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The dollar index resumes a steep ascend after a brief pause on Thursday, boosted by strong safe-haven demand on economic and political uncertainty.

The index hit new highest since Oct 2002 and eyes pivotal Fibo barrier at 109.14 (76.4% of 121.02/70.69, 2001/2008 fall).

Close above this level would generate fresh bullish signal for acceleration through psychological 110 barrier.

The dollar index is on track for the biggest weekly rally since mid-June 2021 that adds to positive signals, although studies on all larger timeframes are overbought and warn of adjustment in the near future.

Traders focus US jobs report which is likely to add to Fed’s argument for more hawkish approach in policy tightening, as unemployment is expected to remain low, pointing to tight conditions in job market, while expected drop in hiring is seen as temporary phenomenon, driven by seasonal factors and so far not so harmful for overall positive picture.

Res: 107.60; 108.74; 109.14; 110.00.
Sup: 106.58; 105.54; 104.56; 103.96.

Spot gold stands at the back foot on Friday and holding in extended consolidation above new multi-month low ($1732) but holding bearish bias.

The metal is on track for the fourth consecutive weekly drop, with this week’s fall being the biggest since the second week of June 2021.

Gold came under increased pressure on growing expectations that the US Federal Reserve will remain aggressive in policy tightening in continuing efforts to put soaring inflation under control.

The dollar benefited from these expectations, along with increased safe haven demand on uncertainty and signals that the US economy is heading into recession.

US jobs data are in focus today and expected to show solid condition of the labor market that would add to Fed’s argument for another 0.75% rate hike in the central bank’s July policy meeting.

In addition, US inflation data are due next week and likely to show further rise that would additionally support Fed’s hawkishness and add to negative outlook for the yellow metal.

Bearish daily technical studies contribute to the action, although oversold conditions suggest bears may take a breather for consolidation / correction, before resuming.

Upticks should stay below resistances at $1786/$1800 (falling 10DMA / former low of May 16 / psychological) to keep larger bears intact.

Res: 1749; 1758; 1772; 1786.
Sup: 1732; 1721; 1700; 1680.

“I want you to know how sad I am to be giving up the best job in the world,” – Boris Johnson said in front of the paparazzi and his colleagues before leaving the UK Prime Minister chair. He held the post for three years after Theresa May left in 2019 due to Brexit contradictions. Changes of such scale aren’t often seen in Europe, so it’s wise to break the situation down.
Why did Boris Johnson leave the post?

It all started with a no-confidence vote at the beginning of June. The UK Conservative party (Tory) criticized Johnson’s job for “perceived incompetency as a leader,” beginning the most significant turmoil in the newest history of Britain. Also, Johnson had a party during Covid-19 pandemic, which was totally unacceptable for a Prime Minister.

If Tory had been successful, Boris would have left much earlier. Here’s how the process works:

Source: BBC

However, Mr. Johnson received the support of 211 out of 359 members of the House of Commons (lower chamber of the UK parliament). The result means 59% of his members (MPs) supported Mr. Johnson.

The story doesn’t end here, though. Another round of problems for Boris started as he hired Chris Pincher as a deputy coordinator of the parliamentary faction. Earlier, Pinches was accused of sexual harassment, and Johnson knew it.

After the Chris designation, a 24-hour period of political turbulence began. Over 40 government resignations happened before Johnson decided to give up and leave the chair of Premier Minister. The general public supported the decision: Twitter is filled with cheers and glees ahead of the next PM election in autumn.

Mr. Boris and Tory in a nutshell

Boris Johnson was the UK Prime Minister and head of the conservative party for three years. The Tories, in turn, are the leading party in the UK, with the Liberal Democrats as the main rival. Usually, elections in the UK need to happen no more than five years apart. Unless an earlier one is called, the next election isn’t due until January 2025.

Boris Johnson could call an early election if he wanted (the law permits this), but now Mr. Johnson has resigned. After the conservative party chooses a new leader, he (or she) can call an early election if he (or she) wishes.

The pound feels sailed off on the news

Pound Sterling is rallying at the time of writing, although it is hard to ascertain just how much of the move is linked to the domestic political news or the broadly supportive global market.

The pair made a double divergence on the RSI. Also, we are close to the support trendline. Our outlook on the British pound is bullish. The currency may rise to the 1.2324 resistance. Also, it may soar higher if the next PM chair candidate is met with glee from the market participants.

