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[Matt Simpson @cLeverEdge]

Yen traders seem to be doing the work of the MOF for them - with another spike lower from the 160 handle on USD/JPY.

With a clear lack of volatilty on the daily chart, do the MOF even have to intervene? Markets seem cautious for now and self correcting to a point.

But a strong set of NFP figures could complicate things.

[Matt Simpson @cLeverEdge]

For now, momentum points higher on the daily chart as we head into Friday's Nonfarm Payrolls (NFP) report. Given the backdrop of shaky ceasefires and persistent inflationary pressures, I suspect the US dollar could remain bid into NFP, with traders favouring dips. Given that the jobs report has surprised to the upside over the past couple of months despite elevated inflation pressures, there is no guarantee it will miss expectations this time either.

However, a weak set of NFP figures could topple the dollar as traders price out concerns over further Fed hikes, and that could help print a lower high beneath 100.50.

US Dollar Outlook: USD Bulls Flex into NFP, AUD and NZD Slide https://t.co/GAKmMKzZ91

[Matt Simpson @cLeverEdge]

I see the potential for gold to bounce over the near term, and it made a decent attempt into Friday's close with a 2-day low-to-high range of 5.3%.

But when I look at futures and options traders, my expectations for a runaway rally are brought back in line.

Gold Outlook: Bulls Eye Rebound, Though Futures Exposure Remains Weak https://t.co/70PVABLArW

[Matt Simpson @cLeverEdge]

Interesting setup may be playing out on EUR/AUD. Similar to GBP/AUD - which rebounded yesterday - so maybe a step behind?

Euro Technical Analysis: EUR/USD, EUR/JPY, EUR/AUD https://t.co/DUMh49FU1L

[Matt Simpson @cLeverEdge]

It has been over a month since the MOF first intervened, sending USD/JPY down around 500 pips within an hour. USD/JPY has recouped most of its losses, yet futures traders have continued to pile into yen shorts.

Meh. Probably nothing...

FX Futures Positioning: US Dollar Bulls Return, Yen Bears Tease MOF https://t.co/1uTp8anM1y

[Matt Simpson @cLeverEdge]

Once again, the Australian dollar finds itself caught between opposing forces from the Middle East and interest rate expectations, although the drivers have flipped. Hopes of de-escalation in the conflict remain alive, while expectations for further RBA rate hikes have softened.

That combination could result in choppy trade with an upside bias this week. Though resistance and downside risks loom.

Australian Dollar Outlook: AUD/USD Extends Gains, But Pullback Risks Remain https://t.co/kWOcIwnqkE

[Matt Simpson @cLeverEdge]

Ultimately, how high gold could bounce - assuming it does at all, will be traced back to the latest attempts at peace via the US dollar.

And as compelling the bullish hammer around the 200-day MAs are, options traders seem cautious.

Gold Outlook: Peace Hopes Support Gold, Options Market Signals Caution https://t.co/afHgDFZKwq

[Matt Simpson @cLeverEdge]

Last trading day of the month, so price action can be fickle. Still, with a bearish engulfing day at its 200-day EMA on Thursday, the overnight rise on SPI 200 could make it tempting for ASX 20 bears to fade into resistance.

ASX 200 Outlook: SPI Futures Rise, But Resistance Looms Over Rally https://t.co/vGxivDY8jq

[Matt Simpson @cLeverEdge]

Bears are pondering a cheeky short on Dow Jones futures, given its false break of a record high, respect of resistance - all while the mighty Nasdaq pauses for breath.

Nasdaq 100 Rally Pauses, Dow Jones Looks Vulnerable to Wall Street Bears https://t.co/no8SchGcis

[Matt Simpson @cLeverEdge]

We're finally seeing the broader Aussie reversal gather pace, with AUD/USD forming a potential bear flag after breaking lower from a bearish reversal pattern, AUD/NZD suffering its worst day in nine years, while GBP/AUD and EUR/AUD rebound from their lows.

