Sample Category Title

Daily Pivots: (S1) 1.0159; (P) 1.0187; (R1) 1.0209; More....

Intraday bias in EUR/CHF remains neutral for consolidation above 1.0096 temporary low. Outlook is unchanged that corrective rebound from 0.9970 should have completed after failing 1.0505 long term resistance. Risk stays on the downside as long as 1.0513 resistance holds. On the downside, below 1.0096 will target a retest on 0.9970 low.

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.

Daily Pivots: (S1) 1.5055; (P) 1.5133; (R1) 1.5187; More...

Intraday bias in EUR/AUD is back on the upside with break of 1.5187 resistance. Further rise would be seen to 1.5277 and then 1.5354 support turned resistance next. On the downside, below 1.5046 minor support will turn intraday bias neutral first. Further break of 1.4759 support will suggest that rebound from 1.4318 has completed. Intraday bias will be turn back to the downside for retesting 1.4318 low.

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.

UK CPI accelerated further from 9.0% yoy to 9.1% yoy in May, matched expectations. That's another record high since the series began in 1997. Also, based on indicate model, it's the highest since around 1982, which was at nearly 11% yoy. CPI core, on the other hand, slowed from 6.2% yoy to 5.9% yoy, below expectation of 6.0% yoy.

ONS said: "Rising prices for food and non-alcoholic beverages, compared with falls a year ago, resulted in the largest upward contribution to the change in both the CPIH and CPI 12-month inflation rates between April and May 2022 (0.17 percentage points for CPIH). The largest offsetting downward contributions to change in the rates were from recreation and culture (0.10 percentage points for CPIH) and clothing and footwear (0.08 percentage points for CPIH).

Full release here.

Also released PPI input came in at 2.1% mom, 22.1% yoy in May. PPI output was at 1.6% mom, 15.7% yoy. PPI output core was at 1.50% mom, 14.8% yoy.

Daily Pivots: (S1) 0.8563; (P) 0.8586; (R1) 0.8605; More...

Intraday bias in EUR/GBP remains neutral and further rise 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.

Overall risk sentiment is rather indecisive in the markets. While US stocks staged a strong rebound overnight, there is no follow through buying in Asia. Dollar and Yen are trading mildly higher today, together with Swiss Franc. New Zealand Dollar is leading commodity currencies lower. Sterling is mixed for now but more volatility is likely with UK CPI release featured.

Technically, Sterling is at a juncture against Euro and Swiss. EUR/GBP is pressing medium term fibonacci level of 38.2% retracement of 0.9499 to 0.8201 at 0.8697. GBP/CHF is also pressing 61.8% retracement of 1.1107 to 1.3070 at 1.1857. Sustained break of these levels could prompt even sharper selloff in the Pound. Let's see.

In Asia, at the time of writing, Nikkei is down -0.07%. Hong Kong HSI is down -1.19%. China Shanghai SSE is down -0.62%. Singapore Strait Times is down -0.16%. Japan 10-year JGB yield is up 0.0030 at 0.239. Overnight, DOW rose 2.15%. S&P 500 rose 2.45%. NASDAQ rose 2.51%. 10-year yield rose 0.068 to 3.307.

BoJ firm on maintaining ultra-loose monetary policy

In the minutes of April 27-28 meeting of BoJ indicated that while the board was concerned with fluctuation in Yen's exchanger rate, it remained firm on the stance to continue with ultra-loose monetary policy.

One board member noted that Japan's economy was "still on its way to recovery". As a "commodity importer", the rise in commodity prices would "lead to an outflow of income from Japan and thus exert downward pressure on the economy." Hence, it's "necessary" to "continue with the current powerful monetary easing and thereby firmly support the economy."

Another member noted that "the challenge of monetary policy in Japan was not to curb inflation, as in the case of the United States and Europe, but to overcome inflation that was still too low". A different member commented that," with the addition of Russia's invasion of Ukraine to the existing downside risks to the economy, the situation had further changed significantly; against this backdrop, it was not appropriate for the Bank to make any big changes to its monetary policy stance."

Regarding Yen's depreciation, "a few members said excessive fluctuations in the foreign exchange market over a short period of time, such as those observed recently, would raise uncertainties about the future and make it more difficult for firms to formulate their business plans".

