Dollar Index Clings to 90 points Ahead of Crucial ADP and NFP Data Releases

Major pairs in FX space traded in a narrow range on Thursday, awaiting release of the Non-Farm Payrolls report on Friday. The downside risks for USD remain as preliminary labor market data for May indicate that job growth could be disappointing again.The dollar index swayed near the 90-point round support, with strong moves unlikely ahead of the major economic release.Unless tomorrow's labor market data surprises with strong job growth or significant wage inflation, expectations for tighter Fed policy will not change much, allowing USD to decline due to the major fundamental force (mix of strong inflation and low nominal short-term rates = low negative real yield). The ADP report is also due today, a negative surprise could shift expectations regarding NFP to a more downbeat outcome. The risk of a further decline in the DXY in June to the January low will likely increase then, since, apart from the NFP, the economic calendar for the US economy is not particularly interesting in June.Yesterday's Fed Beige book report showed that firms were most worried about rising costs, including wages. The word “shortage” was mentioned 42 times in the report, and since the end of last year the number of mentions has grown steadily. The report indirectly showed that job creation in May could be weak again as labor demand growth was higher than the supply.On the technical front for USD, some controversy has emerged. The upward bounces of the dollar turned out to be surprisingly short-lived, which indicates that selling pressure remains high:To continue the downtrend, it is necessary for sellers to gain a foothold below the level of 89.65, which they failed to do numerous times. It is expected that the labor market report tomorrow will significantly clarify the situation with USD.As for the EURUSD, a movement above 1.22 is unlikely today, as there are practically no catalysts. A movement towards 1.2160 and consolidation below may transfer the initiative to sellers for a while, and vice versa, a breakdown of 1.2230 may mean that EURUSD has returned to the uptrend:Among other European currencies, things are also calm for now, but it is worth looking at NOK, as the chances of several rate hikes from the Norwegian Bank in response to inflation emanating from higher oil prices and economic recovery are growing. For these reasons, the downward pressure in USDNOK is expected to rise faster than in other European currencies.Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/dollar-index-clings-to-90-points-ahead-of-crucial-adp-and-nfp-data-releases"
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Heavy slate boosts Greenback

The US Dollar moved slightly higher following the ADP jobs data, which saw private payrolls rise a much higher than expected 978k. USDJPY topped at 109.89, up from 109.80, while EURUSD slipped to 1.2174 from 1.2185. Equity futures continue to indicate a sharply lower Wall Street open, while yields were little changed.

US ADP climbed 978k in May following a revised 654k (was 742k) increase in April, much better than expected and reflecting the robust recovery. The service sector added 850k jobs, and employment in the the goods sector rose 128k. Much of the strength was in the leisure/hospitality area where jobs surged 440k. Education/health added 139k employees. Jobs in trade/transport increased 118k. Professional/business services added 68k. In the goods producing sector, manufacturing jobs were up 52k with construction payrolls up 65k. Large companies added 308k workers, with gains of 333k for small businesses and 338k for medium sized firms.

Click here to access our Economic Calendar

Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /241907/
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Sleepy FX markets are a sign of complacency, investors warn

from Forex News https://www.investing.com/news/economy/sleepy-fx-markets-are-a-sign-of-complacency-investors-warn-2522340
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Market Spotlight: Trading The ADP Employment Release

ADP Employment Release in FocusThe US ADP employment release today is drawing a lot of attention ahead of tomorrow’s crucial NFP release. With the last month marking the first full month of reopening in many parts of the US, May’s data is expected to mark a significant uptick across the board. With the Fed placing a great deal of importance on employment (even over inflation currently), today’s data (which is often used as a proxy for gauging the NFP) has the potential to be create a lot of volatility.Simply put, if todays figure is strong, bullish USD pre-positioning is likely to kick in ahead of the NFP tomorrow. Similarly, if it is weak, bearish USD positioning is likely to extend (market is already short USD) ahead of tomorrow’s release.Where to Trade the ADP Release? USDCHF has been on a steady decline since the Q1 highs. However, the recent move lower has seen plenty of bullish divergence creeping in as price tested the .8926 level, suggesting that the market is primed for reversal. We have already seen a break of the local falling wedge pattern, though no follow through yet. If the data is good today, price should break the .9043 level, with bulls targeting .9181 first off. If the data is weak, USD is likely to continue to drift lower.Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/market-spotlight-trading-the-adp-employment-release"
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Robust UK Composite PMI report lifts Sterling

