CHFJPY reversed from the key resistance level at 199.66
The pair has been trading in a downtrend since June 17
Trade RecommendationTrade:
Open a short position on CHFJPY at the current market price.
Target 1: 198.45
Target 2: 198.10
Stop Loss: 199.92
Analysis
CHFJPY has remained in a downtrend in recent sessions. On the H1 chart , the pair staged a local bullish correction, but buyers failed to break above the key 199.66 resistance , which is defined by the upper boundary of the 1:1 Overbalance structure and the 100-period moving average . According to the Overbalance methodology , as long as the price remains below this resistance level, the prevailing market sentiment stays bearish. With this in mind, further downside in CHFJPY appears likely. We recommend opening a short position at the current market price, targeting 198.45 and 198.10 , with a stop loss at 199.92 .
n labour market proved more resilient than expected, with the unemployment rate falling to 4.4% from a five-year high of 4.5% , while employment increased by 40.3k , comfortably beating expectations for a gain of around 30k . At the same time, household spending surprised to the upside, rising 1.3% in May versus market expectations of just 0.5% . For investors, the key takeaway is that the combination of a strong labour market, resilient consumers and still-elevated inflation complicates the case for an early policy easing by the Reserve Bank of Australia (RBA). Money markets continue to price roughly an 80% probability that the RBA will leave interest rates unchanged in August , but the latest data has strengthened the arguments in favour of another rate hike. For the Australian dollar, this provides potential support from a relatively hawkish central bank, although the medium-term direction of the AUD will depend on upcoming inflation and labour market data.
Labour market: Headline numbers beat expectations
The latest figures from the Australian Bureau of Statistics (ABS) showed that the unemployment rate declined to 4.4% , after previously rising to 4.5% , its highest level in five years. This was an important surprise, as economists had expected unemployment to remain unchanged at 4.5%. Employment increased by 40.3k , significantly outperforming market forecasts. At the same time, around 18.3k people lost their jobs, leaving the overall balance of the labour market firmly positive. The ABS also noted that the backlog of people waiting to start new jobs eased during May, helping boost employment and reduce unemployment. One weaker aspect of the report was a 1.1% decline in hours worked . According to the ABS, this was largely due to Australians catching up on leave that had not been taken during April. At first glance, the report appears very strong: unemployment is falling, employment is rising, and consumers are spending more. These are typically supportive conditions for both the Australian dollar and government bond yields. However, the decline in hours worked and sluggish employment growth over recent quarters suggest the labour market may not be as strong beneath the surface as the headline figures imply. The economy could be approaching a turning point, but it has not reached one yet. For the RBA, the latest data still do not provide sufficient evidence that economic conditions are cooling sustainably.
RBA faces a difficult balancing act
The Reserve Bank of Australia has a dual mandate: maintaining inflation within its 2โ3% target range while supporting full employment. The latest economic releases suggest that the Australian economy remains too resilient for the central bank to comfortably shift toward a more dovish stance. The next set of inflation and labour market data for June will therefore be crucial, as it will represent the final major batch of macroeconomic information before the RBA’s August policy meeting. The RBA recently left its cash rate unchanged at 4.35% , following three consecutive 25-basis-point rate hikes in 2026. Since the beginning of the year, the official cash rate has increased from 3.60% to 4.35% . For financial markets, the August meeting remains finely balanced. Money markets still assign roughly an 80% probability to a pause , but stronger employment data and the rebound in household spending make such a decision less straightforward.
Inflation remains the key risk
Australia’s headline CPI inflation eased to 4.0% YoY in May , down from 4.2% in April. At first glance, this appears to be encouraging news for the RBA. However, much of the improvement was driven by the Australian government’s temporary reduction in fuel excise taxes. Automotive fuel prices declined 11.9% in May , following a 7.0% decline in April. More importantly, the trimmed mean inflation rate โthe RBA’s preferred measure of underlying inflationโrose to 3.6% from 3.4% , indicating that underlying price pressures remain persistent after excluding the most volatile components. For traders, this is the critical part of the inflation story. Unless core inflation begins to decline more convincingly, the RBA may have little choice but to maintain its hawkish rhetoric or even consider another rate increase.
Household spending rebounds
Another important feature of the latest data release was the 1.3% increase in household spending during May . This marked a sharp recovery following declines of 1.1% in April and 1.7% in March . The figure significantly exceeded expectations of a 0.5% increase , suggesting Australian consumers remain surprisingly resilient despite elevated living costs, higher energy bills and rising mortgage repayments. Part of the increase reflected the normalisation of airline ticket refunds following disruptions related to the Middle East conflict. Nevertheless, the broader picture remains unchanged: household spending has yet to show signs of a meaningful slowdown. For the RBA, this creates another challenge. A resilient labour market continues to support household incomes, helping sustain consumption and making it more difficult to return inflation to target.
