Today's analysis: USDJPY Forecast Bearish Outlook as Overbought Conditions Signal Potential Decline

Product:XAU/USD

Prediction: Decrease

Fundamental Analysis:

Gold prices have dropped nearly 1%, falling below $2300. Analysts say the sharp rise in U.S. Treasury yields has strengthened the US dollar, hurting gold prices. The 10-year U.S. Treasury bond yield hit a two-week high, and the dollar reached its highest level in almost two months, making gold more expensive for other currency holders. Ahead of Friday's U.S. PCE price index release, gold prices fell over 0.91% on Wednesday due to the stronger dollar and higher U.S. Treasury yields.

Technical Analysis:

XAU/USD have fallen below the support level of $2300. If prices stay below this level, they might drop to $2277, the low point from May 3, and then to $2222, the high point from March 21. On the other hand, if gold prices go back up to $2350 per ounce, they could aim for the key resistance level of $2387 per ounce, the high point from June 7, and then challenge $2400 per ounce.

Product: EUR/USD

Prediction: Increase

Fundamental Analysis: 

The euro, which on Wednesday similarly fell to its weakest level since the beginning of May, was last 0.01% higher at $1.0680.The common currency was on track to lose roughly 1.5% for the month, weighed down by political turmoil in the euro zone in the lead up to France's snap election set to begin this weekend. Market participants closely monitor the situation, with particular attention on two leading factions: Marine Le Pen's far-right National Rally and the leftist New Popular Front alliance as concerns about the next steps in government policies could drive some volatility, he says. The 10-year OAT yield rises 4.5 basis points to 3.166%, while the 10-year OAT-Bund yield spread widens 2.5 basis points to 73.5 basis points, according to Tradeweb. The euro fell 0.4% to $1.0672.

Technical Analysis:

All the important news data yesterday in the American session were worse than expected, but despite this, the price continued to decline to the 1.07000 level. Our target is the return to the 1.07500 zone, and if the price remains strong, 1.07750. We see the price touching the support level of 1.06673 and bouncing off it. Therefore we see this as a strong support area where we can place our buy orders with profit taking levels at 1.07632 and 1.07929.

Product: USD/JPY

Prediction: Decrease

Fundamental Analysis:

The USD/JPY increased to $160.68, the all-time high. Japan's retail sales data surprised with a 3% year-on-year growth in May, while 2% was expected. However, last quarter's retail trade growth rate was revised down from 2.4% to 2.0%. The larger-than-expected drop in retail sales might show the impact of the yen's depreciation on private consumption, as a weaker yen raises import costs, affecting consumer prices and household spending. The Bank of Japan might need to take more active measures to respond to U.S. Treasury yield trends.

Technical Analysis:

If the USD/JPY rises above Wednesday's high of $160.872, it might reach $162. Conversely, if it falls below $160, the 50-day moving average might come into play. Falling below the 50-day moving average could lead bears to target the support level at $151.685. The 14-day RSI is 70, indicating that the USD/JPY is in the overbought zone, and Wednesday's high of $160.872 might increase selling pressure.

Product: BTC/USD

Prediction: Increase

Fundamental Analysis: 

Large Bitcoin investors, colloquially known as whales, have been quietly accumulating the flagship cryptocurrency as its price seemingly starts to recover from a recent drawdown that saw it hit a low just above the $58,000 mark.

According to data shared by on-chain analytics firm IntoTheBlock, holders who control at least 0.1% of Bitcoins total supply have added 7,130 BTC worth around $436 million to their wallets in a single day amid the price drop.

This buying activity is reflected in the Large Holders Netflow'' metric, which tracks the net movement of Bitcoin into and out of wallets associated with these major investors. IntoTheBlocks definition of large Bitcoin holders – those with at least 0.1% of the cryptocurrency supply – means holders with at least 19,700 BTC, or around $1.2 billion.

Technical Analysis:

Bitcoin entered oversold territory after dipping below $62,000 according to Martinez, but the cryptocurrency kept on dropping to trade at little over $58,000 before recovering, and is now changing hands for $61,100.

Intriguingly, past instances of the RSI reaching oversold levels have been followed by significant price surges for Bitcoin. In August 2023, a similar RSI signal preceded a remarkable 197% rally, while in November 2022 and March 2023 oversold levels were followed by surges of 60% and 62%, respectively.

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