| EURUSD: 1.1178 |
The Euro was under a little downside pressure heading into the weekend, with the dollar being supported by the better than expected GDP and Durable Goods figures. The pair finished near the lows of 1.1160 and looks set to remain under pressure early in the coming week.
While the dailies still look constructive, they may be in the process of topping out, and the short term momentum indicators are now looking heavy so if we break below the good support nearby at 1.1160/65, we could see a run back towards 1.1100 and then towards 1.1080 and 1.1050.
On the topside, the initial resistance will be seen at 1.1200, ahead of Friday’s high at 1.1234, Thursday’s high of 1.1250 and then at the trend high of 1.1268. Beyond there, unlikely today, there is little to stop it heading back to 1.1300, and above that, the points to watch are at 1.1365 (18 Aug high), 1.1427 (24 June high) and then at 1.1450 (major descending trend resistance).
Selling rallies now appears to be the game, with a SL above 1.1270, where a channel top appears to have formed (see chart). Draghi speaking today; otherwise quiet – US/UK holiday.
| 24 Hour: Prefer to sell rallies | Medium Term: Turning mildly bearish. | ||
| Resistance | Support | ||
| 1.1300 | 9 Nov high | 1.1165/60 | (23.6% of 1.0838/1.1268)/22 May low |
| 1.1268 | 22 May high | 1.1140 | Minor |
| 1.1249 | 25 May high | 1.1104 | (38.2% of 1.0838/1.1268) |
| 1.1234 | Friday high | 1.1075 | 18 May low |
| 1.1200 | Pivot | 1.1052 | (50% of 1.0838/1.1268) |
Economic data highlights will include:
M: ECB Governor, Mario Draghi Speech to EU Parliament, US Holiday
T: EU Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate, German CPI, US Personal Consumption/Expenditure, Case Shiller House Price Index, Dallas Fed Mfg Business Climate
W: German Retail Sales, Import/Export Index, German/ EU Unemployment, Provisional CPI, US Pending Home Sales, Chicago Purchasing Managers Index, Beige Book, API Weekly Crude Oil Stock Inventory
T: EU Markit Flash Manufacturing/Services/Composite PMIs, US Markit PMIs, ISM Mfg PMI/Prices Paid, Construction Spending, EIA Crude Oil Stocks Weekly Change
F: EU PPI, US Jobs/NFP/Average Hourly Earnings data
| USDJPY: 111.31 |
US$Jpy saw a slide to 110.87 on Friday, but well supported by buyers at the previous lows around 110.85, the pair recovered to finish the week at 111.30.
The momentum indicators are mixed/neutral again at the start of the week and another choppy, rangebound session, largely confined to the 111/112 area would not surprise. While the dailies remain rather negative the hourly charts may be hinting at a mild squeeze to the topside, and further short term gains could see another move towards Friday’s high of 111.84 and then to 112.00/10, which would appear to be toppish for Monday if we get there. Beyond that though leads to 112.30 and then to 112.75, which might be a decent sell area if we ever get there.
On the downside, below 111.00 would lead back to 110.85, which should be strong, and 110.60, ahead of last Thursday’s low of 110.23. The 4 hour charts are neutral; me too. There are better things to trade while the Yen is chopping around like this.
| 24 Hour: Range Trade | Medium Term: Neutral | ||
| Resistance | Support | ||
| 112.30 | (50% of 114.36/110.23) | 111.10 | Minor |
| 112.12 | 24 May high | 110.85/87 | 23 May low /Friday low |
| 111.95 | 25 May high | 110.57 | 200 WMA |
| 111.84 | Friday high | 110.40` | Minor |
| 111.55 | 200 HMA | 110.23 | 17 May low |
Economic data highlights will include:
M:
T: Unemployment, Retail Trade
W: Housing Starts, Construction Orders
T: Foreign Bond/Stocks Investment, Nikkei Mfg PMI
F:
| GBPUSD: 1.2804 |
Sterling was the worst performer at the end of the week, losing 1% against the dollar in trading down to 1.2775 ahead of a bounce to 1.2800, pressured lower by polls showing a narrowing of the Tory/Labour divide ahead of the election.
The momentum indicators are all aligning increasingly lower and if we head below Friday’s low of 1.2765 then we could see a move towards minor support at 1.2750, below which there is little to hold Cable up until 1.2685/90.
On the topside, resistance will be seen at the minor Fibo levels of the fall from the trend high of 1.3047, beginning at around 1.2840.
For the time being I prefer to sell rallies, although most of the direction until the June 8 election will be poll driven, and anything showing the Conservatives widening their lead over Labour will see a quick reversal to the topside. Today is a UK holiday and liquidity will be thin.
| 24 Hour: Neutral – Prefer to sell rallies | Medium Term: Neutral | ||
| Resistance | Support | ||
| 1.2980 | (76.4% of 1.3047/1.2775) | 1.2800 | Minor |
| 1.2940 | (61.8% of 1.3047/1.2775) | 1.2775 | Friday low |
| 1.2910 | (50% of 1.3047/1.2775) | 1.2756 | 21 April low |
| 1.2878 | (38.2% of 1.3047/1.2775) | 1.2710 | Minor |
| 1.2838 | (23.6% of 1.3047/1.2775) | 1.2688 | (38.2% of 1.2108/1.3047) |
Economic data highlights will include:
M: UK Bank Holiday
T:
W: UK Net Lending to Individuals
T:
F: UK Construction PMI
| USDCHF: 0.9743 |
US$Chf was choppy on Friday and stuck to the familiar range, leaving the outlook unchanged.
