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Breaking: Ethereum price tanks below $1,000

239485   June 30, 2022 22:02   FXStreet   Market News  

Ethereum price has breached a critical area of support over the past few hours, dipping below $1,000. The Fibonacci retracement indicator shows that ETH lacks any significant support levels that could keep prices at bay. For this reason, further selling pressure can trigger another downswing to $900 or even lower. 

The second-largest cryptocurrency by market cap needs to reclaim $1,100 as support to have a change of invalidating the pessimistic outlook. 

ETH 4-hour chart

USD/TRY flirts with 3-day highs around 16.70

239484   June 30, 2022 21:56   FXStreet   Market News  

• USD/TRY leaves behind Wednesday’s advance and tests 16.70.
• Türkiye trade deficit widened to TL10.61B.
• Focus now shifts to Monday’s CPI release.

The Turkish lira sheds some ground and pushes USD/TRY to the area of 3-day peaks around 16.70 on Thursday.

USD/TRY appears supported near 16.00

USD/TRY extends the choppy trade so far and regains ground lost following Wednesday’s pullback, aiming once again for the upper-16.00s amidst the persistent upside momentum in the greenback as well as the increasing risk-off mood.

The lira continues to give away part of Monday’s strong gains, which saw the pair slip back to the 16.00 neighbourhood in response to the Turkish banking watchdog’s announcement to ban commercial loans denominated in lira for companies with a strong position in foreign currency (on Friday).

In the domestic calendar, the trade deficit widened to TL10.61B in May (from TL6.11B).

Next on the docket will be the release of key inflation figures for the month of June, due on July 4.

What to look for around TRY

USD/TRY keeps digesting the recent sharp decline and subsequent rebound following Friday’s announcement by the Turkish banking watchdog.

So far, price action in the Turkish currency is expected to gyrate around the performance of energy prices, the broad risk appetite trends, the Fed’s rate path and the developments from the war in Ukraine, although the effects of this new measure aimed at supporting the de-dolarization of the economy will also have its say.

Extra risks facing TRY also come from the domestic backyard, as inflation gives no signs of abating, real interest rates remain entrenched in negative figures and the political pressure to keep the CBRT biased towards low interest rates remain omnipresent.

Key events in Türkiye this week: Trade Balance (Thursday) – Manufacturing PMI (Friday).

Eminent issues on the back boiler: FX intervention by the CBRT. Progress (or lack of it) of the government’s new scheme oriented to support the lira via protected time deposits. Constant government pressure on the CBRT vs. bank’s credibility/independence. Bouts of geopolitical concerns. Structural reforms. Upcoming Presidential/Parliamentary elections.

USD/TRY key levels

So far, the pair is gaining 0.67% at 16.6867 and faces the immediate target at 17.3759 (2022 high June 23) seconded by 18.2582 (all-time high December 20) and then 19.00 (round level). On the other hand, a breach of 16.0365 (monthly low June 27) would pave the way for a test of 15.6684 (low May 23) and finally 15.2373 (100-day SMA).

EUR/USD: Scope for a dip back to the year’s low in the 1.035 area – Rabobank

239483   June 30, 2022 21:56   FXStreet   Market News  

The money market has pared back expectations regarding the extent of European Central Bank (ECB) rate rises. Therefore, the outlook for the euro has worsened. Economists at Rabobank still expect the EUR/USD pair to test 2022’s low at the 1.1350 area.

Window of opportunity for ECB rate hikes could be narrow

“On the back of risks to gas supply over the winter, we expect the Eurozone to fall into recession in late 2022/early 2023. Not only does this suggest that the window of opportunity for ECB rate hikes could be narrow but, even more worrying for EUR bulls, this suggests the worries regarding fragmentation in Europe are likely to be enhanced.”

“We continue to see scope for a dip back to the year’s low in the EUR/USD 1.035 area on a one to three-month view.”

Can we get a real washout already?

239480   June 30, 2022 21:49   Forexlive Latest News   Market News  

The Nasdaq opened 2.0% lower today despite a second day of falling yields. I think the latest price action is more about quarter end than about anything new.

