Sample Category Title

Germany Ifo business climate dropped slightly from 93.0 to 92.3 in June, below expectation of 92.9. Current assessment index dropped from 99.6 to 99.3, above expectation of 99.0. Expectations index dropped 86.9 to 85.8, below expectation of 87.4.

By sector, manufacturing dropped from 2.7 to 0.3. Service rose from 8.2 to 10.8. Trade dropped from -10.7 to -14.8. Construction rose from -13.4 to -9.7.

Ifo said: "Companies were somewhat less satisfied with their current business situation. Their expectations turned markedly more pessimistic. The threat of gas shortages is of great concern to the German economy."

Full release here.

GBPJPY is mirroring fading buying interest as negative momentum escalated on Thursday, confirming a lower high at 167.82.

Similarly, the RSI seems to be following a negative trajectory after failing to reach its previous high, while the negative turn in the Stochastics and the MACD is also reflecting some discomfort among traders.

Optimism, however, has not completely vanished as the 20-day simple moving average (SMA), which has been a crucial support region over the past week, is still intact. The 23.6% Fibonacci retracement of the 150.96 – 168.70 upleg is also in the same neighborhood at 164.53 along with a dashed ascending trendline. If selling tendencies, however, break that floor, the 50-day SMA currently at 162.11 may immediately come under the spotlight ahead of the 50% Fibonacci of 161.95. Slightly lower, a tentative upward-sloping trendline may attract some attention around 161.00 before traders target the 61.8% Fibonacci of 159.86.

Alternatively, should the 20-day SMA cease downside pressures, the pair may push for a close above the short-term tentative resistance trendline and the 167.70 former restrictive zone. In case the bulls accelerate above the six-year high of 168.70 too, the next barricade may pop up somewhere near 170.50 taken from January-February 2016.

In brief, the positive trend in GBPJPY seems to be losing steam, though the bulls may not give up the battle yet unless the base at 164.53 collapses.

USDCAD is showing some weak signs today with the technical indicators confirming this view. The RSI indicator is moving south in the positive region, while the MACD oscillator is holding above its trigger and zero lines, but with softer momentum than before.

The price posted a double top around the 18-month high of 1.2960 in the previous weeks and any moves higher could boost the long-term bullish outlook. Moving up, the price may meet the 1.3175 barrier, taken from the peak of November 2020, ahead of the 1.3420 level, registered in September 2020.

On the other hand, if the price heads down, immediate support could come from the 1.2980 support and the 40- and 20-day simple moving averages (SMAs) at 1.2825 and 1.2785, respectively. A drop lower may drive the bears until the flat 200-day SMA at 1.2660 before tumbling to 1.2517.

All in all, USDCAD has been in an advancing mode over the last seven months, though only a significant climb above the double top may endorse this positive outlook. 

The Euro kept slightly positive stance in a quiet early Friday’s trading, as stocks edged higher, but lacking direction as near-term action holds within a range, defined by 10 and 20DMA’s, for the third straight day and capped by thick daily cloud.

Technical studies are bearishly aligned on a daily chart as momentum remains negative and stochastic turns south, though recovery from June 15 low at 1.0358 remains alive while the price stays above 10DMA (1.0495), but with limited upside prospects for now.

Traders eye German Ifo business climate data (June 92.9 f/c vs May 93.0) for fresh signals, if the figure significantly diverges from expectations, with end-of-week position liquidations to possibly further move the price.

Look for signals on break of 10DMA which could soften near-term tone and shift focus towards key supports at 1.0358/49/40, loss of which would signal bearish continuation.

This so far looks as preferred scenario as the action remains heavily weighed by a massive daily cloud ( 1.0560/1.0767) and negative fundamentals, driven by weak economic data that raise recession fears.

Only sustained penetration of daily cloud and close above 20DMA (1.0591) would ease downside pressure and allow for stronger rebound, although, overall bias is expected to remain with bears while the action stays below 1.0767/86 (daily cloud top/May 30 lower top).

Res: 1.0560; 1.0591; 1.0621; 1.0685.
Sup: 1.0495; 1.0459; 1.0380; 1.0358.

European futures turned lower on Friday morning as worries about the bloc’s energy situation continued. The main concern is that Russia could continue reducing its natural gas to European Union in his bid to punish the members for their support of Ukraine. Germany, the most industrialized economy in the region, could move to rationing, which will affect its growth. In a statement, the country’s economy minister warned that a complete embargo would have a similar impact to the collapse of Lehman Brothers. Stocks also declined after Ray Dalio unveiled a $10 billion short on European stocks like ASML, TotalEnergies, and Sanofi. Dalio runs the biggest hedge fund in the world with over $150 billion in assets.

The British pound moved slightly ahead of the upcoming UK retail sales numbers. Analysts expect the data to show that sales dropped by 0.7% in May after rising by 1.4% in the previous month. This will translate to a 4.5% year-on-year decline. Excluding the volatile food and energy products, analysts expect the data to show that sales fell by 1.0% and by 5.1% on a MoM and YoY basis. The main cause for this decline will be the soaring inflation. Data published on Wednesday showed that the country’s consumer inflation surged to the lowest level in over four decades.

