The Federal Reserve waits and sees, European Bank turns, and risk aversion heats up

The markets take a cautious stance to the start of the week as investors await headlines for the next round of U.S.-China trade talks scheduled for Monday in London. The European Economic Calendar will release Sentix investor confidence data for June. In the second half of the day, wholesale inventory in April will be the only data released by the United States.

The U.S. Bureau of Labor Statistics reported Friday that the U.S. non-farm employment (NFP) increased by 139,000 in May. This figure is slightly better than the market expectations of 130,000 people. During this period, the unemployment rate remained unchanged at 4.2% as expected. The downside is that non-farm data for March and April were down 65,000 and 30,000 respectively. The USD index rose slightly after the May employment report was released and closed in the upside on Friday. The dollar index remained under moderate bearish pressure, with European early trading volatility slightly below 99.00 on Monday. Meanwhile, U.S. stock index futures fell 0.2% to 0.25% last time, reflecting the risk-averse market atmosphere.

European Central Bank (ECB) President Christine Lagarde said over the weekend that interest rates must remain restrictive when necessary to ensure prices remain stable. “There is still a long way to go to squeeze inflation out of the economy,” Lagarde added. The euro/dollar held its position after falling about 0.4% on Friday, and Europe traded in the upside above 1.1400 in early trading on Monday.

Data from China shows that the trade surplus in Asia has been from 961.8 in April$103.22 billion expanded to $103.22 billion in May. On an annual basis, exports grew by 4.8%, while imports fell by 3.4%. Meanwhile, the consumer price index (CPIwww.avaforexcn.com) fell 0.2% month-on-month.

Basic foreign exchange market trends:

Australia/USD rose in early Monday and remained above 0.6500.

GBP/USD fell about 0.3% on Friday, but closed in the upside last week. The pair regained traction early on Monday, trading above 1.3550. The Office of National Statistics will release April labour market data on Tuesday.

Japanese Prime Minister Shigeru Ishiba said on Monday that the economy is turning to a trend phase of rising interest rates, noting that rising interest rates could push up the government's debt financing costs and affect its spending plans. After two consecutive days of gains before the close of last week, the U.S. dollar/yen/yen turned down and fell to 144.00 earlier on Monday.

Bulle market fundamentals:

Gold opened under pressure this week, and fell below $1 on Friday after falling more than $3,300. XAU/USD corrected a higher in early European session and stabilized above $3,300.

Analysis of major currency trends:

Euro: The intraday bias of the euro/dollar remains neutral at this point. Price trends starting from 1.1572 are considered as a correction pattern to rebound from 1.0716. While the rebound from 1.1064 may expand, 1.1572 should see strong resistance to limit upside potential. On the downside, breaking through the 1.1356 support will indicate that the correction is already in the third stage and aiming at the 1.1209 support for confirmation.

GBP: The intraday bias of GBP/USD remains neutral, and more consolidation may be seen below 1.3615. As long as the 1.3414 support level is held, further rise will still be favorable. Above 1.3615 will target 100% forecasts from 1.2099 to 1.3206, from 1.3138 to 1.3813. Taking into account the bearish divergence of the 4-hour MACD, breaking through the 1.3414 support should confirm a short-term peak and bring a deeper correction to the 1.3138 support.

Yen: The intraday bias of the US dollar/yen is currently neutral. On the plus side, a resistance above 146.27 will indicate that the price trend of 148.64 has been www.avaforexcn.completed as a correction mode. Intraday bias will return to 148.64 resistanceupside space and above to resume rebound from the low of 139.87. However, a firm breakthrough of 142.10 will retest 139.87.

The above content is all about "[Aihua Official Website]: The Federal Reserve is waiting and watching, the European Bank turns, and the heat up of risk aversion". It was carefully www.avaforexcn.compiled and edited by the Avatrade foreign exchange editor. I hope it will be helpful to your transaction! Thanks for the support!

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