Quiet Start To Week In Holiday Monday Trade

GBPUSD – technical overview

The recovery rally to fresh 2015 highs at 1.5815 looks to have finally stalled out, with the market considering the possibility of bearish trend resumption. Look for a break and daily close below 1.5445 to strengthen the outlook and suggest a medium-term lower top is in place at 1.5815 ahead of the next major downside extension, eventually below the yearly low at 1.4565. In the interim, rallies should be well called ahead of 1.5650.

• R2 1.5700 – 21May high – Strong
• R1 1.5600 – Figure – Medium
• S1 1.5445 – 19May high  – Strong
• S2 1.5355 – 8May low  – Medium

GBPUSD – fundamental overview

The market has been rather quick to forget about much stronger UK retail sales and upbeat comments from BOE Carney, with broader flows tilting back in the US Dollar’s favour. Friday’s hotter than expected US CPI print, putting in its strongest gain in over two years, along with hawkish comments from Fed Chair Yellen that she expects a rate hike in 2015, have been fueling the renewed US Dollar bids, with the Pound coming back under significant pressure. Dealers cite stops below 1.5445 and 1.5400.

USDJPY – technical overview

Although the market remains locked within a well defined uptrend, rallies have been very well capped in recent months, with the market deferring to a period of consolidation. Still, the broader trend remains highly constructive and any setbacks should continue to be very well supported in favour of the next major upside extension through 122.03 and towards key psychological barriers at 125.00 further up. At this point, only a close below 118.23 would delay.

• R2 122.50 – Mid-Figure – Medium
• R1 122.03 – 10Mar/2015 high – Strong
• S1 120.58 – 20May low – Medium
• S2 119.83 – 19May low – Strong

USDJPY – fundamental overview

Momentum has been building for a break in this major pair out from some sideways trade that has defined price action over the past several months. Market participants are now eyeing a push above 122.00, for a move to fresh multi-year highs, with last Friday’s hotter US CPI print and hawkish Fed Chair Yellen comments fueling the latest round of bids. With no changes expected from the BOJ on policy, economic data out of the US will likely be the primary driver for USDJPY going forward. Looking ahead, Tuesday’s durable goods and consumer confidence and Friday’s GDP print will be the key releases to watch.

EURCHF – technical overview

The market has finally put in a healthy rebound after a multi-day drop out from the February high at 1.0815. From here, there is risk for additional upside back towards 1.0815 in the days ahead, with any setbacks expected to be very well supported ahead of 1.0300. Look for a push back above 1.0525 to confirm and accelerate gains. Ultimately, only below 1.0235 negates.

• R2 1.0600 – Figure – Medium
• R1 1.0525 – 30Apr high – Strong
• S1 1.0330 – 8May low– Medium
• S2 1.0305 – 7May low – Strong

EURCHF – fundamental overview

This market has come under some pressure in recent trade on the back of Euro outflows as market participants fear the worst in Greece. Greece has said it will not be able to make the June IMF loan repayment if a deal is not reached by the payment, and this has fueled declines. Still, an ongoing SNB commitment to act to curb excessive overvaluation in the Franc, should help support dips. Meanwhile, appetite for global equities has also been supportive of this correlated exchange rate. Dealers cite solid demand, with no meaningful stops until below 1.0200.

AUDUSD – technical overview

A recent recovery rally has stalled out ahead of 0.8200 and overall, the broader downtrend remains intact. Look for a lower top to be in place at 0.8163, in favour of the next major downside extension back towards and eventually below the current multi-year base from early April at 0.7433. Intraday rallies are now expected to be well capped ahead of 0.8000, while ultimately, only a break back above 0.8163 would delay the bearish structure.

• R2 0.8010 – 19May high – Strong
• R1 0.7931 – 22May high – Medium
• S1 0.7787 – 5May low – Strong
• S2 0.7682 – 21Apr low – Medium

AUDUSD – fundamental overview

The Australian Dollar has not been immune to the broad based resurgence in US Dollar demand over the past few days, with optimism for a rebound in Q2 US economic data, hotter US CPI readings and some hawkish comments from Fed Chair Yellen, all driving renewed downside pressure in AUDUSD. Aussie had already come under some pressure of its own last week on a more dovish RBA Minutes and fear over a more aggressive cooling off in the China economy. Dealers cite decent stops below 0.7785.

USDCAD – technical overview

The market looks like it may finally have based out at 1.1920, putting in a meaningful medium-term higher low, ahead of the next major upside extension and bullish trend resumption. At this point, a break back above previous support at 1.2350 will strengthen the outlook, while any setbacks should be well supported above 1.2000.

