Can’t get away from the virus

GBPUSD – technical overview

Technical studies are in the process of consolidating from stretched levels after the push to fresh multi-month highs. This leaves room for additional consolidation, before the market considers a meaningful bullish continuation towards a retest of the 2018 high. But look for setbacks to now be very well supported into the 1.3500 area.

• R2 1.4133 – 16 June high – Strong
• R1 1.4002 – 23 June high – Medium
• S1 1.3800 – Figure – Medium
• S2 1.3786 – 21 June low – Strong

GBPUSD – fundamental overview

Fear around an uptick in the coronavirus and doubts as to whether Boris Johnson would actually be able to deliver on restrictions being lifted by July 19th were behind a lot of the selling in the Pound that we saw on Monday. Looking ahead, key standouts on the calendar include UK mortgage approvals and consumer credit, Eurozone consumer confidence and sentiment reads, German inflation data, US Case Shiller, US house prices, a Fed Barkin speech, ECB Lagarde appearance and US CB consumer confidence.

USDJPY – technical overview

The major pair has run into massive resistance in the form of the monthly Ichimoku cloud. This translates to a longer-term trend that is still bearish despite the latest run higher. Look for additional upside to be limited, with scope for a topside failure and bearish resumption over the coming sessions. It would take a clear break back above 113.00 to negate the outlook.

• R2 112.00 – Figure– Medium
• R1 111.12 – 24 June/2021 high – Medium
• S1 109.71– 21 June low – Medium
• S2 109.19 – 7 June low – Strong

USDJPY – fundamental overview

Virus cases have hit a record in Indonesia and Malaysia has gone ahead extending lockdown indefinitely. All of this is adding stress to financial markets in Asia and the risk off pressure is weighing on the major pair as a consequence. Looking ahead, key standouts on the calendar include UK mortgage approvals and consumer credit, Eurozone consumer confidence and sentiment reads, German inflation data, US Case Shiller, US house prices, a Fed Barkin speech, ECB Lagarde appearance and US CB consumer confidence.

AUDUSD – technical overview

Technical studies have turned up in recent months, after the market traded down to its lowest levels since 2003 in 2020. There is evidence of a longer-term bottom following the latest push back through 0.7000, though at this stage, there is risk for a deeper pullback to allow for shorter term studies to unwind. Setbacks should now be well supported ahead of 0.7400.

• R2 0.7726 – 14 June high – Medium
• R1 0.7647 – 17 Jun high – Medium
• S1 0.7500 – Figure – Medium
• S2 0.7477 – 21 June/2021 low – Strong

AUDUSD – fundamental overview

The Australian Dollar hasn't been able to escape the worry around the latest uptick in coronavirus cases. A whopping 70% of the Australian population is now back under restriction. All of this may of course force the RBA into being more cautious at next week's meeting. Looking ahead, key standouts on the calendar include UK mortgage approvals and consumer credit, Eurozone consumer confidence and sentiment reads, German inflation data, US Case Shiller, US house prices, a Fed Barkin speech, ECB Lagarde appearance and US CB consumer confidence.

USDCAD – technical overview

Has been in major decline since topping out in 2021 above 1.4600. At this stage, with the decline now well extended, the market is likely to find solid support into the 1.2000 area ahead of a resumption of gains. Ultimately, only a weekly close below 1.2000 would suggest otherwise. Back above 1.2500 will strengthen the outlook.

• R2 1.2487 – 21 June high – Strong
• R1 1.2404 – 22 June high – Medium
• S1 1.2252– 23 June low – Medium
• S2 1.2204 – 13 June high – Strong

USDCAD – fundamental overview

The Canadian Dollar was under pressure on Monday and most of this came from the bearish reversal day in the price of OIL. OIL is showing signs of topping out after rallying to its highest levels since October 2018 and more weakness ahead could weigh more heavily on the Loonie. Looking ahead, key standouts on the calendar include UK mortgage approvals and consumer credit, Eurozone consumer confidence and sentiment reads, German inflation data, US Case Shiller, US house prices, a Fed Barkin speech, ECB Lagarde appearance and US CB consumer confidence.

NZDUSD – technical overview

The market has been very well supported in recent months and there is evidence of a longer-term base. Look for setbacks to hold up above 0.7100, with sights set on a run back towards the 0.7500 area.

• R2 0.7243 – 7 June high – Strong
• R1 0.7161 – 15 June high – Medium
• S1 0.6992 – 17 June low– Medium
• S2 0.6923 – 18 June/2021 low – Strong

NZDUSD – fundamental overview

The New Zealand Dollar has not been immune to the latest virus scare, with Wellington expanding virus restrictions. Looking ahead, key standouts on the calendar include UK mortgage approvals and consumer credit, Eurozone consumer confidence and sentiment reads, German inflation data, US Case Shiller, US house prices, a Fed Barkin speech, ECB Lagarde appearance and US CB consumer confidence.

US SPX 500 – technical overview

Longer-term technical studies are looking quite exhausted and the market is showing signs of wanting to roll over after racing to another record high. Look for rallies to be well capped ahead of 4300, with a break back below 4000 to strengthen the outlook.

• R2 4300 – Psychological – Strong
• R1 4294 – 28 June/Record high – Medium
• S1 4200 – Round number – Medium
• S2 4139 – 21 June low – Strong

US SPX 500 – fundamental overview

We're trading just off fresh record highs, and yet, with so little room for additional central bank accommodation, given an already depressed interest rate environment, the prospect for sustainable runs to the topside on easy money policy incentives and government stimulus, should no longer be as enticing to investors. Meanwhile, ongoing worry associated with coronavirus fallout and risk of rising inflation should weigh more heavily on investor sentiment into the second half of 2021.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs and an acceleration beyond the next major psychological barrier at 2000. Setbacks should now be well supported above 1600.

• R2 1917 – 1 June high – Strong
• R1 1826 – 17 June high – Medium
• S1 1761 – 18 June low – Medium
• S2 1756 – 29 April low – Strong

GOLD (SPOT) – fundamental overview

The yellow metal continues to be well supported on dips with solid demand from medium and longer-term accounts. These players are more concerned about exhausted monetary policy, extended global equities, and coronavirus fallout. All of this should keep the commodity well supported, with many market participants also fleeing to the hard asset as the grand dichotomy of record high equities and record low yields comes to an unnerving climax.