The USDJPY is back up retesting the floor area on the hourly chart

Stocks set to open

As stocks get ready to open, the USDJPY has moved back higher and retests a floor area in the 107.317-36 area.  The price has been above that area since May 19. Earlier today, momentum took the price below that area on its way toward the 50% retracement of the move up from the may load to the May high. That midpoint level comes in at 107.03. The low for the day reach 107.061 so far.

Stocks set to open

Decision time for the buyers and sellers intraday. It is the break level to sell against and back to the downside, or higher from here after testing the 50% retracement?

US stocks are opening mixed with the NASDAQ up marginally but the S&P and Dow are trading lower.

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EUR/GBP climbs to fresh two-month high above 0.9000

EUR/GBP buyers make a break for it

EUR/GBP D1 29-05

This is what is weighing on the pound on the session, as we see cable also ease towards the 1.2300 level currently. EUR/GBP has been a little stubborn over the past few sessions near the 0.9000 handle but buyers are finally finding a way through.

The move higher here sees price climb to fresh highs above 0.9000 since 27 March.

A key spot to watch now will be the 38.2 retracement level @ 0.9035, which may offer some resistance to the pair in the sessions ahead.

The month-end Buba demand may be at play here but technically, it has been hard to fight a break in EUR/GBP since the move above the 7 April high @ 0.8865.

The risk for buyers now is if they disappoint and fail to hold a daily move above 0.9000.

Otherwise, there is still reason for the pair to keep chasing a move higher with the pound set to face Brexit risks in the coming weeks.

That said, the euro does have its own risks to be mindful about with the EU recovery fund proposal still far from being a guarantee at this stage.

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GBPUSD has held support. That's the bullish view.

The topside is meh....

The GBPUSD is trading near highs for the day but I can't say the price is racing higher. The pair is well below the highs from yesterday at 1.23528 and Tuesday at 1.23622.  The high price today just reached 1.23037.

The topside is meh....

What can be said definitively from a technical perspective is that the low from yesterday stalled right at a lower trend line (see red circle 4).  Bullish. The low today stalled between the 100 and 200 hour MAs (blue and green lines). That is bullish too.  The bulls/buyers have more control.

So longs/buyers remain more in control. Can the price continue the squeeze higher from here?  We will see. The highs from yesterday at 1.23528 and Tuesday at 1.23622 are targets on more momentum.

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AUDUSD tests 200 day MA. At new session highs. Key barometer for buyers and sellers.

The 200 day MA was broken on Tuesday and Wednesday only to fail.  

The AUDUSD is up testing the 200 day MA at 0.66535.  Low risk focused traders may look to lean against the level as risk could be defined and limited (with stops if the price starts to trade more comfortably above the MA level).

AUDUSD tests the 200 day moving average

The last two trading days have seen moves above the MA level only to fail. Is the third time the charm?   The MA is a key barometer for both the buyers and the sellers. 

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Cable slips to test key near-term levels as BOE Saunders reaffirms dovish take

Saunders argued that it is better for the BOE to ease too much than too little

GBP/USD H1 28-05

There was no major mention of negative rates, but Saunders pretty much confirmed more QE to follow at the June meeting with scope for further stimulus measures should they be needed, whilst painting a very subdued picture on the inflation outlook.

On the case of the latter, Saunders acknowledged risks of the UK falling into the 'lowflation' trap and that indicates that these easing measures will stay in place for an extended period of time - since inflation won't pick up any time soon amid the coronavirus crisis.

Cable has eased by about 20 pips from 1.2255 to 1.2234, testing its key hourly moving averages between 1.2232-43 currently.

Keep above these levels and buyers will still maintain near-term control in the pair but break below and sellers will start to try and explore further downside potential.

There is still some support from the lows yesterday just above 1.2200 but a break below that opens up the way for potential retest of the support region around 1.2165-70.

I don't think what Saunders mentioned is anything that stands out all too much, but it continues to ring the echo chamber of a more dovish BOE and highlights that the pound still has a considerable amount of headwinds - not to mention Brexit risks in the coming weeks.

