Euro Weighed on Greek Impasse, Fed Comments

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 1.5709 – 23Jun high  – Medium
• S2 1.5625 – 17Jun low  – Strong

GBPUSD – fundamental overview

Cable gains have run into some resistance after posting 2015 highs, with the market unable to extend the rally even in the face of some softer US durable goods and manufacturing PMIs. It seems the hawkish Fed Powell comments have been driving most of the price action here, after the central banker called for two rate hikes before year end. A market long Pounds is also getting a little nervous about the prospect for cooler inflation and could be positioning ahead of Friday’s Carney speech.

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 124.18 –23Jun high – Medium
• S1 122.45 – 10Jun low – Medium
• S2 122.00 – Previous Resistance – Strong

USDJPY – fundamental overview

Hawkish Fed Powell comments, elevated equities and confidence a Greece deal will get done are all helping to keep this major pair well supported. Still, dealers are starting to talk about sell interest in the 124.00 area that could do a good job of capping gains. Looking ahead, the final reading of Q1 US GDP is due and could be have an influence on direction in Wednesday trade.

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 opened renewed Euro downside pressure, though there is a feeling in the air we could finally be coming down to the wire with many speculating a deal will get done as soon as today or tomorrow. Of course, 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 – Medium
• S1 0.7679 – 23Jun low – Medium
• S2 0.7646 – 17Jun low – Strong

AUDUSD – fundamental overview

Although the Australian Dollar has been supported in recent trade, softer Aussie data and an RBA that is still leaving the door open for additional cuts should not keep the currency supported for any meaningful period of time. Tuesday’s hawkish Fed Powell comments have also reminded investors of the monetary policy divergence theme, and medium-term players continue to look to build into Aussie shorts. For today, the focus will be on the final reading of Q1 US GDP and any development out of Greece.

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 1.2383 – 23Jun 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 hawkish Fed Powell comments have fueled additional demand for this pair and the focus will now shift to the upcoming release of the final Q1 GDP reading in the US. 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. Daily studies are however looking a little stretched and there is risk for a short-term corrective bounce in the sessions ahead. But any rallies should now be well capped well below 0.7200.

• R2 0.7012 – 17Jun high– Strong
• R1 0.6930 – 22Jun high– Medium
• S1 0.6815 – 23Jun/2015 low – Medium
• S2 0.6800 – Figure – Strong

NZDUSD – fundamental overview

The latest wave of Kiwi selling has been brought on by Greece uncertainty, and hawkish Fed Powell comments, though local developments have also played a part. On Tuesday, the RBNZ said it had overestimated inflation and the market sold some more Kiwi, to fresh 5 year lows against the Buck 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, the final reading for Q1 US GDP is due in North America.

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 few 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, as confirmed by Fed Powell on Tuesday. The final reading of Q1 US GDP will be a major focus on Wednesday.

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

Some early week optimism for a Greek deal has faded and this is putting pressure back on the downside for the Lira. Throw in the fact that President Erdogan’s government has yet to form a coalition and an unwillingness for the CBRT to consider additional rate hikes despite rising inflation and the outlook for the Lira isn’t looking too bright right now. Tuesday’s hawkish Fed Powell comments only throw more fuel on the fire, and the market will now shift its attention back to Greece and to the upcoming final reading of Q1 US GDP.