Sample Category Title

Daily Pivots: (S1) 139.07; (P) 139.76; (R1) 140.27; More...

USD/JPY is still extending the consolidation from 140.90 and intraday bias stays neutral. Further rally is expected as long as 138.22 minor support holds. On the upside, break of 140.90 will resume larger rise from 127.20 to 142.48 fibonacci level. However, considering bearish divergence condition in 4 hour MACD, break of 138.22 will confirm short term topping, and turn bias back to the downside for 55 D EMA (now at 136.35).

In the bigger picture, rise from 127.20 is seen as the second leg of the corrective pattern from 151.93 high. Stronger rally would be seen to 61.8% retracement of 151.93 to 127.20 at 136.34. Sustained break there will pave the way back to retest 151.93. On the downside, however, break of 133.73 support will argue that the pattern could have started the third leg through 127.20 low.

Daily Pivots: (S1) 0.9037; (P) 0.9078; (R1) 0.9105; More...

USD/CHF is staying in consolidation from 0.9146 and intraday bias remains neutral. Further rally is expected with 0.9013 support intact. . Rise from 0.8818 short term bottom is seen as correcting whole down trend from 1.0146. Above 0.9146 will target 38.2% retracement of 1.0146 to 0.8818 at 0.9325. On the downside, however, break of 0.9013 will turn bias back to the downside for retesting 0.8818 low instead.

In the bigger picture, fall from 1.1046 (2022 high) is seen as a leg in the long term range pattern from 1.0342 (2016 high), which might have completed at 0.8818 already, just ahead of 0.8756 long term support. Sustained trading above 0.9058 support turned resistance should confirm medium term bottoming. Further break of 0.9439 resistance will confirm bullish trend reversal.

Daily Pivots: (S1) 1.2382; (P) 1.2420; (R1) 1.2472; More...

Range trading continues in GBP/USD and intraday bias remains neutral. On the downside, break of 1.2306 will resume the correction from 1.2678. Deeper decline would then be seen to 1.1801 cluster support (38.2% retracement of 1.0351 to 1.2678 at 1.1789). On the upside, above 1.2543 will resume the rebound from 1.2306 to retest 1.2678 high.

In the bigger picture, as long as 1.1801 support holds, rise from 1.0351 medium term bottom (2022 low) is expected to extend further. Sustained break of 61.8% retracement of 1.4248 (2021 high) to 1.0351 at 1.2759 will add to the case of long term bullish trend reversal. However, firm break of 1.1801 will indicate rejection by 1.2759, and bring deeper decline, even as a correction.

Daily Pivots: (S1) 1.0684; (P) 1.0703; (R1) 1.0731; More...

EUR/USD dips mildly after rejection by 55 4H EMA but stays above 1.0634 support. Intraday bias remains neutral and more consolidations could still be seen. On the downside, break of 1.0634 will resume the corrective decline from 1.1094. Deeper fall should then be seen to 1.0515 cluster support, 38.2% retracement of 0.9534 to 1.1094 at 1.0498. On the upside, however, above 1.0778 will resume the rebound from 1.0634 to 55 D EMA (now at 1.0829).

In the bigger picture, as long as 1.0515 support holds, rise from 0.9534 (2022 low) would still extend higher. Sustained break of 61.8% retracement of 1.2348 (2021 high) to 0.9534 at 1.1273 will solidify the case of bullish trend reversal and target 1.2348 resistance next (2021 high).

Euro plummets broadly in today's market after a CB survey revealed significant drop in consumer inflation expectations. Sterling and Swiss Franc also recorded a generalized weakness. On the other hand, Australian Dollar held its ground as the day's strongest currency, buoyed by an unexpected interest rate hike by RBA. The Canadian Dollar followed closely, though traders remain vigilant for any surprises from BoC due tomorrow. Amidst these developments, Dollar is making modest gains, aided by a rally in treasury yields, while Japanese Yen showed slight weakness.

From a technical perspective, the main focus continues to be on the potential breakout of Dollar from its narrow range against European majors and Yen. Key levels to watch include 1.0634 support in EUR/USD, 1.2306 support in GBP/USD, 0.9146 resistance in USD/CHF, and 140.90 resistance in USD/JPY. Firm break of any of these levels could signal an early comeback for the greenback.

