out of the Fed’s rate expectations for this year, while the likes of the ECB have seen all but a consolidation of expected tightening plans. In our view, however, it's hard to see a much calmer risk environment amid global monetary tightening and multiple downside risks (China, Russia/Ukraine), and a further shrinking of the USD’s short-term rate advantage over other G10 currencies, given that the FOMC rhetoric is still very hawkish. We see a higher chance of recovery in US rate expectations, which should put a floor under the greenback. When adding a more balanced positioning picture following the latest moves, we think that the dollar’s downside risk is now looking less pronounced, and we favour instead a recovery to the 103.00 level in DXY. Today, risk-sentiment dynamics are still set to drive the vast majority of dollar moves, although markets will keep an eye on any drop in the US personal spending figures for April and in the Fed’s preferred inflation measure – the PCE deflator. There are no scheduled Fed speakers. EUR: Upside potential more limited now EUR/USD is making a fresh attempt at breaking significantly above 1.0750 (the 50-day moving average) this morning, continuing to benefit from the soft dollar environment and some recent eurozone data having left markets more comfortable with pricing in front-loaded tightening (100bp) by the ECB this year. As discussed above, we see a higher chance of some recovery in the dollar from the current levels rather than an extension of the drop, and with a lot of ECB tightening now in the price, the room for the euro to benefit further from the monetary-policy factor appears limited. We expect a return below 1.0700 in the coming days. Today, we’ll hear from the ECB Chief Economist Philip Lane, whose recent comments have however merely backed President Christine Lagarde’s recent guidance. GBP: Bar to trigger a hawkish repricing is set high The pound received only some modest support yesterday as British Chancellor Rishi Sunak announced a £15bn support package to fight the rising cost of living. The fiscal measures should in theory allow the Bank of England to fully focus on fighting inflation and feel more comfortable hiking interest rates – ultimately, a GBP positive. However, markets had previously been quite reluctant to price out the bigger chunk of the BoE tightening cycle, and were already pricing in a policy rate in the 2.00-2.25% area for year-end before Sunak’s fiscal package. This helps explain the pound’s somewhat muted reaction yesterday, and also suggests the bar to trigger further hawkish repricing in the BoE rate expectation curve is quite elevated. In the longer run, as we expect the BoE to underdeliver compared to rate expectations, the pound is still looking likely to face some pressure from the short-term rate differential side. For now, swings in risk sentiment should continue to drive most day-to-day moves. A consolidation around 0.8450-0.8500 in EUR/GBP seems plausible. HUF: Another blow for the forint but let's not throw it overboard Wednesday's decision by the Hungarian government regarding the state of emergency found the forint unguarded and suddenly we are at the weakest levels since the beginning of March. Yesterday's announcement of the tax package, which is expected to bring in more than HUF800bn this year and next, did not help the forint much. For now, the HUF has settled in the 390-395 range. With such FX weakening, markets are raising bets on an emergency rate hike next week. However, in our view, this is far from certain. Thus, market disappointment may lead to further forint weakening to the 400 level, which would be the weakest in history. On the other hand, it is necessary to keep in mind that the market has already priced in a lot of negative news, led by the Ukrainian conflict and the halt of EU money inflows. In addition, the central bank's dovish tone may quickly revert back to aggressive rate hikes after the next inflation print. Thus, we are negative on the forint in the short term, but we continue to monitor headlines that should unlock the hidden potential of the forint in the second half of the year. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

AUDUSD finally tests very strong resistance at 7135/55. Shorts need stops above 7175. A break higher this week is a buy signal targeting 7230/50. Shorts need stops above 7275. Shorts at 7135/55 target 7090 then 7060/50. Further losses test support at 7020/10. Longs need stops below 7000. USDJPY shorts at resistance is at 127.50/70 need stops above 127.80. A break higher is a buy signal targeting 128.20/30, perhaps as far as strong resistance at 128.70/90. Holding resistance is at 127.50/70 targets 127.20/00. A break below 126.80 targets 126.30/20 & eventually 125.80. EURJPY holding strong resistance at 136.50/70 (perfectly on Thursday & Friday) targets 135.60/50 for profit taking on shorts. Further losses target 135.35/25. If we continue lower look for 134.65/55 then strong support at 134.20/00 for profit taking on any shorts. We should have strong resistance again at 136.50/70. Shorts need stops above 136.95. A break higher targets 137.20/30 then 138.00/20. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM EURUSD longs at support at 1.0670/50 start to work on the bounce towards strong resistance at 1.0800/20 for profit taking. Shorts need stops above 1.0835. Support again at 1.0670/55. Longs need stops below 1.0640. Strong support at 1.0600/1.0590. GBPUSD made a high for the day 6 pips above strong resistance at 1.2640/60. Shorts need stops above 1.2680. A break higher this week is a buy signal initially targeting 1.2725/45. Shorts at 1.2640/60 target 1.2590, perhaps as far as 1.2555/45 for profit taking. To subscribe to this report please visit daytradeideas.co.uk or email jason@daytradeideas.co.uk Follow FXMAG.COM on Google News

A holiday-shortened week starts with risk assets in demand as China marginally softens lockdown curbs and the pricing of a Fed pause allows interest to return to FX carry trades. That could see the dollar hand back a little more of its recent strength, although strong US data later in the week should limit the extent of the dollar's downside Source: Shutterstock USD: Interest in dollar-funded carry emerges The dollar is now about 3% off its highs in early May. Driving that correction has certainly been the view that the Fed could pause its tightening cycle after hiking 50bp in both June and July. The Fed funds rate for the 21 September meeting is now priced at 2.15%. At the start of May, it was priced at 2.35%. Clearly, US data and Fed speak will have a big say in the pricing of that Fed cycle. Today US markets are closed for the US Memorial Day public holiday, but the big data point of the week, Friday's release of May nonfarm payrolls, will have an important say for the Fed. Here James Knightley looks for another strong set of numbers, which should prove supportive for both US yields and the dollar. Until then, the dollar remains subject to corrective forces on the back of renewed interest in carry trades. Here, one month USD/JPY implied volatility has sunk back below 10% to signal calmer market conditions and for us, Friday's standout move was the huge rally in the Mexican peso. The peso is the big beast in the emerging market FX space and the USD/MXN drop to 19.50, the lowest level since early 2020, represents some confidence returning to the emerging market FX space. Indeed, some brave investors may be making the play that the dollar has topped and that putting money to work in EM local currency bonds can help cement the top in EM local rate cycles and trigger a virtuous cycle of gains in both the currency and the bond. For example, Mexican 10-year local currency bond yields have recently topped out at 9% and now trade at 8.50%. We think it is too early for those trades since both US yields and the dollar may well have another leg higher later this year, but this is a trend that certainly bears watching. US holiday-thinned trading should keep FX subdued today, but some modest reopening in China and some healthy equity gains should maintain the slightly softer dollar bias for the next few days. DXY is undertaking a slightly deeper correction than we thought and can continue to drift down to the 101.00 area. EUR: Another high German CPI to keep hawks in the ascendancy EUR/USD continues to nudge higher as the Fed pause, marginally better risk environment and ECB hawkishness all combine. Recent reports suggest the speculative community has been cutting its short euro positions. Yet we do not think there are strong arguments for EUR/USD to move back to and above 1.10. After all, the surge in energy prices is being more keenly felt in Europe and the deterioration in Europe's terms of trade has damaged the euro's medium-term fair value. Our preference would be for this EUR/USD correction to top out near 1.08. But for the short term, the external environment will keep EUR/USD supported. For today, we will get the first look at German inflation data for May. This is expected to push up to a new cycle high at 7.6% year-on-year and keep the hawks in the ascendancy at the ECB. That said, the recent narrowing in the two-year Germany-US sovereign spread seems to have run its course and unless one expects the ECB to sound even more hawkish (four to five ECB hikes are already priced this year) or the Fed to turn decisively less hawkish, EUR/USD looks unlikely to get too much more support from the yield spread side. GBP: Quiet week for the sterling story The UK data calendar is quite light this week. That leaves sterling mildly bid after last week's £15bn fiscal stimulus provided some support to otherwise fragile pricing of the BoE tightening cycle. The GBP/USD bounce has certainly been slightly stronger than we thought (we had thought 1.2600/2650 would be the corrective top) and a slightly negative dollar environment at the start of this week could see GBP/USD extend to 1.2730/2770. Longer term, we can still see GBP/USD heading back to the low 1.20s later this summer. EUR/GBP looks set to gravitate around 0.8500 for a while. CEE: Return of a hawkish tone to tame inflation In central and eastern Europe, the main event this week will be the Hungarian central bank meeting. This, in our view, will bring a 60bp hike in the base rate to 6% and a 30bp increase in the deposit rate to 6.75%. However, the weak forint may force the central bank to make a bolder move. Across the region, a breakdown of 1Q GDP growth will be released, which surprised positively in the flash estimate, so the market will be watching the reason behind this and indications for the second quarter. A piece to the puzzle will also come from the PMI for May, which like the eurozone should stagnate or fall just slightly. As always, Poland will be the first in the region to show the way for inflation. We expect it to rise from 11% to above 12.5% YoY, which should reignite the hawkish tone from the central bank, supporting higher rates and prompting the FX market to erase the losses of recent days. Of course, the biggest focus this week will be on forint, which is within reach of all-time lows following recent government decisions. A possible market disappointment would thus bring a move towards the magic level of 400 EUR/HUF, but we assume that this is not the central bank's intention. The zloty reached its strongest levels since the start of the Ukrainian conflict at the end of the last week and a strong CPI number and higher rates should ensure that it holds onto its gains at least. The koruna remains under central bank control and despite the currency's weakening last week, we do not expect the Czech National Bank to allow a move towards EUR 25/CZK territory. Read this article on THINK

The week starts on a positive note after the rally we saw in the US stocks before last week’s closing bell. European futures hint at a positive open. The US 10-year yield stabilized around the 2.75% mark, and the US dollar index is now back to its 50-DMA level, giving some sigh of relief to the FX markets overall. Bonds and Equities One interesting thing is that we observe that the equities and bonds stopped moving together since the 10-year yield hit 3% threshold, suggesting that investors started moving capital to less risky bonds if they quit equities, instead of selling everything and sitting on cash. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM US Jobs Data, Expensive Crude Oil   That’s one positive sign in terms of broader risk appetite and should help assessing a bottom near the actual levels. But the end of the equity selloff depends on economic data. Released on Friday, the US PCE index fell from 6.6 to 6.3% in April. Due this week, the US jobs data, and the wages growth will take the center stage in the Fed talk. Weak dollar pushes the major peers higher, but the rising oil prices preoccupy investors this Monday. The barrel of US crude is above $117, and the news flow suggests further positive pressure. But till where?   Watch the full episode to find out more! 0:00 Intro 0:24 Market update 1:04 Equity, bond correlation is down since US 10-yield hit 3%! 2:58 Economic data is key: what to watch this week? 4:22 BoC to raise rates 5:09 EURUSD pushes higher 6:10 Oil under positive pressure: OPEC, UK windfall tax 9:19 Corporate calendar: GME, HP earnings, Amazon stock split Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. Follow FXMAG.COM on Google News

Weekly Recap It was another bearish week for the US Dollar as the greenback continued to sell off from YTD highs. The FOMC meeting minutes, released mid-week, did little to inspire a fresh rally in the Dollar. While the minutes confirmed the Fed’s hawkish stance and reinforced expectations for further 50bps hikes in June and July, there was little in the way of exciting details to get bulls reinvigorated. Additionally, with the Fed having seemingly turned more hawkish since that meeting, the minutes felt a little outdated. Christine Lagarde, ECB And Rate Hikes On the data front, a string of weaker-than-expected indicators out of the eurozone heightened growth concerns. With ECB’s Lagarde essentially confirming a July rate-hike, recession fears weighed on European asset markets though EUR itself remained well bid. Elsewhere, equities markets generally saw a choppy week though most indices ended the week in the green, benefitting from the weaker US Dollar. Read next: Altcoins: What Is Polkadot (DOT)? Cross-Chain Transfers Of Any Type Of Asset Or Data. A Deeper Look Into Polkadot Protocol | FXMAG.COM BOE’s Bailey warned that further rate hikes will likely be necessary in the face of rising inflation. The new fiscal package announced by the UK government this week, aimed at helping households fight rising energy bills, has further increased the likelihood of BOE rate hikes in the near-term. Weaker Dollar, Stronger Crude, Gold And Silver Commodities prices were higher over the week also. Gold, silver and oil all rallied on the back of a weaker US Dollar. With monetary policy divergence between the Fed and other central banks drying up, USD pressure has helped commodities stay afloat recently. Coming Up This Week Australian GDP Australian GDP will be closely watched this week on the back of the recent RBA rate hike. With the bank lifting rates and sounding firmly hawkish in its outlook and assessment, this week’s data might further support growing RBA rate hike expectations. With the country having emerged from one of the longest lockdowns of the pandemic, the economy has been on the bounce-back. However, as we have seen elsewhere, the economy has still been rocked by rising inflation and supply constraints. Traders will be keen to see the extent to which these factors weighed on the economy over the last quarter. BOC Rate Decision The BOC is widely expected to raise rates when it convenes for this month’s meeting mid-week. All 30 economists polled by Reuters ahead of the event are looking for a .5% hike. With this in mind, the focus will be on the bank’s forward guidance. If the BOC gives a clear signal that further hikes are coming in the near future, this should drive CAD higher near-term. However, if there is any indication that the BOC might look to hold off on any further rate hikes near-term, this will likely see cad dragged lower. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM US Non-Farm Payrolls The latest set of US labour market indicators this week will be closely watched as we head to the June meeting. Recent Fed commentary has been decidedly hawkish and it would likely take a major downside shock to change this narrative. Even then, it certainly wouldn’t impact the June rate hike and would likely only factor in forward guidance issued by the Fed. Still, with slowdown fears building, any weakness would no doubt act as a headwind to risk sentiment in the short-term. Forex Heat Map Technical Analysis Our favourite chart this week is the Dollar Index (DXY) The DYX has pulled back from recent multi-year highs and is now sitting on a make-or-break level at 101.94. This level was the 2020 closing high price. While the level holds as support, DXY is likely to recover and continue the longer-term bull trend. Below here, however, there is room for the correction to develop further towards next support at 100.37 Economic Calendar Plenty of key data releases to keep an eye on this week including Australian GDP, BOC rate decision and US Non-Farm Payrolls to name a few. Please see full calendar below for the complete schedule . Follow FXMAG.COM on Google News

What is going on US core PCE prices.  US core PCE data was out on Friday, and it came in as expected at 4.9% y/y and 0.3% m/m. This was slower than last month's 5.2% y/y and may prompt more talk of inflation peaking out. While PCE is the preferred Fed metric, what cannot be ignored right now is that food and energy prices still have more room to run on the upside suggesting that inflation will remain higher for longer. The May CPI print is due on June 10, so that will be the next one on the radar for further cues in terms of Fed's rate hike trajectory but for this week, the focus will be on the jobs report due on Friday Goldman predicts end of battery metal bull market – saying that the prices for key battery metals cobalt, lithium and nickel will fall over the next two years after an over-eager speculation phase. Goldman predicts that lithium prices could drop slightly this year to $54k from recent spot prices near $60k and fall to near $16k in 2023 before rising again further down the road. There’s been “a surge in investor capital into supply investment tied to the long-term EV demand story, essentially trading a spot driven commodity as a forward-looking equity,” the analysts said. “That fundamental mispricing has in turn generated an outsized supply response well ahead of the demand trend.” Oil prices are becoming an important cross-asset driver.  Brent crude oil closed last week just shy of the $120/barrel level (see above) and also just shy of the highest weekly close for the front month contract since the outbreak of war in Ukraine. As the $120 area was often a resistance area during the high oil price period during 2011-14 (although at that time, the US dollar was far weaker), any further significant advance from here will likely dominate market attention and work against further strong improvements in risk sentiment as high energy prices cloud the growth outlook and would erode corporate profit margins. Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM Benchmark Capital and Sequoia Capital put out a dim outlook for technology.  Both venture capital firms were around during the dot-com bubble run-up and burst, and they have both put out perspective and action plans for the companies they have invested in. Those presentations talk about a much dimmer outlook and investors are shifting focus from revenue growth and revenue multiples to that of free cash flow here and now. Cost-cutting and focus on profitable unit metrics are now paramount to survive the coming years. What are we watching next? US Memorial Day Holiday today. This is a major national holiday, so all US markets are closed today. Read next: Altcoins: Tether (USDT), What Is It? - A Deeper Look Into The Tether Blockchain| FXMAG.COM Eurozone inflation prints out this week.  The energy price shock has been bigger for Europe, and May prints are due for Spain, Germany, France, Italy and the Euro-area in the week ahead. Food price pressures continue to build up amid the supply shortages and protectionist measures, and further gains in May will add more weight to the ECB’s resolve to exit negative rates from Q3 with more aggressive tightening. Special meeting of the European Council today and tomorrow.  Talks will focus on the implementation of a proposed embargo on oil imports from Russia (from 2024 onwards according to the latest draft). Hungary is the only EU country against it. The problem is that any new sanctions against Russia require the unanimous agreement of the 27 member states in order to pass. Expect tough negotiations. Hungary’s Prime minister Viktor Orban has recently passed on a “wish list” of demands he wants met to support oil sanctions. This includes a swap line with the European Central Bank and end to the rule of law Article 7 and “conditionality mechanism” procedures, amongst other things. Australian GPD and balance of trade on watch and could disappoint.  Australian GPD data due Wednesday is expected to show economic growth fell from 4.2% YoY to 3% YoY in Q1. Quarterly GPD is expected to grow just 0.7%, following the 3.4% rise in Q4. If data is stronger than what consensus expects, the RBA has more ammunition to rise rates more than forecast, so the AUDUSD might rally. If GPD is weaker, then, the AUD will likely fall. For equities, Australian financials could rally if data is stronger than expected. Secondly, Australian Export and Import data is released Thursday. The market expects Australia’s surplus income (Export income minus imports payments) to rise from $9.4b to $9.5b in April. But given the iron ore price fell 13% in April, the trade data could miss expectations. Follow FXMAG.COM on Google News Several central banks in focus this week.  Tomorrow, the National Bank of Hungary (NBH) will likely deliver a hike of 50 basis points to 5.9 %. The NBH has recently flagged a slowdown in the pace of rate hikes which had a detrimental impact on the Hungarian currency. What the central bank needs to do now is to define more explicitly the risks to growth, the effect that it would have on inflation this year but especially in 2023, the pace of rate hike and how financing conditions could evolve in the next 12-18 months. On Wednesday, the Bank of Canada is expected to increase interest rates by 50 basis points, from 1% to 1.5% (it has downplayed the possibility of a 75-basis-point hike in the short term). The move has already been priced in the market. Further interest hikes will come in the coming months in order to fight inflation which is running at a 31-year high of 6.8% YoY in April. Last week, former Bank of Canada governor Stephen Poloz mentioned the risk that the country will fall into stagflation this year. Earnings Watch.  This week’s earnings releases are weak in terms of impact expect from earnings from Salesforce, Lululemon and Meituan. Analysts are expecting Salesforce to report FY23 Q1 revenue (ending 30 April) growth of 24% y/y on top of a significant operating margin expansion expected to boost free cash flow generation substantially. Monday: Sino Biopharmaceutical, Huazhu Group Tuesday: DiDi Global, Salesforce, HP, KE Holdings Wednesday: Acciona Energias Renovables, China Resources Power, Veeva Systems, HP Enterprise, MongoDB, NetApp, Chewy, GameStop, UiPath, SentinelOne, Elastic, Weibo Thursday: Trip.com, Pagseguro Digital, Remy Cointreau, Toro, Cooper Cos, Meituan, Crowdstrike, Lululemon, Okta, RH, Asana, Hormel Foods Economic calendar highlights for today (times GMT) 0900 – Euro zone Economic, Industrial, Services Confidence surveys 1200 – Germany May Flash CPI 1500 – US Fed’s Waller (Voter) to speak 1700 – ECB's Nagel to speak 2030 – New Zealand RBNZ’s Hawkesby to speak 2300 – South Korea Apr. Industrial Production 2330 – Japan Apr. Jobless Rate 2350 – Japan Apr. Jobless Rate 2350 – Japan Apr. Industrial Production 0030 – New Zealand May ANZ Business Confidence survey 0130 – China May Manufacturing/Non-manufacturing PMI 0130 – Australia Apr. Building Approvals 0130 – Australia Apr. Private Sector Credit Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Saxo Bank

Still improving risk sentiment sends US dollar lower The US dollar declined once again on Friday as improving risk sentiment continues to unwind the 2022 US dollar rally. That has spilt over into Asian markets today, with regional currencies booking some decent gains versus the greenback this morning. On Friday, the dollar index edged 0.12% lower to 101.64, losing another 0.13% to 101.50 in Asia. Support remains at 101.00, with resistance at 102.50. EUR/USD EUR/USD held steady on Friday, closing almost unchanged at 1.0735, with US dollar weakness being reflected in EMFX and the commonwealth currencies. It has gained 0.20% to 1.0755 in Asia, but overall, seems locked in a 1.0700 to 1.0800 range. Oil’s rally may temper single currency gains, with the multi-decade breakout line, today at 1.0830, still a formidable barrier. Read next: Altcoins: What Is Monero? Explaining XMR. Untraceable Cryptocurrency!? | FXMAG.COM GBP/USD GBP/USD closed 0.20% higher at 1.2630 on Friday, adding another 0.14% to 1.2640 in Asia. GBP/USD looks set to trade in a noisy 1.2600 to 1.2700 range as the week gets underway. The government’s cost of living package may prompt faster BOE tightening, supporting the downside, while the economic slowdown continues to slow upside progress. USD/JPY USD/JPY is trading sideways, ranging each side of 127.00 as US yields trade in narrow ranges. That is likely to continue with US bond markets closed today. The chart suggests USD/JPY has further downside potential that could target 125.00. Only a move through trendline resistance at 127.80 changes the picture. AUD/USD & NZD/USD AUD/USD and NZD/USD continue to be driven entirely by swings in global risk sentiment. Another strong performance by Wall Street on Friday maintained that upward momentum and both AUD and NZD were prime beneficiaries. AUD/USD rallied by 0.85% to 0.7160, adding another 0.20% to 0.7175 today. It has resistance at 0.7260, and support at 0.7100. NZD/USD rose by 0.86% to 0.6536 on Friday, rising another 0.17% to 0.6547 today. Resistance nearby at 0.6570 opens a larger rally to 0.6650, with support at 0.6475. Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM Asian FX rode improving investor risk sentiment higher on Friday, moves reflected throughout the EM space. Gains were led by the Chinese yuan, Korean won, and New Taiwan dollar, all gaining around 0.70%, while even the beleaguered Malaysian ringgit out in a good show, USD/MYR falling to 4.3770. Both the Indonesian rupiah and the Malaysian ringgit should find further strength on higher oil prices, even though it increases their domestic subsidy bills. Oil’s strength is likely the reason the Indian rupee has remained unchanged from Friday through today. CNY, KRW and NTD are rallying strongly today, likely boosted by China’s reopening hopes. USD/CNY, USD/KRW, and USD/NTD have fallen by around 0.80% today. However, if oil prices continue to rise this week, the rally in energy-importing Asian currencies may run out of steam. Follow FXMAG.COM on Google News This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

A preliminary estimate showed that German inflation continues to pick up, reaching 7.9 y/y in May. This is a new inflation record since 1951, and the reading was also above the forecast of 7.6%. Energy, Food Prices, EUR/USD A separate release of import prices noted an acceleration of this type of inflation from 31.2% to 31.7%. Although it was slightly lower than the expected 32.0%, this extreme reading was not only due to a jump in energy and food prices but also to a 15% fall in EURUSD over the past 12 months. Euro Is Falling When It's Not Expected to... Historically, EURUSD has fallen in this way, with even more amplitude several times, but as a rule, it was during times of economic recession. Now we are seeing one of the rare instances of the single currency failing in a growing economy, which further inflates the sails of inflation. With such inputs, there remains pressure on the ECB for more dramatic monetary policy tightening measures. Hawkish ECB Perhaps a hawkish U-turn by the European Central Bank is now the most plausible way to halt the weakening of the EURO and contain inflation. And it seems that the ECB is just in the process of this turn, forming the basis for buying the euro against the dollar and pound after touching multi-year lows earlier in April and May.

