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


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

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