Some member noted, "it was necessary for the Bank to clearly communicate to the public that the aim of monetary policy conduct was to fulfill its mandate of achieving price stability, rather than to control foreign exchange rates."

Australia Westpac leading index dropped to 0.58 in May

Australia Westpac leading index dropped form 1.09% to 0.58% in May, still indicating above trend growth for 2022. Westpac said, "the components of the Index are indicating an important emerging theme around Australia's growth prospects – a significant shock to consumer confidence."

On RBA policy, Westpac expects the central bank to hike a further 50bps in July. It assessed that at 1.35% after the hike, interest rate is still below the neutral setting. Given the tight labor market and rising inflation, further monetary tightening can be expected through 2022.

New Zealand goods exports rose 18% yoy in May, imports rose 24% yoy

New Zealand goods exports rose 18% yoy or NZD 1.1B to NZD 7.0B in May. Goods imports rose 24% yoy or NZD 1.3B to NZD 6.7B. Monthly trade surplus narrowed from NZD 440m to NZD 263m, smaller than expectation of NZD 580m.

Exports to all top destinations rose except to China: China (down -3.8%), Australia (up 49%), US (up 18%), EU (up 23%), Japan (up 0.7%).

Imports from most partners rose except from the US: China (up 25%), EU (up 12%), Australia (up 18%), US (down -5.5%), Japan (up 41%).

Looking ahead

UK CPI and PPI are the main focus in European session. Canada will also release CPI later in the day.

EUR/GBP Daily Outlook

Daily Pivots: (S1) 0.8563; (P) 0.8586; (R1) 0.8605; More...

Intraday bias in EUR/GBP remains neutral and further rise 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.

Economic Indicators Update

Australia Westpac leading index dropped from 1.09% to 0.58% in May, still indicating above trend growth for 2022. Westpac said, "the components of the Index are indicating an important emerging theme around Australia's growth prospects – a significant shock to consumer confidence."

On RBA policy, Westpac expects the central bank to hike a further 50bps in July. It assessed that at 1.35% after the hike, interest rate is still below the neutral setting. Given the tight labor market and rising inflation, further monetary tightening can be expected through 2022.

Full release here.

New Zealand goods exports rose 18% yoy or NZD 1.1B to NZD 7.0B in May. Goods imports rose 24% yoy or NZD 1.3B to NZD 6.7B. Monthly trade surplus narrowed from NZD 440m to NZD 263m, smaller than expectation of NZD 580m.

Exports to all top destinations rose except to China: China (down -3.8%), Australia (up 49%), US (up 18%), EU (up 23%), Japan (up 0.7%).

Imports from most partners rose except from the US: China (up 25%), EU (up 12%), Australia (up 18%), US (down -5.5%), Japan (up 41%).

Full release here.

In the minutes of April 27-28 meeting of BoJ indicated that while the board was concerned with fluctuation in Yen's exchange rate, it remained firm on the stance to continue with ultra-loose monetary policy.

One board member noted that Japan's economy was "still on its way to recovery". As a "commodity importer", the rise in commodity prices would "lead to an outflow of income from Japan and thus exert downward pressure on the economy." Hence, it's "necessary" to "continue with the current powerful monetary easing and thereby firmly support the economy."

Another member noted that "the challenge of monetary policy in Japan was not to curb inflation, as in the case of the United States and Europe, but to overcome inflation that was still too low". A different member commented that," with the addition of Russia's invasion of Ukraine to the existing downside risks to the economy, the situation had further changed significantly; against this backdrop, it was not appropriate for the Bank to make any big changes to its monetary policy stance."

Regarding Yen's depreciation, "a few members said excessive fluctuations in the foreign exchange market over a short period of time, such as those observed recently, would raise uncertainties about the future and make it more difficult for firms to formulate their business plans".

Some member noted, "it was necessary for the Bank to clearly communicate to the public that the aim of monetary policy conduct was to fulfill its mandate of achieving price stability, rather than to control foreign exchange rates."

Full minutes here.

DXY:

On the H4, with RSI moving along an ascending trendline and prices moving along the ascending trendline, we have a bullish bias that bullish momentum will carry price to our 1st resistance at 105.620 where the 61.8% fibonacci projection and swing high resistance are after price rises to our 1st support at 104.718 in line with the horizontal overlap support. Alternatively, price may break 1st support structure and head for 2nd support at 103.954 where the horizontal pullback support and 61.8% fibonacci retracement.