EU partial ban on oil and hawkish commentary from Fed's Waller were the headlines with the US out on holiday. Indian GDP for 1Q22 out later.  Source: shutterstock Macro outlook Global: With the US out on vacation yesterday, there isn’t too much overnight catch-up to do for Asia, though commodity markets are responding to the partial EU ban on Russian oil agreed upon yesterday. FX markets continued their recent gains against the USD though. EURUSD  has now risen to 1.0787, bringing it close to resistance levels just above 1.08. The AUD also continued to make gains, and is currently flirting with 0.72. Within the Asia FX pack, the KRW led the charge, shooting lower to 1238, with the CNY close behind in terms of gains at 6.66. Despite the holidays, the Fed’s Waller struck a more hawkish tone at a speaking engagement than his colleague, Raphael  Bostic, who had recently advocated a possible September pause in hikes. Waller, in contrast, suggested that 50bp hikes should remain on the table until inflation was closer to 2%. Newswires continue to run with stories looking for the trough in the equity sell-off, but also suggesting that the bond sell off is also over. One of those views is likely to be wrong. But whichever is the case, it is a good reflection of the current market sentiment which is looking for turning points. More choppiness ahead seems likely as a result. It is a relatively light day for G-7 macro data today. The EU’s May inflation should show a rise from 7.5% to 7.8%. But ECB rate hike intentions have been clearly flagged for now, so this shouldn’t make too many ripples. And in the US, we have house price figures and consumer confidence numbers. Consumer confidence has barely any correlation with consumer spending, so we can probably give it only a cursory examination. House prices appear to be reaching a peak in year on year growth, but until or unless they show a marked reversal in direction, can probably also be glossed over. India: 1Q22 GDP, which is released at 8pm SGT tonight, should come in at about 4.0%YoY (consensus is 3.9%YoY). That should bring the annual fiscal-year GDP growth for 2021/22 to 8.7%. For the 2022/23 fiscal year, we are forecasting 7.2% GDP growth. Rising prices and tighter monetary policy as well as global disruptions and a less helpful base comparison account for the apparent slowdown.  China: Official PMIs will be released this morning. We expect both the manufacturing and non-manufacturing PMIs will come in under 50, i.e. signalling monthly contraction. That result will mainly reflect the fact that Beijing was in lockdown for most of May, adding extra pressure on activity while Shanghai was also still in lockdown. Unemployment should remain high and will add uncertainty to the non-manufacturing PMI even if Shanghai residents resume work and production starting from 1st June.   Korea:  April monthly activity data signals that China’s lockdown dragged down Korean manufacturing production while local reopening supported services, construction, and consumption activity. Manufacturing production plunged -3.3%MoM (vs -1.3% market consensus), the first monthly drop in seven months. Meanwhile, the construction and services sectors rose modestly for the second straight month, with notable rises in hotels & restaurants and personal services (11.5% and 8.7%) respectively. Consumption fell -0.2% but mainly due to a decline in pharmaceutical consumption, while durable goods, including automobiles, rose slightly. Overall, the April data was on weak side, yet the recent approval of a supplementary budget (62 trillion KRW) and the reopening of China should boost the recovery in the coming months.  Japan: April Industrial production fell -1.3% MoM sa (vs -0.2% market consensus) the first fall in three months, with China’s lockdown hampering supply chains and production activity. However, consumer sales were relatively sound with retail sales and department store sales up by 2.9% YoY and 4.0% respectively. Meanwhile, labour conditions also improved. The jobless rate in April dropped to 2.5% (vs 2.6% market consensus and March) and the job-to-application ratio ticked up to 1.23 (vs 1.22 in March). We ought to be on the watch for tighter labour market conditions leading to wage growth, which is the key that the Bank of Japan has been looking for to gauge a sustainable inflation trend. What to look out for: EU inflation and US non-farm payrolls South Korea industrial production (31 May) Japan retail sales and job-applicant ratio (31 May) China PMI manufacturing (31 May) Thailand trade balance (31 May) Eurozone CPI inflation (31 May  US Conference board expectations (31 May) South Korea trade (1 June) Regional PMI manufacturing (1 June) Australia 1Q GDP (1 June) US ISM manufacturing (1 June) Indonesia CPI inflation (2 June) Australia trade balance (2 June) US ADP jobs, initial jobless claims, durable goods orders (2 June) South Korea CPI inflation (3 June) US non-farm payrolls and ISM services (3 June) Read this article on THINK TagsEmerging Markets Asia Pacific Asia Markets Asia Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

US dollar eyes nonfarm payrolls There was a wax on, wax off feel to currency markets overnight. Soft ADP Employment data spurring a risk-on rally across asset classes as the Fed hiking outlook was tempered. The US dollar staged a broad retreat, unwinding all its gains from the day before in the major space except for USD/JPY. Asian market volatility is being dampened by holidays across the region today, including mainland China and Hong Kong, and the UK later today.  US dollar loses all of its previous gains - MarketPulseMarketPulse The dollar index tumbled by 0.78% to 101.75 overnight, an exact reversal of the rally from the day before. It is unmoved in Asia and support/resistance lies at 101.40 and 102.70. Its fate will be decided by this evening’s US Non-Farm Payrolls.   EUR/USD reversed all its previous day’s losses, rising 0.91% to 1.0750 where it remains in Asia. Resistance between 1.0770 and 1.0830 remains a formidable barrier, with support at 1.0650. Sterling reversed all its previous day’s losses, rising 0.75% to 1.2575 where it remains in Asia. It has support/resistance at 1.2460 and 1.2670. USD/JPY was almost unchanged at 129.85 as US bond yields barely moved. It remains unchanged in Asia. It has support/resistance at 129.00 and 131.30. Their fate will be decided by this evening’s US Non-Farm Payrolls.   AUD/USD staged a bullish outside reversal day overnight, making a new low before closing higher than the high of the day before, thanks to the broad-based risk-on rally after the US data. It leapt 1.27% higher to 0.7260 overnight where it remains today. AUD/USD has support at 0.7150, and the overnight rally took it above its 50/100/200-day moving averages (DMAs) between 0.7230 and 0.7255 as well. A soft Non-Farm print tonight could see AUD/USD rise to test 0.7350, with a weekly close at these levels being a bullish signal technically. Its fate will be decided by this evening’s US Non-Farm Payrolls.   Asian FX currencies booked modest gains overnight, with the rise in oil prices tempering the fast money inflows. Both the Malaysian ringgit and Philippine peso actually fell overnight, a result I suspect, of rising subsidy bills as oil prices climb higher. The Indonesian rupiah has rallied 0.70% to 14,420.00 today, while the KRW and MYR have risen by 0.10%. With a swathe of holidays across the region today, and no PBOC USD/CNY fixing, Asian markets look content to watch from the sidelines as we head into US data this evening and the weekend. Their fate will be decided by this evening’s US Non-Farm Payrolls. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. https://www.marketpulse.com/20220603/us-dollar-loses-all-of-its-previous-gains/

US dollar pares gains from NFP report Friday’s higher Non-Farm Payroll data saw the US dollar reverse much of its losses from Thursday, characterising a very choppy back-and-forth week last week. The dollar index rose by 0.40% to 1.0217, leaving the index slightly higher for the week. Notably, the rally was not enough to lift the index above its 102.35 pivot point, suggesting that the downside remains the path of least resistance still. Support/resistance lies at 101.30 and 102.70. In Asia, the China reopening trade has pushed the index slightly lower to 102.11.  US dollar eases lower in Asia - MarketPulseMarketPulse EUR/USD fell only slightly by 0.27% to 1.0720 on Friday post-data, where it remains in Asia. ​ Resistance between 1.0770 and 1.0830 remains a formidable barrier, with support at 1.0650. However, the single currency continues to show resilience at these levels, and resistance could be seriously tested if China’s reopening trade continues to support risk sentiment. Volumes will be impacted by European holidays today.   Sterling tumbled by 0.70% to 1.2490 on Friday in yet another whipsaw session. It remains there in Asia today. It has support/resistance at 1.2460 and 1.2670. A UK leadership challenge this week may serve to limit gains but a clean break of 1.2670 opens a potentially larger rally to 1.2800 and 1.3000, while the failure of 1.2460 could see sterling fall to 1.2400.   USD/JPY rose 0.73% to 130.85 on Friday, accounting for most of the dollar index gains post US data as US bond yields firmed slightly. USD/JPY has edged 0.15% lower to 130.65 today despite dovish BOJ comments, but the US/Japan rate differential should continue to support the downside unless US yields suddenly fall sharply. It has support at 129.00 and resistance at 131.00, a double top, and 131.30.   AUD/USD fell post US data as risk sentiment turned south. It finished 0.80% lower at 0.7205, easing another 0.20% to 0.7195 in Asia. AUD/USD has nearby support at 0.7180, an ascending one-month trendline, with resistance between its 50/100/200-day moving averages (DMAs) between 0.7225 and 0.7255. RBA hiking concerns ahead of tomorrow’s RBA meeting look set to limit gains in the short term.   USD/Asia moved higher on Friday on firm US data, with the Korean won, New Taiwan dollar, Singapore dollar, and India rupee the main losers, being favourites by fast-money to express risk sentiment of late. Yuan trading was impacted by a China holiday. Markets are quiet in Asia today, with Asian currencies booking only small gains versus the greenback. The sharp rise in oil prices on Friday, which continues in Asian trading today, is likely limiting Asia FX gains. The double-edged sword of China’s reopening is that oil prices are likely to remain firm as well as demand returns. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Relevance up to 13:00 2022-06-07 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/278935 Technical analysis: EUR./USD has been trading sideways in last couple of days but I still see further downside movement. There is the breakout of the upper channel in the background. Trading recommendation: Due to the breakout rising channel in the background and the mid and long term down trend I see potential for further downside movement. Watch for potential selling opportunities with the downside objectives at 1.0640 and 1.0540. Confirmation for the downside movement can be if the price breaks the support at 1.0700. Key resistance is set at the price of 1.0775  

The US consumer price index accelerated by 8.6% in May from 8.3% a month earlier. The new data exceeded expectations, rebutting hopes that US inflation is already slowing. Today's inflation report is the last big release before the Fed meeting next Wednesday. A renewal of inflation to 40-year highs will surely attract the public's attention at the weekend and will pressure the Fed. Potentially, such high reading could trigger a tougher FOMC stance in the accompanying commentary. Recently, the Fed has been expected to raise rates by 50 points next week and hints of another such move in late July. However, with a strong labour market and persistently high inflation, there are increasing chances that more such double-sized rate hikes are required, which is speculatively good news for the dollar in the coming weeks. A separate issue is quantitative tightening. The Fed could also adjust its plans to sell assets off the balance sheet to tighten financial conditions in the country further. Proponents of such an approach point to the record amounts of excess liquidity that commercial banks are parking on central bank balance sheets. High inflation is bad news for the stock market because it will force the Fed to tighten the monetary policy screws even further. The Fed's open intention to suppress inflation creates risk-off market sentiment when the price growth remains high. In this environment, dollar-denominated money market assets become attractive because of higher yields. This is in stark contrast to last year when the Fed reassured us that everything would pass by itself, so investors preferred to sell dollars that were losing value.

As expected, euro buyers' optimism faded immediately after the ECB press conference began, returning EURUSD to a repeat of 1.0600. Shortly after the initial surge in reports of an actual reversal in ECB policy, investors and traders delved into assessments of how slower the policy reversal in Europe was. The ECB will only stop buying assets on its balance sheet later this month - two steps behind the US, where purchases were curtailed months ago and active sales are already due to begin in June. The Fed raised its rate by 25 points in March and 50 points at the start of May, promising two more 50-point hikes in June and July. From the ECB, we see a conditional promise to consider a rate hike of more than 25 points in September in case of high inflation forecasts for 2023. That said, inflation in the eurozone is comparable to the US, and economic growth is just as, if not more, vulnerable to logistical failures and energy prices. Not only has the ECB started its policy turnaround later, but it is also doing so more slowly than the Fed so that the interest rate differential only widens over time. Such differences are a fundamental reason to sell the euro against the dollar. Moreover, the EURUSD bounce in the second half of May erased the pair's oversold conditions, clearing the way for another step down. Yesterday's comments from the ECB convinced us not to expect any hawkish surprises from Lagarde and Co, triggering a new sell-off impulse. It won't be surprising if EURUSD makes another test of the May low at 1.0350 or if it makes a new 20-year low below that level during the next couple of weeks.

The global economy can now be characterised as one in which many central bankers are poised to hike rates more forcefully, even as growth prospects are being revised lower. Investors are now having to ask which economies can best withstand these tighter monetary conditions and which currency to back? During this summer of discontent the answer to these questions largely remains the US economy and the dollar. Unlike the supply-driven inflation suffered in Europe, price rises in the US are far more a function of demand-side factors and suggest stagflation is less of a likelihood in the US than in Europe. And with no end in sight to tight energy markets, the US remains better positioned here too. We expect the Fed to deliver at least another 175bp of hikes this year as the Fed drives real US interest rates into restrictive territory. This is not good news for global growth – but that is the point, the Fed needs to slow demand. Flatter yield curves consistent with the latter stages of the US business cycle are normally good news for the dollar. In all this means that the dollar should stay bid this summer (1.00/1.02 is possible in EUR/USD), while USD/JPY in the 135/140 region looks ready to trigger Japanese intervention. GBP/USD can move to the low 1.20s as the BoE cycle is repriced lower and the CHF should start to outperform in Europe as the SNB guides it higher. CEE FX has become more mixed. We still favour the PLN, but HUF and now CZK look more vulnerable. This will be a fragile environment for most EMFX – especially those most exposed to China. Here USD/CNY can still push higher taking most of $/Asia with it. Developed markets EUR/USD A long, hot summer for the euro Current spot: 1.0476 Both the Fed and the ECB are in hawkish mode – both battling inflation near 8%. Both are probably happy with stronger currencies. The difference is the stagflationary shock from the war in Ukraine which makes the ECB unlikely to deliver on the 150bp of tightening priced in. There is also the issue of growth differentials and what they mean for international equity flows. These could start generating some euro under-performance. EUR/USD looks biased towards the lower end of a 1.02-1.08 range this summer. It looks far too early to pick the top in the Fed cycle. Higher US real rates also spell trouble for risk assets, including EM in general. This will also lend further support to the dollar USD/JPY Official concern and stretched valuations may help JPY Current spot: 134.43 The combination of aggressive Fed tightening (we look for at least another 175bp of Fed rate hikes this year), high energy prices and BoJ dovishness has sent USD/JPY to 135. Japanese officials are now officially unhappy with the rapid pace of JPY weakness. Sensible arguments go that the BoJ cannot intervene to sell $/JPY since: a) markets are not disorderly and b) BoJ is still printing money with QQE. Yet intervention is political & one never knows whether deals get cut behind the scenes We cannot rule out USD/JPY marching towards 140 given that this is a fundamentally driven, but intervention signals are flashing amber/red. Traded USD/JPY volatility can rise further. GBP/USD Bank of England tightening expectations are extreme Current spot: 134.43 GBP/USD looks as though it can trade back down to the 1.21/22 levels – largely on the back of dollar strength. But certainly an Unexploded Bomb (UXB) for sterling is the incredibly aggressive 175bp of tightening priced into the BoE cycle for year-end. This seems very extreme given that not all the MPC were on board with May’s 25bp hike. The 16 June BoE meeting is an event risk. UK growth will struggle in 2Q, although there is increasing speculation over tax cuts coming through this Autumn – in a bid to shore up Conservative support ahead of a possible ‘23 election. We doubt a Tory leadership change or Brexit tension has too much impact on sterling – a lot of bad news is already priced. Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more This article is a part of the report by ING: Source

Relevance up to 09:00 2022-06-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Details of the economic calendar from June 14 Data on the UK labor market came out worse than expected. The unemployment rate increased from 3.7% to 3.8%, while the forecast assumed a decline to 3.6%. Employment in the country rose by 177,000, while jobless claims fell less than expected. In general terms, the indicators for the UK labor market are not the best. Analysis of trading charts from June 14 The EURUSD currency pair has slowed down its downward movement in the area of 1.0400. This move has led to variable turmoil, with the downside sentiment remaining among market participants. On the trading chart of the daily period, there is a gradual recovery of the downward trend relative to the recent correction. The GBPUSD currency pair has accelerated the decline after the prolongation of the medium-term downward trend. The increase in the volume of short positions led to the weakening of the pound sterling towards the psychologically important level of 1.2000. The scale of decline for three trading days amounted to about 550 points.     Economic calendar for June 15 The results of the Fed meeting are at the center of everyone's attention, where, due to a sharp increase in the inflation rate, experts are revising forecasts for the interest rate hike. Based on the last meeting, the regulator planned to continue hanging the rate by 50 basis points. The market, in turn, is concerned about rising inflation and lays down a rate increase of 75 basis points at once, which has already affected the US dollar exchange rate. Time targeting Results of the Fed meeting - 18:00 UTC Fed press conference - 18:30 UTC Trading plan for EUR/USD on June 15 Price stagnation within 1.0400/1.0500 keeps speculators on itself for a while. It can be assumed that the current stop plays the role of the accumulation of trading forces in the forthcoming acceleration in the market. Based on the above range, the best trading tactic is the outgoing momentum method, which will indicate the subsequent price move. We concretize the above into trading signals: Buy positions on the currency pair are taken into account after holding the price above the value of 1.0500 in a four-hour period. Sell positions should be considered after holding the price below 1.0400 in a four-hour period.     Trading plan for GBP/USD on June 15 The area of psychological level 1.1950/1.2000/1.2050 puts pressure on sellers. This led to a reduction in the volume of short positions and, as a result, a local pullback. Taking into account the oversold status of the pound sterling, we can assume further formation of a correction if the price holds above 1.2050 in a four-hour period. At the same time, the high interest of traders in speculative positions allows blocking the technical signal about the pound being oversold. In this case, holding the price below the value of 1.1950 in a four-hour period will lead to the subsequent inertial movement. What is reflected in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future. Read more: https://www.instaforex.eu/forex_analysis/313480

Relevance up to 20:00 2022-06-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. In late September, Re-closure below the price level of 1.1700 has initiated downside-movement towards 1.1500 where some bullish recovery was witnessed. Shortly after, another price decline took place towards 1.1200. Then the EURUSD has temporarily moved-up within the depicted movement channel until downside breakout occurred. The EURUSD looked oversold while approaching the price levels of 1.0800. That's when an upside movement was initiated towards 1.1200. This recent movement towards 1.1200 was suggested for another SELL opportunity which already reached its targets. The previous ascending movement above 1.0600 enabled further advancement towards 1.0800 where evident bearish rejection could be applied. On the other hand, the pair remains under selling pressure to re-visit the new daily low around 1.0350 where price action should be watched.   Read more: https://www.instaforex.eu/forex_analysis/280273

Relevance up to 11:00 2022-06-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. EUR/USD     Higher timeframes Bulls are still trying to limit the current decline, so they continue to insist on the continuation of the rise and the restoration of positions. For this event to be a success and further prospects in the near future, it is necessary to overcome the resistance of the daily Ichimoku cross (1.0516 – 1.0568 – 1.0620 ), two resistances of the higher timeframes (1.0539 – 1.0643) and gain a foothold in the Ichimoku cloud (1.0568). The failure of the bulls may let bears resume the downward trend (1.0339–49).     H4 – H1 Yesterday's corrective movement managed to overcome the resistance of key levels. As a result, the advantage in the lower timeframes shifted to the side of the bulls. The key levels, located at the boundaries of 1.0510 (the central pivot point of the day) and 1.0466 (the weekly long-term trend), serve as supports and are currently trying to defend the interests of the bulls. If this succeeds, then the reference points for the rise from the higher timeframes will be added to the reference points of the lower timeframes at 1.0639 – 1.0730 – 1.0859 (resistances of classic pivot points). In case of loss of key levels (1.0510 – 1.0466), the balance of power will once again be changed and the prospects for movement will again be aimed at restoring the downward trend, first on the lower timeframes (1.0359) and then on the higher ones (1.0349–39). Additional reference points will be the support of classic pivot points (1.0419 – 1.0290 – 1.0199 ). *** GBP/USD     Higher timeframes Bulls continued to rise, as a result, the resistance of the daily Ichimoku death cross (1.2213 – 1.2266 – 1.2300 – 1.2386) is now being tested for strength. Breakdown and reliable consolidation above will open new horizons, which will be weekly levels (1.2511 – 1.2626) and entry into the daily and monthly Ichimoku cloud (1.2523 – 1.2678).     H4 – H1 At the moment, the advantage in the lower timeframes belongs to the bulls. The pair is now testing key levels—the central pivot point of the day (1.2264) and the weekly long-term trend (1.2184). Keeping them as supports will provide opportunities for bullish sentiment to develop. The next reference points for the continuation of the rise will be 1.2489 – 1.2629 – 1.2854. The loss of key levels will deprive the bulls of an advantage, which can contribute to increased activity and performance on the part of the opponent. Downward references today can be noted at 1.2124 – 1.1899 – 1.1759 (support of the classic pivot points). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Read more: https://www.instaforex.eu/forex_analysis/313780

Relevance up to 15:00 2022-06-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Overview : The EUR/USD pair continues to move upwards from the level of 1.0435. Today, the first support level is currently seen at 1.0435, the price is moving in a bullish channel now. Furthermore, the price has been set above the strong support at the level of 1.0435, which coincides with the 23.6% Fibonacci retracement level. This support has been rejected three times confirming the veracity of an uptrend. According to the previous events, we expect the EUR/USD pair to trade between 1.0435 and 1.0602. Also, the daily resistance and support are seen at the levels of 1.0602 and 1.0435 respectively. Therefore, it is recommended to be cautious while placing orders in this area. The support stands at 1.0435, while daily resistance is found at 1.0602. Therefore, the market is likely to show signs of a bullish trend around the spot of 1.0435. The market is likely to show signs of a bullish trend around the spot of 1.0435. Moreover, the major support is also coinciding with the major support today. Additionally, the RSI is still calling for a strong bullish market as well as the current price is also above the moving average 100. Therefore, it will be advantageous to buy above the support area of 1.0435. In other words, buy orders are recommended above the spot of 1.0435 with the first target at the level of 1.0554; and continue towards 1.0602. However, if the EUR/USD pair fails to break through the resistance level of 1.0602 today, the market will decline further to 1.0383 so as to test the weekly bottom - the last bearish wave. Read more: https://www.instaforex.eu/forex_analysis/280651

Relevance up to 22:00 2022-06-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The EURUSD looked oversold while approaching the price levels of 1.0800. That's when a temporary upside movement was approaching the price levels around 1.1200. This recent movement towards 1.1200 was suggested for another SELL opportunity which already reached its targets beyond the price level of 1.0400. The previous ascending movement above 1.0600 enabled further advancement towards 1.0800 where evident bearish rejection arises again. On the other hand, the pair remains trapped under selling pressure to challenge the recent daily low around 1.0350 where price action should be watched.   Read more: https://www.instaforex.eu/forex_analysis/280671

Relevance up to 22:00 2022-06-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   In late September, Re-closure below the price level of 1.1700 has initiated downside-movement towards 1.1500 where some recovery was witnessed. Shortly after, Price levels around 1.1700 managed to hold prices for a short period of time before another price decline took place towards 1.1200. Then the EURUSD has temporarily moved-up within the depicted movement channel until downside breakout occurred recently. Since then, the price zone around 1.1500 has applied significant SELLING pressure when a valid SELL Entry was offered upon the previous ascending movement towards it. Shortly after, the EURUSD looked oversold while approaching the price levels of 1.0800 few weeks ago. That's where the recent upside movement was previously initiated. However, the recent movement towards 1.1200 was considered for another SELL Trade which is already running in profits now. The previous ascending movement above 1.0600 enabled further advancement towards 1.0800 where bearish rejection could be applied again.   Read more: https://www.instaforex.eu/forex_analysis/280673

EURUSD recovery from the May low of 1.0360/50 leaves a potential double bottom buy signal although on Friday we made a high for the day at 1.0545/55. Above here today retests Thursday's high at 1.0660/62 then last week's high at 1.0640/42. Minor support at 1.0460/50. Below 1.0330 risks a retest of the double bottom low at 1.0360/50. Longs need stops below 1.0325. USDCAD clearly at the upper end of the 1 year range as we retest the May high at 1.3060/80. This will be key to direction for this week. Probably worth trying a short with stop above 1.3100. A break higher however targets 1.3160/70 & 1.3240/60. Shorts at 1.3060/80 target 1.3030/20 & 1.3000/1.2990. Expected good support at 1.2955/35 for today. Dax looks likely we can hold important longer term support at 13250/150 for a bounce to 13360/380 then 13500 & resistance at 13600/650. We have a gap to fill at 13730/750. A break above here is anther buy signal. A break below 12950 is a very important medium term sell signal initially targeting 12700/600 before a retest of the March low at 12450/425. FTSE broke lower to the next target of 7000/6990 last week, holding just 56 ticks above very strong support at 6940/10. Longs here this week need stops below 6870. The bounce on Friday held 8 ticks from strong resistance at 7120/40. Shorts need stops above 7160. A break higher is a buy signal targeting 7240/50, perhaps as far as strong resistance at 7300/20. To receive this report every morning please subscribe at our website www.daytradeideas.co.uk or email jason@daytradeideas.co.uk

