US equity market remained closed yesterday due to the US Independence Day holiday, but the cautious mood ahead of this week’s Monetary Policy Meeting Minutes from the Fed and the European Central Bank has exerted bearish pressure on investors’ sentiment. The futures for the US equity index and European bonds fell as investors worried that a faster pace of monetary tightening from global central banks will slow economic growth. Therefore, the economic fears kept the risk profile weak, which in turn helped the US dollar to remain upside momentum.

On the economic data side, the Producer Price Index from Eurozone rose 0.6% in May and came in weaker than the market’s expectations of 1%, which continues to warrant rate hikes from the European Central Bank. The dismal European data undermined demand for the Euros meanwhile the energy crisis also acted as a headwind for the shared currency amid the Russian invasion of Ukraine. The market focus now shifts to the FOMC minutes of its latest meeting on Wednesday and the Nonfarm Payrolls report on Friday, as market participants expect that the Fed elevated its interest rates by 75 basis points in its June monetary policy meeting.

Main Pairs Movement

A slow beginning to the week, as US markets were closed due to the Fourth of July Holiday. The DXY index was also in the mood of holiday during the first half of Monday and stay steadily around 105.1, and then gained some strength by the end of the day, reaching 105.198, but the action was limited as some traders stayed away from their desks.

GBP/USD was surrounded by bullish momentum at the start of Monday, even reaching a daily high around 1.2154, but then lost its bullish traction and fell to around 1.2105, since Brexit woes undermined demand for the Pound. At the same time, EUR/USD got a rebound from last Friday’s low of around 1.039 to a daily high of around 1.045 at the middie on Monday, but then Dismal European Data undermined demand for shared currency, and EUR/USD closed by 1.0425.

Gold continued the rebound momentum gained from last Friday’s daily low below $1786 and managed to reach above $1812.5, but then fell below $1805 as the expectation of a hike in interest rates makes gold less attractive.

Technical Analysis

USDJPY (4-Hour Chart)

USDJPY advances toward near 135.70 at the time of writing. USDJPY turns upside after experiencing a correction. From current levels, weakness below the resistance level of 135.70 would continue to find robust support at 134.89. If the support level is broken, then it would trigger a fresh technical selling, making USDJPY slide further south. On the flip side, if the pair can break through the resistance at 135.70 and further above the ascending trend line, then USDJPY could potentially attract more buyers to lift the pair above the psychological level of 136.00 and 137.00.

Resistance: 1.35.70, 137.00

Support: 134.89, 134.24, 133.59

GBPUSD (4-Hour Chart)

GBPUSD clings around 1.2100 on Monday. The pair has reversed its direction after reaching near the support level around 1.1934 area. The British Pound looks to regain position as the RSI indicator stays below, suggesting that buyers remain on the sidelines for the time being; in the meantime, the MACD has turned positive, indicating the reversal trend from bearish to bullish. To the upside, GBPUSD is heading toward the next resistance at 1.2227; if the pair can successfully breach the level, then it would continue to head north. On the downside, if the support level of 1.1934 cannot eventually defend the line, then GBPUSD would slide further south.

Resistance: 1.2227, 1.2408, 1.2555

Support: 1.1934

Gold (4-Hour Chart)

Gold struggles to stage a recovery on Monday following last week’s drop. Despite gold attempts to climb above the $1,800 level, it stays under modest bearish pressure, remaining within the descending channel. At the moment, even though the RSI indicator stays below the midline, gold looks to be capped by the midline of the Bollinger Band, having a hard-to-move further north. Gold needs to climb above $1,835 to reclaim bulls in the near- term. On the flip side, if the current support level at $1,784 cannot hold, then gold would accelerate further south.

