In the video above, I take a look at the three major currency pairs – the EURUSD, USDJPY and GBPUSD – from a technical perspective. Both the EURUSD and the GBPUSD show similar patterns after yesterday breaking to new highs for the year only to fail shortly thereafter. That had buyers turning to sellers against the previous old five from earlier in June. The price is not running the downside with only modest declines on the day, but the failure looms in traders heads. For the USDJPY, it has fallen sharply over the last two days and has seen a solid rebound of about 0.57% trading day.
The video will show the key levels in play for each of these currency pairs bias perspective with a look at the targets and risk defining levels.
Overnight, at its June meeting, the Bank of Japan (BoJ) acknowledged that while recent hard data for April and May appeared solid, the full effects of US tariff policies have yet to materialize. Economic uncertainty remains high, especially around trade tensions and geopolitical issues in the Middle East. Japan’s economy is facing challenges, caught between transitioning to a growth-driven model and risks of stagnation, with wage increases and business investment continuing amid labor shortages. The BoJ noted that although US tariffs have not had a direct observed impact on Japan so far, downward pressures are expected, and the full extent may take time to unfold. Given the elevated uncertainty, the bank emphasized the need to maintain accommodative financial conditions by keeping interest rates low. Concerns were also raised about rising volatility in super-long-term bond yields, which could unintentionally tighten market conditions. Despite inflation and wage trends being somewhat stronger than expected, the BoJ remains cautious, aiming to support the economy while monitoring both domestic and international risks.
BOJ policymaker Naoki Tamura (hawk) noted that upside risks to Japan’s inflation outlook are increasing, with price growth accelerating more than he had anticipated back in May. While uncertainty surrounding US tariffs is beginning to clear, Tamura cautioned that the economic outlook remains difficult to predict. He emphasized that the Bank of Japan may need to act decisively if inflationary pressures intensify significantly, potentially even considering a rate hike. However, Tamura tempered his hawkish tone, clarifying that he does not currently see a need for an imminent rate increase. He stated that any future policy move would depend on how tariffs evolve and their impact on the broader economy, with no fixed timeline for the next rate hike.
Yesterday Fed Chairman Powell testified on Capitol Hill front of the House members, and admitted that a July hike would be possible if inflation were to remain tame. However he expects increases to start to show up as a result tariffs in June or July, and August which also tempers his enthusiasm a rate cut. Nevertheless is that rates are likely to come down at some point in the future. Powell will repeat his performance in front of the Senate today.
The crude oil inventory data was released late yesterday and showed:
-
Crude oil: ↓ 4.277 million barrels
-
Gasoline: ↑ 764,000 barrels
-
Distillates: ↓ 1.026 million barrels
-
Cushing: ↓ 75,000 barrels
The EIA inventory data will be released at 10:30 AM with expectations showing:
- Crude oil -0.797M
- Gasoline: +0.381M
- Distillates +0.410M
The price of crude oil is currently trading up $0.25 or 0.37% at $64.61