Dollar in choppy waters The US dollar held onto its intraday gains on Friday, as US bond inflows seemed to support it as investors preferred safety over risk into the weekend and today’s US holiday. With the weekend being relatively uneventful, the US dollar has eased in Asia, but overall continues a pattern of choppy range trading. The dollar index rose 0.82% to 104.65 on Friday, thanks mostly to a weak yen. In Asia, it has eased 0.26% to 104.38. The dollar index has support at 1.0350 with resistance now distant at 1.0570.   EUR/USD eased by 0.56% to 1.0495 on Friday in another 100-point session, climbing by 0.31% to 1.0525 in Asia as weekend hedges are taken off. Dutch natural gas futures prices remain elevated, so the single currency is not receiving much of a boost from last Friday’s oil retreat. It has initial resistance at 1.0600, with challenging resistance at 1.0650. Support is at 1.0450 and 1.0400 now although I note that EUR/USD has based twice at 1.0350. That leaves the door open slightly to a corrective recovery this week.   Sterling has another awful day as its economic picture darkens, falling by 1.10% to 1.2215 on Friday, edging 0.22% higher to 1.2240 in Asia. ​ GBP/USD has initial resistance at 1.2400 and 1.2500, with support at 1.2200 and then 1.1950.   USD/JPY powered higher on Friday as the Bank of Japan left monetary policy unchanged and continues to heavily intervene to cap ultra-low JGB yields. With Japan’s inflation only expected to hit 2.50% this Friday, I can’t really blame them, but with the US, Switzerland, the United Kingdom, et al hiking, the interest rate differential continues to power USD/JPY higher. USD/JPY leapt 2.10% higher to 135.00 on Friday, with last week’s 131.50 low a distant memory and a bargain for somebody. Having probed 135.45 today, USD/JPY has eased back to 134.85 this morning, as commodity prices fell. It is likely to be only a respite though unless US yields move sharply lower this week. USD/JPY has resistance at 135.60 with support distant at 132.20.   Swings in investor sentiment continue to generate all the two-way volatility in the Australian and New Zealand dollars. AUD/USD fell 1.60% on Friday to 0.6935 before rising to 0.6955 in Asia. NZD/USD fell 0.80% to 0.6315 on Friday before rising to 0.6330 in Asia. A US holiday is dampening volumes but both Australasians have traced out bottoming patterns on the charts. As long as 0.6850 and 0.6200 hold respectively, further gains to 0.7150 and 0.6450 cannot be ruled out.   On a 24-hour basis, Asian currencies are mostly unchanged today after the losses on Friday and were mostly unwound this morning. The main reason has been a rally by China’s CNY and CNH after the PBOC left both the 1 and 5-year LPRs unchanged. USD/CNY has fallen 0.60% to 6.6760, while USD/CNH has fallen by 0.50% to 6.6745, dragging USD/Asia lower. Although the KRW, INR, MYR, THB, and IDR look the most vulnerable and remain near last week’s lows, a US holiday today should mean range-trading continues into Wednesday. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. US dollar remains firm but choppy - MarketPulseMarketPulse

Relevance up to 15:00 2022-06-21 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   EURUSD is trading above 1.05. Even in the 4 hour chart price remains below the 4 hour Kumo (cloud). This indicates that trend remains bearish. Price is above the tenkan-sen (red line indicator) and the kijun-sen (yellow line indicator). This is supportive for the short-term. But bulls need to show more signs of strength and push price above the cloud. Support by the tenkan-sen is at 1.0495 and by the kijun-sen at 1.0480. Bulls need to defend these support levels. Failure to hold above these support levels will lead EURUSD back towards 1.03. Bulls are challenging the lower cloud boundary. They will need to break inside the cloud to change trend to neutral.   Read more: https://www.instaforex.eu/forex_analysis/280897

Relevance up to 12:00 2022-06-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   As of this writing, EUR/USD is trading near 1.0535, testing an important short-term resistance level at 1.0527 (200 EMA on the 1-hour chart). In case of its breakout, the upward correction may continue to the resistance level of 1.0616 (200 EMA on the 4-hour chart).     EUR/USD is in the zone of a long-term bearish market below the key resistance levels 1.0955 (144 EMA on the daily chart) and 1.1085 (200 EMA on the daily chart). Therefore, for now, its further corrective growth will most likely be limited by the resistance level of 1.0670 (50 EMA on the daily chart), and in the main scenario, there will be a rebound from the resistance level of 1.0527.     A breakdown of the local support level 1.0485 will return downside risks to 1.0300, and further towards parity with the euro against the dollar against the backdrop of a steady strengthening of the dollar and a deterioration in the prospects for the Eurozone. In an alternative scenario, the price will break through the resistance levels of 1.0527, 1.0616, and 1.0670 and grow to the local resistance levels of 1.0780, 1.0800, and 1.0810. Further movements will largely depend on the dynamics of the dollar and the actions of the Fed and the ECB regarding their monetary policies.     Support levels: 1.0500, 1.0485, 1.0400, 1.0355, 1.0300, 1.0200, 1.0100, 1.0000 Resistance levels: 1.0527, 1.0616, 1.0670, 1.0780, 1.0800, 1.0810, 1.0955, 1.1000, 1.1085 Trading Tips Sell Stop 1.0470. Stop-Loss 1.0565. Take-Profit 1.0400, 1.0355, 1.0300, 1.0200, 1.0100, 1.0000 Buy Stop 1.0565. Stop-Loss 1.0470. Take-Profit 1.0616, 1.0670, 1.0780, 1.0800, 1.0810, 1.0955, 1.1000, 1.1085   Read more: https://www.instaforex.eu/forex_analysis/313948

Relevance up to 09:00 2022-06-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The EUR/USD bulls keep trying to continue the bounce, Currently, the market is consolidating the recent gains in a narrow zone located between the levels of 1.0489 - 1.0545 that looks like a Bullish Pennant pattern. The nearest technical support is seen at 1.0469 - 1.0448, so as long as the market trades above this zone, the outlook remains bullish. Please notice, that despite the recent efforts, the bulls are still trading inside the bearish zone, the level of 1.0615 is still unreachable for them, and they need to break above the level of 1.0678 to enter the bullish zone.     Weekly Pivot Points: WR3 - 1.0840 WR2 - 1.0724 WR1 - 1.0600 Weekly Pivot - 1.0479 WS1 - 1.0363 WS2 - 1.0238 WS3 - 1.0113 Trading Outlook: The up trend can be continued towards the next long-term target located at the level of 1.1186 only if the complex corrective structure will terminate soon (above 1.0335) and the market breaks above 1.0678 level. The bullish cycle scenario is confirmed by breakout above the level of 1.0726, otherwise the bears will push the price lower towards the next long-term target at the level of 1.0335 or below.   Read more: https://www.instaforex.eu/forex_analysis/281013

Relevance up to 08:00 2022-06-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Analysis of transactions in the GBP / USD pair GBP/USD reaching 1.2220 prompted a sell signal in the market, however, having the MACD line far from zero limited the downside potential of the pair. Shortly after that, pound jerked up and hit 1.2265, forming a buy signal. At that time, the MACD line was far from zero, limiting the upside potential of the pair. When the pair tested the level again, the MACD line was in the overbought area, so the signal to sell triggered a decrease of around 30 pips. No other signal appeared for the rest of the day.     Although the lack of statistics helped pound, there was no upward correction in GBP/USD yesterday. But today there is every chance for further growth as the absence of statistics will play on the side of buyers, allowing them to push the pair above 1.2274. Furthermore, in the afternoon, US data may harm dollar as the US housing market has not been in the best shape lately due to higher interest rates. This, however, may be offset by the speech of Fed member Loretta Mester. For long positions: Buy pound when the quote reaches 1.2274 (green line on the chart) and take profit at the price of 1.2331 (thicker green line on the chart). There is a chance for a rally today, but only in the morning. Nevertheless, remember that when buying, the MACD line should be above zero, or is starting to rise from it. It is also possible to buy at 1.2231, but the MACD line should be in the oversold area as only by that will the market reverse to 1.2274 and 1.2331. For short positions: Sell pound when the quote reaches 1.2231 (red line on the chart) and take profit at the price of 1.2178. Pressure will return if there are no active purchases above 1.2274. However, when selling, make sure that the MACD line is below zero or is starting to move down from it. Pound can also be sold at 1.2274, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.2231 and 1.2178.     What's on the chart: The thin green line is the key level at which you can place long positions in the GBP/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the GBP/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Read more: https://www.instaforex.eu/forex_analysis/314031

Relevance up to 15:00 2022-06-22 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   In the Daily chart EURUSD is challenging the lower cloud boundary and both the tenkan-sen (red line indicator) and the kijun-sen (yellow line indicator). Resistance is important at 1.0570. Traders need to be cautious in case we see a rejection at resistance. We have a confluence of resistance levels around 1.0570. So a break above this level could be big news for bulls. If this happen, then I will be expecting price to move even higher towards the upper cloud boundary at 1.0770.   Read more: https://www.instaforex.eu/forex_analysis/281109

Relevance up to 07:00 2022-06-23 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The EUR/USD pair had broken out from a narrow zone located between the levels of 1.0489 - 1.0545 that looked like a Bullish Pennant pattern. Nevertheless, the rally was short-lived as it was capped at the level of 1.0582 after a Piercing Pattern was made. The nearest technical support is seen at 1.0469 - 1.0448, so as long as the market trades above this zone, the outlook remains bullish. Please notice, that despite the recent efforts, the bulls are still trading inside the bearish zone, the level of 1.0615 is still unreachable for them, and they need to break above the level of 1.0678 to enter the bullish zone.     Weekly Pivot Points: WR3 - 1.0840 WR2 - 1.0724 WR1 - 1.0600 Weekly Pivot - 1.0479 WS1 - 1.0363 WS2 - 1.0238 WS3 - 1.0113 Trading Outlook: The up trend can be continued towards the next long-term target located at the level of 1.1186 only if the complex corrective structure will terminate soon (above 1.0335) and the market breaks above 1.0678 level. The bullish cycle scenario is confirmed by breakout above the level of 1.0726, otherwise the bears will push the price lower towards the next long-term target at the level of 1.0335 or below.   Read more: https://www.instaforex.eu/forex_analysis/281203

EURUSD attempts to rebound The US dollar finds support from higher Treasury yields. The pair saw strong support near May’s lows (1.0380). A surge above 1.0500 prompted short-term sellers to cover and paved the way for a rebound. This is a sign of robust interest in keeping last month’s rally intact. 1.0660 is a former support that has turned into a resistance. Its breach would bring the single currency to the recent peak near 1.0770, which is the last hurdle before a meaningful recovery. On the downside, 1.0460 is a fresh support in case of a pullback. GBPJPY to test peak The Japanese yen weakens as the BoJ’s meeting minutes confirm its ultra-loose stand. The sell-off came to a halt at the psychological level of 160.00 where the pair first broke out in late May. The latest rally above 166.00 further trimmed the downward pressure. A break above 168.60 would put the rally back on track. The uptrend remains intact in the medium-term and the bulls may see pullbacks as an opportunity to jump in. 165.50 is the first support as buyers may wait for the RSI to drop back into the neutral area. CADCHF grinds demand zone The Canadian dollar recoups losses as April’s retail sales beat market expectations. The price action is hovering above the origin of a mid-April rally around 0.7400. A bullish RSI divergence indicates a slowdown in the liquidation momentum, and in conjunction with a demand zone, sellers could be taking some chips off the table. A rebound will need to clear 0.7580 before it could gain traction. Otherwise, a fall below 0.7400 may trigger a new round of sell-off towards 0.7300.

Relevance up to 09:00 2022-06-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Markets await the report of Fed Chairman Jerome Powell to the US Senate Banking Committee as it would contain hints on the future of monetary policy. The US central bank already raised interest rates by 0.75% last week, the first time in decades. But Powell made it clear that rates might not rise further at such a pace, making markets relieved. Surprisingly, although there was another collapse last Thursday, many still hope that rates will rise by about 0.50%, then stop as inflationary pressure decreases. Powell may talk about this during his report to the Senate Banking Committee, in relation to high inflation and its impact on the economy. Powell may also mention the disruption of transport links, which has already led to a drop in imports and the like. But investors will be more interested on how exactly the Fed will act in July and beyond. There are two opinions on the market right now. The first has already been described above, which is a kind of soft option. But there is another, tougher one. According to Reuters, many market participants expect the Fed to increase the rate again by 0.75% in July, then raise it by 0.50% in September. Under these conditions, the market may again experience sharp sell-offs, while dollar and Treasury yields will see further growth. In this case, the ICE dollar index may again test the recent local high of 105.56. Which option will be implemented is difficult to determine as both have a high potential. This is why traders should wait for Powell's speech before making any move in the market.. Forecasts for today:     EUR/USD The pair has overcome 1.0500. A consolidation below may lead to its further decline to 1.0400.     AUD/USD The pair broke through 0.6900, which may lead to a further decrease to 0.6800. The driver will be the declining commodity prices and negative sentiment in the stock markets.   Read more: https://www.instaforex.eu/forex_analysis/314179

Relevance up to 11:00 2022-06-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Overview : The EUR/USD pair has broken support at the level of 1.0567 which acts as a resistance now. According to the previous events, the EUR/USD pair is still moving between the levels of 1.0567 and 1.0360. Therefore, we expect a range of 207 pips in coming two days or three. The trend is still below the 100 EMA for that the bearish outlook remains the same as long as the 100 EMA is headed to the downside. Hence, the price spot of 1.0567 remains a significant resistance zone. Consequently, there is a possibility that the EUR/USD pair will move downside. The structure of a fall does not look corrective. In order to indicate a bearish opportunity below 1.0567, sell below 1.0567 with the first target at 1.0458. Besides, the weekly support 2 is seen at the level of 1.0360. If the pair fails to pass through the level of 1.0458, the market will indicate a bearish opportunity below the level of 1.0458 . So, the market will decline further to 0.6604 in order to return to the daily bottom point (1.0360 - S2). However, traders should watch for any sign of a bullish rejection that occurs around 1.0616. The level of 1.0616 coincides with 61.8% of Fibonacci, which is expected to act as a major resistance today. Since the trend is below the 61.8% Fibonacci level, the market is still in a downtrend. Overall, we still prefer the bearish scenario.   Read more: https://www.instaforex.eu/forex_analysis/281501

Relevance up to 10:00 2022-06-24 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Active growth was noted in EUR/USD during the European trading session. However, the pair fell and closed lower during the US trading session, showing the strength of dollar in the market. The bearish trend has not changed since June 17.     In this situation, the best action is to abandon long positions, focusing on short positions with targets at yearly lows. And given that there is a three-wave pattern (ABC), where wave A represents the selling pressure last week, traders can sell up to the 50% retracement level, with stop loss at 1.07. Take profit on the breakdown of 1.03300. This strategy is based on the Price Action and Stop Hunting methods. Good luck and have a nice day!   Read more: https://www.instaforex.eu/forex_analysis/314323

The euro is in negative territory on Thursday and has pared most of this week’s gains. EUR/USD is trading just above the 1.05 line in the European session, down 0.58% on the day. German, eurozone PMIs soften Today’s German and eurozone PMIs indicated slower activity in May, which reflects weaker economic activity. Manufacturing and Services PMIs in both Germany and the eurozone weakened, although they still pointed to expansion, with readings above the neutral 50.0 level. Nevertheless, the releases are a cause for concern. As the largest economy in the eurozone, Germany is a bellwether for the bloc. With the outlook for the German economy looking gloomier, it’s a bad sign for the rest of the eurozone. The German economy has been hit by a fall in exports, and high inflation and economic uncertainty have hurt domestic demand. Businesses are more pessimistic about the economic outlook, pointing to the war in Ukraine, supply disruptions in China and higher prices. The latest setback is that Russia is decreasing its supply of natural gas to Germany, raising fears that Germany may run short of natural gas in the winter. This has prompted German to enter Phase 2 of its three-stage emergency gas plan. The euro has taken a tumble and EUR/USD is down over 550 points since April 1st. The slow response of the ECB to spiralling inflation hasn’t helped, as the ECB is yet to embark on a rate-tightening cycle, while the Fed has been raising rates and delivered a mammoth 75-bps hike last week. This has widened the US/Europe rate differential and sent the euro lower. Unless US yields fall, the euro is likely to continue losing ground. . EUR/USD Technical EUR/USD has initial resistance at 1.0612, followed by resistance at 1.0727 EUR/USD tested support at 1.0485 in the Asian session. Below, there is support at 1.0370   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

The outlook for EUR/USD over the next 18 months is clouded by uncertain growth prospects, uneven policy responses, and unpredictable geopolitical events. In this video, ING's Francesco Pesole outlines four potential scenarios for the currency pair, including our base case for a weak rally through 2023   EUR/USD: Sizing up the scenarios   Read this article on THINK TagsUS FX Federal Reserve Eurozone ECB Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

It has been a relatively quiet week in the currency markets, and the limited activity has continued today, with the euro unchanged. German consumer confidence drops Germany, the bellwether for the eurozone, continues to churn out weak numbers, raising concerns that the bloc could be headed toward a recession. German ifo Business Climate dipped to 92.3 in June, down from 93.0 in May (92.8 est.) Germany and the rest of the eurozone remain vulnerable to negative economic factors which, unfortunately, do not show signs of improving anytime soon. These are the war in Ukraine, supply chain disruptions due to lockdowns in China, and spiralling inflation. The ECB has been slow to respond to higher inflation and the danger of stagflation is a serious risk. Germany has been slowly trying to wean itself off of Russian energy exports, but Moscow has decided to retaliate by decreasing its natural gas exports to Germany. This prompted Berlin to implement phase two of its emergency energy plan earlier this week. The energy crisis is getting worse and could result in the euro losing ground. The currency slipped below the 1.0500 line last week, and the risk is tilted to the downside for the euro due to the deteriorating situation with regard to Russian energy exports. Fed Chair Powell’s appearance on Capitol Hill this week was keenly watched by nervous markets. Powell didn’t hold back any punches, acknowledging that a recession was possible and a soft landing for the economy would be a challenge. At the same time, Powell sounded relatively optimistic about the strength of the US economy, and this message appeared to calm the financial markets, for the time being at least. . EUR/USD Technical EUR/USD has initial resistance at 1.0612, followed by resistance at 1.0727 EUR/USD has support at 1.0485 and 1.0370 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Euro drifting as German confidence dips - MarketPulseMarketPulse

Relevance up to 09:00 2022-06-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Details of the economic calendar from June 24 UK retail sales data showed a slowdown in the decline from -5.7% to -4.7%. This is a positive factor, if not for the revision of the previous indicators for the worse from -4.9% to 5.7%, as well as the forecast of a stronger slowdown to -4.1%. The bottom line shows bad statistics, which negatively affects the British currency. Analysis of trading charts from June 24 The EURUSD currency pair is moving within the range of 1.0500/1.0600, having local breaks, from time to time, that did not lead to violation of the set amplitude. The GBPUSD currency pair has formed a stagnation within the stagnation. For the second week, the quote has been moving within the flat 1.2150/1.2320, where a stagnation was formed within its upper border. Price fluctuations in a closed corridor indicate a characteristic uncertainty among market participants, which can lead to the accumulation of trading forces.     Economic calendar for June 27 Today, during the American trading session, data on orders for durable goods in the United States will be published, where May figures may decrease by 0.3%. If the data is confirmed, this is a negative factor, which can negatively affect the US dollar. Trading plan for EUR/USD on June 27 The flat is still relevant in the market, for this reason, traders are considering a scenario of a price rebound from the upper limit. If expectations coincide, the quote may slow down the growth rate, showing downward interest. At the same time, market participants are considering a flat breakout scenario. An increase in the volume of long positions may occur when the price holds above the value of 1.0600 in a four-hour period.     Trading plan for GBP/USD on June 27 In this situation, a short-term stagnation within the upper limit can become a lever in the subsequent acceleration in the market. Buy positions are taken into account after holding the price above the value of 1.2325 in a four-hour period. This step will indicate the completion of the flat. Sell positions should be considered after holding the price below 1.2250 in a four–hour period with the prospect of a move to 1.2200-1.2150.     What is reflected in the trading charts? A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market. Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.   Read more: https://www.instaforex.eu/forex_analysis/314575

Relevance up to 11:00 2022-06-28 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. EUR/USD     Higher timeframes The weekly short-term trend went down and now the main zone of attraction, where the levels of different timeframes have united, is located in the area of 1.0568 – 1.0539. The exit from the zone of the current consolidation, and the liquidation of the daily Ichimoku cross (1.0624) will open up prospects for a rise to the important resistance level of 1.0767 – 1.0787 (the upper limit of the daily cloud + weekly Fibo Kijun). The preservation of consolidation and further activity of the bears will allow considering plans to return to the supports of 1.0339 – 1.0349 (local low). Consolidation below will restore the downward trend on all higher timeframes.     H4 – H1 The uncertainty of the higher timeframes has led to the pair spinning around the key levels in the lower timeframes, consolidating in their zone of attraction. At the moment, key levels are located at 1.0538–46 (central pivot point of the day + weekly long-term trend). Finding and working above the levels gives preference to the development of bullish sentiments, their further reference points for the rise today can be noted at 1.0581 – 1.0605 – 1.0640 (resistance of the classic pivot points). Consolidation below key levels will support a shift in priorities in favor of the bears. The downward reference points within the day will be the support of the classic pivot points (1.0522 – 1.0487 – 1.0463). *** GBP/USD     Higher timeframes The center of attraction is now the weekly short-term trend (1.2300). If the pair leaves the consolidation zone and liquidates the daily death cross (1.2386), then the resistance of the daily cloud (1.2500 – 1.2727), reinforced by weekly (1.2626) and monthly (1.2678) levels, will wait for it. If the bears manage to maintain their ability to decline, coming out of this confrontation, then the support area of 1.2000 – 1.1933 is waiting for them. Consolidation below will allow us to consider new downward prospects.     H4 – H1 On the lower timeframes, the pair has been in the zone of influence and attraction of key levels for a long time (1.2277 central pivot point of the day + 1.2261 weekly long-term trend). At the same time, on H4, bullish players managed to enter the bullish zone relative to the Ichimoku cloud. As a result, resistance and reference points for the rise in the lower timeframes can now be noted at 1.2313 – 1.2357 – 1.2393 (resistance of classic pivot points) and at 1.2532 – 1.2598 (H4 target). If the priorities change and the activity will be inherent in bears, then their reference points for a decline within the day can be noted at the supports of 1.2233 – 1.2197 – 1.2153 (classic pivot points). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Read more: https://www.instaforex.eu/forex_analysis/314602

Relevance up to 15:00 2022-06-29 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   EURUSD bulls made another attempt to enter the Daily Kumo (cloud). Yesterday the daily candle closed above the kijun-sen (yellow line indicator) and inside the Kumo (cloud). Today price is getting rejected. If things stay like this, price action will be bearish. Support by the tenkan-sen (red line indicator) is at 1.05. The cloud rejection today if combined with a close below 1.0573 (kijun-sen), will be a bearish signal. Failure to stay above 1.05 will also be a bearish signal. Bulls need to react now and recapture 1.0590. As long as price is below the Kumo we remain bearish.   Read more: https://www.instaforex.eu/forex_analysis/282263