Resistance: 1835.026, 1866.243

Support: 1784.565

Economic Data

US stock advanced on Friday and recovered some of the ground lost in Thursday’s session, as the late-day rebound might be exacerbated by low volume ahead of Monday’s holiday. The risk of a renewed selloff in equities is still high due to the pessimistic growth outlook, as investors are worried that the tighter monetary expectations in the face of higher inflation will lead to economic growth slowing and a possible recession. On the economic data side, the Institute for Supply Management’s US manufacturing PMI fell to 53 from 56.1 in May, which was the weakest since June 2020 and showed that the manufacturing activity in the US has weakened as new orders contracted. The market focus now shifts to this week’s minutes of the Federal Reserve’s June meeting, as the central bank is expected to raise interest rates by 75 basis points.

The benchmarks, S&P 500, Nasdaq 100 and the Dow Jones Industrial Average both rose on Friday despite the safe-haven US dollar advanced on recession fears. Nasdaq 100 was up 0.7% daily and the Dow Jones Industrial Average also advanced with a 1.0% gain for the day. All eleven sectors stayed in positive territory as the utilities and consumer discretionary sectors are the best performings among all groups, rising 2.48% and 1.97%, respectively. The S&P 500 climbed the most with a 1.1% gain on Friday and the MSCI World index rose 0.5%. For the week ahead, Nonfarm Payrolls will be the key data that might provide fresh impetus.

Main Pairs Movement

The US dollar advanced on Friday, rebounding from the 104.7 level that touched on Thursday and extending its rally toward the 105 area amid risk-off market sentiment. The DXY index was surrounded by bullish momentum during the first half of the day and reached a daily high near 105.6 level in the early US session, but then lost its bullish traction to surrender some of its daily gains. The safe-haven greenback continued to find demand amid escalating fears about a global recession, as the dismal US manufacturing PMI fueled recession-related concerns.

GBP/USD tumbled with a 0.70% loss on Friday amid the stronger US dollar across the board. The flight to safety increased the appetite for safe-haven assets and weighed on the GBP/USD pair. The cable remained under bearish pressure and dropped to a monthly low below the 1.199 mark, but then regained some upside traction to recover its daily losses. Meanwhile, EUR/USD slumped to the lowest level since June 15th below 1.038 level. The pair was down almost 0.50% for the day.

Gold rebounded back slightly after touching a daily low below $1786 in the late European session, as the US yields collapsed and provided support to the precious metal amid fears of a recession. Meanwhile, WTI oil climbed back to the $109 area despite the escalating recession fears that have overshadowed the supply worries again.

Technical Analysis

EURUSD (4-Hour Chart)

EURUSD traded 0.54% lower over the last trading day of the week. The Eurozone HICP, the harmonised index of consumer prices, jumped to 86% in May, coming in higher than the 8.3% expectations. Despite the ECB’s efforts to tame inflation, prices are still growing at a pace that threatens price stability. The U.S. Greenback continues to be on the rise as market sentiment continues to be risk-averse and the U.S. equity market continues to fall further into bear territory. U.S. PMI data came in at 52.7, compared to estimates of 52.4, showing growth in purchasing and still signs of a healthy economy.

On the technical side, EURUSD was able to recover from our previously estimated support level of 1.0382 despite falling below this level briefly. A new level of resistance has formed around the 1.0485 price region. RSI for the pair sits at 41.02, as of writing. On the four-hour chart, EURUSD currently trades below its 50, 100, and 200-day SMA.

Resistance: 1.0485, 1.05754

Support: 1.0382

GBPUSD (4-Hour Chart)

GBPUSD lost 0.68% on the last trading day of the week. The pair gave up gains from the previous day as demand for the U.S. Greenback resumed. The dollar index, which measures the U.S. Dollar against a basket of other major foreign currencies, gained 0.36% to close the week in the green. The U.S. PMI data, which was released during the American trading session, provided fresh optimism for the U.S. Dollar as the figure came in better than expected.

On the technical side, GBPUSD successfully defended our previously estimated support level of 1.20824, despite the pair trading below that level for a brief period during the late European trading session. RSI for Cable sits at 38.1, as of writing. On the four-hour chart, GBPUSD currently trades below its 50, 100, and 200-day SMA.

