Forex News

TD Securities strategists focus on AUD/NZD after a sharp post-RBNZ selloff. They argue the start of the Reserve Bank of New Zealand (RBNZ) hiking cycle versus a peaking Reserve Bank of Australia (RBA) cycle should cap the prior AUD/NZD uptrend, but expect short-term consolidation. The team implements a 1m 1.18/1.2050/1.23 AUD/NZD fly, citing historical retracement patterns and limited scope for further NZD-positive surprises near term.

Fly structure for expected consolidation

"AUD/NZD fly into RBNZ hiking cycle. Last week's RBNZ meeting was a hawkish surprise."

"That being said, we expect some short-term spot consolidation after this week's selloff. We enter a long 1m 1.18/1.2050/1.23 AUD/NZD fly structure to express this view."

"AUD/NZD saw its largest one-day depreciation since July 2016. Across 13 observations of one-day selloffs (20y lookback) that exceeded the move on May 27, AUD/NZD would retrace higher over the next week 69% of the time."

"With rest of the RBNZ hiking cycle priced-in and little NZ data release in the next month, we believe it's unlikely for AUD/NZD to fall on further bullish NZD catalysts in the near-term."

"Risk to the trade is unexpected increase in AUD/NZD vol moving spot price beyond the breakeven levels for the fly structure."

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

• EUR/USD recovery halts below 1.1650 despite hot Eurozone HICP data.
• Inflation in the Eurozone accelerated to a 3.2% yearly rate in May, from 3% in April.
• The pair remains trapped within the last two weeks' range below 1.1660.

The Euro (EUR) nudges higher against the US Dollar (USD) on Tuesday, although the pair has retreated from session highs at 1.1650, trading at 1.16440 at the time of writing. The hotter Eurozone inflation figures do not change the view that the European Central Bank (ECB) will hike rates in June, while concerns about Iran’s war and strong US data keep US Dollar dips limited.

The Eurozone Harmonised Index of Consumer Prices (HICP) grew by 3.2% year-over-year (YoY) in May, up from 3% in April, according to preliminary data released on Tuesday. The core HICP rose by 2.5%, faster than April's 2.2% advance and above the 2.4% market consensus.

On the geopolitical front, a ceasefire between Israel and Hezbollah in Lebanon has lifted market sentiment on Tuesday and contributed to the moderate Euro recovery. Investors, however, remain on edge after Tehran announced the suspension of peace talks with the US on Monday due to violations of the ceasefire.

In the US, ISM Manufacturing Purchasing Managers Index (PMI) figures released on Monday showed a healthy expansion of business activity in May, with new orders increasing fast and the decline in employment slowing down. Later on Tuesday, the focus will be on the US JOLTS Job Openings data, which will set the tone for a string of US labour-market related releases this week, ending with the key Nonfarm Payrolls report on Friday.

Technical Analysis: Key resistance remains at 1.1660

EUR/USD trades at 1.1642, holding a broadly neutral near-term stance as it consolidates near the top of the recent trading range. The Relative Strength Index (RSI) shows a balanced momentum, while the Moving Average Convergence Divergence (MACD) has slipped marginally below zero, hinting that upside attempts may continue to meet supply as price approaches higher levels.

The technical picture is little changed, with Euro bulls capped below the mentioned range top, at 1.1660 (May 18, 27, and 28 highs). Above here, the next targets are the May 14 high, at 1.1720, and May's peak, in the 1.1790 area. Bearish attempts, on the contrary, are likely to find support at Monday's lows, near 1.1610, ahead of the range bottom, in the 1.1575 area.

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

UOB’s Quek Ser Leang and Lee Sue Ann describe EUR/USD as neutral after Monday’s reversal from 1.1606 to close at 1.1630. They expect the pair to consolidate intraday between 1.1610 and 1.1660, while the broader 1.1590–1.1685 range remains in force. On a multi‑week horizon, they flag building downside momentum, with a break of 1.1540 potentially opening the way toward 1.1410.

Sideways now but downside risk building

"24-HOUR VIEW: EUR reversed its initial sharp drop to 1.1606 yesterday, as it rebounded and closed 0.25% lower at 1.1630. Given the brief drop, there has been no significant increase in downward momentum. Today, instead of continuing to decline, EUR is more likely to trade in a range between 1.1610 and 1.1660."

"1-3 WEEKS VIEW: Our most recent narrative was from last Monday (25 May, spot at 1.1620), when we highlighted that EUR “is neutral now, and it is likely to trade between 1.1590 and 1.1685.” We continue to hold the same view for now."

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

Rabobank’s Senior Macro Strategist Bas van Geffen highlights that Brent futures near the mid-$90s per barrel, down from a recent peak of $108, still reflect only a relatively optimistic scenario for the Iran conflict. A prolonged disruption in the Strait of Hormuz could keep Oil markets tight, drive input costs higher and sustain inflationary pressure.

