‘Data Dependency’ Is The Name Of The Game

GBPUSD – technical overview

The market has broken to a fresh 2015 high beyond the previous peak at 1.5815, with the push exposing a test of the next key psychological barrier at 1.6000. Any setbacks from current levels should now be well supported above 1.5550, with only a break back below this level to take the immediate pressure off the topside.

• R2 1.6000 – Psychological – Strong
• R1 1.5945 – 11Nov high – Medium
• S1 1.5700 – 21May high  – Medium
• S2 1.5625 – 17Jun low  – Strong

GBPUSD – fundamental overview

What an impressive run for the Pound these past several days, with the UK currency racing to another 2015 high against the Buck. Though the BOE Minutes may have carried a slightly more hawkish tone, it was the surge in UK earnings via the labour market report that opened the latest wave of demand. Dealers now cute interest to 1.6000, with decent bids supporting on dips. The balanced FMC rate decision hasn’t really factored into trade, though today’s UK retail sales and US CPI will likely play a greater role.

USDJPY – technical overview

Although the bullish structure remains firmly intact, following the recent break to fresh multi-year highs, the market has finally entered a period of healthy correction after stalling ahead of 126.00. Stretched studies are unwinding from overbought, with room for further weakness to 122.00. But any additional setbacks below 122.00 should be very well supported in favour of a bullish resumption.

• R2 124.44 – 17Jun high – Strong
• R1 123.80 –16Jun high – Medium
• S1 122.45 – 10Jun low – Medium
• S2 122.00 – Previous Resistance – Strong

USDJPY – fundamental overview

The FOMC rate decision produced an balanced result, though it seems the USDJPY market was quite sensitive to Yellen comments that more attention should be placed on the broader rate trajectory which remains accommodative, than on the timing of the actual liftoff. It seems the message is that while the Fed may go ahead and hike rates in September, this should not be taken as a sign the Fed will start raising rates at a rapid pace. Yield differentials have since narrowed back in the Yen’s favour and the market is considering deeper setbacks towards 122.00.

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 recovery back towards 1.0815 in the days ahead, with any setbacks expected to be very well supported above 1.0400 on a daily close basis. Look for a push back above 1.0575 to strengthen the constructive outlook and accelerate gains.

• R2 1.0700 – 19Mar high – Medium
• R1 1.0575 – 4Jun high – Strong
• S1 1.0405 – 17Jun low – Medium
• S2 1.0305 – 7May low – Strong

EURCHF – fundamental overview

All signs of progress in the Greece saga have once again faded and it appears Greece and its creditors will be back and forth into the final hour when everything will most certainly come to a head. Still, setbacks have held up rather well in the face of this news. Moreover, an ongoing SNB commitment to act to curb excessive overvaluation in the Franc should continue to support on dips. No change is expected on rates or policy from the SNB today, and the central bank should just reaffirm its existing stance.

AUDUSD – technical overview

Overall, the broader downtrend remains intact after the market stalled out ahead of 0.8200 several days back. Look for a medium-term lower top to now 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 0.7533. Any corrective rallies should be well capped ahead of 0.8000, while ultimately, only a break back above 0.8163 will delay the bearish structure.

• R2 0.7934 – 20May high – Medium
• R1 0.7819 – 3Jun high – Strong
• S1 0.7646 – 17Jun low – Medium
• S2 0.7598 – 1Jun low – Strong

AUDUSD – fundamental overview

The outlook for the Australian Dollar is quite negative at the moment, with this week’s dovish RBA Minutes being followed up by a downbeat Aussie Westpac leading index. Throw in slumping iron ore prices, a cooling China and a general uneasiness surrounding the outcome for Greece and deeper setbacks are on the cards for the commodity currency. There has also been talk in recent days of the potential for additional cuts from the RBA.

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 towards the 2015 high at 1.2835. Recent setbacks should now be well supported in the 1.2200 area, after the market reached a short-term double top objective. Ultimately, only a daily close below 1.2150 would delay the constructive outlook.

