EURUSD is moving in the Descending Triangle and the market has reached the lower high area of the pattern.
Eurozone The PMI for Germany came in last week at a very low 40.6 for the month of June, and the PMI for France also performed better than expected. Because demand has slowed, factories in Europe have had to reduce production more frequently, resulting in very low overall PMI numbers over the past three years. ECB Businesses and households that spend money on materials are burdened by rising interest rates.
The Euro depreciated against the US dollar at the beginning of the week, retracing some of its Friday strong rebound, as the economies of the Eurozone continued to post disappointing economic data. Numerous Purchasing Managers Index numbers, from Europe and elsewhere, were released on Monday. These closely monitored indicators provide an accurate forecast of the state of the economy.The most worrisome of Europe’s recent developments may be Germany’s manufacturing release. Since July of last year, the headline figure has been below the crucial 50 level separating expansion from contraction, and the most recent release for June was regrettably no exception. The PMI stumbled to 40.6, its lowest reading in three years, as businesses reported further reductions in production as demand remained weak. The PMI for France came in slightly better than expected, but it was still very much in contraction mode.
As the European Central Bank works to control inflation, the interest rates facing the Eurozone will continue to rise. Christine Lagarde, President of the European Central Bank, actually came the closest to guaranteeing that borrowing costs would increase once more in July last month of any central banker ever. Therefore, more bad news is probably in store for European manufacturers, as tighter monetary policy will undoubtedly reduce demand even further, as that is its main objective. The manufacturing sector in China is still growing, but at a noticeably slower pace now. With the Institute for Supply Management’s PMI due later in the session, attention will now shift to the US. It is also anticipated to continue contracting. However, it is important to keep in mind that Monday’s trading hours in the United States will be cut short in anticipation of the Independence Day holiday on Tuesday. Additionally, the market experienced lighter trading conditions than usual.
XAUUSD Gold Price is moving in an Ascending channel and the market has rebounded from the higher low area of the channel.
Following the release of US ISM Manufacturing PMI data yesterday that was below expectations, gold prices have increased. This week, gold prices are more erratic because of the FOMC meeting minutes and the US NFP on Friday.
Due to a stronger US dollar, gold prices are slightly lower as the week begins. As last week’s core PCE deflator just barely missed expectations, gold remains at the mercy of US factors. Since then, the money market has been pricing in a 25 basis point increase by the Fed as having an 85% chance of happening. Later in the year, there is still a chance for another hike, but the markets are still unsure.
USDCHF is moving in an Ascending channel and the market has reached the higher low area of the channel.
Switzerland’s monthly CPI was 0.10%. Annualised CPI data came in at 1.7% versus the expected 1.8%, which is significantly less than the SNB target of 2%. This reading was less than the 0.30% last month printed. So that the SNB can halt rate increases at its next meeting.
Extreme selling pressure has been present on the USDCHF pair since a hesitant pullback to 0.8970 in the early London session. Following in the footsteps of the US Dollar Index, the Swiss Franc asset has declined. Investors’ attention has shifted to the publication of the United States Employment data, which has caused the USD Index to decline significantly. S&P500 futures have experienced nominal losses in Europe as a result of investors becoming more cautious due to the American holiday. Due to Independence Day, US markets will be closed. The US economy is currently going through a difficult period, which has put pressure on the USD Index. Due to difficult loan conditions, US factory activity has drastically decreased as businesses struggle to obtain credit from local banks. According to the US Institute of Supply Management (ISM), the Manufacturing PMI has continued to decline for an additional eight months. A value less than 50.0 is regarded as a general decline in economic activity. The economic data came in at 46.0, much less than the predicted 47.2 and the previous release of 46.9.
EURCHF is moving in the Symmetrical triangle pattern and the market has reached the Bottom area of the pattern.