In Europe, at the time of writing, FTSE is down -0.03%. DAX is down -0.04%. CAC is down -0.11%. Germany 10-year yield is down -0.0198 at 2.362. Earlier in Asia, Nikkei rose another 0.90%. Hong Kong HSI dropped -0.05%. China Shanghai SSE dropped -1.15%. Singapore Strait Times rose 0.03%. Japan 10-year JGB yield dropped -0.0107 to 0.423.

ECB Survey: Inflation expectations dropped significantly

According to the latest Consumer Expectations Survey conducted by ECB in April, consumer inflation expectations have taken a significant downturn, reversing most of the gains made in the previous month.

The survey revealed that mean inflation expectations for the coming 12 months dropped from 6.3% to 5.3%. Median inflation expectations for the same period also saw a decline, dropping from 5.0% to 4.1%. These results mark a decrease even below February readings, which were at 5.8% and 4.6% respectively.

Looking further ahead, mean inflation expectations for three years in the future also slid down from 4.3% to 3.8%. Similarly, median expectations for this timeline dropped from 2.9% to 2.5%.

However, consumer sentiment regarding economic growth over the next 12 months displayed less negativity. The mean expectations for economic growth in the next year edged up from -1.0% to -0.8%. Meanwhile, median growth expectations remained static at 0.0% for the next 12 months.

Eurozone retail sales flat in April, EU up 0.1% mom

Eurozone retail sales was unchanged for the month in April, below expectation of 0.2% mom. Volume of retail trade increased by 0.5% mom for non-food products, while it decreased by -0.5% mom for food, drinks and tobacco and by -2.3% mom for automotive fuels.

EU retail sales rose 0.1% mom. Among Member States for which data are available, the highest monthly increases in the total retail trade volume were registered in the Croatia (+3.4%), Luxembourg (+3.3%) and Sweden (+3.1%). The largest decreases were observed in Slovakia (-5.8%), Romania (-3.7%) and Slovenia (-2.4%).

UK PMI construction rose to 51.6, mixed picture

UK PMI Construction rose from 51.1 to 51.6 in May, above expectation of 50.9. S&P Global noted that total activity increased at the fastest pace for three months. Growth was driven by commercial and civil engineering activity. House building, however, fell at the steepest rate since May 2020.

Tim Moore, Economics Director at S&P Global Market Intelligence, said: "May data highlighted a mixed picture across the UK construction sector as solid growth rates in commercial and civil engineering activity contrasted with a steeper downturn in house building....

"Inflationary pressures meanwhile eased considerably May, with purchase prices increasing to the smallest extent since September 2020. Supply chain normalisation helped to moderate cost inflation, as signalled by the strongest improvement in delivery times for construction products and materials for almost 14 years."

RBA surprises with 25bps hike, to give itself greater confidence

RBA surprises the market by raising the cash rate target rate, by 25bps to 4.10. Tightening bias is maintained as "Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe".

The central bank noted that while inflation is "still too high" even though it has "passed its peak." Also, it will be "some time yet" before inflation falls back to target range. It explained, "this further increase in interest rates is to provide greater confidence that inflation will return to target within a reasonable timeframe".

Growth "has slowed" and labor market conditions "remain very tight" even though eased. Wages growth "has picked up" but is "still consistent with the inflation target". The path to soft landing "remains a narrow one" and a "significant source" of uncertainty continues to be household consumption.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.0684; (P) 1.0703; (R1) 1.0731; More...

EUR/USD dips mildly after rejection by 55 4H EMA but stays above 1.0634 support. Intraday bias remains neutral and more consolidations could still be seen. On the downside, break of 1.0634 will resume the corrective decline from 1.1094. Deeper fall should then be seen to 1.0515 cluster support, 38.2% retracement of 0.9534 to 1.1094 at 1.0498. On the upside, however, above 1.0778 will resume the rebound from 1.0634 to 55 D EMA (now at 1.0829).

In the bigger picture, as long as 1.0515 support holds, rise from 0.9534 (2022 low) would still extend higher. Sustained break of 61.8% retracement of 1.2348 (2021 high) to 0.9534 at 1.1273 will solidify the case of bullish trend reversal and target 1.2348 resistance next (2021 high).

Economic Indicators Update

USD is slowing down after we spotted 5th wave on May 31 (CLICK HERE). We warned about a pullback, as yields turned down from resistance which are in positive correlation with DXY chart.

The main reason for the DXY slow down is 10Y US Yields chart, which is turning down from resistance in minimum three waves. While one more leg down is still missing, we believe that DXY can be trading in the middle of a higher degree A-B-C correction.