Resistance: 1.2381

Support: 1.2123, 1.20824

USDJPY (4-Hour Chart)

USDJPY retreated a further 0.31% for the last trading day of the week. After touching a 24-year high on the 29th, USDJPY has been on a two-day short-term correction. However, as the U.S. reported better than expected PMI figures, demand for the U.S. Greenback returned towards the end of the American trading session. Carry trade opportunities continue to exist between these two currencies and are expected to increase as the better PMI provides more confidence for the Fed to hike interest rates by the next FOMC meeting.

On the technical side, USDJPY retreated from our previously estimated resistance level of 136.57 and successfully defended our estimated support level at 134.6. RSI for USDJPY sits at 58.39, as of writing. On the four-hour chart, USDJPY currently trades above its 50, 100, and 200-day SMA.

Resistance: 136.57

Support: 134.6

Economic Data

US stock markets fell on Thursday as the S&P 500 capped its worst first half of the year in more than 50 years. The Dow Jones Industrial Average slid 0.8% and the tech-heavy Nasdaq Composite dropped 1.3%. And the S&P 500 was down 0.9% at the end of the day. Now, the market seems to be forced to adjust back to reality after the unprecedented pandemic and unprecedented monetary policy.

US natural gas future contract plummeted 16%, the worst performance in more than three years. The plunge came after an inventory report showed a larger–than–expected storage build, thus the market rose the concerned over an oversupplied market.

Cryptocurrency exchange FTX is closing a deal to buy struggling cryptocurrency lender BlockFi for $25 million in a fire sale, well below BlockFi’s last valuation. The deal came after FTX provided a $250 million emergency credit to BlockFi. The fallout for BlockFi, a crypto lending company, happened following the major sell-off and the major plunge of crypto assets. Funds have struggled with liquidity issues as counterparties fail to maintain and meet margin calls.

Main Pairs Movement

WTI price plunged 3.44% on Thursday following the news that OPEC+ decided to stick with the planned oil production hike. The Middle East will increase monthly production to 648,000 barrels per day in August with the original plan.

AUD/USD edged 0.40% higher and closed with 0.69013. The Australian dollar out- weighted against the greenback following the concerns that a more aggressive move by major central banks might pose challenges to global economic growth.

EUR/USD advanced 0.43% and finished at 1.04836 at the end of the day. The advance came as Fed Chairman Jerome Powell clarified that the more significant mistake would be to fail to restore price stability.

Gold remained bearish, dropping 0.58%, to $1,807 on Thursday. During the ECB forum, Jerome Powell mentioned that the US economy is well-positioned while imposing more tightening policies in response to inflation. The factor has held back the bets on gold, deteriorating the demand for the precious metal, gold.

Technical Analysis

EURUSD (4-Hour Chart)

EURUSD gained 0.34% over the previous trading day. The U.S. PCE figures came in at 0.3%, below estimates of 0.4%; however, year over year PCE came in at 4.7%, in line with the Fed’s expectations. During Fed Chair Jerome Powell’s speech, he stated that price stability would still be the priority of the Fed, but it would be a mistake if the central bank sacrificed the economy to achieve price stability. On the other hand, ECB president Lagarde’s speech did not shed much light on the central bank’s intentions regarding interest rates shortly. On the economic docket, manufacturing PMI from Germany and the U.S. will be released today during the European trading session and the American trading session, respectively.

On the technical side, EURUSD rebounded from our previously estimated support level of 1.038 and is heading up towards 1.0494, which was previously a support level but has since changed polarity and is acting as a short-term resistance level. RSI for EURUSD sits at 43.69, as of writing. On the four-hour chart, EURUSD currently trades below its 50, 100, and 200-day SMA.

