• US equities finish the week on a soft note
• Key Events and Releases to Watch Next Week in Trading
• Gold rally proves short-lived as it falls $40
• MUFG: BOJ likely to raise rates next month, MOF under pressure to intervene
• Baker Hughes oil rig count -3 to 485
• European equity close: Soft finish but a better week
• US May existing home sales 4.11m vs 4.10m expected
• US June S&P Global flash services PMI 55.1 vs 53.7
• Kickstart the FX trading day for June 21 w/a technical look at the EURUSD, USDJPY & GBPUSD
• Canada May producer price index 0.0% versus 0.5% estimate
• Canada April retail sales +0.7% vs +0.7% expected
• The NZD is the strongest and the GBP is the weakest as the NA sesson begins
• ForexLive European FX news wrap: Euro slips after soggy PMI data

The week is coming to a close with the USD being the strongest of the major currencies. The JPY is the weakest.The gains in the greenback today were helped by stronger-than-expected flash PMI data that saw services index rise to 55.1 vs 53.7 expected, and the manufacturing rise to 51.7 above estimate of 51.0.

For the USDJPY, it rose to the highest level since the April peak when the price traded to 60.208. The high price today reached 159.774.

Going into the new trading week in the USDJPY, a move above the 160.208 level would take the price of the pair to the highest level going back to 1990 where the high for the year reached to 160.40. Move above that level, and the USDJPY is trading at the highest level since January 1987. Those levels are the progression given more upside momentum in the new week.

Of course, the risk exists that the BOJ intervenes. When the price moved above 160.00 the last time, intervention sent the pair quickly down to 155.19 in short order. Another intervention move sent the price from 157.58 to 152.99. The current price is between the two extremes that attracted intervention.

Today, BOJ and Japan officials tried to jawbone the JPY higher( USDJPY lower), but was unsuccessful. Will they be inclined to be more direct next week?

For the trading week, the USD was mixed. The greenback rose vs the JPY, EUR, GBP, CHF, CAD and NZD and fell vs the CAD and AUD. Look at the major pairs:

• USDJPY rose 1.51% (USD higher)
• EURUSD fell -0.11% (USD higher)
• GBPUSD fell -0.342% (USD higher)
• USDCHF rose 0.46% (USD higher)
• USDCAD fell -0.33% (USD lower)
• AUDUSD rose 0.38% (USD lower)
• NZDUSD fell -0.39% (USD higher)

The greenback rose vs the CHF despite the SNB cutting rates this week by 0.25%. The BOE kept rates unchanged but the statement was somewhat dovish and flash PMI data was weakish today.

In other markets today, the US stocks ended the day mixed. For the 2nd consecutive day, the Dow is ending higher (only marginally), while the S&P and the Nasdaq indexes moved lower.

The final numbers for the day are showing:

• Dow Industrial Average average rose 15.57 points or 0.04% at 39150.34.
• S&P index fell -8.55 points or -0.16% at 5464.61
• NASDAQ index fell -32.23 points or -0.18% at 17689.36

The small-cap Russell 2000 rose 4.64 points or 0.23% at 2022.03.

For the trading week the S&P and Dow Industrial Average average rose while the NASDAQ closed the week virtually unchanged:

• Dow Industrial Average average, +1.45%
• S&P index, +0.61%
• Nasdaq index rose 0.48 points which is less than 0.00%, but technically an up week by the slimmest of margins.

This week, the S&P and Nasdaq set new all time high close levels:

• S&P new all-time high close is 5487.02
• Nasdaq new high close is now at 17862.23

In the US debt market:

• 2-year yield 4.736%
• 5-year yield 4.276%.
• 10-year yield 4.257%.
• 30-year yield 4.399%

For the trading week:

• 2 year yield rose 2.9 basis points
• 5 year yield rose 3.6 basis points
• 10-year yield rose 3.4 basis points
• 30- year yield rose 4.9 basis points

Thank you for your support. Have a great weekend

This article was written by Greg Michalowski at www.forexlive.com.

