Japan's Deputy Finance Minister Masato Kanda confirmed that the government is ready to take appropriate measures if excessive currency fluctuations have a negative impact on the national economy. However, Kanda's comments had minimal impact on the Japanese Yen (JPY) exchange rate amid the Bank of Japan's reluctance to provide a detailed plan to reduce bond purchases. This is a significant divergence from the hawkish stance of the Federal Reserve (Fed) and suggests that the path of least resistance for the USD/JPY pair lies to the upside.

Amid the Fed's hawkish pause in June, recent comments from policymakers indicated that the central bank is in no hurry to start a rate cut cycle. Fed Chair Michelle Bowman on Tuesday reiterated her view that keeping rates steady for some time is likely to be enough to bring inflation under control. Fed Chair Lisa Cook said lower interest rates would be appropriate "at some point" given the significant progress in inflation and the gradual cooling of the labor market, but did not elaborate on the timing of the easing.

Nevertheless, signs of easing inflationary pressures in the US keep hopes alive for the Fed's first interest rate cut in September. This, in turn, keeps dollar bulls away from aggressive bets and limits the upside potential of the USD/JPY pair. Traders also prefer to stay on the sidelines ahead of the final US GDP data for the first quarter on Thursday, which will be followed by the publication of the Personal Consumption Expenditures (PCE) price index on Friday. The latter indicator will influence the Fed's further decision and will determine the near-term trajectory of the currency pair.

Trading recommendation: Trade mainly with Buy orders from the current price level

The GBP/USD pair demonstrated bullish sentiment on Monday, rising from recent lows to 1.2650 as markets commenced the new trading week with an appetite for risk. The week ahead will see a dearth of key economic data, so those trading in the cable will be keeping an eye on important calendar releases that will not be released until later in the week. The US and UK gross domestic product (GDP) data are scheduled for release at the end of the trading week, followed by the US personal consumption expenditure (PCE) price index data on Friday.

The Tuesday release schedule is limited to averages, so markets will focus on statements from central bank policymakers. The Federal Reserve's few comments on Monday caused a minor jitter in markets, and the same is expected on Tuesday.

On Monday, Federal Reserve Bank of San Francisco President Mary Daly observed that the 2024 inflation figures do not instil much confidence when viewed in aggregate, although recent data offers grounds for optimism. Fed Chair Daley's comments followed those made earlier by Federal Reserve Bank of Chicago President Austan Goolsbee, who expressed optimism about further progress on inflation. He noted that Fed policy remains sufficiently restrictive.

The Euro-dollar pair remains lower for the third consecutive day on Monday, trading around 1.0690-1.0685 in the Asian session, just above the lowest level since early May. The common currency continues to be dragged down by uncertainty over the outcome of the snap election in France, which has fueled fears that the new government will worsen the financial situation in the Eurozone's second-largest economy. In addition, flash PMI indices released on Friday showed that business activity growth in the Eurozone slowed sharply in June. This, as well as some subsequent US Dollar (USD) buying, proved to be key factors putting downward pressure on EUR/USD.

The US Dollar Index (DXY), which tracks the dollar against a basket of currencies, rose to its highest level since May 9 on the back of Friday's PMI data, which showed that US business activity rose to a 26-month high in June. The data confirms the Federal Reserve's (Fed) patient approach, although signs of weakening inflationary pressures have raised the prospect of a rate cut in September. This could deter dollar bulls from aggressive bets and help limit further EUR/USD declines.

Traders may also prefer to wait for Friday's release of US Personal Consumption Expenditures (PCE) price index data to get an indication of how the Fed will cut the rate. This, in turn, will play a key role in influencing US Dollar price action in the near term and will provide meaningful momentum to the EURUSD. Traders are now waiting for the release of German IFO business climate data and speeches of influential FOMC members to take advantage of short-term opportunities in the absence of any significant macroeconomic releases from the US.

