Greece Updates and US Durable Goods

GBPUSD – technical overview

An impressive rally to fresh 2015 highs has stalled out ahead of the 1.6000 psychological barrier, with the market reversing lower and exposing a drop back towards some internal support at 1.5550. A break and close below 1.5550 will open the door for a more pronounced bearish reversal, while inability to do so will keep the immediate pressure on the topside for an eventual test of 1.6000.

• R2 1.5930 – 18Jun/2015 high – Strong
• R1 1.5831 – 23Jun high – Medium
• S1 1.5700 – 21May high  – Medium
• S2 1.5625 – 17Jun low  – Strong

GBPUSD – fundamental overview

The UK economic calendar is light this week and the lack of first tier economic data is forcing local traders to look for inspiration elsewhere. Last week’s solid UK economic data had propelled the Pound to fresh 2015 highs against the Buck, though the market has since come under some pressure on the back of ongoing Greece uncertainty and some better than expected Monday US existing home sales. Looking ahead, UK industrial trends will get some attention, though ongoing developments in Greece and US durable goods will be front and centre.

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 consolidation 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 124.00 –Figure – Medium
• S1 122.45 – 10Jun low – Medium
• S2 122.00 – Previous Resistance – Strong

USDJPY – fundamental overview

The combination of a rally in the Nikkei and some softer Japanese manufacturing PMIs have been used as an excuse to help bid up the major pair into Tuesday trade. Still, with much uncertainty surrounding Greece and with US durable goods orders on the horizon, any additional gains beyond 124.00 may prove hard to come by.

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 1.0403 – 19Jun low – Medium
• S2 1.0305 – 7May low – Strong

EURCHF – fundamental overview

Lack of any real progress on Greece has kept the Euro in check, though there is a feeling in the air we could finally be coming down to the wire. Over the weekend, Greece submitted another list of reforms to its creditors and it appears there is a strong desire for a deal to get done. But inability to come up with any breakthroughs on the deal front this week will not bode well for this rate, with the Euro expected to come under renewed pressure. Still, the SNB remains committed to act to curb excessive overvaluation in the Franc, particularly if brought on by a fallout in Greece.

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 0.7849 – 18Jun high – Strong
• R1 0.7796 – 22Jun high – Strong
• S1 0.7646 – 17Jun low – Medium
• S2 0.7598 – 1Jun low – Strong

AUDUSD – fundamental overview

A resurgence in USD demand on Greece uncertainty and some softer economic data have been weighing on the Australian Dollar in Tuesday trade. The Aussie conference board leading index and house price index disappointed, while in China, manufacturing PMIs didn’t inspire much confidence despite coming in a tad better than forecast, with the data still below the 50 boom/bust level. RBA officials have been talking down the Australian Dollar in recent weeks, on a account of a slowing economy, threat of cool down in China and slumping iron ore prices and with the RBA leaving the door open for additional rate cuts, deeper setbacks are on the cards. In the interim any signs of a deal out of Greece would likely prop the risk correlated Aussie for a short while before players stepped back in to sell rallies. US durable good orders are the key economic release in Tuesday trade.

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. Setbacks should now be well supported in the 1.2200 area, while ultimately, only a daily close back below 1.2127 would delay the constructive outlook.

• R2 1.2442 – 9Jun high – Strong
• R1 1.2361 – 15Jun high – Medium
• S1 1.2215 – 19Jun low – Medium
• S2 1.2127 – 18Jun low – Strong

USDCAD – fundamental overview

The Loonie is still feeling the impact from the softer Canada retail sales print last week, though we have seen an intensification of CAD selling this week. Lack of clarity on Greece and some solid Monday US existing home sales have fueled additional demand for this pair and the focus will now shift to the upcoming release of US durable goods orders. OIL price action has taken a backseat with the commodity stabilizing in recent trade, though this market should not be overlooked. Dealers cite buy-stops above 1.2400, with plenty of demand on dips below 1.2300.

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 0.6800. Any rallies should now be well capped below 0.7400.

• R2 0.7012 – 17Jun high– Strong
• R1 0.6930 – 22Jun high– Medium
• S1 0.6837 – 23Jun/2015 low – Medium
• S2 0.6800 – Figure – Strong

NZDUSD – fundamental overview

Another day and another low for the New Zealand Dollar, which sits at 5 year lows against the Buck. This latest wave of selling has been brought on by Greece uncertainty, though local developments have also played a part. Earlier today, the RBNZ said it had overestimated inflation and the market sold some more Kiwi on the news, with the comments strengthening the case for the possibility of additional easing from the central bank. Macro players continue to reposition to the short side, particularly with the risk correlated US equity market starting to look less reliable at lofty heights. Looking ahead, US durable goods will be the feature release in Tuesday trade.

US SPX 500 – technical overview

The recent 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 topside failure and daily close back below 2100 to strengthen the outlook open the door for deeper setbacks towards critical support at 2040 over the coming sessions. Ultimately, only a daily close above 2137 negates.

• R2 2137.00 – 19May/Record – Strong
• R1 2130.00 – 22Jun high – Medium
• S1 2070.00 – 9Jun low – Medium
• S2 2040.00 – 11Mar low – Strong

US SPX 500 – fundamental overview

The equity market has failed to establish any meaningful bullish momentum since 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 over the past couple of weeks has helped solidify prospects for a sooner than later rate liftoff, and this reality is making it less attractive to be long equities at lofty levels. Renewed optimism for a Greek deal has helped to keep the market supported for now, but even with a deal, equity investors will be looking to head for the exits with rates in the US expected to move higher. US durable goods are due later today, though it is questionable the stock market will be rooting for a solid print in light of the Fed policy implications.

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 1206.00 – 18Jun 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. Buy stops reported above $1235.

Feature – technical overview

USDTRY is locked within a well defined uptrend, with the market consolidating off recently established record highs. A medium-term higher low is in place just over 2.5600, with any setbacks expected to be very well supported above the level ahead of the next major upside extension back above 2.8095. Ultimately, only a break and close below 2.5605 would negate.

• R2 2.8095 – 8Jun/Record – Strong
• R1 2.7500 – 16Jun high – Medium
• S1 2.6445 – 29Apr low – Medium
• S2 2.5605 – 21May low – Strong

Feature – fundamental overview

No change expected to policy when the CBRT meets today. Though we have seen a pickup in inflation, the central bank is not in a position to raise rates as it would strangle a struggling local economy. President Erdogan’s calls for a quick formation of a coalition government and some renewed optimism over the prospect for a Greece deal this week have been helping to fuel a welcome round of bids in a Turkish Lira that is recovering off record lows against the Buck. Still overall, with the Fed expected to move on rates and plenty of uncertainty surrounding the Turkish economy, the emerging market currency remains at risk for additional weakness over the coming months.