Skip to content

TOP FOREX BROKERS REVIEW

THE INTERNET'S MOST COMPREHENSIVE LIST OF ONLINE FOREX BROKERS AND FOREX REVIEWS. 

Forex Forecast & Forex Technical Outlook for 10 June to 14 June 2024

Forex Forecast & Forex Technical Outlook for 10 June to 14 June 2024
author Written by
Rex John Walsh
author Fact checked by
Sangram Mohanta

Last Updated on June 10, 2024 by TOP FOREX BROKERS REVIEW

The robust job growth and increase in average hourly earnings in May solidified the Fed's rate cut. This belief is becoming increasingly contingent upon a few sluggish inflation reports. The FOMC's Summary of Economic Projections and the CPI report due next week are now the primary focus.

Moreover, the Bank of Canada reduced its policy rate by 25 basis points this week and issued dovish remarks. Similarly, the European Central Bank (ECB) implemented a 25 basis point rate reduction and maintained a cautious approach to future monetary policy. 

The Federal Open Market Committee (FOMC) will publish an updated Summary of Economic Projections (SEP) concurrently with its policy meeting next week. Analysts anticipate an increase in the median dot projection due to the persistent price pressures since the most recent SEP.

Top Rated Online Best Forex Brokers 2024

Rating
Fastest Limit Order SpeedAward Wining BrokerTrade Smarter with EightcapTrade with a Global BrokerTrade FX, CFDs and StocksMore than Just Trading
Open AccountOpen AccountOpen AccountOpen AccountOpen AccountOpen Account

Forex Technical Outlook for 10 June to 14 June 2024

Let’s see the list of events to look at this week:

  • GBP Claimant Count Change on Tuesday
  • US CPI m/m on Wednesday
  • Federal Funds Rate and FOMC Statement on Wednesday
  • AUD Employment Change on Thursday
  • US PPI m/m on Thursday
  • BOJ Policy Rate and Rate Statement on Friday
  • Prelim UoM Consumer Sentiment on Friday

EUR/USD

​​Following the US Nonfarm Payrolls (NFP) report, the EUR/USD experienced a substantial decline during Friday's New York session. The report indicated that US employers increased their payrolls by 272,000, surpassing the anticipated figure of 185,000 and the altered previous figure of 165,000. Nevertheless, the unemployment rate rose to 4.0%, surpassing the previous and forecasted rate of 3.9%.

The unexpectedly high payroll numbers allayed concerns regarding decreased labor demand, exacerbated by recent indicators that indicated a loosening job market. The labor market showed some softening, as evidenced by the fact that April's JOLTS Job Openings and May's ADP Employment Change were weaker than anticipated. The Initial Jobless Claims for the week ending May 31 exceeded estimates.

In addition, market expectations for the Federal Reserve to commence interest rate reductions at the September meeting have been substantially diminished due to this elevated inflation concern. As a result of the NFP report, the probability of rate decreases in September decreased from 68% to 54.4%, as indicated by the CME FedWatch tool.

EURUSD

 

In the daily chart, the EUR/USD price trades under extreme bearish pressure during the post-NFP timeframe, creating a potential bearish trend reversal.

The 14-day Relative Strength Index (RSI), which turned bearish below the 50.00 line, suggested a bearish factor. Moreover, the 20-day EMA is above the current price and is working as resistance. In that case, investors might experience a downside continuation, with the main aim of testing the 1.0700 key support level.

GBP/USD

After the Non-farm payroll release, the Pound Sterling (GBP) experienced a significant decline from 1.2800 to the US Dollar (USD). The downside pressure came as the labor market conditions remained constrained despite the Federal Reserve's extended restrictive monetary policy.

The report indicated that employers increased their payrolls by 272,000, which was amended down from 175,000. Nevertheless, the Unemployment Rate rose to 4.0%, defying the consensus that it would remain at 3.9%. Additionally, the Average Hourly Earnings, a metric for wage growth momentum, increased to 4.0% annually, consistent with the revised figure from April (3.9%) and surpassed the consensus estimate of 3.9%. Wage growth increased to 0.4% every month, surpassing the anticipated 0.3%.

GBP/USD

 

In the daily chart of GBP/USD, the recent price remains corrective above the 1.2675 support level. As the current price at the top from the bullish swing started from the 1.2299 low, a sufficient downside correction is pending.

In that case, a bearish daily candle below the 1.2675 low could be a potential bearish opportunity, targeting the 1.2517 support level. However, any immediate bullish reversal from the dynamic 20-day EMA could resume the existing trend towards the 1.2950 level.

AUD/USD

The Australian Dollar is under pressure due to the uncertainty surrounding the May United States Nonfarm Payrolls (NFP) report, which restricts the potential for risk-sensitive assets to appreciate.

The US NFP report is anticipated to influence market expectations for Federal Reserve (Fed) rate decreases, prompting a shift in market sentiment toward caution. Overnight gains have been erased, and S&P 500 futures have shifted to the negative, suggesting a decrease in investor risk appetite. 

