Fri, Jun 24, 2022 @ 23:26 GMT
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Foreign Exchange Market Commentary: EUR/USD, USD/JPY, GBP/USD,AUDUSD, GBPCAD, GOLD, WTI CRUDE, DJIA, FTSE100, DAX

EUR/USD

The EURUSD pair eased from Tuesday’s fresh nearly three-week high at 1.0735 which was retested on Wednesday, but strong barrier, shaped in daily Kijun-sen line, kept gains limited for now. Consolidation phase remained above broken 1.0700 barrier, reinforced by 20SMA at 1.0689 that keep in play fresh bullish momentum, gained on Tuesday’s rally, for fresh attempts higher.

Slightly stronger dollar kept the Euro’s near-term action at the back foot, however, dollar’s gains were limited due to persisting geopolitical tensions and June rate expectations edging lower on weaker than expected US economic data and softer US economic growth expectations, as Trump administration no longer expects to complete tax reforms by August, as initially planned.

The Euro is expected to attempt above current highs and resume bull-leg from 1.0601 trough, after completing consolidation phase, which may extend below 1.0700/1.0689 support zone, but should not exceed next strong support and lower pivot at 1.0653 (daily Tenkan-sen / Fibonacci 61.8% retracement of 1.0601/1.0735 upleg).

Support: 1.0700, 1.0685, 1.0653, 1.0636
Resistance: 1.0738, 1.0777, 1.0800, 1.0826

USD/JPY

USD JPY managed to hold above two-day low at 108.32 on Wednesday, but remained under 200SMA barrier at 108.85, after repeated probes above it failed. Another close below 200SMA will maintain negative near-term tone, as overall structure remains bearish. The dollar stays under pressure on rising tensions over North Korea that triggered strong migration from riskier assets into safe haven yen.

The price is expected to stay in extended consolidation above fresh five-month low at 108.11, signalled by reversal of slow stochastic from oversold zone on daily chart. Upside was so far limited at 109.20, ahead of pivotal 109.43 barrier (Fibonacci 38.2% of 111.57/108.11 downleg) and next strong barrier at 109.84 (daily Tenkan-sen) which is expected to cap extended upticks.

Larger bear-leg from 115.50, which also marks the third wave of five-wave cycle from 118.65, is looking for eventual close below its 100% Fibonacci expansion at 108.48, for attack at immediate target at 107.86 (Fibonacci 61.8% retracement of 101.18/118.65 rally).

The wave could travel to its FE 123.6% at 106.82 on break of the latter.
Alternatively, bounce above daily Tenkan-sen barrier would sideline immediate bearish threats for stronger correction of the downleg from 111.57.

Support: 108.32, 108.11, 107.86, 107.00
Resistance: 108.94, 109.22, 109.43, 109.84

GBP/USD

British pound extended pullback from fresh high at 1.2905 (the highest since 03 Oct) posted after strong rally on Wednesday. Corrective easing was triggered by overbought studies and profit-taking Wednesday’s strong rally, when the pair gained 2.2%.

However, decision for early election in the UK was welcomed by markets, as yesterday’s rally of pound showed and fresh bullish sentiment has been established, keeping focus at the upside.

Fresh bulls are expected to attempt again at 1.2904 barrier, with possible extension towards psychological 1.3000 target, after markets fully digest the latest news.

Pullback’s extension below 1.2800 handle faces solid support at 1.2755 (Fibonacci 38.2% of Wednesday’s rally) ahead of 1.2700 and 1.2635 (daily Tenkan-sen) where extended downticks are expected to find ground.

Support: 1.2771, 1.2755, 1.2704, 1.2663
Resistance: 1.2859, 1.2905, 1.2950, 1.3000

AUDUSD

The Aussie dollar remained firmly in red on Wednesday and extended pullback from recovery high at 0.7610 (posted on Apr 17). Fresh weakness has eventually taken out strong supports at 0.7550 (200SMA) and 0.7519 (100SMA) and also broke below round-figure support at 0.7500, signalling full retracement of 0.7472/0.7610 upleg on final push towards key supports at 0.7472/60 (Apr 10/12 base / daily Ichimoku cloud base).

Daily technicals in firm bearish mode are supportive for further downside action on break below thick daily Ichimoku cloud and extension towards 0.7453 (50% retracement of 0.7158/0.7749, Jan/Mar rally.

Broken Daily Tenkan-sen and 200SMA at 0.7541/51 are expected to keep the upside protected.

Support: 0.7491, 0.7472, 0.7460, 0.7384
Resistance: 0.7519, 0.7541, 0.7551, 0.7576

GBPCAD

The GBPCAD cross remained well supported on Wednesday and attempted higher again after narrow consolidation, posting fresh marginally higher multi-month high at 1.7280. Firm bullish sentiment is so far ignoring strongly overbought conditions of daily studies and continuing to aim higher.