GBPUSD daily chart

• Resistance: 1.2324, 1.2700, 1.3000
• Support: 1.1900, 1.1740

Bitcoin gained 6% on Thursday, ending the day around $21,600 and developing gains on Friday to $22,400, pulling back to 21,800 (+7.2% in 24 hours) at the time of writing. Ethereum added 6.5% to $1240, while other leading altcoins gained between 1.9% (BNB) and 3.2% (Solana).

Total crypto market capitalisation, according to CoinMarketCap, rose 5% overnight to $962bn. The Cryptocurrency Fear and Greed Index was up 2 points to 20 by Friday and remains in “extreme fear” mode.

As we can see, the first and second cryptocurrencies outperform the rest of the market, indicating a recovery in demand among professional investors following the strengthening of stock indices.

Since the beginning of the month, BTCUSD has gained more than 17%, which looks like an impressive result but only at first glance. The thing is, bitcoin was driven as low as possible by the end of June, and the current remarkable rise is just a recovery to the levels of 3 weeks ago.

BTCUSD is still below its 200-week average and sold off again today on its approaches, indicating a significant supply overhang from sellers.

Bloomberg believes the crypto market has bottomed out, and BTC will resume its offensive in the next six months.

According to Bank of America, the number of active cryptocurrency users is down more than 50% from its peak in November last year. At the same time, consumer interest in digital assets remains at a reasonably high level.

A US investor has filed a class-action lawsuit in California court against Solana and its partners, accusing them of illegally profiting from selling SOL tokens as a security.

The developers of Ethereum continue to test the transition to the Proof-of-Stake consensus algorithm. They announced the successful migration of the Sepolia test network to PoS.

The developers of Shiba Inu reported on the current state of development of new ecosystem components and announced the launch of its stablecoin.

GBPJPY finished Thursday’s session comfortably in the green zone after refusing to close below the 162.00 round level once again. Simultaneously, the bullish action seems to have confirmed Wednesday’s hammer candlestick pattern – an encouraging sign that the balance may change in the favor of the bulls, potentially causing an upside reversal in the price.

Consulting other technical indicators, however, some patience might still be required. Despite the soft upturn in the Stochastics, the RSI is still consolidating its downtrend below its 50 neutral mark. The MACD is also lacking bullish signs, testing a cross below its zero line instead.

The 50-day simple moving average (SMA), where the 20-period SMA is also positioned in the four-hour chart, is currently buffering bearish forces around 162.58. If the price secures a floor around that level, it may rotate towards the 20-day SMA at 164.53 once today’s ceiling of 163.93 (200-period SMA in the four-hour chart) gives way. The 23.6% Fibonacci retracement of the 150.96 – 168.70 upleg is in the neighborhood as well. Hence, any additional gains from here are expected to drive the pair straight up to the tentative short-term falling trendline seen at 166.38, while a close above the 167.00 number could be a prerequisite to visit the topline at 168.70.

On the downside, traders will keep a close eye on the 162.58 – 161.95 support zone, which encapsulates the 38.2% Fibonacci too. If that base collapses, the bears may again attempt to reach the 50% Fibonacci of 159.86 and the tentative ascending trendline from the low of 150.96. Another failure here could see the price initially seeking shelter around the 200-day SMA and then near the 61.8% Fibonacci of 156.64.

In brief, GBPJPY is still exposed to sellers’ dominance despite the latest positive candlestick formation. A decisive move above the 163.93 – 164.53 area could raise confidence in the latest price upturn, while a break below 162.58 – 161.95 is expected to worsen market sentiment. 

USDCAD posted a triple top around the 18-month high of 1.2960, failing to create a higher high to continue the buying interest. However, the MACD oscillator surpassed its trigger and zero lines, while the RSI is sloping upwards in the positive region. Both are suggesting that the structure is still bullish in the near-term.

In the positive scenario, traders would be eagerly looking for a break above the recent top of 1.2960 to increase buying orders. If that’s the case, the rally could last until 1.3175, the highest level marked in November 2020. If bullish forces appear even stronger, 1.3385 should be another resistance to keep in mind.

Should the price retreat, the 20-day simple moving average (SMA) which the bears were unable to break over the last month could provide immediate support. Moving lower, the focus will shift to the 1.2820 restrictive area, which overlaps with the 40-day SMA, while lower still, a violation of the 200-day SMA at 1.2685 would increase speculation that the bullish phase has ended, and a downtrend is in progress.

