The Swiss National Bank cut rates by 25 basis points yesterday and that reversed the downward bias that the USDCHF was experiencing going into the rate decision. The subsequent move higher move back above the 38.2% retracement of the move up from the December 2023 low at 0.8883, a swing area between 0.8881 and 0.8892, and the 200-day moving average of 0.88957. That cluster support is now a risk-defining level for buyers looking for more upside. It must stay above to keep the buyers hopes in play today and going forward.

On the topside, the 100-bar moving average on the 4-hour chart comes in at 0.8938. It’s 100-day moving average comes in at 0.89657. Both of those levels are upside targets today and going forward into the new trading week.

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

The July Bank of Canada decision is shifting more-decisively towards a rate cut after today’s softer retail sales and PPI numbers. The market is now pricing in a 73% chance of a back-to-back cut.

Retail sales matched the +0.7% estimate for April but the May advance report showed a 0.6% decline and the March reading was revised to -0.3% from -0.2%. Add it up and it points to a weakening consumer, something that was also seen in the Canadian card data from RBC.

Inflation also appears to be slowing and today’s PPI reading of 0.0% was below the +0.5% expected. Raw materials also fell 1.0% in the month (though that follows a 5.3% climb the prior month).

It’s notable that the Canadian dollar hasn’t been weakening as BOC cut odds increase. That could be just variance in the FX market and a response to oil prices rising but I believe the BOC is behind the curve and the market could ultimately cheer effects to cut rates as there is still an opportunity for Macklem to avoid a hard landing.

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

In the kickstart video for June 21, I take a look at the three major currency pairs from a technical perspective and explain what the bias is, what the risks are, and what the targets are for each.

The EURUSD corrected up to tested 61.8% retracement of the move up from the April low at 1.07208, found willing sellers and pushed down toward the low price from last week at 1.06668 where buyers leaned. Bias remains to the downside below 1.07208 and 1.07346.

USDJPY traded to a new high and further away from the old high ceiling from June 14 and June 18 respectively in the 158.25. Staying above that level is more bullish going forward.

The GBPUSD corrected higher in the early European session, but fell short of the old floor area between 1.26748 and 1.26858 (now a topside risk/bias level). The price move down to test and break it 100 day moving average of 1.26386, but is trading above and below that level as the market digests the next move.

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

• Prior was -0.2%
• Ex autos +1.8% vs +0.7% expected
• Ex autos and gasoline +1.4%
• Motor vehicle and parts dealers -2.2%
• Food and beverage retailers +1.9%, led by grocery stores
• Alberta +3.1%, Ontario -1.0% with Toronto sales -2.5% (Toronto is weakest housing market right now)
• Preliminary May data -0.6% m/m

Yesterday, RBC reported a slump in Canadian discretionary spending in May so the soft May reading adds up. The market increasingly focuses on the advance estimate rather than the main headline.

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

• Prior month 1.5% revised to 1.4%
• Producer Prices MoM 0.0% vs 0.5% estimate
• Producer prices YoY 1.8 % vs 1.4% last month revised to 1.3%. This was the biggest year on year increase since January 2023.
• Raw material prices MoM -1.0% vs 5.5% last month revised to 5.3%. Excluding accrued energy products, the RMPI rose 2.4%
• Raw material prices YoY 7.6% vs 3.1% last month revised to 2.9%

The PPI was unchanged after four consecutive months of increases.

Details:

• Energy prices and petroleum products -3.9% (first decrease after three month-to-month increases. The declines were due to lower prices for crude oil
• Lumber and other wood products -4.9%. Softwoods fell -10.2% for the largest decrease since June 2022
• Primary nonferrous metal products, +4.3%
• Meat, fish and dairy products +1.6%
• Crude energy products fell -6.4% in May for its first decrease since December 2023.

The large YoY RMPI increase is partially explained by base effects. May 2023 showed a large decline of -5.4% which exited the equation for this month.

Ex energy and petroleum products the index rose 0.5%.

There is a little something for everyone in this report. The USDCAD is trading up and down above the 200 bar MA on the 4-hour chart at 1.3685 (currently at 1.3695).

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