EUR/USD Weakens Below 1.0750 Amid Eurozone Political Uncertainty

Forex

Economic

Summary:

EUR/USD slips below 1.0750 amid Eurozone political uncertainty and Fed's cautious stance. Snap elections in France and ECB's potential easing weigh on the Euro. The Fed's hawkish tone limits the dollar's downside, with key PMI data awaited.

SELL EURUSD

Close Time

CLOSED

1.07200

Entry Price

1.06000

1.07800

1.13914 +0.00287 +0.25%

23.9

Pips

Profit

1.06000

1.06961

Exit Price

1.07200

Entry Price

1.07800

The EUR/USD pair has lost traction, trading around 1.0730 in the early European session on Thursday. This drop ends a three-day winning streak as political uncertainty in the Eurozone weighs heavily on the shared currency. Market participants remain cautious, anticipating the preliminary Purchasing Managers Index (PMI) data from both the Eurozone and the US, set for release on Friday.

Political turbulence in the Eurozone, particularly in France, has added to investor anxiety. The call for a snap election following a defeat by the far-right National Rally has intensified fears regarding the region's political stability. This uncertainty continues to undermine confidence in the Euro.

In parallel, the European Central Bank (ECB) has signaled the possibility of further monetary easing. On Wednesday, ECB Governing Council member Mario Centeno suggested that the central bank could ease policies further if inflation remains subdued. This dovish stance contrasts sharply with the US Federal Reserve’s current position, contributing to the downward pressure on the Euro.

Across the Atlantic, the recent US Retail Sales report indicated weaker consumer activity, bolstering the argument for potential Fed rate cuts later this year. Despite this, several Fed officials have maintained a cautious outlook. Boston Fed President Susan Collins remarked that it is premature to declare victory over inflation, while Richmond Fed President Thomas Barkin emphasized the need for more economic data before considering a rate cut.

This cautious tone from the Fed officials might limit the downside for the US Dollar in the near term, even as the market adjusts expectations based on mixed economic signals.

Technical Analysis

From a technical perspective, the EUR/USD pair has exhibited clear negativity, breaking below the 1.0720 level and settling beneath it. This move reinforces expectations of a continued bearish trend, driven by stochastic indicators suggesting further downside momentum.

Today, the EUR/USD pair rallied to the 0.618 Fibonacci retracement level, a critical juncture that often signals potential reversals or continuations of trends. The price action has shown clear negativity by breaking below the 1.0720 mark, settling into a bearish posture that suggests further declines. This bearish outlook is further reinforced by the pressure exerted by the 50-day Exponential Moving Average (EMA), which has acted as a significant resistance point.

The anticipated downside targets are situated at 1.0675 and 1.0600, reflecting key support levels that traders will be closely watching. The stochastic oscillator, which measures momentum, is currently aligned with this bearish trend, indicating that the negative pressure is likely to persist. Should the pair manage to hold below the critical 1.0795 level, the bearish trend is expected to continue. A break above this level, however, could invalidate the bearish scenario, potentially triggering a bullish reversal that could propel the price towards the next significant resistance at 1.0915.

Overall, the trading range for the EUR/USD pair is expected to be between the support level at 1.0660 and the resistance level at 1.0800 for the day. The broader trend remains bearish unless significant positive catalysts emerge to shift market sentiment.

TRADE RECOMMENDATION

SELL EURUSD

ENTRY PRICE : 1.0720

STOP LOSS : 1.0780

TAKE PROFIT : 1.0600

Risk Warnings and Disclaimers

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Eva Chen

Commodity

Economic

Summary:

Investors focus on crude oil inventory data, where a larger-than-expected drawdown could indicate strong demand, potentially driving oil prices significantly higher.

