Sample Category Title

Daily Pivots: (S1) 1.2882; (P) 1.2927; (R1) 1.2992; More...

Intraday bias in USD/CAD remains neutral for the moment. Further rise will remain mildly on favor as long as 1.2516 support holds. Above 1.2995 will target 1.3075 resistance. Firm break there will resume medium term rally and sustained trading above 1.3022 fibonacci level will carry larger bullish implications. Next target is 100% projection of 1.2005 to 1.2947 from 1.2401 at 1.3343.

In the bigger picture, focus stays on 38.2% retracement of 1.4667 (2020 high) to 1.2005 (2021 low) at 1.3022. Sustained break there should confirm that the down trend from 1.4667 has completed after defending 1.2061 long term cluster support. Further rise would then be seen towards 61.8% retracement at 1.3650. However, rejection by 1.3022 will maintain medium term bearishness.

Daily Pivots: (S1) 0.6971; (P) 0.7020; (R1) 0.7096; More...

Intraday bias in AUD/USD stays neutral and outlook remains bearish as with 0.7282 resistance intact. On the downside, firm break of 0.6828 support will resume larger fall from 0.8006. Next target is 0.6756/60 cluster support. However, firm break of 0.7282 will be a sign of bullish reversal and bring stronger rebound to 0.7666 resistance.

In the bigger picture, price actions from 0.8006 are seen as a corrective pattern to rise from 0.5506 (2020 low). Deeper fall could still be seen to 50% retracement of 0.5506 to 0.8006 at 0.6756. This coincides with 100% projection of 0.8006 to 0.7105 from 0.7660 at 0.6760. Strong support is expected from 0.6756/60 cluster to contain downside to complete the correction. Meanwhile, firm break of 0.7660 resistance will confirm that such corrective pattern has completed, and larger up trend is ready to resume.

Daily Pivots: (S1) 130.93; (P) 132.81; (R1) 134.11; More...

Intraday bias in USD/JPY stays neutral and consolidation from 135.58 could extend further. However, outlook stays bullish as long as 131.34 resistance turned support holds. Above 135.58 will resume larger up trend to 61.8% projection of 114.40 to 131.34 from 126.35 at 136.81. Firm break there will target 100% projection at 143.29. However, firm break of 131.34 will bring deeper pull back to 55 day EMA (now at 128.34).

In the bigger picture, current rally is seen as part of the long term up trend from 75.56 (2011 low). Next target is 100% projection of 75.56 (2011 low) to 125.85 (2015 high) from 98.97 at 149.26, which is close to 147.68 (1998 high). This will remain the favored case as long as 126.35 support holds.

Daily Pivots: (S1) 0.9535; (P) 0.9762; (R1) 0.9894; More...

Intraday bias in USD/CHF stays on the downside for 0.9543 support. It's viewed as the third leg of the corrective pattern from 1.0063. Strong support should be seen at around 0.9543 to contain downside to bring rebound. On the upside, above 0.9815 minor resistance will turn bias back to the upside for retesting 1.0063 resistance.

In the bigger picture, down trend from 1.0342 (2016 high) should have completed with three waves down to 0.8756 (2021 low) already. Rise from 0.8756 is likely a medium term up trend of its own. Next target is 1.0237/0342 resistance zone. This will remain the favored case as long as 0.9471 resistance turned support holds. However, sustained break of 0.9471 will extend long term range trading with another falling leg.

Daily Pivots: (S1) 1.2126; (P) 1.2266; (R1) 1.2491; More...

GBP/USD's rebound from 1.1932 extends higher today but stays below 1.2666 resistance. Intraday bias remains neutral first and outlook stays bearish. Break of 1.1932 will resume larger down trend from 1.4248. However, firm break of 1.2666 will suggest medium term bottoming and bring stronger rebound back towards 1.3158 support turned resistance.

In the bigger picture, fall from 1.4248 (2018 high) could be a leg inside the pattern from 1.1409 (2020 low), or resuming the longer term down trend. Deeper decline is expected as long as 1.2666 resistance holds. Next target is 1.1409 low. However, firm break of 1.2666 will bring stronger rise back to 55 week EMA (now at 1.3175).

Daily Pivots: (S1) 1.0422; (P) 1.0511 (R1) 1.0642; More...

Intraday bias in EUR/USD is turned neutral first as it recovered ahead of 1.0339/48 support zone. Outlook will stay bearish as long as 1.0786 resistance holds. Sustained break of 1.0339/48 will resume larger down trend. Next target is long term projection level at 1.0090.

In the bigger picture, focus stays on 1.0339 long term support (2017 low). Decisive break there will resume whole down trend from 1.6039 (2008 high). Next target is 61.8% projection of 1.3993 to 1.0339 from 1.2348 at 1.0090. However, firm break of 1.0805 support turned resistance will delay this bearish case, and bring stronger rebound first.

Yen trades broadly lower today after BoJ left monetary policy unchanged, including keeping the 10-year JGB yield cap. Selling is not too fierce for now on mixed sentiment in the Asian markets. But if global stocks stage a pre-weekend rebound, the decline in Yen could quickly intensify. Meanwhile, Swiss Franc is still the strongest one for the week after SNB's rate hike yesterday. Commodity currencies are broadly lower, led by Canadian,

Technically, both EUR/JPY and GBP/JPY breached minor resistance levels at 141.48 and 165.14. The development suggests that near term pull back could be finished, and stronger rise could be in favor. The question is, if that happens, whether that would be accompanied by stronger rebound in EUR/USD and GBP/JPY. Let's see.

