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The USDCHF pair, commonly called the "Swissie," represents the exchange rate between the US Dollar and the Swiss Franc, providing insights into the economic dynamics between the United States and Switzerland. The US Dollar is influenced by the broader economic trends in the United States and decisions by the Federal Reserve, particularly concerning interest rates and monetary policy. The Swiss Franc, known for its stability, is impacted by Switzerland’s economic policies and its status as a global "safe haven" currency. This status often leads to its appreciation during periods of international economic uncertainty.

Switzerland Consumer Price Index (CPI) MoM, July 4, 8:30 (GMT+2)

This CPI release is key for traders, affecting the Swiss Franc’s valuation. The upcoming release of Switzerland’s CPI is projected at a 0.2% increase, slightly under the prior month’s 0.3%. If the actual CPI exceeds this forecast, indicating higher inflation than expected, it could prompt the Swiss National Bank (SNB) to adopt a more hawkish monetary policy stance, potentially strengthening the Swiss Franc against the US Dollar. This would likely lead to a decline in the USDCHF exchange rate. Conversely, if the CPI is lower than forecast, suggesting weaker inflation, it may soften the Franc, causing an increase in the USDCHF rate as confidence in the Swiss economy’s strength wanes.

US Nonfarm Payrolls, July 5, 14:30 (GMT+2)

The US Nonfarm Payrolls for July are expected to add 180 000 jobs, down from the previous month’s 272 000. This data is pivotal as it reflects the health of the US job market, potentially impacting Federal Reserve policy. Should the payroll numbers exceed this forecast, it would signal a stronger US labor market than anticipated, potentially leading to tighter US monetary policy. This scenario likely bolsters the US Dollar, causing an upward movement in the USDCHF rate. However, if the job addition is less than expected, indicating a slowing in economic growth, this could weaken the US Dollar against the Swiss Franc and result in a downward trend for the USDCHF pair as confidence in the US economic outlook diminishes.

Last time, on June 7, US NFP data far exceeded forecasts, which contributed to a strong USDCHF rally!

In the Daily timeframe, USDCHF started a short-term bearish trend after a prolonged rise. After reaching the lower trend line, the price bounced and reached the critical resistance area, previously a support, testing MA100. There are two options to consider in this case.

• • If the price passes the resistance at 0.9000 and MA100, the growth will start with the target of 0.9150;
  • Otherwise, the rebound from the resistance will continue the fall to 0.8840;

The USD/JPY pair continues to escalate, currently positioned at 160.88, nearing the 37-year peak of 161.27 achieved last Friday.

Early today, the yen temporarily strengthened following Japan’s Q2 Tankan survey results, which indicated a slight improvement in industrial sentiment to 13 points from 11. However, the services sector displayed mixed results, maintaining 27 points against predictions of an increase, with future expectations slightly downgraded.

Despite these data points, the predominant driver of the yen’s weakness remains the significant interest rate differential between the Bank of Japan (BoJ) and the US Federal Reserve.

The BoJ has no immediate plans to adjust interest rates but might alter its government bond purchases, hinting at potential monetary tightening. However, market sentiment remains sceptical about such changes, contributing to the yen’s downward pressure.

USD/JPY technical analysis

 The USD/JPY is creating a consolidation range just below the 161.26 level. A brief surge to 161.33, considered a local peak within this upward trend, is possible. After this level, a corrective movement to 158.66 might initiate, potentially followed by another upward wave aiming for 163.30. This forecast is supported by the MACD indicator, with its signal line positioned above zero but pointing downwards, suggesting upcoming corrections.

The pair completed an upward movement to 161.26, followed by a correction to 160.26. Currently, it has surged to 160.88, forming a consolidation range. Breaking above this range could lead to a rise towards 161.30. Conversely, a downward break might lead to a correction to at least 160.11 before another potential rise to 161.30. The Stochastic oscillator indicates that the signal line, currently above 50, is poised to drop to 20, reflecting potential short-term declines before further gains.

Market outlook

As investors navigate these fluctuations, the broader focus remains on global central bank policies, particularly any shifts by the BoJ or the Fed that could influence the USD/JPY trajectory. The upcoming economic releases and central bank updates will be crucial in shaping market dynamics and the yen’s valuation against the dollar.

• EURUSD surges after French far-right party wins first race with weaker majority
• Bullish bias expected to come above 1.0788; sellers could take control below 1.0670

EURUSD opened with a positive gap on Monday after Le Pen’s far right party dominated the first round of the election on Sunday with a smaller margin than analysts expected, increasing speculation that an absolute majority on July 7 might be a struggle for the Euro-sceptic party.