Mortgage holders remain under pressure
Since the beginning of 2026, the RBA’s cash rate has increased from 3.60% to 4.35% . Three consecutive quarter-point rate hikes have added approximately AUD 342 to the average monthly repayment on a typical AUD 736,000 mortgage. On an annual basis, this translates into roughly AUD 4,128 in additional borrowing costs. Should the RBA deliver a fourth rate increase, Compare the Market estimates average monthly repayments would rise by a further AUD 114 . Combined with the previous hikes, annual mortgage servicing costs would increase by around AUD 5,472 . This is particularly important for investors because household finances remain one of the key transmission channels of monetary policy in Australia. The paradox is that despite mounting pressure on borrowers, consumer spending has yet to weaken materially. This increases the likelihood that the RBA continues to view the economy as too resilient.
Labour shortages remain widespread
Despite record migration levels, Australian businesses continue to report significant labour shortages. According to ABS data, job vacancies remain 45% above pre-pandemic levels and have stayed above 325,000 vacancies for five consecutive years. The most acute shortages remain in healthcare and social assistance , where vacancies are 90% higher than before the pandemic. Manufacturing vacancies are 78% higher , electricity, gas, water and waste services are 76% above pre-pandemic levels, while mining vacancies remain 58% higher . This matters because persistent labour shortages tend to keep wage pressures elevated. As long as businesses continue competing for workers, wage inflation could remain stronger than desired even if overall economic growth slows. For the RBA, this means the labour market may stay too tight for underlying inflation to return quickly to target. For investors, it raises the probability that monetary policy will remain restrictive for longer.
Implications for the Australian dollar โ AUD/USD chart
The latest labour market report is broadly supportive for the Australian dollar because it reinforces the case for higher interest rates for longer. Stronger employment, lower unemployment and resilient consumer spending all reduce the scope for the RBA to pivot toward easier monetary policy. For currency pairs such as AUD/USD , AUD/JPY and EUR/AUD , the key question is whether markets begin shifting expectations from a rate pause toward another hike. If rate hike probabilities continue to increase, the Australian dollar could receive additional support through the interest rate channel. At the same time, the Australian dollar remains highly sensitive to global risk sentiment, commodity prices and developments in China. Consequently, stronger domestic macroeconomic data alone may not be sufficient to generate a sustained uptrend if global conditions become less supportive for cyclical currencies. The main conclusion for investors is straightforward: the latest labour market report has reduced expectations of an early dovish shift by the RBA while significantly increasing the importance of the next inflation release.
Looking at the AUD/USD chart, the pair has fallen below the 200-period EMA (red line), which has generally acted as a springboard for rebounds since April 2025. The key question now is whether this latest decline marks the beginning of a more durable trend reversal or simply a deeper correction similar to previous pullbacks. The nearest major support is located around 0.67 , corresponding to the March swing lows, while the 200-period EMA near 0.70 now represents the primary resistance level.
In mid-2026, the attention of financial markets is focused on the de-escalation of the situation in the Middle East and the race for dominance in the artificial intelligence sector, although at the same time, there is more and more talk about a bubble rather than further development. Parallelly, however, a climatic phenomenon is developing in the equatorial belt of the Pacific Ocean that has the potential to destabilize global supply chains, hit the production of key commodities, and trigger another wave of food inflation. Meteorological data from mid-2026 indicates a rapid transition of the ocean from a neutral phase to an active El Niรฑo.
Forecasts from the American Climate Prediction Center (CPC) and the World Meteorological Organization (WMO) set the probability of this phenomenon transforming into a so-called Super El Niรฑo before the end of the year at a level of 60% to 67%. If these forecasts materialize, the upcoming episode from the turn of 2026 and 2027 could become one of the strongest thermal anomalies recorded since 1950. How, then, should one react in market terms?
Graphic representing the height of the Pacific surface, which also coincides with water temperatures. Source: NASA
NOAA predicts over 60% probability of a Super El Niรฑo occurring at the turn of 2026 and 2027. Source: NOAA
Physics and Climatology of ENSO: From Walker Circulation to the Implementation of the RONI IndexNormal Situation
Understanding the economic mechanism of El Niรฑo requires an analysis of the physical processes occurring in the atmosphere and hydrosphere of the Pacific. Under neutral conditions, constant winds, called trade winds, blow from east to west, pushing sun-warmed surface waters toward Southeast Asia and Indonesia. This causes a physical accumulation of water off the coast of Asia, where the sea level is about 0.5 meters higher than off the coast of South America. Simultaneously, intense upwelling occurs off the coast of Peru and Ecuador, which is the rising of cold, oxygen- and nutrient-rich waters from the ocean floor, fueling local ecosystems and allowing for massive fish catches.
