Forex Signals Brief June 14: Closing the Week with BOJ Meeting

Yesterday we had the employment report from Australia in the Asian session which was positive but didn’t offer much support to the AUD. The unemployment rate fell from 4.1% to 4.0%, as expected, reflecting a moderate improvement in labour market conditions, while employment change increased by +39.7K, above the projected +38.5K, indicating ongoing solid job growth. The participation rate climbed slightly from 66.7% to 66.8%, indicating that more people are entering the labour force with positive employment prospects. The underemployment rate remained constant at 6.7%, showing that some people continue to want more hours at work.

The BOJ is in Focus

The US dollar exhibited significant strength today, despite initial weakness following lower US PPI (Producer Price Index) and higher jobless claims data. These indicators reinforced concerns about declining employment and inflation. Initially, there was some selling pressure on the dollar, leading to minor 20-30 pip swings.

However, this weakness was short-lived as broader market dynamics and possibly safe-haven demand bolstered the dollar’s position later in the day. The euro faced selling pressure, particularly in the latter half of the day. This was exacerbated by declines in European shares, indicating broader market concerns and possibly geopolitical factors influencing sentiment. The yen remained soft for the second consecutive day, ahead of the Bank of Japan’s impending decision.

Market participants awaited the central bank’s policy stance amid ongoing economic uncertainties. Equities, particularly technology and AI sectors, continued to lead gains despite broader market concerns. However, there was a worrying breadth of losses across other sectors, notably cyclicals. The divergence in sector performance underscored mixed investor sentiment, with tech and AI stocks buoyed by specific drivers while cyclicals faced headwinds, reflecting cautious market outlook.

Today’s Market Expectations

Today the day started with the Bank of Japan meeting, which will be the highlight for the day and close another intense week in financial markets. The BOJ was widely expected to keep the policy unchanged, with their  Policy Rate at 0.10%, however investors attention was on the press conference for any hints of policy change soon.

The European session is pretty light, while in the US session we have the Manufacturing Sales and Wholesale Sales from Canada, which are not expected to induce much volatility in the CAD pairs. The Prelim UoM Consumer Sentiment will be released after that, but the attention will be on the UoM Inflation Expectations, with last moth’s number being revised 2 points lower from 3.5% to 3.3%, while the ECB president Lagarde will close the week with a speech in the evening.

Yesterday the volatility decline compared to Wednesday, with the USD continuing to crawl higher since the bullish reversal following the FOMC meeting. We opened 9 trading signals in total, however just six closed, with only one losing trade while five forex signals reached the TP target.

Mas Slips Below $2,300 Again

Despite initially gaining above $2,340 on Wednesday, gold encountered resistance around the 100-day SMA and subsequently declined. Technical Indicators: Technical signs are going negative, indicating a possible additional slide. The 100 SMA is falling, with the 200 SMA providing first support at $2,290, followed by the monthly low at $2,286.70. Geopolitical Factors: Despite recent decreases, geopolitical tensions in the Middle East and political uncertainty in Europe may boost gold prices, preventing additional losses.Chart XAUUSD, H4, 2024.06.13 20:46 UTC, MetaQuotes Ltd., MetaTrader 5, Demo

XAU/USD – H4 chart

EUR/USD Returns to the Lows Pretty Quick

After the Non-Farm Payrolls (NFP) report last Friday, EUR/USD sharply declined, reaching fresh monthly lows around 1.0719-20 early on Monday morning. The market reacted negatively to the results of the right-leaning European Parliament elections, causing the pair to open the week with a negative gap. Following the release of disappointing US Consumer Price Index (CPI) inflation data on Wednesday, EUR/USD initially rose to approximately 1.0852. This movement was driven by market expectations of a more dovish stance from the Federal Reserve due to weaker inflation numbers. The upward movement of EUR/USD was halted by resistance from key moving averages, notably the 100-period Simple Moving Average (SMA) on the H4 chart (represented by the green line). This resistance triggered a swift reversal, pushing the pair back down towards the 1.0735 level by yesterday.Chart EURUSD, H4, 2024.06.13 23:58 UTC, MetaQuotes Ltd., MetaTrader 5, Demo

EUR/USD – H4 Chart

Cryptocurrency Update

The Jump Fails in Bitcoin 

Bitcoin’s long-term uptrend remains intact above the 100-day SMA, but recent price action suggests a period of retracement and consolidation. The failure to maintain levels above $70,000 and the break below the 20-day SMA indicate short-term bearishness. Maintaining a sell strategy appears prudent, especially considering the strong selling pressure evident in recent attempts to push prices higher.

BTC/USD – Daily chart

Ethereum Falls to $3,500

Since the launch of the ETH ETF, Ethereum has traded within a range, reaching a high of $3,832.50. This surge in price was driven by increased market confidence following the SEC’s favorable stance on spot Ether ETFs. Ethereum saw a substantial increase, with prices rising by 25% from its previous highs, reflecting strong market demand and investor interest. Despite the promising trend, Ethereum’s price has recently declined, and ETH/USD has been trading below the $3,500 level for the past two weeks.

ETH/USD – Daily chart

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Skerdian Meta
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Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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