The pair ran to an almost three-week high of 1.0742, but the 20- and 50-day simple moving averages (SMAs) kept the price action limited. Also, a close above 1.0788 and the nearby 200-day SMA is still required for an advance towards the 1.0850-1.0885 constraining territory. Beyond the latter, the price could experience a significant appreciation towards the ascending line from October 2023 seen around 1.0955.

A new bullish phase is looking more likely after the latest rebound near the critical support trendline at 1.0660. The upward move in the technical indicators is another encouraging sign that the bulls could stay in play, although some caution is still necessary as the RSI has yet to climb above its 50 neutral mark and the MACD is around its red signal line in the negative region.

Nevertheless, sellers might not show up until the price tumbles below the crucial support trendline seen at 1.0670. In the event that the bearish scenario plays out, the pair could decline to 1.0600, and if it breaks below that level, it could result in more dramatic movements, ultimately shifting focus to the 1.0515 restrictive region.

Overall, EURUSD appears to have located a favorable starting point for its next bullish stage, and a move above 1.0788 may be required to trigger new buying. 

EURUSD opened with gap-higher and rose to three-week high in early European trading on Monday, lifted by results of the first round French parliamentary election.

Rally was capped by the base of thickening daily cloud, following last week’s cloud twist, with subsequent easing, pointing to strength of 1.0778/1.0800 resistance zone (daily cloud, spanned between 1.0777 and 1.0791 and reinforced by converged 100/200DMA’s / psychological resistance).

Daily studies show strengthening positive momentum, MA’s in mixed setup, while daily cloud remains strong obstacle.

Near term price action may hold in prolonged consolidation while capped by cloud, but with slight bullish bias as long as today’s gap stays unfilled.

Sustained break higher would bring near term bulls fully in play and open way for further retracement of 1.0915/1.0666 bear-leg.

Conversely drop and close below daily Tenkan-sen (1.0712) would weaken near term structure and risk retest of 1.0666 higher base.

Res: 1.0777; 1.0800; 1.0820; 1.0852.
Sup: 1.0731; 1.0712; 1.0700; 1.0666.

GBPJPY remains in an unobstructed uptrend and hit new multi-year high (the highest since 2008) in early Monday.

The cross extends steep ascend into eleventh straight day, after registering the sixth consecutive monthly gain in June.

Yen weakened further against all major currencies on dovish BoJ and despite looming intervention after Japanese authorities signaled readiness to intervene to support falling currency.

The price has established above psychological 200 mark (also near Fibo 61.8% retracement of 251.08/116.95 2007/2011 downtrend), following the second monthly close above this level.

Bulls eye targets at 205.62 and 206.45 (Fibo 238.2% and 261.8% projections of the upleg from 197.20 higher low) which guard 210 round-figure barrier, ignoring for now intervention threats.

However, strongly overbought conditions on daily chart, signal that bulls may take a breather in coming sessions.

Rising 10DMA (202.32) offers solid support, which should ideally contain dips and keep intact lower pivots at 201.00/200.00 (20DMA /psychological).

On the other hand, the pair would accelerate lower in case Japanese authorities decide to intervene.

Res: 204.27; 205.62; 206.45; 207.80.
Sup: 203.17; 202.32; 201.00; 200.00.

The euro has started the week with strong gains. EUR/USD is trading at 1.0756 in the European session, up 0.41% on the day at the time of writing. The euro is at its highest level since June 14.

Macron takes a drubbing in round one

France went to the polls on Sunday, with voter turnout at a four-decade high. The vote was a stinging rebuke for French President Emmanuel Macron, whose Ensemble alliance came in a distant third in the three-way race. The big winner was the far-right, as Marie Le Pen’s National Rally (RN) party won 33% of the vote and will likely be the largest party in the next parliament.

If the RN doesn’t win a majority, that could set the stage for a hung parliament and political uncertainty, which would not bode well for the French financial markets and the euro. Interestingly, the French markets and the euro are in positive territory on Monday, as investors appear relieved that the RN might miss out on a majority in parliament. The relief on investors’ faces today could be quickly erased, however, if the NR has a strong showing in the second round of voting, which takes place on July 7.

Market focus will shift from France and focus on German inflation, which will be released later today. German CPI is expected to dip to 2.3% y/y in June, compared to 2.4% in May. Monthly, the market estimate stands at 0.2%, following 0.1% gain in May. Eurozone inflation follows on Tuesday with an estimate of 2.8% y/y in June, compared to 2.9% a month earlier.

EUR/USD Technical

• EUR/USD is testing resistance at 1.0752. Above, there is resistance at 1.0790
• 1.0709 and 1.0671 are the next support lines

Market picture

The crypto market has been enjoying an influx of buyers since Saturday, with a visible acceleration on Monday. Over the past 24 hours, capitalisation has risen 3.6% to $2.33 trillion. Last week’s drop in the crypto sentiment index to 30 (fear zone) reversed the price twice, showing that the market is dominated by a ‘buy the dip’ pattern.