El Nino
During the El Niรฑo phase, the trade winds weaken, and sometimes even reverse their direction. Warm water accumulated in the west begins to spill back to the east, raising the sea surface temperature off the coast of South America by 1 to even 3 degrees Celsius, although most often 2 degrees are already treated as a very serious disturbance to the entire ecosystem. This process completely flattens the thermocline and blocks the pushing of cold water to the surface. The resulting giant “heater” releases thermal energy into the atmosphere, which disrupts the Walker circulation, shifts storm tracks, triggers heavy rains in South America, and catastrophic droughts in Asia and Australia, partially also affecting the situation across the globe, including Africa, which is key in the case of cocoa crops.
Weather conditions during El Niรฑo. Source: NOAA
How to measure El Niรฑo?
The traditional tool used to measure the strength of ENSO is the ONI (Oceanic Niรฑo Index), calculated as a three-month moving average of sea surface temperature (SST) anomalies in the key Niรฑo 3.4 region. A threshold of +0.5 signifies the formal occurrence of El Niรฑo, a threshold of +1.5 defines a strong episode, and from the value of +2.0, the very strong zone begins, i.e., Super El Niรฑo.
Key location where the El Niรฑo phenomenon forms. Source: NOAA
El Niรฑo Oscillator index and palm oil prices. As can be seen, the index is currently clearly negative, indicating the absence of the phenomenon. However, this is usually a prelude to a later, stronger hit. Source: Bloomberg Finance LP Modern global warming significantly complicates the interpretation of ONI results. Record hot oceans worldwide mean that traditional indicators give misleading, inflated readings.
For example, the episode from 2023โ2024 peaked according to the old methodology at +2.0, but due to a lack of stability in the anomaly, it was classified only as “strong.” For this reason, meteorological agencies in Australia (BOM), the USA (NOAA), and New Zealand implemented a new indicator โ RONI (Relative Oceanic Niรฑo Index). This index dynamically filters out the general planetary warming trend from the real, cyclic anomaly of the Pacific. It is RONI that confirms in mid-2026 that the approaching phenomenon is developing extremely fast, moving from a neutral phase into a strong strike. For comparison purposes, the table below presents the classification of historical episodes according to their maximum intensity measured by the ONI index.
Source: own study based on NOAA
Impact on GDP and the Role of the “Conflict Multiplier”
The relationship between climate physics and financial markets has been precisely described in economic research, including those published by the European Central Bank (ECB). A strong El Niรฑo phenomenon raises global prices for non-energy commodities (agricultural goods and metals) by an average of about 5%. Crucially for monetary policy, this effect persists in markets for 6 to even 16 months after the weather shock itself. This anomaly does not affect all economies in the same way, creating drastic discrepancies in GDP dynamics:
Indonesia: Records an average GDP drop of 1% due to paralyzing droughts destroying agriculture and limiting coal and nickel mining.
United States: Gains about 0.5% of GDP (which translates to over 150 billion dollars) thanks to milder winters in the north and more favorable rainfall in the agricultural belt in the south (lower gas consumption, higher yields).
Thailand: May record a GDP growth of almost 1%, provided there is appropriate water resource management in agriculture.
On a global scale, the balance is decidedly negative. Losses resulting from lost productivity were estimated at nearly 5.7 trillion dollars for the 1997โ1998 episode and over 7.8 trillion dollars for the phenomenon of 2015โ2016. In mid-2026, the global economy is exceptionally vulnerable to these types of shocks due to elevated core inflation, shipping restrictions, and energy costs driven up by a previous conflict in Iran. The USDA forecasts a 4.7% increase in food prices in the USA in 2026, and for products based on sugar and cocoa, it indicates an increase of up to 8.4%. For this reason, the FAO and WFP launched a joint appeal for 202 million dollars for preventive actions in 22 priority countries.
Parallelly, drought caused by El Niรฑo acts as a factor creating conflict. Model studies conducted by Bloomberg Economics indicate that a drastic drop in rainfall and loss of income from agriculture exacerbate competition for shrinking natural resources. Countries with low GDP per capita, high corruption, and weak institutions are particularly sensitive to this mechanism. Myanmar, Pakistan, and Nigeria are identified as countries with the highest risk of outbreaks or escalation of internal conflict in 2026. Conversely, in Latin America (Mexico, Colombia, Brazil), a prolonged lack of rainfall could overlap with existing tensions and escalate violence from drug cartels controlling water resources and rural territories.
