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AUD/JPY Approaches 50-Day SMA amid Failure to Test May High AUD/JPY falls toward the 50-Day SMA (89.95) following the failed attempt to test the monthly high (92.44), and the exchange rate may give back the advance from the May low (89.17) if it struggles to hold above the moving average. AUD/JPY Rate Outlook AUD/JPY carves a series of lower highs and lows as it extends the decline from the start of the week, and the exchange rate may threaten the monthly range as the Japanese Yen appreciates against most of its major counterparts. A break/close below the 89.60 (50% Fibonacci retracement) to 90.30 (23.6% Fibonacci extension) region may push AUD/JPY towards the monthly low (89.17), with the next area of interest coming in around 88.60 (38.2% Fibonacci extension). However, failure to break/close below the 89.60 (50% Fibonacci retracement) to 90.30 (23.6% Fibonacci extension) region may keep AUD/JPY within the May range, with a move above 91.70 (38.2% Fibonacci retracement) bringing the monthly high (92.44) back on the radar. --- Written by David Song, Strategist

GBP/USD Defends April Low GBP/USD attempts to trade back above the 50-Day SMA (1.2442) as it registers a fresh weekly high (1.2447), and the exchange rate may track the positive slope in the moving average as it seems to be defending the April low (1.2275). GBP/USD Rate Outlook Failure to break/close below the 1.2280 (23.6% Fibonacci extension) to 1.2340 (23.6% Fibonacci extension) area may lead to a near-term rebound in GBP/USD as the Relative Strength Index (RSI) rebounds from its lowest reading since March. A close above the moving average may push GBP/USD towards 1.2650 (38.2% Fibonacci extension), with a move above the yearly high (1.2680) opening up the 1.2760 (61.8% Fibonacci retracement) region. However, GBP/USD may threaten the April low (1.2275) if it fails to push above the moving average, with a break/close below the 1.2280 (23.6% Fibonacci extension) to 1.2340 (23.6% Fibonacci extension) area opening up the 1.2030 (38.2% Fibonacci extension) region). --- Written by David Song, Strategist

Apple Stretches into Key Pivot Zone Apple has now rallied more than 43% off yearly lows with the bulls now testing a key resistance at 177.11/179.70- a region defined by the 100% ext of the yearly advance and the 2022 high-day close. Note that this region converges channel resistance over the next few days- watch the closes. Support rests with lower parallel / 78.6% retracement of the 2022 decline at 170.36- look for a larger reaction there IF reached. A topside breach / close above this threshold keeps the focus on the record highs at 182.94. Michael Boutros, Sr Technical Strategist with FOREX.com Twitter: MBForex @MBForex

Nasdaq Approaches Major Resistance Hurdle #NDX is now within striking distance of a key resistance zone we've been tracking for months now at 14327/49- a region defined by the April 22' uncovered gap and the objective 61.8% retracement of the 2021 decline. Looking for possible price inflection into this threshold IF reached. Michael Boutros, Sr Technical Strategist with FOREX.com Twitter: MBForex @MBForex

EUR/AUD Recovery Takes Shape amid Failure to Test Monthly Low EUR/AUD appears to have reversed ahead of the monthly low (1.6137) as it breaks out of the range bound price action carried over from last week. EUR/AUD Rate Outlook EUR/AUD trades to a fresh weekly high (1.6498) after bouncing along the 50-Day SMA (1.6320), and the exchange rate may track the positive slope in the moving average as it retraces the decline from the start of the month. A above 1.6590 (78.6% Fibonacci expansion) may push EUR/AUD towards the monthly high (1.6671), with a break/close above 1.6680 (100% Fibonacci extension) raising the scope for a run at the yearly high (1.6786). Nevertheless, failure to push above 1.6590 (78.6% Fibonacci expansion) may keep EUR/USD within the monthly range, with a move below the 1.6300 (61.8% Fibonacci extension) to 1.6380 (78.6% Fibonacci extension) region bringing the monthly low (1.6137) back on the radar.

