Forex

In this week’s edition, we discuss the EUR/USD, AUD/USD and USD/CAD forecast and look forward to the macro events in the week ahead.

A weaker USD has allowed the AUD/USD to recoup recent losses, whilst reduced bets of a Fed hike and a debt-ceiling deal with the Senate could be supportive of the ASX 200.

The sell-off has been trigged by broad US dollar weakness ahead of the US nonfarm jobs report on Friday. Consequently, the USD/CAD outlook has turned bearish, at least in the short-term anyway.

The next major hurdle for the US dollar and the economy will be Friday’s NFP reading, which is expected to show nearly 200K net new jobs and wages to rise at 0.3% m/m

Investors’ focus now turns back to US data as speculation over whether the Fed will hike in June continues. Watch out for fresh EUR/USD analysis from the team as the data could shift Fed bets again.

Gold had an underwhelming finish to the month of May to say the least, closing at the low of the month. Yet gold continues to show signs that its hopes are perking up.

Weak China PMI data has weighed on sentiment ahead of today's European open, helping to support gold ahead of the vote on the debt-ceiling bill in the House of Republicans.

The commitment of traders (COT) report shows how large speculators are positioned across futures markets on the CME exchange.

USD/JPY remains in a bullish short-term trend, with room to extend its rally toward 142.00 before encountering meaningful resistance...

Thanks to hawkish rhetoric from ECB, traders are not so keen to slam EUR hard despite stock sell-off. A close above 1.0850 would enhance the EUR/USD forecast.

NZD pairs were lower after the RBNZ hiked for a 12th consecutive meeting and signalled they may have reached a peak rate of 5.5%. At least for now.

Our longer-term gold forecast remains positive, owing to the fact global monetary policy can only start to loosen from here

Before you start trading, it’s important to understand the potential risks involved. Let’s take a look at the different types of market risks.

The debt ceiling negotiations drag on for at least another day (and likely for the rest of the week). For now we can focus on today’s flash PMIs and how EUR/USD reacts.

PMI data for Japan and Australian has surpassed expectations, which provides a positive lead for flash PMI data from Europe and the US. Meanwhile, USD/JPY bulls eye a move to 140.

The RBNZ (Reserve Bank of New Zealand) are expected to hike by another 25bp tomorrow, despite 1 and 2-year inflation expectations plummeting at their fastest pace since the pandemic.