Hormuz disruption and Oil price risks

"Financial markets have continued to trade a relatively optimistic scenario for the Iran war, which may not fully reflect the potential for physical shortages around the globe – especially if the situation in the Middle East lasts much longer, or if tensions flare up again. At the time of writing, near-term Brent futures are trading around $96/barrel."

"The Strait of Hormuz has effectively been closed for several months now, and the balance of risks is skewed towards a longer closure. The first signs of the inflationary effects have started to manifest already, and a more protracted conflict would probably add to these price pressures."

"Our global strategist now assumes that the Strait of Hormuz remains out of normal operation for up to three more months. Even if the US and Iran agree to extend the ceasefire, this would not resolve the conflict."

"So, at best, an extended ceasefire would lessen the near-term tail risks – although both sides have already violated the current armistice. At the same time, it arguably increases the medium-term risks for the global economy. The longer the conflict remains unresolved, the longer Hormuz will effectively remain closed – putting more strain on supply chains. And if negotiations fail and tensions were to re-escalate in a couple of months, this will happen against a backdrop of further depleted fossil fuel supplies."

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

DBS Group Research’s Philip Wee highlights that USD/JPY is again trading near 160, keeping markets wary of potential Japanese authorities’ intervention and a possible 25 bps rate hike by the Bank of Japan (BoJ) to 1% at its June meeting. Governor Ueda’s recent rhetoric on the weak Japanese Yen (JPY) and low real rates supports gradual policy normalization over the coming weeks.

Yen under pressure as BoJ eyes hike

"USD/JPY is near 160 again, keeping markets alert for more currency interventions and a 25-bps hike to 1% by the Bank of Japan at its June 16 meeting."

"BoJ Governor Kazuo Ueda’s keynote address on June 3 will provide the final policy cues before the rate announcement."

"Ueda has become more vocal about the JPY’s depreciation driving up import costs, stressing that real interest rates remained historically low, two factors supporting more rate normalization."

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

Silver prices (XAG/USD) rose on Tuesday, according to FXStreet data. Silver trades at $76.37 per troy ounce, up 2.00% from the $74.87 it cost on Monday.

Silver prices have increased by 7.43% since the beginning of the year.

The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, stood at 59.31 on Tuesday, down from 59.90 on Monday.

(An automation tool was used in creating this post.)

• The Indian Rupee trades calmly against the US Dollar, while oil prices have recovered due to US-Iran deal uncertainty.
• US-Iran negotiations appear to have halted due to the exchange of attacks between Israel and Lebanon.
• Investors await the US JOLTS Job Openings data and the RBI policy.

The Indian Rupee (INR) trades almost flat against the US Dollar (USD) during India's afternoon trading hours on Tuesday. The USD/INR pair flattens around 95.00, while the Indian Rupee’s outlook has become uncertain as oil prices have bounced back due to fresh concerns over the United States (US)-Iran deal.

As of writing, the WTI Oil price trades 1.25% lower to near $90, but recovered strongly by over 4.5% on Monday. Theoretically, currencies from economies, such as India, which rely heavily on oil imports to meet their energy needs, tend to underperform when oil prices recover.

US-Iran negotiations toward a deal have been halted

Iran's Tasnim News agency reported on Monday that members of the negotiating team of Tehran have stopped message exchanges with the US through mediators in protest against attacks on Lebanon.

Iran’s Parliament Speaker Mohammad Bagher Ghalibaf also said a post on X that the US naval blockade and war crimes in Lebanon are clear evidence of US noncompliance with the ceasefire. Separately, Iranian Foreign Minister Seyed Abbas Araghchi warned the US and Iran of serious consequences if there were military actions on all fronts, including Lebanon.

Meanwhile, US President Donald Trump has calmed market nerves by expressing confidence, in an interview with ABC News, that an agreement with Iran to extend the ceasefire and reopen the Strait of Hormuz over the next week, adding he had quickly resolved a diplomatic "glitch" that threatened to derail progress.

After threats of consequences to the US and Iran, President Donald Trump stated in a post on Truth Social that the exchange of attacks between Israel and Lebanon has been stopped.

RBI’s policy awaited

This week, the Reserve Bank of India’s monetary policy announcement on Friday will be the key trigger for the Indian currency. The RBI is almost certain to hold the Repo Rate steady at 5.25% and guide a hawkish stance on the monetary policy outlook, as elevated energy prices have prompted inflationary pressures. Investors will also focus on commentary from RBI Governor Sanjay Malhotra regarding the economic outlook in the wake of the Middle East crisis.

FIIs remained net sellers on first day of June

Foreign Institutional Investors (FIIs) remained net sellers on the first day of June, offloading their stake worth Rs. 3,911.68 crore in the Indian stock market. Overseas investors have been paring their stake for a long time. Meanwhile, the Middle East tensions-driven energy supply shock has raised concerns over India Inc.'s projected earnings.

