| EURUSD: 1.1255 |
The Euro traded a little lower in Europe on Monday, pressured by EurGbp as Sterling recovered, but has ended the day mid-range after a session confined to 1.1233/83.
The day’s range leaves the outlook unchanged, and for the time being the top of the channel at 1.1285 is capping further upside progress. A break of 1.1285 could yet take the Euro on to 1.1300, a break of which could elicit a quick move higher, to where 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).
The short term momentum indicators now look neutral, while the dailies look a little uncertain of any upside progress above the channel top, and back below the session low could then see a return towards 1.1200. Back under 1.1200, would then allow for another test of 1.1160 and potentially of 1.1100/10, and further out, 1.1075 and 1.1040 are likely targets albeit that they are still some way off.
As before, while the dailies remain toppish, selling rallies at the top of the channel could be a plan, with a SL placed above 1.1300. A daily close above 1.1300 would turn things around and would suggest the Euro is going to look for a test of 1.1400 and possibly 1.1500 at some stage.
| 24 Hour: Prefer to sell rallies at channel top; tight SL | Medium Term: Neutral | ||
| Resistance | Support | ||
| 1.1365 | 18 Aug high | 1.1237 | Session low |
| 1.1350 | Minor | 1.1200/01 | 2 June Low / 1 June low |
| 1.1326 | 8 Sept high | 1.1163 | 31 May low |
| 1.1300 | 9 Nov high | 1.1108 | 30 May low |
| 1.1284 | Channel top/2 June high/Session high | 1.1075 | 18 May low |
Economic data highlights will include:
EU Retail Sales, US API Weekly Crude Oil Stock Inventory
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| USDJPY: 110.49 |
We are sitting above strong support, with both the 200 DMA and the 200 WMA close by, ensuring that a cautious stance is required as the momentum indicators are offering little hint in either direction, although possibly looking to turn a little lower.
The soft US data is not helping the cause of the dollar, and if this continues to be the case further losses are likely (although there is no meaningful data today). Below 110.20/25 would see little to hold it up until 109.60, and those with long dollar positions do need to leave a tight SL below 110.20 as we could see an acceleration to the downside. Below 109.60, there is a chart gap going back to mid-April that still needs filling, to 109.30, and below that there is again very little to support the dollar until 108.85.
On the topside, 110.70/80 will see offers ahead of 111.00 and then 111.15 although this seems unlikely to be seen again today. Further out though, we could yet see a run towards back towards the 2 June high of 111.70 and the 111.85/95 and possibly towards 112.15/30. Neutral – possibly prefer to sell rallies.
| 24 Hour: Neutral – Sell rallies? Possibly | Medium Term: Neutral | ||
| Resistance | Support | ||
| 111.84 | 26 May high | 110.57 | 200 WMA |
| 111.70 | 2 June high | 110.35 | 200 DMA |
| 110.15 | 200 HMA | 110.23/27 | 18 May low/Session low |
| 110.90 | 100 HMA | 110.00 | Minor |
| 110.72 | Session high | 109.60 | 76.4% of 108.22/114.50 |
| GBPUSD: 1.2905 |
Cable shrugged off the weekend terrorist act and instead focused on a poll showing an 11 point lead for the Tories ahead of Thursday’s election, reaching 1.2940 before settling at 1.2910.
Both the short-term momentum and the daily indicators are now neutral, and ahead of the election Cable is probably best left alone.
The immediate points to watch though, on the downside, are at 1.2875 and at 1.2855. Back below 1.2830 would retest 1.2800 and the 31 May low of 1.2768, albeit probably not today. If wrong, under here could revisit minor support at 1.2750/55 but a break of which there is little to hold Cable up until 1.2685/90.
On the topside, Cable has so far been halted at the Fibo level at 1.2940, a break of which could then lead to 1.2980, ahead of 1.3000, and a possible retest of 1.3015 and eventually 1.3047.
As we said before, there are better things to look at right now although a better than expected Conservative win in next Thursday’s election would not surprise, taking Cable (sharply?) higher. A hung parliament would be an ominous outcome.
| 24 Hour: Neutral | Medium Term: Neutral | ||
| Resistance | Support | ||
| 1.3047 | 18 May high | 1.2875 | 200 HMA |
| 1.3015 | 25 May high | 1.2854 | Session low |
| 1.3000 | Psychological | 1.2829 | 1 June low |
| 1.2980 | (76.4% of 1.3047/1.2768) | 1,2800 | Minor |
| 1.2940 | (61.8% of 1.3047/1.2768)Session high | 1.2768 | 31 May low |
| USDCHF: 0.9649 |
US$Chf has had a rangebound session (0.9626/63) leaving the outlook unchanged.
On the downside, support is building at 0.9620 but below this, there is little to hold the dollar up until 0.9590/0.9600 and the November spike low at 0.9550, roughly where the 200 WMA also lies.