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Boeing announced involuntary layoffs of 6770 US employees

More layoffs at Boeing

More layoffs at Boeing

Boeing did a round of 5500 voluntary layoffs and now it's moving to involuntary layoffs. In addition to this, the company says it will layoff 'several thousand' others in the coming months.

Layoff announcements remind me of the financial crisis when there was day-after-day of announcements. The huge wave at the start was all about the virus, but now it's about the economic impact and that's a different thing.

Shares of BA like this latest announcement but I'm curious to see how the broader market handles the idea of layoffs. 6700 fewer employees to pay is good for Boeing stock but 6700 families without a paycheck isn't a good news for anyone else.

Overall the company plans to cut 10% of workers.

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Gold extends decline in third day of losses

Gold falls to the low of the day

Gold falls to the low of the day

Gold sank through $1700 and continued down to a session low of $1694 in a $16 decline. It's the third day of selling this week and is being helped along by a strong dollar today.

The drop wipes out the mid-may rally and puts gold back in the middle of the April range.

The better risk tone and big moves in stocks are sparking flows out of gold and into risk assets. 

Technically, this looks like a false break or at the very least a retest of the old range. 

If central banks are the drivers of this rally, you have to worry about a scenario like the Bank of Israel early this week, where they upgraded growth forecasts and hinted at a time on the sidelines. I can easily see the Fed following the same playbook and that would undermine the short-term case for gold. It's the same thing on the fiscal side where the better mood will slow the appetite for spending

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The Richmond Fed and the Beige Book are on the economic calendar today

What's coming up in North American trade

The US economic calendar features the Richmond Fed at 10 am (1400 GMT) and the Beige Book at 2 pm ET (1800 GMT). 

The risk trade, political headlines and Hong Kong are going to be the focus.

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USDJPY reverses higher and tests 100 hour MA

Tests 50% of the day's range too

The USDJPY has reversed higher after a run below its 200 hour moving average at 107.493 failed. The low for the day did bottom near the 50% retracement of the move up from the May 13 low at 107.409. The low for the day reached 107.395 just a pip or 2 away from that 50% retracement level.  So the combination of the support holding at the 50% and the market

price moving back above its 200 hour moving average gave the buyers more confidence. 

Tests 50% of the day's range too

The run to the upside has ran into its own resistance. The 100 hour moving average at 107.636 and the midpoint of the days trading range at 107.656 as so far stalled the run higher. The high price just reached 107.652 between those 2 levels. It would take a move back above each to open up the upside move even more.

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GBPUSD looks toward its 50% retracement of the move down from the April high

Some easing of concessions from the EU helping

The USD is racing lower which is helping the GBPUSD,  but there was also the news that the EU may drop 'maximalist' approach on fisheries in UK talks which is helping to propel the pair sharply higher.   There is bit of a squeeze higher in the pair and there is room to roam.  

Some easing of concessions from the EU helping

Technically, the pair moved above the 200hour MA in the Asian session and stayed above. In the early European session, the price moved above the 1.2239-50 swing area (see yellow area) and the swing high from last week at 1.22966.  

The last run has now taken the price above the May 12 high and the pair looks toward the 50% of the move down from the April 30 high at 1.23577.  The 50% is a key barometer for the bulls and the bears. Get above and tilts the overall trading bias more in favor of the buyers.  

Taking a broader look at the daily chart below, the pair today, re-broke above swing lows from April 21 at 1.2240 and May 7 at 1.22653 respectively.  The price traded above and below those levels over the last few weeks, but the momentum above last week, failed. Today is a more serious move.

Also of note from the chart is that if there is good news on Brexit with a global re-opening (including travel), there is room to roam on the topside. The 50% of the move down from the December 2019 high comes in at 1.24611 level.  Get back above that level and it opens the door toward the falling 100 day MA at 1.26018 and the 200 day MA at 1.26538.  The 200 day MA stalled the rally twice in April.  

GBPUSD on the daily.

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