BUY WTI

Close Time

CLOSED

81.098

Entry Price

85.000

79.000

63.643 +1.744 +2.82%

16.8

Pips

Profit

79.000

81.266

Exit Price

81.098

Entry Price

85.000

Fundamentals

Oil prices have continued to rise amid a series of bullish catalysts. With the arrival of the US hurricane season, Houthi rebels sinking a ship in the Red Sea, and Israel preparing for military action in Lebanon, investors are facing a combination of factors that could push oil prices higher.

Market direction may be guided by the upcoming US Energy Information Administration (EIA) inventory report, which is expected to show a reduction of 2.8 million barrels following an earlier increase of 3.7 million barrels. If Thursday's EIA data once again shows a significant decrease in inventories, crude oil prices could surge into new price ranges.

Technical Analysis

WTI crude oil is retreating from resistance levels within an ascending channel, confirming a potential pullback toward nearby support levels. The Fibonacci retracement tool suggests that bulls may be waiting to enter positions at key levels within the upward trend.

The 38.2% Fibonacci level is close to the mid-channel area of interest at $79.68, followed by the 50% level aligning with the dynamic support at the 100 SMA at $79.23. A deeper retracement could target the 61.8% Fibonacci level near the channel bottom at approximately $78.78. The 200 SMA dynamic inflection point might act as a slightly lower pullback line, as a break below this point could signal the start of a downtrend.

In terms of moving averages, the 100 SMA is above the 200 SMA, indicating the path of least resistance is upwards, or that support levels are more likely to hold than to break. However, the narrowing gap between the indicators suggests a weakening upward momentum.

The declining stochastic oscillator indicates selling pressure, yet the oscillators are also entering oversold territory, suggesting that bearish momentum may soon exhaust itself. The RSI has more downside potential before reaching oversold territory, implying that bearish pressure could persist for a longer period.

Trading Recommendations

Trading Direction: Long

Entry Price: 80.29

Target Price: 85.00

Stop Loss: 79.00

Valid Until: 2024-07 - 05 23:55:00

Support: 80.67, 80.36, 79.55

Resistance: 81.51, 81.84, 83.08

Risk Warnings and Disclaimers

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Peterson

Forex

Summary:

The intraday oscillation range is expected to be 1.065-1.0800, with a focus on buying low and selling high.

SELL EURUSD

EXP

EXPIRED

1.08000

Entry Price

1.06500

1.08500

1.13914 +0.00287 +0.25%

Pips

EXPIRED

1.06500

1.07233

Exit Price

1.08000

Entry Price

1.08500

Fundamentals

On Thursday (June 20) during the Asian session, the EURUSD experienced narrow fluctuations and is currently trading around 1.075. Due to disappointing U.S. retail sales data, the U.S. dollar index has softened, marking a slight decline for three consecutive days, though the momentum is relatively mild and the overall outlook remains optimistic. The EURUSD has basically stabilized around the 1.07 mark, yet political and economic risks for the eurozone remain unresolved. The short-term focus remains on tonight's U.S. initial jobless claims and Friday's preliminary PMI figures. If the data is weak, it may drag down the dollar, while a strong performance could test the euro's support at the 1.07 level again.

Additionally, attention should be paid to the Bank of England's interest rate decision and speeches from Federal Reserve officials, which could also disturb the market. In the short term, the U.S. dollar index might continue to rise, potentially leading to further declines in non-U.S. currencies. From a broader perspective, the U.S. dollar index is expected to weaken, maintaining a medium to long-term bearish outlook.

Technical Analysis

EURUSD is currently facing resistance at the 200-hour EMA of 1.0767, making it difficult for EURUSD to break through the 1.0750 threshold. Despite a rebound from recent lows near 1.0667, suggesting signs of stabilization, the upward momentum is still impeded. The daily candlestick chart indicates that EURUSD might aim for the 200-day SMA around 1.0800. However, the downward trend from early June, around 1.092, remains unchanged, limiting the rebound momentum. If this trend persists, EURUSD could continue lower, potentially reaching new lows for 2024 below 1.0600 or even testing the 1.0450 level.

