In the week ending June 2, overall currency trends included a strengthening dollar and yen, with the USDJPY in a short downward retrace after exceeding 157.5. The EURUSD was mostly aimless, trending between 1.08 and 1.09. Meanwhile, the GBPUSD reversed its climb after reaching just below 1.28.

The EURJPY and GBPJPY also bottomed out on Thursday due to a strengthening yen, but effected a robust rebound thereafter.

Let's review the market movements through the week.

In the period from Monday, May 27 to Wednesday, May 29, there were no key economic indicators pertaining to the dollar, yen, euro, or pound.

On Thursday, May 30, the U.S. released its annualized quarter-on-quarter data for quarterly real GDP (revised data) from January to March, showing an increase of 1.3% matching an expected 1.3%.

On Friday, May 31, preliminary data for the Eurozone's May Harmonised Index of Consumer Prices (HICP) were released. Year-on-year data showed growth of 2.6% versus an expected 2.5%. For the core index, year-on-year growth was 2.9% versus an expected 2.7%.

This indicator release triggered a rally in the EURUSD, which reached a high of 1.0882.

Friday also marked the release of the much-awaited U.S. personal consumption expenditures (PCE) data for April. The PCE deflator year-on-year data came in at 2.7% vs. 2.5% expected. When excluding food and energy, the PCE deflator showed a 0.2% month-on-month increase vs. 0.3% expected, and was up 2.8% year on year vs. 2.8% expected.

This new indicator triggered a drop in the USDJPY to 156.56, but the pair rebounded to close the week above 157.

Economic Indicators and Statements to Watch this Week
(All times are in GMT)

June 3 (Mon)
14:00, U.S.: May ISM Manufacturing PMI

June 5 (Wed)
12:15, U.S.: May ADP National Employment Report (month-on-month data)
14:00, U.S.: May ISM Non-Manufacturing PMI (composite)

June 6 (Thu)
12:15, Europe: European Central Bank (ECB) Governing Council policy interest rate announcement
12:45, Europe: Regular press conference by European Central Bank (ECB) President Christine Lagarde

June 7 (Fri)
09:00, Europe: January-March quarterly regional gross domestic product (finalized regional GDP, quarter-on-quarter data)
09:00, Europe: January-March quarterly regional gross domestic product (finalized regional GDP, year-on-year data)
12:30, U.S.: May change in nonfarm payrolls (month-on-month data)
12:30, U.S.: May unemployment rate
12:30, U.S.: May average hourly earnings (month-on-month data)
12:30, U.S.: May average hourly earnings (year-on-year data)

Like many weeks falling in the early month, this one will host a great deal of important economic indicator released. Of these, the most highly-watched will certainly be Friday's release of several U.S. employment statistics. The previous release showed worse-than-expected job growth, which led to a sell-off in the dollar, driving down the USDJPY.

The CME's FedWatch tool shows that the September FOMC meeting is the first where the probability of an interest rate cut exceeds that of an unchanged interest rate. With two more FOMC meetings in 2024, November and December, a rate cut in September could signal as many as three cuts by the end of the year.

It is highly advisable to keep an occasional eye on economic indicators and key statements, including this week's employment report, as any sign of receding inflation or negative economic data would enhance the probability of a rate cut.

The following currency pair charts are analyzed using an overlay of the ±1 and ±2 standard deviation Bollinger Bands, with a period of 20 days.

In addition to the aforementioned Friday release of employment statistics, the week will see the release of several other important U.S. economic indicators, including the ADP National Employment Report and the ISM. The pair has largely recouped losses from its intervention-driven fall during Japan's Golden Week holiday period, and it will be interesting to see if the USDJPY will once again test the 160 level.

Next is an analysis of the USDJPY daily chart.

The pair has generally remained above the Bollinger Bands' middle line. The upper and lower band widths are narrowing, with the pair appearing to be conserving energy for a trend reboot.

We continue with an analysis of the USDJPY weekly chart.

The pair has remained above 152 and has begun to move between the +1 and +2 standard deviation Bollinger Bands, which could lead it to mark higher highs on the chart.

Notable euro-related developments include the quarterly GDP to be released on Friday. In the past few years, markets have largely been dominated by U.S. monetary policy, with many instances of minimal reaction to euro-related economic indicators. It may be more effective to base trades primarily on movements in the dollar.

Next is an analysis of the EURUSD daily chart.

Though the middle Bollinger Band is climbing upward, the most recent price trend has been directionless. There is a potential case for the pair surpassing the +1 standard deviation Bollinger Band and re-entering a bullish trend.

We continue with an analysis of the EURUSD weekly chart.

Looking over a longer weekly timeline, the pair is still trading in a triangle formation. For the moment, the pair appears to be positioned closer to the upper side of the formation.

The coming week will yield no economic indicators of high importance in relation to the pound. As with the EURUSD, trades will watch the movements of the dollar.

Now, we analyze the daily GBPUSD chart.

Though the pair had been in a sustained bandwalk, it has closed below the +1 standard deviation Bollinger Band. With a climbing middle Bollinger Band, there is a case for the pair extending gains if it breaks above the +1 standard deviation band.

We continue with an analysis of the GBPUSD weekly chart.

Like the EURUSD, this pair is also trading inside a triangle formation, but the tip of the whisker for last week has touched the triangle's upper edge. A dollar weakening from here could lead to an upward breakout scenario.