Today's analysis: USDJPY Set for Potential Increase Amid Intervention Risks and Bullish Trends

Product:GBP/USD

Prediction: Decrease

Fundamental Analysis: 

The GBP/USD pair looks set for an active Friday. Key UK data will be released during the European session, and US PMI surveys will wrap up the week. The Bank of England (BoE) kept rates at 5.25%, holding off on rate cuts, which disappointed some market expectations. The BoE's decision was anticipated, but their comments on inflation and the labour market left the pound's value uncertain. They are committed to restrictive policies while the labour market remains tight. Weak US economic data, especially higher-than-expected jobless claims, dampened investor confidence on Thursday. GBP traders are now focused on Friday's UK Retail Sales and PMI data. Retail sales are predicted to rebound by 1.5% in May, and PMIs are expected to show slight improvements. US PMIs for Manufacturing and Services are expected to decline slightly.

Technical Analysis: 

The pound is trading near the lower limit of an ascending channel against the dollar, with the RSI around 50, indicating a lack of clear momentum. Key support is at 1.2700, coinciding with the 200-period SMA and the channel's lower bound. A break below could lead to a move towards 1.2640 (100-day SMA) and 1.2600 (psychological level). On the upside, resistances are at 1.2740 (100-period SMA), 1.2800 (psychological level), and 1.2850 (end of the latest uptrend). The price action suggests a consolidation phase, with upcoming data and events likely to provide the next directional cue for the pair.

Product: EUR/USD

Prediction: Decrease

Fundamental Analysis: 

The EUR/USD exchange rate declined after failing to maintain gains above 1.0750. However, financial markets showed a positive sentiment, limiting the US dollar's strength. Meanwhile, an ECB policymaker indicated that the planned interest rate cuts for 2024 align with the bank's projections and suggested the possibility of quarterly policy decisions. Economic data from the US showed a rise in jobless claims, declines in building permits and housing starts, and a lower-than-expected manufacturing survey. Investors await the release of the Eurozone's preliminary June consumer confidence index.

Technical Analysis: 

From a technical standpoint, the EUR/USD shows room for further decline. The daily chart indicates the pair is trading near its intraday low and below its moving averages, with the 20-day SMA likely to cross below the flat 100 and 200 SMAs, signalling increased selling pressure. Technical indicators also point to a bearish momentum.

In the near term, the EUR/USD appears neutral to bearish. The 100-day SMA has crossed below the 200-day SMA, maintaining a bearish slope, while the pair is trading below a flat 20-day SMA. Technical indicators are marginally higher but still within negative territory. Support levels are at 1.071 and 1.0665. The pair would need to break above 1.0760 to confirm a bullish continuation, which seems unlikely, and a stronger resistance level maintains at 1.081.

Product: XAU/USD

Prediction: Increase

Fundamental Analysis: 

Gold prices have risen by 0.5% to around $2,340 as global geopolitical tensions escalate. The market mood is calm, but gold is seeing increased safe-haven demand due to rising threat levels.

Technical Analysis: 

Gold has broken the key resistance area around $2,340, near a trendline and the 50-day moving average. This level is a technical crossroads that could determine the precious metal's future direction.

A decisive break above this resistance would invalidate a bearish head-and-shoulders pattern, signalling a continuation of the broader uptrend towards the mid $2,380s. However, if gold price gets back below this level could support the formation of the head-and-shoulders pattern, which often signals a trend reversal. A break below the $2,279 neckline would validate the pattern and activate downside targets. The next few trading sessions will be crucial in determining gold's near-term direction.

Product: USD/JPY

Prediction:Increase

Fundamental Analysis: 

The US dollar is trading near the zone where the Japanese government previously intervened to support the yen. Japan's top currency official has warned of unlimited resources for forex intervention against excessive currency moves.

Although the technical trend is bullish, USD/JPY is a unique case due to the high risk of market manipulation by Japanese authorities. Traders should be cautious about assuming the pair will continue its uptrend, as government intervention could disrupt the market's natural dynamics.

Technical Analysis: 

The USD/JPY pair has regained its upward momentum, breaking above the 158.25 temporary top. The choppy rise from 151.86 has resumed, with the pair now targeting a retest of the 160.20 high. However, the upside may be limited on the first attempt.

In the broader perspective, the price movements from the 160.20 medium-term top are considered a corrective pattern within the larger uptrend from 150.25. Another rally is expected to eventually break through the 160.20 level and continue the broader uptrend. That said, a decisive break below 150.87 could suggest a larger correction is underway, potentially targeting the 146.47 support level next. 

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