Resistance: 1.05754, 1.06315

Support: 1.0382

GBPUSD (4-Hour Chart)

GBPUSD gained 0.48% over the previous trading day. The broad-based U.S. Greenback allowed the British Pound to rise against the Dollar. During Governor Andrew Bailey’s speech at the ECB’s annual forum on central banking, he stated that the U.K. is currently being hit with a large income shock that could hurt the overall U.K. economy. The BoE continues to be stuck between raising interest rates and slowing the economy as the country faces a different situation than the U.S., where the economy still seems to be healthy. PMI figures from the U.S. will be released during the American trading session tomorrow.

On the technical side, GBPUSD has consolidated around our previously estimated support level of 1.2123 and successfully found demand to trade higher. Resistance at 1.2381 remains unchallenged. RSI for Cable sits at 41.17, as of writing. On the four-hour chart, GBPUSD currently trades below its 50, 100, and 200-day SMA.

Resistance: 1.2381

Support: 1.2123, 1.20824

USDJPY (4-Hour Chart)

USDJPY retreated 0.68% over the previous trading day. The retreating Dollar snapped a four-day winning streak for USDJPY. During his speech at the ECB forum, Fed chair Jerome Powell reaffirmed the healthiness of the U.S. economy and reiterated the central bank’s commitment to trimming inflation with interest rate hikes. The near-term decrease of the USDJPY will not be sustained as the Fed and the BoJ continues to adopt diverging monetary policies that will increase the interest rate difference between the two countries.

On the technical side, USDJPY has retreated from our previously estimated resistance level of 136.57, but the pair remains firmly on an upward trajectory. The support level at 134.6 remains unchallenged. RSI for USDJPY sits at 61.13, as of writing. On the four-hour chart, USDJPY currently trades above its 50, 100, and 200-day SMA.

Resistance: 136.57

Support: 134.6

Economic Data

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US shares were mixed, fluctuating on Wednesday after the major US indices failed to attempt a bounce in the previous trading session. The market prepared to finish to close out the worst first half of the year since 1970. The Dow Jones Industrial Average closed 0.27% higher. The S&P 500 dropped 0.07% while the Nasdaq Composite edged lower by 0.03%. Investors and markets continue to look for the bottom as the first half of 2022 comes to an end on Thursday. Worry about a slowing economy and aggressive interest rate hikes have mostly consumed much of the first half of 2022, and fears and concerns of an economic recession are rising and happening.

At an ECB forum, the Fed Chairman, Jerome Powell, vowed to prevent inflation from taking a hold of the US economy in the long run. Jerome Powell reiterated that central banks would not allow a transition from a low inflation environment into a high inflation environment. Since the Fed started raising interest rates in March, the expectation of inflation has fallen relatively; the inflation-indexed government bonds to standard Treasurys dropped from 3.6% in March to 2.73% in June. Though the road to tackling inflation is painful, the Fed is responsible and is charged with bringing down those inflations.

Main Pairs Movement

EUR/USD was down 0.74%, to 1.04386 on Wednesday. The euro-dollar was comparably weak against the dollar as the inflation rates in Europe seemed disoriented. For instance, some Mediterranean countries have pushed their annual inflations to double figures; however, Europe’s largest country has not experienced this kind of high figure.

GBP/USD edged lower by 0.54 at the end of the day. The British pound was sniped by the fact that the Bank of England acknowledges the possibility that the British economy tips into a recession in 2023; on the contrary, Jerome Powell remains confident that the US can avoid a recession.

USD/JPY reached as much as 137, and was up 0.34% on Wednesday, gaining follow-through traction for the fourth consecutive day. The US dollar pick up a fresh bid tone following Jerome Powell’s restated bets for a more aggressive monetary policy.

Gold oscillated in a tight range, down 0.12%. Investors remained cautious and looked for a fresh clue about the next monetary policy move by the Fed.

