The US dollar’s strength is under question due to weaker than expected US GDP data. The Eurozone is anticipating inflation data and a potential ECB rate cut on June 6th. JPY carry trade strategies might be losing their appeal due to rising JGB yields. The Canadian dollar is under pressure due to the Fed’s delayed rate cuts. The Swiss franc is strengthening on the back of stronger-than-expected GDP data and potential SNB intervention. Gold is showing signs of a potential rebound.

Euro (EUR/USD):

  • Analysis: Eurozone inflation is expected to tick higher (2.5% vs 2.4% previously), potentially supporting the euro. Weaker US GDP data (1.3% vs market estimate of 1.2%) could also boost the euro. Technically, EUR/USD is testing resistance at 1.0845. A break above could see a rise to 1.0859. Conversely, a fall below 1.0787 could lead to 1.0715 or even 1.0645.
  • Forecast: Bullish bias in the near term, with potential for a rise to 1.0859 if US data is weak. Support levels at 1.0787 and 1.0715.


British Pound (GBP/USD):

  • Analysis: Recent inflation data might support the case for a Bank of England rate cut later this year. Technically, GBP/USD is testing resistance at 1.2721. A break above could see a rise to 1.2757 or even 1.2797. Conversely, a fall below 1.2681 could lead to 1.2646 or even 1.2615.
  • Forecast: Mixed outlook. Potential upside to 1.2797 if US data is weak and there are no bears at 1.2721. Support levels at 1.2681 and 1.2615.


Japanese Yen (USD/JPY):

  • Analysis: Rising JGB yields might make JPY-funded carry trades less attractive, potentially weakening JPY. Technically, USD/JPY is testing resistance at 158.30. A break above could see a rise to 159.50 or even 160.30. Conversely, a fall below 155.90 could lead to 154.30 or even 153.70.
  • Forecast: Bullish bias in the near term, with potential for a rise to 159.50 if JGB yields climb and US data is strong. Support levels at 155.90 and 153.70.


Australian Dollar (AUD/USD):

  • Analysis: AUD/USD broke below support at 0.6627. This could signal a medium-term decline. The Marlin oscillator and MACD also suggest a bearish trend.
  • Forecast: Bearish bias. Potential for further decline if support at 0.6555 is broken.


Canadian Dollar (CAD/USD):

  • Analysis: Mixed Canadian data and lack of clarity on BoC rate cuts keep USD/CAD rangebound.  Canadian dollar remains weak due to concerns over delayed Fed rate cuts and weak retail sales data. The Bank of Canada’s rate decision on June 5th will be key for the loonie. Higher than expected Canadian GDP data and a hawkish BoC could see the CAD strengthen.
  • Forecast: Neutral to slightly bearish. USD/CAD could trade between 1.3590 and 1.3760, or fall slightly if Canadian GDP surprises on the upside..


Swiss Franc (USD/CHF):

  • Analysis: The Swiss franc strengthened after stronger-than-expected Swiss GDP data. USD/CHF is down.
  • Forecast: Neutral to bullish.  CHF might continue to strengthen in the near term due to positive economic data.


Gold (XAU/USD):

  • Analysis: Gold prices are under pressure due to rising US interest rates and potential for a Fed rate cut being pushed back. Technically, a break below $2,335 could trigger a deeper pullback.
  • Forecast: Bearish bias in the near term. Potential for further decline if support at $2,335 is broken.


Key Events To Watch:

  • Eurozone inflation data (May 31)
  • US GDP data revision (May 30)
  • Bank of Canada rate decision (June 5)
  • Swiss National Bank meeting (June 20)


Categories: Market News

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