That said, we’re clearly in a tech bust, or an everything-that-was-overleveraged bust. I don’t think that’s a controversial statement anymore and nearly all investors have accepted that everyone got drunk on cheap money during the pandemic.

The problem is that these declines are like death by 1000 cuts. If you look at the Nasdaq since the start of the year, there’s no capitulation here. There’s steady selling, some bounces and then more selling, like we’re seeing today.

After the US CPI report, we had somewhat of a rout but given the bounce and now resumption of selling, that doesn’t look like a washout.

When you get down to it, the mania can be encapsulated by a single stock: Tesla. It’s still trading above the May lows and around 6x above pre-pandemic levels. Next year’s earnings are expected at $11.92, which puts it at a 56x P/E and much worse if government incentives are taken out.

What’s particularly worrisome is that Elon Musk has hinted at some kind prosecution coming his way, which he’s framed as political. He also hasn’t tweeted in nearly a week, which has led to all kinds of speculation.

I would love to see this chart crack because I think that’s necessary before we get any kind of a bottom.

USD/CAD to maintain the 1.27/1.31 range, but the bias remains to the upside – TDS

239479   June 30, 2022 21:49   FXStreet   Market News  

USD/CAD remains in a range. Economists at TD Securities expect the pair to continue trading within 1.27 and 1.31.

BoC rate hikes start to rattle the housing market

“USD/CAD should continue to maintain the 1.27/1.31 range in the short-term. The bias, though, remains to the upside, especially as BoC rate hikes start to rattle the housing market and risk appetite remains shaky.” 

“We also downplay the importance of the oil factor given limited longer-term investment implications.” 

“While the consensus view around USD/CAD seems less varied than other pairs, we’re generally more bearish CAD in the months ahead.”

Gold Price Forecast: XAUUSD defends $1,800 and rebounds swiftly from one-and-half-month low

239478   June 30, 2022 21:49   FXStreet   Market News  

• Gold staged a solid recovery from the $1,800 neighbourhood or its lowest level since May 16.
• Softer US PCE inflation data led to a modest USD pullback and extended support to the metal.
• Sliding US bond yields, growing recession fears further benefitted the safe-haven commodity.
• The prospects for faster Fed rate hikes held back bulls from placing fresh bets and capped gains.

Gold witnessed a dramatic turnaround during the early European session and rallied over $20 from the vicinity of the $1,800 mark or the lowest level since May 16. The momentum pushed spot prices to a fresh daily high, around the $1,825 region, though lacked follow-through buying.

Data released from the US showed that the Core Personal Consumption Expenditures (PCE) Price Index – the Fed’s preferred inflation gauge – moderated to the 4.7% YoY rate in May from the 4.9% previous. Additional detail revealed that Personal Spending growth slowed significantly in May to just 0.2% during the reported month. The softer data, along with the ongoing decline in the US Treasury bond yields, forced the US dollar to trim a part of its intraday gains and offered some support to the dollar-denominated gold.

Apart from this, concerns that rapidly rising rates and tighter financial conditions would hurt global economic growth continued weighing on investors’ sentiment and further benefitted the safe-haven gold. That said, the prospects for aggressive Fed rate hikes held back traders from placing fresh bullish bets around the non-yielding metal. In fact, Fed Chair Jerome Powell said on Wednesday that the US central bank remains focused on getting inflation under control and the market pricing is pretty close to the dot plot.

Even from a technical perspective, the recent repeated failures near the very important 200-day SMA support prospects for a further near-term depreciating move. That said, the emergence of some buying near the $1,800 mark warrants some caution. Nevertheless, the bias still seems tilted in favour of bearish traders and any subsequent move up might still be seen as a selling opportunity. This makes it prudent to wait for strong follow-through buying before confirming that gold price might have formed a near-term bottom.