The US Dollar (USD) remains resilient early Friday after rising against major rivals on Thursday. Later in the day, S&P Global will release preliminary reports on manufacturing and services PMIs for Germany, the UK, the eurozone and the US for June. Ahead of the weekend, market participants will also keep a close eye on May US existing home sales data and May Canadian retail sales data. EUR/USD returned to familiar technical levels on Thursday, falling towards 1.0700 after a miss in US economic data supported the dollar.

Germany's Producer Price Index (PPI) fell to 0.0% month-on-month in May, down from the previous reading of 0.2% and missing the expected rise to 0.3%. On an annualized basis, the PPI was also below expectations, falling to -2.2% for the year ending in May. While the annualized figure improved from the previous reading of -3.3%, it still fell short of the projected recovery to -2.0%.

The latest US initial jobless claims data came in above expectations: 238,000 people applied for unemployment benefits in the week ended June 14, up from the previous week's revised figure of 243,000. The increase also pushed the four-week average to 242,750 from the previous 227,250.

The Philadelphia Fed's manufacturing sector business activity index for June fell to 1.3 from 4.5, falling short of the expected 5.0. In addition, U.S. housing starts in May fell to 1.277 million new units, down from the forecast of 1.37 million and the previous month's revised figure of 1.352 million.

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The USD and JPY pair is trading above the 158.00 price level during the Asian session today and remains a step away from the highest level since late April reached last week. Nevertheless, the mixed fundamental backdrop calls for some caution before positioning for a continuation of the recent gains seen over the past two weeks.

The Japanese Yen (JPY) is weakened by the Bank of Japan's (BoJ) decision to refrain from discussing the reduction of JGB issuance until its next meeting. In addition, the bullish tone in global stock markets is reducing demand for the safe-haven Yen and providing support to the USD/JPY pair. However, speculation that the Japanese authorities may intervene to support the national currency, along with ongoing geopolitical tensions and political uncertainty in Europe, should limit a significant decline in the yen.

In addition, hawkish remarks from Bank of Japan Governor Kazuo Ueda earlier this week that the central bank may raise rates in July depending on economic data may deter bears from aggressively betting on the JPY. Meanwhile, the US Dollar (USD) continues to struggle to attract meaningful buyers and languishes near weekly lows amid expectations that the Federal Reserve (Fed) will cut interest rates twice this year, backed by signs of fading inflation. This could help to contain the USD/JPY pair.

Today, market participants pay attention to the economic agenda in the US, where, as usual, initial jobless claims, the Philadelphia Fed manufacturing index and housing market data - building permits and housing starts - will be released. These data, as well as the US bond yields and the Fed's speech will influence the USD price dynamics and will give some impetus to the USD/JPY pair. Traders will focus on broader risk sentiment to capitalize on short-term opportunities ahead of the release of Japanese core CPI and global PMIs on Friday.

Trading recommendation: Trade predominantly with Buy orders from the current price level

The GBP/USD pair has been unable to make meaningful gains on Wednesday and has been fluctuating in a narrow trading range around the round 1.2700 mark during the Asian session. Spot prices, meanwhile, are holding above the one-month low reached last Friday as traders await the release of the latest UK consumer inflation data with interest before positioning themselves for the next leg of directional movement.

The UK core consumer price index is expected to rise to 0.4 per cent in May from the previous reading of 0.3 per cent, while the annual rate is expected to slow to 3.5 per cent from 3.9 per cent in April. The data will play a key role in influencing the British pound (GBP) and will provide some momentum to the GBP/USD pair. The market will then turn its attention to Thursday's Bank of England (BoE) monetary policy meeting, which will help determine the currency pair's near-term trajectory.

In the run-up to key central bank data and risks, weak US Dollar (USD) price action has been a key supportive factor for the GBP/USD pair. Tuesday's weaker-than-anticipated US retail sales report indicated signs of consumer fatigue and confirmed speculation that the Federal Reserve (Fed) may begin cutting interest rates in September. This led to an overnight decline in US Treasury bond yields and is thought to have undermined the dollar.