• Mon, Jun 24, 3 AM ET. USD: FOMC member Waller speaking
• Mon, Jun 24, 1:45pm CAD: BOC Gov Macklem Speaks

Tuesday June 25

• Tue, Jun 25, 8:30am CAD: CPI m/m (Estimate: 0.3%, Previous: 0.5%), Median CPI y/y (Estimate: 2.6%, Previous: 2.6%),Trimmed CPI y/y (Estimate: 2.8%, Previous: 2.9%)
• Tue, Jun 25, 10:00am USD: CB Consumer Confidence (Estimate: 100.2, Previous: 102.0)
• Tue, Jun 25, 10:00AM USD: Richmond Fed manufacturing index. Estimate 2.0. Previous 0.0

Wednesday, June 26

• Weds, Jun 26, 9:30pm ET (Tuesday) AUD: CPI y/y (Estimate: 3.5%, Previous: 3.6%)

Thursday, June 27

• Thu, Jun 27, 5:30am GBP: BOE Gov Bailey Speaks
• Thu, Jun 27, 8:30am USD: Final GDP Q1 q/q (Estimate: 1.4%, Previous: 1.3%)
• Thu, Jun 27, USD: Unemployment Claims (Estimate: 240K, Previous: 238K)
• Thu, Jun 27, USD. Durable goods orders (Estimate -0.1%, previous 0.6%), Core durable goods orders (Estimate 0.1%. Previous 0.4%
• Thu, Jun 27, 10:00am USD: Pending Home Sales m/m (Estimate: -7.7%, Previous: -7.7%)

Friday June 28

• Fri, Jun 28, 8:30am CAD: GDP m/m (Estimate: 0.3%, Previous: 0.0%)
• Fri, Jun 28, USD: Core PCE Price Index m/m (Estimate: 0.1%, Previous: 0.2%)
• Fri, Jun 28, 10:00am USD: Revised UoM Consumer Sentiment (Estimate: 65.9, Previous: 65.6)

In addition to the above the US treasury will auction off:

• June 25, 2-year notes
• Jun 26: 5 -year notes
• Jun 27: 7-year notes

This article was written by Greg Michalowski at www.forexlive.com.

It was quad witching in the equity market and that played a big role in today’s trading.

• S&P 500 down 0.2%
• Nasdaq Comp down 0.2%
• Russell 2000 up 0.2%
• DJIA flat
• Toronto TSX Comp down 0.1%

On the week:

• S&P 500 +0.6%
• Nasdaq flat
• DJIA +1.4%

The candle on the Nasdaq could be nothing or it could be something, especially with the reversal in Nvidia yesterday that continued with a 3.2% decline today.

This article was written by Adam Button at www.forexlive.com.

MUFG highlights the yen’s recent weakening trend and anticipates the Bank of Japan (BoJ) raising rates at next month’s meeting. Concurrently, the Ministry of Finance (MoF) faces increased pressure to intervene in the currency markets to prevent the yen from further depreciation beyond critical levels.

Key Points:

1. Yen Weakness and Intervention Reversal:

   • USD/JPY has risen back above 159.00, approaching the year-to-date high of 160.17 from April.
   • The impact of Japan’s intervention in late April/early May to support the yen has nearly fully reversed.

2. Yield Spread Dynamics:

   • Despite the narrowing of the 2-year yield spread between US and Japanese government bonds from a peak of around 4.75% in April to a 30bps decrease, the yen continues to weaken.
   • The yield spreads remain at their widest levels since the late 1990s/early 2000s, insufficient to reverse the yen’s weakening trend.

3. MoF Intervention Pressure:

   • The yen’s re-weakening increases pressure on the MoF to intervene again if USD/JPY breaks above 160.00 and the pace of the yen sell-off accelerates.
   • Previous interventions have had limited lasting impact, suggesting the need for more substantial or coordinated efforts.

4. BoJ Policy Normalization:

   • The weakening yen also puts pressure on the BoJ to expedite its policy normalization process.
   • MUFG expects the BoJ to raise rates by 15bps at next month’s policy meeting.
   • Additionally, the BoJ is anticipated to announce detailed plans to slow the pace of Japanese Government Bond (JGB) purchases over the next couple of years.

Conclusion:

MUFG forecasts that the BoJ will raise rates by 15bps at the upcoming policy meeting and announce plans to reduce JGB purchases. Concurrently, the MoF may face increased pressure to intervene in the currency markets to prevent the yen from depreciating beyond critical levels, particularly if USD/JPY breaches 160.00. The combination of BoJ policy adjustments and potential MoF interventions aims to stabilize the yen and address the ongoing currency depreciation.

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This article was written by Adam Button at www.forexlive.com.

Today’s outside reversal lower in gold prices rekindles some worries on the chart.

Gold has looked to be forming a head-and-shoulders top over the past two months in a move that would target $2150. However yesterday the bulls made a move and tried to take out the late-May highs. That failed through and today the sellers returned with a vengeance, knocking it lower by $40 to $2318.