GBPUSD, H1

The UK’s final May composite PMI was unexpectedly revised higher, to 62.9 from the preliminary estimate of 62.0. The headline is a new record high for the data series going back to January 1998. The headline improved from the April reading of 60.7. The improvement was driven by a much stronger than expected manufacturing PMI, which rose to a record (since 1992) 65.6, despite being revised lower from the preliminary figure of 66.0, after jumping from the 60.9 headline in the month prior. The services PMI was upwardly revised to 62.9 from the preliminary reading of 61.8, which marked a jump from 61.0 in the month prior. The surveys showed the quickest pace of private sector employment since June 2014. New orders rose by the most since October 2013. Cost pressures rose by the quickest rate in almost 13 years, which were passed on to customers, with prices charged rising the most in over 21 years.

The unlocking economy has released pent-up demand, and consumer confidence has improved markedly amid the evident success of the UK’s Covid vaccination program. Nearly 75% of the adult population in the UK have now received at least one dose of a vaccine and 47% both doses.

Overall, a stellar report. While the pace of improvement has slowed over the last month, the private sector of the UK economy is amid a robust recovery expansion. The prognosis for the months ahead is looking good. While there has been a creep higher in new Covid cases in the UK, which has caused the prime minister to publicly ruminate that the fourth and final phase of reopening, scheduled for June 21, might be delayed, there are good grounds to expect the prevailing lift in new Covid cases won’t develop into a full blown wave. The spread, which is being driven by the Indian variant, is mostly among younger, unvaccinated people, with the vaccinated majority proving to be resistant.

Later today the UK government is due to announce its latest updates on foreign travel for England and speculation is rife over which countries could be added to the “green” list. Spanish and Greek islands (but not their respective mainlands) plus Malta, Finland and Slovakia are among the European destinations experts believe may be given green status. However, there is also speculation that Portugal could be downgraded to “amber” following a spike in new cases there.¹

The positive swirl of the data and feel good factor from travel restrictions expectations has lifted Sterling today. Cable currently trades at 1.4180, up from 1.4142 lows earlier, and R1 today sits at 1.4200, a key psychological and technical resistance level, with today’s pivot point at 1.4154. EURGBP dipped under 0.8600 earlier and has pushed down to S1 at 0.8591, S2 sits at 0.8576 and today’s pivot point and 200-hour moving average coalesce at 0.8615. GBPJPY continues to accrue, as it enters its 27th day above the 20-day moving average. Currently trading at 155.70, the recent high from May 27, it briefly breached 156.00 at 156.06 which represented a 39-month high.

¹https://www.bbc.com/news/live/uk-57340860

Click here to access our Economic Calendar

Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /241946/
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USDJPY, H1 is seeing strong bullish momentum, awaiting upside confirmation at 109.90.

USDJPY, H1 is seeing strong ascending trendline support along with moving average support which is holding price up really nicely. There's big resistance at the 109.90 area which price needs to break past in order to trigger a move upwards towards big resistance at 110.20.Disclaimer: Thematerial provided is for information purposes only and should not be consideredas investment advice. The views, information, or opinions expressed in the textbelong solely to the author, and not to the author’s employer, organization,committee or other group or individual or company.High Risk Warning: CFDsare complex instruments and come with a high risk of losing money rapidly dueto leverage. 73% and 65% of retail investor accounts lose money when tradingCFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You shouldconsider whether you understand how CFDs work and whether you can afford totake the high risk of losing your money.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/usdjpy-h1-is-seeing-strong-bullish-momentum-awaiting-upside-confirmation-at-109-90"
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BTCUSD, H1 facing bearish pressure, potential for a reversal.