Bitcoin is trading near $63.3K, adding 5% since Saturday morning and reaffirming the importance of the 61.8% retracement of the Jan-March rally. From another perspective, Bitcoin is adding and bouncing off the lower boundary of the downward channel. Likely, the price is now moving towards the upper boundary at $67K. However, cautious buyers may prefer to wait for confirmation with the price rising above $72-73K – the pivot area of the last four months – which would be confirmation of the start of a new impulsive wave of growth.

Bitcoin ended June down 8.5% to $61.9K. In terms of seasonality, July is considered quite successful for BTC, adding eight times (22.3% on average) out of the last 13 and declining on five occasions (-7.8% on average).

News background

Ethereum-ETFs will not begin trading in early July. The SEC has returned Forms S-1 to potential issuers of spot ETH-ETFs for corrections. The regulator expects corrected filings to be returned by 8th July.

CryptoQuant recorded an easing of Bitcoin miner sales pressure. The end of these sales could set the stage for a resumption of the rally, and this could happen in Q3.

According to Santiment, the level of bullish sentiment on social media has significantly decreased, and traders have lost confidence in the markets. This can be seen as one factor in Bitcoin reaching a possible bottom.

The SEC sued ConsenSys, the developer of the MetaMask wallet. According to the agency, the firm violated the law by selling unregistered securities through the MetaMask Staking service.

VanEck Investment Company filed a form with the SEC to register a spot ETF based on the Solana cryptocurrency (SOL). Swiss company 21Shares also filed the same application with the SEC a little later. According to Bloomberg, the chances of approval of SOL-ETF after the pre-election debates in the U.S. have increased. The new president and the change of the head of the SEC may change the situation.

According to Reuters, exit polls show that Marine Le Pen's far-right party, the National Rally (RN), won the first round of parliamentary elections in France on Sunday.

The financial market reacted to this with a rise in the euro's exchange rate against other currencies.

Specifically, the EUR/USD rate jumped to its highest level since June 13.

The EUR/USD chart shows that:

→ At the end of June, the price formed a consolidation pattern (shown as an orange triangle);

→ But today's bullish gap (shown in green) broke through it.

According to the principles of technical analysis, if the height of the consolidation pattern is measured through the A-B extremes, the rise could reach the level of 1.08400 (the height of the pattern, projected from the breakout level).

However, for this to happen, bulls need to overcome the resistance zone of 1.080-1.078.

Note that at the Monday morning high, the EUR/USD price sharply reversed downwards (indicated by an arrow). This indicates the activity of supply forces, so traders should not rule out a scenario where the price retraces to the breakout level, into the zone of the bullish gap.

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UK's PMI Manufacturing was finalized at 50.9 in June, slightly down from May's 22-month high of 51.2. This marks a continued period of growth for the sector, but with some emerging concerns.

Rob Dobson, Director at S&P Global Market Intelligence, commented, "The UK manufacturing sector is enjoying its strongest spell of growth for over two years". Performance of the domestic market remains a "real positive." However, he noted the persistent challenges in export markets, with manufacturers struggling to secure new business in the US, China, and mainland Europe.

Despite the overall optimism for future growth, manufacturers are focusing heavily on cost minimization and cash flow protection. This cautious approach has resulted in further job losses, cuts to non-essential spending, and leaner stock holdings. The renewed cost inflation pressure is also a significant concern, with input prices rising at the fastest pace since early 2023.

This surge in manufacturing costs will likely heighten worries among hawkish policymakers at BoE regarding the persistence of underlying inflationary pressures.

Full UK PMI manufacturing final release here.

• Gold trades back and forth in the past few sessions
• Price fails to claim 50-day SMA and restrictive trendline
• Momentum indicators are neutral-to-bullish

Gold has been under pressure lately following its break below the 50-day simple moving average (SMA). Although the price managed to find its feet at the lower end of the Ichimoku cloud, it has failed to jump back above the downward sloping trendline drawn from the all-time high of 2,450.

Should the latest weakness persist, the price could test the recent support of 2,294. Further declines could then stall at the 2,286-2,777 range, defined by the May and June lows. Even lower, bullion might face the March resistance of 2,223, which could serve as support in the future.

On the flipside, if the price rotates back above the 50-day SMA, the latest rejection region of 2,368 could prove to be the first barricade for the bulls to overcome. Higher, the June peak of 2,388 may prevent further upside attempts. Failing to halt there, the price may revisit the April high of 2,430.

In brief, gold dipped below its 50-day SMA, extending its structure of lower highs. Therefore, a solid move above the restrictive trendline drawn by connecting these lower highs is needed for the price to escape its short-term bearish pattern.