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Weekly Analysis June 3rd 2024
BY Janne Muta
|June 3, 2024This could be quite an eventful week for traders, with several key economic events and data releases likely to create higher volatility. These could open new intraday and swing trading opportunities, especially should the reported numbers differ substantially from market expectations.
On Monday, 3rd June, we'll get the final S&P Global US manufacturing PMI data, expected to remain stable at 50.9, indicating steady manufacturing activity. The ISM Manufacturing PMI is forecasted to rise slightly to 49.8 from 49.2, suggesting a marginal improvement yet still indicating contraction (index remains below 50) in the sector.
On Tuesday, traders' attention will shift to the Swiss CPI month-over-month data, anticipated to rise to 0.4% from 0.3%, indicating moderate inflationary pressures in Switzerland. In the US session, we'll get the US JOLTS Job Openings report. Data is expected to show a slight decrease to 8.40 million from 8.49 million and will also be closely monitored as it could give clues on Friday's employment report.
Wednesday will see Australia's GDP quarter-over-quarter, projected to remain at 0.2%, reflecting steady yet modest economic growth. This would be the 10th consecutive quarter of economic growth if the number is positive. In the US, the ADP Non-Farm Employment Change is yet another closely followed indication of the health of the US jobs market. The report is forecasted to show a decline to 175K from 192K. Another key data point on Wednesday is the ISM services PMI reading. The index is expected to improve to 51.0 (49.4 prior) after declining earlier this year.
The most significant event on the day will be the Bank of Canada's rate decision. Analysts expect to see a 25 bp cut even though Governor Macklem has indicated a cautious approach towards cutting the overnight rate, emphasising patience. According to Scotiabank, he has highlighted the necessity of waiting for "months" of consistent evidence of softened core inflation before considering a rate cut. In Macklem's view, hasty decisions might undermine the credibility of the BoC's forward guidance.
On Thursday traders' focus will be on the European Central Bank, which is expected to cut its main refinancing rate from 4.50% to 4.25%. This decision, largely anticipated by the market, will be accompanied by President Lagarde’s press conference, which will provide further guidance on the central bank's future policy path. Additionally, the US Initial Unemployment Claims are forecasted to drop slightly to 215K from 219K.
Friday will be particularly busy with crucial employment data releases from both Canada and the US. The US Non-Farm Payrolls is projected to increase slightly to 185K (175K prior), while the unemployment rate is expected to remain steady at 3.9%. Additionally, US average hourly earnings are anticipated to increase by 0.3% month-over-month, up from 0.2%.
EURUSD
EURUSD created a weekly higher reactionary low in April and rallied almost 300 pips before the 1.0885 resistance level moved the market into a profit-taking mode resulting in a two-week consolidation. Last week we noted that the market could move down to the 1.0790 level in the case of EURUSD weakness. The level was tested and the buyers came in rallying the market once again. However, the market has since created a lower high in the 8h chart suggesting weakness. This suggests we might see a retest of Thursday's low at the 1.0788 level and possibly a push below it. So it looks like there is short-term weakness ahead and a move down to the 1.0750 - 1.0765 range would not be surprising. Alternatively, if the EUR bulls are prepared to defend levels above the 1.0790 we could see EURUSD trading through the 1.0885 resistance level. A decisive break above the level would open the way to 1.0930.
GBPUSD
GBPUSD has lost some upside momentum after trending higher for several weeks. Last week, the market created a weekly loss of momentum candle below the 1.2803 resistance level and could now be in the process of creating a lower reactionary high in the daily chart at 1.2766. This suggests the nearest support level at 1.2675 could break. If the level is violated, look for a move down to 1.2650 and then perhaps to 1.2620 or so. Alternatively, above the 1.2675 level, a move to 1.2820 could be likely.
Nasdaq 100
Nasdaq finished the day strong on Friday after the PCE release showed inflation could be easing. The market created an exhaustion candle that could be a sign that the down move is over and the technology index might be soon ready to rally higher. At the time of writing this, the market is trying to push above a 4h resistance level at 18,608. If it fails, look for a move down to 18,500. Alternatively, above the 18,608 level, we might see a rally to 18,640 and then perhaps to 18,800 if the upside momentum is sustained.
This weeks high impact market events
The following economic events and data releases have the potential to cause considerable price movements, thereby offering you both opportunities and risks. Stay informed and leverage our economic calendar to access real-time data and analysis as these key events unfold.
All times are GMT+3
Monday 3rd June
| Time | Currency | Event |
| 4:45 PM | USD | Final Manufacturing PMI |
| 5:00 PM | USD | ISM Manufacturing PMI |
Tuesday 4th June
| Time | Currency | Event |
| 9:30 AM | CHF | CPI m/m |
| 5:00 PM | USD | JOLTS Job Openings |
Wednesday 5th June
| Time | Currency | Event |
| 4:30 AM | AUD | GDP q/q |
| 3:15 PM | USD | ADP Non-Farm Employment Change |
| 4:45 PM | CAD | BOC Rate Statement |
| CAD | Overnight Rate | |
| 5:00 PM | USD | ISM Services PMI |
| 5:30 PM | CAD | BOC Press Conference |
Thursday 6th June
| Time | Currency | Event |
| 3:15 PM | EUR | Main Refinancing Rate |
| EUR | Monetary Policy Statement | |
| 3:30 PM | USD | Unemployment Claims |
| 3:45 PM | EUR | ECB Press Conference |
Friday 7th June
| Time | Currency | Event |
| 3:30 PM | CAD | Employment Change |
| CAD | Unemployment Rate | |
| USD | Average Hourly Earnings m/m | |
| USD | Non-Farm Employment Change | |
| USD | Unemployment Rate |
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DISCLAIMER: TIO Markets offers an exclusively execution-only service. The views expressed are for information purposes only. None of the content provided constitutes any form of investment advice. The comments are made available purely for educational and marketing purposes and do NOT constitute advice or investment recommendation (and should not be considered as such) and do not in any way constitute an invitation to acquire any financial instrument or product. TIOmarkets and its affiliates and consultants are not liable for any damages that may be caused by individual comments or statements by TIOmarkets analysis and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his/her investment decisions. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances, or needs. The content has not been prepared in accordance with any legal requirements for financial analysis and must, therefore, be viewed by the reader as marketing information. TIOmarkets prohibits duplication or publication without explicit approval.
Janne Muta holds an M.Sc in finance and has over 20 years experience in analysing and trading the financial markets.
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