BTCUSD, H1 is facing bearish pressure from a recent descending resistance line. There's also multiple Fibonacci retracements at the 39200 level where a potential reversal could occur pushing prices down to support at 35800 area - which also happens to be a Fibonacci confluence area.Disclaimer: Thematerial provided is for information purposes only and should not be consideredas investment advice. The views, information, or opinions expressed in the textbelong solely to the author, and not to the author’s employer, organization,committee or other group or individual or company.High Risk Warning: CFDsare complex instruments and come with a high risk of losing money rapidly dueto leverage. 73% and 65% of retail investor accounts lose money when tradingCFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You shouldconsider whether you understand how CFDs work and whether you can afford totake the high risk of losing your money.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/btcusd-h1-facing-bearish-pressure-potential-for-a-reversal"
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Chinese Central Bank Takes Action Against Rising Yuan

PBOC Fighting Back The PBOC has taken a series of steps this week aimed at halting the ongoing rise of the Chinese Yuan. USCNH is down over 3.5% this year alone, and more than 11% from the 202 highs. The rally in CHN has been driven by a combination of factors such as the swift and sustained recovery from the pandemic lows, the quick handle the government got on the virus and the general improvement in risk appetite, along with the weakness in the US Dollar. However, now it seems the Yuan has gone too far and the central bank and government are seeking to prevent any further gains.FX Reserves Requirements Increased On Monday, the PBOC announced that as of June 15th, financial institutions will be required to step up their holding of foreign exchange holdings from 5% to 7%. This increase will effectively force banks and institutions to bolster their FX reserves, removing that capital from the impacting foreign exchange prices. The move marks the first such increase since May 2007, pre GFC. Industry commentators project that the 2% hike will amount to around a $20 billion reduction in foreign exchange transactions for the purposes of long-term trading. The move has been described as a from of monetary policy targeting aimed at limiting speculative activity which has been highlighted as driving the recent Yuan rally.Monetary Policy Divergence The government and the PBOC has been increasingly concerned about the health and competitiveness of the country’s exports as a result of the stronger Yuan over the last year. The government has been fighting to keep the economic recovery on track. However, given the divergence in monetary policy between China and much of the rest of the world, money has been flowing into China, driving yuan higher.China Concerned Over Commodities Rally Along with the rise in Yuan, China has also been increasingly concerned with the surge in commodity prices. Last week, the government announced it would be stepping up its funding for privately run businesses in a bid to curtail the passing on of higher prices or the negative impact of suffering reduced margins.Weaker Fix On Wednesday, the PBOC also set a weaker fixing against the US Dollar, putting an end to six straight days of stronger fixings. The daily fixing is another key channel the PBOC uses to impact the strength of the Yuan. The PBOC sets the level and allows the Yuan to move 2% higher or lower from it.Technical Views USDCNHThe sell-off in USDCNH this year has seen price breaking below the 6.4018 level, which was the prior 2021 low, as the bear channel continues to extend. However, MACD and RSI divergence has been building on the last leg of the decline and price is now correcting higher within the channel. If price can break back above that level and the channel top, bulls will be looking for a run up to the 6.4964 level next.Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/chinese-central-bank-takes-action-against-rising-yuan"
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AMC is a wildly overvalued joke – but it's good news for shareholder democracy

Shareholder perks used to be a big deal, or so I hear.

In the good old days, sadly mostly before I was old enough to pay proper attention to the stock market, lots of companies, particularly consumer-facing ones, would give shareholders genuinely decent discounts or perks.

For example, at one point, early shareholders in Eurotunnel had a right to unlimited £1 return tickets across the Channel.

Those perks have mostly dwindled away (no wonder, you might think).