El Niรฑo and Key Soft Commodity Markets: Coffee and Cocoa
The coffee and cocoa markets are considered litmus tests for the strength of El Niรฑo due to the geographical concentration of crops in the equatorial zone. In the years 2026โ2027, this phenomenon overlaps with previous structural shortages, triggering powerful reshuffles in the pricing of futures contracts.
Cocoa: Threat to Main Harvests in West Africa and Disease Crisis in Ecuador
A popular market narrative assumes the simplification that El Niรฑo means drought in West Africa, which will translate into an uncontrolled increase in cocoa prices. The reality, however, is more complex because the direct ENSO climate signal for Cรดte d’Ivoire and Ghana (accounting for nearly 60% of global supply) is weaker than for Asia. The historical price record from 2023โ2024 resulted mainly from structural problems: a fertilizer crisis caused by war, a lack of investment in tree rejuvenation, and destructive Harmattan winds. In the second half of 2026, markets fear the superimposition of these structural weaknesses on weather anomalies. Three factors determine the current, pro-growth positioning of capital:
Weak fruit setting: Early surveys on plantations in West Africa point to extremely low setting of young fruits (cherelles) for the 2026/2027 season, which heralds poor main harvests starting in October.
Revision of the commodity balance: StoneX drastically cut its global cocoa surplus forecast for the 2026/2027 season to just 149,000 tons (compared to an estimated 267,000 tons in January). Conversely, Citigroup predicts a deep deficit of 56,000 tons in the 2026/2027 season. On the other hand, forecasts appeared that the current season might end with an oversupply as high as 400,000 tons, mainly due to weak demand.
Demand destruction as a brake: A bearish counterweight is the high ICE-certified stocks (reaching nearly 2.9 million bags in June 2026) and a clear drop in cocoa processing (grinding) in Europe (down 7.8% year-on-year in the first quarter of 2026 โ the lowest reading in 17 years) and North America (down 3.8% year-on-year).
Cocoa stocks are at their highest in several years, though it is worth remembering that in 2023-2024 there was a massive contraction in stocks. We are now theoretically at the seasonal peak. If stocks start to grow, however, it could mean the scale of oversupply is larger than expected. Source: Bloomberg Finance LP, XTB
Despite weakening demand in developed countries, Citigroup predicts that due to Super El Niรฑo, cocoa prices will permanently exceed the level of 5,000 dollars per ton in the next three months, with the potential to reach 6,000 dollars per ton on a 12-month horizon. An additional catalyst for increases is the situation in Ecuador (the world’s third-largest producer). El Niรฑo brings heavy rains and floods there. Extreme humidity in the period from December 2026 to February 2027 creates ideal conditions for the spread of fungal diseases (such as moniliasis or black pod rot), which directly destroys crops and prevents traditional sun-drying of harvested beans. Ecuador recently aspired to second place in terms of production, but due to its own problems, it will likely remain in third place, just behind Ghana.
Most El Niรฑo periods ended with clear price increases. What’s more, the impact of El Niรฑo from 2023 still reached strongly into 2024. Source: Bloomberg Finance LP, XTB
Coffee: Extreme Drought for Robusta and Vegetative Anomalies for Arabica
In the coffee market, the El Niรฑo phenomenon triggers starkly different reactions depending on the species and growing region:
Robusta (Vietnam, Indonesia): Southeast Asia accounts for about 50% of global Robusta production. El Niรฑo brings extreme heatwaves and droughts to these areas, which drastically lowers yields. Although Vietnamese exports in the period of January-May 2026 increased by 7.9% year-on-year, the upcoming lack of rainfall creates a high risk of a drastic supply shortage in the next several months, which is already pushing Robusta futures contracts to multi-month highs.
Arabica (Brazil): El Niรฑo initially brings excessive rains in Brazil. In the short term, this complicates and delays harvesting (by mid-June 2026, only 15.8% of crops were harvested compared to 26.6% in the same period of 2024). Although the USDA forecasts record Brazilian harvests at 71.9 million bags (up 14% year-on-year), rains deteriorate the quality of harvested beans and stimulate premature flowering of coffee trees before the harvest is complete, which threatens bud dropping and damage to production potential for the 2027/2028 season. There is also a high risk that heavy rains will give way to a severe drought in key growing regions in September and October 2026, which will prevent proper flowering and trigger a sharp rise in Arabica prices.
USDA data for several years has shown an oversupply, but this does not always coincide with the narrative from other institutions, particularly the Brazilian CONAB. Source: Bloomberg Finance LP
Market Paradoxes and Energy-Industrial Commodities
The impact of El Niรฑo on commodity markets abounds in anomalies that defy the intuition of inexperienced market participants:
Soybeans as a beneficiary of rainfall: While most crops are destroyed, soybeans are a structural beneficiary of El Niรฑo. This phenomenon brings abundant rainfall to the US growing belt, in Argentina, and in southern Brazil. Historically, this translates into yield increases of 10% to 15% above the trend, generating global oversupply and triggering sharp price drops on the Chicago exchanges.