Technical Analysis

EURUSD (4-Hour Chart)

EURUSD lost 0.74% over the previous trading day. The pair extended its previous losing day as inflation data from the EU came in mixed. Spain’s inflation rose by 10%, year over year, and up 8.5% over the previous month; on the other hand, Germany’s CPI came in at 7.6%, lower than the 7.9% consensus. The mixed inflation data acted as a headwind for the Euro and a roadblock to more aggressive rate hikes by the ECB. The Dollar continues its upward movement as markets remain risk-averse.

On the technical side, EURUSD has fallen through our previously estimated support level of 1.0494 and is heading lower towards our next estimated support level of 1.0382. RSI of EURUSD sits at 40.66, as of writing. On the four-hour chart, EURUSD currently trades below its 50, 100, and 200-day SMA.

Resistance: 1.05754, 1.06315

Support: 1.0382

GBPUSD (4-Hour Chart)

GBPUSD lost 0.54% over the previous trading day. The British Pound continues to be held back as members of parliament continue their efforts of overturning a keystone Brexit agreement. Furthermore, hawkish remarks from Fed Chair Jerome Powell have provided a boost to the safe-haven Dollar. Risk-off sentiment across markets has attracted further demand for the U.S. Greenback. On the economic docket, the British GDP is set to release during today’s European trading session.

On the technical side, GBPUSD is consolidating around our previously estimated support level of around the 1.2123 price region. The next level of support for Cable sits at around the 1.20824 price region. RSI for GBPUSD sits at 38.25, as of writing. On the four-hour chart, GBPUSD currently trades below its 50, 100, and 200-day SMA.

Resistance: 1.2381

Support: 1.2123, 1.20824

USDJPY (4-Hour Chart)

USDJPY gained 0.34% over the previous trading day. Hawkish remarks from Fed Chair Jerome Powell have attracted fresh demand for the U.S. Greenback. On top of an already risk-off environment, market participants have continued to bid up the U.S. Dollar as aggressive rate hikes are now expected during the next FOMC meeting. On the economic docket, U.S. PCE and initial jobless claims data will both be released during the American trading session.

On the technical side, USDJPY has once again touched above the 136 level and is consolidating around our previously estimated resistance level of 136.57. Support levels at 134.6 remain firmly intact. RSI for the pair has heated up and sits at 66.14, as of writing. On the four-hour chart, USDJPY currently trades above its 50, 100, and 200-day SMA.

Resistance: 136.57
Support: 134.6

Economic Data

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US shares fell heavily on Tuesday following the release of CB Consumer Confidence, worse- than- expected. In the meantime, markets and investors are worried about oil prices stably staying at the high price while the Fed is not interested in slowing down. The Dow Jones Industrial Average dropped 1.56%. The Nasdaq Composite slid 3%, to 11,181.54 while the S&P 500 declined 2.01%. All three major indices erased their gains from last Friday, back into the bear- market. US indices were once up more than 1% during the US session before the release of the economic data. However, as the consumer confidence fell to 98.7, it essentially indicated that investors feared a recession that might happen in the future. At the same time, the officials also mentioned that 12- month inflation expectations were 8% for June, the highest since 1987.

With the war between Russia and Ukraine remaining, NATO Secretary Jen Stoltenberg said that NATO, the most powerful military alliance, has reached a deal with Turkey to admit Finland and Sweden. Before that, Turkey was not interested in signing the agreement as the Turkish President said that he would support the Kurdish organization. The move to add both countries to members of NATO comes after Russia invades Ukraine. Countries fear becoming the next Ukraine.

Main Pairs Movement

AUD/USD was down 0.23% to 0.69055 at the end of the day. The Australian dollar was relatively weak against the US dollar as the US shares fell sharply amid the risk sentiment, which came from the decline in Consumer Confidence that was released by the US.

USD/JPY advanced 0.49%, up for the third consecutive day. The Japanese Yen lost some interest from investors as the BOJ remains its monetary policy, continuously widening the gap between domestic and overseas’ yield rates. In the meantime, some news has said that the BOJ might have been saddled with as much as 600 million Yen in unrealized losses.