But now the retail investor revolution in American might be bringing them back...

You can't make a narrow economic argument for investing in AMC

AMC is a cinema chain. As you can imagine, cinemas have not been the best business to be in over the past year, what with them all being shut down, and no one releasing any films.

AMC however, is also a "meme" stock. You remember the GameStop frivolity from a few months ago? AMC is a similar story. If anything, it's even more deranged.

AMC's share price doubled yesterday. It has risen by about 3,000% since the start of the year. And it was also the most actively-traded stock in the US yesterday.

What makes yesterday's price action even more wild is events earlier in the week. On Tuesday morning, AMC said it had sold 8.5m new shares to Mudrick, a hedge fund. The share price was $27 a share. The price promptly went up to $32.

To be clear, you'd normally expect the share price to fall when a company issues more shares, for the simple reason that each share then represents a smaller chunk of said company. (The same logic in reverse applies to share buybacks, which is usually how they're justified).

So that was unusual. Then later that same day, the hedge fund sold all the shares it had bought, and promptly said that it thought the stock was overvalued. You'd normally expect that to hammer the price - it's a bit of a "so long, suckers!" moment.

Of course, that's not what happened. Yesterday, as we've already noted, AMC's price doubled and hit a new record high.

You can make attempts to rationalise this: the FT's Robert Armstrong has an entertaining crack at it in his Unhedged newsletter this morning.

But at the end of the day, in the narrowly rational sense of the argument, it makes no sense. You can't make an investment case based on numbers for this particular company.

So what is it all based on then? This is where we get to the shareholder perks.

This is mad, but it's also good news for shareholder democracy

AMC is offering its investors free popcorn.

That might seem an odd reason for the stock to surge. But given how silly the whole thing looks, it's as good a reason as any. Here's why.

Small investors now own something like 80% of AMC, according to the FT. As I said earlier, it's a continuation of the GameStop story, whereby a group of "retail" traders bet that the ailing high street video game chain would turn itself around.

There are lots of amateur psychologists in financial journalism trying to explain this phenomenon. And I don't exclude myself from the group.

There's the "Robin Hood" story where it's about an amorphous "poor" group of traders are sticking it to "the man" as represented by "hedge funds". By this reading, it's "occupy Wall Street" all over again. There's a fair bit of patronising handwringing accompanying this one, because it's the usual "small investors will end up getting done over and the big players will suck them dry" narrative.

My feeling is that this is rather too simplistic. The barrier to entry for investors has fallen a lot but I'm not convinced that genuinely "poor" people are gambling on stocks. Young people without a huge amount of capital as yet, maybe, but that's a bit different.

As for the rebellion aspect – there's an underlying element of nihilism to it for sure, epitomised by the acronym YOLO (You Only Live Once). This, I think, can be blamed mostly on central banks (or at least, the low interest rate environment we've ended up in) and the sense of wealth inequality created by horrendously high property prices.

If you're young, and buying a house looks out of reach, and your wages aren't rising fast, but "assets" are, then why not buy some assets, particularly the ones that are going up quickly?

But I also think people are doing this for the usual age-old reason: to get rich quick. (And also to have a laugh).

Is it irrational to put a chunk of money you can afford to lose into a slot machine where the payoff might end up being several multiples of your original stake? If AMC makes no economic sense at $20 a share, what's to stop it from going to $60? Same for doge, and all the other cryptocurrencies.

Moreover, what if you can get organised? Memes are jokes, yes – but they're also signals. Is it irrational to buy a stock if you know everyone else is going to buy it too? It's throwing the oldest market reporter joke back in the face of the market: why did AMC go up? "More buyers than sellers".

This is an interesting new force in markets. It's coming about as an extension of the investor franchise (which always creates bubbles, like in the 1920s), and companies which might otherwise have died in the pandemic are being smart enough to tap into it.