The aforementioned fundamental backdrop supports the prospects for a significant strengthening of the GBP/USD pair. Nevertheless, the absence of follow-through buying calls for caution before taking a position on the continuation of the recent rebound from the mid-1.2600s or the one-month low reached last Friday.

Trading recommendation: Trading predominantly Buy orders from the current price level.

Specialists at Goldman Sachs Group have revised their year-end forecast for the S&P 500 index (#SP500) upward to 5,600 points. This adjustment is based on the assumption that negative earnings will be below average and that the price-to-earnings ratio is now considered fair.

Yesterday, the S&P 500 reached a new all-time high of 5,488 points! The index has already grown by 15.8% since the beginning of the year, and the upward trend is expected to continue.

We previously discussed the rise of the S&P 500 in April. Our traders closely monitor the market and engage in active trading, so this new surge was not a surprise to them.

The growth of leading American companies strengthens the resilience of the U.S. economy

The stock price of Applied Materials (#AppliedMat) has increased by 56% since the beginning of the year. Applied Materials is an American corporation that provides equipment, services, and software for the production of semiconductor chips used in electronics, flat panel displays, smartphones, televisions, and solar products. The rising demand for electronic chips fuels investor interest in this company.

Motorola Solutions (#Motorola), the successor of one of the oldest U.S. corporations, has transformed into a leading manufacturer of specialized communication devices and holds a monopoly in certain niches. The company's stock has grown by 22.6% since the start of the year. Motorola Solutions focuses on the highly profitable public sector procurement, leading to steady revenue growth for MSI.

Procter & Gamble (#PG) is a global leader in the consumer goods market, well-established in the U.S. and abroad. The stock of this defensive goods group (covering beauty and grooming, healthcare, fabric and home care, and baby, feminine, and family care products) has been growing steadily and reliably. Over the year, their value has increased by 15.6%.

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The Euro-dollar pair is trading down near 1.0730 on Tuesday in the early hours of European trading. A moderate recovery in the US dollar is leading the major pair lower. Traders prefer to stay on the sidelines ahead of the release of Eurozone inflation data and US retail sales data. US retail sales are expected to grow by 0.2% m/m in May.

The pan-European economic data is limited to mid-single digits this week, so markets will focus on Tuesday's upcoming US retail sales data. US retail sales are expected to increase 0.2% y/y in May after being unchanged at 0.0% in the previous month. Core retail sales, excluding auto sales, are also expected to be unchanged at 0.2%.

Various Federal Reserve (Fed) officials are scheduled to speak on the economic calendar during the week, with a number of policymakers expressing a markedly cautious stance on Monday. Although the latest inflation data showed a faster-than-expected decline, the Fed emphasized its reluctance to cut rates prematurely, stressing the need for more data before making any decisions.

At the end of the week, EU and US PMI data scheduled for Friday are expected to diverge: market forecasts expect a slight increase in activity in the EU and a slight decline in US PMIs.

The USD/JPY pair continues to rally near 157.50 in the early Asian session on Monday. The hawkish stance of the US Federal Reserve (Fed) is providing some support to the pair. Meanwhile, the Japanese Yen (JPY) is losing ground as the Bank of Japan (BoJ) decided to keep the interest rate at 0% following its June meeting on Friday.

The Fed left interest rates unchanged in the current range of 5.25% to 5.5% at its last meeting last week, as widely expected. In addition, the Fed revised its forecast for a rate cut to one in 2024. Fed Chairman Jerome Powell said at a press conference that the central bank doesn't yet have the confidence to cut rates and needs more convincing evidence that inflation is moving toward the 2% target. On Sunday, Minneapolis FRB President Neel Kashkari said the "reasonable forecast" is that the Fed will wait to cut interest rates until December, adding that the Fed is in a very good position to get more data before making any decisions.

On Friday, the preliminary report on the Michigan Consumer Sentiment Index, a monthly survey of U.S. consumer confidence, fell to a 7-month low in June at 65.6 from 69.1 in the previous reading, below the forecast of 72.0. Nevertheless, the low consumer confidence data had little impact on the dollar.