In Asia, at the time of writing, Nikkei is down -1.45%. Hong Kong HSI is up 1.35%. China Shanghai SSE is up 0.96%. Singapore Strait Times is down -0.48%. Japan 10-year JGB yield is down -0.0138 at 0.257. Overnight, DOW dropped -2.42% to 29927, losing 30k handle. S&P 500 dropped -3.25%. NASDAQ dropped -4.08%. 10-year yield dropped -0.088 to 3.307.

BoJ leaves rate unchanged at -0.1%, keeps 0.25% 10-yr yield cap

BoJ left short-term policy interest rate unchanged at -0.10%, and 10-year JGB target at around 0% under the yield curve control. It will continue to defend the 0.25% 10-year JGB yield cap, by offering to purchase it at the rate on every business day through fixed-rate purchase operations.

The decision was made by 8-1 vote. Goushi Kataoka dissented again, pushing for further strengthening monetary easing by lowering short- and long-term interest rate.

The central bank also said "it is necessary to pay due attention to developments in financial and foreign exchange markets and their impact on Japan's economic activity and prices."

CHF/JPY resumes up trend towards 140

CHF/JPY's up trend resumes this week on diverging monetary policy of SNB and BoJ. SNB surprised the markets by announcing a 50bps rate hike yesterday, and indicated that more is coming. However, BoJ just kept policy unchanged today, with yield cap maintained at 0.25% too. At the same time, risk aversion is supporting both, making things even.

For the new term, outlook in CHF/JPY will stay bullish as long as 134.00 support holds. Next target is 61.8% projection of 127.48 to 137.77 from 134.00 at 140.35, and then 100% projection at 144.29.

Also, note that CHF/JPY is extending a healthy long term up trend that started at 101.66, still in acceleration mode. 2015 high at 151.22 is a feasible target is policy of SNB and BoJ continues to diverge.

New Zealand BusinessNZ manufacturing rose to 52.9, excess demand abating

New Zealand BusinessNZ Performance of Manufacturing index rose from 51.2 to 52.9 in May. Production rose from 49.4 to 52.8. Employment rose from 49.8 to 53.0. New orders dropped from 55.2 to 53.0. Finished stocks dropped from 54.0 to 53.1. Deliveries rose from 49.7 to 55.4.

BNZ Senior Economist, Craig Ebert stated that "The net result of the sub-index values was the inference that excess demand alleviated during May. New orders are perhaps the cleanest representation of demand, while deliveries speak more to the supply side. To the extent excess demand is abating, so too will be core inflation pressure".

Looking ahead

Italy trade balance and Eurozone CPI final will be release in European session. Canada will release IPPI and RMPI while US will release industrial production later in the day.

EUR/USD Daily Outlook

Daily Pivots: (S1) 1.0422; (P) 1.0511 (R1) 1.0642; More...

Intraday bias in EUR/USD is turned neutral first as it recovered ahead of 1.0339/48 support zone. Outlook will stay bearish as long as 1.0786 resistance holds. Sustained break of 1.0339/48 will resume larger down trend. Next target is long term projection level at 1.0090.

In the bigger picture, focus stays on 1.0339 long term support (2017 low). Decisive break there will resume whole down trend from 1.6039 (2008 high). Next target is 61.8% projection of 1.3993 to 1.0339 from 1.2348 at 1.0090. However, firm break of 1.0805 support turned resistance will delay this bearish case, and bring stronger rebound first.

Economic Indicators Update

CHF/JPY's up trend resumes this week on diverging monetary policy of SNB and BoJ. SNB surprised the markets by announcing a 50bps rate hike yesterday, and indicated that more is coming. However, BoJ just kept policy unchanged today, with yield cap maintained at 0.25% too. At the same time, risk aversion is supporting both, making things even.

For the new term, outlook in CHF/JPY will stay bullish as long as 134.00 support holds. Next target is 61.8% projection of 127.48 to 137.77 from 134.00 at 140.35, and then 100% projection at 144.29.

Also, note that CHF/JPY is extending a healthy long term up trend that started at 101.66, still in acceleration mode. 2015 high at 151.22 is a feasible target is policy of SNB and BoJ continues to diverge.

New Zealand BusinessNZ Performance of Manufacturing index rose from 51.2 to 52.9 in May. Production rose from 49.4 to 52.8. Employment rose from 49.8 to 53.0. New orders dropped from 55.2 to 53.0. Finished stocks dropped from 54.0 to 53.1. Deliveries rose from 49.7 to 55.4.

BNZ Senior Economist, Craig Ebert stated that "The net result of the sub-index values was the inference that excess demand alleviated during May. New orders are perhaps the cleanest representation of demand, while deliveries speak more to the supply side. To the extent excess demand is abating, so too will be core inflation pressure".

Full release here.

BoJ left short-term policy interest rate unchanged at -0.10%, and 10-year JGB target at around 0% under the yield curve control. It will continue to defend the 0.25% 10-year JGB yield cap, by offering to purchase it at the rate on every business day through fixed-rate purchase operations.

The decision was made by 8-1 vote. Goushi Kataoka dissented again, pushing for further strengthening monetary easing by lowering short- and long-term interest rate.

The central bank also said "it is necessary to pay due attention to developments in financial and foreign exchange markets and their impact on Japan's economic activity and prices."

Full statement here.