The Federal Open Market Committee minutes will be the main topic moving forward. A thorough explanation of the steady interest rate policy and opinions on interest rate guidance will be provided in the minutes. The US Automatic Data Processing (ADP) Employment data will also be closely scrutinised. Payrolls are predicted to decrease by 180K in June compared to the previous estimate of 278K. The monthly Consumer Price Index (CPI) increased at a rate that was 0.1% slower than the rate seen last month, when it increased at a rate of 0.3%, which has reduced the appeal for the Swiss Franc. In contrast to expectations of 1.8%, the annualised CPI has slowed to 1.7%. The Swiss National Bank (SNB) would be able to pause further tightening of policy if the figure fell below 2%.
EURJPY is moving in an Ascending Channel and the market has reached the higher low area of the channel.
Masato Kanda, a currency diplomat for Japan, said that we are in touch with the US as well as other nations about currencies. US domestic data sparked worries about a US recession, while Japanese domestic data more slowly provided evidence in favour of the country’s loose monetary policy.
Masato Kanda, the top currency diplomat for Japan, told Reuters that he is in contact with several nations, including the US, about currencies. Kanda told reporters, according to Reuters, We are exchanging views with and communicating with authorities in other countries, including our ally the United States, not only on currencies, financial markets, but various other issues.” As the USDJPY hovers around the multi-month high of around 145.00, it is important to note that Japan’s Chief Cabinet Secretary Hirokazu Matsuno and Finance Minister (FinMin) Shunichi Suzuki have also recently raised concerns about the Asian major’s market intervention. In addition to the Japan intervention, the recent softening of US data and rising US Treasury bond yields all contribute to the risk-barometer pair’s decline. However, the USDJPY pair is being supported by the Bank of Japan’s defence of easy-money policy as well as recently softer Japan statistics. However, the Yen pair ended Monday’s North American trading session at about 144.65 and started the week with a daily gain of 0.26%.
EURNZD is moving in the Descending channel and the market has fallen from the lower high area of the channel.
This week’s NZD business data is light, and it is likely that this week’s NZD dollar news will affect the USD and AUD. The NZD is stronger against these two pairs because the USD ISM Manufacturing PMI was lower than anticipated yesterday and the RBA is pausing rate hikes today.
GBPCAD is moving in the Descending channel and the market has reached the lower high area of the channel.
The final UK Manufacturing PMI numbers were released this morning, and the reading of 46.5 is the lowest since 2023. By raising interest rates and reducing inflationary pressures seen in 2023, the Bank of England is acting correctly.
This morning, the UK Manufacturing Final PMI numbers were released, and they indicated a slowdown as output, new orders, and employment all decreased. The UK has thus far far exceeded expectations regarding economic growth in a difficult environment, and the reading of 46.5 is the lowest of 2023. One encouraging aspect of the data may be the decline in input prices and output charges, which have both decreased and should be encouraging for the future of the UK’s inflation situation. The Bank of England (BoE) has continued to be very optimistic about an easing of inflationary pressures in the second half of 2023, and this may be the first indication of an impending easing of price pressures.
AUDUSD is moving in the Descending channel and the market has reached the lower high area of the channel.
The rate hike by the RBA was put on hold at the meeting today because the CPI inflation reading for the month of May was lower than anticipated. In accordance with how the inflation reading responds to the economy, the RBA said further rate increases are possible.
AUDCAD is moving in an Ascending channel and the market has reached the higher high area of the channel.
Demand is skyrocketing from the US and China sides following the announcement of cuts to Saudi Arabian and Russian oil supply. The increase in oil prices benefited the Canadian dollar. Last week’s Canadian domestic data revealed a lower-than-anticipated GDP, supporting the Bank of Canada’s decision to postpone rate increases in upcoming meetings.
Crude Oil Analysis
Crude Oil is moving in an Ascending channel and the market has reached the higher low area of the channel.
The Recent losses in the Loonie pair may be attributed to both a rise in Canada’s main export and a decline in the US Dollar Index. However, WTI crude oil shows modest gains near $70.30 as it supports the most recent Saudi Arabian and Russian announcements suggesting additional supply cuts. The expectation that US and Chinese oil demand will rise as both of these economies work to resolve recent differences may strengthen the energy benchmark.
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