AUD/USD Bear Case Builds as AUD/NZD Signals Top, GBP/AUD Eyes Rebound https://t.co/xz5QiVRpEg

[Matt Simpson @cLeverEdge]

RBNZ held their OCR as expected, though NZD/USD has been given a nice bump with the hawkish statement - notably the line "the OCR will most likely need to increase sooner and by more than envisaged..."

While momentum points higher for now, I suspect the US dollar has more strength up its sleeve and bears could be seeking to fade into NZD resistance levels.

[Matt Simpson @cLeverEdge]

Consumer prices are not exactly cheap, though not as bad as they were. The annual rate for food, housing and transport slowed to drag CPI down to 4.4% y/y.

Trimmed mean rose to 22-month high of 3.4% y/y, though that is to be expected given the geopolitical backdrop.

RBA to retain hawkish bias in June, though whether that translates to a hike following weak employment remains up for debate.

Though lower yields suggest bond markets remain unconvinced. Market response quite muted for ASX and AUD/USD.

[Matt Simpson @cLeverEdge]

While macro correlations and Nasdaq sentiment remain supportive for the Nikkei, some near-term warning signs are emerging.

The obvious one is USD/JPY struggling to break above its prior highs with intervention risks still lingering. But mixed performance among several heavyweight stocks — alongside SoftBank’s outsized influence on the index — also suggests bulls may want to tread carefully near current levels.

[Matt Simpson @cLeverEdge]

The British pound is showing mixed technical signals across major FX pairs, with GBP/USD stalling beneath 1.3500 while GBP/AUD and EUR/GBP test important support zones. Although sterling has managed to stabilise against the US dollar and Australian dollar in recent sessions, momentum studies and reversal patterns suggest traders may soon face key directional decisions.

British Pound Outlook: GBP/USD, GBP/AUD Tease Bears, EUR/GBP Rebounds https://t.co/lDoXDfZA9Z

[Matt Simpson @cLeverEdge]

Markets are once again betting that the US and Iran are moving closer to a peace deal. However, we’ve seen enough false starts surrounding the end of this conflict to know it’s not over until it is officially confirmed by the US, Iran and Israel. No such confirmation has yet arrived, so I continue to treat these headlines as hopeful rumours.

I take a look at the technical outlook for the US dollar index (DXY), AUD/USD and EUR/AUD as geopolitical headlines continue to drive sentiment across FX markets.

US Dollar Retreats on Iran Peace Deal Hopes, Though AUD/USD Bears Eye 70c https://t.co/RZ4PrMGhRf

[Matt Simpson @cLeverEdge]

Instead of higher yields supporting the yen through policy normalisation, markets began worrying that fiscal pressures and bond market instability could force the BOJ to remain cautious. That helped drive futures traders back into yen shorts.

FX Futures Positioning: Dollar Rebound Stalls as Yen Bears Return | COT Report https://t.co/CymCQMXQD9

[Matt Simpson @cLeverEdge]

The Aussie has gapped higher today, but I'm seeking evidence of a swing high in anticipation of a break below 71c for a move towards 70c.

AU and US CPI stand out on the calendar.

Australian Dollar Outlook: Yield Spreads Hint at Downside Break for AUD/USD https://t.co/zx7MznHLHK

[Matt Simpson @cLeverEdge]

ASX 200 Outlook: Bulls Buy Dips as RBA Hike Bets Collapse https://t.co/QVk7ThJ32m

[Matt Simpson @cLeverEdge]

I have been eyeing the rally on USD/JPY with suspicion all week. While the broader US dollar rally has of course been a major factor behind USD/JPY reaching a three-week high, I remain on guard for another round of yen intervention from Japan’s MOF.

Japanese Yen Outlook: USD/JPY Stalls While JPY Crosses Turn Choppy https://t.co/k6fGhDYmZF