Bearish pressure on American natural gas: El Niรฑo brings milder and warmer winters to the northern United States. This results in a drastic drop in demand for gas for home heating, exerting strong downward pressure on the commodity’s price (bear market) in the USA, which stands in contradiction to the general trend of rising commodity prices.
Hydroelectric crisis in China: Chinese electricity demand in 2026 is growing by 5% year-on-year, driven by the development of AI data centers and EV charging. The drought caused by El Niรฑo drastically limits production from Chinese hydroelectric plants. Consequently, local governments are forced to substitute hydro energy with coal and gas generation. Beijing issued a categorical decree ordering power plants to rebuild coal stocks to a level covering a minimum of 20 days of consumption, which stimulates price increases for thermal coal.
Copper logistics paralysis in Chile and Peru: South America in copper mining zones experiences heavy rains and floods. This leads to the washing out of transport roads, flooding of mine infrastructure, deficits in local hydro energy, and mudslides. The supply restriction from these two key countries constitutes a strong upward impulse for copper prices on the LME.
Investors are starting to position for a soybean production surplus. The number of longs is clearly being reduced, while the number of shorts is rising. Source: Bloomberg Finance LP, XTB
Guide to Listed Companies: Winners and Losers of Super El Niรฑo
For stock market investors, Super El Niรฑo constitutes a significant capital allocation factor. The following discussion presents companies that may see improvement in financial results, and those that are exposed to serious operational and financial risks.
Fertilizer and Crop Protection Sector
Weather anomalies and falling yields force farmers to intensify fertilization and protection of surviving crops to save revenues, which supports producers of agricultural production inputs.
CF Industries Holdings Inc. (CF): The company focuses on nitrogen fertilizers. In mid-2026, its valuation fluctuates around 102 dollars (about 19% below the analyst consensus of 124 dollars). CF Industries benefits from cheap gas in the USA (the main raw material for ammonia production), maintaining a high EBITDA margin while European competitors struggle with more expensive raw materials. An additional long-term factor is the implementation of the 3.7 billion dollar Blue Point project in the low-emission ammonia segment.
The company gained significantly in value during the crisis related to the Strait of Hormuz. It may turn out that fertilizers will again come under upward pressure. Source: xStation5
Nutrien Ltd. (NTR): The company shows a more nuanced risk profile. It has strong nitrogen exposure, but droughts caused by El Niรฑo drastically delay farmer demand for potash, leading Berenberg to downgrade NTR to “Hold” with a target price of 65 dollars. The company offers a stable dividend yield of 3.4%, but its growth potential in 2026 is limited by the fall in potash prices. Currently, shares are trading around 61 USD.
The Mosaic Co. (MOS): The company is heavily dependent on potash sales, which in drought conditions weakening demand for this nutrient puts it in a worse market position. The company is currently at multi-year lows, around 21 USD, but in 2025 it traded as high as 37 USD.
Corteva Inc. (CTVA): As a global provider of advanced seeds and chemical crop protection, it may see revenue growth as farmers pay a premium for drought- and pathogen-resistant biotechnologies.
Biochemical and Aquaculture Sector
Thermal anomalies in the Pacific drastically change the cost structure in global feed and food production.
Corbion NV (CRBN.NL): The company is a key winner of the raw material crisis in Peru. The upwelling blockage off the coast of Peru led to a complete halt of anchovy fishing in May 2026. Prices of traditional fish oil (a key ingredient in salmon feeds and dietary supplements) jumped from 3.10 dollars per kilogram in July 2025 to a record 10 dollars per kilogram in June 2026. Corbion is a global leader in industrial production of alternative algae oil rich in Omega-3 fatty acids. The price jump of natural fish oil made Corbion’s product reach price parity, generating powerful demand from feed and baby formula producers. Berenberg raised its recommendation for Corbion to “Buy” with a target price of 24 euros, forecasting EBITDA growth from the algae segment alone to 44 million euros in 2026 and 49 million euros in 2027. The company is also cited as an attractive acquisition target for global players following the planned spin-off of the polylactic acid (PLA) segment.
