Dollar sold despite shift in rate pricing

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 door is now open for the next major upside extension towards the 2023 high at 1.3143. Any setbacks should be well supported ahead of 1.2000.

• R2 1.2894 – 8 March/2024 high – Strong
• R1 1.2740 – 19 June high – Medium
• S1 1.2622 – 21 June low – Medium
• S2 1.2578 – 15 May low – Medium

GBPUSD – fundamental overview

The Pound is finally ready to look past the more dovish leaning BOE decision, instead putting its focus on the latest UK CBI numbers which came in better than expected. June total orders were less bad at -18 from -33 previous, and selling prices rose to 20 from 15 previous. Key standouts on Tuesday’s calendar come from Fed speak, Canada inflation, the Chicago Fed National Activity Index, US Case Shiller, US house prices, US consumer confidence, and Richmond Fed manufacturing.

USDJPY – technical overview

The market remains confined to a strong uptrend, most recently extending to a multi-year high through 160.00. Key support comes in at 151.95, with only a weekly close below to delay the constructive outlook.

• R2 160.21 – 29 April/2024 high – Strong
• R1 159.93 – 24 June high – Medium
• S1 157.52 – 18 June low – Medium
• S2 156.57 – 13 June low – Medium

USDJPY – fundamental overview

The Yen has managed to avert retesting this year's multi-year low, with the currency recovering mildly on the back of profit taking on long US Dollar positions into an area where there is some worry about official action from Japanese officials. We have indeed been hearing rhetoric on the wires in recent sessions with the usual line that excessive volatility is undesirable and the exchange rate is being watched closely. Key standouts on Tuesday’s calendar come from Fed speak, Canada inflation, the Chicago Fed National Activity Index, US Case Shiller, US house prices, US consumer confidence, and Richmond Fed manufacturing.

AUDUSD – technical overview

There are signs of the potential formation of a longer-term base with the market trading down into a meaningful longer-term support zone. Only a monthly close below 0.6200 would give reason for rethink. Back above 0.6900 will take the big picture pressure off the downside and strengthen case for a bottom.

• R1 0.6715– 16 May high – Strong
• R2 0.6705 – 12 June high – Medium
• S1 0.6576– 10 June low – Medium
• S2 0.6558 – 8 May low – Strong

AUDUSD – fundamental overview

Aussie consumer confidence data wasn't great, though the data did come in better than expected. Meanwhile, Westpac said this month's report pointing to improvements in consumer confidence, which also helped to prop the Australian Dollar. Key standouts on Tuesday’s calendar come from Fed speak, Canada inflation, the Chicago Fed National Activity Index, US Case Shiller, US house prices, US consumer confidence, and Richmond Fed manufacturing.

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 1.3847 – 16 April/2024 high – Strong
• R1 1.3792 – 11 June high – Medium
• S1 1.3620 – 4 June low – Medium
• S2 1.3586 – 10 May low – Strong

USDCAD – fundamental overview

A broad rally in commodities prices contributed to the latest recovery in the Canadian Dollar. Meanwhile, the Bank of Canada pledged an audit of pandemic-era monetary policies. Key standouts on Tuesday’s calendar come from Fed speak, Canada inflation, the Chicago Fed National Activity Index, US Case Shiller, US house prices, US consumer confidence, and Richmond Fed manufacturing.

NZDUSD – technical overview

Overall pressure remains on the downside with the market continuing to stall out on runs up into the 0.6500 area. At the same time, there are some signs of the market wanting to put in a longer-term base. Ultimately, a break back above 0.6500 would be required to take the medium-term pressure off the downside and encourage this prospect. A monthly close below 0.5800 will intensify bearish price action.

• R2 0.6222 – 12 June high – Strong
• R1 0.6200 – Figure – Medium
• S1 0.6083 – 22 May low – Medium
• S2 0.6031 – 15 May low – Strong

NZDUSD – fundamental overview

The Westpac-McDermott Miller Employment Confidence Index declined in Q2, hitting its lowest level since 2020. The sharpest declines in the data came via the current job opportunities component and the expected job opportunities component. Meanwhile, China fixing of the USDCNY rate to a fresh 7 month high wasn't a help to the New Zealand Dollar, as it will lead to lower demand from China importers. But overall, the Kiwi rate has held up well considering these setbacks. Key standouts on Tuesday’s calendar come from Fed speak, Canada inflation, the Chicago Fed National Activity Index, US Case Shiller, US house prices, US consumer confidence, and Richmond Fed manufacturing.

US SPX 500 – technical overview

Longer-term technical studies continue to look quite extended, begging for a deeper correction ahead. At the same time, the latest bullish breakout to a fresh record high beyond the 2024 high opens the door for the next measured move upside extension targeting the 5650 area. Key support comes in at 5194.

• R2 5600 – Round Number – Strong
• R1 5524 – 20 June/Record high – Medium
• S1 5394 – 14 June low – Medium
• S2 5321 – 7 June low – Strong

US SPX 500 – fundamental overview

Though we have seen a healthy adjustment of investor expectations towards the amount of rate cuts in 2024, the market still hopes policy will end up erring more towards the investor friendly, accommodative side of things. This bet has kept stocks well bid into dips and consistently pushing record highs. Still, if there is a sense the Fed will need to be more sensitive towards erring on the side of higher rates, it could invite major disruption to the stock market.

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 this next major upside extension into the 2500-3000 area. Setbacks should now be well supported above 2000 on a monthly close basis.

• R2 2451 – 20 May Record high – Strong
• R1 2388 –7 June high – Medium
• S1 2277 – 3 May low – Strong
• S2 2223– 21 March high – Strong

GOLD (SPOT) – fundamental overview

The yellow metal has pushed record highs in 2024 with solid demand from medium and longer-term accounts. These players are more concerned about inflation, geopolitical 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 end.