Areas of consideration:

• H4 time frame, 1st resistance at 105.620
• H4 time frame, 1st support at 104.718

XAU/USD (GOLD):

On the H4, with prices moving below the ichimoku indicator, we have a bearish bias that prices will drop from our 1st resistance at 1856.84 where the horizontal swing high resistance and 100% fibonacci projection are to our 1st support at 1807.93 in line with swing low support. Alternatively, price may break 1st resistance structure and head for 2nd resistance at 1874.20 in line with swing high resistance and 78.6% fibonacci projection.

Areas of consideration:

• H4 time frame, 1st Resistance at 1856.84
• H4 time frame, 1st Support at 1807.93

GBP/USD:

On the H4, with prices expected to bounce off the ichimoku support, we have a bullish bias that price will rise from our 1st support at 1.21846 where the horizontal overlap support,50% fibonacci retracement and 61.8% fibonacci projection to our 1st resistance at 1.24327 in line with the 61.8% fibonacci projection, 78.6% fibonacci retracement and pullback resistance. Alternatively, price may break 1st support structure and head for 2nd support at 1.19313 where the horizontal swing low support is.

Areas of consideration:

• H4 1st resistance at 1.24327
• H4 1st support at 1.21846

USD/CHF:

On the H4, with price expected to bounce off the stochastics indicator, we have a bullish bias that price will rise from our 1st support at 0.96315 where the horizontal pullback support and 78.6% Fibonacci retracement is to our 1st resistance at 0.98879 in line with the horizontal pullback resistance and 61.8% Fibonacci retracement. Alternatively, price may break structure and head for 2nd support where the horizontal swing low support is.

Areas of consideration

• 1st support level at 0.96315
• 1st resistance level at 0.98879

EUR/USD :

On the H4, with price reaching the key support level at 1.05077, we have a bullish bias that price will rise from the 1st support at 1.05077 in line with the pullback support and 100% fibonacci projection to the 1st resistance at 1.07848 in line with the swing high, 100% fibonacci projection and 50% fibonacci retracement. Alternatively, price may reverse off the 1st support and drop to the 2nd support at 1.03603 in line with the multiple swing lows and 61.8% fibonacci projection.

Areas of consideration :

• H4 1st resistance at 1.07848
• H4 1st support at 1.05077

USD/JPY:

On the H4, with price moving above the ichimoku indicator, we have a bullish bias that price will rise from our 1st support at 135.536 in line with the pullback support to our 1st resistance at 138.846 where the 161.8% fibonacci extension and 78.6% fibonacci projection are . Alternatively, price may break 1st support structure and head for 2nd support at 131.607 in line with the swing low support,78.6% fibonacci projection and 50% fibonacci retracement.

Areas of consideration:

• H4 time frame, 1st resistance at 138.846
• H4 time frame, 1st support at 135.536

AUD/USD:

On the H4, with price moving below the icihimoku cloud and in a descending trendline, we have a bearish bias that price will continue to drop from the 1st resistance at 0.69924 in line with the 61.8% fibonacci projection to the 1st support at 0.68502 at the horizontal swing low. Alternatively, price may reverse off the 1st resistance and rise to the 2nd resistance at 0.70699 in line with the pullback resistance and 50% fibonacci retracement.

Areas of consideration

• H4 1st resistance at 0.69924
• H4 1st support at 0.6850

NZD/USD:

On the H4, with price moving within the ichimoku cloud and in a descending trendline, we have a bearish bias that price will drop from the 1st resistance at 0.63723 at the pullback resistance to the 1st support at 0.62022 at the horizontal swing low. Alternatively, price may reverse off the 1st resistance and rise to the 2nd resistance at 0.64262 in line with the 61.8% Fibonacci projection and 61.8% Fibonacci retracement.

Areas of consideration:

• H4 time frame, 1st support at 0.62022
• H4 time frame, 1st resistance at 0.63723

USD/CAD:

On the H4, with price expected to reverse off the stochastics indicator, we have a bearish bias that price will rise from our 1st resistance where the 50% Fibonacci retracement is to our 1st support at 1.28598 in line with the horizontal pullback support and 50% Fibonacci retracement. Alternatively, price may head for 2nd resistance where the horizontal swing high resistance and 161.8% Fibonacci projection is.