As for the yen, the Bank of Japan left the benchmark interest rate unchanged in a range of 0% to 0.1% at the end of its two-day meeting on Friday, but indicated that it may reduce its purchases of Japanese government bonds after its next monetary policy meeting in July. Bank of Japan Governor Kazuo Ueda also said he did not rule out raising interest rates in July as the weakening Japanese yen (JPY) drives up the cost of imports. "The decision suggests that the BOJ is very cautious about reducing bond purchases, which means the central bank is also cautious about raising rates," said Takayuki Miyajima, senior economist at Sony Financial Group. This dovish stance of the BoJ continues to undermine the Japanese Yen and acts as a tailwind for the USD/JPY pair.

Trading recommendation: Trade mainly with Buy orders from the current price level

The EUR/USD is trading at a flat rate of around 1.0735 on Friday in early Asian trading. The pair's growth may be limited due to uncertainty related to the European Parliament elections. Investors will be focusing on Christine Lagarde's speech at the ECB and the preliminary Michigan consumer sentiment report for June.

The European Parliament elections have exposed rifts in several member states. In France, following the defeat of the far-right Rassemblement Nationale, President Emmanuel Macron dissolved parliament and called snap elections, which could result in a strengthening of the far-right in the country's parliament, according to the website of the European Council on Foreign Relations.

The combination of political uncertainty in Europe and rate cuts by the European Central Bank (ECB) could put some pressure on the Euro (EUR) against the US Dollar at the moment. At its June meeting last week, the ECB cut interest rates by 25 basis points (bps), a move widely anticipated by market participants. As a result, the ECB's key rate fell to 3.75% from a record 4% since September 2023. Financial markets have fully priced in another rate cut this year, but economists polled by Reuters last week forecast two more rate cuts by the end of 2024.

The US producer price index (PPI) came in weaker than expected, with a 2.2% increase in May compared to April's 2.3% (revised from 2.2%), according to the US Bureau of Labour Statistics' Thursday report. In contrast, the core producer price index increased by 2.3% year-on-year in May, below the consensus estimate of 2.4% and April's 2.4%. The number of individuals filing initial jobless claims in the US for the week ending 6 June increased by 242,000 from the previous week, exceeding the market consensus forecast of 225,000.

However, the weak US economic data did not result in a decline of the dollar against its peers, as the Federal Reserve (Fed) signalled that it will cut its key interest rate just once by 25 basis points (bps) until the end of 2024. In a statement to the BBC, Fed Chairman Jerome Powell indicated that only "modest" progress had been made towards the target. He also noted that the US central bank would need to see a "good measure of inflation" before cutting interest rates.

The Japanese Yen (JPY) retreated from its recent gains on Thursday, while the US Dollar (USD) rose following assertive statements from the US Federal Reserve (FOMC), boosting the USD/JPY pair. At its meeting on Wednesday, the Federal Open Market Committee (FOMC) left the benchmark lending rate unchanged at 5.25-5.50 per cent for the seventh consecutive time, as expected.

The Japanese Yen may experience limited declines as market participants exercise caution ahead of the Bank of Japan's (BoJ) decision on Friday. While the BoJ is expected to leave interest rates unchanged, traders will be monitoring any announcements regarding a potential reduction in the central bank's monthly bond purchases.

The CME FedWatch Tool indicates that the probability of a Federal Reserve interest rate reduction of at least 25 basis points in September has decreased to 61.5% from 69.4% a week earlier.

On Thursday, investors will be monitoring the release of the Producer Price Index (PPI) data, which is expected to provide further insight into the current state of the US economy.

Trade recommendation: Trading mainly by Buy orders from the current price level.

The GBP/USD pair is trading with slight losses around 1.2740 in the early Asian session on Wednesday. The continued rise in the US dollar (USD) amid cautious sentiment is exerting pressure on the major pair. Investors will be monitoring the US Consumer Price Index (CPI) data, which will be released hours before the FOMC meeting.