Summarizing, the recent bullish action may turn the biggest picture more positive if the market overcomes the triple top pattern.

EUR/USD

The bears managed to violate the psychological level at 1.0200, but the pair formed a support zone at 1.0150, which limited the sell-offs. At the time of writing this analysis, the pair is hovering just above the mentioned support and the expectations for today’s trading session are for a correction towards the resistance at 1.0270. Only a successful breach of the support at 1.0150 would pave the way for the pair towards the critical support at 1.0100. During today's session, market participants will closely follow the announcement of the non-farm payroll change data for the U.S. (12:30 GMT), together with the unemployment rate change data, again for the U.S. (12:30 GMT).

USD/JPY

The resistance at 136.30 still withholds the attacks of the bulls and the forecast for today’s trading session is for the pair to head towards a test of the support at 134.77. Consequently, the pair may consolidate in the range of 134.77 – 136.27. If the bulls prevail and manage to breach the resistance zone at 136.30, then an upward movement may develop towards the high at 136.70.

GBP/USD

The pair bounced back from the support at 1.1872 and the bulls took control and violated the psychological level at 1.1200. The pair would most probably consolidate above 1.1200, with an upper border of 1.2100. If the bears enter the market and lead the pair below 1.1200, then we may expect a downward movement towards the support at 1.1873. However, the market sentiment remains positive – for a continuation of the upward movement towards the key resistance at 1.2180, which scenario is likely to be realised only after a confirmed breach of the resistance at 1.2100.

EUGERMANY40

The index continues to gain value and the bulls would most probably try to attack the resistance zone at 12940. However, considering this level offers strong resistance, the forecast for today’s trading session is for the price to remain below it and to witness a slight correction towards the support at 12739, where a successful breach would suggest a downward movement towards the support at 12622.

US30

The bulls faced difficulties in overcoming the resistance at 31386, and in the early hours of today’s trading, the sellers are trying to take control and so the most probable scenario for today’s trading session is for a corrective move towards the support at 30930. However, if the bulls manage to take control and breach the resistance at 31386, then we may witness an impulsive upward movement towards the next key resistance at 31700.

The Euro started a fresh decline below the 1.0300 support zone against the US Dollar. The EUR/USD pair even traded below the 1.0200 level to move into a bearish zone.

A low is formed near 1.0144 and the pair is now consolidating losses. It recently tested a connecting bearish trend line with resistance near 1.0180 on the hourly chart but failed to continue higher. It is also struggling below the 50 hourly simple moving average.

On the upside, the next major resistance is near 1.0200 on FXOpen. A break above the 1.0200 and 1.0220 resistance levels could start a decent recovery wave. In the stated case, it could even surpass 1.0250.

An immediate support is near the 1.0150 level. The next key support is near 1.0120, below the pair could decline towards the 1.0100 level in the near term. Any more losses might send the pair towards the 1.0050 level.

Daily Pivots: (S1) 162.20; (P) 162.91; (R1) 164.23; More...

Price actions in GBP/JPY are not too decisive so far. But further fall is in favor with 162.56 minor resistance intact. Firm break of 159.97 support will raise the chance of rejection by 167.93 long term fibonacci resistance. Deeper fall would be seen to 155.57 support for confirmation. On the upside, break of 165.26 minor resistance will turn bias back to the upside for retesting 168.67 high.

In the bigger picture, up trend from 123.94 (2020 low) is still in progress. Sustained break of 61.8% retracement of 195.86 (2015 high) to 122.75 (2016 low) at 167.93 will be a long term bullish signal, and could pave the way back to 195.86 high. This will now remain the favored case as long as 155.57 support holds, even in case of deep pull back.

Daily Pivots: (S1) 137.78; (P) 138.42; (R1) 138.86; More....

Intraday bias in EUR/JPY stays on the downside at this point. An important top might be formed at 144.26 after rejection by 144.06 long term fibonacci level. Deeper fall would be seen to 132.63 support for confirmation. On the upside, above 139.78 minor resistance will turn intraday bias neutral first.

In the bigger picture, up trend from 114.42 (2020 low) is in progress. Such rise is seen as the third leg of the pattern from 109.30 (2016 low). Sustained trading above 100% projection of 114.42 to 134.11 from 124.37 at 144.06 will indicate upside acceleration and target 149.76 long term resistance (2014 high). In any case, outlook will remain bullish as long as 132.63 support holds, in case of deep pull back.