• R2 1.2350 – Previous Support – Strong
• R1 1.2322 – 22May high – Medium
• S1 1.2172 – 22May low – Medium
• S2 1.2129 – 19May low – Strong

USDCAD – fundamental overview

The Canadian Dollar has come back under pressure in recent trade, with the market managing to shrug off some stronger Canada retail sales, instead focusing on softer Canada inflation, hotter US inflation and hawkish comments from the Fed Chair. With the Fed still expected to hike rates in 2015, yield differentials are shifting back into the US Dollar’s favour. Also seen weighing on the Canadian Dollar a bit in recent trade has been the pullback in OIL prices, with many fearing the recovery in the commodity has come to an end.

NZDUSD – technical overview

Despite a minor consolidation, the market remains locked within a broader, well defined downtrend and looks to be in the process of carving out the next medium-term lower top. As such, look for a more pronounced bearish reversal in the sessions ahead, back towards the key low of 0.7176, below which opens the next major downside extension towards psychological barriers at 0.6500. Ultimately, only back above 0.7890 would compromise and give reason for pause.

• R2 0.7564 – 14May high– Strong
• R1 0.7395 – 22May high– Medium
• S1 0.7282 – 20May low – Medium
• S2 0.7176 – 3Feb/2015 low – Strong

NZDUSD – fundamental overview

Overall, with the RBNZ inching closer towards a rate cut, with the dairy market continuing to look soft, and with equity markets vulnerable at record highs, any additional upside in the risk correlated currency should be met with formidable resistance. Throw in a broad resurgence in US Dollar demand on the back of some hotter US CPI and hawkish comments from Fed Chair Yellen, and NZDUSD could be on the verge of clearing key stops below 0.7176 in the sessions ahead. Dealers talk about private client and model names on the offer into rallies.

US SPX 500 – technical overview

The latest break and close above 2126 has opened the door for fresh record highs and the next major upside extension in this market, potentially towards a measured move in the 2200 area. At this point, a break and daily close back below 2116 would now be required to take the immediate pressure off the topside.

• R2 2150.00 – Psychological – Medium
• R1 2137.00 – 19May/Record – Strong
• S1 2116.00 – 18May low – Medium
• S2 2084.00 – 17May low – Strong

US SPX 500 – fundamental overview

Investors have fed back into the broader uptrend in this market, with stocks breaking to fresh record highs in the previous week. However, despite the gains, the market has demonstrated an inability to establish any meaningful bullish momentum thus far, and could be at risk for stalling out yet again. Friday’s hotter than expected US CPI reading and hawkish Fed Chair comments could start to weigh more heavily in Tuesday post holiday trade.

GOLD (SPOT) – technical overview

The market has been very well supported on dips since recovering from the 2014 base. The price action suggests the market could now be poised for additional upside in the sessions ahead, in an attempt to carve out a more meaningful longer-term base. Look for a break back above recent highs at 1232 to strengthen this outlook. Ultimately, only back below 1170 will negate.

• R2 1246.00 – 10Feb high – Medium
• R1 1232.00 – 18May high – Strong
• S1 1170.00 – 1May low – Medium
• S2 1143.00 – 17Mar low – Strong

GOLD (SPOT) – fundamental overview

The GOLD market continues to show signs of demand since stalling ahead of the 2014 base. Many investors already feel that with currencies across the board looking less attractive in a low yield environment, and with global equities looking vulnerable at record highs, there is no better place to be invested than in the yellow metal. Dealers cite plenty of demand ahead of $1170 with buy-stops reported above $1235.

Feature – technical overview

USDTRY has been in corrective mode over the past several days, with the market pulling back sharply from the 2.7430 record high from late April. Still, this market remains locked within a more well defined medium-term uptrend and should start to find support ahead of 2.5400 in favour of a bullish resumption and next major upside extension. Ultimately, only a close below 2.5390 would force a shift in the structure.

• R2 2.6225 – 13May low – Medium
• R1 2.6110 – 20May high – Strong
• S1 2.5600 – 21Apr low – Medium
• S2 2.5390 – 23Mar low – Strong

Feature – fundamental overview

Though we have seen an impressive recovery in the Lira over the past several weeks, the currency is starting to show signs of renewed weakness. An on hold CBRT decision last week and expectations the central bank won’t be looking to cut any time soon, have indeed helped to support the Lira, although it seems risk associated with Greece and a potential cooling in China are variables that can not be overlooked. Throw in renewed broad based US Dollar demand and uncertainty surrounding the upcoming Turkey election and it seems additional TRY rallies should be very well capped.