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ECB Governing Council member Peter Kazimir stressed today the necessity for continued monetary policy tightening to address prevailing inflationary pressures. he specifically highlighted the need for another rate hike in July to move further into a restrictive policy stance.

"We need to deliver another rate hike in July and move further into restrictive territory," Kazimir stated. He underscored that a continuation of monetary policy tightening is "the only reasonable way ahead."

Looking ahead to September, Kazimir cautioned that an updated analysis would be required to assess the impact of ECB's rate hike cycle before proceeding with further tightening measures. However, he emphasized that halting rate hikes prematurely presents a "much more significant" risk than overtightening.

Kazimir drew attention to several factors contributing to inflation risks, asserting, "Upward inflation risks are still substantial, linked to the labour market situation, food prices and, last but not least, profit margins."

EURUSD had been experiencing a downside correction after peaking at the 13-month high of 1.1094. However, the pair has been regaining ground since it found its feet at the May low of 1.0633, crossing above its 50-day simple moving average (SMA) before its rebound stalled at the upper end of the Ichimoku cloud.

The momentum indicators currently suggest that near-term risks are tilted to the upside. Specifically, the RSI has flatlined above its 50-neutral mark, while the MACD histogram jumped above zero and its red signal line to its highest level since May 23.

If the positive momentum intensifies further, the February peak of 1.1032 could prove to be the first obstacle for buyers to clear. Surpassing that zone, the price could advance towards the 13-month high of 1.1094. A violation of that zone could send the price towards levels not seen in months, where the March 2022 high of 1.1184 might curb its upside.

Alternatively, should the price reverse downwards, initial support could be found at the 50-day SMA, currently at 1.0880. A dive beneath that region could turn the spotlight to 1.0790 before the May low of 1.0633 comes under examination. Failing to halt there, the pair could challenge the March double-bottom region of 1.0515.

In brief, EURUSD’s latest attempt for recovery has faltered after hitting the upper boundary of the Ichimoku cloud, but bullish forces have not surrendered yet. Therefore, the pair could enter a consolidation phase before buyers retry pushing the price higher.

The Euro edged lower in early Monday, adding downside risk after Friday’s long-legged Doji signaled strong indecision.

Last week’s rally (nearly 1.8% up for the week) accelerated strongly on Thursday on hawkish ECB but faced strong headwinds on approach to the top of thick daily cloud (1.0964).

Traders are likely to collect some profits after recent strong acceleration higher for price adjustment ahead of fresh push higher, as overall sentiment remains positive and completion of reversal pattern on weekly chart adds to bullish signals.

Fading bullish momentum on daily chart and overbought stochastic, contribute to reversal signals, although the pullback is likely to be limited, with solid supports at 1.0891/81 (Fibo 23.6% of 1.0635/1.0970 / 55DMA), guarding pivot at 1.0842 (Fibo 38.2% retracement) which should contain extended dips and keep larger bulls in play.

Res: 1.0964; 1.0983; 1.1000; 1.1053.
Sup: 1.0917; 1.0881; 1.0842; 1.0811.

Daily Pivots: (S1) 179.76; (P) 180.90; (R1) 182.97; More...

Intraday bias in GBP/JPY stays on the upside at this point. Current up trend should target 138.2% projection of 148.93 to 172.11 from 155.33 at 187.36. On the downside, below 178.80 minor support will turn intraday bias neutral and bring consolidations first, before staging another rally.

In the bigger picture, up trend from 123.94 (2020 low) is extending. Next target is 195.86 (2015 high). For now, medium term outlook will remain bullish as long as 172.11 resistance turned support holds, even in case of deep pull back.

Daily Pivots: (S1) 153.76; (P) 154.52; (R1) 155.94; More....

Intraday bias in EUR/JPY stays on the upside as up trend is in progress. Next target is 100% projection of 139.05 to 151.60 from 146.12 at 158.67. On the downside, below 153.08 minor support will turn intraday bias neutral and bring consolidations first, before staging another rally.