S&P needs to hold THIS support level to maintain bullish bias The debt limit stalemate continues as we approach the Memorial Day weekend. With the June 1 deadline now just a stone’s throw away, the pressure is growing on both sides to strike a deal. Will the markets stage a recovery in the event of a deal? That is highly likely. But whether that potential recovery will hold, is what I am not too sure about. If you take out technology out of the equation and not look at the Nasdaq 100, you will realise the markets are not looking very good for the bulls, and this is not just because of the debt limit uncertainty. This is hardly surprising, thanks to the ongoing weakness in commodity prices, concerns over China and rising bets that the Fed may tighten its belt even more. Before discussing why markets are falling, let’s take a look at the charts of the S&P 500. S&P 500 technical analysis The index is testing a key long-term inflection point circa 4140, a level which was previously support and resistance on several occasions. A decisive break below last week’s low at 4108 would be a significant technical development for the bears. The index has already broken below a short-term bullish trend line and 21-day exponential moving average, which also happen to come in around that 4140 area. At the time of writing, it was testing these areas from underneath. A close below 4108 could pave the way for a move down to 4050 next. For the bulls, well there’s not too much to cheer right now and the best course of action for them is to sit on their hands and await a key bullish reversal. It could be a long wait. A daily close above 4140 would be an ideal outcome for them, as things stand. Why are stocks struggling? While the Nasdaq may have hit a new high for the year, thanks to Nvidia, other global indices have continued to struggle today. The German DAX, for example, relinquished its entire gains from last week, before hitting a new low earlier this morning. The FTSE also displayed similar characteristics. Chinese mainland shares turned negative on the year earlier this week. Worries over global growth, US debt ceiling and sticky inflation are all unnerving investors. The focus remains firmly fixated on the US debt limit situation. A sell-off in the markets was always going to be needed to put pressure on the two sides to make a compromise. Negotiators are still far apart on key issues. They must act quickly to avert a default – and to stop the market turmoil. But have they left it all too late? It is not just stocks. Sentiment towards nearly all risk assets has turned negative quite abruptly this week. Concerns are on the rise about the health of the Chinese and European economies and fears about the US debt ceiling. You also have a Fed still keen to tighten its policy further, while inflation in some parts of the world continues to remain very high, causing all sorts of problems and hurting the pockets of consumers. Businesses are not doing very well either, especially in the manufacturing sector, as we found out on Tuesday with those weak PMI numbers. Will we see a relief rally on debt deal? Well, if we see some concrete signs a debt deal will be reached, I would be expecting a sharp relief rally in the major indices. Whether or not the spoos would go back above 4200 in that event is something I wouldn't bet my life on, simply because there are so many other risks to consider - from China slowing down to the Fed potentially raising rates even further. The latest from Washington is that it is going to the wire, once again. US House speaker McCarthy said he doesn’t know if they will have a debt deal today. NVIDIA powers Nasdaq higher – for now The only bright spot is technology right now after NVIDIA shares jumped a massive 25% on the back of its strong results. But if markets continue to struggle, I don’t think technology would be immune to a sell-off. If anything, rising yields are not meant to be good for stocks that carry low div yields, like many of those found in the Nasdaq. So, watch out for a false breakout on the Nasdaq. US economy more resilient than expected Meanwhile, there was more evidence of to suggest the Fed might, after all, raise interest rates further, or at least put off rate cuts for longer. US GDP came in at 1.3% compared to 1.1% expected and reported initially. The GDP deflator was 4.2%, higher than 4.0% expected. Jobless claims surprised, too, printing 229K vs. 249K expected. Following the release of the data, bond yields rose further, as too did the dollar. -- Written by Fawad Razaqzada, Market Analyst Follow Fawad on Twitter @Trader_F_R

EUR/JPY Bounces Back from Weekly Low EUR/JPY may attempt to retrace the decline from the monthly high (151.62) as it bounces back from the weekly low (148.84). EUR/JPY Rate Outlook EUR/JPY appears to be on track to test the weekly high (150.06) as it climbs back above 149.60 (100% Fibonacci extension), and the exchange rate may track the positive slope in the 50-Day SMA (145.25) as it holds above the moving average. A break above the weekly high (150.06) may generate another run at the March 2008 low (151.69), but EUR/JPY may track the monthly range if it struggles to defend the weekly low (148.84). A break/close below 148.30 (23.6% Fibonacci retracement) may push EUR/JPY towards the 146.20 (38.2% Fibonacci retracement) to 147.00 (78.6% Fibonacci retracement), which largely aligns with the monthly low (146.13).

USD/JPY Ripper Eyes First Major Hurdle A breakout of the yearly opening-range in USD/JPY is now approaching the first major resistance hurdle at 139.58-140.33- a region define by the 50% retracement of the 2022 decline and 100% extension of the yearly ascent. Looking for a larger reaction there IF reached. Support / Near-term bullish invalidation now raised to 137.47. Michael Boutros, Sr Technical Strategist with FOREX.com Twitter: MBForex @MBForex

AUD/JPY Rebound Stalls Ahead of Monthly High AUD/JPY appears to have staged a failed attempt to test the monthly high (92.44) as it gives back the advance from the start of the week. AUD/JPY Rate Outlook AUD/JPY pulls back from a fresh weekly high (92.35) as the Japanese Yen appreciates against most of its major counterparts, and the exchange rate may continue to track the monthly range as it fails to extend the series of higher highs and lows from last week. Failure to hold above 91.70 (38.2% Fibonacci retracement) may push AUD/JPY towards the 89.60 (50% Fibonacci retracement) to 90.30 (23.6% Fibonacci extension) region, which encompasses the 50-Day SMA (89.60), with the next area of interest coming in around the monthly low (89.17). Nevertheless, AUD/JPY may stage further attempts to test the monthly high (92.44) if it defends the weekly low (91.38), with the next area of interest coming in around the February high (93.05).

GBP/USD Bounces Along 50-Day SMA GBP/USD failed to defend the opening range for May as it registered a fresh monthly low (1.2392) during the previous week, but the exchange rate may respond to the positive slope in the 50-Day SMA (1.2416) as it holds above the moving average. GBP/USD Rate Outlook GBP/USD consolidates after snapping the series of lower highs and lows from last week, and the exchange rate may attempt to retrace the decline from the monthly high (1.2680) as it bounces along the moving average. Need a move above last week’s high (1.2547) to bring 1.2650 (38.2% Fibonacci extension) back on the radar, with a move above the monthly high (1.2680) opening up the 1.2760 (61.8% Fibonacci retracement) region. Next area of interest comes in around 1.2890 (50% Fibonacci extension), but failure to clear last week’s high (1.2547) may lead to a further decline in GBP/USD, with a close below the moving average opening up the 1.2280 (23.6% Fibonacci extension) to 1.2340 (23.6% Fibonacci extension) area.