Activity to pick back up as US returns

GBPUSD – technical overview

Signs have emerged of the market wanting to put in a longer-term base after collapsing to a record low in September 2022. The November 2022 monthly close back above 1.2000 strengthens this prospect. Any setbacks should now be well supported ahead of 1.2000. Next key resistance comes in at 1.3000.

• R2 1.2849 – 16 June/2023 high – Strong
• R1 1.2760 – 27 June high – Medium
• S1 1.2591 – 29 June low – Medium
• S2 1.2487 – 12 June low – Strong

GBPUSD – fundamental overview

hawkish comments from BOE Greene have resulted in some upside and outperformance in the Pound. Greene said UK rates may be higher permanently, and it would be a mistake for central bankers to take comfort in the notion that inflation and rates will automatically go back to the low levels we saw pre-COVID. Key standouts on Wednesday’s calendar come from Auusie retail sales, PMI reads out of Germany, the Eurozone, and UK, Eurozone producer prices, US factory orders, and the Fed Minutes late in the day.

USDJPY – technical overview

The major pair has seen a nice recovery following the massive correction out from multi-year highs. Setbacks have finally been well supported ahead of 125.00 in the 127s thus far. At this stage, it looks like the market could be wanting to resume the bigger picture uptrend and head back towards a retest of that multi-year high from October 2022 up at 151.95. Look for any weakness to continue to be well supported in favor of higher lows along the way.

• R2 145.08 – 30 June high – Strong
• R1 145.00 – Psychological – Medium
• S1 142.69 – 23 June low – Medium
• S2 141.21 – 20 June low – Strong

USDJPY – fundamental overview

Higher JGB yields and a stronger Tankan report this week haven't really had much impact on the Yen, with the currency remaining under pressure near yearly lows against the Buck. Yield differentials and monetary policy divergence themes continue to lean hard in the US Dollar's favor. Key standouts on Wednesday’s calendar come from Auusie retail sales, PMI reads out of Germany, the Eurozone, and UK, Eurozone producer prices, US factory orders, and the Fed Minutes late in the day.

AUDUSD – technical overview

There are signs of the potential formation of a longer-term base following the late 2022 surge back above 0.6500. Next key resistance comes in at 0.7284. Setbacks should continue to be well supported in the 0.6500 area. Only a monthly close below 0.6500 would give reason for rethink.

• R1 0.6806 – 22 June high – Strong
• R2 0.6721 – 27 June high – Medium
• S1 0.6595 – 29 June low – Medium
• S2 0.6564 – 10 March low – Strong

AUDUSD – fundamental overview

The Australian Dollar was steady overall after the overnight decision by the RBA to keep the cash rate target unchanged. The RBA left rates at 4.10% as expected to give the board 'more time to assess the state of the economy and the economic outlook and associated risks.' Still, Lowe and company said further tightening may be required. Key standouts on Wednesday’s calendar come from Auusie retail sales, PMI reads out of Germany, the Eurozone, and UK, Eurozone producer prices, US factory orders, and the Fed Minutes late in the day.

USDCAD – technical overview

Above 1.3000 signals an end to a period of longer-term bearish consolidation and suggests the market is in the process of carving out a more significant longer-term base. Next key resistance now comes in up into the 1.4000 area. Setbacks should be very well supported down into the 1.3000 area.

• R2 1.3384 – 12 June high – Strong
• R1 1.3286 – 29 June high – Medium
• S1 1.3117 – 27 June/2023 low – Strong
• S2 1.3100 – Figure – Medium

USDCAD – fundamental overview

What little price action we did see in some exceptionally thin Tuesday holiday trade was supportive of the Canadian Dollar, mostly on the back of rallying oil prices. There was also some demand on the better than expected Canada manufacturing PMI print. Key standouts on Wednesday’s calendar come from Auusie retail sales, PMI reads out of Germany, the Eurozone, and UK, Eurozone producer prices, US factory orders, and the Fed Minutes late in the day.

NZDUSD – technical overview

Overall pressure remains on the downside with the market once again stalling out on a run up into the 0.6500 area. Ultimately, a break back above 0.6577 would be required to take the immediate pressure off the downside. A monthly close below 0.6000 would intensify bearish price action.

• R2 0.6248 – 16 June high – Strong
• R1 0.6213 – 4 July high – Medium
• S1 0.6050 – 29 June low – Medium
• S2 0.6031 – 7 June low – Medium

NZDUSD – fundamental overview

Most of this latest impressive recovery in the price of the New Zealand Dollar comes from upbeat global risk sentiment and higher equities. We've also seen some demand from less bad New Zealand building permits earlier in the week, while a softer GDT auction hasn't factored into price action. Key standouts on Wednesday’s calendar come from Auusie retail sales, PMI reads out of Germany, the Eurozone, and UK, Eurozone producer prices, US factory orders, and the Fed Minutes late in the day.

US SPX 500 – technical overview

Longer-term technical studies are in the process of unwinding from extended readings off record highs. Look for rallies to be well capped in favor of lower tops and lower lows. A monthly close back above 4400 will be required to take the immediate pressure off the downside. Next key support comes in at 4260.

• R2 4500 – Psychological – Strong
• R1 4460 – 30 June/2023 high – Medium
• S1 4328 – 26 June low – Medium
• S2 4260 – 8 June low – Strong

US SPX 500 – fundamental overview

We've finally reached a point in the cycle where the Fed recognizes unanchored inflation expectations pose a greater downside risk than over-tightening. This is significant, as it means less investor friendly monetary policy that risks potential recession in the months ahead. Overall, we expect inflation to continue to be a problem in 2023 that results in downside pressure into rallies despite market expectations that would argue otherwise.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs. Setbacks should now be well supported above 1600 on a monthly close basis ahead of the next major upside extension. The recent break back above 1808 strengthens the bullish outlook. Next major resistance comes in at 2100, above which opens the next extension towards 2,500.

• R2 2076 – Record high/2020 – Strong
• R1 1986 – 24 May high – Medium
• S1 1900 – Round Number – Medium
• S2 1893 – 29 June low – Strong

GOLD (SPOT) – fundamental overview

The yellow metal continues to be well supported on dips with solid demand from medium and longer-term accounts. These players are more concerned about inflation risk and a less upbeat global growth outlook. All of this should keep the commodity well supported, with many market participants also fleeing to the hard asset as the grand dichotomy of record high equities and record low yields comes to an unnerving climax.