The week started quietly ahead of the Bank of Canada’s and the European Central Bank’s interest rate meetings midweek. See below for more details on those. Equity markets remained supported and, as long as the Federal Reserve doesn’t signal earlier interest rate hikes next week, the Fed’s accommodative policy should keep dip buyers interested. However, investors need to be aware that the S&P500, the Dow, the Nasdaq, and the DAX are all trading around record highs. Therefore, keep on top of risk and don’t over-leverage in these types of extended markets.
Other key events from the past week
CAD: Interest Rate Meeting, June 09: The BoC’s meeting saw no change this week as expected and the BoC were keen to have a ‘holding’ week. The USDCAD pair was mildly supported out of the meeting, but the pair looks vulnerable to a retracement higher, especially on any reasons for USD strength.
EUR: Interest Rate Meeting, June 10: The ECB also kept a ‘steady hand’ this month. The General Council are more optimistic about the outlook than 3 months ago and they see a strong rebound from Q2. However, will this lift the euro?
Bitcoin: Will $30,000 hold? Bitcoin’s key level is the $30,000 support zone on the weekly chart. If it holds then a retest of $40,000 looks more likely than a fall down to $20,000. However, as always, be prepared for Bitcoin volatility!
Key events for the coming week
USD: Interest Rate meeting, June 16: There is one fundamental question in the market’s mind. Will the Fed taper? Any hint of tapering from the FOMC this week and expect USD strength. However, if the Fed stay on hold and are more dovish then expect gold strength.
AUD: Key employment data, June 17: Investors will be watching the unemployment rate very carefully next week. If unemployment drops below 5% that should provide strong support for the AUD.
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EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
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Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
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