Forex Market Analysis: Dollar Setups Amid Economic Woes

2024/06/05

CURRENCIES

US Dollar Setups:

• Analyzing EUR/USD, AUD/USD, and USD/CHF.
• Path for a lower Dollar as economic data deteriorates.
• Focus on EUR/USD ahead of ECB rate cut.
• Dollar bulls eye lower AUD/USD amid waning risk appetite.
• Swiss Franc advances, overheating signals flash red.

A Path for a Lower USD Comes into View as Data Deteriorates:

• Notable decline in US economic data.
• GDP now forecast shows massive turnaround in Q2 growth.
• Disinflation narrative returns with April’s CPI and PCE data.
• Accumulation of weaker-than-expected data observed.

EUR/USD in Focus Ahead of the Highly Anticipated Rate Cut:

• ECB gearing up for first rate cut.
• Market reaction likely muted, attention on path of rate cuts.
• EUR/USD attempting bullish breakout, conviction lacking.
• Challenges to EUR/USD downside, key support levels.

Swiss Franc Advances at Pace but Overheating Signals Flash Red:

• USD/CHF plummets, bearish setup.
• Immediate threat from 200-Day SMA and RSI oversold territory.
• SNB Chairman dentifies weaker Franc as risk to inflation outlook.
• USD/CHF moving lower, potential entry points awaited.

Dollar Bulls Eye Lower AUD/USD as Risk Appetite Wanes, Iron Ore Prices Ease:

• AUD/USD may provide opportunities amid waning risk appetite.
• Metals struggle to find bullish momentum, iron ore prices decline.
• AUD/USD eases lower, key support levels to watch.

STOCK MARKET

US job market hits milestone on long, strange trip back to pre-pandemic normal:

• Beveridge curve: A wonky economic chart reaches pre-pandemic levels.
• Federal Reserve Governor Christopher waller’s insights validated.
• Job openings and unemployment rate relationship.

Not a marquee concept:

• Significance of the beveridge curve.
• Shifts during the pandemic and return to pre-crisis levels.
• Further progress on inflation and the last mile.

Job openings to unemployed:

• Economic reopening and surge in job openings.
• Impact of the health crisis on labor supply.
• Realignment between worker demand and availability.

Quits Rate:

• Pandemic’s influence on labor market dynamics.
• Historic reshuffling of the labor market.
• Stabilization of the quits rate and implications.

Unemployment rate:

• Sustainable unemployment rate for stable inflation.
• Comparison of pre-pandemic and current unemployment trends.
• Factors affecting labor market functionality.

Monthly payroll growth:

• Anticipation of May job growth data.
• Impact of population growth on job requirements.
• Sustainable job growth rates and post-pandemic realignment.

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