An active Tuesday calendar

GBPUSD – technical overview

Technical studies are in the process of consolidating from stretched levels after the push to fresh multi-month highs. This leaves room for additional consolidation, before the market considers a meaningful bullish continuation towards a retest of the 2018 high. But look for setbacks to now be very well supported into the 1.3500 area.

• R2 1.4250 – 1 June/2021 high – Strong
• R1 1.4200 – Figure – Medium
• S1 1.4070 – 14 June low – Medium
• S2 1.4006 – 13 May low – Strong

GBPUSD – fundamental overview

The Pound has been more tentative of late, less certain about wanting to extend gains in the face of the news around the delay of the UK reopening. The currency has also been struggling with the latest headlines around Sunak failing to extend support for businesses when things reopen. Key standouts on today’s calendar come in the form of German inflation, UK employment, Eurozone trade, Canada housing starts, a BOE Bailey speech, Canada producer prices, US retail sales, US producer prices, US industrial production, US business inventories, and US NAHB housing.

USDJPY – technical overview

The major pair has run into massive resistance in the form of the monthly Ichimoku cloud, and has since stalled out. This translates to a longer-term trend that is still bearish despite the run up we saw in 2021, with risk for deeper setbacks ahead. It would take a clear break back above 113.00 to negate the outlook.

• R2 110.97 – 31 March/2021 high – Strong
• R1 110.33 – 4 June high – Strong
• S1 109.19– 7 June low – Medium
• S2 108.34 – 7 May low – Strong

USDJPY – fundamental overview

Japan industrial production data shot up and the Nikkei put in its strongest close in more than a month. All of this contributed to the Monday weakness in the Yen. Key standouts on today’s calendar come in the form of German inflation, UK employment, Eurozone trade, Canada housing starts, a BOE Bailey speech, Canada producer prices, US retail sales, US producer prices, US industrial production, US business inventories, and US NAHB housing.

AUDUSD – technical overview

Technical studies have turned up in recent months, after the market traded down to its lowest levels since 2003 in 2020. There is evidence of a longer-term bottom following the latest push back through 0.7000, though at this stage, there is risk for a deeper pullback to allow for shorter term studies to unwind. Setbacks should now be well supported ahead of 0.7400.

• R2 0.7892 – 10 May high – Strong
• R1 0.7776 – 11 Jun high – Medium
• S1 0.7645 – 3 June low – Strong
• S2 0.7600 – Figure – Medium

AUDUSD – fundamental overview

Not much of a reaction to the latest RBA Minutes where the central bank sketched out several potential scenarios for whether to cease or extend the QE and YCC programs. Ultimately, the RBA said a key factor on the decisions would depend on progress towards employment and inflation targets and the impact on overall financial conditions. Key standouts on today’s calendar come in the form of German inflation, UK employment, Eurozone trade, Canada housing starts, a BOE Bailey speech, Canada producer prices, US retail sales, US producer prices, US industrial production, US business inventories, and US NAHB housing.

USDCAD – technical overview

Has been in major decline since topping out in 2021 above 1.4600. At this stage, with the decline now well extended, the market is likely to find solid support into the 1.2000 area ahead of a resumption of gains. Ultimately, only a weekly close below 1.2000 would suggest otherwise. Back above 1.2352 will strengthen the outlook.

• R2 1.2252 – 5 May low – Strong
• R1 1.2204 – 13 May high – Medium
• S1 1.2057– 7 June low – Medium
• S2 1.2007 – 1 June/2021 low – Strong

USDCAD – fundamental overview

The miss on Canada factory sales did little to weigh on the the Canadian Dollar, with the Loonie mostly holding up on Monday from the record highs in US equities and fresh yearly high in OIL. Key standouts on today’s calendar come in the form of German inflation, UK employment, Eurozone trade, Canada housing starts, a BOE Bailey speech, Canada producer prices, US retail sales, US producer prices, US industrial production, US business inventories, and US NAHB housing.

NZDUSD – technical overview

The market has been very well supported in recent months and there is evidence of a longer-term base. Look for setbacks to hold up above 0.7100, with sights set on a run back towards the 0.7500 area.

• R2 0.7317 – 26 May high – Strong
• R1 0.7243 – 7 June high – Medium
• S1 0.7115 – 4 May low– Strong
• S2 0.7100 – Figure – Medium

NZDUSD – fundamental overview

Bloomberg reported on emails that revealed NZ FinMin Robertson's move to add home prices to the RBNZ's monetary policy remit was never expected to trigger a tighter monetary policy stance from the RBNZ. Instead, the New Zealand Treasury saw the remit change as merely a signal which wouldn't have a significant impact on monetary policy or house prices. Key standouts on today’s calendar come in the form of German inflation, UK employment, Eurozone trade, Canada housing starts, a BOE Bailey speech, Canada producer prices, US retail sales, US producer prices, US industrial production, US business inventories, and US NAHB housing.

US SPX 500 – technical overview

Longer-term technical studies are looking quite exhausted and the market is showing signs of wanting to roll over after racing to another record high. Look for rallies to be well capped ahead of 4300, with a break back below 4000 to strengthen the outlook.

• R2 4300 – Psychological – Strong
• R1 4267 – 15 June/Record high – Medium
• S1 4036 – 13 May low – Medium
• S2 4000 – Psychological – Strong

US SPX 500 – fundamental overview

We're trading just off fresh record highs, and yet, with so little room for additional central bank accommodation, given an already depressed interest rate environment, the prospect for sustainable runs to the topside on easy money policy incentives and government stimulus, should no longer be as enticing to investors. Meanwhile, ongoing worry associated with coronavirus fallout and risk of rising inflation should weigh more heavily on investor sentiment into the second half of 2021.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs and an acceleration beyond the next major psychological barrier at 2000. Setbacks should now be well supported above 1600.

• R2 1960 – 6 January/2021 high – Strong
• R1 1917 – 1 June high – Strong
• S1 1809 – 13 May low – Medium
• S2 1756 – 29 April 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 exhausted monetary policy, extended global equities, and coronavirus fallout. 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.