The company has lost almost 1/3 of its value since the peak in 2020. Source: xStation5
Food Processing and Candy Manufacturer Sector
Mondelฤz International Inc. (MDLZ): As the owner of brands such as Cadbury, Milka, and Toblerone, the company is one of the largest global consumers of cocoa and sugar. In conditions of raw material crisis caused by El Niรฑo, Mondelez uses a highly effective margin protection strategy through so-called “shrinkflation” (reducing the weight of products while maintaining existing price points) and intense expansion in the premium segment. CEO Dirk Van de Put argues that consumers are more willing to accept a smaller bar than a higher price on the shelf. Additionally, the company invested 65 million CHF in expanding the Toblerone factory in Bern, transforming it into a global Center of Excellence. This strategy allows for maintaining high profitability (in 2025 revenues grew 5.8% y/y to 38.5 billion USD, and net profit reached 2.45 billion USD). Although CFO Luca Zaramella indicates some stabilization and “normalization” of cocoa prices from extreme highs, this raw material remains structurally expensive, meaning Mondelez’s ability to pass costs on to consumers (pricing power) will be a key factor deciding the preservation of margins in the 2026/2027 season.
The company currently has fairly low margins, but due to the situation, there is significant potential for a return to the 2023 situation. Additionally, the company appears to be undervalued currently, looking at a fundamental valuation based on averages from the last 5 years. The company’s shares are more than 20% below historical peaks. Source: Bloomberg Finance LP, XTB
Insurance and Financial Sector
Shifts in jet streams caused by El Niรฑo generate asymmetric risks for financial institutions.
Allstate Corp. (ALL.US). Progressive Corp. (PGR) / Travelers (TRV): Theoretical beneficiaries of El Niรฑo. This phenomenon causes strong wind shear over the Atlantic, which makes it difficult for destructive hurricanes to form off the coast of Florida and in the Gulf of Mexico (NOAA forecasts indicate a drop in the number of named storms to a level of 8 to 14 in the 2026 season compared to a norm of 14). Fewer hurricanes mean a radical reduction in claim costs for American property insurers. However, the unpredictability of climate change remains a risk, as it could bring other local disasters.
Allstate and Travelers are currently at historical levels, while Progressive Corp may appear somewhat undervalued relative to the sector. Source: xStation5
Credicorp Ltd. (BAP). Intercorp Financial Services (IFS): Peruvian financial holdings were downgraded by JPMorgan to a “Neutral” recommendation. El Niรฑo directly hits key sectors of the Peruvian economy, namely fishing and agriculture. JPMorgan indicates that bank valuations at 2.5 times book value for BAP (target price around 360 dollars) and 1.7 times for IFS (target price around 56 dollars) do not fully discount the risk of an increase in write-offs on unpaid agricultural and fishing loans and the political uncertainty associated with the power transition process in Peru.
Summary and Conclusions for Commodity and Equity Investors
The Super El Niรฑo anomaly at the turn of 2026 and 2027 should not be treated as a simple signal for speculative purchase of all agricultural commodities. Precise positioning in the market requires considering climate asymmetry and overlapping structural factors. The basis of an effective strategy is abandoning traditional ONI index readings in favor of the RONI index, which is cleared of the ocean warming trend. Investors should avoid exposure to soybeans and American natural gas (or look for sell signals), which, due to the specificity of Pacific teleconnections, become natural beneficiaries and exhibit a downward trend.
In turn, the key growth potential lies in soft commodities such as Robusta coffee (which partially translates into Arabica coffee prices) and cocoa, where El Niรฑo drastically deepens an already tight supply-demand balance. On the other hand, an aspect that El Niรฑo does not take into account is demand, which is depleted after these commodities hit historical peaks. In the equity segment, the optimal choice is capital allocation into companies with a high barrier to entry and direct operational leverage on the effects of
USD/JPY trades with a mild negative bias and is undermined by a combination of factors.
Easing inflationary concerns temper Fed rate hike bets and prompt some USD profit-taking.
Intervention fears lend support to the JPY and weigh on the pair ahead of the US PCE data.
The USD/JPY pair edges lower during the Asian session on Thursday, albeit it lacks follow-through and finds support ahead of the 161.50 level. Nevertheless, spot prices remain well within striking distance of a 40-year high as traders look forward to the US Personal Consumption Expenditures (PCE) Price Index for a fresh impetus.
The crucial inflation data will dictate the Federal Reserve’s (Fed) policy path, which, in turn, will play a key role in influencing the US Dollar (USD) price dynamics and determining the next leg of a directional move for the USD/JPY pair. In the meantime, the recent decline in Crude Oil prices has eased inflationary concerns, prompting traders to scale back their bets on Fed interest rate increases. This, in turn, triggers a modest USD pullback from its highest level since May 2025, touched on Wednesday, and acts as a headwind for the USD/JPY pair.
Apart from this, heightened speculation about joint US-Japan intervention offers some support to the Japanese Yen (JPY) and further caps the upside for the currency pair. In fact, Japan’s Finance Minister Satsuki Katayama and US Treasury Secretary Scott Bessent agreed to take steps on currencies if necessary. Also, Japanโs Chief Cabinet Secretary Minoru Kihara said on Tuesday that he will take appropriate action against the foreign exchange moves if needed. This, along with a hawkish Bank of Japan (BoJ), offers some respite to the JPY bulls.