USD/CAD oscillated at 1.28727. The strength of the US dollar, boosted by the risk sentiment, was offset by the advance of oil prices, highly related to the Canadian dollar.

WTI was up 1.84%, bullish attacking for the third- consecutive day as the sanctions on Russia remain and the chatters surrounding OPEC+ forecasts for 2022 market surplus.

Technical Analysis

EURUSD (4-Hour Chart)

EURUSD lost 0.62% over the previous trading day. The Euro enjoyed a boost early during the European trading session as ECB president Lagarde reaffirms the central bank’s intent to raise interest rates by 25 basis points in July; furthermore, president Lagarde hints at more aggressive interest rate hikes if the central bank sees fit. On the economic docket, both ECB president Lagarde and Fed chair Jerome Powell are scheduled to speak on the 29th. U.S. GDP for Q1 is also scheduled to be released during the American trading session.

On the technical side, EURUSD retreated from our previously estimated resistance level of 1.0598 and is heading towards our projected support level of 1.0493. RSI for the pair sits at 45.7, as of writing. On the four-hour chart, EURUSD currently trades below its 50, 100, and 200-day SMA.

Resistance: 1.05754, 1.06315

Support: 1.0493

GBPUSD (4-Hour Chart)

GBPUSD lost 0..68% over the previous trading day. Heightened demand for the U.S. Dollar and broader risk-averse market sentiment have sent the U.S. Greenback higher. Market participants will be closely watching the U.S. GDP release and Fed chair Jerome Powell’s speech on the 29th. On the other hand, members of parliament have voted in favour of overturning a previously agreed Brexit deal, the Northern Ireland Protocol.

On the technical side, GBPUSD is trading towards our previously estimated support level of around the 1.2173 price region. Resistance at 1.2381 remains firmly intact. RSI for the pair sits at 40.52, as of writing. On the four-hour chart, GBPUSD currently trades below its 50, 100, and 200-day SMA.

Resistance: 1.2381

Support: 1.2173, 1.20824

USDJPY (4-Hour Chart)

USDJPY rose 0.49% over the previous trading day. Demand for the U.S. Dollar returned as market participants remain risk-averse. The upbeat U.S. durable goods orders, unexpectedly rose 0.7% in May. This could lead to reduced chances of the Fed hiking rates at a more aggressive rate. U.S. GDP and Fed Chairman Jerome Powell’s speech tomorrow could provide price action for the pair as the short-term bullish movement of the pair remains well fueled.

On the technical side, USDJPY has once again begun its march upwards toward our previously estimated resistance level of 136.57. Our previously estimated support level of 134.6 was successfully defended. RSI for the pair sits at 64.94, as of writing. On the four-hour chart, USDJPY currently trades above its 50, 100, and 200-day SMA.

Resistance: 136.57

Support: 134.6

Economic Data

US shares edged lower to start the week following a major rebound from last Friday. The Dow Jones Industrial Average dropped 0.2%, to 31,438.26. The Nasdaq Composite declined 0.7% while the S&P 500 fell 0.3% at the end of the day. US stocks struggled to turn upside down on Monday as investors weighed whether the bottom has been reached and stocks have been oversold in this bear market.

Russia has entered its first major foreign debt default as the payment period expires. Interest payments of $100 million that Russia needed to pay were due on May 27 with the grace period on June 26. However, several bondholders have indicated that they have not received the payments after Russia attempted to pay in Ruble, which is blocked by international sanctions. The next test would be further 2 billion payments are due before the end of the year. If Russia continues to default, it would effectively ostracize the country from the global financial system; however, so far Russia has managed to find ways to get payments to bondholders.

Main Pairs Movement

AUD/USD edged 0.31% lower on Monday. The Aussie traded in the tight range in the absence of domestic data this week other than Retail Sales. At the end of the day, AUD/USD finished at 0.69213.

