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EUR/USD Slips Below 1.0700 as US Dollar Gains GroundEUR/USD slipped below the 1.0700 level during the early European morning, driven down by a strengthening US Dollar and a lackluster risk sentiment. The pair faced additional pressure from mixed German Industrial Production data. Market focus now turns to ECB-related announcements. Yesterday, the price broke the dynamic trendline of the bullish channel, invalidating the potential bullish impulse from the ABCD pattern and causing a renewed decline in bearish momentum. The next target to watch for is around the 1.06450 area and 1.06100. From a fundamental perspective, the European Central Bank (ECB) is expected to raise interest rates by 25 basis points next week, with the possibility of another hike in July. While the June hike is already priced in, future decisions will depend on data outcomes. Recent economic figures reveal that retail sales in the Eurozone stalled in April, showing consumer caution with a 2.6% decline compared to the previous year. Additionally, Germany reported a weakening in April factory orders, down 0.4% month-on-month. The ECB's monthly survey indicated a decline in inflation expectations to 4.1% in April. On Wednesday, German industrial production data will be released. On Tuesday, the US Dollar experienced modest gains against other currencies as Wall Street saw a slight increase. Traders remain cautious ahead of a significant week, marked by a gloomy global outlook and expectations of higher interest rates. The Federal Reserve is currently in a media blackout period leading up to the next FOMC meeting. Analysts warn that the upcoming May Consumer Price Index, to be released next Tuesday, will play a crucial role in determining the outcome.
Short
by FOREXN1
18
GBP/USD Bears Strengthen, European Morning Sees Decline to 1.24Yesterday, the GBP/USD currency pair experienced a pullback at the 50% Fibonacci level, marking the beginning of a new bearish trend. As the downtrend unfolds, the next potential target for the GBP lies around the support area of 1.23400. On the fundamental front, the GBP/USD pair encountered renewed bearish pressure during the European morning, causing it to decline towards the 1.2400 level after a relatively quiet Asian session. This downward movement can be attributed to a shift in risk sentiment, which is favoring the US Dollar (USD) and could continue to influence the pair's performance in the absence of significant high-tier data releases. Looking back at Monday's market dynamics, the USD struggled to build on the gains it made on Friday, mainly due to the impact of the Institute for Supply Management's (ISM) Services Purchasing Managers' Index (PMI) report. The report led market participants to lean towards the view that the Federal Reserve (Fed) would not make any changes to its policy rate in June. The headline Services PMI registered a decline from 51.9 in April to 50.3. Of particular significance was the drop in the Prices Paid Index, which fell from 59.6 to 56.2, indicating a softening in input inflation. Furthermore, the Employment Index dropped below 50, indicating a contraction in service sector employment. As of the time of writing, the CME Group FedWatch Tool indicates that the market is pricing in an approximately 80% probability of the Fed maintaining the policy rate within the range of 5-5.25% at the upcoming policy meeting on June 13-14. In the broader market context, the UK's FTSE 100 Index is currently down 0.3% in the early European session, while US stock index futures are experiencing losses ranging between 0.1% and 0.2%. If safe-haven flows dominate the financial markets in the latter half of the day, the USD is expected to maintain its strength, thus exerting downward pressure on the GBP/USD pair. Conversely, a shift away from risk aversion could reverse this dynamic.
Short
by DAY_PROFITS
6
USD/JPY Shows Strong Bearish Impulse after Pullback 140.400 In terms of technical analysis, yesterday the USD/JPY experienced a strong bearish impulse after reaching the 140.400 value. This indicates a downward price change and suggests a bearish setup. On the fundamental side, the US Dollar (USD) has been recovering from a one-week low since the release of the Non-Farm Payrolls (NFP) data. This recovery is seen as a positive factor for the USD/JPY pair and is supported by the expectation of a 25 bps rate hike by the Federal Reserve (Fed) at its upcoming policy meeting. The rise in US Treasury bond yields due to this expectation continues to strengthen the US Dollar. On the other hand, the Japanese Yen (JPY) is being negatively affected by the Bank of Japan's (BoJ) more dovish stance. Additionally, the JPY's safe-haven status is being diminished by the prevailing risk-on sentiment in the equity markets, further supporting the USD/JPY pair. However, the possibility of Japanese authorities intervening in the markets limits deeper losses for the JPY and prevents significant gains for the USD/JPY pair, at least for now. Considering these factors, it is advisable for aggressive bullish traders to exercise caution and carefully evaluate before taking any further intraday bullish positions. Nonetheless, the overall fundamental backdrop suggests that the path of least resistance for the USD/JPY pair is upward. Traders are now keeping an eye on the US ISM Services PMI, scheduled for release later during the early North American session. Additionally, the movement of US bond yields, along with the broader risk sentiment, is expected to provide fresh momentum to the major currency pair.