Hence "AMC Investor Connect" - why worry about loyalty cards for your customers when in reality, it's your investors who really are keeping you afloat? Investors can get free popcorn and attendance at special screenings.

But also, if you have something like 3 million private investors on your shareholder register, then why wouldn't you give them a freebie to come and spend their money in your cinema once it reopens? After all, they've already demonstrated their commitment to your business. As well as taking a punt on your shares, they might want to add to your future profits too.

To be clear, none of this means you should invest in AMC, or other meme stocks. It's still "greater fool" theory, or practically a legal form of pyramid scheme.

But it's very interesting to watch. And there are definitely elements here which are healthy for capitalism. This is shareholder democracy in action. AMC is now courting the individual - and those individuals are genuinely engaged – rather than worrying about what the big institutions might be thinking.

That's progress. Imagine what could happen if we had this sort of engagement with the Amazons and the Googles and all the other big companies whose influence we spend all our time fretting about.

Instead of having meaningless ESG drivel spouted at us from on high by politicians and CEOs, we could be engaging directly with companies on specific issues like privacy, monopoly, and all the rest of it.

from Moneyweek RSS Feed https://moneyweek.com/investments/603333/amc-is-a-wildly-overvalued-joke-but-its-good-news-for-shareholder-democracy
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Fed To Unwind Corporate Asset Purchases

SMCCF To Be Unwound Speculation around when the Fed will begin tapering its massive monetary stimulus programme jumped back into focus overnight. In one of the first moves that signal the beginning of the end, the Fed released a statement outlining that it will begin unwinding its Secondary Market Corporate Credit Facility (SMCCF). The facility which was launched during the height of the pandemic at $750-billion, was created as a Special Purpose Vehicle (SPV) and was one of many unprecedented actions the Fed took during that time.Ground-Breaking Support The SMCCF was a ground-breaking move by the Fed as it was the first time the central bank included corporate debt issuance in its asset purchase program. Additionally, within these corporate purchases the Fed took the hugely unexpected move of allowing junk bonds to be included in its purchases. The vehicle was intended to be a catch-all system to help fund businesses throughout the pandemic and was set up via treasury funding issued by the government as part of the cares ACT.Gradual Unwinding In its statement overnight the Fed said the unwinding of its assets “will be gradual and orderly, and will aim to minimize the potential for any adverse impact on market functioning by taking into account daily liquidity and trading conditions for exchange traded funds and corporate bonds.”$13.8 Billion in corporate Holdings The scheme has been frozen since December 31st 2020 when the (then) treasury secretary Steven Mnuchin refused to extend the scheme, so the assets being sold were those purchases during the height of the pandemic last year. In its most recent accounts published in May, the Fed listed $13.8 billion in corporate holdings including corporate bonds, bond ETFs, junk bonds and junk bond ETFs. The scale of the holdings and the program in sum, was always only a minor part of the Fed’s $7.9 trillion balance sheet. However, the principle here is the removal of support.Labour Data in Focus Looking ahead this week, the focus is of course on the jobs number tomorrow though today’s ADP release is likely to cause some volatility on a big surprise either way. If tomorrow’s numbers are strong, USD is likely to rise on increase Fed tapering expectations. Similarly, a miss will send USD lower.Technical Views S&P500Equities are holding in a tight block of consolidation near highs, ahead of the data tomorrow. If USD moves higher equities could see a sharp move below the 4182.50 level. Given the bearish divergence in both MACD and RSI, this move could quickly see a test of 4116 level. Alternatively, if USD tanks, we could see a break above the 4236.50 level.Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/fed-to-unwind-corporate-asset-purchases"
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Investment Bank Outlook: 03-06-2021

