US stocks stabilized slightly in the futures market after Gina Raimondo, the Commerce Secretary, hinted that the government could remove the tariffs that were implemented by Donald Trump. In the statement, she hinted that steel and aluminum tariffs will keep them intact in a bid to protect American workers. Some of those items whose tariffs could be removed include household goods and other products like bicycles and furniture. The president is expected to determine what to do with those tariffs in the coming weeks. While some industries have benefited from those tariffs, others have not, and the US trade deficit has widened.
The British pound moved sideways against the US dollar as investors reacted to ongoing political drama in the UK. It is estimated that some rebel Tory members of parliament will table a vote of no confidence in the coming days. Johnson has insisted that he won’t step down over the parties that were held in Downing Street during lockdowns. The political drama is happening as the UK has a long weekend to celebrate the Queen’s Jubilee.
The economic calendar will have no major events today. Still, investors will be looking forward to a busy week. The highlights will be interest rate decisions by the Reserve Bank of Australia (RBA) and the European Central Bank (ECB). The RBA is expected to deliver its second interest rate decision of the year while the ECB will provide its guidance on its rate hike in July. Other important events to watch will be the upcoming services and composite PMIs and US inflation data.
EURUSD
The EURUSD pair is trading at 1.0716, which is slightly below last week’s high of 1.0760. The pair has moved to the 25-day moving average while the Relative Strength Index (RSI) has continued moving in a downward trend. It is also along the 61.8% Fibonacci retracement level, and it seems like it has formed a double-top pattern. Therefore, the pair will likely have a bearish breakout towards the ECB decision.
USDCHF
The USDCHF pair has been moving sideways in the past few days. It is trading at 0.9625, which is slightly above last week’s low of 0.9548. It is in a narrow channel whose upper part is at 0.9645. Also, the pair is consolidating around the 25-day and 50-day moving average while the Relative Strength Index has pointed upwards. The MACD is near its neutral point, meaning that the pair will likely have a bullish breakout.
USDJPY
The weakness of the Japanese yen continued as the USDJPY pair rose to the highest level since May 10. It has managed to move above the important resistance level at 129.43, which was the highest level on April 20. It rose above the 25-day and 50-day moving averages while the Relative Strength Index and the momentum oscillators have kept rising. Therefore, the pair will likely keep rising this week.
