Sample Category Title

Daily Pivots: (S1) 0.8521; (P) 0.8536; (R1) 0.8561; More...

EUR/GBP is still bounded and range trading and intraday bias stays neutral. Further rally is in favor with 0.8365 support intact. On the upside, break of 0.8617 will resume rise from 0.8201 medium term bottom to 0.8697 medium term fibonacci level. However, break of 0.8365 will dampen this bullish view, and turn bias back to the downside instead.

In the bigger picture, a medium term bottom could be in place at 0.8201, on bullish convergence condition in daily and weekly MACD. Rise from there could either be a correction to the down trend from 0.9499 (2020 high), or a medium term up trend itself. In either case, further rise should be seen to 38.2% retracement of 0.9499 to 0.8201 at 0.8697. Sustained break there will target 61.8% retracement at 0.9003.

Daily Pivots: (S1) 1.4745; (P) 1.4831; (R1) 1.4879; More...

Intraday bias in EUR/AUD remains on the downside for the moment as fall from 1.5277 is in progress. Corrective rebound from 1.4138 should have completed at 1.5277, ahead of 1.5354 resistance. Break of 1.4597 support will bring retest of 1.4318 low. On the upside, above 1.4965 minor resistance will mix up the outlook and turn intraday bias neutral first.

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) 1.0241; (P) 1.0272; (R1) 1.0325; More....

Further decline is expected in EUR/CHF with 1.0335 resistance intact. Corrective rebound from 0.9970 could have completed at 1.0513. Break of 1.0086 will bring retest of 0.9970. On the upside, though, break of 1.0335 minor resistance will dampen this bearish case, and turn bias back to the upside for 1.0513 resistance.

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) 1.0677; (P) 1.0715 (R1) 1.0784; More...

Intraday bias in EUR/USD remains neutral for the moment. On the upside, break of 1.0786, and sustained trading above 55 day EMA (now at 1.0757) will target 1.0935 resistance next. On the downside, however, break of 1.0626 minor support will indicate rejection by 55 day EMA, and turn bias back to the downside for retesting 1.0348 low instead.

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 medium term corrective rebound first.

Daily Pivots: (S1) 1.2500; (P) 1.2543; (R1) 1.2618; More...

Intraday bias in GBP/USD remains neutral at this point. On the upside, above 1.2666 will resume the rebound from 1.2154. Sustained of 55 day EMA (now at 1.2726) will target 1.2999 support turned resistance. On the downside, though, break of 1.2457 minor support will turn bias back to the downside for retesting 1.2154 low instead.

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 1.2999 support turned resistance holds. On resumption, next target is 1.1409 low.

Daily Pivots: (S1) 0.9556; (P) 0.9597; (R1) 0.9621; More...

No change in USD/CHF's outlook and intraday bias remains neutral for the moment. Strong support is expected from 61.8% retracement of 0.9193 to 1.0063 at 0.9525 to complete the pull back from 1.0063. On the upside, above 0.9763 minor resistance will turn bias back to the upside for retesting 1.0063 high. However, sustained break of 0.9525 will bring deeper decline to 0.9193 support.

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) 129.53; (P) 129.88; (R1) 130.26; More...

USD/JPY is losing some upside momentum as seen in 4 hour MACD. But further rally is still expected with 128.45 minor support intact. Decisive break of 131.34 resistance will confirm up trend resumption for 61.8% projection of 114.40 to 131.34 from 126.35 at 136.81. On the downside, below 128.45 minor support will turn bias to the downside to extend the corrective pattern from 131.34 with another falling leg.

In the bigger picture, current rally is seen as part of the long term up trend form 75.56 (2011 low). Sustained trading above 61.8% projection of 75.56 (2011 low) to 125.85 (2015 high) from 98.97 at 130.04 will pave the way to 100% projection at 149.26, which is close to 147.68 (1998 high). For now, this will remain the favored case as long as 121.27 support holds.

Daily Pivots: (S1) 1.2527; (P) 1.2607; (R1) 1.2649; More...

USD/CAD's fall from 1.3075 is still in progress, and intraday bias stays on the downside for 1.2401 support. Decisive break there will argue that whole rebound from 1.2005 has completed, after rejection by 1.3022 fibonacci resistance. Deeper fall would then be seen to retest this low. On the upside, above 1.2685 minor resistance will mix up the near term outlook and turn intraday bias neutral first.

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. Break of 1.2005 will resume the down trend from 1.4667 and that carries larger bearish implications too.

Markets

The economic calendar yesterday focused on the US, with below-consensus ADP job growth and factory orders but slightly better-than-expected weekly jobless claims. None of them had a significant market impact though. US and European stocks snapped a two-day losing streak by adding between 1.33%-2.69% and around 1% respectively.