In the bigger picture, rise from 114.42 (2020 low) is in progress. Next target is 100% projection of 124.37 to 148.38 from 138.81 at 162.82. For now, medium term outlook will remain bullish as long as 148.38 resistance turned support holds, even in case of deep pull back.

Daily Pivots: (S1) 0.8514; (P) 0.8541; (R1) 0.8560; More...

EUR/GBP's decline continues today and intraday bias stays on the downside. Fall from 0.8977 should target 161.8% projection of 0.8977 to 0.8717 from 0.8874 at 0.8453. However, break of 0.8611 resistance will indicate short term bottoming, and turn bias back to the upside for stronger rebound.

In the bigger picture, the down trend from 0.9267 (2022 high) is still in progress. It's seen as part of the long term range pattern from 0.9499 (2020 high). Deeper fall would be seen towards 0.8201 (2022 low). But strong support should be seen from there to bring reversal. This will now remain the favored case as long as 0.8717 support turned resistance holds.

Daily Pivots: (S1) 1.5873; (P) 1.5915; (R1) 1.5954; More...

Intraday bias in EUR/AUD stays neutral at this point. Strong support is expected from around 100% projection of 1.6785 to 1.6134 from 1.6513 at 1.5862 to complete the fall from 1.6785. On the upside, break of 1.6101 resistance will confirm short term bottoming, and turn bias back to the upside for rebound.

In the bigger picture, price actions from 1.6785 are seen as a correction to up trend from 1.4281 (2022 low) only. Strong support should be seen around 38.2% retracement of 1.4281 to 1.6785 at 1.5828 to complete the first leg and bring rebound. However, sustained trading below 1.5828 will raise the chance of trend reversal and target 61.8% retracement at 1.5238.

Daily Pivots: (S1) 0.9758; (P) 0.9771; (R1) 0.9795; More...

Intraday bias in EUR/CHF stays neutral for the moment. A short term bottom should be in place after hitting 61.8% retracement of 0.9407 to 1.0095 at 0.9670. Further rally is in favor. Break of 0.9793 and sustained trading above 55 D EMA (now at 0.9777) will add to case that whole correction from 1.0095 has completed. Intraday bias will be back on the for 0.9878 resistance next.

In the bigger picture, prior rejection by 38.2% retracement of 1.1149 to 0.9407 at 1.0072 suggests that medium term outlook is staying bearish. The pair is also capped below 55 W EMA (now at 0.9924). Down trend from 1.2004 (2018 high) is not complete yet and is in favor to resume through 0.9407 at a later stage. However, decisive break of 1.0095 resistance will raise the chance of bullish trend reversal. Rise from 0.9407 should then target 1.0505 cluster resistance (2020 low at 1.0505, 61.8% retracement of 1.1149 to 0.9407 at 1.1484).

Hello traders. In this technical article we’re going to take a look at the Elliott Wave charts charts of Ethereum ( ETHUSD ) published in members area of the website. As our members know ETHUSD reached extreme zone ( buying zone) in the cycle from the April 16th peak. In further text we’re going to explain the Elliott Wave structure and the forecast.

ETHUSD 4h Hour Asia Elliott Wave Analysis 06.04.2023

ETHUSD is showing incomplete bearish sequences in the cycle from the April 16th peak. At this stage we believe correction is unfolding as Elliott Wave Double Three Pattern. We call (x) blue connector completed at the 1927 high. As far as the price stays below that high, Ethereum should ideally make another leg down toward 1668.4-1450.5 area. At the marked blue box zone buyers should ideally appear again.

ETHUSD 4h Hour Asia Elliott Wave Analysis 06.18.2023

We got the decline as expected. Eventually ETHUSD reached extreme zone, blue box (buying zone). So far reaction from the blue box is still shallow. Ethereum still can see another leg down within extreme zone to complete the cycle.