Central banks have proven their ability to move rates higher once again, trumping recession fears for now. We expect no let-up at the ECB’s Sintra forum today, but any further rise in yields is subject to risk sentiment holding up. The EUR curve structure is at odds with the worsening macroeconomic backdrop All eyes will be on the European Central Bank's forum in Sintra, Portugal The ECB out-hawks the market At the start of this week, one could reasonably have doubted central bankers’ ability to push market pricing into an even more hawkish territory. After all, recession fears boiling over in the eurozone, and elsewhere, cast a long shadow on policy tightening forecasts. In addition, the European Central Bank’s (ECB) Sintra forum promised to be a hawk-fest where officials try to regain control of the narrative, and inject some much needed confidence in the market. ECB comments have rekindled EUR rates upside Source: Refinitiv, ING   Today’s line-up promises even more hawkish comments The ECB has delivered on hawkish expectations, and then some. Martin Kazaks broke ranks with the 25bp July hike consensus, and President Christine Lagarde repeated ad nauseum that inflation-fighting remains the ECB’s utmost priority. The latter was expected, and the former was a risk at least partially priced by the market going into the event. And yet, this was enough for the market to add to Monday’s double-digit rise in EUR yields. It is difficult to extrapolate this into a third day of a bonds sell-off but, if anything, today’s line-up (see events section) promises even more hawkish comments. The EUR curve structure anomaly Once again, the policy-sensitive part of the curve finds itself in the firing line. Traditionally, this has meant 5Y and maturities around it. As central banks scramble to catch up with high inflation, effectively front-loading hikes, shorter maturities have seen the most volatility. This week’s underperformance of the 5Y point may be an accident, perhaps due to supply in the sector from Germany and KFW. If it isn’t, it would signal a greater confidence into this tightening cycle being a more protracted affair than previously thought. In light of growing recession fears, we have our doubts and would expect the 5Y sector to come in on the curve, for instance with the 2s5s10s butterfly in EUR swaps converging towards zero. The EUR forward OIS curve is the only one that isn't inverted Source: Refinitiv, ING   We expect the 5Y sector to come in on the curve Similarly, a more hawkish re-pricing should in our view come with an inversion of the near-dated forwards, effectively pricing the possibility of a subsequent cut. This has long since been the case in USD and GBP rates, but the EUR swaps term structure has so far remained flat. Should the terminal deposit rate climb above the 2% line, we expect inversion to occur… provided recession doesn’t become the market’s central scenario before then. Today's events and market view Spain and Germany kick off this round of June CPI releases today. A slight acceleration in the annual EU-harmonised measures would give weight to the barrage of hawkish ECB comments we’re sure to get from and around the Sintra forum. This being said, regional Germany inflation indices available at the time of writing suggest further inflation acceleration is not a given in June. Talking of which, no less than ECB President Christine Lagarde, Fed Chair Jerome Powell, BoE Governor Andrew Bailey are taking part of a policy panel early in the European afternoon. Recent comments suggest that central bankers will look to out-hawk each other to project an aura of confidence to markets roiled by inflation risk. They will be joined by Augustin Carstens of the Bank of International Settlements who, judging by his foreword to its annual report, will lean heavily in the hawkish direction. US data consists of mortgage applications and the third read of the now dated 1Q GDP report. Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The euro remains under pressure and briefly fell below the symbolic 1.0500 level in the Asian session before recovering. Lagarde says ECB ready to act if needed The ECB forum in Sintra, Portugal this week is a chance for the heads of central banks to hobnob and provide encouragement in these challenging times. ECB President Lagarde, Federal Reserve Chair Powell and BoE Governor Bailey are all in attendance. Inflation has become public enemy number one, and the BoE and the Federal Reserve have responded with an aggressive rate-hike campaign as inflation nears double-digits in the US and UK. Inflation has not spared the eurozone and accelerated to 8.1% in May. It wasn’t that long ago that Lagarde was dismissive of inflation, stating that it was temporary. Lagarde has been forced to change her tune, and the ECB has finally joined the tightening bandwagon, saying earlier this month that it would raise rates in July and again later in the year. Lagarde admitted on Tuesday that the ECB had revised downwards its growth forecasts, but downplayed concerns about a recession. Many market players would disagree, with Russia cutting energy supplies to the bloc and a very real possibility of the US economy tipping into recession. Lagarde’s hawkish comments at the ECB forum didn’t help the euro, which lost ground on Tuesday. Investors will be listening closely as Lagarde and Federal Reserve Chair Powell address the forum later today. Market jitters over a US recession are rising, which has boosted US equity markets of late, the logic being that the Fed will have to ease up on its hawkish bias. Powell may opt to play it safe on his visit to scenic Sintra, but any hints of dialing back on rate hikes could send the US dollar lower. . EUR/USD Technical 1.0544 is a weak resistance line, followed by resistance at 1.0618 There is support at 1.0482 and 1.0408 This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. Lagarde talks tough, Powell next at ECB - MarketPulseMarketPulse

Summary:  The US dollar has generally risen in recent months on the increasingly rapid pace of Fed tightening and perceived changes to that pace, so it was interesting yesterday to note that the US dollar rose purely as a function of weak risk sentiment in the wake of an ugly US Consumer Confidence number for June, as treasury yields and Fed expectations actually dropped modestly on the day. Elsewhere, the JPY is looking nervous again for testing the BoJ. FX Trading focus: Hard to find any path to sustained US dollar weakening. The equity market lurched suddenly into risk-off mode yesterday, just two days after one of the strongest rallies this year, showing an unsettling volatility of volatility. In Q1, the market rallied steeply in March, but rolled over starting on the second to last day of the quarter. This quarter, we found a bottom in sentiment right around the FOMC meeting and rallied steeply, only to roll over (so far) on the third to last day of the quarter. Are these portfolio rebalancing effects and are they already fading ahead of the new quarter? In any case, the jolt weaker in risk sentiment offered traditional safe-haven support for the US dollar, which has generally traded since late last year as a function of Fed tightening anticipation. The USD won’t roll over durably, I argue in our upcoming Q3 outlook, until the Fed is seen as launching into a sustained easing again. So, although yesterday saw a modest apparent safe-haven bid into treasuries, we also had Fed officials out staying on message for further tightening (Cleveland Fed’s Mester: Fed is “just at the beginning” of raising rates) and we have a QT that is on autopilot to continue tightening financial conditions. One key data point that spooked the market yesterday was the huge drop in expectations component of the US Consumer Confidence reading for June, which fell to 66.4 from the revised 73.7 in May (revised down from 77.5!). This is the worst for that data point since 2013 and further inverts the Expectations-Present Situation spread. But we’re not really “there yet” in terms of clear recession unfolding until the Present Situation is moving clearly negative. Technically, nothing has broken down among USD pairs – the EURUSD has merely shied away from the key 1.0600 resistance and traded back toward the pivotal 1.0500 area, the AUDUSD is having a look at a minor consolidation triangle support, but is still above the 0.6829 cycle low and GBPUSD finally halted its string of days of nearly unchanged daily closing levels at six and lurched lower yesterday, but traded nearly two figures above the cycle lows below 1.2000 this morning. So let’s wait and see for the next round of data to test USD direction and whether it has potential higher again. The easiest upside path would be US data that proves less bad than expected or even distinctly inflationary on earnings next week (the Citi economic data surprise index for the US is about as negative as it ever has been over the last several years, if we remove the pandemic outbreak months from consideration), together with a fresh leg higher in crude oil, all of which supports the USD from the Fed policy outlook side and safe-haven angle, if risk deleveraging continues . Good data is likely bad for risk and good for the US dollar, while very very bad for the JPY, as discussed below. Chart: USDJPYA decent little retreat in US treasury yields, and yet here we are pegged near the highs in USDJPY – possibly ready for an aggravated ascent in coming days if the US data fails to confirm the “recession incoming!” scenario and US yields tick back up higher toward the 3.50% level for the US 10-year treasury yield benchmark, for example. While US yields have remained rangebound recently, we also have to consider the relative balance sheet situation of the two central banks as the BoJ has added to its balance sheet at a record pace recently to defend the yield-curve-control policy and has effectively lost control of its balance sheet in a rising yield environment, while the Fed is set to accelerate the shrinking of its balance sheet (QT) from here. We have a potentially explosive situation on our hands that could lead to a spike higher in USDJPY to well above 140 and possibly even 150, which could then lead to the Bank of Japan to finally capitulate and driving a 10% or greater boomerang move in the opposite direction. Beware volatility potential in both directions! Source: Saxo Group Table: FX Board of G10 and CNH trend evolution and strength.JPY fading to the weak side again – will BoJ be forced to capitulate before other central banks change direction/yields in general roll over? USD comeback nothing to write home about just yet – watching through next US data points as noted above. But sterling weakness is picking up again, while CHF is riding highest and EURCHF is pushing on parity. Source: Bloomberg and Saxo Group Table: FX Board Trend Scoreboard for individual pairs.Interesting to note the USDCNH poking back into an “uptrend”, although really there was just the one-off move from the base there and then a subsequent period of range-trading. Elsewhere, note more sterling pushing to negative in more place - yesterday on the close versus SEK and NOK. Source: Bloomberg and Saxo Group Upcoming Economic Calendar Highlights (all times GMT) 1200 – Germany Flash Jun. CPI  1300 – Central Banks speakers at ECB Conference: Fed Chair Powell, BoE Governor Bailey, ECB President Lagarde  1500 – ECB President Lagarde to speak  1530 – US Fed’s Mester (voter) to speak  1705 – US Fed’s Bullard (voter) to speak  2350 – Japan May Industrial Production  0100 – New Zealand Jun. ANZ Business Survey  0130 – China Jun. Manufacturing and Non-manufacturing PMI Source: FX Update: USD jolted higher on fitful safe haven bid. JPY risks mount. | Saxo Group (home.saxo)

How low can you go? Given fears of a global recession, ‘How low can you go?’ is now a pressing question being asked of many risk assets and of key FX pairs like EUR/USD. Investors hold out little hope for improvement in energy supplies anytime soon and central bankers are showing no signs of being distracted from forceful monetary tightening cycles. That all points to equity markets perhaps another 10% lower and a worst case for EUR/USD near 0.95. The ECB in particular faces the conundrum of trying to address inflation fears, while at the same time trying to avoid driving the Eurozone economy into recession. While it may only deliver 100bp of the 175bp tightening currently priced by the market, our team now look for a Eurozone technical recession in 4Q22/1Q23. This will weigh on pro-cyclical currencies like the euro, sterling, the Swedish krona, and many currencies in CEE. Outperformers in what will be a difficult summer for risk will likely remain the dollar, the yen and the Swiss franc. In fact, the Swiss National Bank is now using its huge war chest of FX reserves to ensure the Swiss franc does just that – strengthen. Peak pain this summer and the focus on demand destruction will keep commodity currencies on the back foot. Most vulnerable may well be the likes of the South African rand and the Brazilian real – the latter shaping up for contentious elections in October. And in Asia, high beta currencies like the Korean won will remain soft as will the Philippine peso and Indonesian rupiah, the latter pair left vulnerable by dovish central banks. USD/CNY set to remain range-bound while Covid policy and geopolitics dominate. Developed markets EUR/USD How low can you go? Current spot: 1.0133 • As we put pen to paper, EUR/USD is within striking distance of parity. The stagflationary effects of the war in Ukraine are being felt far more in Europe than in N. America. Thus, short term rate spreads continue to move against EUR/USD as does the risk environment, where equities could have another 10% leg lower. • Based on recent correlations, a 10% fall in equities and a 25bp widening in spreads this summer would put EUR/USD somewhere near 0.98. A 50bp widening in spreads, were the Fed to move more aggressively or ECB hawks to soften, would be worth 0.95. • Don’t look for a substantial turn higher in EUR/USD this summer, since it seems far too early for Fed hawks to back down. USD/JPY Deteriorating risk sentiment to support the JPY Current spot: 136.97 • One of the core challenges faced by central banks the world over is to get inflation lower. The only tool they have at their disposal is to tighten monetary conditions and try to slow demand. Slowing demand is taking its toll on equity markets, which look vulnerable as central banks tighten further even as growth slows. The JPY, like the USD and CHF, should out-perform this summer. • The big USD/JPY rally looks to have stalled near 135 and certainly the going above here will be harder. US 10-year yields, a key driver of USD/JPY, have probably peaked at 3.50%. • The BoJ meeting of July 21st is unlikely to see the BoJ turn hawkish. A lower USD/JPY will be driven by equities & US yields. GBP/USD Bank of England keeping a close eye on sterling Current spot: 1.1971 • Away from the political circus in Westminster, sterling has been hit by the super-strong dollar, but is outperforming the euro. Here the BoE has started to highlight sterling’s role in monetary conditions. With UK CPI expected to push up to 11% in October, expect the BoE to stay hawkish and to hike 50bp on August 4th. • Yet, as a growth-sensitive currency, sterling will be in a for a tough summer and Cable looks set to trade down to 1.17 and possibly 1.14/15 again. We tentatively think these could again prove the lows for the year if, as we expect the $ turns by yr-end. • UK politics mean we won’t have a working government until September, but looser fiscal policy this Autumn can help GBP. This article is a part of the report by ING Economics Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Flight to safety boosts US dollar The US dollar caught another flight-to-safety boost overnight, running rampant over DM currencies with the euro, sterling, yen, and Australian dollar coming in for particular attention. In Asia today, EUR/USD continues to flirt with parity, while the US dollar has strengthened broadly across the Asia FX space. US Dollar Index (DXY) The dollar index soared 1.23% higher to 108.21 overnight, gaining another 0.16% to 108.38 in Asia as the euro and sterling losses continued. Overall, the technical picture remains constructive for the dollar index, although the daily relative strength index (RSI) is now in overbought territory, suggesting a temporary downward correction is possible. Having broken out of a 5-year triangle at 102.50 in April, its longer-term target remains in the 1.1700 area. More immediate resistance is at 108.45 and 110.00. Support is at the 1.0585 breakout point, and then 1.0500, followed by 1.0350 and 102.50. ​ EUR/USD EUR/USD tumbled by 1.43% to 1.0040 overnight, edging 0.17% lower to 1.022 today, having traded as low as 1.0006 earlier in the session. I expect there to be plenty of bids into parity initially, likely option and exporter-related. A break of 1.0000 is likely to trigger a sharp move lower as stop-losses and algos kick in. Since breaking a multi-year support line at 1.0850 in April, the euro has looked consistently weak, the recovery rally failing ahead of 1.0850 in a technical analysis nirvana. An oversold RSI allows for short-term recovery, with resistance at 1.0200 and 1.0270. Support is at 1.0000, and failure targets the 0.9900/25 area. British Pound To US Dollar GBP/USD fell by 1.19%% to 1.1890 overnight, dragged lower by the euro and a rampant US dollar. With a new Prime Minister not due to be announced until early September, this uncertainty will continue to weigh on the sterling. In Asia GBP/USD has edged 0.20% lower to 1.1867. Immediate support is nearby at 1.1860 and 1.1800, with 1.1400 the medium-term target. Resistance is well defined at 1.2060 and 1.2200. US Dollar To Japanese Yen USD/JPY rallied by 0.98% to 137.40 overnight despite US yields easing. In Asia, it is steady at 137.30 as Finance Minister Suzuki’s comments add some two-way risk into being long USD/JPY at these levels, at least temporarily. USD/JPY has resistance at 138.00 and 140.00, with support at 136.00, 134.25 and 132.00. Only a sharp fall in US yields seems likely to turn USD/JPY lower. Australian Dollar To US Dollar AUD/USD slumped by 1.70% overnight to 0.6735 on a combination of haven-based US dollar buying, a reversal in global investor sentiment, and China lockdown concerns. In Asia, it has eased 0.17% lower to 0.6725. A correction above resistance at 0.6900 looks unlikely for now, with risks skewed towards the downside and a test of 0.6600. NZD/USD also plummeted overnight and is facing a test of 0.6100 today. Asia Asian currencies fell overnight as investors moved into risk-aversion mode and bought US dollars across the board. The won, baht and yuan led losses, and today USD/Asia is higher by around 0.30%, with the Philippines peso falling 0.60% after poor trade data, while USD/IDR is testing 15,000.00 and USD/MYR looks set to test 4.4500. USD/INR and USD/PHP are trading at record lows although the price action in USD/INR, USD/IDR, USD/KRW, USD/PHP and USD/THB suggests that local central banks are offering US dollars at these levels. That is likely to be smoothing rather than lines in the sand, and US inflation above 7.0% this Thursday will probably spur more selling. USD/CNH has also moved sharply higher in the last 24 hours, and any indication that China is enacting lockdowns again in major urban centres will see it and the rest of the Asia FX space move sharply lower. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

It's inflation day in the US, and consensus is centred around a further acceleration in the headline rate and modest slowdown in the core. A 75bp hike by the Fed in July is almost certain. This is also the case in Canada today after New Zealand delivered 50bp this morning. Elsewhere, EUR/USD remains at risk of a break below parity  USD: Another acceleration in headline inflation The dollar gave up a portion of its recent gains yesterday against a pool of currencies which are generally driven by diverging factors. The high-beta Swedish krona, and Australian and New Zealand dollars rose along with the safe-haven yen, in what might have been a position-squaring dynamic. Oil-sensitive currencies (Norway's krone and the Canadian dollar) came under pressure as crude prices plunged. Yesterday's price action in the oil market was peculiar, as the news that OPEC sees crude demand exceeding supply by one million barrels per day seemed to be completely overshadowed by growing recession fears, which pushed Brent back below the $100/bbl mark.   China’s growth concerns likely played a role in the oil slump – although surprisingly did not hit AUD and NZD – as a new rise in Covid cases in Shanghai is fuelling speculation that more restrictive measures will be put in place. The implications of another re-rating lower of China’s economic outlook may end up offering even more support to the dollar across the board. Today, the focus will shift back to US data, as June’s headline inflation is widely expected to have accelerated again. Our economics team expects an 8.7% year-on-year reading, as prices of gasoline, food, shelter and airline fares have all continued to rise. The core rate may instead decelerate to 5.8% from 6.0% YoY. Barring a sizeable contraction in inflation measures, it appears likely that today’s numbers will do very little to dent the market expectations of a 75bp Fed hike in July. Later today, the Fed’s Beige Book will be released. We think the dollar could remain mostly a function of global dynamics today. With China’s Covid numbers rising again, we suspect markets will stay mostly on the defensive side, and the dollar may consolidate around current levels. But if we see a break below parity in EUR/USD (a very big CPI figure could be the trigger), then we should see a ripple effect (dollar positive) across many USD crosses.   EUR: Risks of a break below parity still high EUR/USD heavily tested the parity level yesterday, but to the best of our knowledge, the 1.00000 (unrounded) level did not print. Now, we are back where we were yesterday morning, around 40 pips above parity. After the final release of German inflation numbers this morning, which were in line with the previous reading, we should expect something similar for France and Spain later today, and no market impact. There are no other releases to highlight in the eurozone today, except for the rarely market-moving industrial production figures from the eurozone for May. To be sure, the region’s growth sentiment has remained quite weak after yesterday’s grim ZEW figures. The dollar should remain largely supported today around the US CPI release, and a big jump in inflation (not our base case, but possible) may actually be the trigger for another round of USD appreciation and potentially for a break below parity in EUR/USD. On the European front, the lingering uncertainty around a potential reduction in gas supply from Russia may continue to prevent a recovery in the euro for now. We continue to think that the chances of a break below parity are higher than a material rebound in EUR/USD. If we do see a break lower, we suspect that a further technical drop to the 0.9800-0.9900 area is possible. Elsewhere in Europe, EUR/GBP has traded on the soft side as the euro remains in a fragile position, and UK industrial production figures for May beat expectations this morning. Yesterday, Bank of England Governor Andrew Bailey sounded quite hawkish as he suggested bigger rate hikes will be used if necessary to curb inflation. When it comes to the Tory leadership contest, Rishi Sunak appears to be consolidating his role as the front-runner, although the implications for FX markets appear quite limited for now. EUR/GBP could stay around 0.8400-0.84500 today, but downside risks would be magnified if EUR/USD breaks parity. CAD: 75bp hike by the BoC today The Bank of Canada will announce monetary policy today, and we expect a 75bp rate hike, in line with what is now widely expected to be the next Fed move. Here is our full preview of today’s announcement. The rate decision will be accompanied by the release of updated economic projections, and a press conference by Governor Tiff Macklem. Given the still good economic backdrop – a correction in employment figures last week did not dent the notion of a tight labour market – and the fastest inflation rate in three decades, we see no reason for the BoC to scale down the hawkishness of its policy message today. Indeed, markets are fully pricing in a 75bp move today, and expect around 120bp of additional tightening for the rest of the year. Such rate expectations are definitely not too hawkish, in our view, as we believe that two more 50bp rate hikes in September and October, followed by 25bp in December are warranted. As today’s policy message by the BoC may not dent such rate expectations, we believe the overall impact on CAD should be rather limited or – if anything – slightly positive. At the moment, the prevalence of external factors is not boding too well for CAD as oil prices have come under fresh pressure, even though we expect the loonie to perform better than other oil currencies thanks to a still good domestic backdrop and aggressive BoC tightening. Spikes to the 1.31-1.33 area in the near term are possible in USD/CAD, but we still expect sub-1.25 levels by year-end. Elsewhere in the commodity FX space, the Kiwi dollar was very little impacted by the RBNZ 50bp rate hike. Despite the Bank reiterating its hawkish message about more aggressive rate hikes, we see rising risks of a recalibration in the hawkish tone at the August meeting (or anyway before the end of the year) due to a falling housing market and worsening economic outlook. In any event, NZD/USD should remain driven by external factors for now, and 0.6000 might be tested in the coming weeks. CEE: The region defies the strengthening dollar Currencies in the Czech Republic, Hungary and Poland have now reached our levels for this week. What else will the rest of the week bring for the region? The koruna has stepped out of the shadows and become the star of the week. As we expected, the Czech National Bank likely moved its levels a bit lower and combined with the liquidation of short positions, the koruna reached EUR/CZK 24.40, the strongest level since late April. Today's release of June inflation leaves us hopeful that the koruna still has room to strengthen further towards 24.30. However, early data shows that in last week's FX intervention, the CNB spent as much as in May and June combined. In addition, we think the August CNB meeting will renew the pressure on the koruna to weaken. Thus, it is only a matter of time before intervention becomes too costly. Meanwhile, the National Bank of Hungry delivered an interest rate hike yesterday as promised, which helped the forint for a while. Although the interest rate differential has reached new record levels and the NBH is the most open central bank in the region to further rate hikes, we believe the forint will soon return closer to the 410 EUR/HUF level and it remains our least favourite currency in the region. On the other hand, in Poland, the market has restored some of its hawkish expectations after misreading Governor Adam Glapinski's speech. In our view, this opens up room for the zloty to erase some of its current losses and return closer to 4.70. Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Relevance up to 10:00 2022-07-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. EUR/USD     Higher timeframes Interaction with 1.0000 support continues. The emerging inhibition has formed. As a result, the situation in its conclusions and expectations has not changed significantly. Bears are interested in passing the level and consolidating below. At the same time, it is desirable for the opponent that the deceleration becomes not just a pause before the next stage of decline but leads to more significant results and the beginning of a new corrective rise. The nearest resistance today is located at 1.0231 (daily short-term trend).     H4 – H1 The pair continues to trade in the correction zone on the lower timeframes, limited by key levels. Key levels are bearish today, consolidating around 1.0059–92 (central pivot of the day + weekly long-term trend). Consolidation above will change the current balance of power in favor of a possible increase in bullish sentiment. The succeeding upward reference points within the day will be the resistance of the classic pivot points (1.0121 – 1.0184 – 1.0246). The exit from the correction zone and the continuation of the downward trend will return the relevance to the downward benchmarks of the current day—the support of the classic pivot points (0.9996 – 0.9934 – 0.9871). *** GBP/USD     Higher timeframes The pair traded in the daily correction zone for the past day. The nearest boundaries of the current movement are Tuesday's low (1.1807) and the resistance area of 1.1986 – 1.2000 (daily short-term trend + weekly long-term trend). Consolidation above or below these boundaries will allow us to consider new perspectives.     H4 – H1 At the moment, the pair remains in the correction zone. The correction has been supported for a long time by the first classic pivot point of the day—S1 (1.1819). Further, S2 (1.1752) and S3 (1.1678) can serve as reference points for the decline. The key levels of the lower timeframes are now holding back the development of the correction and are located today at 1.1893 (central pivot point of the day) and 1.1932 (weekly long-term trend). Consolidation above will change the current balance of power in favor of strengthening bullish sentiment. Further reference points for the rise within the day today will be the resistance of the classic pivot points (1.1960 – 1.2034 – 1.2101). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Read more: https://www.instaforex.eu/forex_analysis/316180

US dollar in choppy waters Currency markets had another choppy overnight session, which ultimately ended up sideways again, despite US inflation unexpectedly rising. EUR/USD traded to parity but managed to finish higher at 1.0040, a pattern repeated across most major currencies. With the US dollar looking overbought on short-term indicators as well, I suspect that the odds of a US dollar correction lower have risen sharply, especially as Asian central banks and others have rushed to tighten monetary policy this week. I could see the correction persisting in some shape or form until the FOMC meeting later this month. The dollar index traded in a 100-point 107.50 to 108.50 range overnight but ultimately finished just 0.13% lower at 108.02. It has risen by 0.23% to 108.27 in Asia, led by a much weaker Japanese yen. Resistance is at 108.50 and 110.00. Support is at 107.50 and then the 1.0585 breakout point, followed by 1.0500. ​ The relative strength index indicator (RSI) is overbought, signalling a potential correction lower by the US dollar. EUR/USD traded through 1.0000 to 0.9998 overnight, but held this level once again, and rose back to finish the day 0.21% higher at 1.0058. In Asia, it has eased to 1.0035. A clean break of 1.0000 is likely to trigger a sharp move lower as stop-losses and algos kick in, but it is significant that it has held this level for two days in a row, although its rallies have been limited. ​ The oversold RSI and underwhelming post-inflation performance by the US dollar suggests the euro could be tracing out a low for now and a correction back towards 1.0200 is possible. EUR/USD has support at 1.0000 and then 9900/25. It has resistance at 1.1020, the overnight high, and then 1.0200. GBP/USD traded as high as 1.1965 overnight before closing unchanged at 1.1890. It has fallen to 1.1870 in Asia but looks to be trying to trace out a temporary low at 1.1800, which is initial support. Resistance is at 1.1965 and then 1.2060 and 1.2200. USD/JPY continued rallying overnight as US short-dated yields rose, finishing 0.41% higher at 137.45. In Asia, USD/JPY has continued rallying quite aggressively, rising 0.44% to 138.05. With a procession of central banks capitulating and hiking rates aggressively in the past 24 hours, Japan’s super-easy policy leaves it an outlier and that seems to be weighing on the yen. ​ USD/JPY’s next resistance is at 140.00, with support at 136.00, 134.25 and 132.00. I expect the “watching markets closely” noise to increase from Tokyo today and being long above 138.00 could be a dangerous trade in the shorter term. AUD/USD was unchanged at 0.6755 overnight, quite the surprise, given the US inflation data and another reason to think a greenback correction lower is imminent. ​ In Asia, super-strong employment data had lifted rate hike expectations and pushed AUD/USD 0.30% higher to 0.6775. It also looks like some decent AUD/JPY buying is going through. It has resistance at 0.6800 and 0.6850, with support between 0.6700 and 0.6730. NZD/USD is unchanged at 0.6130 again today, suggesting increased downside risks post the RBNZ yesterday. AUD/NZD buying post the Australian data is also capping NZD/USD gains. Asian currencies ranged overnight once again and have edged lower in Asia as some US dollar strength had returned. Overall, though, the response by Asian FX has been relatively muted post the US data and the moves seen by the MAS and BSP this morning. That said, USD/MYR continues to creep closer to 4.4500, USD/IDR to 15,000.00 and USD/INR and USD/KRW remain close to recent highs. The SGD and PHP have outperformed today as both central banks sprung unscheduled monetary tightening on markets. With South Korea, Singapore and the Philippines tightening this week, the pressure will be increasing on other regional currencies to follow suit as Asian central banks break ranks on inflation. Most notably, the INR, IDR and MYR look the most vulnerable and the recent slump in commodity prices will be another headwind for Indonesia and Malaysia. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. US dollar consolidates - MarketPulseMarketPulse

