SUMMARY

  • Eurozone CPI came in at 2.6%, meeting market expectations. The ZEW index of investor confidence in the economic bloc came in at 51.3, beating the forecast of 47.8, indicating optimism for the economy.
  • Japan’s trade balance came in at -0.62B, versus -0.61T expected by the market. Exports increased by +13.5% in the country, against the 10.4% expected.
  • Nvidia has become the most valuable company in the world. Since its IPO, the value of the company’s shares has increased by +591,078%.
  • The shares of energy companies, allowed the Toronto Stock Exchange index, the TSX, to close yesterday in positive (+0.11%).
  • The governments of Singapore and Cambodia have launched a digital infrastructure initiative, with the aim of increasing trade.

 

Key developments:

  • UK CPI
  • Swiss Central Bank monetary policy meeting
  • New Zealand GDP

EURUSD

Specifications

  • Leverage: 200
  • Units: 100,000
  • Margin requirement: USD$539
  • Example: 100 pips change in EURUSD price = USD1,000 potential PL.
  • Support 1: 1.0737
  • Support 2: 1.0735
  • Resistance 1: 1.0741
  • Resistance 2: 1.0743

Fundamental Analysis

  • Eurozone CPI came in at 2.6%, meeting market expectations. The ZEW index of investor confidence in the economic bloc came in at 51.3, an improvement over the forecast of 47.8, indicating optimism for the economy.
  • U.S. retail sales rose 0.1% month-over-month. However, the market was expecting +0.3%. This may be a sign of weaker demand.
  • The U.S. industrial production index rose +0.39% y/y, which is favorable as it is a supply-side indicator.
  • Traders are looking ahead to the European Central Bank’s non-monetary policy meeting.
  • EURUSD remains in the support zone, looking for more buying volume, which will allow the price to move higher towards 1.0827 resistance. The currency remains sideways above the 1.0739 level. RSI is at 58.41, in neutral territory. The moving averages indicate buying.

USDJPY

Specifications

  • Leverage: 200
  • Units: 100,000
  • Margin requirement: USD$499
  • Example: 100 pips change in USDJPY price = USD1,000 potential PL.
  • Support 1: 157.78
  • Support 2: 157.71
  • Resistance 1: 157.88
  • Resistance 2: 157.91

Fundamental Analysis

  • Japan’s Trade Balance came in at -0.62 Trillion vs -0.61T expected by the market. Exports increased by +13.5% in the country, vs 10.4% expected. USDJPY closed yesterday in positive territory for the fourth consecutive day. At the moment, the currency is correcting -0.02% and is trading at 157.81.
  • The USDJPY remains sideways, waiting for more volatility in the market. The price is close to the resistance at 158. If the buying volume allows to overcome this level, the next target is at 158.26. The RSI is at 49.49 in the neutral zone. The moving averages are neutral.
  • Traders are evaluating the upcoming intervention of the Bank of Japan. The Bank has argued its intention to reduce bond purchases for its next monetary policy meeting in July 2024.
  • Analysts are evaluating a deeper correction of the currency, as long positions are threatened by the BoJ, and the currency has an interesting price to sell.

USDCAD

Specifications

  • Leverage: 200
  • Units: 100,000
  • Margin requirement: USD$686
  • Example: 100 pips change in USDCAD price = USD1,000 potential PL.
  • Support 1: 1.3712
  • Support 2: 1.3709
  • Resistance 1: 1.3718
  • Resistance 2: 1.3721

Fundamental Analysis

  • According to Deloitte, compliance with the carbon emissions ceiling is not possible without cuts in oil and gas production. Meanwhile, shares of energy companies, allowed the Toronto Stock Exchange index, the TSX, to close yesterday in positive (+0.11%).
  • The USDCAD remains sideways above the 1.3717 area, right at the support line. The RSI is at 43.29, in the neutral zone, so we could expect a rebound towards the 1.3740 resistance. The moving averages indicate sell.
  • Fed executives asked investors for more patience on the interest rate cut. The delay of the decision is affecting the Canadian market, as they are highly correlated trading partners.
  • Stocks globally are rising on optimism in the development of more Artificial Intelligence applications.

SOURCES

  • Thomson Reuters
  • Market watch
  • Bloomberg
  • Tradingview

 

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