US JOLTS Job Openings data awaited

In Tuesday’s session, investors will focus on the US JOLTS Job Openings data for April, which will be published at 14:00 GMT. The JOLTS Job Openings data will provide cues regarding the job demand, information that influences the Federal Reserve’s (Fed) monetary policy expectations.

The data is expected to show that US employers posted 6.82 million fresh jobs, close to the March reading of 6.866 million.

Technical Analysis: USD/INR continues to face selling pressure above 20-day EMA

USD/INR trades almost flat at around 95.00, keeping a mildly bearish near-term tone as it holds just under the 20-day Exponential Moving Average (EMA) at 95.38. The pair has slipped back from recent highs, and the inability to reclaim the short-term EMA suggests upside attempts are being capped, while the Relative Strength Index (14) near 49.5 hints at fading momentum and a more balanced, consolidative backdrop rather than strong directional pressure.

On the topside, immediate resistance is located at the 20-day EMA around 95.39, and a daily close above this barrier would be needed to ease the current downside bias and reopen the path toward the May 28 high at 95.67. Looking down, the pair could decline towards 94.00 if it drops below the May 29 low at 94.46.

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

ING’s Warren Patterson and Ewa Manthey note that Copper prices in New York and London have risen ahead of a key US tariff decision. The Commerce Department is considering phased import duties starting at 15% in 2027, widening the US price premium and drawing more shipments to US ports. They argue that ongoing tariff uncertainty is underpinning market sentiment.

US tariff review underpins Copper

"Copper prices in New York and London rose yesterday ahead of the US administration’s decision on potential import tariffs."

"The Commerce Department previously deferred immediate duties."

"It proposes phased tariffs beginning at 15% in early 2027, a plan now under review with an updated recommendation expected by the end of June."

"Anticipation of this decision has widened the US price premium, prompting increased shipments to US ports."

"Tariff uncertainty is likely to support market sentiment."

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

Eurozone preliminary Harmonized Index of Consumer Prices (HICP) data for May has come in at 3.2% year-on-year (YoY), as expected, higher than the April reading of 3%. In the same period, the core HICP – which excludes volatile components like food, energy, alcohol, and tobacco – arrived at 2.5%, higher than 2.4% estimated and the previous reading of 2.2%. On a monthly basis, the headline and the core HICP rose moderately by 0.1% and 0.3% respectively.

The Euro (EUR) appears to have reacted negatively to the Eurozone flash inflation data for May, which has accelerated on an annualized basis, but has cooled down significantly month-on-month (MoM). As of writing, EUR/USD drops to near 1.1640, but is still marginally up from Monday’s closing price at 1.1631.

What do high Eurozone core HICP data means for the Euro?

Eurozone inflation was anticipated to accelerate as energy prices have remained elevated due to the restricted energy flow through the Strait of Hormuz. Still, the higher-than-expected reading in core inflation is expected to bolster expectations for an interest rate hike by the European Central Bank (ECB) at its policy meeting next week.

Generally, expectations of an interest rate hike by the ECB bode well for the Euro.

Lately, various ECB officials have highlighted the need to tighten monetary conditions in the near term to contain escalating inflation expectations.

Technical Analysis: EUR/USD remains sideways

EUR/USD trades marginally higher at around 1.1641 at press time. The pair holds a mildly bearish near-term bias as the upside remains capped by the 20-day exponential moving average (EMA), which is at 1.1656.

The Relative Strength Index (RSI) at 46.7 sits just below the neutral 50 line, hinting at a lack of strong upside momentum and reinforcing the notion of a corrective, rather than impulsive, tone.

On the topside, immediate resistance is located at the 20-day EMA around 1.1656, and a daily close above this barrier would be needed to ease downside pressure and open the door for a more meaningful recovery towards the May 29 high at 1.1685. Looking down, the pair could slide towards 1.1500 if it breaks an almost three-week-long consolidation on the downside below the May 21 low at 1.1576.

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

OCBC's strategists Sim Moh Siong and Christopher Wong shift their British Pound (GBP) view from bearish to neutral, citing easing fiscal concerns and attractive carry that have helped GBP recover from early May losses. Despite soft United Kingdom (UK) data and ongoing political risks, including potential Labour leadership changes, the bank expects stretched short positioning and possible lower Oil prices to limit GBP downside.

Neutral stance on the Pound

"We shift from bearish to neutral on the GBP and revise our end-2026 EUR/GBP forecast to 0.87 from 0.89."

"Politics remains a key focus. A potential win for Andrew Burnham at the 18 June Makerfield by-election could trigger a Labour leadership contest in late August or early September. Burnham is widely seen as a likely successor to Prime Minister Keir Starmer according to recent YouGov polling."

"Despite soft UK data and ongoing political risk, GBP has recovered from early May losses."

"Easing fiscal concerns, supported by Burnham’s commitment to discipline, and relatively attractive carry have helped stabilise the currency."

"Positioning also matters. Elevated GBP shorts could unwind further, especially if oil prices ease, which tends to support risk-sensitive, oil-importing currencies like GBP."

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