RBC Capital Markets Overnight: USD is drifting higher overnight though well within yesterday’s ranges. Markets are generally calm ahead of tomorrow’s all-important payrolls. In China, the Caixin services PMI came in a touch weaker than expected, still pointing to expansion but at a relatively steady pace over the past year. Japanese weekly capital flows data showed another week of sizeable foreign bond selling (JPY1trn).Day ahead: In the US, ADP employment change, weekly jobless claims, and the ISM services index are out ahead of tomorrow’s payrolls. The Euro area and the UK publish the final services PMI prints, while Turkey releases May CPI. There are also a range of central bank speakers from the Fed (Bostic, Quarles, Kaplan, Harker) and BoE (Bailey). CAD: The potential double bottom that has just formed at 1.2013 serves as key support in USD/CAD now, with resistance located at 1.2121.Citi Broader risk sentiment still appears to be fairly neutral as market participants await Friday’s US NFP report. The USD continues to see a slight bias as market participants reduce risk with EURUSD flirting with 1.22 and the Antipodeans heading towards yesterday’s lows.Elsewhere, sentiment seems well. While US equity futures are close to flat, Asian equities resumed higher with Topix rallying as much as 1.2%. Meanwhile, China equity indexes held up well despite headlines that US plans to amend its list of Chinese military-linked blacklisted companies in the defense and surveillance technology sectors. The amended order is expected to be signed by Biden later this week but should be seen more as a tweak.Looking ahead, ADP may get more attention than usual though it’s correlation with NFP has broken down. For this morning, we have final Markit PMI prints for Europe, which are not expected to change significantly from the preliminary prints. We also have an all important inflation print for TRY. Local markets will be closed in THB, PLN, UGX, and BRL for holidaysDisclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/investment-bank-outlook-03-06-2021"
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Market Update – June 3 – Standing By for Jobs Data

Market News Today – USD grinds higher awaiting jobs data today & tomorrow. .  USDIndex spiked to 90.20 yesterday back to 90.00 now. Equity markets edged out gains (USA500 +6 to 4208). AMC rallied 95% after Tuesday’s +22% after $250m investment. Asian markets higher – ASX200 at ATH, USOil over $69.00 following OPEC+ deal. Overnight Chinese Services PMIs miss , AUD Retail Sales in line and Harker talked of “low rates for longer”, Beige Book “moderate pace of expansion”. Suga to hold snap election after Olympics, Biden progresses Infra talks with Republicans, & offers incentives to boost vaccination rate, UK 75% of adults at least one vaccination.  EUR 1.2186,  JPY 109.80, GBP 1.4150. GOLD dipped from $1909 earlier to under $1895 now.

This week – Heavy dose of global data – top of the shop is US NFP, Eurozone Retail Sales & GDP and monthly PMI data – The data could  reveal the acceleration in annual inflation growth for major economies.

European Open – The June 10-year Bund future is little changed, as are Treasury futures, while in cash markets the US 10-year rate is now up 0.3 bp at 1.59%, after the paper pared earlier gains. DAX and FTSE 100 futures are up 0.2%, while U.S. futures are narrowly mixed, with overall trading still sluggish and muted as investors wait for another trigger, with the focus now on US payroll numbers tomorrow. Tapering musings seem to be getting louder and while ECB’s Lagarde stressed late on Wednesday that the central bank will maintain favourable financing conditions through the crisis, that would undoubtedly still be the case if monthly purchase volumes under PEPP were scaled back to the levels seen early in the year.

Today – EZ, UK and US Services and Composite Final PMIs, US ADP, Weekly Claims, ISM Services PMI, DoEs, ECB’s Elderson, BoE’s Bailey, Fed’s Bostic, Kaplan, Harker, Quarles

Biggest FX Mover @ (07:30 GMT) NZDUSD (-0.38%) has moved down to test yesterdays lows at 0.7205 (S1) earlier, (last Thursday was trading over 0.7300). faster  MAs remain aligned lower, RSI 32.40 and filing heading to OS zone, MACD signal line and histogram falling again and have been below 0 line since Tuesday. Stochs. still moving lower and into OS zone. H1 ATR 0.0007, Daily ATR 0.0063.