Euro Stabilizes Short-Term with Downside Risks Persisting_1

Trading Recommendations

Trading Direction: Short

Entry Price: 1.0800

Target Price: 1.0650

Stop Loss: 1.0850

Support: 1.0700, 1.0650

Resistance: 1.0750, 1.0800

Risk Warnings and Disclaimers

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Jason

Summary:

U.S. initial jobless claims data will be released today. For the sharp rises in the data over the past two weeks, the market has interpreted it as seasonal fluctuations. However, if tonight's data does not change, the market may see substantial change.

BUY USDX

EXP

EXPIRED

105.150

Entry Price

105.850

104.748

99.130 +0.130 +0.13%

Pips

EXPIRED

104.748

105.859

Exit Price

105.150

Entry Price

105.850

Fundamentals

The U.S. financial markets were closed for the holiday yesterday. It seemed calm, but potential changes may appear soon.

Fed officials made speeches frequently about inflation this week, and the topic was the same as last week's. However, Fed officials made relatively dovish speeches last week, but they turned more hawkish this week. In the past, after an official delivered a hawkish speech, the subsequent official always delivered a relatively dovish speech, trying to keep a balance. But so far this week, the Fed's signal has been slightly hawkish to support the idea of "being patient for rate cuts".

For example, Kashkari, the president of the Federal Reserve Bank of Minneapolis, said on Monday that it is reasonable to forecast that interest rates will be cut only once this year, but not until December.

Musalem, the president of the St. Louis Fed, and Collines, the president of the Federal Reserve Bank of Boston, similarly hinted at only one rate cut this year.

Nevertheless, the market did not believe in the Fed but raised the expectation of a rate cut in September. At the same time, there was a sharp decline in the USDX, and the S&P 500 as well as the Nasdaq closed at historical highs. It means that the market decided to follow economic data rather than speeches from the Fed officials.

The U.S. initial jobless claims data will be released today. Although this data has less impact on the USDX, it may be special this time because of its sharp rises in the past two weeks. The market interpreted it as seasonal oscillations. However, if tonight's data does not change, the market may see substantial change.

In contrast, the rate cut expectation in September will be boosted if the data is higher than expected.

Moreover, the market will 'move in advance' if the data reaches 250,000, and expects two rate cuts this year.

Anyway, the Fed will decide whether or not to 'postpone' the rate cuts according to inflation data and whether or not to 'advance' the rate cuts based on initial jobless claims.

Technical Analysis

In the 4H chart, the USDX is supported by the upper edge of the oscillating range and is stopped from rising by the 23.6% Fibonacci retracement level (105.517). Now, it is oscillating narrowly in this range. If the USDX crosses above the 23.6% Fibonacci retracement level, it will test the annual high. If it falls below the upper edge of the oscillating range, it may touch 104.

In the Ichimoku Kinko Hyo, the kijun-sen and the tenkan-sen move horizontally. The current price is tending to hit the kijun-sen, and the USDX will surge shortly or hit the highest price on June 14th if the tenkan-sen turns upward. In DMI, +DI and -DI move too close to indicate a clear direction. If -DI keeps descending later, the USDX will also depreciate.

In general, considering the divergence between the current hawkish attitude of Fed officials and data, the market will change its forecast once the data falls short of expectations. Thus, the USDX will stay on an upward trend, and investors should buy it at lows.

Trading Recommendations

Trading direction: Long

Entry price: 105.15

Target price: 105.85

Stop loss: 104.748

Support: 105.15/104.768/104.384

Resistance: 105.517/105.922/106.428

Risk Warnings and Disclaimers

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Warren Takunda

Forex

Economic

Summary:

USD/JPY hovers near 158.00 as markets await Japan's National CPI data and fresh cues on the Fed’s rate-cut timeline. Mixed US Retail Sales data and BoJ discussions on rate hikes contribute to the current uncertainty.

