FED: Lack Of Support For A July Cut, But It's Still Live (1/3)

• RES 4: 1.1625 1.500 proj of the Feb 28 - Mar 18 - Mar 27 price swing
• RES 3: 1.1608 High Nov 9 2021
• RES 2: 1.1573 High Apr 21 and the bull trigger
• RES 1: 1.1453 76.4% retracement of the Apr 21 - May 12 bear leg
• PRICE: 1.1432 @ 16:32 BST Jun 2
• SUP 1: 1.1293 20-day EMA
• SUP 2: 1.1172/1.1065 50-day EMA and a pivot level / Low May 12
• SUP 3: 1.1026 38.2% retracement of the Feb 3 - Apr 21 bull cycle
• SUP 4: 1.0943 Low Apr 10

A bullish theme in EURUSD remains intact and Monday’s gains reinforce current conditions. Support to watch lies at 1.1172, the 50-day EMA. A clear break of this average would undermine the bull theme and signal scope for a deeper retracement. This would open 1.1065, the May 12 low. On the upside, the breach of  1.1419, the May 26 high, confirms a resumption of the trend and opens 1.1573, the Apr 21 high and bull trigger.   

• Fed Funds implied rates for late 2025 have almost fully reversed the modest dovish tilt after the miss for ISM mfg (but with prices paid seeing another month close to 70) and soft construction spending.
• Cumulative cuts from 4.33% effective: 1bp Jun, 6.5bp Jul, 21.5bp Sep, 35.5bp Oct and 51.5bp.
• SFRZ6 meanwhile is back at pre-ISM lows of 96.725, for an implied terminal yield of 3.275% after a 4.5bp intraday recovery. It’s back in the range of 100bp +/-5bp of cuts from the effective rate seen mostly over the past three weeks).
• Ahead, Fed Chair Powell is set to give opening remarks at conference marking the Board of Governors International Finance 75th anniversary (text only). The conference is to recognize the division’s history and we don’t expect Powell to touch on mon pol, or at least certainly not offer anything new, but will monitor just in case.

• ISM manufacturing survey chief discusses the sector outlook -- On MNI Policy MainWire now, for more details please contact sales@marketnews.com