Relevance up to 10:00 2022-07-16 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The euro-dollar pair yesterday updated another price low, reaching 0.9953. In general, new lows in the foreseeable future will be limited to 20 years ago, since in 2002, the EUR/USD pair traded in the range of 0.85–1.05. Therefore, one and a half thousand points down from the parity level, so to speak, were "staked out" in 2002. However, at the moment, these circumstances are symbolic. In practical terms, the more pressing question is: can the EUR/USD bears settle below parity, and if so, how far will they go from the 1.0000 mark? Today, we can say that the sellers are cautiously probing the "uncharted" price territory, not risking staying within the 99th figure. And although each new attempt to go below 1.0000 looks more confident than the previous one, it is still risky to open short positions below the parity level. Figuratively speaking, traders make a circle, "capturing" the area of the 99th figure, and then come back, closing the trading day above the parity zone. We see this circle gradually expanding: at first, sellers reversed a step away from parity, then at 0.9998. Yesterday, the price low was fixed at 0.9953. And yet, it is still premature to announce the development of a downward movement: for this, the bears need at least to gain a foothold below the key support level.     Here it is necessary to highlight an important point: the downward trend for the pair is still in force—the only question is how far sellers can go down from the 1.0000 target. Traders are justifiably afraid of "catching the price bottom," so they act extremely cautiously within the 99th figure. But in general, there are no prerequisites for a large-scale price reversal today and are not expected. The fundamental picture clearly favors the dollar, while the euro is under the yoke of economic and geopolitical problems. Therefore, EUR/USD buyers can now only count on corrective upward waves. It is noteworthy that EUR/USD buyers actually ignored Bloomberg's information published today that the ECB will present an unlimited bond buying tool next week, which will help markets "adjust to sharper and faster interest rate hikes than previously thought." Despite the hawkish nature of this message, the euro remained under pressure. Rumors have been circulating on the market for several weeks that the ECB may raise rates by 50 basis points in July. But, firstly, such assumptions are still the subject of discussion, and secondly, even if the members of the European regulator decide to take this step, they will still be behind—at least with respect to the Fed. The fact is that after the release of data on the growth of the consumer price index in the United States and the producer price index, hawkish expectations regarding the Fed's further actions have significantly increased in the market. Market participants estimate the probability of a 100-point increase following the results of the July meeting at 88%. Such a step would be unprecedented. Therefore, the very fact that this scenario is being discussed in a practical plane allows the dollar to stay afloat and dominate. Moreover, most economists surveyed by Bloomberg still doubt that the European Central Bank will deviate from the previous plan. In their opinion, the deposit rate, which currently stands at -0.5%, will be increased by 25 basis points in July and 50 points in September. After that, according to general forecasts, at each subsequent meeting, until the March meeting in 2023, the ECB will increase the rate in 25-point increments until it reaches 1.25%. All this suggests that the dollar in the foreseeable future will retain its attractiveness in tandem with the euro. Here we do not even consider other fundamental factors that support the US currency against increased anti-risk sentiment. And yet the main question, in my opinion, remains unanswered—to what "depth" are EUR/USD sellers able to descend within the framework of the development of the downward trend? Indeed, it is necessary to be careful when opening short positions on the pair. On the one hand, corrective pullbacks do not allow you to enter sales with an optimal price gap. On the other hand, the bears of the pair feel insecure under the 1.0000 mark. It may be necessary to "follow the beaten path" here. For example, yesterday, traders identified themselves at 0.9953, impulsively declining and bouncing back. Therefore, this target is now the main downward target and the support level, which coincides with the lower line of the Bollinger Bands indicator on the D1 timeframe. Therefore, the following targets can be determined on corrective upward pullbacks: 1.0050, 1.0000, 0.9955. Longs in any case look risky, given the prevailing fundamental background and the widespread dominance of the US currency.   Read more: https://www.instaforex.eu/forex_analysis/316278

Relevance up to 09:00 2022-07-30 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis EUR/USD will increase this week, from 1.0213 (closing of the last weekly candle) to 1.0213, which is the 38.2% retracement level (yellow dotted line). Then, it will continue moving up to the 50% retracement level at 1.0367 (yellow dotted line), before returning to 1.0278, which is the upper fractal (weekly candle from 07/17/2022).     Fig. 1 (weekly chart) Comprehensive analysis: Indicator analysis - uptrend Fibonacci levels - uptrend Volumes - uptrend Candlestick analysis - uptrend Trend analysis - uptrend Bollinger bands - uptrend Monthly chart - uptrend All this points to an upward movement in EUR/USD. Conclusion: The pair will have an upward trend, with no first lower shadow on the weekly white candle (Monday - up) and no second upper shadow (Friday - up). During the week, euro will climb from 1.0213 (closing of the last weekly candle) to the 38.2% retracement level at 1.0213 (yellow dotted line), move to the 50% retracement level at 1.0367 (yellow dotted line), then return to the upper fractal at 1.0278 (weekly candle from 07/17/2022). Alternatively, the pair could decrease from 1.0213 (closing of the last weekly candle) to the 161.8% retracement level at 1.0078 (red dotted line), then bounce up to the 23.6% retracement level at 1.0146 (yellow dotted line).   Read more: https://www.instaforex.eu/forex_analysis/317034

Relevance up to 03:00 2022-08-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis (Fig. 1). The euro-dollar pair may move upward from the level of 1.0245 (close of yesterday's daily candle) to 1.0281, the 50.0% retracement level (red dotted line). After testing this level, the price may continue to move upward with the target of 1.0351, the historical resistance level (blue dotted line). Upon reaching this level, a downward pullback is possible.     Fig. 1 (daily chart). Comprehensive analysis: Indicator analysis – up; Fibonacci levels – up; Volumes – up; Candlestick analysis – up; Trend analysis – up; Bollinger bands – up; Weekly chart – up. General conclusion: Today, the price may move upward from the level of 1.0245 (close of yesterday's daily candle) to 1.0281, the 50.0% retracement level (red dotted line). After testing this level, the price may continue to move upward with the target of 1.0351, the historical resistance level (blue dotted line). Upon reaching this level, a downward pullback is possible. Alternative scenario: from the level of 1.0245 (close of yesterday's daily candle), the price may move upward to 1.0281, the 50.0% retracement level (red dotted line). After testing this level, a downward movement is possible with the target of 1.0163, the 38.2% retracement level (blue dotted line). When testing this level, the price may move up.   Read more: https://www.instaforex.eu/forex_analysis/318125

US dollar has had an uneven sell-off overnight The US dollar fell overnight, led by losses against the euro for unknown reasons, with the Japanese yen also gaining as US yields slid slightly. Sterling and the Australasians hardly moved, while Asian currencies remain stubbornly anchored near to recent lows.   The dollar index fell 0.59% lower at 105.75 overnight, retracing slightly higher by 0.11% to 105.87 in Asia. The dollar index breakout lower at 106.45 has continued to cap rallies this week on a closing basis, suggesting downside risks are still the path of least resistance. Beyond that, 106.75 is the next resistance. Support is at 105.65, and then the more important 1.0500 level. Failure signals a deeper move lower to 1.0350 and, potentially, the 102.50 longer-term breakout.   EUR/USD rallied by 0.76% overnight to 1.0245, easing slightly to 1.0235 in Asian trading. Given stubbornly high European gas prices and the recessionary risks from its Eastern border, the single currencies environment remains challenging, even if 0.9950 is now looking like a medium-term low. EUR/USD had solid resistance nearby at 1.0250 and then 1.0300. A close above 1.0300 this even would signal further gains to 1.0500, however. Meanwhile, EUR/USD has support at 1.0150 and then a series of daily lows between 1.0100 and 1.0125.   GBP/USD traded in a choppy 150+ point Bank of England range overnight but ultimately finished nearly unchanged at 1.2160. In Asia, it has edged lower to 1.2145. When your central bank has forecast a recession and inflation rising to 13.0% but has only hiked rates to 1.75%, it is reasonable to assume they are behind the curve. That stagflationary reality could be limiting sterling’s gains. Support is at 1.2065, the overnight low, with resistance at 1.2215, the overnight high, followed by 1.2300.   Four days in Bali saw me miss the long-awaited capitulation sell-off by USD/JPY as the US/Japan rate differential narrowed. Much will depend on the US Non-Farm Payroll data this evening and the reaction by US bonds. The sell-off this week went further than I expected but held the 100-day moving average (DMA), which today is at 130.70. Resistance is clearly denoted at 134.65 now. Expect plenty of noise in between.   AUD/USD rose 0.25% to 0.6965 overnight, and NZD/USD rose by 0.40% to 0.6295. Both are almost unchanged in Asia as risk sentiment holds up into the Asian session. The technical picture for both remains constructive as both currencies staged upside breakouts higher a fortnight ago. They remain well above their breakout lines at 0.6790 and 0.6145, and a daily close above either 0.7050 or 0.6350 signals the next stage of the recovery rally.   Asian currencies were steady overnight, booking an uneven session of mixed gains against the greenback. In Asia, surging inflation numbers from the Philippines and Thailand have sparked 0.75% rallies by THB and PHP to 35.620 and 55.17 as markets price in faster monetary tightening. That has had a knock-on impact across the Asian FX space, with the Korean won gaining 0.40% to 1297.20. The Indonesian rupiah and Malaysian ringgit remain near recent lows, however, as both central banks remain very reluctant rate hikers. With inflation rising in Asia, lifting rate hike expectations, Asian currencies could finally be starting also to gain some benefits from recent US dollar strength elsewhere. USD/INR has eased to 89.976 today. With the RBI rate decision this afternoon, I expect volatility ahead. Further INR strength from here probably relies on the RBI statement being hawkish; otherwise, I suspect INR weakness will resume. This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds. US dollar retreat continues - MarketPulseMarketPulse

Relevance up to 04:00 2022-08-09 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The euro fell by 60 points on Friday due to good data on employment in the US. The lower shadow of the daily candle touched the target support at 1.0150. In the non-agricultural sector, 528,000 new jobs were created in July. This morning the price approached the support at 1.0150 again and shows the intention to overcome it.     If this plan succeeds, then the price will open the way to the target bearish level of 1.0020. This is our main scenario. The signal line of the Marlin Oscillator is also close to overcoming the zero neutral line and moving into the downward trend zone. The main plan may be disrupted by the price's exit above Friday's high at 1.0252, which will also correspond to overcoming the resistance of the MACD indicator line on a daily scale. In this case, the target would be 1.0360 (15 June low).     On the four-hour chart, the price develops under both indicator lines - balance and MACD. The Marlin Oscillator is in a downward position. We are waiting for the price to leave the area below 1.0150 and settle under the level. If the situation develops according to an alternative scenario, the price moving above the MACD line (1.0220) will not be enough to develop movement to 1.0360, such a transition above the indicator line may turn out to be false. The working signal will be overcoming the MACD line of the daily scale, which is near Friday's high at 1.0252.   Read more: https://www.instaforex.eu/forex_analysis/318258

Relevance up to 20:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The content of the report of the United States Department of Labor came as a complete surprise, and eventually led to a noticeable strengthening of the dollar. And the fact is that all the main indicators turned out to be much better than forecasts. Thus, the unemployment rate, instead of remaining unchanged, fell from 3.6% to 3.5%. Moreover, 528,000 new jobs were created outside of agriculture. Although, according to forecasts, the creation of 290,000 new jobs was expected. In fact, they were about twice as many. And do not forget that in order to maintain the stability of the labor market, a little more than 200,000 new jobs should be created outside of agriculture. And since they turned out to be more than twice as many, the unemployment rate will continue to decline. Which somewhat contradicts the idea that the US economy is sliding into recession. Number of new non-agricultural jobs (United States):     Today the macroeconomic calendar is absolutely empty, and apparently, the market will consolidate around the values reached on Friday. Despite everything, the EURUSD currency pair is moving within the 1.0150/1.0270 horizontal channel, consistently working out the set boundaries. Last Friday, the quote rebounded from the area of the upper border and rushed to the area of the lower one, where the volume of short positions decreased. A consistent cycle of fluctuations is essential in the market, which makes it possible for traders to work based on the natural basis of the past. The technical instrument RSI H4, following the price rebound from the upper border of the flat, crossed the middle line 50 from top to bottom. This signal only indicates the bounce method, but not the end of the flat. In general terms, the indicator is still centered on the middle line. The moving MA lines on the Alligator H4 have a lot of interlacing, this indicates a variable signal that corresponds to the flat stage.     Expectations and prospects The flat stage is still relevant in the market, which is indicated by the current price rebound from the lower border. In this situation, the subsequent increase in the volume of long positions is expected after the price stays above the value of 1.0200. In this scenario, it is possible to consider movement towards 1.2150/1.2170. The main strategy, as before, is the method of breaking through one of the control levels: 1.0300 - when considering the upward development of the market; 1.0100 - if market participants are oriented towards a hike towards the parity level. It is worth noting that the signal must be confirmed in a four-hour period. Complex indicator analysis has a variable signal in the short-term and intraday periods due to the current flat. At the moment, the indicators point to long positions on the euro, due to the price rebound from the lower border of the outset.   Read more: https://www.instaforex.eu/forex_analysis/318280

Relevance up to 07:00 2022-08-11 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results.   The US currency started the week quite cheerfully, trying to maintain the positive momentum received after the release of the Nonfarm Payrolls data. At the same time, the euro cannot boast of similar dynamics, demonstrating pendulum dynamics. The euro is once again teetering on the brink of falling, while trying to settle in the positions it has won. However, these actions are not always successful as the USD continues to dominate the market. At the same time, according to reports on the dollar index (USDX), investors are showing bearish sentiment against the US currency. Over the past two weeks, market participants have reduced their positions on USD growth after a long build-up. A continuation of the current trend can lead to a short-term drawdown of the greenback. Currently, the greenback is trying to gain a foothold in the upward trend, and not without success. Its rise was catalyzed by impressive US employment data. Against this backdrop, markets expect more decisive action from the Federal Reserve in terms of tightening monetary policy. Recall that, according to reports, 528,000 jobs appeared last month in the US economy, and the unemployment rate fell to 3.5%. According to economists, positive data on US employment revived the hopes of traders and investors about a significant increase in the key rate (by 75 bps) at the Fed's September meeting. Note that strong data on employment growth in America came as a surprise to the markets. Most experts expected opposite results, referring to recent studies on the onset of a recession in the US economy and to a slowdown in economic growth in the country. For the time being, however, fortune favors the greenback. After the release of Nonfarm Payrolls, the dollar confidently overtook the euro. The EUR/USD was trading near 1.0186 on Monday morning, August 8, trying to return to last week's highs near 1.0200.     Note that after the release of the US employment report, the EUR/USD pair plunged sharply to the critical 1.0170, but later managed to recover. Against this background, some experts are optimistic about the immediate prospects for the euro. According to preliminary calculations, in the coming months, the euro may be in an upward trend, despite the threat of a recession in the European economy. The reason is the increased risk appetite in global markets. Against this background, experts believe that the fair rate of the EUR/USD pair is close to 1.1400. Analysts' conclusions are based on the difference in rates in the US and Germany. At the same time, experts do not exclude another fall of the euro to parity with the dollar. This week, investors are focusing on US inflation data. The release of the July consumer price index is scheduled (the preliminary forecast provides for an increase of 0.2% in monthly terms) on Wednesday, August 10. The markets will get acquainted with the US producer price index on Thursday, August 11. This indicator is crucial for the further dynamics of the interest rate. Recall that the positive report on employment in the US opened the way for the Fed to aggressively tighten monetary policy. According to experts, having received confirmation of the strengthening of the US economy, investors will return to long positions on the dollar. This will give an additional impetus to the latter and set up traders for an extreme tightening of monetary policy by the Fed.   Read more: https://www.instaforex.eu/forex_analysis/318270

The dollar starts the new week on the firm side after some impressive US July jobs figures on Friday. US money markets now price around 125bp of further Fed tightening and then a softer Fed profile from next summer onwards - pretty much now in line with our house view. Firm US July CPI data this week can see the dollar continue to trade near its highs Source: Shutterstock USD: Dollar to hold near highs, but interest in carry could emerge An unequivocally strong US July jobs report released on Friday has gone a little way to assuaging recession fears and given credence to last week's pushback from the Fed that it was nowhere near done in terms of tightening. Pricing in the US money markets now sees a further 125bp of Fed hikes this year (we see hikes of 50bp, 50bp, and 25bp in September, November and December). And those money markets price in around 50bp of cuts from summer '23 onwards. Current pricing is consistent with our house view and perhaps could usher in a period of calm for Fed pricing and the dollar. That pricing looks unlikely to be altered much this week with a strong US July CPI, where the core rate should stay near 6% year-on-year and keep the Fed concerned. There should also be focus this week on the Senate's approval of what is now called the Inflation Reduction Act - legislation focused on bringing down prescription drug prices and targeting spending on the climate emergency. At $437bn it is a far cry from the $1-1.5trn initial plans for the Build Back Better legislation and thus seems unlikely to be read as any kind of major fiscal stimulus. It will be interesting to see, however, whether new taxation on stock buybacks next year triggers a rush of stock buybacks this year - potentially supporting US equities (and probably the dollar) into year-end. Expect DXY to hold near its recent highs of 107. But if the dollar is not going anywhere in a hurry, there could be renewed interest in the carry trade. Of the available carry, we think the near 10% levels offered through the 3-month Mexican peso implied yields look attractive. Here Banxico does a good job of keeping USD/MXN stable and is expected to hike rates 75bp to 8.50% this Thursday. Chris Turner We see the dollar holding near its highs after Friday's strong jobs reporthttps://t.co/WwxUhzptEZ — ING Economics (@ING_Economics) August 8, 2022   EUR: Italy's ratings outlook change won't help the euro On Friday evening, the ratings agency Moodys shifted its rating outlook on Italy's sovereign debt from stable to negative. Given that Moodys' Italian rating is just one notch above junk - that has raised some eyebrows and no doubt will call the European Central Bank into further supportive action, be it through the more aggressive re-investment of the Pandemic Emergency Purchase Programme or potentially even using its new support instrument - the Transmission Protection Instrument (TPI). None of this will help the beleaguered euro, where the ECB's trade-weighted measure remains glued to the lows of the year. Indeed, if quiet summer markets prompt renewed interest in the carry trade, the euro will probably be one of the preferred funding currencies.  EUR/USD was understandably hit by Friday's strong US jobs release data and looks like it can stay offered in a 1.0100-1.0300 trading range. Elsewhere, EUR/CHF will be monitoring the performance of Italian bonds today and can probably edge back towards the lower end of a 0.97-0.98 range - a move that will not be unwelcome to the newly hawkish Swiss National Bank. Chris Turner GBP: Week culminates in a 2Q GDP contraction Following last week's pretty bleak Bank of England meeting, the focus this week will be Friday's release of 2Q22 UK GDP data. The market is expecting a 0.2% quarter-on-quarter contraction, we are looking for -0.1% QoQ.  A contraction is widely priced because of the extra bank holiday in June, but weaker activity will highlight the BoE's call of the UK entering a recession in 4Q22 and contracting 2% over the five subsequent quarters. Sterling probably has not sold off more since investors do not quite know what to do with a reserve currency that will be backed by rates at 2.25% if we are correct with our BoE call for the September meeting. Given that the euro should remain soft, we are sticking with our original call from last Thursday that EUR/GBP may struggle to break above the 0.8450 area this week. Chris Turner CEE: Inflation strikes back, again A heavy calendar in the Central and Eastern Europe region is again led by inflation numbers. On Monday, we will see data from the labour market, foreign trade and industrial production in the Czech Republic. The monthly numbers show a slowdown in the economy, but we have also seen some positive surprises that reduce the risk of a technical recession in the second half of the year. Inflation in Hungary will be published on Tuesday. Peter Virovacz expects a further increase from 11.7% to 13.3% year-on-year, slightly above market expectations, also supported by tax changes. In the Czech Republic, inflation will be published on Wednesday. Again, we expect a new record at 18.5% YoY, well above market expectations, mainly due to the announced energy price hikes. On Thursday, we will see inflation in Romania. Valentin Tataru forecasts a drop in YoY terms from 15.1% to 14.6%, which would mark the first decline from the peak. On Friday, the current account in Poland and the Czech Republic will be published, we will see the final estimate of Polish inflation and the Czech National Bank will publish minutes. In the FX market, on the floating side of the CEE region, the Polish zloty and Hungarian forint have strengthened significantly in the past week and, as we mentioned on Wednesday, it is a bit too much for our liking. In both countries, market interest rate expectations have since fallen further, driving rate differentials to their lowest levels since mid-June in Hungary, and April in Poland. Moreover, Friday's US jobs report supported the dollar, which is also not playing into the region's hands. Thus, in our view, the only thing that saved the zloty and forint from losses at the end of last week was the positive market sentiment and risk-on mode. However, we expect both currencies to be weaker this week. We see the forint as more vulnerable, with our target at 399 EUR/HUF and the zloty at 4.75 EUR/PLN for the days ahead. The koruna is still liquidating short positions after Thursday's CNB meeting which made it clear that the end of FX intervention is not on the table. However, we expect the koruna to return to 24.60 EUR/CZK soon. The Romanian leu remained untouched after Friday's central bank meeting and is still enjoying its trip to stronger levels around 4.925 EUR/RON - a move that we think is temporary. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Relevance up to 10:00 2022-08-10 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. EUR/USD     Higher timeframes The situation has not changed significantly over the past day, so the conclusions and expectations voiced earlier remain relevant today. The center of attraction now is the daily cross (Kijun 1.0200 + Tenkan 1.0204). Bullish targets remain at 1.0259–85 (closing daily cross + weekly short-term trend). The benchmarks, which will allow bears to build new prospects, remain today at 1.0000 – 0.9952 (psychological level + minimum extremum).     H4 – H1 On the lower timeframes, the key levels joined forces at the level of 1.0193 (central pivot point of the day + weekly long-term trend). At the same time, the pair is in the zone of attraction of key levels, which confirms the absence of a clear preponderance of forces between the parties. The reference points for bulls within the day, in the case of an upward trend, are the resistance of the classic pivot points at 1.0225 – 1.0255 – 1.0287. In the case of a decline, then the reference points for bears are 1.0163 – 1.0131 – 1.0101 (support of the classic pivot points). *** GBP/USD     Higher timeframes For the last working day, the pound could not change anything. It remains in the attraction zone of the weekly short-term trend (1.2082). Due to the fact that the situation has not changed, the location of all the main reference points has remained the same. For bears, it is important to overcome the support (1.2026 - 1.2000) and liquidate the daily golden cross (1.1963) in the near future. For bulls, the following reference points are important: 1.2148 (daily short-term trend) - 1.2227 (lower limit of the daily cloud) - 1.2293 (maximum extremum).     H4 – H1 The lower timeframes are currently busy testing the key levels, which are at 1.2087 (central pivot point) and 1.2131 (weekly long-term trend), as well as interacting with the resistance of the H4 cloud (1.2091 - 1.2187). Bullish targets, in the case of continued rise within the day, are 1.2177 - 1.2216 (resistance of the classic pivot points). For bears, the support is at 1.2036 - 1.1997 - 1.1946 (support of the classic pivot points). *** In the technical analysis of the situation, the following are used: higher timeframes – Ichimoku Kinko Hyo (9.26.52) + Fibo Kijun levels H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Read more: https://www.instaforex.eu/forex_analysis/318438