On the topside sellers will be seen at minor levels of 0.9765/75 ahead of 2 June’s high of 0.9719 although I doubt that we see that again today. The short term momentum indicators have turned a little higher today, suggesting a neutral stance and the 100 MMA at 0.9640 may continue to act as a magnate.
| 24 Hour: Neutral | Medium Term: Neutral | ||
| Resistance | Support | ||
| 0.9760 | 31 May high | 0.9640 | 100 MMA |
| 0.9734 | (23.6% of 1.0099/0.9621) | 0.9621/26 | 2 June Low /Session low |
| 0.9719 | 1 June high /2 June high | 0.9575 | Minor |
| 0.9700 | Minor | 0.9549/40 | 9 Nov low/200 WMA |
| 0.9663 | Session high | 0.9517 | 22 June 2016 low |
| AUDUSD: 0.7485 |
The Aud has had a solid session, underpinned by some short covering of Friday’s losses and also by gains in the iron ore price, reaching a high of 0.7497, and now waiting on today’s RBA decision.
Technically, the short-term momentum indicators still look positive on Tuesday although the hourlies are now reaching overbought territory. The dailies may also be picking up some mildly positive momentum, and on the topside, if we can make further progress above 0.7500 we could head towards 0.7515, the 200 DMA (0.7525) and even to the 100 DMA (0.7555).
On the downside, the initial bids will arrive at the minor rising trend support at around 0.7475. A break of this would trigger some short term stops and may produce a trip down towards 0.7440 and to 0.7420 ahead of the 100 WMA, at just under 0.7400. Further out, strong support would arrive at 0.7370/75, but a break of which could then see a decline towards the 12 May low of 0.7366 and to 0.7350 (minor). Further out, we should look for a run towards 0.7328 (9 May low) and the stronger 0.7310 level, where the 18-month rising trend support currently lies and could produce a decent bounce if we get there. If not, the Aud would find little to hold it up until minor support at 0.7285 and there is then little to be seen until 0.7160 although this is still a long way off.
Today will be all about the RBA – no change expected, with focus to be on the statement. Tomorrow is potentially more important, when we get the Q1 GDP. Keep an eye on Gold, which is threatening a major technical breakout on the topside. If it does materialise, it should be supportive of the Aud.
| 24 Hour: Mildly bullish | Medium Term: Prefer to sell rallies | ||
| Resistance | Support | ||
| 0.7555 | 100 DMA/2 May high | 0.7475 | Minor rising trend support |
| 0.7537 | (50% pivot of 0.7750/0.7328) | 0.7440 | 100 HMA |
| 0.7525 | 200 DMA | 0.7420 | Minor |
| 0.7517 | 23 May high | 0.7393 | 100 WMA |
| 0.7497 | Session high | 0.7372/73 | 1 June low/ (76.4% of 0.7329/0.7517) |
Economic data highlights will include:
Current Account (Q1), RBA Interest Rate Decision/Statement
| NZDUSD: 0.7137 |
The Kiwi has been quiet, but firm, on Monday, finishing towards the top end of the 0.7113/49 range.
The short-term momentum indicators are now look neutral while the dailies remain positive, and beyond 0.7150 would open the way towards the major descending trend resistance going back to July 2014 at 0.8835, but currently at 0.7180/85. Beyond there could see quite an acceleration higher, towards 0.7240 and to 0.7370, although it is too early for that scenario but note that the Kiwi finished May by making a key-monthly bullish reversal, which possibly does hint at further gains through 2017.
The 4 hour indicators are vaguely hinting at some bearish divergence, and on the downside the initial support once again lies nearby at 0.7110/20, ahead of 0.7100. Below there would allow a return to minor support at 0.7180 and then at 0.7065. Further out, support levels would be seen at the 30 May low of 0.7035 and at 0.7000 a break of which could take us back to the 24 May low of 0.6988.
While looking bid in the short term, I would be tempted to look to sell into strength at the descending trend resistance at around 0.7185, with a tight SL placed above 0.7200. A break, and daily close above here, would change the ball game and could prompt an acceleration to the topside. Watch out for the Global Dairy Trade Index tonight.
| 24 Hour: Mildly bullish – Prefer to sell rallies | Medium Term: Prefer to sell rallies | ||
| Resistance | Support | ||
| 0.7247 | 23 Feb high | 0.7113 | Session low |
| 0.7200 | Minor | 0.7100 | Minor |
| 0.7188 | Descending trend resistance | 0.7080 | 100 HMA |
| 0.7160 | (61.8% of 0.7375/0.817) | 0.7065 | (23.6% of 0.6817/0.7144)/200 HMA |
| 0.7149 | Session high | 0.7057 | 31 May low/2 June Low |
Economic data highlights will include:
ANZ Commodity Price index, Global Dairy Trade Index
By June 6, 2017