While the pattern isn’t exactly textbook, it is a head-and-shoulders top and it comes after some data showing that the US service sector isn’t slowing. In fact, the S&P Global services PMI rose to a 26-month high.

That could keep the Fed from cutting rates at all this year and lead to aggressive profit taking in gold.

This article was written by Adam Button at www.forexlive.com.

As the clock ticks to the end of the trading week, the USDCAD has moved higher after reaching a new low for the week earlier in the trading day.

On the way to the low, the price did move back below its 200 bar moving average on the 4-hour chart at 1.3687. It also fell below the broken 38.2% retracement of the trading range since mid April (two month trading range). The level also is at 1.3687. The failure on the break of both those levels disappointed that the sellers and has led to a bounce back rally in the North American session.

That move to the upside has taken the price back up to test the 50% midpoint of the two-month trading range at 1.3717. So far the price has stalled against that the level.

The move back toward the 50% midpoint just that neither buyers or sellers are willing to take control.

Fundamentally, the Bank of Canada did cut rates at their last interest-rate decision becoming one of the first G-7 countries to do so. However, after peaking within a swing area between 1.3784 1.3803, the price has been up and down over the last seven or so trading days. Moreover, the current price is below the 50% of the two-month trading range. On the positive side it is above the 200 bar moving average on the 4-hour chart at 1.3687, and is trading above and below the 100-bar moving average on the 4-hour chart of 1.37079.

So buyers and sellers seem to be pointing into next week where perhaps there is more of a shift in the technical bias one way or the other.

This article was written by Greg Michalowski at www.forexlive.com.

• Oil rigs -3 at 485
• Natural gas rigs unchanged at 98
• Total rigs -2 at 588

The price of crude oil is trading at $80.55 it’s down $0.72 or -0.89% on the day

This article was written by Greg Michalowski at www.forexlive.com.

The S&P index and in the NASDAQ and a are now trading in positive territory and at highs for the day:

The NASDAQ is leading the way with a gain of 50 points or 0.28% at 17770.44. The S&P index is up 2.23 points or 0.04% of 5475.42.

For the trading week, both indices are on pace to close higher:

• NASDAQ index is currently up 0.46%
• S&P index is up 0.80%

Meanwhile, the Dow industrial average is now lower on a day by -28 points or -0.07% at 39106. Despite the decline, the index is still up 1.34% for the trading week.

Both the S&P and NASDAQ indices made new all-time high closing levels this week:

• NASDAQ index all-time high closing level comes in at 17862.22
• S&P all-time high closing level comes in at 5487.02

For the Dow Industrial Average average, it’s all-time high closing level came in on Monday the 17th at 40,003.60.

This article was written by Greg Michalowski at www.forexlive.com.

The US is determined to dominate semiconductors and not allow China to catch up.

• New proposed rules restrict US investment in key sectors
• Rules ban certain investments in design, automation, fabrication and advanced packaging tools
• Quantum computers and AI also targeted
• Proposes notification requirements for all other investments in Chinese AI system development

The US is going to use every tool at its disposal to prevent anyone else from getting in the chips and AI game. But remember, the US outlawed Huawei, had the founder’s daughter arrested and banned all technology in its phones. Yet within a couple years, the company replaced more than 13,000 parts and redesigned 4000 circuit boards to overcome US sanctions, something The Economist wrote about.

It’s tough to bet against Chinese manufacturing and surely Beijing will be putting all its weight behind catching up.

The question is: Would they go all the way to Taiwan to get ahead?

This article was written by Adam Button at www.forexlive.com.

The GBPJPY has been on an upward trend this week, but it turned lower during the European session following weaker-than-expected flash PMI data. The price dropped below its 100-hour moving average (blue line on the chart above at 200.77) but found support near the 200-hour moving average and the lower boundary of a swing area between 200.41 and 200.825.

After finding support, the pair rallied to last week’s high of 201.60. A break above this level could trigger further upside momentum, pushing the GBPJPY to its highest level since September 2008. Additionally, the price has moved above the 61.8% retracement level of the trading range since the 2007 high, which is at 199.808 (see monthly chart below).

Buyers remain in control. The only thing in the way for further gains right now is the high price from last week. Sellers who think the price has gone too far could lean against that level with a stop above.

Buyers meanwhile want to see a break with momentum above that level.

This article was written by Greg Michalowski at www.forexlive.com.