While the US is sticking to good old inflation spotting, Europe is preparing for the next round of the gas story. EUR/USD will remain under US domination, but the Central and Eastern European region is more likely to dance according to geopolitical squabbles USD: CPI to cement the cycle It has been a trendless week for the dollar so far, with very little follow-through from Friday’s jobs-inspired rally. Today sees the biggest data event risk of the week – and probably of the month. US July CPI is expected to soften a little on a headline basis but nudge up on a core basis to just above 6% year-on-year. Stubbornly high core inflation should support the Federal Reserve’s position that its work is far from done. It should also support pricing in the US money market curve that sees the policy rate taken around 125bp higher in this cycle. Barring a massive upside surprise that can demand an extra 25-50bp or so priced into the back end of the curve (and sending the dollar a leg higher), we expect the inflation data to cement current tightening expectations and keep the dollar bid near the high. Yet it is a long time until the next FOMC meeting on 21 September and barring any shocks, we feel that the dollar holding gains against the low yielders such as the euro and yen should not preclude a little more interest in some emerging high yield currencies. 105.70-107.00 are now the short-term parameters for DXY. Chris Turner EUR: Too many challenges EUR/USD continues to languish near the lows and there does not seem a compelling case to buy it. As we discussed recently, medium valuation considerations do not show it as particularly undervalued. And the larger geopolitical event risks leave Europe more exposed than North America. There is no European data of note today and EUR/USD will therefore be bounced around by the US CPI print. Declining levels of implied volatility suggest investors may be in no mood to chase EUR/USD out of a 1.0100-1.0300 range near term. Chris Turner CEE: The European gas story has reached the next level Yesterday's news about the halt of gas supplies from Russia to Central and Eastern Europe has not caused much damage so far. Of course, further developments, especially the length of the supply stoppage, will be key. Purely in terms of energy dependence, Hungary is the most exposed to problems with supplies from Russia, followed by the Czech Republic. At the same time, the statistics on gas in storage are negative for Hungary. For the time being, both countries report that they have enough gas in reserve to last several weeks and keep the economy running as normal. However, no one will want to test what the reality is. In the FX market, so far, the only visible reaction within CEE has been in the Hungarian forint, which we previously identified as the most vulnerable. Of course, in the coming days, this story will be in focus and drive the direction of FX markets. We see strong potential here to trigger difficult times for the region. Frantisek Taborsky CZK: Tricky inflation print to test CNB pain threshold After Poland and Hungary, July inflation will be published today in the Czech Republic, and we think it will be the trickiest reading so far this year. July will bring a third round of energy price hikes and this time, the month-on-month jump should be a record. However, the problem is the uncertain ratio of fix/float contracts and the approach of the statistical office to such a massive jump in energy suppliers' price lists. Overall, we feel comfortable on the high side of estimates and believe the market may be underestimating these price changes. Thus, we expect inflation to jump from 17.2% to 18.5% today, while the market is expecting 17.9%. The central bank expects 18.8% in its new forecast, but even a higher number cannot be ruled out at this point. For the Czech National Bank, however, we believe the pain threshold is high given that any surprise will come from energy prices, which the new board places on the cost side, thus out of the central bank's reach. From a market perspective, just a few days ago, we would have expected the news to fuel hawkish expectations that the central bank might react anyway. However, yesterday's 20bp jump in the short end of the curve, presumably in preparation for today's inflation, and profit-taking, should limit that market reaction. On the FX front, the market remains safely away from the 24.60-24.70 level after last week's CNB meeting and for now is vainly gathering strength for another stage of attack against the central bank, which has been defending the koruna. Frantisek Taborsky Read this article on THINK TagsFX Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

EURUSD has broken bullish out of its sideways range on back of the CPI numbers released yesterday. EURUSD hasn’t moved far after the breakout however, being rejected at the 0.618 Fibonacci retracement at 1.0360, coinciding with the medium-term falling trend line and 55 SMA. A strong resistance area.RSI is still showing negative sentiment and needs to close above 60 to reverse that. Today EURUSD seems to have another go at the resistance. If EURUSD can push through those resistances, there is room up till around 1.06. Possibly 1.0790. If it fails once again and is pushed back below 1.0280 it could be range bound in past few weeks range for a couple of more weeks. Source: Saxo Group Source: Saxo Group The longer-term picture on EURUSD outlined in previous analysis remains intact. EURUSD trend is down and parity is likely to be tested later in 2022. To reverse that a close above 1.15 is needed.   Source: Saxo Group Source: Technical Update - EURUSD having another go at strong resistance at 1.0360. It might succeed this time | Saxo Group (home.saxo)

Softer-than-expected US price data this week has lifted risk assets around the world, especially in the emerging market space. The highlight of today's relatively quiet session will be US August consumer sentiment data, which is expected to pick up after the big drop in gasoline prices. This should be good for US growth and the dollar US gasoline has fallen from $5/gallon to $4 over the last month USD: Rising consumer confidence should be good news all round Softer-than-expected US July price data this week (both CPI and PPI) have been good news for risk assets around the world. Investors have read it as reducing the Fed's urgency to tighten policy. That said, Fed rhetoric has been consistent all week. Namely, the policy rate is heading toward 3.25/3.50% later this year (roughly priced by the markets) and then possibly 4% next year (not priced).   The latest US consumer sentiment readings from the University of Michigan – out today – will feed into this story. James Knightley looks for an upside surprise in consumer sentiment after US gasoline's fall to $4 from $5/gallon over the last month. We also get fresh inflation expectations data. Here the 5-10 year expectations peaked at 3.10% earlier this summer, were 2.9% in July and today are expected to fall to 2.8%.  How will markets read the data? A drop in inflation expectations may suggest the Fed can be more relaxed on inflation. But there are no signs of that coming through in its rhetoric. Instead, the bigger impact may be the bounce in consumer sentiment, reduced fears of a 2023 recession, and the pricing out of some of the 50bp of easing expected in 2H23. This should be a dollar-positive development. As we discussed yesterday, we like the dollar against the low yielders (euro and yen), but feel that declining levels of volatility will see renewed interest in the carry trade. Yesterday, we picked out long MXN/JPY as a pair that could rally in this environment. Mexico's central bank Banxico did hike 75bp yesterday to 8.50% and even though it omitted language talking about 'more forceful' rate hikes in the future, we think Banxico will match the Fed hike-for-hike. 6.80 remains our target for MXN/JPY. Heavily weighted to the low yielders, DXY should be able to edge a little higher today. A break above 105.50 would go a long way to stabilising it after the heavy losses suffered on Wednesday's US CPI release. Chris Turner EUR: Gas developments remain worrying European industry must be watching with growing concern as European natural gas prices continue to edge higher. Higher costs are a given, but winter rationing probably remains the bigger threat. For FX markets, 2022 has been the year of watching terms of trade developments – the price of exports over imports. These have moved very negatively for the eurozone this year and delivered a negative income shock. This week's move in gas prices has sent eurozone terms of trade towards the worst levels of the year and is a clean euro negative. Given that we are slightly bullish on the dollar today, we think that the recent EUR/USD correction has stalled in the 1.0350/0400 resistance area and would favour a move back to 1.0275 today. Elsewhere, some softer-than-expected July Swedish CPI data released today may pour cold water on calls for a massive Riksbank rate hike in September. After a good run in July, we doubt the Swedish krona pushes on too much further against the euro. Chris Turner GBP: 2Q22 UK GDP data not quite as bad as expected UK 2Q22 GDP data came in marginally better than expected, where the extra bank holiday in June did not have quite as large a negative impact as analysts thought. The data can probably keep expectations alive that the Bank of England (BoE) will hike 50bp on 15 September. And ever-rising expectations for how much higher the UK energy price cap will be adjusted (and what it means for the peak of UK inflation) will probably mean the BoE stays hawkish all year. EUR/GBP is slightly stronger than we thought and could edge up to the 0.8485 area. But given the challenges faced on the continent, we would not chase EUR/GBP higher. Chris Turner CEE: Hungary rating review tonight In the Central and Eastern Europe (CEE) region, industrial production in Romania, the final estimate of inflation in Poland, Czech National Bank (CNB) minutes, and current account data across the region will close the busy calendar this week. The final CPI reading in Poland is unlikely to differ markedly from the flash estimate of 15.5% year-on-year. However, given that gas prices at the pump continued to decline in the final week of July, we do not rule out a downward revision to 15.4% YoY. In the long term, we expect the summer months to be marked by relatively stable, albeit very high, inflation. Inflationary pressure is projected to re-emerge with the beginning of the heating season in autumn and at the beginning of 2023 due to the upswing in regulated prices. CNB minutes should reveal the details of the new board's discussion from the last meeting when the central bank left rates unchanged for the first time since May 2021. In addition to the minutes, the full forecast will be released, including alternative scenarios. Hungary's rating review by S&P will also be published later today. We do not expect a change in the rating outlook (BBB, stable), but a downgrade is in play, mainly due to energy dependence and uncertain access to EU money. For today, we do not see many impulses from the regional calendar and the main issue remains the current level of EUR/USD, which is playing positively into the hands of the CEE currencies for now. We see the Polish zloty and Hungarian forint fairly priced, but it is hard to be bullish in this part of the region given the energy risks and the escalating conflict with the European Commission over access to EU money. The koruna shook off another batch of short positions yesterday and we believe EUR/CZK should gradually start to return to higher levels, given that with the region's most dovish central bank on its back, it is hard to find justification for the current EUR/CZK levels. Frantisek Taborsky Read this article on THINK TagsGasoline FX Daily FX Dollar CEE region Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Relevance up to 09:00 2022-08-13 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Although the US inflation data has been very encouraging lately, Fed officials said the central bank is unlikely to change its stance on interest rates this year and the next. Minneapolis Fed President Neil Kashkari noted that the benchmark rate could reach 3.9% by the end of this year and rise to 4.4% by the end of 2023.   Chicago Fed President Charles Evans had the same view, mentioning that although inflation eased, it is still unacceptably high. He said they will ensure that inflation returns to 2%. At the moment, inflation has fallen below estimates, prompting investors to lower bets that the Fed will go for another three-quarters of a percentage point rate hike in September. But San Francisco Fed President Mary Daly said in a recent speech that it is too early to declare victory in the central bank's fight against inflation, so it is likely that the Fed will still implement another 75 basis point hike in the next policy meeting.     In another note, the US released the latest data on jobless claims, which showed an increase for the second week in a row. It remained at the highest level since November, indicating continued moderation in the labor market, which is what the Federal Reserve is trying to achieve. Initial jobless claims rose by 14,000 to 262,000, slightly lower than the expected 265,000. The reason why jobless claims is on the rise is the layoffs and suspended hiring in companies, especially in the technology sector. Demand for new workers is also declining as the Federal Reserve raises interest rates. The four-week moving average, smoothing out the fluctuations, rose to 252,000. Another important report was the US producer price data, which unexpectedly fell in July due to lower energy prices. It dipped 0.5% from the previous month, but rose 9.8% from last year. There was also data on producer prices, which rose 0.2% from June and 7.6% from a year earlier. The numbers suggest that inflationary pressures are beginning to ease, which could eventually lead to a slowdown in consumer price growth.     In terms of the forex market, EUR/USD is trading above 1.0300 and has good chances for further growth. Consolidating beyond 1.0320 will give buyers an excellent chance to return to 1.0370, then go to 1.0430 and 1.0500. But if pressure returns around 1.0270, the pair could fall to 1.0230 and 1.0200. In GBP/USD, buyers need to stay above 1.2180 because only that can push the quote to 1.2220, 1.2260 and 1.2345. If pressure return around 1.280, the pair will fall to 1.2130 and 1.2100.   Read more: https://www.instaforex.eu/forex_analysis/318788

Relevance up to 13:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Technical outlook: EURUSD slipped through 1.0290 intraday on Friday after reversing from the 1.0360 highs earlier this week. Looking into the price action in the past two trading sessions, the single currency pair has been consolidating between 1.0280 and 1.0370. If we assume that a triangle is unfolding, the sideways movement will continue for a while before prices breakout towards 1.0450. EURUSD had been in a downtrend since January 2021 after hitting highs at 1.2350. The bears managed to produce a series of lower lows and lower highs and carve a potential bottom at around 0.9952 in July 2022. Since then, a larger-degree counter-trend rally is unfolding with potential targets towards 1.0450 and 1.0800 in the next few trading sessions. On the flip side, if prices continue to slide from current levels breaking consistently below 1.0270, the bears might take control and drag the pair lower towards the 1.0075-1.0100 area. The currency pair is expected to produce a bullish bounce thereafter and resume higher towards 1.0800 and 1.0900 at least. Trading plan: Potential rally towards 1.0800-1.0900 against 0.9952 Good luck!   Read more: https://www.instaforex.eu/forex_analysis/288344

Relevance up to 14:00 2022-08-15 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. EUR/USD     Higher time frames Yesterday, the pair managed to stay above the weekly short-term trend (1.0285). It is the last trading day of the week, so the focus is on the closing level today. Bullish sentiment is likely to increase if the price closes above the weekly short-term trend (1.0285) today. The nearest bullish target is seen in the 1.0419 – 1.0465 range of the Ichimoku cloud. Support is still standing at the daily golden cross levels (1.0246 – 1.0210 – 1.0160 – 1.0111).     H4 – H1 In lower time frames, the pair is still in the zone of uncertainty and correction. The key target is at the central daily Pivot level of 1.0320. Bearish power is likely to increase after a breakout through the MA and its reversal. Another bullish intraday target is at classic Pivot levels of 1.0364 – 1.0409 – 1.0453, in line with resistance. Additional bearish targets stand at 1.0231 – 1.0186 support (classic Pivot). *** GBP/USD     Higher time frames The pair entered the range of the daily cloud but failed to extend growth yesterday. Since it is the last trading day of the week, the focus is on the closing level today. If the price closes below this week's tested 1.2082 resistance (daily cloud + weekly short-term trend), a pullback will occur and bearish sentiment will grow. Alternatively, in case of a breakout through the daily cloud (1.2270) and consolidation in the bullish zone, bullish sentiment is likely to increase.     H4 – H1 In lower time frames, moving down, the pair tested the weekly long-term trend at 1.2131. Once the pair breaks and consolidates below the level, bearish sentiment is likely to rise. In such a case, support is seen at 1.2082 and 1.2000 in the higher time frames. *** Indicators used in technical analysis: higher time frames – Ichimoku Kinko Hyo (9.26.52); Fibo Kijun H1 - Pivot Points (classic) + Moving Average 120 (weekly long-term trend)   Read more: https://www.instaforex.eu/forex_analysis/318831

Relevance up to 04:00 2022-08-17 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The euro moved down with all determination on Monday, finally accepting a plan for a medium-term decline. The fall was 100 points and at the moment the price is testing the strength of the target support level of 1.0150. The Marlin Oscillator has come close to the border with the downward trend territory on the daily chart.     Simultaneous crossing of support by the price and the zero line by the oscillator can give an additional impetus to the price and the next target at 1.0020 will be reached fairly quickly. The third target is 0.9950. There may also be a second option for the development of a downward movement: the price will work out their support with the oscillator, then they will correct and with fresh forces, on the second attempt, they will overcome them. The correction limit is the MACD line on the daily chart – 1.0218.     The oscillator fell quite deeply on the H4 chart, although it is not yet in the oversold zone. The signal line turns up, relieving tension and accumulating strength for a new downward shot. From such positions, the option of a decline with a preliminary correction looks the most possible.   Read more: https://www.instaforex.eu/forex_analysis/318975

The rise in gas prices around the world and how policymakers handle them is very much back in focus as terms of trade indices for the big importers hit new lows. Combining this theme with both the weakness in the Chinese renminbi and what should be a positive set of US events over the next 48 hours favours continued dollar strength Germany continues to suffer both with low water levels on the Rhine and now a gas levy for German consumers USD: All systems are go We see three factors that can keep the dollar strong near term and probably send it a little stronger. The first is the ongoing energy shock primarily being felt through natural gas prices. These prices continue to rise as importers compete for cargoes ahead of the northern hemisphere winter and the very uncertain supply situation. In financial markets, the cost of higher gas prices is born out in terms of trade indices. Energy importers such as Europe and large parts of Asia are seeing their terms of trade indices (export versus import prices) continuing to dive. These effectively represent a large negative income shock. The energy independence of the US leaves the dollar relatively insulated on this score. The second factor is the one we highlighted yesterday – the uncertainty as to whether the People's Bank of China (PBoC) will engineer another mini-devaluation in the renminbi as it searches for growth. The PBoC overnight fixed USD/CNY in line with model-based estimates. This is being read rather equivocally by markets as the PBoC is not actively encouraging speculation of a weaker renminbi, nor delivering a stern warning against yesterday's renminbi sell-off. USD/CNH is now trading through 6.80 and a move through 6.82/84 will certainly raise speculation of something larger afoot akin to the April/May 6% renminbi devaluation. That period saw the DXY dollar index up around 6% too. The final factor is the US economy and the Fed story. Today sees the release of July industrial production and tomorrow the release of retail sales. Our team sees better figures for both – largely helped by lower gasoline prices. The figures should temporarily allay US recession fears and prepare the markets for what could be a hawkish set of FOMC minutes tomorrow night. We agree with Padhraic Garvey's opinion piece that the Fed probably wants tighter financial conditions now – which implicitly include a firmer dollar. In all, we continue to prefer north American currencies, where last week we picked out the Mexican peso for some carry. The Canadian dollar also should remain supported on dips and today sees some July CPI data. This can shed light on whether the Bank of Canada hikes 50bp or 75bp on 7 September (59bp currently priced). Of the three, we would probably prefer slightly overweight US dollar positions since the risk environment could easily deteriorate again. 106.95/107.00 looks like the near-term target for DXY. In addition, please find the August edition of FX talking here and also some thoughts on where ESG issues interact with the FX market.  Chris Turner EUR: Grim As Carsten Brzeski noted yesterday, Germany continues to suffer both with low water levels on the Rhine and now a gas levy for German consumers. The gas levy could keep German inflation higher for longer and cause more headaches for the European Central Bank (ECB). The trade-weighted euro is a whisker away from the lows of the year and a slightly stronger dollar over the next 48 hours could easily see EUR/USD retesting parity. 1.0200 should now prove short-term resistance. In terms of data today, look out for German and eurozone investor expectations for August. These should remain near the lows despite a decent last month for European equities. Chris Turner GBP: You are not alone News that Germany will impose a gas levy – confirming that the government cannot fully shield households from the spike in gas prices – leaves the UK less of an outlier in Europe. This will be one of the factors helping to limit EUR/GBP gains and could actually favour a drift back to the 0.8390/8400 area. Today's July UK employment data is somewhat of a mixed bag for sterling. This showed a slight slowing in hiring but strong average earnings – the latter pointing to hoarding of staff. We think the data supports a 50bp Bank of England hike on 15 September (45bp currently priced). In all, EUR/GBP can soften a little, but a stronger dollar means that Cable can go sub 1.20 again. Chris Turner   CEE: Another painful day under the reign of the US dollar The strong US dollar quickly took back almost all of the CEE region's recent currency gains. However, the invisible hand of the market intervened in a different order than we had anticipated yesterday. While the Polish zloty lost the least and narrowly avoided 4.700 EUR/PLN, the Hungarian forint came under heavy sell-off, hit by the rating outlook downgrade from S&P. And the koruna returned halfway to CNB's intervention levels. In all three cases, we can expect more losses today, in our view. The regional calendar is almost empty and global conditions for CEE currencies have deteriorated again, led by a stronger US dollar. We continue to believe the zloty should head above 4.700 EUR/PLN, while the forint has lost too much in our view. It can be expected to remain out of the market's favour for some time due to the rating decision, but market conditions remain most favourable for the forint. This is the only currency in the region that can rely on a rising interest rate differential. Once the jitters over the rating outlook change subside, the forint could return to 396 EUR/HUF. Frantisek Taborsky Read this article on THINK TagsFX Daily Dollar CEE region Bank of England Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

The bullish dollar narrative was fairly straightforward  Yes, the US main challengers, China and Russia, have been hobbled in different ways by self-inflicted injuries. Still, the driver of the dollar was the expected aggressive tightening by the Federal Reserve. The market accepted that after being a bit slower than ideal (though faster and before many other large central banks), the Fed would move forcefully against inflation, even if it diminished the chances of an economic soft-landing.   However, now the market seems to have a different reaction function  The euro was impressively resilient after the job growth of more than twice expectations. However, the softer than expected US CPI sent the dollar broadly lower, inflicting some apparent technical damage to the charts.  We are reluctant to chase the dollar lower and impressed in a week that the US reported a decline in CPI and PPI that the 10-year bond yield closed a few basis points higher and the first back-to-back weekly increase in two months Technically, it seems that the dollar's pullback, nearly a month-old, move is getting maybe getting stretched. We will try to identify levels that could confirm another leg lower and what would suggest the US dollar may snap back.   Dollar Index:   After reaching almost 107.00 after the stronger than expected jobs data, the Dollar Index fell to almost 104.65 in response to the softer than expected CPI. It was the lowest level since the end of June. The MACD is still falling but oversold. The Slow Stochastic looks poised to turn lower from the middle of the range. Nevertheless, we like it higher in the coming days. We target 106.30 and then 107.00. A move above 107.50 could signal a return to the highs near 109.30 from mid-July. That said, a close below 105.00 would boost the risk of another leg lower.  Euro:  The euro rallied strongly after the softer US CPI, but a key trendline drawn off the February, March, and June highs begins the new week near $1.0375 remains unchallenged. Although the momentum indicators allow for additional gains, we look for the euro to push lower in the coming days. Only a move above the trendline would give it new life. We think the greater likelihood is for the single currency to initially ease toward $1.0180-$1.0200. It may take a break of $1.01 to signal a return to the 20-year low set in mid-July near $0.9950. The US two-year premium over Germany narrowed every day last week for a cumulative 11 bp to near 2.66%. Italy's premium over Germany was trimmed by six basis points. It was the third week of convergence, but at 0.75%, it is still nearly twice what it was in June. Japanese Yen:  The greenback was pushed away from JPY135 by the decline in US rates after the CPI figures. It was sold to about JPY131.75, holding above the month's low set on August 2 near JPY130.40. However, US rates closed firmer on the week despite three softer-than-expected price reports (CPI, PPI, and import/export prices). As a result, the greenback looks poised to test the JPY135.00-50 ceiling. A move above JPY136 would target the JPY137.50 area. We have emphasized the strong correlation between changes in the exchange rate and the US 10-year yield. That correlation is off its highs though still above 0.50, while the correlation with the US two-year yield has risen toward 0.65, the highest in five months.  British Pound:   Sterling rose to $1.2275 in the broad US dollar sell-off in the middle of last week. It stalled in front of the high set on August 2, a little shy of $1.23. This sets up a potential double top formation with a neckline at $1.20. A break would re-target the two-year low set in July near $1.1760. The MACD is set to turn down. The Slow Stochastic is going sideways in the middle of the range after pulling back earlier this month. Sentiment seems poor, and in the week ahead, the UK is expected to report some easing in the labor market, accelerating consumer prices, and another decline in retail sales. Canadian Dollar:   The US dollar fell to near a two-month low last week slightly below CAD1.2730, and slipped through the 200-day moving average on an intraday basis for the first time since June 9. The test of the (61.8%) retracement of this year's rally (early April low ~CAD1.2400 and the mid-July high ~CAD1.3225) found near CAD1.2715 was successful. The US dollar recovered ahead of the weekend back to the CAD1.2800 area. Although the momentum indicators give room for further US dollar losses, we suspect a near-term low is in place and look for an upside correction toward CAD1.2850-CAD1.2900. The Canadian dollar remains sensitive to the immediate risk environment reflected in the change in the S&P 500. The correlation over the past 30 sessions is a little better than 0.60. The correlation reached a two-year high in June near 0.80. The exchange rate's correlation (30 sessions) with oil prices (WTI) set this year's high in early August near 0.60. It is now slightly below 0.50.  Australian Dollar:   Although our bias is for the US dollar to correct higher, the Aussie does not line up quite as well. It broke above the high set at the start of the month near $0.7050 and has held above it. However, its surge stalled slightly above $0.7135, and it consolidated in a narrow range around $0.7100 ahead of the weekend. The momentum indicators are constructive. The main hurdle is the 200-day moving average near $0.7150 and the (50%) retracement of this year's decline (~$0.7660 in early April and ~$6680 in mid-July) found near $0.7170. A break of this area could see a return to the June high by $0.7285.   Mexican Peso:   Latin American currencies had a good week, except for the Argentine peso, which fell by more than 1%, for the dubious honor of being the poorest performer in the emerging markets. Led by Chile (+3.9%) and the Colombian peso (3.8%), Latam currencies accounted for half of the top five performers last week. The peso's 2.7% gain was its best in five months, and the dollar was sold a little through MXN19.85, its lowest level since late June when it reached almost MXN19.82.There seems little to prevent a move toward MXN19.50. Any worries that AMLO's appointments to the central bank would block aggressive tightening of monetary policy must have evaporated as Banxico demonstrated a resolve to hike rates and shadow the US.  Chinese Yuan:   The yuan took a step lower from mid-April until mid-May. Since then, it has been trading within the range more or less seen in the second half of May. That dollar range is roughly CNY6.650 to CNY6.77. For the past month, the dollar has traded between CNY6.72 and CNY6.78, fraying the upper end of the broader range after the greenback surged broadly after the US employment data. Policymakers have signaled concern about inflation and its reluctance to ease monetary policy. It would seem the domestic policy efforts might favor a firm yuan.     Disclaimer   Source: Is the Dollar's Month-Long Pullback Over?