by FOREXN1
6
EUR/USD Gains Momentum on ECB's Hawkish Stance and USD WeaknessFrom a technical perspective, the EUR/USD is currently trading within a bullish channel, and in the last hour, the price has been attempting to establish a new swing high. There is an identifiable ABCD pattern, with the D point serving as our target. The D leg corresponds to the 1.217% Fibonacci extension, located at the 1.0800 level. We are observing a potential setup for a bullish move. On the fundamental side, the Euro received a slight boost after Christine Lagarde, the President of the European Central Bank (ECB), hinted at the likelihood of further interest rate increases. This statement was prompted by the absence of clear evidence indicating that underlying inflation has reached its peak. Lagarde's remarks, coupled with recent hawkish comments from various ECB officials, have reinforced market expectations that the central bank will continue raising rates despite a decrease in inflationary pressures. It is important to note that Eurozone Consumer Price Index (CPI) figures for May showed a greater deceleration than anticipated, with a year-on-year rate of 6.1% compared to the previous 7.0%. Additionally, Core CPI declined from 5.6% to 5.3% last month. Moreover, the emergence of USD selling has contributed to a moderate intraday rebound of approximately 50 pips for the EUR/USD pair. In fact, the US Dollar Index (DXY), which tracks the performance of the Greenback against a basket of currencies, lost momentum and relinquished its modest intraday gains following the disappointing release of the US ISM Services Purchasing Managers' Index (PMI) for May, which fell to 50.3. This data, coupled with dovish rhetoric from several Federal Open Market Committee (FOMC) officials last week, has reinforced market expectations for an imminent pause in the Federal Reserve's tightening cycle. Market participants are now pricing in a higher probability of the US central bank keeping interest rates unchanged at the conclusion of its upcoming two-day policy meeting on June 14. Consequently, US Treasury bond yields experienced a significant overnight decline, keeping USD bulls on the defensive during the Asian session on Tuesday and providing support to the EUR/USD pair. However, it is worth noting that a cautious market sentiment could strengthen the safe-haven demand for the US dollar and limit gains for the Euro. Nevertheless, the aforementioned fundamental backdrop appears to favor the bulls and supports the potential for an intraday appreciation in the EUR/USD pair. Investors are now awaiting the release of German Factory Orders data and Eurozone Retail Sales figures, which could provide fresh impetus. Meanwhile, there are no significant market-moving economic data releases expected from the US, which leaves the Greenback influenced by US bond yields and overall risk sentiment.
by FOREXN1
8
GOLD:Pressure Mounts with Expected Interest Rate Hike - SHORTIn the early European session, the price of Gold found temporary support around $1,943.00. Although there has been a short-term decline in the value of this precious metal, further losses are expected as the Federal Reserve (Fed) is likely to raise interest rates to address persistent inflation in the United States. S&P500 futures have recovered some of the losses experienced in the Asian session, suggesting an improvement in market participants' risk appetite. Despite the release of better-than-expected Nonfarm Payrolls (NFP) data on Friday, US equities continued their bullish trend. Following a strong rally, the US Dollar Index (DXY) has been trading sideways around 104.00. This indicates that the index is consolidating before potentially moving higher. The likelihood of another interest rate hike by the Federal Reserve has also boosted US Treasury yields. The yield on 10-year US Treasury bonds has risen significantly above 3.74%. After the seventh consecutive contraction in US factory activity, investor attention is shifting towards the upcoming release of the US ISM Services PMI data. While the US Manufacturing PMI has struggled to surpass the 50.0 threshold for the past seven months, the Services PMI has been performing relatively better. The preliminary report suggests a decline in the US Services PMI to 51.5 compared to the previous release of 51.9. However, the New Orders Index, which reflects future demand, is expected to improve to 56.5 from the previous release of 56.1. Considering our technical analysis, which indicates a bearish channel for gold, we are currently seeking a short setup with a target of $ 1,920.00
PHILLIPNOVA:XAUUSDShort
by FOREXN1
25
NZD/USD Vulnerable to Bearish Pressure: A Closer LookThe NZD/USD pair initially reached a five-day high at 0.6111 before declining to around 0.6065. This movement was driven by strong labor market data from the US, which indicated robust employment growth and potentially prompted a reevaluation of additional rate hikes by the Federal Reserve (Fed). As a result, the US Dollar gained traction, supported by increasing US bond yields. The US Bureau of Labor Statistics reported that employment in the United States exceeded expectations, with a 339k increase in May compared to the consensus forecast of 190k. However, the Unemployment Rate slightly rose to 3.7% instead of the expected 3.5%. Average Hourly Earnings, which serve as an indicator of wage inflation, registered a year-on-year growth of 4.3%, slightly below the projected 4.4%. While labor demand shows signs of deceleration, the strong employment growth and mounting inflationary pressures make a case for the Fed to reconsider a 25 basis points (bps) hike in their upcoming June meeting. Consequently, US bond yields have been trending upward, with the 10-year yield rising to 3.68%, a daily gain of 2.70%. Similarly, the 2-year yield stands at 4.51%, marking a 3.64% increase, and the 5-year yield is at 3.84%, up by 3.81%. The Federal Reserve's ultimate objective is to achieve full employment and price stability. Therefore, the release of the May Consumer Price Index (CPI) next week will be crucial in shaping the expectations and considerations of the Federal Open Market Committee (FOMC) regarding future interest rate decisions. Currently, the CME FedWatch tool indicates that markets are still assigning higher probabilities to no rate hike in the upcoming June 13-14 meeting, but the possibility of a 25 bps hike has gained some relevance. When examining the price action using technical analysis, it becomes evident that there was a notable retracement occurring at the 38.2% Fibonacci level, which coincided with the previous resistance level. This confluence of factors indicates a significant area of interest for traders. Presently, our focus lies in identifying a new bearish setup, aligning with the observed price movement and potential resistance, to potentially capitalize on a downward market trend.