Strong bullish acceleration was underpinned by double-bottom pattern formed on weekly chart at 1.5740 zone, which also marks the bottom of larger bear-trend from Jan 2016 high at 2.0918. The pair is focusing targets at 1.7524/42 (Sep 15 / Aug 03 highs) after pivots at 1.7037/1.7119 (Fibonacci 38.2% of 1.9127/1.5745 descend / Nov 11 highs) were taken out.

These levels now act as initial supports and guard significant point at 1.6988 (Fibonacci 38.2% of 1.6515/1.7280 rally), which is expected to contain deeper pullbacks.

Support: 1.7176, 1.7119, 1.7100, 1.7037
Resistance: 1.7280, 1.7454, 1.7524, 1.7542

GOLD

Spot Gold ended in red on Wednesday and extended pullback from fresh high at $1295 to briefly probe below $1275 (Fibonacci 38.2% of $1243/$1295 upleg). Quick bounce above $1275 pivot signalled that downside remains limited for now, as technical correction on overbought daily studies faces strong headwinds on Gold’s safe haven buying on rising tensions around Korean peninsula.

However, technical studies show more room for extension of pullback from $1295. Rising daily Tenkan-sen line (currently at $1271) acts as good support, where extended easing should be ideally contained, before bulls regain control.

Near-term focus remains at $1295/$1300 targets, with break of the latter (which is seen very likely on rising uncertainty in the markets), expected to expose next barriers at $1307/15 (Nov 2 high / Sep 1 low).

Support: 1275, 1271, 1269, 1263
Resistance: 1283, 1290, 1292, 1295

WTI CRUDE OIL

WTI oil accelerated strongly lower on Wednesday, extending pullback from $53.74 peak to hit lows ticks ahead of psychological $50.00 support. Strong bearish acceleration broke below important supports at $51.75/62 (100/55SMA’s), $51.19 (Fibonacci 38.2% of $47.07/$53.74) and 20SMA at $50.73. Oil prices dropped nearly 4% on Wednesday, on the biggest one-day loss since early March, after bearish U.S. inventories data, raised concerns that the increasing levels of U.S. shale oil production could weigh on OPEC’s efforts to reduce output and support oil prices.

EIA report showed that crude oil inventories fell by 1 million barrels compared to forecast for nearly 1.5 million barrels draw in the week ending Apr 12.

The report had negative impact on oil price that dropped into dangerous territory near $50.00 pivot, loss of which would drag the price down to 200SMA at $48.92.

Wednesday’s long bearish candle is expected to weigh on near-term action.

Recent bearish acceleration may take a breather on oversold daily slow stochastic, however, firmer bullish signal is awaited.

Support: 50.41, 50.00, 49.62, 48.92
Resistance: 51.19, 51.58, 51.75, 52.24

DJIA

Dow Jones remained under pressure on Wednesday and extended below daily Ichimoku cloud base which offered solid support during past few sessions. Daily close below the cloud will be seen as bearish signal for extension towards next significant supports at 20266 (Fibonacci 61.8% retracement of 19713/21160 upleg) and 20197 (rising 100SMA).
Daily technicals are establishing in firm bearish mode and maintain downside pressure, as overall sentiment for stocks is negative.

Broken cloud base now acts as solid resistance, which should ideally limit the upside and guard next pivotal barrier at 0500 (falling daily Tenkan-sen line).

Support: 20310, 20266, 20197, 20054
Resistance: 20385, 20437, 20500, 20580

FTSE100

FTSE index stayed under pressure and extended losses on Wednesday, to hit new low at 7032, on the way towards target at 7024 (Feb 2 low). Full retracement of 7024/7444 rally will be seen as strong bearish signal for extension of larger bear-phase from fresh all-time high at 7444 (posted on Mar16) towards psychological 7000 support and 6969 (Fibonacci 61.8% retracement of larger 6675/7444 rally.

Broken daily Ichimoku cloud which will start turning lower next week, now marks strong barrier. Cloud base at 7192, reinforced by falling daily Tenkan-sen line is expected to cap stronger upside attempts.

Support: 7032, 7024, 7000, 6969
Resistance: 7091, 7144, 7192, 7235

DAX

DAX remained in red on Wednesday, as price action entered consolidation phase above Tuesday’s fresh low at 11979, after bears cracked psychological 12000 support. Larger bear-phase off 12410 (Apr 03 peak) which currently rides on the third wave is signalling extension towards key support at 11878 (Mar 22 trough / top of rising daily Ichimoku cloud), for full retracement of 11878/12410 rally.

Strong bearish sentiment that dominates in the stock markets and bearish momentum building on daily studies are supportive for final attack at 11878 target.

Broken 20SMA at 12158 marks strong resistance which is expected to limit extended corrective upticks.

Support: 11979, 11943, 11878, 11718
Resistance: 12062, 12144, 12158, 1245

Henyep Capital Marketshttps://www.hycm.com/en
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