USD is currently recovering sharply after a drop into first leg A, so we are tracking a three-wave a-b-c recovery within wave B that can retest the highs as part of a flat correction before wave C shows up.

What we want to say is that USD – DXY is trading in a correction within uptrend, but correction may take more time and can retest 103 – 102 support area before we will see more upside towards 105 - 106 area.

Market picture

The cryptocurrency market hit a sell-off on Monday night, losing 3.8% in the last 24 hours, down to a capitalisation of $1.091 trillion – near almost three-month lows.

Bitcoin is losing 4% to 25.7 over this period; Ether is losing 3% to $1814, with top altcoins losing between 3.7% (Tron) and 7.9% (BNB).

The sharp move down has pushed Bitcoin’s price below its 200-week average ($26.3K). And now all the attention of position traders is focused on whether the price returns to territory above that line before the end of the week. If not, we should be prepared for a big sell-off down to $22K. This is the main working scenario, given the series of lower highs and lower lows over the past two months.

An alternative and less likely scenario would be a reversal to the upside after a brief dip below the 200-week average. This dynamic could assert that big players are gaining on Bitcoin at this level, suggesting considerable upside potential.

According to CoinShares, investments in cryptocurrencies fell by $62M last week, the 7th week of outflow. Bitcoin investments fell by $3m, as did Ethereum. Tron, a smart contracts platform, saw a $51m outflow over the week due to the closure of the offering by one of the providers.

News background

According to Bloomberg strategist Mike McGlone, Bitcoin won’t be able to show significant growth in the summer months. He also doesn’t rule out a substantial drawdown in the crypto market amid a halt to change and a stagnant equity market.

According to The Block, bitcoin’s 30-day average volatility on a year-over-year basis has fallen from the asset’s characteristic average of 71% to 32%. The famous Meta and Amazon stocks have overtaken digital gold on this measure.

The US Securities and Exchange Commission (SEC) has sued cryptocurrency exchange Binance and its CEO Changpeng Zhao. The regulator brought 13 charges, including unregistered offers and sales of BNB and BUSD tokens, Simple Earn and BNB Vault products, and staking.

JPMorgan will speed up interbank transactions in India using blockchain. The financial giant has agreed with five Indian banks to implement its blockchain-based Onyx settlement platform.

According to the latest Consumer Expectations Survey conducted by ECB in April, consumer inflation expectations have taken a significant downturn, reversing most of the gains made in the previous month.

The survey revealed that mean inflation expectations for the coming 12 months dropped from 6.3% to 5.3%. Median inflation expectations for the same period also saw a decline, dropping from 5.0% to 4.1%. These results mark a decrease even below February readings, which were at 5.8% and 4.6% respectively.

Looking further ahead, mean inflation expectations for three years in the future also slid down from 4.3% to 3.8%. Similarly, median expectations for this timeline dropped from 2.9% to 2.5%.

However, consumer sentiment regarding economic growth over the next 12 months displayed less negativity. The mean expectations for economic growth in the next year edged up from -1.0% to -0.8%. Meanwhile, median growth expectations remained static at 0.0% for the next 12 months.

Full ECB Consumer Expectations Survey here.

Eurozone retail sales was unchanged for the month in April, below expectation of 0.2% mom. Volume of retail trade increased by 0.5% mom for non-food products, while it decreased by -0.5% mom for food, drinks and tobacco and by -2.3% mom for automotive fuels.

EU retail sales rose 0.1% mom. Among Member States for which data are available, the highest monthly increases in the total retail trade volume were registered in the Croatia (+3.4%), Luxembourg (+3.3%) and Sweden (+3.1%). The largest decreases were observed in Slovakia (-5.8%), Romania (-3.7%) and Slovenia (-2.4%).

Full Eurozone and EU retail sales release here.

UK PMI Construction rose from 51.1 to 51.6 in May, above expectation of 50.9. S&P Global noted that total activity increased at the fastest pace for three months. Growth was driven by commercial and civil engineering activity. House building, however, fell at the steepest rate since May 2020.

Tim Moore, Economics Director at S&P Global Market Intelligence, said: "May data highlighted a mixed picture across the UK construction sector as solid growth rates in commercial and civil engineering activity contrasted with a steeper downturn in house building....

"Inflationary pressures meanwhile eased considerably May, with purchase prices increasing to the smallest extent since September 2020. Supply chain normalisation helped to moderate cost inflation, as signalled by the strongest improvement in delivery times for construction products and materials for almost 14 years."

Full UK PMI construction release here.