Action Insight Mid-Day Report 6-6-23

Euro Down as ECB Survey Shows Falling Inflation Expectations, Aussie Staying Strong

Euro plummets broadly in today's market after a CB survey revealed significant drop in consumer inflation expectations. Sterling and Swiss Franc also recorded a generalized weakness. On the other hand, Australian Dollar held its ground as the day's strongest currency, buoyed by an unexpected interest rate hike by RBA. The Canadian Dollar followed closely, though traders remain vigilant for any surprises from BoC due tomorrow. Amidst these developments, Dollar is making modest gains, aided by a rally in treasury yields, while Japanese Yen showed slight weakness.

From a technical perspective, the main focus continues to be on the potential breakout of Dollar from its narrow range against European majors and Yen. Key levels to watch include 1.0634 support in EUR/USD, 1.2306 support in GBP/USD, 0.9146 resistance in USD/CHF, and 140.90 resistance in USD/JPY. Firm break of any of these levels could signal an early comeback for the greenback.

In Europe, at the time of writing, FTSE is down -0.03%. DAX is down -0.04%. CAC is down -0.11%. Germany 10-year yield is down -0.0198 at 2.362. Earlier in Asia, Nikkei rose another 0.90%. Hong Kong HSI dropped -0.05%. China Shanghai SSE dropped -1.15%. Singapore Strait Times rose 0.03%. Japan 10-year JGB yield dropped -0.0107 to 0.423.

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EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.0684; (P) 1.0703; (R1) 1.0731; More...

EUR/USD dips mildly after rejection by 55 4H EMA but stays above 1.0634 support. Intraday bias remains neutral and more consolidations could still be seen. On the downside, break of 1.0634 will resume the corrective decline from 1.1094. Deeper fall should then be seen to 1.0515 cluster support, 38.2% retracement of 0.9534 to 1.1094 at 1.0498. On the upside, however, above 1.0778 will resume the rebound from 1.0634 to 55 D EMA (now at 1.0829).

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EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY

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GMT	Ccy	Events	Actual	Forecast	Previous	Revised
23:01	GBP	BRC Like-For-Like Retail Sales Y/Y May	3.70%	5.20%
23:30	JPY	Labor Cash Earnings Y/Y Apr	1.00%	1.90%	0.80%	1.30%
23:30	JPY	Overall Household Spending Y/Y Apr	-4.40%	-2.30%	-1.90%
01:30	AUD	Current Account (AUD) Q1	12.3B	15.0B	14.1B	11.7B
04:30	AUD	RBA Interest Rate Decision	4.10%	3.85%	3.85%
06:00	EUR	Germany Factory Orders M/M Apr	-0.40%	3.80%	-10.70%	-10.90%
08:30	GBP	Construction PMI May	51.6	50.9	51.1
09:00	EUR	Eurozone Retail Sales M/M Apr	0.00%	0.20%	-1.20%	-0.40%
12:30	CAD	Building Permits M/M Apr	-18.80%	0.20%	11.30%	12.30%
14:00	CAD	Ivey PMI May	57.2	56.8