Buck roaring into H2 2021

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 1.4002 – 23 June high – Strong
• R1 1.3884 – 29 June high – Medium
• S1 1.3786 – 21 June low – Medium
• S2 1.3669 – 12 April low – Strong

GBPUSD – fundamental overview

Initially, the Pound was able to easily absorb the downward revision to UK GDP. However, the ongoing broad Dollar demand into the end of H1 2021 was too much to ignore. Looking ahead, Thursday’s calendar features an ECB Lagarde speech, German, Eurozone, and UK manufacturing PMIs, a BOE Bailey speech, Eurozone unemployment, US initial jobless claims, and US ISM manufacturing.

USDJPY – technical overview

The major pair has run into massive resistance in the form of the monthly Ichimoku cloud. This translates to a longer-term trend that is still bearish despite the latest run higher. Look for additional upside to be limited, with scope for a topside failure and bearish resumption over the coming sessions. It would take a clear break back above 113.00 to negate the outlook.

• R2 112.00 – Figure– Medium
• R1 111.50 – Mid-Figure – Medium
• S1 109.71– 21 June low – Medium
• S2 109.19 – 7 June low – Strong

USDJPY – fundamental overview

There's been no stopping US equities, which continue to march to record highs and all of this has been a major prop to USDJPY, which is also getting an added boost from the strong wave of Dollar demand into the end of H1 2021. Looking ahead, Thursday’s calendar features an ECB Lagarde speech, German, Eurozone, and UK manufacturing PMIs, a BOE Bailey speech, Eurozone unemployment, US initial jobless claims, and US ISM manufacturing.

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 0.7726 – 14 June high – Medium
• R1 0.7647 – 17 Jun high – Medium
• S1 0.7492 – 30 June low – Medium
• S2 0.7477 – 21 June/2021 low – Strong

AUDUSD – fundamental overview

The Australian Dollar has been hurting this week from renewed virus concerns, softer China PMI data and a wave of US Dollar demand on the back of a repricing of Fed expectations. Looking ahead, Thursday’s calendar features an ECB Lagarde speech, German, Eurozone, and UK manufacturing PMIs, a BOE Bailey speech, Eurozone unemployment, US initial jobless claims, and US ISM manufacturing.

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 1.2500 will strengthen the outlook.

• R2 1.2487 – 21 June high – Strong
• R1 1.2424 – 30 June high – Medium
• S1 1.2252– 23 June low – Medium
• S2 1.2204 – 13 June high – Strong

USDCAD – fundamental overview

The Canadian Dollar wasn't hit as hard as its peers on Wednesday, with the Loonie getting a boost from the better than expected Canada GDP read, which was accompanied by an upward revision. Looking ahead, Thursday’s calendar features an ECB Lagarde speech, German, Eurozone, and UK manufacturing PMIs, a BOE Bailey speech, Eurozone unemployment, US initial jobless claims, and US ISM manufacturing.

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 0.7243 – 7 June high – Strong
• R1 0.7161 – 15 June high – Medium
• S1 0.6963 – 22 June low– Medium
• S2 0.6923 – 18 June/2021 low – Strong

NZDUSD – fundamental overview

RBNZ Governor Orr was out doing his best to try and stop the bleed of the falling Kiwi rate this week, saying activity was returning to pre-COVID levels, and export prices were up on global demand. But ultimately, risk off flow from the uptick in the virus, softer China PMIs, and a market pricing a more hawkish Fed, have been too hard for Kiwi to shrug off. Looking ahead, Thursday’s calendar features an ECB Lagarde speech, German, Eurozone, and UK manufacturing PMIs, a BOE Bailey speech, Eurozone unemployment, US initial jobless claims, and US ISM manufacturing.

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 4350, with a break back below 4139 to strengthen the outlook.

• R2 4350 – Psychological – Strong
• R1 4306 – 30 June/Record high – Medium
• S1 4200 – Round number – Medium
• S2 4139 – 21 June low – 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 1917 – 1 June high – Strong
• R1 1826 – 17 June high – Medium
• S1 1750 – 29 June low – Medium
• S2 1724 – 13 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.