Areas of consideration:

• H4 time frame, 1st resistance at 1.30780
• H4 time frame, 1st support at 1.28598

OIL:

On the H4, with price moving below the ichimoku cloud, we have a bearish bias that price will rise from our 1st resistance at 111.17 where the horizontal pullback resistance is to our 1stsupport at 103.71 in line with the horizontal swing low support. Alternatively, price may head for 2nd resistance where the horizontal pullback resistance and 50% Fibonacci retracement is. Take note that we are waiting for the break of 1st resistance to confirm the bearish continuation.

Areas of consideration:

• H4 time frame, 1st resistance of 112.51
• H4 time frame, 1st support of 103.71

Dow Jones Industrial Average:

On the H4, with price expected to bounce off the stochastics indicator, we have a bullish bias that price will rise from our 1st support at 29748 where the 127.2% Fibonacci extension is to our 1st resistance at 30795 in line with the horizontal pullback support. Alternatively, price may break structure and head for 2nd support where the 161.8% Fibonacci extension is.

Areas of consideration :

• H4 time frame, 1st resistance at 30795
• H4 time frame, 1st support at 29748

Last weekend, Bitcoin collapsed to $17,590, marking the first time ever that the king of cryptocurrencies has fallen below its previous cycle's high. Moreover, Bitcoin is challenging its historical records as it is trading below its 200-week simple moving average (SMA), which was essentially the bottom of all its previous bear markets. Although monetary tightening and regulatory woes continue to undermine cryptocurrencies' prospects, investors are increasingly tilting towards the idea that the market is currently hovering near its bottom. Does the recent bounce indicate that history will repeat itself or is there further downside on the menu?

Macro headwinds weigh on cryptos

Since the beginning of 2022, a barrage of negative developments has negatively affected the performance of risky assets. The persistently high inflation that is increasingly eroding people's disposable income combined with the aggressive monetary tightening and mounting fears over a recession have dented investors' risk appetite.

On top of that, the recent sell-off has triggered a massive round of liquidations to cover margin calls, which has further deteriorated the downfall. Specifically, investors who stepped into the market with leverage have been forced to offload their positions, while companies that used cryptocurrencies as collateral for granting loans have suffered the same fate. This debt swirling around crypto markets has amplified recent declines, which are further bolstered by constrained liquidity as crypto exchanges have been suspending transfers and withdrawals.

Cryptocurrency industry jitters accelerate fall

Many cryptocurrency-related companies have announced mass layoffs amid fears of an upcoming 'crypto winter', which is anticipated to deal a significant blow to their financial performance. More precisely, the US exchange platform Coinbase announced that it is going to sack 1,100 employees due to the broader market downturn. Furthermore, Gemini, a cryptocurrency exchange is planning to reduce its workforce by 10%, while the online app Crypto.com will cut 5% of its staff.

Additionally, following Celsius and Binance, Babel Finance - a Hong Kong-based crypto lender - paused withdrawals and redemptions, citing unusual liquidity pressures. Also, a crypto hedge fund called Three Arrows failed to meet its margin calls from lenders, fueling rumours that many crypto-related firms might suffer collateral damage. Overall, as crypto companies continue to face operational crackdowns and fire personnel, investors' sentiment towards cryptos could continue to deteriorate.

The first short Bitcoin ETF

Eight months after establishing the first US Bitcoin ETF, the investment provider ProShares announced on Monday that it plans to launch the first short Bitcoin-linked ETF by next week. This investment vehicle will be designed to allow investors to gain from declines in Bitcoin's price or enable them to hedge their spot crypto holdings.

Is this the bottom?

The recent sharp sell-off in crypto markets caused Bitcoin's price to fall to a fresh 2022 low and slash through its 200-week SMA for the first time since March 2020, before bouncing back slightly.

Should negative momentum strengthen, the recent low of $17,590 may act as the first line of defense. Failing to halt there, the price could descend to form fresh multi-year lows and the next crucial barrier could be met at the August 2020 resistance of $12,500.

To the upside, bullish actions might encounter initial resistance at the 200-week SMA, currently at $22,330. An upside violation of the latter may open the door for the $28,737 level, which is the 61.8% Fibonacci retracement of the 3,850-68,999 upleg.