EUR/USD (Euro/US Dollar) – Sell
The EUR/USD pair is attempting to break below 1.0855 after forming a bullish signal at the end of last week. Attention this week is on the European Central Bank (ECB) meeting on June 6, where interest rates are expected to be lowered from 4.50% to 4.25%. Last week’s Eurozone inflation data suggested the possibility of an interest rate adjustment. The May Consumer Price Index (CPI) accelerated to an annual rate of 2.6% from 2.4%, while the monthly rate decreased from 0.6% to 0.2%. In the US, the nonfarm payrolls (NFP) for May will be released on Friday, with an expected increase from 175,000 to 180,000 and the unemployment rate remaining at 3.9%.
GBP/USD (British Pound/US Dollar) – Sell
The GBP/USD pair is attempting to break below 1.2750, with US inflation statistics applying some pressure. The Personal Consumption Expenditures (PCE) price index increased by 0.3% monthly and 2.7% annually, while the core index rose by 0.2% monthly and 2.8% annually. In the UK, macroeconomic statistics showed a decrease in mortgage approvals and consumer credit. Today’s focus is on the business activity data for May from both the UK and the US. The UK’s manufacturing PMI is expected to remain at 51.3 points, while the US ISM manufacturing PMI is expected to rise from 49.2 points to 49.8 points.
AUD/USD (Australian Dollar/US Dollar) – Neutral
The AUD/USD pair is hovering around 0.6650, with business activity data from Australia and China being released. Australia’s manufacturing PMI for May rose slightly from 49.6 points to 49.7 points, while China’s PMI increased from 51.4 points to 51.7 points. The Federal Reserve is expected to maintain its current monetary policy, which is limiting further growth. The Fed is anticipated to cut interest rates once in 2024, likely in November or December. The Reserve Bank of Australia (RBA) is in no hurry to lower borrowing costs amid ongoing inflation risks.
USD/JPY (US Dollar/Japanese Yen) – Strong Sell
The USD/JPY pair is attempting to break below 157.40. Expectations that the Federal Reserve will not rush to ease monetary policy are supporting the US dollar. The next Fed meeting is scheduled for June 12, where it is expected to emphasize the need for more data before adjusting borrowing costs. The current scenario anticipates at least a 25 basis point rate cut in November or December. The Bank of Japan (BOJ) spent approximately $62 billion in April on currency intervention to support the yen. The Jibun Bank manufacturing PMI was adjusted slightly from 50.5 points to 50.4 points.
XAU/USD (Gold/US Dollar) – Strong Buy
The XAU/USD pair is attempting to break above 2320.00. It showed a slight increase at the end of last week in response to US inflation data, with growing expectations that the Fed will lower borrowing costs this year. The April PCE price index increased by 0.3% monthly and 2.7% annually. Meanwhile, the core index rose by 2.8% annually and was adjusted from 0.3% to 0.2% monthly. The next Fed meeting is scheduled for June 12, by which time decisions from the ECB and the Bank of England will likely have been announced.