The stronger US jobs report released last week has led to a shift in expectations that the US Federal Reserve (Fed) will start cutting interest rates in September. However, a softer-than-expected inflation report could influence Fed Chairman Jerome Powell to maintain his stance of three interest rate cuts before the end of the year. This could consequently exert pressure on the US dollar. The US Consumer Price Index is anticipated to have increased by 3.4% year-on-year in May, while the core CPI for the same period is expected to have risen by 3.5% year-on-year.

The Federal Reserve is anticipated to maintain its current interest rate structure at its June meeting on Wednesday. Traders will be monitoring the latest interest rate forecasts to identify the number of times the Fed is expected to cut rates in 2024. The CME FedWatch Tool indicates that market expectations are for one to two rate cuts in 2024.

Conversely, the UK labour market experienced a fourth consecutive contraction. The change in the number of people in employment in the three months to April was 140,000 lower than the previous figure of 177,000. In other news, the ILO unemployment rate increased to 4.4% in the three months to April, up from 4.3% in the previous period. This was above market expectations of 4.3%. The number of people claiming unemployment benefits increased by 50,400 in May, up from 8,400 in April. Following the release of disappointing reports, the value of the pound declined. The unemployment rate and number of jobless claims data for May revealed a concerning picture of the UK labour market.

Trading recommendation: Trading mainly by Sell orders from the current price level.

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The EUR/USD exchange rate rose during the Asian session on Tuesday and is currently trading in the 1.0765-1.0770 area. However, there is currently a lack of strong follow-through buying. Furthermore, the fundamental backdrop and technical situation call for some caution before positioning for a continuation of the previous day's modest bounce from the 1.0735-1.0730 area, or one-month low.

The US Dollar (USD) continues to be well supported by growing recognition that the Federal Reserve (Fed) may keep interest rates on hold for longer, helped by stronger-than-expected US jobs data released on Friday. In addition, the decision by French President Emmanuel Macron to call a snap election later this month has increased political uncertainty in the Eurozone's second-largest economy, which could continue to undermine the common currency. This, in turn, favours bearish traders and confirms a negative outlook for EUR/USD in the near term.

Conversely, the overnight low around 1.0735-1.0730 now seems to protect the near-term downtrend ahead of the round figure of 1.0700. Further selling will be seen as a new trigger for bearish traders, taking the EUR/USD pair to the next relevant support around 1.0650-1.0640. Eventually, spot prices could fall towards testing 1.0600, or the low since the beginning of the year reached in April.

The Japanese yen (JPY) declined for the second consecutive trading day on Monday. The USD/JPY pair received support as the US dollar (USD) regained strength following the release of better-than-expected US jobs data on Friday.

On Monday, Japan released a combination of data that could potentially limit the decline in the Japanese yen. The annualised gross domestic product figure revealed that Japan's economy contracted at a slower rate than anticipated in the first quarter. In addition, the GDP (Q/Q) contracted in the first quarter, which coincided with the flash data.

The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, continues to appreciate due to higher US Treasury yields. A strong US jobs report is anticipated to reinforce the Federal Reserve's hawkish stance. The CME FedWatch Tool indicates that the probability of a 25-basis-point or greater rate cut by the Federal Reserve in September has declined to approximately 48% from 54.8% a week ago.

The GBP/USD pair traded in positive territory for the third consecutive day around 1.2785 in the early Asian session on Friday. In the absence of key UK economic data releases, the GBP/USD pair will be influenced by the US dollar. All eyes will be on the US Non-Farm Payrolls (NFP) data for May, due out later on Friday.

Traders raised bets that the US Federal Reserve (Fed) will cut interest rates later this year, which led to a decline in the US Dollar (USD) and bond yields. The US Dollar Index (DXY), which reflects the value of the dollar against a basket of foreign currencies, fell to 104.10 and 10-year US bonds fell to 4.285%. Markets estimate the probability of a Fed rate cut in September at about 68%, down from 55% earlier in the week, according to CME's FedWatch tool.