The Australian Dollar has maintained its gains in the interim, as it is not anticipated that the Reserve Bank of Australia (RBA) will implement rate cuts this year. Governor Michele Bullock's hawkish guidance on Wednesday diminished expectations for RBA rate decreases. Bullock declared that the central bank is prepared to increase interest rates further if inflation fails to revert to the target range of 1%-3%. It is anticipated that the Reserve Bank of New Zealand (RBNZ) will also contemplate reversing its restrictive interest rate policy next year in addition to the Reserve Bank of Australia (RBA).

AUD/USD

 

In the daily chart of AUD/USD, the recent price shows a corrective momentum at the top, suggesting a possible downside pressure in the coming days. However, the most recent price remains at the support from the MA wave, while the RSI is below the 50.00 line.

In that case, an additional downside pressure with a daily candle below the 0.6556 level could lower the price toward the 0.6464 support level.

USD/JPY

Shortly after the NFP, the USD/JPY exchange rate significantly increased by over half a percent. The US Dollar (USD) is strengthening due to better-than-expected results, and the pair is currently trading in the upper 156s.

Additionally, the Bureau of Labor Statistics (BLS) reported a 4.1% increase in average hourly earnings year over year, which surpassed the 3.9% estimate and the revised 4.0% estimate in April. 

In general, the data indicate that the US labor market is more favorable than previously anticipated, particularly in light of the lower-than-anticipated JOLTS Job Openings and ADP payroll data from earlier in the week. The higher-than-expected wage inflation suggests the potential for headline and core inflation to increase as workers expend their increased wages.

Real wages in Japan experienced a 25th consecutive month of decline in April, as domestic inflation surpassed wage growth. This circumstance challenges the Bank of Japan (BoJ) in its efforts to normalize its monetary policy. The BoJ is the sole major central bank currently engaged in quantitative easing (QE) and has maintained interest rates in the ultra-low 0.0%-0.1% range. This has resulted in a substantial devaluation of the Yen, a source of concern for policymakers due to its impact on business activity.

USD/JPY

 

In the USD/JPY daily chart, the recent price shows a bullish continuation, followed by the broader market trend. Moreover, the major support is below the current price, where the MA wave could be the major barrier to bulls.

Based on this structure, an upward continuation could take the price above the 160.00 psychological level in the coming days. However, a downside pressure below the 154.56 level could lower the price towards the MA wave area.

XAU/USD

Following the release of US Nonfarm Payrolls (NFP) data on Friday, XAU/USD declined to $2300s. The data indicated that the US economy added 272K jobs in May, surpassing the anticipated 185K. This figure was also higher than the revised down figure of 165K from April.

The BLS data generally suggested that wage inflation was increasing, potentially leading to higher core and headline inflation. This situation may induce the Federal Reserve (Fed) to postpone the reduction of interest rates. The opportunity cost of holding a non-yielding asset increases, which is detrimental to gold if interest rates remain elevated for an extended period.

Following the announcement that the People's Bank of China (PBoC) had discontinued its gold purchases in May, gold prices began to decline on Friday. This decision was made after an 18-month purchase streak.

The PBoC's gold reserves remained unchanged at 72.8 million troy ounces at the end of May, the same as they were at the end of April, as disclosed by official PBoC data released on Friday. Consequently, gold experienced a downward trend at the end of the week.

China's gold reserves at the PBoC reached an all-time high in April, accounting for 4.9% of total reserves, following 18 consecutive months of growth. This data was released following the strong purchasing.

Gold prices are significantly influenced by central bank purchases, primarily in Asia. This purchase likely played a role in the 2024 rally, culminating in gold reaching a record high of $2,450 in May. According to the World Gold Council (WGC), the strength of gold was significantly influenced by unreported over-the-counter purchasing by central banks.

XAU/USD

In the daily chart of XAU/USD, a potential head-and-shoulders pattern is visible, with the neckline at the 2278.13 level. In that case,a valid bearish recovery below the support line could validate the price reversal, creating a strong downside signal.

BTC/USD

The Bitcoin (BTC) price remains optimistic despite stabilizing at approximately $71,000. Whales are resuming their robust purchasing activities, US spot Bitcoin ETFs are increasing, and the absence of FOMO among investors indicates that Bitcoin is poised to achieve new all-time highs.

Data from CryptoQuant's Total Whale Holdings and Monthly Percentage Change reports underscore the combined Bitcoin holdings of large investors or institutions, commonly referred to as "whales" due to their substantial impact on the cryptocurrency market.

The Monthly Percentage Change quantifies the change in these holdings over a month and provides insights into market sentiment and potential future movements. The purchasing or selling decisions of these significant holders can significantly influence the price of Bitcoin.

The 30-day percentage change for Bitcoin increased from 2.79% to 5.08% from May 6 to June 6, which is the most significant increase in two months. This 2.29 percentage point increase suggests that whales are again demonstrating robust purchasing power.

BTC/USD

In the daily chart, the BTC/USD bulls have been active since the pennant breakout, suggesting a strong upward continuation. However, a sufficient downside correction might come towards the pennant support before aiming for the 72000.00 psychological level.

Read Next

Top Rated Premium Forex Signals Services

Top Rated Premium Forex Signals Services

Leave a Comment





FP Markets Join Now
FBS Broker Offer
Scroll To Top