In fact, the Summary of Opinions from the BoJ’s June meeting showed that policymakers debated mounting inflation risks, with some calling for faster interest rate increases to raise borrowing costs to near levels deemed neutral to the economy. Furthermore, BoJ board member Naoki Tamura said earlier today that it is important to push the policy rate closer to the neutral level, which is about 2%. This is still lower than the Fed’s 3.5% to 3.75% target rate, however, which keeps the JPY carry trade in play and helps limit the downside for the USD/JPY pair.
USD/CAD loses ground as the US Dollar weakens despite rising expectations of later Fed rate hikes.
CME FedWatch tool indicates that markets are now pricing in an 83.1% probability of rate hikes by the end of December.
The Canadian Dollar struggles as easing US-Iran tensions cool the global oil market.
USD/CAD halts its winning streak that began on June 10, trading around 1.4230 during the Asian hours on Thursday. The currency pair depreciate as the US Dollar (USD) declines despite rising market expectations of Federal Reserve (Fed) interest rate hikes later this year.
Traders are positioning for tighter monetary policy after Federal Reserve Chairman Kevin Warsh signaled a firm focus on taming inflation, noting that the broader economy remains on a stable footing. Reflecting this hawkish shift, the CME FedWatch tool shows that markets are now pricing in an 83.1% probability of rate hikes by the end of December.
Traders focus now shifts to the upcoming US Personal Consumption Expenditures (PCE) data release, where headline inflation is expected to heat up to 4.1% YoY in May from April’s 3.8%, and core PCE is projected to edge higher to 3.4% YoY.
The commodity-linked Canadian Dollar (CAD) is struggling against its US counterpart as easing geopolitical tensions between the US and Iran cool the global oil market. Lower crude prices directly hit the Canadian economy, as Canada is the largest exporter of crude oil to the United States.
Global oil supplies are rapidly improving following breakthrough progress in US-Iran peace efforts, which has restored shipping confidence and encouraged tankers to transit the critical Strait of Hormuz with their tracking signals activated.
Underscoring this supply surge, US Energy Secretary Chris Wright stated at the Reuters Global Energy Forum in New York that roughly 20 million barrels of oil exited the Strait within a single 24-hour window, marking a clear return to normal operational flows.
Shipping data confirms this rebound, showing that three previously stranded tankers carrying 5 million barrels of crude finally exited the Gulf on Wednesday under the interim diplomatic deal. Available supply is expected to expand even further due to a temporary US waiver that permits the purchase of already-loaded Iranian oil.
Compounding the pressure on the Canadian Dollar, Canadaโs 10-year government bond yield fell to a three-month low of 3.36% in late June, as signs of cooling underlying domestic inflation reinforce expectations that the Bank of Canada (BoC) will refrain from raising interest rates for the rest of the year.
AUD/USD loses ground as the Australian Dollar holds losses following domestic labor market data.
Australia’s Unemployment Rate ticked down to 4.4% from 4.5%, as the economy added a strong 40.3K jobs in May.
CME FedWatch tool indicates markets are now pricing in an 83.1% probability of rate hikes by the end of December.
AUD/USD continues its losing streak for the eighth consecutive day, trading around 0.6900 during the Asian hours on Thursday. The pair remains subdued as the Australian Dollar (AUD) holds losses following the release of domestic labor market data.
According to the latest data from the Australian Bureau of Statistics (ABS), Australiaโs labor market showed strong signs of recovery in May, highlighted by the Unemployment Rate trickling down to 4.4% from April’s 4.5%. This drop aligned perfectly with market expectations. The most striking takeaway from the report was the net Employment Change, which saw an influx of 40.3K jobs. This easily surpassed the consensus forecast of a 25K increase and marked a sharp turnaround from the 40.7K jobs lost during the previous month.
Under the hood, the data reveals that while the overall Participation Rate held steady at 66.7%, the workforce expansion was primarily driven by part-time roles. Part-Time Employment surged by 35.2K positions, completely reversing the 19K decline seen in April. Full-Time Employment also bounced back, albeit more modestly, adding 5.2K jobs following a notable drop of 21.7K in the prior reading.
The AUD/USD pair weakens as the US Dollar (USD) may continue its winning streak amid rising market expectations of Federal Reserve (Fed) interest rate hikes later this year. Traders are positioning for tighter monetary policy after Federal Reserve Chairman Kevin Warsh signaled a firm focus on taming inflation, noting that the broader economy remains on a stable footing. Reflecting this hawkish shift, the CME FedWatch tool shows that markets are now pricing in an 83.1% probability of rate hikes by the end of December.
