Forex News

MUFG’s Lloyd Chan expects the upcoming US nonfarm payrolls release to show a moderate slowdown after April’s 115k gain, with consensus at 88k already reflecting soft expectations. He notes the Dollar Index remains firm above 99.00 as net long Dollar positioning has rebuilt since mid-May, but argues downside NFP risks are largely priced, keeping the overall risk profile balanced.

Balanced NFP risks cap Dollar upside

"US nonfarm payrolls (NFP) is due later today alongside the unemployment rate and wage growth. DXY remains firm above the 99.00 level, with markets rebuilding net long USD positioning since mid-May after a short period of modest unwinding. Positioning is not particularly stretched, while the dollar itself remains softer than what positioning would suggest."

"Following April’s 115k print, the upcoming NFP release could show a moderate slowdown rather than a sharp deterioration. With consensus already soft at 88k, downside risks are broadly priced, leaving the overall risk profile balanced in our view. Initial jobless claims rose to around 215k in on average in May from 208k in April."

"The ADP employment only improved modestly to +122k in May from +105k in April. Meanwhile, the ISM services employment index was broadly unchanged at 47.9 in May from 48.0 in April."

"Given the balanced risk backdrop, a modest in-line or slightly soft print is unlikely to trigger a meaningful hawkish repricing of Fed expectations. The bar for a sustained USD rally on the back of NFP remains high."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Ghose at Commerzbank expects Turkey’s May Consumer Price Index (CPI) to show only modest month-on-month moderation after April’s spike, keeping inflation momentum uncomfortably high. He focuses on seasonally adjusted monthly data rather than year-on-year rates and warns that the CBRT’s reluctance to hike, combined with renewed Lira depreciation, raises the risk of faster currency losses and further inflation pressure in coming months.

CBT reluctance heightens depreciation risk

"Turkey’s statistics office will release May CPI and PPI data today. Estimating from consensus year-on-year forecasts, analysts expect a slight moderation in the month-on-month increase (seasonally-adjusted) after April’s spike, but even so, May would still mark one of the stronger monthly readings of 2026 (the consensus forecast translates to 2.5%m/m sa)."

"April had already shown that inflation is running elevated – and the root cause from higher commodity and energy prices has not disappeared – precisely why we argued in our preview for March data that exact inflation readings will be somewhat beside the point in coming months."

"That remains the key point now. A modest easing in May’s seasonally adjusted month-on-month rise would not tell us that underlying disinflation is back on track. It would merely follow an exceptionally strong April print and still leave inflation momentum running at an uncomfortably high pace."

"This is especially relevant because CBRT continues to send the signal that it does not want to hike rates. That stance was already problematic when inflation momentum was merely sticky; it is more problematic now that the lira has begun to show faster depreciation"

"If policymakers keep implying that no rate hike will be considered, there is an increased chance that lira depreciation will accelerate further in the coming months, adding yet more pressure to inflation."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• The Indian Rupee gains against the US Dollar after the RBI's monetary policy announcement.
• RBI Governor Malhotra leaves Repo Rate steady at 5.25%, raises inflation projections and lowers growth forecasts.
• Investors await the US NFP data for fresh cues regarding the Fed’s monetary policy outlook.

The Indian Rupee gains against the US Dollar (USD) after Reserve Bank of India’s (RBI) monetary policy decision; with the USD/INR pair sliding to near 95.35.

As expected, the RBI has left its Repo Rate steady at 5.25%, with warning that adverse implications of the extended disruption in global supply chains and higher energy prices have prompted risks both to inflation and growth. However, RBI Governor Sanjay Malhotra has stated that the headline inflation is still below the central bank’s target and the core inflation is much lower, excluding precious metals.

Regarding the monetary policy outlook, RBI Governor Malhotra has guided that it is “prudent to wait for greater clarity to emerge” and the central bank will remain “data-dependent”.

The RBI has raised retail inflation forecast for the Financial Year (FY) 2026-27 to 5.1% from 4.6% previously anticipated, and has lowered GDP growth forecast to 6.6% from 6.9%.

Meanwhile, the RBI has unveiled various measures to boost foreign inflows into the economy, especially the withdrawal of taxes on interest income earned from government securities as well as on capital gains.

Geopolitical tensions to remain a key drag on Indian Rupee

Continues hostilities between Israel and Lebanon despite the United States (US)-brokered ceasefire continue to escalate US-Iran deal uncertainty.

Hezbollah chief Naim Qassem has rejected the ceasefire deal as a “farce”, warning that northern Israel will remain a target for fighters as long as Israel continues to bomb Lebanon, AlJazeera reported.

Ongoing Israel-Lebanon attacks could result in a resumption in oil prices’ rally, a scenario that will be unfavorable for currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs.

US NFP data awaited

Later in the day, investors will pay close attention to the US Nonfarm Payrolls (NFP) data for May, which will be published at 12:30 GMT. The US official employment data will influence market expectations for the Federal Reserve’s (Fed) monetary policy outlook.

The US NFP report is expected to show that employers hired 85K fresh workers, lower than 115K in April. The Unemployment Rate is seen steady at 4.3%.

Year-on-Year (YoY) Average Hourly Earnings, a key measure of wage growth, is estimated to arrive lower at 3.4% from the previous reading of 3.6%. On a monthly basis, the wage growth measure is expected to have grown 0.3% faster than 0.2% in April.

Technical Analysis: USD/INR falls below 20-day EMA

USD/INR trades sharply lower at around 95.35 at press time. The near-term tone of the pair has become uncertain as it has fallen back below the 20-period Exponential Moving Average (EMA), which is at 95.45.

The Relative Strength Index (RSI) has eased back toward the 50 area, hinting at fading upside momentum but not yet signaling a decisive reversal.