Gold turned downside after attempting to sustain above the resistance level above $1,840. Mixed US economic data undermined the market sentiment, bringing gold down to $1,822.75; the US Durable Goods Orders were up 0.7%, better- than- expected; in the meantime, Pending Home Sales dropped 13.6 YoY.

EUR/USD advanced 0.24% to 1.05820. The ECB will host the Forum on central banking in Portugal, this week; ECB President Christine Lagarde will offer a speech during the commencement.

GBP/USD consolidated, dropping 0.06% on Monday as there were no major economic events. The UK parliament members will vote on legislation that would possibly allow members to amend or rewrite Brexit deals.

WTI oil price was up 2.39% on Monday, advancing two- consecutive days. Oil prices turned upside as OPEC+ decided to cut the 2022 market surplus from 1.4 million to 1 million BPD. Moreover, due to the political turmoil in Libya, the crude oil output will shrink by approximately 600 K BPD in the oil market.

Technical Analysis

EURUSD (4-Hour Chart)

EURUSD edged higher on the first trading day of the week. The U.S. Greenback witnessed broad-based weakness as mixed data from the U.S. came in and market participants remain worried over a slowing U.S. economy. U.S. pending home sales decreased by a staggering 13.6%, year over year, for May. On the economic docket, U.S. GDP is set to release on the 29th, while EU CPI is scheduled to be released on July 1st.

On the technical side, EURUSD has traded above our previously estimated resistance level of 1.05754, but upward momentum seems to be fading. The next level of resistance sits at around the 1.06315 price region. RSI for the pair sits at 50.33, as of writing. On the four-hour chart, EURUSD currently trades near its 50-day SMA and below its 100 and 200-day SMA.

Resistance: 1.05754, 1.06315

Support: 1.0493

GBPUSD (4-Hour Chart)

GBPUSD traded mostly sideways over the first trading day of the week. Brexit continues to weigh on the British economy as members of parliament will vote on legislation that would allow ministers to rewrite parts of the post-Brexit deal and remove checks on goods entering Northern Ireland from the rest of the U.K. Market sentiment continues to put the British Pound and the U.S. Greenback in contention as the haven currency of choice as global economies show signs of recession.

On the technical side, GBPUSD continues to trade below our previously estimated resistance level of 1.2381. The support level at 1.2173 remains firm. RSI for Cable sits at 44.31, as of writing. On the four-hour chart, GBPUSD currently trades below its 50, 100, and 200-day SMA.

Resistance: 1.2381

Support: 1.2173, 1.20824

USDJPY (4-Hour Chart)

USDJPY built on last Friday’s upward momentum and continued to trade higher throughout Monday’s trading. Despite a broad-based weakness of the U.S. Greenback, the Japanese Yen continues to experience strong selling. The export-reliant country, Japan, continues on its course of a supportive monetary environment to keep exchange rates low. The benchmark U.S. 10-year Treasury yield has resumed trading above 3.2%.

On the technical side, USDJPY has rebounded strongly from our previously estimated support level of 134.6. Resistance at 136.57 remains close by and could be challenged. RSI for the pair has climbed to 62.63, as of writing. On the four-hour chart, USDJPY currently trades above its 50, 100, and 200-day SMA.

Resistance: 136.57

Support: 134.6

Economic Data

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US shares rallied on Friday, rebounding off the lows of the bear market. In the meantime, the bounce-back of the US shares capped its first weekly advance since May. The Dow Jones Industrial Average advanced 2.68%, 823.32 points. The S&P 500 jumped 3.06%, and the Nasdaq Composite rallied 3.34% to 11,607.62 on Friday. All three major indices snapped the losing streaks as investors deliberated the idea of whether stock markets have been oversold and have hit a bottom; however, several investment banks remained pessimistic outlook. Moreover to the US economic data, the US Consumer Sentiment from a University of Michigan survey hit a record low of 50 in June; a gloomy consumer sentiment means that the demand for goods and services has decreased, impacting the entire economic ecosystem, including corporates, employment opportunities, and the stock market.