The 4 hour charts look pretty neutral, possibly pointing slightly higher, and on the topside, back above 0.9760 (Friday high) would open the way to 0.9775/85, above which could see a run back to 0.9800/10. Back above here would then run towards 0.9845, although possibly not today.
The dailies still point lower though, and on the downside good support should be seen at 0.9700/0.9690, but below 0.9690 would then open the way back to 0.9675 and to 0.9600/40 although this looks unlikely to be seen today.
I am neutral on US$Chf although if the Euro slides against the dollar, as looks possible, then US$Chf may begin to make some gains, turning the daily momentum indicators higher.
| 24 Hour: Neutral | Medium Term: Neutral | ||
| Resistance | Support | ||
| 0.9825 | 15 May high | 0.9695/91 | 25 May low / 22 May low |
| 0.9804 | 19 May high | 0.9675 | Minor |
| 0.9786 | (23.6% of 1.0100/0.9691) | 0.9635 | Minor |
| 0.9775 | 24 May high | 0.9600 | Minor |
| 0.9760 | Friday high | 0.9585 | Minor |
| AUDUSD: 0.7445 |
Early losses saw Asia take the Aud down to 0.7422 on Friday, although these were later reversed through Europe/US trade, and a squeeze to 0.7460 was seen ahead of a close at 0.7445.
The momentum indicators are mixed at the start of the week, and in the absence of the UK/US a quiet session would seem to lie ahead. The daily charts still look mildly constructive, and above Friday’s high we might expect a run back towards minor resistance at 0.7480 and at 0.7500 ahead of the 23 May high of 0.7517. Above here would then look for a run towards 0.7540/45 and eventually to 0.7555 although that remains remote.
On the downside, support will be seen at Friday’s low of 0.7422 ahead of 0.7400/10 and the recent lows at 0.7384/88. Below this would open the way to the 12 May low of 0.7366 and 0.7350 (minor), ahead of the stronger 0.7330 level. Back below the 9 May low of 0.7328 would find little to hold the Aud up until 0.7300 and the rising trend support, at 0.7285, although this seems unlikely to be seen for a while.
A neutral stance is required, although the dailies do seem to hint at slightly higher levels, but the prospect of a soft (even negative) GDP reading on Wednesday may well limit any positive momentum.
| 24 Hour: Neutral | Medium Term: Neutral | ||
| Resistance | Support | ||
| 0.7545 | 3 May high | 0.7435 | Minor |
| 0.7538 | (50% of 0.7750/0.7328) | 0.7421 | Friday low |
| 0.7515/17 | 25 May high/23 May high | 0.7407/01 | 19 May low /(61.8% of 0.7329/0.7517) |
| 0.7480 | Minor | 0.7388/84 | 17 May low/15 May low |
| 0.7460 | Friday high | 0.7373 | (76.4% of 0.7329/0.7517) |
Economic data highlights will include:
M: Company Gross Operating Profits (Q1)
T: Building Permits (Apr)
W: Private Sector Credit, (Apr), GDP (Q1), China Mfg/Non Mfg PMI (May)
T: AIG Mfg Index (May), Retail Sales (Apr), US Personal Consumption/Expenditure (Q1), Caixin China Flash Services PMI (May)
F: New Home Sales
| NZDUSD: 0.7062 |
Having looked soft through Asian trade on Friday, the Kiwi squeezed sharply higher through European trade to reach 0.7076, before closing the week at 0.7060.
The momentum indicators seem to be aligning higher on Monday, and if 0.7076 is taken out we might expect a quick run towards 0.7090/95, above which the 200 DMA lies at 0.7105.
On the downside, minor support lies at around 0.7025 ahead of Friday’s low at 0.7006. A break of 0.7000, unlikely today I suspect, could take us back to the 24 May low of 0.6988, below which would see a run to 0.6965 and possibly to 0.6940.
| 24 Hour: Neutral | Medium Term: Neutral -Cautiously bullish. | ||
| Resistance | Support | ||
| 0.7160 | (61.8% pivot of 0.7375/0.817) | 0.7040 | Minor |
| 0.7105 | 200 DMA | 0.7025 | 100 HMA |
| 0.7090/95 | 21 Mar high/(50% pivot of 0.7375/0.817) | 0.7006 | Friday low |
| 0.7076 | Friday high | 0.7000 | (23.6% of 0.6817/0.7058) |
| 0.7054 | 100 DMA | 0.6988 | 24 May low |
Economic data highlights will include:
M:
T: ANZ Business Confidence (May)
W: RBNZ Financial Stability Report, ANZ Activity Outlook
T: Terms of Trade
F:
