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GBPUSD – technical overview

Signs have emerged of the market wanting to put in a longer-term base after collapsing to a record low in September 2022. The latest push to a fresh 2024 high beyond 1.2830 confirms the outlook and opens the door for the next major upside extension towards the 2023 high at 1.3143. Any setbacks should now be well supported ahead of 1.2000.

• R2 1.2710 – 9 April high – Strong
• R1 1.2701 – 16 May high – Medium
• S1 1.2578 – 15 May low – Medium
• S2 1.2446 – 9 May low – Strong

GBPUSD – fundamental overview

Absence of first tier data out of the UK left the Pound trading on US Dollar themes. The softer US CPI data and awful retail sales were the key focus for the day, which gave the Pound a nice boost on the back of the broad based US Dollar selloff in the aftermath. Key standouts on Thursday’s calendar come from the ECB financial stability review, BOE financial stability report, BOE speak, US housing starts and building permits, US initial jobless claims, the Philly Fed index, US industrial production, and Fed speak.

USDJPY – technical overview

The market remains confined to a strong uptrend, most recently extending to a multi-year high through 160.00. Key support comes in at 151.95, with only a weekly close below to delay the constructive outlook.

• R2 157.99 – 1 May high – Medium
• R1 156.78 – 14 May high – Medium
• S1 153.60 – 16 May low – Medium
• S2 151.86 – 3 May low – Strong

USDJPY – fundamental overview

Japan GDP data came in much softer than expected, with private consumption and business spending suffering, also accompanied by downward revisions. The saving grace for the Yen has been a wave of broad based US Dollar weakness and Japanese inflation data which appears to be trending lower. This should take the immediate pressure off Japanese officials from needing to think about intervention. Key standouts on Thursday’s calendar come from the ECB financial stability review, BOE financial stability report, BOE speak, US housing starts and building permits, US initial jobless claims, the Philly Fed index, US industrial production, and Fed speak.

AUDUSD – technical overview

There are signs of the potential formation of a longer-term base with the market trading down into a meaningful longer-term support zone. Only a monthly close below 0.6200 would give reason for rethink. Back above 0.6900 will take the big picture pressure off the downside and strengthen case for a bottom.

• R1 0.6800– Figure – Medium
• R2 0.6715 – 16 May high – Medium
• S1 0.6620– 15 May low – Medium
• S2 0.6558 – 8 May low – Strong

AUDUSD – fundamental overview

Aussie employment data was out earlier today and came in stronger than expected on the whole. Employment levels rose much faster than expected, and though the unemployment rate also rose, this was attributed to people who were planning to step back into the workforce, indicating they had a job lined up. The Australian Dollar has been exceptionally well bid in the aftermath, also getting a nice boost from the latest run of broad based US Dollar selling. Key standouts on Thursday’s calendar come from the ECB financial stability review, BOE financial stability report, BOE speak, US housing starts and building permits, US initial jobless claims, the Philly Fed index, US industrial production, and Fed speak.

USDCAD – technical overview

Above 1.3000 signals an end to a period of longer-term bearish consolidation and suggests the market is in the process of carving out a more significant longer-term base. Next key resistance now comes in up into the 1.4000 area. Setbacks should be very well supported down into the 1.3000 area.

• R2 1.3847 – 16 April/2024 high – Strong
• R1 1.3785 – 30 April high – Medium
• S1 1.3586 – 10 May low – Medium
• S2 1.3547 – 9 April low – Strong

USDCAD – fundamental overview

The Canadian Dollar was able to rally on broad based US Dollar selling from softer US CPI and ugly US retail sales, but still underperformed relative to its peers. The relative weakness was attributed to a sour run of Canada economic data in the form of housing starts and manufacturing sales. Key standouts on Thursday’s calendar come from the ECB financial stability review, BOE financial stability report, BOE speak, US housing starts and building permits, US initial jobless claims, the Philly Fed index, US industrial production, and Fed speak.

NZDUSD – technical overview

Overall pressure remains on the downside with the market continuing to stall out on runs up into the 0.6500 area. At the same time, there are some signs of the market wanting to put in a longer-term base. Ultimately, a break back above 0.6500 would be required to take the medium-term pressure off the downside and encourage this prospect. A monthly close below 0.5800 will intensify bearish price action.

• R2 0.6200 – Figure – Medium
• R1 0.6141 – 16 May high– Medium
• S1 0.6031 – 15 May low – Medium
• S2 0.5981 – 8 May low – Strong

NZDUSD – fundamental overview

The New Zealand Dollar has been enjoying a fresh run of bids following the latest round of broad based US Dollar selling on the back of the softer US CPI reading and discouraging US retail sales print. At the same time, we have seen some Kiwi selling into the run higher, perhaps on a downbeat report from ASB bank. In a research note sent out the other day, the bank wrote that New Zealand's long-term productivity decline had worsened since the start of the pandemic, which has pushed up the cost of doing business. Key standouts on Thursday’s calendar come from the ECB financial stability review, BOE financial stability report, BOE speak, US housing starts and building permits, US initial jobless claims, the Philly Fed index, US industrial production, and Fed speak.

US SPX 500 – technical overview

Longer-term technical studies continue to look quite extended after pushing to fresh record highs, begging for a deeper correction ahead. Look for rallies to be well capped ahead of 5500. Next key support comes in at 4921.

• R2 5400 – Round Number – Strong
• R1 5323 – 16 May/Record high – Medium
• S1 5196 – 14 May low – Medium
• S2 5132 – 6 May low – Medium

US SPX 500 – fundamental overview

Though we have seen a healthy adjustment of investor expectations towards the amount of rate cuts in 2024, the market still hopes policy will end up erring more towards the investor friendly, accommodative side of things. This bet has kept stocks well bid into dips and consistently pushing record highs.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs. Setbacks should now be well supported above 1900 on a monthly close basis ahead of the next major upside extension towards 2500.

• R2 2432 – 12 April/Record high – Strong
• R1 2479 – 10 May high – Medium
• S1 2277 – 3 May low – Medium
• S2 2223– 21 March high – Strong

GOLD (SPOT) – fundamental overview

The yellow metal has pushed record highs in 2024 with solid demand from medium and longer-term accounts. These players are more concerned about inflation, geopolitical risk and a less upbeat global growth outlook. 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 end.