US market returns from holiday break

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 1.4002 – 23 June high – Strong
• R1 1.3884 – 29 June high – Medium
• S1 1.3732 – 2 July low – Medium
• S2 1.3669 – 12 April low – Strong

GBPUSD – fundamental overview

UK PMI reads were above forecast and the market prepared for remaining lockdown restrictions to be lifted, both of which helped to prop up the Pound in an otherwise US holiday light session. Key standouts on Tuesday’s calendar come from the RBA policy decision, German factory orders, Eurozone construction PMIs, Eurozone retail sales, Eurozone and German ZEW sentiment reads, and US ISM non-manufacturing.

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 111.66 – 2 July/2021 high – Strong
• S1 110.42 – 30 June low – Medium
• S2 109.71 – 21 June low – Strong

USDJPY – fundamental overview

The Yen was neither here nor there in a very light US holiday Monday trading sessions. Things are expected to pick up today and dealers have been talking about Yen demand in the aftermath of the latest slide. Key standouts on Tuesday’s calendar come from the RBA policy decision, German factory orders, Eurozone construction PMIs, Eurozone retail sales, Eurozone and German ZEW sentiment reads, and US ISM non-manufacturing.

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 0.7000.

• R2 0.7617 – 25 June high – Strong
• R1 0.7571 – 29 Jun high – Medium
• S1 0.7444 – 2 July/2021 low – Strong
• S2 0.7400 – Figure – Medium

AUDUSD – fundamental overview

There's been talk of a potential extension of the lockdown in Sydney with cases still not back under control. Activity is expected to pick up in the market today, as the market digests the latest RBA decision and the US returns from holiday. Key standouts on Tuesday’s calendar come from the RBA policy decision, German factory orders, Eurozone construction PMIs, Eurozone retail sales, Eurozone and German ZEW sentiment reads, and US ISM non-manufacturing.

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 1.2450 – 2 July high – Medium
• S1 1.2252– 23 June low – Medium
• S2 1.2204 – 13 June high – Strong

USDCAD – fundamental overview

The Bank of Canada business outlook indicator rose, though with trading conditions so thin on Monday on account of the US holiday, we didn't see much in the way of price action. Key standouts on Tuesday’s calendar come from the RBA policy decision, German factory orders, Eurozone construction PMIs, Eurozone retail sales, Eurozone and German ZEW sentiment reads, and US ISM non-manufacturing.

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 0.6800, with sights set on a run back towards the 0.7500 area.

• R2 0.7096 – 25 June high – Strong
• R1 0.7052 – 29 June high – Medium
• S1 0.6947 – 2 July low– Medium
• S2 0.6923 – 18 June/2021 low – Strong

NZDUSD – fundamental overview

The RBNZ purchased NZD 110 million of government bonds in Monday's QE operation, where decent offers were seen. New Zealand's June ANZ commodity price index rose 0.8% m/m versus an upwardly revised 2.1% m/m previous. However, it's worth noting that dairy prices were the only major category to fall. Trading conditions are expected to pick up on Tuesday as the US market returns from the holiday. Key standouts on Tuesday’s calendar come from the RBA policy decision, German factory orders, Eurozone construction PMIs, Eurozone retail sales, Eurozone and German ZEW sentiment reads, and US ISM non-manufacturing.

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 4400, with a break back below 4139 to strengthen the outlook.

• R2 4400 – Psychological – Strong
• R1 4358– 2 July/Record high – Medium
• S1 4281 – 30 June low – Medium
• S2 4218 – 22 June low – Medium

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 1750 – 29 June low – Medium
• S2 1724 – 13 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.