Technical levels to watch

Gold Price Forecast: XAUUSD under pressure despite rising recession odds – TDS

239477   June 30, 2022 21:45   FXStreet   Market News  

Gold trades with a mild negative bias for the fourth successive day on Thursday. Despite increasing recession fears, the yellow metal is set to remain under downside pressure, economists at TD Securities report.

Liquidity is being sapped from global markets

“Gold prices are under pressure despite rising recession odds, in contrast to recent price action pointing to safe-haven flows supporting the yellow metal.”

“Gold prices have disconnected altogether from market pricing for Fed hikes over the past month, and have instead grown their relationship with the USD, pointing to a smaller magnitude of idiosyncratic flows for the yellow metal.”

“Liquidity is being sapped from global markets, and gold flows have not been spared.”

ECB to divide eurozone countries as donors and recipients of PEPP reinvestment – Reuters

239476   June 30, 2022 21:45   FXStreet   Market News  

The European Central Bank (ECB) will divide eurozone countries as donors, recipients and neutrals for the reinvestment of the Pandemic Emergency Purchase (PEPP) Programme proceeds, Reuters reported on Thursday, citing sources familiar with the matter.

The list of recipients will reportedly include Italy, Spain, Portugal and Greece while Germany, France and Netherlands will be among the donors.

ECB is said to review these lists monthly, focusing on the size and the speed of the bond-spread moves.

Market reaction

EUR/USD recovered modestly from two-week lows in the last hour and was last seen losing 0.22% on the day at 1.0417.

GBP/USD eyes a break below 1.20 in the near-term – TDS

239475   June 30, 2022 21:40   FXStreet   Market News  

Economists at TD Securities expect the GBP/USD pair to continue its downfall. Although the Bank of England (BoE) could offer some support, cable is set to break under 1.20 in the near-term.

GBP vulnerable on the crosses

“The near-term GBP trajectory is biased to the downside, even though it maintains a pretty heft discount.”

“The BoE plus fiscal support may help to put a floor in cable but not before a near-term break below 1.20. Still, BoE pricing seems too aggressive relative to our forecast, leaving GBP vulnerable on the crosses.”

EUR/USD to retest the 1.04-1.0350 support zone – Scotiabank

239474   June 30, 2022 21:40   FXStreet   Market News  

The EUR/USD slide is set to continue. Economists at Scotiabank expect the pair to retest the 1.04-1.0350 support zone.

Intraday trends look soft

“The EUR has failed to break through the low 1.06 area three times since mid-month, leaving markets little technical choice but to retest the 1.04-1.0350 support zone for the EUR.” 

“Intraday trends look soft, with the EUR unable to reverse any of Wednesday’s losses.”

“We spot resistance at 1.0450 and 75.”

“Support is 1.0400 and 1.0350/60.”

USD/CAD to have a free run at 1.30 on a break above 1.2950 – Scotiabank

239473   June 30, 2022 21:35   FXStreet   Market News  

USD/CAD is extending Tuesday’s sharp squeeze higher from the 1.2820 area. Economists at Scotiabank note that the pair could reach the 1.30 level on a break past 1.2950.

USD gains unlikely to extend much above the 1.30 area

“Gains through the 20s target intraday strength to 1.2950 and, above here, spot would have a free run at 1.30+ again. We still see limited scope for USD gains to extend much above the 1.30 area, however.”

“Intraday support is 1.2865 and 1.2820.”

EUR/USD to hold the 1.03/1.07 range before pushing higher in H2 – TDS

239472   June 30, 2022 21:35   FXStreet   Market News  

Economists at TD Securities expect another push lower in the EUR/USD targeting a level around 1.03. However, the pair is set to rebound later in the year.

Lower oil would benefit the euro 

“The EUR’s near-term outlook remains challenging, reflecting, in part, the sluggish backdrop for risk sentiment.”

“The wall of worry around European and global growth risks remains elevated, while China is only starting to emerge from its growth slumber.”

“Oil prices are another key factor to watch in the months ahead, where lower oil would benefit EUR.”

“We expect EUR/USD to hold the 1.03/1.07 range before pushing higher in H2.”