Core bond markets diverged. USTs stabilized after selling off lately, even as Fed vice governor Brainard and Cleveland Fed’s Mester basically ruled out a September pause in the tightening cycle as suggested by Bostic last month. US yields changes varied between -1.2 bps (2y) and 1.8 bps (30y).

German Bunds hugely underperformed, adding 2.1 bps (30y) to 7.6 bps (2y-5y) as markets keep raising bets that the ECB will have to follow the Fed in going bolder (50 bps hikes). Germany’s 10y yield (+5 bps) closed at 1.237%, just an inch above the 1.234% resistance level (38.2% recovery of the 2008-2020 decline).

Oil prices briefly fell after OPEC+ announced it would raise planned output hikes in July and August by 50%, from 432k to 648 kbarrels per day. The downleg quickly reversed with an intraday turnaround of more than 5% (Brent closed at $117.61/b).

UST outperformance in combination with risk-on deprived the dollar of its recently found momentum again. EUR/USD rebounded from 1.065 to 1.0747. USD/JPY lost a few ticks after hitting 130 resistance. The Swiss franc temporarily appreciated to the strongest level since early May after above-consensus CPI (2.7%) heats up speculation going into the SNB meeting on June 16. EUR/GBP rose further to 0.854 while UK markets were busy celebrating the Queen’s Platinum Jubilee. They continue doing that today.

In Asia, Hong Kong and Chinese markets are closed as well. Markets that are open generally trade in (pale) green. FX markets trade quietly. The euro holds a small advantage over the dollar with EUR/USD nearing 1.0758 resistance. The Chinese yuan strengthens in thin-liquidity trading to USD/CNY 6.66.

Core bonds hover sideways this morning ahead of the US payrolls release and the services ISM later today. Consensus is for a 320k job gain. Hourly earnings will probably remain solid and could be defining for the market reaction. The stronger-than-expected manufacturing ISM earlier this week called off the downward correction in yields. Will the services gauge surprise to the upside similarly?

This week’s batch of strong US eco data in any case convinced investors for the time being that the US economy is strong enough to withstand Fed tightening. We see room for US bond yields to extend gains following decent-to-strong data. Resistance (10-y) is located just south of 3%, marking the right shoulder top of a potential head-and-shoulders pattern in the making with the neckline situated at 2.72%. EUR/USD recapturing 1.0758 ahead of the weekend would be a bullish sign but remains difficult, especially should rising (US) yields result in a shaky equity sentiment.

News Headlines

Inflation in South Korea again jumped at a faster-than-expected pace in May. Headline inflation rose 0.7% M/M and 5.4% Y/Y, compared to 4.8% in April, reaching the highest level since August 2008. Core inflation excluding food and energy prices also jumped from 3.6% to 4.1%. Transportation costs rose 14.5% Y/Y, food prices were 6% higher. Utility prices rose 5%. In a statement, the Bank of Korea warned that inflation may stay high for a considerable period of time with more 5%+ prints expected in June and July. The BoK last week raised its policy rate for a fifth time since the start of its hiking cycle in August last year by 25 bps to 1.75% and signaled further steps. The Korean won which almost touched a multi-year low against the dollar mid-May, today extended its rebound with USD/KRW easing from 1252 yesterday to currently trade near 1240.

In an interview at the website of the Czech National Bank (CNB) vice governor Marek Mora indicated that the CNB is likely to raise the policy rate further at the June meeting. He said that all options are open as is necessary to bring inflation back to the target. On a question whether a hike bigger than 75 bps is possible, he said he has no ceiling or limit. At the same time he stated that Czech rates are already quite high and that the CNB is nearing the point where no further rate hikes are needed. In this respect, he considers a scenario of the CNB board unanimously voting for stable rates at the August meeting as possible.

The Euro started a fresh increase from the 1.0625 support zone against the US Dollar. The EUR/USD pair surpassed the 1.0650 level to move into a positive zone.

The price even traded above the 1.0700 level and the 50 hourly simple moving average. It traded as high as 1.0764 and is currently consolidating gains. An immediate support is near the 1.0740 level.

The next key support is near 1.0700 and the 50 hourly simple moving average, below the pair could decline towards the 1.0650 level in the near term. Any more losses might send the pair towards the 1.0600 level.

On the upside, the pair might struggle near 1.0765. The next major resistance is near the 1.0785 level. A break above the 1.0785 and 1.0800 resistance levels could start another increase. In the stated case, it could even surpass 1.0850 on FXOpen.