• R2 1.2442 – 9Jun high – Strong
• R1 1.2361 – 15Jun high – Medium
• S1 1.2202 – 10Jun low – Strong
• S2 1.2129 – 29May low – Medium

USDCAD – fundamental overview

The Canadian Dollar hasn’t been doing much these past few days, with the currency settling into some consolidation along with the rest of the FX market. However, a combination of much higher than expected Canada wholesale sales and some mild broad based US Dollar selling post FOMC have taken USDCAD back down towards recent range lows. There isn’t any data out of Canada on Thursday and the key focus will be on US CPI and initial jobless claims.

NZDUSD – technical overview

The recent break to fresh 2015 and multi-month lows confirms a medium-term lower top at 0.7744 and opens the door for the next major downside extension towards a measured move objective in the 0.6500 area. For now, the market will be focused on trying to establish below the psychological barrier at 0.7000, with the next key support level coming in to 0.6900. Any rallies should now be well capped below 0.7400.

• R2 0.7081 – 11Jun high– Medium
• R1 0.7012 – 17Jun high– Strong
• S1 0.6879 – 12Jun/2015 low – Medium
• S2 0.6800 – Figure – Strong

NZDUSD – fundamental overview

The New Zealand Dollar has been a standout underperformer in recent trade, following the completion of a material shift in the RBNZ monetary policy outlook, culminating with last week’s rate cut. A massive unwinding of Kiwi longs is underway and NZDUSD is now establishing below 0.7000 against the Buck, testing levels not seen since 2010. Deeper setbacks are projected, with macro players continuing to reposition to the short side, particularly with the risk correlated US equity market starting to show signs of rolling over. Thursday’s much softer New Zealand GDP release has only strengthened the bearish case and the market will now look ahead to US CPI.

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. The recent close back below 2100 strengthens the bearish outlook and could open the door for deeper setbacks towards critical support at 2040 over the coming sessions. Ultimately, only above 2137 negates.

• R2 2137.00 – 19May/Record – Strong
• R1 2115.00 – 11Jun high – Strong
• S1 2062.00 – 7May low – Medium
• S2 2040.00 – 11Mar low – Strong

US SPX 500 – fundamental overview

The equity market has failed to establish any meaningful bullish momentum after recently breaking to fresh record highs in May and could be at risk of forming a major top. A wave of solid first-tier US economic data, highlighted by an impressive US employment report and retails sales, have helped to solidify prospects for a sooner than later rate liftoff, and this reality is making it less attractive to be long equities at lofty levels. Thursday’s FOMC decision confirmed the likelihood for a sooner Fed rate hike and even with the Fed still committing to remaining accommodative, the market wasn’t able to find any fresh momentum.

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 a fresh bounce 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 a daily close below 1170 will negate.

• R2 1232.00 – 18May high – Strong
• R1 1204.00 – 1Jun high – Medium
• S1 1163.00 – 5Jun low – Medium
• S2 1143.00 – 17Mar low – Strong

GOLD (SPOT) – fundamental overview

Despite recent setbacks, the GOLD market continues to show signs of demand on dips. 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 for capital allocation than GOLD. Dealers cite plenty of interest around $1170.

Feature – technical overview

USDSGD setbacks have been very well supported in the 1.3150 area and the market looks like it is in the process of carving the next medium-term higher low ahead of a bullish resumption. Look for a break back above 1.3630 to confirm and open the door for a retest of the 2015 high at 1.3937 further up. Ultimately, only a daily close below 1.3150 delays.

• R2 1.3629 – 8Jun high – Strong
• R1 1.3499 – 17Jun high – Medium
• S1 1.3275 – 22May high – Medium
• S2 1.3148 – 29Apr low – Strong

Feature – fundamental overview

The recent bid in the Singapore Dollar is less a function of any positives on the domestic front and more a function of some broad based profit taking on USD longs. While the Fed has still left the door open for  September rate hike, the fact that Janet Yellen has stressed the Fed will remain accommodative, suggesting any hikes will be slow and gradual, is helping an EM FX market that is very sensitive to yield differentials and monetary policy divergence.