Summary:  Equities traded higher still yesterday as treasury yields fell further back into the recent range and on hopes that an Iran nuclear deal will cement yesterday’s steep drop in oil prices. The latest data out of the US was certainly nothing to celebrate as the July US Homebuilder survey showed a further sharp drop in new housing interest and a collapse in the first regional US manufacturing survey for August, the New York Fed’s Empire Manufacturing.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) S&P 500 futures extended their gains yesterday getting closer to the 200-day moving average sitting around the 4,322 level. The US 10-year yield seems well anchored below 3% and financial conditions indicate that S&P 500 futures could in theory trade around 4,350. The news flow is light but earnings from Walmart later today could impact US equities should the largest US retailer lower their outlook for the US consumer. Hong Kong’s Hang Seng (HSI.I) and China’s CSI300 (000300.I) Hong Kong and mainland Chinese equities were mixed. CSI300 was flat, with electric equipment, wind power, solar and auto names gained. Hang Seng Index declined 0.5%. Energy stocks fell on lower oil price. Technology names were weak overall, Hang Seng TECH Index (HSTECH.I) declined 0.9%. Sunny Optical (02382:xhkg) reported worse than expected 1H22 results, revenues -14.4% YoY, net profits -49.5%, citing weakening component demand from the smartphone industry globally. The company’s gross margin plunged to 20.8% from 24.9%. Li Auto’s (02015:xhkg/LI:xnas) Q2 results were in line with expectations but Q3 guidance disappointed. The launch L9 seems cannibalizing Li ONE sales. USD: strength despite weak US data and falling treasury yields and strong risk sentiment Yesterday, the JPY tried to make hay on China cutting rates and as global yields eased back lower, with crude oil marked several dollars lower on hopes for an Iran nuclear deal. But the move didn’t stick well in USDJPY, which shrugged off these developments as the USD firmed further across the board, despite treasury yields easing lower, weak data and still strong risk sentiment/easy financial conditions. A strong US dollar is in and of itself is a tightening of financial conditions, however, and yesterday’s action has cemented a bullish reversal in some pairs, especially EURUSD and GBPUSD, where the next important levels pointing to a test of the cycle lows are 1.0100 and 1.2000, respectively. Elsewhere, USDJPY remains in limbo (strong surge above 135.00 needed to suggest upside threat), USDCAD has posted a bullish reversal but needs 1.3000 for confirmation, and AUDUSD is teetering, but needs a close back below 0.7000 to suggest a resurgent US dollar and perhaps widening concerns that a Chinese recession will temper interest in the Aussie. Crude oil Crude oil (CLU2 & LCOV2) trades lower following Monday’s sharp drop that was driven by a combination softer economic data from China and the US, the world’s top consumers of oil, and after Iran signaled a nuclear deal could be reached soon, raising the prospect of more Iranian crude reaching the market. The latest developments potentially reducing demand while adding supply forced recently established longs to bail and short sellers are once again in control. Brent needs to hold support at $93 in order to avoid further weakness towards $90. Focus on Iran news. Copper Copper (COPPERUSSEP22) led the metals pack lower, without breaking any key technical levels to the downside, after China’s domestic activity weakened in July. Meanwhile, supply side issues in Europe also cannot be ignored with surging power prices putting economic pressure on smelters, and many of them running at a loss. HG copper jumped 19% during the past month and yesterday’s setback did not challenge any key support level with the first being around $3.50/lb. BHP, the world’s top miner meanwhile hit record profits while saying that China is likely to offer a “tail wind” to global growth (see below). EU power prices hit record high on continued surge in gas prices ... threatening a deeper plunge into recession. The latest surge being driven by low water levels on Europe’s rivers obstructing the normal passage for diesel, coal, and other fuel products, thereby forcing utilities to use more gas European Dutch TTF benchmark gas futures (TTFMU2) has opened 5% higher at €231/MWh, around 15 times higher than the long-term average, suggesting more pain ahead for European utility companies. Next-year electricity rates in Germany (DEBYF3) closed 3.7% higher to 477.50 euros ($487) a megawatt-hour on the European Energy Exchange AG. That is almost six times as much as this time last year, with the price doubling in the past two months alone. UK power prices were also seen touching record highs. US Treasuries (IEF, TLT) see long-end yields surging. Yields dipped back lower on weak US economic data, including a very weak Empire Manufacturing Survey (more below) and another sharp plunge in the NAHB survey of US home builders, suggesting a rapid slowdown in the housing market. The survey has historically proven a leading indicator on prices as well. The 10-year benchmark dipped back further into the range after threatening to break up higher last week. The choppy range extends down to 2.50% before a drop in yields becomes a more notable development, but tomorrow’s US Retail Sales and FOMC minutes offer the next test of sentiment. What is going on? Weak Empire State manufacturing survey and NAHB Index Although a niche and volatile measure, the United States NY Empire State Manufacturing Index, compiled by the New York Federal Reserve, fell to -31.3 from 11.1 in July, its lowest level since May 2020 and its sharpest monthly drop since the early days of the pandemic. New orders and shipments plunged, and unfilled orders also declined, albeit less sharply. Other key areas of concern were the rise in inventories and a decline in average hours worked. This further weighed on the sentiment after weak China data had already cast concerns of a global growth slowdown earlier. Meanwhile, the US NAHB housing market index also saw its eighth consecutive monthly decline as it slid 6 points to 49 in August. July housing starts and building permits are scheduled to be reported later today, and these will likely continue to signal a cooling demand amid the rising mortgage rates as well as overbuilding. China's CATL plans to build its second battery factory in Europe CATL unveiled plans to build a renewable energy-powered factory for car battery cells and modules in Hungary. It will invest EUR 7.34 billion (USD 7.5bn) on the 100-GWh facility, which will be its second one in Europe. To power the facility CATL will use electricity from renewable energy source, such as solar power. At present, CATL is in the process of commissioning its German battery production plant, which is expected to roll out its first cells and modules by the end of 2022. Disney (DIS) shares rise on activist investor interest Daniel Loeb of Third Point announced a significant new stake in Disney yesterday, helping to send the shares some 2.2% higher in yesterday’s session. The activist investor recommended that the company spin off its ESPN business to reduce debt and take full ownership of the Hulu streaming service, among other moves. Elliott exits SoftBank Group The US activist fund sold its stake in SoftBank earlier this year in a sign that large investors are scaling back on their investments in technology growth companies with long time to break-even. In a recent comment, SoftBank’s founder Masayoshi Son used more cautious words regarding the investment company’s future investments in growth companies. BHP reports its highest ever profit, bolstered by coal BHP posted a record profit of $21.3bn supported by considerable gains in coal, nickel and copper prices during the fiscal year ending 30 June 2022. Profits jumped 26% compared to last year’s result. The biggest driver was a 271% jump in the thermal coal price, and a 43% spike in the nickel price. The world’s biggest miner sees commodity demand improving in 2023, while it also sees China emerging as a source of stable commodity demand in the year ahead. BHP sees supply covering demand in the near-term for copper and nickel. According to the company iron ore will likely remain in surplus through 2023. In an interview Chief Executive Officer Mike Henry said: Long-term outlook for copper, nickel and potash is really strong because of “unstoppable global trends: decarbonization, electrification, population growth, increasing standards of living,” What are we watching next? Australia Q2 Wage Index tonight to determine future RBA rate hike size? The RBA Minutes out overnight showed a central bank that is trying to navigate a “narrow path” for keeping the Australian economy on an “even keel”. The RBA has often singled out wages as an important risk for whether inflation risks becoming more embedded and on that note, tonight sees the release of the Q2 Wage Index, expected to come in at 2.7% year-on-year after 2.4% in Q1. A softer data point may have the market pulling back expectations for another 50 basis point rate hike at the next RBA meeting after the three consecutive moves of that size. The market is about 50-50 on the size of the RBA hike in September, pricing a 35 bps move. RBNZ set to decelerate its guidance after another 50 basis point move tonight? The Reserve Bank of New Zealand is expected to hike its official cash rate another 50 basis points tonight, taking the policy rate to 3.00%. With business and consumer sentiment surveys in the dumps in New Zealand and oil prices retreating sharply the RBNZ, one of the earliest among developed economies to tighten monetary policy starting late last year, may be set for more cautious forward guidance and a wait and see attitude, although wages did rise in Q2 at their second fastest pace (+2.3% QoQ) in decades. The market is uncertain on the future course of RBNZ policy, pricing 44 bps for the October meeting after tonight’s 50 bps hike and another 36 bps for the November meeting. US retailer earnings eyed After disappointing results last quarter, focus is on Walmart and Home Depot earnings later today. These will put the focus entirely on the US consumer after the jobs data this month highlighted a still-tight labor market while the inflation picture saw price pressures may have peaked. It would also be interesting to look at the inventory situation at these retailers, and any updated reports on the status of the global supply chains.   Earnings to watch Today’s US earnings focus is Walmart and Home Depot with analysts expecting Walmart to report 7% revenue growth y/y and 8% decline y/y in EPS as the US retailer is facing difficulties passing on rising input costs. Home Depot is expected to report 6% growth y/y in revenue and 10% growth y/y in EPS as the US housing market is still robust driving demand for home improvement products. Sea Ltd, the fast-growing e-commerce and gaming company, is expected to report revenue growth of 30% y/y in Q2 but worsening EBITDA margin at -16.2%. The previous winning company is facing headwinds in its gaming division and cash flow from operations have gone from positive $318mn in Q1 2021 to negative $724mn in Q1 2022. Today: China Telecom, Walmart, Agilent Technologies, Home Depot, Sea Ltd Wednesday: Tencent, Hong Kong Exchanges & Clearing, Analog Devices, Cisco Systems, Synopsys, Lowe’s, CSL, Target, TJX, Coloplast, Carlsberg, Wolfspeed Thursday: Applied Materials, Estee Lauder, NetEase, Adyen, Nibe Industrier, Geberit Friday: China Merchants Bank, CNOOC, Shenzhen Mindray, Xiaomi, Deere Economic calendar highlights for today (times GMT) 0900 – Germany Aug. ZEW Survey 0900 – Eurozone Jun. Trade Balance 1200 – Poland Jul. Core CPI 1215 – Canada Jul. Housing Starts 1230 – US Jul. Housing Starts and Building Permits 1230 – Canada Jul. CPI 2030 – API Weekly Report on US Oil Inventories 2350 – Japan Jul. Trade Balance 0130 – Australia Q2 Wage Index 0200 – New Zealand RBNZ Official Cash Rate announcement 0300 – New Zealand RBNZ Governor Orr Press Conference  Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher Source: Financial Markets Today: Quick Take – August 16, 2022

Bonds quickly reversed their gains and look under further pressure from the goldilocks state of play across financial markets. There are risks to these not too hot nor too cold markets, however. A more hawkish Fed in today’s minutes is one. Hard US economic data point to a healthy 3Q but things should worsen in 4Q Source: Shutterstock Banking on a dovish Fed carries risks Bunds have tested the 1% yield level again after a 9bp round trip in two days. This is the proof that market moves in illiquid summer months, even more so due to bank holidays in some parts of Europe on Monday, should be taken with a pinch of salt. Bonds more broadly continue to trade weak with a bias toward higher yields evident since the start of the month. We attribute some of the move to better risk sentiment across developed markets, but risks to these goldilocks, neither too hot that central banks need to keep hiking nor too cold that the economy falls off a cliff, state of play abound. Hawkish FOMC minutes and strong retail sales could bump up the US yield curve Source: Refinitiv, ING   Tonight’s Fed minutes might well jar with the upbeat tone evident in financial markets The first and most obvious challenge is that central banks can ill afford a loosening of financial conditions as they still grapple with record high inflation. The Fed is clearly one example but by no means an isolated one. Tonight’s Fed minutes might well jar with the upbeat tone evident in many financial markets. Even if investors might be tempted to discount any hawkish concerns as ‘pre-CPI peak’, the tone of Fed comments since the July FOMC meeting leaves no doubt about their mood. This in turn should result in higher treasury yields, reaching above 3% again, and a softer tone in risk assets. Both economic optimism and tighter spread look at risk The discrepancy between soft and hard data in the US continues to drive some of the whipsaw in bond yields. Industrial production yesterday cemented our expectations for a solid 3Q GDP growth, and July retail sales, to be published today, should look equally solid. The contrast with sentiment indicators might only be a matter of timing however, with 4Q growth prospects looking a lot less healthy. It is difficult to imagine markets extrapolating this good stint of positive US numbers for long, with other corners of the economy, most notably housing, heading south. Risk of profit-taking in fixed income into the September supply window are rising Source: Refinitiv, ING   There is a looming risk of a profit-taking into the September/October supply window Another risk is coming from the rise in government bonds themselves. Independent of the tone of central banks, rising core yields bring about wider sovereign spreads. This has been evident in the underperformance of peripheral bond markets this week with greater volatility in core yields also affecting demand for spread products. There is also a looming risk of a profit-taking into the September/October supply window after the gains registered over the summer months. This may not be the case yet but, in the case of sovereign spreads, some investors may well decide that they do not want to go into the last month of Italian election campaign with too much exposure. Today's events and market view Eurozone 2Q GDP sees its preliminary release today. Consensus is for a print in line with the advanced 0.7% MoM/4% YoY first reading but the focus in financial markets is much more on the energy crunch facing the eurozone economy over the winter months. The main item on the economic calendar in the US is the July retail sales report. A fall in gasoline prices will depress the headline figure but this should free up cash for other goods and services according to our economics team. This could add to upward pressure on bond yields into the FOMC minutes. The US Treasury will also sell $8bn worth of 20Y T-bonds. The main potential market-mover will be later in the session however, in the form of the July FOMC minutes. The majority view is that the Fed can ill afford a further easing of financial conditions if it is to get inflation under control. This argues in favour of an overall hawkish tone coming out of the minutes. Michelle Bowman will also be on the wires. Read this article on THINK TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

FOMC minutes as a communication tool against easing expectations should keep the US dollar supported. German recession is becoming inevitable. Sterling strikes back at the euro, backed by a hawkish Bank of England. And GDP data in Central and Eastern Europe will show how close we are to recession USD: Dollar to stay supported into FOMC minutes The dollar goes into today’s release of the 27 July FOMC minutes about 2% off the highs of the year. This particular meeting had triggered a sell-off in the dollar on the view that the Fed might have already taken the policy rate to some kind of neutral level and that future rate hikes would be undertaken on a meeting-by-meeting basis. The question is whether the Fed wants to use these minutes as a communication tool to push back against the view of a 2023 easing cycle. Post-meeting rhetoric from the Fed suggests that this is more likely to be the case – especially since the Fed funds futures price the policy rate being cut from 3.60% to 3.20% in the second half of next year. A further rejection of this market pricing should help the dollar. And bearish flattening of the US Treasury curve could pressure the commodity currencies. Here, currencies like AUD/USD could come under pressure again – hit by the Fed applying the brakes to growth at the same time as Chinese growth prospects are being revised even lower.  Favour DXY pushing up the 107.00 area. Chris Turner EUR: Consolidating near the lows The European Central Bank's nominal euro trade-weighted index (weighted against 19 major trading partners) is now at the lows of the year. The gas crisis and what it means for eurozone growth prospects this winter is clearly taking a toll on the euro. As Carsten Brzeski wrote yesterday in reaction to a near record low German ZEW sentiment reading, a German recession is almost inevitable in the second half of the year. Perhaps the ECB, rather like the People’s Bank of China earlier this year, will embrace a weaker currency? After a month of consolidation, EUR/USD does not look particularly oversold on technical indicators, and we continue to favour support at 1.0100 giving way to a move to parity.Chris Turner GBP: Sterling enjoys the Bank of England re-pricing This week, sterling has been fighting back against the weaker euro. In addition to euro weakness on the back of higher gas prices, the move in gas has also helped to re-price the Bank of England cycle again. Look at OIS pricing for the BoE policy rate in March 2023, market pricing has shifted from 2.72% in late July to close to 3.40% yesterday. And on top of that, UK inflation quickened to 10.1% year-on-year in July, faster than expected and a new 40-year high. These moves are providing sterling with some insulation and any further extension in the gas price surge could send EUR/GBP all the way back to 0.8350. As an exporter of natural gas, the US does not face these challenges and our bias in GBP/USD remains sub 1.20. Chris Turner CEE: Poland most at risk of recession signals Today's GDP numbers will show the state of the economy in the CEE region in the second quarter, what we can expect from the third quarter and what the chances of a recession are. Two weeks ago, the Czech Republic released GDP data, which positively surprised with 0.2% quarter-on-quarter growth and narrowly avoided a downturn. Today, we will see data in the rest of the region. In Poland, we expect a 1.2% QoQ decline, worse than the market expects. But on a YoY basis, that still gives a solid 6.5%. For Hungary and Romania, we expect 0.4% growth, which is more or less in line with expectations, but in all cases the surveys are quite broad, reflecting the uncertainty associated with 2Q. We believe that Hungary was able to avoid a drop in GDP versus the previous quarter, as industry was able to shake off the supply-side issues by the end of the quarter. In the meantime, retail sales suggest that consumption has embarked on a soft landing, but we are not ready to call a drop yet in the second quarter. In Romania, after a very strong first quarter, the economy seems to have entered a phase of quasi-stagnation. Industrial production has probably contracted in the second quarter, but retail sales remain solid. In the FX space, the Polish zloty has resisted any significant upward movement as part of the sell-off in recent days, which today's data, supporting the National Bank of Poland's dovish narrative, should change. Moreover, the zloty so far has ignored rising gas prices and regional movements in recent days, which we believe makes it vulnerable. On the other hand, the Hungarian forint is already at the end of its sell-off unless we see another jump in gas prices or a strengthening US dollar, which could be the case after the Fed minutes today. On the other hand, the weaker forint has supported market expectations of a more decisive National Bank of Hungary rate hike, which has pushed the interest rate differential higher and should dampen any pressure on the forint to weaken further. The Czech koruna is almost within reach of Czech National Bank intervention levels and the scope for further depreciation is shrinking. Frantisek Taborsky Read this article on THINK Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Relevance up to 04:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. The euro spent the entire Tuesday at the support level of 1.0150. There was no qualitative breakthrough under this level (with consolidation), we are waiting for it today or tomorrow. The correction limit is the daily MACD line (1.0206).     The euro spent the entire Tuesday at the support level of 1.0150. There was no qualitative breakthrough under this level (with consolidation), we are waiting for it today or tomorrow. The correction limit is the daily MACD line (1.0206).     The price is slowly developing a correction on the four-hour chart. The option with the price reaching the MACD line of the daily scale (1.0206) while the Marlin Oscillator works out the zero line and the subsequent synchronous downward turn seems to be the main scenario. In any case, after consolidating under 1.0150, we are waiting for further price decline to the level of 1.0020.   Read more: https://www.instaforex.eu/forex_analysis/319102

Relevance up to 05:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.   Technical outlook: EURUSD dropped throgh the 1.0125 lows during early New York session on Tuesday, remaining shy by just a few pips from the projected 1.0100-1.0110 range. The single Europen currency raised throgh the 1.0194 highs thereafter and is now seen to be trading close to the 1.0175 mark. Prices are expected to push towards the 1.0200-20 range in the immediate short term. EURUSD is working on a larger degree corrective wave towards the 1.0950 levels, revised from earlier projections, seen on the daily chart now. After having carved a meaningful downswing between the 1.2350 and 0.9952 levels, bulls are now looking poised to push through the Fibonacci 0.382 level towards the 1.0900 levels projected on the above chart. EURUSD has now retraced almost through the Fibonacci 0.618 level of its recent upswing between 0.9952 and 1.0368, which is close to the 1.0100-10 zone. If the above structure holds well, bulls will be determined to come back in control from here and push through at least the 1.0900 level, holding prices above the 0.9952 mark. Trading plan: Potential rally towards 1.0900 against 0.9950 Good luck!   Read more: https://www.instaforex.eu/forex_analysis/288770

EUR/USD 5M     The EUR/USD pair continued to fall quietly until it hit the level of 1.0123 on Tuesday, which was the last local low, the level from which the last round of the upward movement began. Yesterday this level was 1.0120, but by the end of the day we moved it 3 points higher. A rebound from this level provoked the euro's growth by 70 points, and we would like to note right away that such a strong and sharp growth was purely technical. Because no important macroeconomic statistics or "fundamentals" were available yesterday either in the US or in the European Union. Traders again had nothing to react to during the day. And after the completion of the current upward correction, we expect the pair to resume falling with targets near 20-year lows, which were updated a month ago. Correction may take several days. Everything in regards to Tuesday's trading signals was just fine. Or almost perfect. The fact is that the only trading signal was formed near the level of 1.0120, and the price did not reach it by 3 points. This is an acceptable error, but traders had to decide for themselves whether to open a long position at this moment or not. If they did this, they could make a profit of about 40 points. The nearest target line Senkou Span B was located very far away, so the deal had to be closed manually in the late afternoon anyway. COT report:     The Commitment of Traders (COT) reports on the euro over the past six months have raised a huge number of questions. The chart above clearly shows that for most of 2022 they showed an openly bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation has changed, but NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions for the non-commercial group increased by 8,400, and the number of shorts - by 4,100. Accordingly, the net position increased by about 4,000 contracts, which is a negligible change for the euro. The mood of major players remains bearish. From our point of view, this fact very eloquently indicates that at this time even commercial traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 35,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is also quite low. The fact that major players are in no hurry to buy the euro may lead to a new, even greater fall. The euro has not been able to show even a tangible correction over the past six months or a year, not to mention something more. The highest upward movement was about 400 points. The pair has just managed to correct by 400 points over the past four weeks. Has the plan been completed? We recommend to familiarize yourself with: Overview of the EUR/USD pair. August 17. The first two trading days of the week showed which way traders are looking. Overview of the GBP/USD pair. August 17. The pound is stuck. The first part of the statistics package this week was left without attention. Forecast and trading signals for GBP/USD on August 17. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H     The pair completed the upward trend and now rushed down again on the hourly timeframe. We believe that globally everything is going according to plan, as the euro corrected up by 400 points, so now there are sufficient technical reasons for the resumption of the downward trend. Macroeconomic statistics are now of little importance to traders, and they were not available either on Monday or Tuesday. And those reports that are scheduled for this week are unlikely to lead traders astray. We allocate the following levels for trading on Wednesday - 1.0000, 1.0072, 1.0123, 1.0269, 1.0340-1.0366, 1.0485, as well as Senkou Span B (1.0245) and Kijun-sen lines (1.0245). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect against possible losses if the signal turns out to be false. The European Union will publish the second estimate of GDP for the second quarter, and in the US - a report on retail sales. Both reports are not super important, so we do not expect a strong market reaction to them. Explanations for the chart: Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels. Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one. Support and resistance areas are areas from which the price has repeatedly rebounded off. Yellow lines are trend lines, trend channels and any other technical patterns. Indicator 1 on the COT charts is the size of the net position of each category of traders. Indicator 2 on the COT charts is the size of the net position for the non-commercial group.