On Thursday, the U.S. Labor Department reported that initial jobless claims for the week ended May 31 rose 229,000 from the previous reading of 221,000, beating the market consensus forecast of 220,000. Investors will be focused on U.S. employment data for May.

NFP forecast that the US economy will add 185,000 new jobs in May and the unemployment rate will remain unchanged at 3.9% for the same period. Weaker-than-expected employment data may trigger speculation of a Fed rate cut, which will put pressure on the US dollar.

This week, the financial news market is buzzing with mixed events. Oil prices continue to fall, while American stocks are delighting investors with unexpected rises.

FreshForex traders have quickly capitalized on these events to make profits. Let's take a closer look at what’s happening and why.


Black gold is getting cheaper

At the beginning of this week, oil prices fell again, causing concern among investors. Market volatility is increasing due to fears about future demand and a possible easing of production restrictions by OPEC+ by the end of the year. Brent crude oil fell below $77 per barrel on Tuesday!

Oil prices declined following decisions made by OPEC+ at their June 2 meeting. The organization announced a gradual lifting of oil production restrictions, affecting market sentiment. Moreover, disappointing figures from the US manufacturing PMI (ISM) also played a role: at the end of May, the index dropped below 50 points to 48.7, indicating a decline in the sector. The rise in borrowing costs, limited investments, and increased raw material costs are challenging American industry.

Experts are divided: Goldman Sachs sees potentially negative consequences for the market from OPEC+'s decision, while UBS and RBC analysts believe that the cartel will manage the market flexibly, gradually easing restrictions.


Rises in the US stock market

Meanwhile, optimism reigns in the US stock market. The price of tech giant Apple (#Apple) exceeded a 5-month high, surprising Wall Street once again. The company’s profits surpassed expectations, causing a buzz among investors that continues to this day.

Microsoft (#Microsoft) shares continue to rise. Microsoft is developing and training its own AI model, MAI-1, which could compete with models from Google, Anthropic, and even OpenAI, according to a Yahoo report. The company's first-quarter revenues were supported by high demand for AI products.

Micron (#Micron) shares are soaring. The company is poised to become one of the largest beneficiaries of AI demand in the chip industry. Micron announced strong quarterly results and an optimistic earnings forecast for the current quarter.

Once again, GameStop Corp (#GameStop) became sensational news. As we mentioned earlier, the company’s shares soared following new content from popular YouTube streamer Keith Gill, known as Roaring Kitty. In a recent Reddit post, Gill shared a screenshot of his investment portfolio, which included a significant holding of GameStop shares and call options. This information sparked another explosive interest in the stock, doubling its price to $47 on the New York Stock Exchange (NYSE) on Monday, June 3. We already mentioned GameStop in May, so for our regular readers and active traders, the latest surge was no surprise.

Ethereum (ETHUSD) is once again at the peak of interest in the crypto community, and it's no coincidence. Here are some key events:

1. ETF Breakthrough: The U.S. Securities and Exchange Commission (SEC) has finally approved 8 applications to launch Ethereum ETFs from giants like BlackRock and Fidelity. This SEC decision is primarily political and opens the doors to new investments from the masses. It is expected that the Ethereum ETF will attract between $5 and $8 billion.

2. Successful Network Upgrade: The recent Ethereum network upgrade, known as Dencun, brought significant improvements in scalability and security. These changes, including new smart contract capabilities, will make the Ethereum network even more attractive to developers and users, driving further growth.

3. Analysts’ Forecasts Fuel Interest: Analysts agree that the approval of the ETF and the successful network upgrade can significantly impact the value of the second-largest cryptocurrency and may even trigger a new "altcoin season," similar to how Bitcoin ETF approval previously led to substantial price increases across various crypto pairs.

All these factors create optimistic prospects for the cryptocurrency as a whole, attracting the attention of investors and developers. So, if you haven't tried it yet, now is the perfect time to consider investing in the world of cryptocurrencies.