On the downside, immediate support is located at 95.00, followed by the May 7 low around 94.00. Looking up, the pair could aimd to revisit the all time high slightly above 97.00 if it manages to rise above the June 4 high at 96.30

(The technical analysis of this story was written with the help of an AI tool.)

UOB’s Quek Ser Leang and Lee Sue Ann see EUR/USD consolidating near 1.16 with momentum indicators flattening intraday, but the broader bias tilting lower. A break below 1.1590 would raise the risk of a move toward 1.1555, while over the coming months price action is expected within a 1.1555–1.1750 range, with 1.1555 viewed as more vulnerable.

Key 1.1590 and 1.1555 supports in focus

"24-HOUR VIEW: EUR declined to a low of 1.1594 two days ago. Yesterday, when EUR was at 1.1605, we indicated that “downward momentum has increased, albeit not significantly,” and we were of the view that EUR “could test the major support at 1.1590 before the risk of rebound increases.” EUR dipped to 1.1592 during the Asian session and then rebounded strongly to a high of 1.1645 before retreating to close at 1.1609 (+0.12%). Momentum indicators are turning flat, and today, EUR could trade in a range between 1.1590 and 1.1640."

"1-3 WEEKS VIEW: After holding the same view since last Monday (25 May, spot at 1.1620), wherein “EUR is neutral now, and it is likely to trade between 1.1590 and 1.1685,” we indicated yesterday (04 Jun, spot at 1.1605) that “downward momentum is increasing, and if EUR breaks and holds below 1.1590, it would increase the risk of a decline toward the significant support at 1.1555.” We added, “the likelihood of EUR breaking clearly below 1.1590 will remain intact as long as 1.1655 (‘strong resistance’ level) is not breached.” Our view remains unchanged."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

• AUD/USD could slide toward the rectangle's lower boundary near 0.7070.
• The 14-day Relative Strength Index near 45 suggests fading bullish momentum.
• The pair may test the immediate barrier at the 50-day EMA of 0.7127.

AUD/USD depreciates after registering minor gains in the previous day, trading around 0.7120 during the Asian hours on Friday. The technical analysis of the daily chart shows the pair consolidating sideways within a rectangle pattern, as neither bulls nor bears gain control.

However, the AUD/USD pair is holding a slight bearish tone as it sits beneath both the nine-day and 50-day Exponential Moving Averages (EMAs). The proximity of these EMAs just overhead suggests topside attempts are likely to face supply, while the 14-day Relative Strength Index (RSI) near 45 hints at fading bullish momentum rather than outright oversold conditions.

The AUD/USD pair may fall toward the lower boundary of the rectangle around 0.7070. Further declines would put downward pressure on the pair to explore the four-month low of the 0.6833 region, recorded on March 30.

On the upside, the immediate barrier lies at the 50-day EMA of 0.7127, followed by the nine-day EMA at 0.7147. A break above these averages would strengthen the bullish bias and support the pair to approach the upper rectangle boundary around 0.7270, followed by 0.7277, the highest level seen since June 2022, recorded on May 6.

(The technical analysis of this story was written with the help of an AI tool.)

• Gold price falls in Friday’s early European session.
• There was no sign of progress in ceasefire talks between the US and Iran, weighing on the Gold price.
• Traders brace for the US May employment report, which is due later on Friday.

Gold price (XAU/USD) attracts some sellers to near weekly low during the early European session on Friday. The precious metal remains volatile amid ongoing geopolitical turmoil. Traders will closely monitor the developments surrounding the US-Iran peace deal and the US May employment report later on Friday.

Iran’s Foreign Minister Abbas Araghchi said Wednesday that "no tangible progress" has been made in negotiations to end the Middle East war. Araghchi further stated that lines of communication with Washington were still open but warned that any attack by Israel on the Lebanese capital Beirut as part of its campaign against Hezbollah would trigger a "full-scale resumption" of the US-Iran conflict.

While Iran’s Foreign Minister stated that the negotiations had stalled, US President Donald Trump said ceasefire talks are in the “final” stages. On Wednesday, Iran fired missiles and drones at Kuwait and Bahrain, killing one person and injuring dozens at Kuwait’s main airport, after the US struck an oil tanker headed to the Islamic Republic.

A lack of progress in ceasefire talks between the US and Iran after the worst burst of violence in weeks continue to fuel concerns over inflation and expectations of elevated interest rates, which weigh on the Gold price, non-yielding asset.

“Higher inflation expectations, associated with the negative supply shocks, have pushed yields across the curve higher, kept the USD firm, and prompted markets to begin pricing in a Fed hike in late 2026,” said Bart Melek from TD Securities.

The US employment report will take center stage later in the day. The Nonfarm Payrolls (NFP) are expected to show a gain of 85,000 jobs in May, while the Unemployment Rate is projected to remain steady at 4.3% during the same period. Any signs of surprise weakening in the US labour market could undermine the US Dollar (USD) and support the USD-denominated commodity price in the near term.

XAU/USD daily chart

Gold keeps the bearish vibe in near term 

In the daily chart, XAU/USD holds in a bearish near-term bias as price sits under the 100-day Moving Average and below the Bollinger Bands middle line, keeping the broader downswing intact. The Relative Strength Index (RSI) at 40 is weak but not oversold, suggesting sellers retain control while still allowing room for further downside before exhaustion signals emerge.

On the topside, initial resistance is located at the Bollinger Bands middle band around $4,545, with the upper band near $4,715 and the 100-day MA at $4,795 forming a wider cap if a rebound extends. On the downside, the first notable support is the lower Bollinger band at roughly $4,370; a clear break beneath this zone would open the door to a deeper retracement, while holding above it would hint at scope for consolidation within the current bearish structure.
(The technical analysis of this story was written with the help of an AI tool.)