by FOREXN1
16
GOLD Retreats Amid Market Uncertainty Technical + Fund.AnalysisThe price of gold (XAU/USD) has recently pulled back from its weekly high, signaling a tentative stance from buyers. This retreat aligns with the uncertain market conditions, where conflicting factors are at play. On one hand, there is optimism surrounding the US debt-ceiling deal and a diminishing hawkish sentiment regarding the Federal Reserve (Fed). On the other hand, caution prevails ahead of crucial top-tier US data releases. Notably, the positive China Caixin Manufacturing Purchasing Managers' Index (PMI) bolsters the upside momentum for XAU/USD. However, the probability of a 25 basis points rate hike by the Fed in June, standing at 40.0%, encourages gold buyers, further adding to the market dynamics. Looking ahead, the focus will be on the US employment indicators and flash PMIs for May, as they will provide clearer guidance for market direction. Additionally, the final round of talks by the Fed before the pre-Federal Open Market Committee (FOMC) blackout period for policymakers will be crucial. Furthermore, close attention should be paid to the voting by US Senators on measures to avert default conditions, even though the bill is expected to receive substantial support in the Senate, where Democrats hold the majority. If the slightly less hawkish bias from the Fed continues, supported by mixed US data, we may see a potential recovery in the gold price. However, if data releases remain positive and optimism for the US economy persists, XAU/USD bears may maintain their confidence. From a technical standpoint, the price continues to follow a bearish channel, with lower highs and lower lows, aligning with a pure swing trading strategy and the formation of ABCD patterns. Yesterday, after rebounding from the 61.8% - 78.6% Fibonacci area, the price experienced a new pullback in line with the bearish momentum. We anticipate a continuation of the bearish trend.
OANDA:XAUUSD
by FOREXN1
12
EUR/USD Remains Below 1.0700 Amid USD Index Strength Policy Div.The EUR/USD currency pair is currently experiencing oscillations below the 1.0700 level, primarily influenced by the USD Index surpassing the immediate resistance level of 104.30. This development reflects the strength of the US dollar and its impact on the pair's movements. Financial markets are witnessing a state of chaos due to the conflicting views among Federal Reserve policymakers regarding interest rate guidance. This divergence of opinions is causing uncertainty and instability in the markets, adding to the complexity of the current situation. European Central Bank President Müller expresses confidence in the central bank's plan to raise interest rates by 25 basis points on multiple occasions, emphasizing the persistent nature of core inflation. This stance implies a potentially more aggressive approach from the European Central Bank. At present, the EUR/USD pair is consolidating within a narrow range below the significant psychological resistance level of 1.0700 during the early European session. Traders anticipate heightened market activity as the release of Eurozone inflation and United States employment data approaches. In the Asian session, S&P500 futures have recorded substantial gains, indicating a recovery in investor risk appetite. However, caution prevailed among market participants on Wednesday, leading to a sell-off of US equities. This cautious sentiment arose from mounting expectations of an additional interest rate hike by the Federal Reserve (Fed). Our analysis suggests the possibility of a potential pullback at the 61.8% Fibonacci retracement level from the previous swing, which coincides with the dynamic trendline of the bearish channel and the resistance area. This confluence of factors presents an opportunity for the formation of a new AB=CD pattern, with the D leg extending at 1.272%.
by FOREXN1
8
How to Day Trade or Swing Trade S&P500 Part 2Hey Traders, So this is part 2 of the previous strategy I talked about with the stock indexes. I used to trade the Forex, Commodities, Crypto and other markets. But in my opinion these stock indexes are the best markets of the all to trade because they move daily with strong volume and give you multiple trading opportunites. So lets look at now how we can truly fine tune this strategy and turn it into a great method. In the future I believe I will only focus on trading the stock indexes S&P500, Nasdaq 100 and Russell 2000. Enjoy! Trade Well, Clifford
CME_MINI:ESM2023Education
by TradeTheIndex
4
US30 (Week of May21st)The previous idea for US30 still holds. I will still be looking for buys to the upper supply area for temporary or major sells.I will be looking for minor breaks of structure then a retest of the current demand zone to continue higher. I would prefer to get this entry at my trading session (New York), but if price moves up without me, I will look to take sell positions if market presents it self for that condition. Updates will be provided later. Good Luck!
ULong
by TheDream20