Markets

The consumer confidence of the University of Michigan was he only market relevant data release on Friday, but it brought somewhat of a mixed message, especially for bond investors. Consumers’ assessment, both on current conditions (63.9 from 59.2) and on expectations (68.0 from 64.9) printed stronger than expected but inflation expectations for the year ahead unexpectedly softened from 4.2% to 3.3%. Yields whipsawed after the release, but there was no lasting directional impact. Plenty of mostly hawkish oriented policy makers were eager to give their view on the ECB strategy going forward. ECB’s Wunsch was most specific in its guidance as he said that ‘if core inflation keeps around 5.0% on a yearly basis in the coming months, then we will have to increase beyond September’. Assuming two additional hikes in July and September, this suggests that a cycle peak ECB deposit rate of 4.25% would be a real possibility. BuBa’s Nagel and Austria’s Holzmann were on the same line. Others including ECB Chair Lagarde were more reluctant to comment on what might happen beyond the clearly flagged July hike. German yields took a breather after last week’s upleg, easing between 0.3 bps (2-y) and 3.4 bps (30-y). The 2.55% level proves to be tough resistance for the German 10-y yield. US interest rate markets showed somewhat of a different picture as they had to adjust after a ‘too’ strong setback on the back of higher (weaker than expected) jobless claims on Thursday. US yields rebounded between 7.25 bps (2-y) and 1.5 bps (30-y). Even so, US 2 & 10-y yields also feel headwinds from resistance at respectively 4.8% and 3.85%. Real yields (10-y currently 1.54%) again nearing the cycle peak probably was factor slowing the US equity rally (Nasdaq -0.67%). At 4395, the EuroStoxx 50 (+0.68%) is only a whisker away from the cycle top. On FX markets, the dollar mostly kept Thursday’s post-claims/post-ECB losses. EUR/USD closed marginally lower at 1.0937. Sterling continues to profit from ‘comfortable’ interest rate support with EUR/GBP drifting further south in the 0.85 big figure (close 0.8532).

Today, the calendar is extremely thin. US markets are closed for the Juneteenth holiday. In the EMU there no important data. ECB’s Lane, Schnabel, Villeroy and Guindos will speak. We expect the downside both in US and EMU/German yields to remain well protected. After last week’s break higher, EUR/USD might develop a further buy-on-dips pattern. The cycle top at 1.1095 remains the key reference. Later this week, Fed Chair Powell’s testimony before Congress (Wednesday, Thursday) will be closely looked at. On Friday, the PMI’s will give a new update on the health of the economy in most majors countries. In the UK, the BoE on Wednesday still receives key inflation data before deciding on policy the next day. Aside from the BoE, also the Hungarian centrale bank (Tuesday), the Czech National bank (Wednesday) and the Swiss and Norwegian centrale bank (Thursday) will decide on policy.

News and views

The US Treasury in its semiannual report referring to 2022 included seven major economies on its monitoring list for currency practices. It did not, however, label any trading partner as an FX manipulator since none of them had met all three criteria. Even if it did, there are no immediate consequences other than holding talks to address the matter. The list is mainly to pressure those perceived to be artificially keeping their currency weak(er) to gain a competitive advantage. Countries being monitored today are China, South Korea, Germany, Malaysia, Singapore, Switzerland and Taiwan. Japan was dropped. The country in 2022 intervened a number of times but to strengthen the yen against a surging USD. Switzerland had exceeded one of the three criteria and the UST said it will continue a thorough analysis of the country until it no longer meets any of them.

Argentina is on the verge of defaulting once again as soon as the end this month. Some $2.7bn is due to the International Monetary Fund but Argentina’s FX reserves took another blow from a major drought that sunk soy and corn harvests. The country is set to hold talks with the IMF this week and hopes to bring forward more than $10bn in IMF disbursements scheduled for later this year. The government however is reluctant to agree with additional tough austerity measures with October general elections looming. Argentina’s economy is suffering under a whopping 114% inflation, hurting spending power and pushing people ever more in poverty.