BUY USDJPY

Close Time

CLOSED

158.296

Entry Price

160.200

157.000

142.142 -0.288 -0.20%

60.3

Pips

Profit

157.000

158.899

Exit Price

158.296

Entry Price

160.200

The USD/JPY pair remains steady, trading close to a seven-week high around 158.00 during Wednesday's European session. Investors are in a holding pattern, awaiting further clarity on the Federal Reserve’s interest rate trajectory and Japan’s National Consumer Price Index (CPI) data for May, slated for release on Friday.

Market sentiment continues to favor risk-perceived assets, buoyed by increasing speculation that the Federal Reserve will commence reducing interest rates starting in September. This optimism is reflected in the gains posted by S&P 500 futures during European trading hours. Concurrently, the US Dollar Index (DXY), which measures the dollar's strength against six major currencies, has dipped slightly to 105.15.

The anticipation of Fed rate cuts intensified after the latest US Retail Sales data for May fell short of expectations. Retail sales grew by a mere 0.1%, below the forecasted 0.2%. The report also highlighted a reduction in discretionary spending by households, a signal of weakening purchasing power in the face of persistent inflation and high interest rates.

Despite the market's expectations for two Fed rate cuts this year, the Federal Reserve's latest dot plot suggests only one reduction. Fed officials have consistently stressed the need to maintain current interest rates until sustained improvements in inflation data are evident.

In Tokyo, the Japanese Yen has shown weakness despite the release of minutes from the Bank of Japan's (BoJ) June meeting, which revealed discussions on the possibility of earlier-than-expected interest rate hikes. Governor Kazuo Ueda has expressed support for tighter monetary policy due to the rising inflation risks associated with the yen's depreciation. Japan's export competitiveness and increasing import costs are contributing to upward price pressures.

The major event for the Japanese Yen this week will be the release of the National CPI data. Expectations are for an acceleration in the annual National CPI excluding Fresh Food, projected to rise to 2.6% from the previous reading of 2.2%.

Technical Analysis

The USD/JPY pair has displayed a pronounced bullish bias, consolidating above the crucial 158.00 level, which underscores the market’s optimism. The price action suggests that the pair is gearing up for a continuation of its upward trajectory, with the first significant resistance target set at 158.40. A breach of this level would likely pave the way for an extension towards the next major target of 160.20, indicating a sustained bullish sentiment.

The technical landscape reveals that USD/JPY is benefiting from strong upward momentum, bolstered by the positive sentiment surrounding the US Dollar amid rate-cut speculations. The price has consistently found support around 157.35, with further substantial backing at 156.75. These levels are critical as they serve as the foundation for the current bullish wave. The pair’s ability to stay above these support levels is pivotal for maintaining the upward bias.

Examining the broader trend, the USD/JPY pair appears to be forming a robust bullish channel, characterized by higher highs and higher lows. This pattern indicates a well-established uptrend, supported by consistent buying pressure. The price’s movement within this channel suggests that any dips towards the lower boundary are likely to be met with significant buying interest, reinforcing the bullish outlook.

The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicators further corroborate the bullish scenario. The RSI is hovering in the positive territory, indicating that the pair is not yet overbought and has room for further gains. Meanwhile, the MACD is showing a widening spread between the MACD line and the signal line, which is a bullish signal suggesting strengthening momentum.

TRADE RECOMMENDATION

BUY USDJPY

ENTRY PRICE : 158.30

STOP LOSS : 157.00

TAKE PROFIT : 160.20

Risk Warnings and Disclaimers

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Peterson

Commodity

Summary:

WTI crude is expected to swing in the range of 78.5-81.0 today. Investors can buy low and sell high.

SELL WTI

Close Time

CLOSED

81.000

Entry Price

78.500

81.500

63.643 +1.744 +2.82%

17.4

Pips

Loss

78.500

81.174

Exit Price

81.000

Entry Price

81.500

Fundamentals

During the Asian session on Thursday, June 20, WTI crude oil fluctuated in a narrow range, and it is currently trading near $80.4 per barrel.