Traders await the upcoming US Personal Consumption Expenditures (PCE) data release due later in the day, where headline inflation is expected to heat up to 4.1% YoY in May from April’s 3.8%, and core PCE is projected to edge higher to 3.4% YoY.
GBP/USD rebounds to around 1.3175 in Thursdayโs Asian session.
UK PM Keir Starmer resigned on Monday, throwing UK politics into sudden turmoil.
Traders will keep an eye on the US PCE Price Index report for May, which is due on Thursday.
The GBP/USD pair recovers some lost ground to near 1.3175 during the Asian trading hours on Thursday. However, the potential upside for the major pair might be limited amid UK political instability and rising expectations of US interest rate hikes this year. Traders await the US May Personal Consumption Expenditures (PCE) inflation data on Thursday for fresh impetus.
UK Prime Minister Keir Starmer resigned on Monday, throwing the country into yet another political crisis. Starmer stepped down under intense pressure following Andy Burnham’s victory in the Makerfield by-election last week. His Labour Party will now need to select a new leader to lead the country.
Traders will closely monitor what Burnhamโs policy would look like. Analysts warned that Burnhamโs preferred expansionary fiscal stance, higher taxation, and increased gilt issuance could weigh on the British Pound (GBP) against the US Dollar (USD).
The US PCE Price Index report for May will take center stage on Thursday. The headline PCE is expected to show a rise of 4.1% YoY in May, compared to 3.8% in April. The core CPE inflation is projected to show an increase of 3.4% YoY in May, versus 3.3% prior. Any signs of easing inflation in the US could undermine the Greenback and create a tailwind for the major pair.
Meanwhile, traders reassess the timing of possible US rate hikes after the Federal Reserveโs (Fed) hawkish signal. Markets have priced in nearly a 34.2% probability of a 25 basis points (bps) hike at the July meeting, up from 8.5% a week ago, and 66.4% for September, up from 29.1%, according to the CME FedWatch tool.
EUR/JPY remains stuck in a corrective phase dominated by short-term downward pressure.
The 14-day Relative Strength Index at 36.96 suggests downside momentum is slowing but not yet fully exhausted.
The currency cross trades above the 183.69 VWAP, indicating mild bullish sentiment for the current session.
EUR/JPY pares its daily losses, remaining in the negative territory and trading around 183.80 during the Asian hours on Thursday. The currency cross holds in a corrective phase below the short- and medium-term trend filters, with the nine-day Exponential Moving Average (EMA) at 184.47 and the 50-day EMA at 184.95 acting as immediate overhead caps and reinforcing a bearish near-term bias.
The EUR/JPY cross has slipped back under the moving averages after failing to sustain gains near recent highs, while the 14-day Relative Strength Index (RSI) at 36.96 approaches oversold territory, hinting that downside momentum is softening but not yet exhausted.
The EUR/JPY cross is remaining within the symmetrical triangle, suggesting market indecision and an impending breakout as energy builds.
The spot price is trading slightly above the Volume-Weighted Average Price (VWAP) at 183.69, suggesting a mild bullish sentiment for the current trading session. Buyers are willing to pay more than the average price paid by all other traders throughout the day.
In context with the symmetrical triangle, trading just above the day’s average volume weight indicates that bulls are trying to push the price toward the upper boundary of that triangle for a potential breakout.
The initial support is aligned at the lower boundary of the symmetrical triangle around 183.40. Further declines would expose the four-month low of 181.87, recorded on March 16, followed by six-month low of 180.81.
On the upside, a recovery above the nine-day EMA at 184.47 would be the first sign of easing pressure, though bulls would likely need a daily close over the 50-day EMA at 184.95 to challenge the major resistance band near all-time high of 187.95.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the Swiss Franc.
USD
EUR
GBP
JPY
CAD
AUD
NZD
CHF
USD
-0.05%
-0.09%
-0.06%
-0.03%
0.10%
0.17%
-0.15%
EUR
0.05%
-0.02%
0.04%
0.06%
0.18%
0.25%
-0.08%
GBP
0.09%
0.02%
0.02%
0.07%
0.19%
0.27%
-0.08%
JPY
0.06%
-0.04%
-0.02%
0.03%
0.16%
0.21%
-0.11%
CAD
0.03%
-0.06%
-0.07%
-0.03%
0.12%
0.20%
-0.15%
AUD
-0.10%
-0.18%
-0.19%
-0.16%
-0.12%
0.06%
-0.24%
NZD
-0.17%
-0.25%
-0.27%
-0.21%
-0.20%
-0.06%
-0.35%
CHF
0.15%
0.08%
0.08%
0.11%
0.15%
0.24%
0.35%
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
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