Click here to access our Economic Calendar

Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /241880/
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Daily Market Outlook, June 3, 2021

Daily Market Outlook, June 3, 2021 Overnight Headlines Fed says will start unwinding its corporate bond holdings Half of U.S. states to end Biden-backed pandemic unemployment benefits early Biden to speak again with Republican Senator Capito on Friday on infrastructure U.S. Treasury says G7 expected to endorse U.S. global minimum tax proposal Fed's dovish inflation approach complicates BOJ's taper plans Japan PM Suga seen calling snap election after Olympic, Paralympic Games – Asahi Japan's service sector shrinks for 16th month as health crisis hits demand, May PMI 46.5, prev 49.5 China's services activity growth slows in May, Caixin PMI 55.1, 56.3 prev AU May Retail Sales Final MM, 1.1%, 1.1% f’cast and prev; AU April Trade Balance SA, A$, 8.03 bln, 7.90 bln f’cast, 5.57 bln UK's Sunak says U.S. plan to break global tax deadlock could work ECB to keep policy loose this year despite high inflation risks Israel's opposition declares new government, set to unseat NetanyahuG10 FX Options Expiries for 10AM New York Cut(Hedging effect can often draw spot toward strikes pre expiry if nearby)EUR/USD: 1.2100-15 (1.3BLN), 1.2125-35 (428M), 1.2155-70 (757M)1.2200 (445M), 1.2215-20 (506M), 1.2250 (466M), 1.2300 (918M)EUR/GBP: 0.8500 (217M), 0.8600-10 (430M)GBP/USD: 1.3970 (544M), 1.3990-1.4000 (652M), 1.4100 (820M), 1.4250 (409M)AUD/USD: 0.7715-30 (782M), 0.7765 (314M)USD/CAD: 1.2050-65 (205M), 1.2200 (200M). EUR/CAD: 1.4700-05 (1BLN)USD/JPY: 109.00 (1.3BLN), 109.15-25 (1.1BLN), 109.40-50 (850M)109.75-80 (400M), 110.00 (1.4BLN), 110.25 (345M), 110.45-50 (1.1BLN)AUD/JPY: 84.40-55 (440M), 86.00 (302M)Technical & Trade ViewsEURUSD Bias: Bearish below 1.2150 bullish aboveEURUSD From a technical perspective, the close through 1.2120 is constructive but bulls must defend 1.2140 to set up a test of 1.2270/80. A close through 1.2140 would suggest a corrective phase developing.Overnight trade: Idles around 1.2200 in quiet Asian session • EUR/USD opened unchanged around 1.2210 after recovering from 1.2163 • Trading was quiet in Asia with the EUR/USD trading in a 1.2203/14 range • Support is at 1.2174 and break shifts pressure to the downside • Resistance is at the May 25 trend high at 1.2266 with sellers above 1.2250 • EUR/USD likely to range trade ahead of US payrolls on Friday • Sentiment remains bullish, but a break below 1.2160 would discourage bulls.Flow reports suggest topside offers congested through to the 1.2300 level with weak stops limited through the 1.2320 area and long term trend line around the 1.2345 area likely to see strong offers before weak stops opening the topside to further gains through the 1.2400 level. Downside bids into the 1.2140-60 level likely to be light and then increasing through the 1.2120 level to 1.2080 before weak stops appear and open up a deeper move through to the 1.2000 level with very little congestion until that point.GBPUSD Bias: Bullish above 1.41 bearish belowFrom a technical perspective, as 1.3960 now acts as support, bulls will target a test of 1.43. Only a close back below 1.41 would concern the bullish thesis opening the window for a corrective cycle.Overnight trade: back in a range ahead of U.S. payrolls • Steady at the base of a very tight, quiet 1.4166-1.4178 Asian range • Markets appear in a holding pattern, awaiting Friday's U.S. payrolls • Charts; momentum studies coil • neutral setup at familiar levels • Break of tested 1.4126 would be bearish – l.4092 range low pivotal • Mixed signals suggests 1.4090-1.4250 consolidation since mid May can extend • 1.4126 and NY 1.4182 high are first support and resistanceFlow reports suggest topside offers light through the 1.4250 area with some congestion increasing on any move to the 1.4300 and stronger offers in the area, a break above the 1.4310 area will likely see weak stops and breakout stops coinciding and the topside open to a quick squeeze through the 1.4350 level and an attempt on the