Relevance up to 08:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Several interesting market entry signals were formed yesterday. Let's take a look at the 5-minute chart and figure out what happened. I paid attention to the 1.0144 level in my morning forecast and advised that you make decisions on entering the market from it. The pair's decline in the area of 1.0144 in the first half of the day after receiving disappointing data on Germany and the eurozone resulted in forming a false breakout and an excellent entry point into long positions. But to my regret, I did not see any active growth from the pair, and after moving up by 20 points, the euro returned to 1.0144. A repeated test of this range took place with a breakdown and a reverse test from the bottom up, which resulted in a sell signal. But even after that, the pair went down only about 15 points, after which the demand for the euro returned as a result of weak data on the US real estate market.     When to go long on EUR/USD: The euro has every chance for a further upward correction, but much will depend on the statistics that we will see in the first half of the day. Reports are expected on the change in the volume of eurozone GDP for the 2nd quarter of this year, and the change in the level of employment in the eurozone. Clearly, the eurozone economy has fared quite well in the first half of this year, as the energy crisis and high inflation have not yet taken a toll. However, trading is conducted on expectations, not on facts, so even if we receive good indicators, it is unlikely that it would help the euro much. If we see negative data worse than economists' forecasts, the pressure on the pair will return. If EUR/USD falls to the nearest support area of 1.0159, where the average moving averages playing on the bulls' side pass, forming a false breakout at this level will provide the first signal to open long positions in hopes of continuing to build an upward trend with the prospect of a return to 1.0193. A breakthrough and test from top to bottom of this range creates another signal for entering long positions with the possibility of moving up to 1.0221, a breakthrough above which will not be as easy as it seems, since it was from this level that large players sold the euro at the beginning of this week. If the EUR/USD declines and there are no bulls at 1.0159, the pressure on the pair will increase again. This will open the way to 1.0127, and further support at 1.0099, where I recommend taking profits. A test of this level will bring EUR/USD back into the descending channel observed since August 11. I advise you to buy EUR/USD immediately on a rebound only from 1.0073, or even lower - in the area of 1.0045, counting on an upward correction of 30-35 points within the day. When to go short on EUR/USD: The bears' main task is to protect the resistance at 1.0193, formed on the basis of yesterday's results. Weak statistics on the euro area will help to cope with this task, so forming a false breakout there will provide an excellent entry point for selling the euro. An equally important task is to take control of the nearest support at 1.0159, just below which the moving averages go. A breakthrough and consolidation below this range, as well as a reverse test from the bottom up - all this creates another sell signal with the removal of bulls' stops and a larger movement of the pair to the 1.0127 area - this month's low, a retest of which will erase all of the bulls' hopes for building an upward corrections. Consolidating below 1.0127 is a direct road to 1.0099, where I recommend completely leaving short positions. A more distant target will be the area of 1.0073. If EUR/USD moves up during the European session, as well as the absence of bears at 1.0193, it will be possible to observe a further upward correction with building the lower border of a new ascending channel. In this case, I advise you to postpone short positions to a new weekly high of 1.0221. Forming a false breakout at 1.0221 will be a new starting point for entering short positions. You can sell EUR/USD immediately for a rebound in the area of 1.0243, or even higher - from 1.0267, counting on a downward correction of 30-35 points.     COT report: The Commitment of Traders (COT) report for August 9 logged a sharp increase in both short and long positions, but the former turned out to be more, which continues to indicate the gradual end of the bear market and an attempt to find a market bottom after reaching euro parity against the US dollar. Statistics on inflation in the US came out last week, which turned everything upside down. The first slowdown in inflationary pressure in recent times since reaching a peak of 10.0% has brought back demand for risky assets. But, as you can see on the chart, it didn't last long. The risk of deterioration of the situation associated with the recession of the global economy discourages traders and investors from any desire to build up long positions in the euro. There are no important reports this week that can help the euro regain lost ground, so I would recommend betting more on trading on the horizontal channel. Definitely, before the fall of this year, we can hardly expect serious market shocks. The COT report shows that long non-commercial positions rose by 8,396 to 200,088, while short non-commercial positions jumped by 4,121 to 234,624. At the end of the week, the overall non-commercial net position remained negative, but slightly increased from -39,811 to -34,536, which indicates a continuation of the market turning towards euro bulls. The weekly closing price increased and amounted to 1.0233 against 1.0206.     Indicator signals: Moving averages Trading is above the 30 and 50-day moving averages, which indicates the euro's succeeding growth. Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart. Bollinger Bands In case of a decline, the lower border of the indicator around 1.0140 will act as support. In case of growth, the upper border of the indicator in the area of 1.0193 will act as resistance. Description of indicators Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart. Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart. MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9 Bollinger Bands (Bollinger Bands). Period 20 Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements. Long non-commercial positions represent the total long open position of non-commercial traders. Short non-commercial positions represent the total short open position of non-commercial traders. Total non-commercial net position is the difference between short and long positions of non-commercial traders.   Read more: https://www.instaforex.eu/forex_analysis/319116

Relevance up to 08:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Analysis of transactions in the EUR / USD pair The test of 1.0144 took place at the moment when the MACD went down quite a lot from zero, limiting the downside potential of the pair. Some time later, another test happened, but this time the MACD line was already recovering from the oversold area. This seemed to be a good signal to buy, however, it only led to losses as the euro turned up only in the afternoon. The test of 1.0170, which occurred when the MACD line was far from zero, did not allow further purchases in the market.     EUR/USD was under pressure because of yesterday's report on business sentiment and present situation in Germany. But by afternoon, there was a bullish correction in the pair, thanks to the data on the US real estate market, which lowered demand for dollar. Ahead is the report on Q2 GDP of the Euro area, which, if not revised for the worse, will raise the price of euro. The unemployment report, meanwhile, will be of little interest to the market. No less important data is the report on retail sales in the US as a decrease in it will not only indicate an impending recession, but also harm dollar in the short term. There will also be the minutes of the Fed meeting, which will shed light on how the central bank plans to further raise interest rates. A less aggressive approach will play in the favor of risky assets. The speech of FOMC member Michelle Bowman will not be of great interest. For long positions: Buy euro when the quote reaches 1.0185 (green line on the chart) and take profit at the price of 1.0219. Although there is little chance for a large rally today, good data on the eurozone economy could prompt a rise to new highs. Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0152, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0185 and 1.0219. For short positions: Sell euro when the quote reaches 1.0152 (red line on the chart) and take profit at the price of 1.0107. Pressure will return if the upcoming statistics in the Euro area fell short of forecasts. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0185, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.0152 and 1.0107.     What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Read more: https://www.instaforex.eu/forex_analysis/319126

Relevance up to 12:00 2022-08-18 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. In the morning article, I highlighted the level of 1.0159 and recommended making decisions with this level in focus. Now, let's look at the 5-minute chart and try to figure out what actually happened. A sell signal appeared after a decline of the pair to 1.0159 in the first half of the day and an upward test. Unfortunately, this signal brought losses as I did not expect the pair to fall further. Closer to the middle of the day, the bulls pushed the price above 1.0159. Therefore, I had to revise the technical outlook.     What is needed to open long positions on EUR/USD Traders paid zero attention to the Eurozone's GDP data even though the second-quarter GDP reading was slashed. Apparently, nobody expects the economy to accelerate in the third quarter as it is gradually sliding into a recession due to soaring inflation and rate hikes. In the autumn, the situation could worsen significantly when energy prices go up again. Today, traders are anticipating the FOMC meeting minutes for July. They may provide more hints about the Fed's future plans for monetary policy. It may also reveal whether the Fed is going to hike the key rate in the autumn. If the minutes are less hawkish than expected, the euro may assert strength. If the pair drops, only a false breakout of 1.0154 will give a buy with the prospect of a rise to the nearest resistance level of 1.0192. Yesterday, the bulls failed to push the pair above this level. A breakout and a downward test of this level along with a dovish tone of the minutes will force the bears to close their Stop Loss orders. As a result, an additional buy signal may appear with the possibility of an increase to 1.0221. A more distant target will be a new high of 1.0243 where I recommend locking in profits. If EUR/USD slides and buyers show no activity at 1.0154, the pressure on the pair will escalate. Notably, the price has already tried to break through this level today. In this case, the bullish sentiment may lose steam. The best option for opening long positions will be a false breakout of 1.0127. You can buy EUR/USD immediately at a bounce from 1.0099 or a low of 1.0045, keeping in mind an upward intraday correction of 30-35 pips. What is needed to open short positions on EUR/USD Apart from the FOMC meeting minutes, investors are sure to take notice of US retail sales data. If the reading drops in July, it may undermine a rally of the US dollar. It will be rather bullish for the euro. So, it could grow to 1.0192. If big sellers are present in the market, they will easily defend this level. The optimal scenario for opening short positions will be a false breakout of the resistance level of 1.0192. If so, the euro could decline to 1.0154. A decrease below this level and an upward test will provide an additional sell signal. The bulls will have to close their Stop Loss orders, pushing it to 1.0127. After a slide below this level, the likelihood of an uptrend will be low. Therefore, the price could touch 1.0099 and 1.0073 where I recommend closing all short positions. A more distant target will be the 1.0045 level. If EUR/USD rises during the US session and bears show no energy at 1.0192, the bulls are likely to regain ground. Weak retail sales data could also help the euro climb higher. In this case, I would advise you to postpone short positions to 1.0221 but only if a false breakout occurs. You can sell EUR/USD immediately at a bounce from a high of 1.0243 or 1.0267, keeping in mind a downward correction of 30-35 pips.     COT report The COT report (Commitment of Traders) for August 9 logged a sharp increase in both short and long positions. However, the number of short positions turned out to be bigger, which indicated the gradual end of the bear market and an attempt to find the bottom after reaching the parity level. Last week, US fresh macro stats were released, which turned everything upside down. The CPI report showed the first slowdown in inflation after reaching a peak of 10.0%. It fueled demand for risky assets. As seen on the chart, risk aversion soon returned to the market. Traders are unwilling to increase long positions due to the risks of a global recession. No crucial economic reports are expected this week that could facilitate the growth of the euro. Therefore, the euro is likely to stay in the sideways channel. There could hardly be sharp trend reversals before the fall of this year. The COT report revealed that the number of long non-commercial positions rose by 8,396 to 200,088, while the number of short non-commercial positions jumped by 4,121 to 234,624. At the end of the week, the total non-commercial net position, although it remained negative, climbed slightly to -34,536 from -39,811, signaling a shift to the bull market. The weekly closing price climbed to 1.0233 against 1.0206.     Signals of technical indicators Moving averages EUR/USD is trading near 30- and 50-period moving averages, which signals market uncertainty. Remark. The author is analyzing the period and prices of moving averages on the 1-hour chart. So, it differs from the common definition of classic daily moving averages on the daily chart. Bollinger Bands In case of a rise, the upper border of 1.0180 will act as resistance. Definitions of technical indicators Moving average recognizes an ongoing trend through leveling out volatility and market noise. A 50-period moving average is plotted yellow on the chart. Moving average identifies an ongoing trend through leveling out volatility and market noise. A 30-period moving average is displayed as the green line. MACD indicator represents a relationship between two moving averages that is a ratio of Moving Average Convergence/Divergence. The MACD is calculated by subtracting the 26-period Exponential Moving Average (EMA) from the 12-period EMA. A 9-day EMA of the MACD called the "signal line". Bollinger Bands is a momentum indicator. The upper and lower bands are typically 2 standard deviations +/- from a 20-day simple moving average. Non-commercial traders - speculators such as retail traders, hedge funds and large institutions who use the futures market for speculative purposes and meet certain requirements. Non-commercial long positions represent the total long open position of non-commercial traders. Non-commercial short positions represent the total short open position of non-commercial traders. The overall non-commercial net position balance is the difference between short and long positions of non-commercial traders.   Read more: https://www.instaforex.eu/forex_analysis/319173

The euro's depreciation has helped to improve the competitiveness of eurozone businesses but in contrast to previous episodes of euro weakness, exports are hardly benefiting. Remarkably, structurally weaker eurozone economies have gained relative competitiveness since the start of the pandemic Does parity bring relief for eurozone exporters? Euro-dollar reached parity for the first time since 2002 - a milestone that is largely symbolic. However, the weakening of the euro, in general, deserves attention. The euro has been falling against the dollar since mid-2021, which seems to be largely related to diverging central bank expectations and a sudden decline in the eurozone's trade balance. The latter is mainly related to the energy crisis, which has turned a solid trade surplus into a large trade deficit. The high energy prices paid in international markets have played an important role in the weakening of the currency. Because the energy element is so important in the slide of the euro, the euro has weakened most significantly against the dollar. Against other important trade partners, the eurozone has seen its currency weaken less. While the euro has lost 16.2% vis-à-vis the US dollar since 1 January 2021, the trade-weighted exchange rate has only depreciated by 6.9%. The euro's slide has resulted in a lot of imported inflation because we pay for global commodities in dollars. At the same time, gains in competitiveness have been modest. This is far from the best of both worlds. The euro weakening is closely linked to higher energy prices Source: Macrobond, ING Research Competitiveness is improving, but businesses aren't noticing it The competitiveness improvement does require a deeper look, though, as relative inflation between trade partners plays a role. Taking this into account, the real effective exchange rate (REER) for a country is considered to be a key indicator measuring competitiveness. This is an exchange rate which is weighted by local cost developments. In this case, we use unit labour costs. As chart 3 shows, the REER for the eurozone has been sliding, which boosts the competitive position of eurozone companies. This means that despite a limited drop in the nominal effective exchange rate, businesses do seem to be profiting from relatively better price competitiveness. So while the main impact of the weakening euro is definitely negative through higher imported inflation, there is at least some improvement in export competitiveness to be seen, which could cushion the recessionary effects in the domestic market. Competitiveness is improving, but businesses aren't noticing it Source: European Commission, Eurostat, ING Research   The problem is that businesses are far from feeling this though. The Economic Sentiment Indicator has a subindex which reveals how businesses perceive their competitiveness to have changed in their home markets and abroad. This indicates that competitiveness has dropped significantly within the EU and outside. While exports have recovered to the pre-pandemic trend in recent quarters, it looks like the weaker euro has not given an extra push. The question is whether this relates to price competitiveness or whether weakening global demand is causing this. Regardless, it does not look like businesses are profiting from the improved REER at this point, highlighting the fact that the eurozone is currently mainly feeling the burden from the weak euro and is reaping little benefit from it. How has relative competitiveness within the eurozone evolved since the pandemic started? Reflecting on the euro crisis, we noticed a severe deterioration in competitiveness among the ‘periphery’ countries ahead of the crisis. The big question was if the weaker economies could make structural adjustments to become more attractive exporters again and with that, run surpluses. Painful wage adjustments were modestly successful in regaining competitiveness at that point. While competitiveness is not the primary economic problem right now, it is interesting to see if any divergence in competitiveness is emerging again. When looking at the developments in the real effective exchange rate based on unit labour costs against other eurozone economies in recent years, we see interesting differences in performance. Germany, the Netherlands and Belgium have seen their competitiveness deteriorate, while Italy, France and Greece have seen strong improvements. Spanish competitiveness has been stable over recent years, while Portugal has experienced a sizable deterioration. The export powerhouses of the past decade have seen their competitive position slip a little compared to other eurozone countries. This is mainly due to stronger wage growth while productivity growth did not improve in tandem. Overall, this development is a small step towards making the monetary union more coherent and reducing the risk of a new euro crisis triggered by differences in competitiveness. Internal eurozone competitiveness gains are made by France and Italy Source: European Commission, ING Research   A shift in relative competitiveness had already started prior to the pandemic. However, some of the large moves at the start of the pandemic were likely related to how furlough schemes are included in the statistics and so are not necessarily an accurate reflection of underlying competitiveness developments. This seems to be the case for the Netherlands and Greece for example, but in the Dutch case, we still notice a break from the pre-pandemic trend as cost competitiveness ended up at a weaker level in the second quarter. Since energy prices have become a dominant factor and labour cost competitiveness is muddied by government support, a look at a different measure of cost competitiveness is useful. Taking the GDP deflator, a broad price index across the economy, we see that a roughly similar picture emerges. Also here, the Netherlands and Germany have seen cost competitiveness deteriorate compared to other eurozone economies, while Italy and France have seen improvements. Compared to a broader basket of trade partners, the weaker euro dominates but still, we see that Germany and the Netherlands have experienced smaller gains compared to France and Italy. Competitiveness gains have been modest and smallest in the north The euro's depreciation has helped to improve the traditional cost competitiveness of eurozone businesses but in contrast to previous episodes of euro weakness, exports are hardly benefiting. As energy prices are probably a much larger cost concern for eurozone businesses, traditional cost competitiveness indicators have to be taken with a pinch of salt. Still, looking at competitiveness shifts within the eurozone, remarkably, structurally weaker eurozone economies have become relatively more competitive since the start of the pandemic, reducing the risk of a new euro crisis being triggered by stark differences in competitiveness. Read this article on THINK TagsGDP Eurozone Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

Relevance up to 10:00 2022-08-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Technical Market Outlook: The EUR/USD pair awaits the Eurozone CPI data that might trigger a bigger move. The bulls are still under the pressure as the recent bounce from the oversold market conditions was very shallow and hit only the level of 1.0203. The nearest technical resistance is located at the level of 1.0256. The last biggest bounce had been capped at the supply zone seen between the levels of 1.0470 - 1.0490, since then all the bounces are shallower and used by market participants to short the EUR. Please notice the weak and negative momentum on the H4 time frame chart supports the short-term bearish outlook for EUR with a potential target seen at the level of 1.0097 and below.     Weekly Pivot Points: WR3 - 1.0308 WR2 - 1.0280 WR1 - 1.0263 Weekly Pivot - 1.0252 WS1 - 1.0234 WS2 - 1.0222 WS3 - 1.0194 Trading Outlook: The monetary parity level as the first target for bears in the long term had been hit and the Euro is still being under the bearish pressure. There is no sign of relief for the EUR as the down trend should continue lower after the 61% Fibonacci retracement still has not been violated. The up trend can be continued towards the next long-term target located at the level of 1.1186 only if the complex corrective structure will terminate soon (above 1.0000) and the level of 1.0726 is clearly violated.   Read more: https://www.instaforex.eu/forex_analysis/289040

Relevance up to 08:00 2022-08-19 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Trend analysis (Fig. 1) On Thursday, from the level of 1.0179 (closing of yesterday's daily candle), EUR/USD will attempt to continue moving down in order to test the support line of 1.0136 (thick blue line). Then, it will go to the 38.2% retracement level at 1.0203 (red dotted line), before going up to the 50.0% retracement level at 1.0282 (red dotted line).     Fig. 1 (daily chart) Comprehensive analysis: Indicator analysis - downtrend Fibonacci levels - downtrend Volumes - downtrend Candlestick analysis - downtrend Trend analysis - downtrend Bollinger bands - downtrend Weekly chart - uptrend Conclusion: EUR/USD will continue moving down from 1.0179 (closing of yesterday's daily candle) in order to test the support line of 1.0136 (thick blue line). Upon reaching it, the quote will bounce to the 38.2% retracement level at 1.0203 (red dotted line), then go up to the 50.0% retracement level at 1.0282 (red dotted line). Alternatively, the pair could fall from 1.0179 (closing of yesterday's daily candle) and test the 61.8% retracement level at 1.0107 dashed blue line. Then, it will climb to the 38.2% retracement level at 1.0203 (red dotted line) and higher price levels.   Read more: https://www.instaforex.eu/forex_analysis/319251

Last night's publication of the minutes of the last Fed meeting, which took place at the end of July, may have affected the US dollar's trading. The policymakers touched on the regulation of the digital asset market for the first time at such a meeting. According to the published minutes, Fed officials remain very attentive to inflation risks and are committed to lowering price growth and keeping inflation expectations under control. A commitment to tightening monetary policy can take place, even if it comes at the expense of economic growth, the FOMC minutes show. The July discussion touched on the possible risks of too many and too large interest rate hikes. There was also talk that the Fed may be pursuing too much restrictive monetary policy than is necessary to restore price stability in the economy. The Fed, for the moment, seems unconcerned about GDP data and the risk of a sustained slowdown or official recession, as officials said the economy is stable for now, pointing to strong job growth, a low unemployment rate and elevated wage growth. Moreover, there was also discussion of the possibility of a later upward revision of earlier GDP readings, which are revised over time. There was also a statement regarding possible further action by the Federal Reserve. Policymakers discussed the possibility of slowing the pace of interest rate hikes at some point, but this will require data readings that can be considered satisfactory in terms of the impact of current hikes on slowing inflation. Meanwhile, for the moment, it may be crucial to maintain a restrictive stance to avoid a loosening of inflation expectations. Initially, after the release of the minutes, the EUR/USD exchange rate rose to 1.0200, before retreating to the region of 1.0150 this morning. The reaction thus appears to be mixed, without leading to a major impulse, and the exchange rate of the main currency pair has remained in consolidation since the morning of August 16. On Wall Street, on the other hand, indexes were down after the publication. The S&P500 fell 0.3 percent and the Nasdaq 100 fell 0.6 percent. The committee also turned its attention to the world of digital assets. Participants recognized the growing importance of digital assets and their increasing interconnectedness with other segments of the financial system, underscoring the need to establish a robust supervisory and regulatory framework for the sector to adequately mitigate potential systemic risks. Several participants mentioned the need to strengthen supervision and regulation of certain types of non-bank financial institutions, according to published minutes. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.   Source: Highlights from the Fed minutes

EURUSD was rejected at key resistance at around 1.0360 and the falling upper trendline and is now close to test key support at around 1.01. If EURUSD closes below the support, parity is likely to be tested shortly after.RSI is still showing negative sentiment after failing to break above 60 threshold supporting the bearish picture. If RSI closes below 40 threshold combined with a EURUSD close below 1.01 down trend is confirmed., At the time of writing Bollinger bands are expanding indicating the initial stage of a (down)trend. IF EURUSD closes outside of the lower Bollinger band it is further a strong indication of a down trend.   Source: Saxo Group GBPUSD has formed a Double Top like pattern on the very short term. If GBPUSD closes below 1.20 it is confirmed and GBPUSD is likely to test July lows at around 1.1760 . If GBPUSD is to move the same distance as the difference between the peak and low of the Double Top formation after breaking 1.20 it could reach 1.1729 illustrated by the two vertical arrows. However, there could be more downside in store for GBPUSD. If it takes out 1.1760 there is not support before around 1.14. See weekly chart Source: Saxo Group     Source: Saxo Group Source: Technical Update - EURUSD and GBPUSD testing key supports. Will they hold or will EURUSD test parity again and GBPUSD drop to 1.14?

Inflation in the Eurozone appears to be rising steadily, which may be influenced by the rising cost of electricity and energy carriers. Today's release of producer prices in Germany suggests that the peak of inflation in the Eurozone may be yet to come. Germany is the eurozone's largest economy, so published readings for that economy could heavily influence data for the community as a whole. Energy for businesses rose by 105 percent. Today we learned that in July producer prices (PPI inflation) rose in Germany at the fastest pace on record. PPI inflation on an annualized basis was as high as 37.2 percent. A month earlier, price growth stood at 32.7 percent, while the market consensus was for inflation of 32 percent. Energy prices still seem to remain the main driver of producer costs. The cost of the aforementioned energy for businesses rose 105 percent compared to July 2021. Had it not been for this factor, producer prices could have risen much more slowly, by only 14.6 percent. - according to the published data. Entrepreneurs could translate such a significant increase in costs into their products, which could also raise consumer CPI inflation as a result. Hence, it is not impossible that a possible peak in inflation in the eurozone is yet to come. It could fall in the last quarter of this year, or early next year, assuming that energy prices begin to stabilize or fall. Otherwise, the eurozone economy could plunge into a deep crisis. EUR/USD near parity again The rate of the EUR/USD pair fell today to 1.0084 (yesterday it was around 1.0200) and again approached parity at 1.0000. Concerns about the eurozone economy may be reflected in the exchange rate. However, it seems that the reaction to negative data is becoming less and less, as if the market has to some extent already discounted some of the bad news that may come in the near future. The European Central Bank's forthcoming actions may put the brakes on the euro's sell-off. According to the interest rate market, the ECB may opt for two rate hikes of 50 basis points each this fall. The market assumes that the ECB will raise the main interest rate to 1.5 percent throughout the cycle. Unlike the Fed, which may reduce the pace of hikes at the end of the year, the ECB may only move with a rapid increase in interest rates. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Source: PPI inflation in Germany highest on record. Euro under pressure

Summary:  The USD is breaking higher still, with important levels falling versus the Euro and yen yesterday. But the pain in sterling is most intense as presaged by the lack of a response to surging UK rates. Can the Bank of England do anything but continue to chase inflation from behind, caught between the Scylla of inflation and the Charybdis of a vicious recession? Also, USDCNH lurks at the top of the range ahead of another PBOC rate announcement on Monday. FX Trading focus: USD wrecking ball swinging again. UK faced with classic ugly choice between taking the pain via inflation or a severe recession The US dollar strength has picked up further after yesterday saw the breakdown in EURUSD below 1.0100 and a shot through 135.50 in USDJPY as longer US yields pushed to local highs. GBPUSD has been a bigger move on sterling weakness as discussed below.  A bit of resilient US data (especially the lower jobless claims than expected and a sharp revision lower of the prior week’s data taking the momentum out of the rising trend) has helped support the USD higher as longer US yields rose a bit further, taking the 10-year US treasury yield benchmark to new local highs, although we really need to see 3.00% achieved there after a few recent teases higher with no follow through higher. Looking forward to next week, the market will have to mull whether it has been too aggressive in pricing the Fed to pivot policy next year on disinflation and an easy-landing for the economy. The steady drumbeat of Fed pushback against the market’s complacency, together with a few of the recent data points (ISM Services, nonfarm payrolls, yesterday’s claims, etc.) has seen some of the conviction easing. But the key test will come next Friday, when Fed Chair Powell is set to speak on the same day we get the July PCE inflation data. Keep USDCNH on the radar through the end of today on the risk of an upside break above the range and Monday as the PBOC is set for a rate announcement (consensus expectations or another 10 bps of easing).   Chart: GBPUSD Lots at stake for sterling as discussed below, as it is a bit scary to see a currency weaken sharply despite a massive ratcheting higher in rate expectations from the central bank. The fall of 1.2000 has set in motion a focus on the 1.1760 cycle low, with an aggravated USD rise here and tightening of global financial conditions possibly quickly bringing the spike low toward 1.1500 from the early 2020 pandemic outbreak panic into focus. It is worth noting that the lowest monthly closing level for GBPUSD since the mid-1980’s is 1.2156. Without something dramatic to push back against USD strength next week from Jackson Hole, it is hard to see how this month may set the new low water mark for monthly closes. Source: Saxo Group GBPUSD slipped below 1.1900 this morning after breaking below the psychologically important 1.2000 level yesterday. As