TA Tuesday: Key Insights on CPI, FOMC, and Crypto Trends

Week-over-week performance:

  • BTCUSD: 67,960 / -1.25%
  • ETHUSD: 3,560 / -5.21%
  • US10Y: 4.45% / +5 bps
  • DXY: 105.12 / +0.98% (!)
  • GOLD (USD/OZ): 2,302 / -2% (!)
  • SPX: 5,360 / +1.46%
  • NDX: 19,074 / +2.55% (!)
  • DVOL: 51.70 / -0.17%
  • VIX: 12.75 / -2.82%

Looking Ahead – Economic Calendar:

  • Tuesday, 11 June: US 10Y note auction
  • Wednesday, 12 June: UK GDP, DE CPI, US CPI, FOMC + Press Conference
  • Thursday, 13 June: CH PPI, US PPI, US Jobless claims, US Treasury Secretary Yellen Speaks
  • Friday, 14 June: BoJ Interest Rate Decision, Fed Monetary Policy report, ECB President Lagarde Speaks 

On the macro side: 

Last week was relatively calm until the US NFP report surprised everyone with much higher-than-expected figures, showing 272,000 jobs added versus a forecast of 182,000 and a previous figure of 165,000. Additionally, US Average Hourly Earnings rose by 4.1% year-on-year, compared to a forecast of 3.9% and a previous rate of 4%.

This data triggered an initial risk-off reaction, with 10-year Treasury yields increasing by 5 basis points week-on-week and the DXY reclaiming the 105 mark. Despite growing accustomed to NFP revisions—such as January’s NFP being revised down to 229,000 from 353,000—the persistently high average hourly earnings underscore the stickiness of inflation. Consequently, Federal Funds futures are now pricing in an end-of-year Fed target rate of 500-525 basis points, indicating that there will be a single 25 basis point cut at the July meeting, which has also pushed gold prices down.

This week is packed with economic events. As we await clarity from the CPI report and the FOMC press conference, equities continue to show strong demand while digital assets display weakness.

Chart 1: FOMC Meeting target rates and probabilities


On the FX side:

As interest rate differentials widen between the USD and other currencies, and the US labour market remains robust, the USD has appreciated. With the DXY at 105.14, following the rejection of EURUSD at 1.09, I prefer to remain neutral on USD ahead of the US CPI release, which might offset the impact of the recent strong NFP report.

As noted last week, the strong USD has weakened cryptocurrencies. If the USD consolidates at these levels, we can expect a more stable environment for crypto and other risk assets.

Chart 2: DXY 1D


On the crypto side:

Since the late Friday risk-off shift, markets have remained weak, especially compared to equities, which continue to hit new highs daily. Despite this, the crypto narrative remains strong, although the market appears stretched due to leverage build-up and excessive positioning.

ETH ETF issuers submitted their updated S-1 forms on 31 May and are now awaiting feedback from the SEC. Analysts anticipate two more revisions before approval is granted.

Funding rates have naturally reset to net-zero, yet overall open interest remains high, which is a bullish sign. In terms of volatility, strong positioning persists, with the 25-delta risk reversal (call-put) still indicating a bullish outlook for both BTC and ETH. Traders are paying relatively high premiums for options, with BTC’s 7-day realised volatility at 26% compared to a 7-day implied volatility of 46%.
I continue to favour accumulating on dips ahead of the summer (i.e., short vol + buy the dip). For BTCUSD, the first support is at USD 67,000 and resistance is at USD 72,000.

Chart 3: BTCUSD 1d


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