possibly weak 1.4400 area and stronger stops again through the level. Downside bids likely to increase on a move through the 1.4150 area and into the 1.4100 with a couple of weeks of congestion building up in the area with weak stops on a break through the 1.4090-80 area and opening to the 1.4000 level with very little support other than limited sentimental bids, however, the move through will then start to see stronger bids into the 1.3950-1.3900 area limiting any further losesUSDJPY Bias: Bullish above 108 targeting 112USDJPY From a technical perspective, as 108.30 supports bulls will target 110.70’s, a closing breach of 108.30 would suggest a corrective move to test 106.30Overnight trade: JPY crosses better bid in quiet trading • USD/JPY again saw some Tokyo fix demand, remains bid with JPY crosses • USD/JPY up small, from 109.57 to 109.69 EBS in quiet Tokyo trade • Offers back in from @109.70 however, trail up, help cap • Bids eyed from @109.50, trail down, low yesterday 109.45 • Massive option expiries below and above today to help contain action • 109.00-50 @$4 bln, above from 109.75-80, $401 mln, 110.00-50 3.7 bln • USD/JPY likely to remain in 109.33-93 range since Monday pre-US NFP • US yields soggy, Treasury 10s @1.588%Flow reports suggest downside light through the 108.50 before opening the market to a new test of the 108.00 level, stronger bids into the 107.80 however, a break through the level is likely to see weak stops and breakout stops appearing and the market free to quickly test 107.50 and an old trendline then nothing until closer to the 107.00 area where stronger bids start to appear but the downside opening to Feb levels, topside offers through to the 110.00 level with light congestion through the figure level and weak stops possibly limited and stronger offers likely increasing on a move higher towards the 111.00.AUDUSD Bias: Bearish below .7790 bullish aboveAUDUSD From a technical perspective, the breach of .7790 refocuses attention on the downside as .7820 contains upside attempts, look for a test of .7680.Overnight trade: Offered tone after local data fails to excite • AUD/USD opened unchanged around 0.7750 after a whippy, outside trading day • It traded with an offered tone throughout the quiet Asian morning session • The low has been 0.7737 and it is around 0.7740 into the afternoon • Solid Aus retial sales and trade numbers – followed up strong GDP yesterday • AUD/USD failure to track higher on better data is discouraging longs • Buyers tipped ahead of 0.7700 with break targeting trend low at 0.7677 • Resistance is at the 50% retracement of the 0.7891/0.7677 move at 0.7784Flow reports suggest topside offers into the 0.7800 area with weak stops through the 0.7820 before opening for a new run higher and strong offers likely through the 0.7840-60 area to build for the 79 cent level. Downside bids light through the 0.7750 area and stronger bids likely continue through to the 0.7700 area before weak stops appear below the 0.7680 and a stronger 0.7650 area then holds the downsideDisclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-june-3-2021"
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Oil Forecast: Potential Drop Ahead

Good day,Currently, oil is testing the resistance at the level of 71.30. The question is, will the oil manage to break this level or drop? So, it will be interesting to check what the asset is going to do next to this level and glimpse the candlestick formations, which might forecast the price movements. In principle, oil might potentially drop.The price of American index S&P500 keeps moving along the level of 4200.00. Hence, the asset’s price might correct itself and drop soon.The price of the Australian dollar has entered the wedge. Therefore, the asset should pull from the upper or lower boundary of this wedge. Should the asset manage to break the boundary of wedge, interesting things might happen soon.Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 65% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/oil-forecast-potential-drop-ahead"
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