US stocks were relatively mixed after the final day of Jerome Powell’s testimony in Congress. The Fed chair reiterated that the American economy was doing well although inflation was a major challenge. As a result, he said that the bank will do whatever it can to lower inflation. This will include high interest rates and the ongoing balance sheet reduction policy. These stocks will react to the upcoming new home sales data that will come out in the American session. Analysts expect the data to show that new home sales declined from 591k to 588k. Earlier this week, data showed that the country’s existing home sales dropped sharply in May.

GBPUSD

The GBPUSD pair moved sideways ahead of the upcoming UK retail sales numbers. It is trading at 1.2230, which is slightly above this week’s low of 1.2140. The pair has also moved between the 38.2% and 50% Fibonacci retracement level. It is above the 25-day moving average while the Relative Strength Index (RSI) has moved to the neutral point. It has formed a descending channel that is shown in green. Therefore, the pair will likely remain in this range today.

USDCHF

The USDCHF pair has been in a strong bearish trend after the Swiss National Bank (SNB) delivered a hawkish interest rate decision. The pair dropped to a low of 0.9567, which was the lowest level since early June. It has moved below the bearish pennant pattern shown in green. At the same time, it has fallen below the 25-day and 50-day moving average while the DeMarker indicator has moved slightly above the oversold level. The pair will likely continue falling as bears target the key support at 0.9500.

EURUSD

The EURUSD pair moved sideways as investors reflected on the statement by Jerome Powell. It is trading at 1.0500, which is along the ascending trendline shown in green. The pair has moved slightly below the 25-day moving average while the Relative Strength Index has moved to the neutral point at 50. The DeMarker is pointing lower. The pair will likely continue falling now it has found a strong resistance at 1.0585.

Daily Pivots: (S1) 164.40; (P) 165.75; (R1) 166.83; More...

Intraday bias in GBP/JPY stays neutral at this point. On the upside, decisive break of 168.67 resistance will resume larger up trend. Next near term target is 100% projection of 155.57 to 168.67 from 159.97 at 173.07. On the downside, below 164.45 minor support will turn bias back to the downside for 159.97 support instead.

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) 140.96; (P) 142.48; (R1) 143.53; More....

Intraday bias in EUR/JPY is mildly on the downside at this point. Current fall is viewed as the third leg of the consolidation from 144.23. Deeper decline could be seen to 137.83 support. On the upside, decisive break of 144.23 will resume larger up trend.

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 now remain bullish as long as 132.63 support holds, in case of deep pull back.

Daily Pivots: (S1) 0.8557; (P) 0.8599; (R1) 0.8624; More...

EUR/GBP is still stuck in sideway trading and intraday bias remains neutral. Further rally is expected with 0.8484 support intact. On the upside, break of 0.8720 and sustained trading above 0.8697 medium term fibonacci level will carry larger bullish implication. Next target is 0.9003 fibonacci level. However, break of 0.8484 will indicate rejection by 0.8697 and turn near term outlook bearish.

In the bigger picture, rise from 0.8201 medium term bottom could could either be a correction to the down trend from 0.9499 (2020 high), or a medium term up trend itself. Sustained break of 38.2% retracement of 0.9499 to 0.8201 at 0.8697 will affirm the latter case, and pave the way to 61.8% retracement at 0.9003. However, rejection by 0.8697 will maintain medium term bearishness.

Daily Pivots: (S1) 1.5193; (P) 1.5269; (R1) 1.5339; More...

Intraday bias in EUR/AUD is turned neutral with current retreat. Focus stays on 1.5354 support turned resistance. Sustained break there will indicate medium term bottoming at 1.4318. Stronger rally would be seen back to 100% projection of 1.4318 to 1.5277 from 1.4759 at 1.5718. On the downside, however, break of 1.5083 minor support will turn bias back to the downside for 1.4759 support instead.

In the bigger picture, as long as 1.5354 support turned resistance holds, larger down trend from 1.9799 (2020 high) is still expected to continue. On resumption, next target is 61.8% projection of 1.9799 to 1.5250 from 1.6434 at 1.3623, which is close to 1.3624 long term support (2017 low). However, firm break of 1.5354 will indicate medium term bottoming and bring stronger rally back to 1.6434 key resistance.

Daily Pivots: (S1) 1.0068; (P) 1.0117; (R1) 1.0165; More....

EUR/CHF's fall from 1.0512 resumes by breaking through 1.0096. Intraday bias is back on the downside. Outlook is unchanged that corrective rebound from 0.9970 should have completed after failing 1.0505 long term resistance. Deeper decline would be seen back to retest 0.9970 low. On the upside, however, above 1.0214 minor resistance will turn bias back to the upside for stronger rebound.

In the bigger picture, as long as 1.0505 support turned resistance (2020 low) holds, long term down trend from 1.2004 (2018 high) is expected to continue. Next target is 100% projection of 1.2004 to 1.0505 to 1.1149 at 0.9650. However, firm break of 1.0505 will suggest medium term bottoming, and bring stronger rebound towards 1.1149 structural resistance.