Yesterday, WTI oil prices closed with a doji star pattern after surging higher and falling. It even refreshed the recent high. Since early June, it has risen by more than 9 dollars. Due to the U.S. holiday yesterday, oil prices closed earlier, and the EIA weekly report will also be delayed by one day. There was little influential news available.

As oil prices rebounded, sentiment improved. Investors were more concerned about bullish factors. However, with oil prices going higher, bulls' enthusiasm began to subside, and overbought conditions also emerged during the rising process. Therefore, oil prices fell from highs after the surge. Next, it is more likely to retreat.

Technical Analysis

Yesterday, oil prices failed to keep going upward. After breaking through the 81 level, it began to pull back, finally closing with a bearish doji star, which is not a good signal for oil prices. To a large extent, it signals that the oil price has peaked at this stage. We should keep an eye on the lower edge of the previous running channel. While the previous channel has been broken above, we need to see whether it is valid as a new channel is not yet on the horizon. After a big rise, WTI has been overbought and needs to retreat, so investors can sell it now with small positions. Our attention should be paid to the 80.5-81 resistance area.

Yesterday's Doji Star Indicates an Incoming Correction_1

Trading Recommendations

Trading direction: Short

Entry price: 81.00

Target price: 78.50

Stop loss: 81.50

Support: 78.50, 76.50

Resistance: 81.00, 82.50

Risk Warnings and Disclaimers

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Peterson

Commodity

Summary:

The fluctuation range during the day will be 2,324-2,365, and investors are advised to buy low and sell high.

BUY XAUUSD

EXP

EXPIRED

2324.00

Entry Price

2365.00

2320.00

3327.02 -15.88 -0.48%

Pips

EXPIRED

2320.00

2363.70

Exit Price

2324.00

Entry Price

2365.00

Fundamentals

During the Asian session on Thursday (June 20), the spot gold fluctuated downwards and is currently trading around 2,333.

Yesterday, the U.S. stock and bond markets were closed. The U.S. Dollar Index (USDX) closed at 105.15 with narrow fluctuations. Gold prices slightly declined, mainly due to the impact of U.S. retail sales data earlier in the week. Although U.S. economic data showed marginal weakness, investors remained cautious due to the Fed's hawkish stance. While economic data weakened, the rebound in retail sales indicates a recovery in U.S. consumer spending. Currently, more attention is on the Fed's monetary policy. For USDX, the market is mostly influenced by the Fed's expectation management.

After a certain degree of decline, the USDX did not continue to fall but rather showed signs of stabilization and rebound. Therefore, the short-term gold price will still be under pressure, with key resistance at 2,342. It is hard to see a bull market before any breakout. The key support is at the 2,287-2,292 range. It is also hard to see a bear market without breaking below key levels. Before that, we can continue to apply a range-bound strategy, focusing on buying low and selling high.

Technical Analysis

The bottoming sign in the 1D timeframe is clear, but the upward momentum still falls short of expectations. If a strong uptrend forms today, we could see a high of 2,370 in the 1D timeframe, after completing this uptrend, we will then assess whether there will be a correction or if the bullish trend will continue. In the 4H timeframe, it is just lacking a bit of momentum for an uptrend. With another rise on Thursday to break through 2,342 and the Bollinger upper band widening, it will form a strong uptrend. This could lead to a significant surge, and combined with the target in the 1D timeframe, we could see a rise of about US$30 this week. Therefore, the bullish outlook for this week remains unchanged. On Thursday and Friday, attention will be on whether the gold price can break out with great momentum.

For today's trend, the gold price directly opened higher in the morning, showing a clear bullish trend after the break on Wednesday. However, as the price is approaching the resistance level of 2,342, it is not recommended to buy it now. The support below is around 2324. It is recommended to wait for a pullback before going long, and if there is a breakout, our subsequent focus should be on the highs of 2,350, 2,365, and 2,375, while also paying attention to the short-term data impact.