USDJPY Looking To Break Multi-Month Range

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 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 1.5600 – Figure – Medium
• R1 1.5507 – 25May high – Medium
• S1 1.5400 – Figure  – Medium
• S2 1.5355 – 8May low  – Strong

GBPUSD – fundamental overview

No first-tier data due out of the UK on Tuesday, and the market isn’t expected to move much on the UK CBI Distributive Trades release. 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. Last 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. Looking ahead, US durable goods and consumer confidence are the key releases for the day. Dealers cite stops below 1.5400.

USDJPY – technical overview

The market has finally broken out of a multi-month range, with the price surging through key resistance at 122.00, to open the door for the next major upside extension towards the 125.00-130.00 area further rup. The broader trend remains highly constructive and any setbacks should now be very well supported on dips. At this point, only a close below 118.23 would delay.

• R2 123.00 – Figure – Strong
• R1 122.69 – 26May high – Medium
• S1 121.49 – 26May low – Medium
• S2 120.58 – 20May low – Strong

USDJPY – fundamental overview

Japanese names and HFTs have been notable buyers in Tuesday trade, with this market finally looking like to establish above key resistance at 122.00 after breaking to fresh multi-year highs above the figure. Although the Bank of Japan has signaled its content with current policy, and won’t be looking to accommodate further, a hotter US CPI print and hawkish comments from Fed Chair Yellen, expecting a rate hike in 2015, have been enough to fuel renewed bids in the major pair. A daily close above 122.00 on Tuesday will likely do a good job of generating additional demand.

EURCHF – technical overview

The market has finally leveled out 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 June 5th payment date, 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. Still, we have seen some support for the commodity currency in Tuesday trade on the back of a healthy rebound in the price of iron ore. Looking ahead, US durable goods and consumer confidence will be the key data releases to watch.

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 daily close 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 1.2328 – 26May 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. Looking ahead, US durable goods and consumer confidence are due.

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

Not much of a boost for Kiwi on Tuesday, despite the better than expected New Zealand trade data release. 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. Looking ahead, US durable goods and consumer confidence will be the next key releases to watch.

US SPX 500 – technical overview

The latest break to fresh record highs has stalled out, with the lack of bullish momentum suggesting the market could be exhausted at current levels and poised for a significant corrective decline. Look for a break and close below 2116 to strengthen this outlook and accelerate declines in the sessions ahead.

• 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. Last Friday’s hotter than expected US CPI reading and hawkish Fed Chair comments could start to weigh more heavily in today’s post holiday trade. Looking ahead, the market will take in US durable good and consumer confidence.

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 2.6710 – 13May high – Strong
• R1 2.6335 – 14May high – Medium
• S1 2.5600 – 21Apr low – Medium
• S2 2.5390 – 23Mar low – Strong

Feature – fundamental overview

The increasing risk of a potential Greek default is something that has been weighing more heavily on the correlated Turkish Lira in recent trade. 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. As far as the election is concerned, at least three major polls have shown the ruling AK Party falling short of the votes needed to form a single party government, the first time something like this has happened in over a decade. Looking ahead, US economic data will factor, with durable goods and consumer confidence due.