Forex Market Forecast for June 2024

Nick Ranga

Forex Market Forecast for June 2024

The question going into June is when central banks in the US, UK, and Europe will move to cut rates. Given the recent hotter-than-expected inflation data in the US, investors have had to reconsider when the first cut will arrive and how many (if any) there will be this year. Here are some key aspects to keep an eye on in May:

  • The US dollar has weakened against many of the other major currencies in May. However, any talk of higher rates for longer could see some money flow back into the greenback.
  • The EURGBP had just dropped to its lowest level since August 2023 intraday earlier this week. However it bounced back shortly after. Even so, the pair may be one to keep an eye on in June.
  • The Japanese yen again continued to decline against the US dollar. However, UBS highlighted the 160 area as being “toppish” for the pair. That level could be fast approaching and is one to watch out for.

US Dollar

As mentioned, the US dollar lost some ground against many of the other major currencies in May (barring the JPY). From an economic point of view, the talk is focused on when the Federal Reserve will look to cut rates. Given the recent hotter-than-expected inflation data, the chances of a rate cut in June have been significantly reduced. Most now expect the first US rate cut in September. If the chances of a rate cut pick up, we could see the USD weaken as interest rate differentials come into play.

Key Levels

  • EURUSD: Higher – 1.0900, Lower – 1.0723
  • GBPUSD: Higher -1.2800, Lower – 1.2560
  • USDJPY: Higher -160.00, Lower -154.80

Euro

With the prospect of a rate cut from the European Central Bank next week, the euro has been a little directionless over the past two weeks or so. The ECB is forecast to cut rates to 3.75% from 4%. The decision, and comments after could add some pressure to the currency. Until then, it may remain without a strong directional move either way. The EURGBP had dropped to lows earlier this week but quickly bounced back. However, given a potential rate cut, there is the potential we could see it test that lower support level around 0.85 once again.

Key Levels

  • EURUSD: Higher – 1.0900, Lower – 1.0723
  • EURGBP: Higher – 0.8587, Lower – 0.8465

British Pound

The GBP had a solid may, although it began to pullback slightly against the USD towards the end of the month. It did touch the 1.28 level before turning around. It also broke out of April’s downtrend. With Bank of England rate cut bets fading in recent weeks, the GBP has strengthened. In the near-term, against the USD we are neutral, with the BoE recently stressing that a June cut depends on the coming data.

Key Levels

  • EURGBP: Higher – 0.8587, Lower – 0.8465
  • GBPUSD: Higher -1.2800, Lower – 1.2560

Japanese Yen

The USDJPY fell to 151.85 in May before resorting back to form and continuing to climb. As of 09:55 am on May 31, it is back at 157.26. Again, given the potential for intervention by the BoJ, it is important to be cautious when trading the yen. However, in a recent research note, analysts at UBS stated that they “believe 160 is toppish for USD/JPY.” In a separate note at the end of April, UBS CIO Mark Haefele said “FX interventions tend to have a short-lived impact, and the fundamental picture for the Japanese yen remains challenging in the short run.”

“We believe near-term volatility in the USDJPY rate is set to remain elevated amid US dollar strength,” he added. “But in our base case, we continue to expect the currency pairing to top out and move lower as the year progresses.”

Key Levels

  • USDJPY: Higher -160.00, Lower -154.80
  • EURJPY: Higher – 171.60, Lower – 167.35

People Also Read:


 

Trade EURUSD with our top brokers

Broker Features Regulator Platforms Next Step
Number One Broker Blackbull LogoYour capital is at risk Founded: 2014
  • User-friendly platform with great trade-analysis tools
  • Leverage Up To 1:500
  • Spreads as low as 0.00 pips
  • Quality trade execution thanks to high-spec IT infrastructure
  • $0 minimum account opening balance
  • 26,000 tradeable instruments
  • Not available in all jurisdictions
  • Regulatory infrastructure
FSPR MT4
Your capital is at risk Founded: 2006
Europe* CFDs ar...
  • Multi-asset broker offering a wide variety of markets
  • Strong regulatory framework
  • Innovative risk management tools
  • Choice of market-leading platforms
  • Wide spreads on some markets
  • Expiry date on Demo Accounts
ASIC, FSA, FSB, MiFID MetaTrader4, Sirix, AvaOptions, AvaTrader, Mirror Trader
Between 74-89% of CFD traders lose Founded: 2010
Between 74-89 % of retail investor accounts lose money when trading CFDs
  • Low trading costs
  • Great market flow
  • Research and analysis which helps spot trades
  • Wide range of Copy and Social Trading options
  • Limited range of non-forex markets
ASIC, FCA MetaTrader 4, MetaTrader 5, cTrader
eToro Logo77% of CFD traders lose Founded: 2007
77 % of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
  • Social and Copy Trading Platform
  • Beginner Friendly
  • Risk-free Demo Account
  • Top-tier regulation
  • Limited means of raising queries
  • Withdrawal process isn’t really ‘client-focused’
ASIC, CySEC, FCA eToro Platform
XM LogoYour capital is at risk Founded: 2009, 2015, 2017
  • Low minimum deposit
  • Super- tight bid-offer spreads
  • Impressive trading platforms
  • Tier-1 regulators
  • Difficult to contact tech support
  • No Crypto
ASIC, CySEC, IFSC MT4 Terminal, MT4 for Mac, Web Trader, iPhone/iPad Trader, Droid Trader, Mobile Trader, MT5
FxPro LogoYour capital is at risk Founded: 2006
  • Very well regulated
  • Comprehensive education section
  • Fantastic customer service
  • No cryptocurrencies
  • Fees could be more competetive
CySEC, DFSA, FCA, FSB, SIA MetaTrader4, MetaTrader5, cTrader, FxPro Edge (Beta)

    Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.

    Nick Ranga
    Between 74-89% of CFD traders lose Between 74-89 % of retail investor accounts lose money when trading CFDs
    • Low trading costs
    • Great market flow
    • Research and analysis which helps spot trades
    • Wide range of Copy and Social Trading options
    • Limited range of non-forex markets
    Your capital is at risk Europe* CFDs ar...
    • Multi-asset broker offering a wide variety of markets
    • Strong regulatory framework
    • Innovative risk management tools
    • Choice of market-leading platforms
    • Wide spreads on some markets
    • Expiry date on Demo Accounts
    eToro Logo77% of CFD traders lose 77 % of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
    • Social and Copy Trading Platform
    • Beginner Friendly
    • Risk-free Demo Account
    • Top-tier regulation
    • Limited means of raising queries
    • Withdrawal process isn’t really ‘client-focused’
    Blackbull LogoYour capital is at risk
    • User-friendly platform with great trade-analysis tools
    • Leverage Up To 1:500
    • Spreads as low as 0.00 pips
    • Quality trade execution thanks to high-spec IT infrastructure
    • $0 minimum account opening balance
    • 26,000 tradeable instruments
    • Not available in all jurisdictions
    • Regulatory infrastructure
    XM LogoYour capital is at risk
    • Low minimum deposit
    • Super- tight bid-offer spreads
    • Impressive trading platforms
    • Tier-1 regulators
    • Difficult to contact tech support
    • No Crypto