Over the weekend, G-7 countries announced that they will ban the import of Russian gold, so-called gold sanctions. According to US President Joe Biden, world leaders need to work together against Russia as the invasion of Ukraine by Russia has brought and caused painful and serious impacts on food and energy supplies across the world. Imposing gold sanctions on Russia might cause a severe impact on Russia as Russia has used gold to support its currency as a way to circumvent other sanctions. One example would be swapping the gold for a more liquid foreign exchange that is not subject to sanctions from other countries.

Main Pairs Movement

EUR/USD edged higher, up 0.38% on Friday. The greenback was unable to gather bullish momentum amid the concerns of an economic slowdown in the US. In the meantime, the ECB pointed out that it would have to aim for large interest rate hikes since its monetary policy has fallen behind. Thus, the euro-dollar got boosted.

USD/JPY moved upside after the release of Japan’s inflation. The core CPI in Japan jumped to 2.1% in May, the second consecutive jump. With the BOJ continuing to keep its ultra-loose monetary policy, the Japanese Yen weakens against the greenback. On Friday, USD/JPY was up 0.17%, finishing at 135.16.

Gold was up 0.25%, and closed at $1,827.31 on Friday. The precious metal was comparably stronger than the greenback as the greenback lost some interest amid cooling hawkish expectations from the Fed.

AUD/USD was up 0.7%, trading at 0.6942 at the end of the day. The Aussie rallied as the demand for the US dollar decreased resulting in the risk sentiment. In the meantime, during the testimony of Fed Chairman Jerome Powell, he pointed out that the possibility of raising rates would be based on the incoming economic data and the outlook of the economy; thus, slightly dovish hawkish comments brought the US dollar down.

Technical Analysis

EURUSD (4-Hour Chart)

EURUSD gained 0.38% over the last trading day of the week to end the week in positive territory. Depressed PMI data from Germany and the Euro area has added concerns over an impending recession in the EU and uncertainty about the ECB’s abilities to tame inflation and support economic growth. On the economic docket, ECB President Lagard is set to speak on the 28th and Fed Chair Jerome Powell is set to speak on the 29th.

On the technical side, EURUSD continues to trade below our previously estimated resistance level of 1.05754. Selling pressure remains strong around this level. RSI for the pair sits at 55.93, as of writing. On the four-hour chart, EURUSD currently trades above its 50-day SMA, but below its 100 and 200-day SMA.

Resistance: 1.05754, 1.06315

Support: 1.0382

GBPUSD (4-Hour Chart)

GBPUSD traded sideways over the last trading day of the week. Cable ended the week with a 0.44% gain. U.K. retail sales declined by 0.5% monthly in May, thus hurting some of the demand for the British Pound. On the economic docket, British GDP figures are set to release on the 30th, after BoE governor Bailey’s speech on the 29th.

On the technical side, GBPUSD continues to trade below our previously estimated resistance level of 1.2381; on the other hand, support levels for Cable remain firm at 1.2173 and 1.20824. RSI for the pair sits at 44.58, as of writing. On the four-hour chart, Cable currently trades below its 50, 100, and 200-day SMA.

Resistance: 1.2381, 1.25047

Support: 1.2173, 1.20824

USDJPY (4-Hour Chart)

USDJPY gained 0.17% on the last trading day of the week to close the week in positive territory despite experiencing strong pullbacks on Wednesday and Thursday. The bullish sentiment continues to surround USDJPY as interest rate differences between the U.S. and Japan continue to overshadow any sort of fundamental news effects. On the economic docket, Japan’s Tankan large non-manufacturers index is set to release on the 30th.

On the technical side, USDJPY has found new support at the 134.76 price region and continues to trend upwards. The resistance level at 136.57 has not been challenged since Wednesday. RSI for the pair sits at 61.73, as of writing. On the four-hour chart, USDJPY currently trades above its 50, 100, and 200-day SMA.

Resistance: 136.57

Support: 133.84, 134.76

Economic Data