Sample Category Title

Daily Pivots: (S1) 0.8542; (P) 0.8568; (R1) 0.8611; More...

EUR/GBP's rally resumed after brief consolidation and intraday bias is back on the upside. Further rally should be seen to 0.8697 medium term fibonacci level next. On the downside, break of 0.8514 support is needed to signal short term topping. Otherwise, outlook will remain bullish in case of retreat.

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) 1.5024; (P) 1.5109; (R1) 1.5232; More...

Intraday bias in EUR/AUD is turned neutral for now, with focus on 1.5354 cluster resistance (100% projection of 1.4318 to 1.5053 from 1.4597 at 1.5332. Rejection by this level will maintain medium term bearishness for another fall through 1.4138 low at a later stage. But firm break of 1.5332/54 will argue that the larger trend is reversing. Next target is 161.8% projection at 1.5786 first.

In the bigger picture, as long as 1.5354 support turned resistance holds, larger down trend form 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) 1.0423; (P) 1.0458; (R1) 1.0485; More....

A temporary top was formed at 1.0513, just ahead of 100% projection of 0.9970 to 1.0086 from 1.0400 at 1.0516. Intraday bias is turned neutral first. For now, further rise is still in favor as long as 1.0369 resistance turned support holds. Sustained break of 1.0505 long term resistance will carry larger bullish implications. Next target is 161.8% projection at 1.0782. However, break of 1.0369 will indicate rejection by 1.0505 and turn bias back to the downside for 1.0186 support.

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) 136.00; (P) 136.85; (R1) 137.53; More....

EUR/JPY is still extending the consolidation pattern from 139.99 and intraday bias remains neutral first. In case of another decline, downside should be contained by 38.2% retracement of 124.37 to 139.99 at 134.02 to bring rebound. On the upside, firm break of 139.99 will resume larger up trend for 144.06 medium term projection level.

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). Next target will be 100% projection of 114.42 to 134.11 from 124.37 at 144.06. In any case, outlook will now remain bullish as long as 124.37 support holds, in case of deep pull back.

Daily Pivots: (S1) 158.25; (P) 159.79; (R1) 160.73; More...

GBP/JPY's fall from 168.50 resumed by breaking through 159.59 and intraday bias is back on the downside. Current fall should be seen to 61.8% retracement of 150.95 to 168.40 at 157.61. Strong support is expected there to complete the correction to bring rebound. On the upside, above 162.16 minor resistance will turn bias back to the upside for retesting 168.40 high. However, sustained break of 157.61 will bring deeper fall back to 150.95 key structural support.

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 150.95 support holds, even in case of deep pull back.

With the help from risk aversion and extended pull back in benchmark global treasury yields, Yen's rebound is making some progress. US 10-year yield is back below 2.9% handle in Asian session while Germany 10-year bund yield also broke 1% yesterday. Euro and Dollar are still relatively firm on risk-off sentiment. On the other hand, selloff continues to concentrate on Aussie and Kiwi, with Sterling picking up too.

Technically, AUD/JPY resumed the decline from 95.73 after rejection by 4 hour 55 EMA. Further fall is expected to 100% projection of 95.73 to 90.41 from 94.00 at 88.68. Strong support is expected there to contain downside to complete this "corrective" move, and bring rebound. However, firm break of 88.68, with downside acceleration, would raise the chance that AUD/JPY is already in trend reversal. Such development, if happens, could be a signal to broader risk market developments.

In Asia, at the time of writing, Nikkei is down -1.09%. Hong Kong HSI is down -1.05%. China Shanghai SSE is up 0.17%. Singapore Strait Times is down -0.76%. Japan 10-year JGB yield is up 0.0015 at 0.250. Overnight, DOW dropped -1.02%. S&P 500 dropped -1.65%. NASDAQ dropped -3.18%. 10-year yield dropped -0.072 to 2.921.

Fed Bullard: We can proceed on a plan of 50bps per meeting

In a Yahoo Finance interview, St. Louis Fed President James Bullard said that a 75bps rate hike is "not my base case", and he gave a nod to the 50bps per meeting plan.

"We've got a good plan in place and the committee is, based on public comments anyway from my colleagues, has coalesced around a plan of 50 basis points per meeting. So I think we can proceed on that," he said.

Bullard added that whether there would be 50bps hike at each of the upcoming meeting, to bring interest rate to 3.5% by year end, would be data-dependent. "It's possible inflation could moderate a lot. It's possible the real economy could take twists and turns. And so I don't think we want to be promising today what we're going to do in December," he said.

Fed Bostic: We are going to get our policy rate certainly to a neutral space

Atlanta Fed President Raphael Bostic said yesterday, "we are going to get our policy rate certainly to a neutral space where we are no longer providing accommodation. If inflation stays at high levels or levels that are too high -- by too high, it's really not moving back towards our 2% target -- then I am going to be supporting moving more."

"We moved our policy rate 25 basis points and the 30 year (mortgage) moved 2 percentage points. That is tremendous responsiveness," Bostic also noted. "The moves that we have seen in rates and in yields are a sign that the markets still believe the Fed has credibility. They have said what we are going to do and they have priced in us doing them … That is an important dimension in the marketplace."

BoJ: Necessary to continue with current powerful monetary easing

In the Summary of Opinions of the April 27-28 meeting, BoJ noted that "as Japan is a commodity importer, the rise in commodity prices leads to an outflow of income from Japan and thus exerts downward pressure on the economy." And, "it is necessary for the Bank to continue with the current powerful monetary easing and thereby firmly support the economy"

One opinion noted that "one reason for the yen's recent depreciation is that economic conditions in Japan have been different from those in the United States and Europe, and it is not appropriate that the Bank change its policy with the aim of controlling foreign exchange rates."

"With a view to clarifying the Bank's stance to date of not accepting the long-term interest rate exceeding 0.25 percent and to avoiding a situation where daily operations are unnecessarily factored in by the market, it is appropriate for the Bank to announce in advance that it will conduct fixed-rate purchase operations at 0.25 percent every business day, unless it is highly likely that no bids will be submitted."

Looking ahead

UK will release GDP, productions and trade balance in European session. Swiss will release PPI. Later in the day, US will publish PPI and jobless claims.

GBP/JPY Daily Outlook

Daily Pivots: (S1) 158.25; (P) 159.79; (R1) 160.73; More...

GBP/JPY's fall from 168.50 resumed by breaking through 159.59 and intraday bias is back on the downside. Current fall should be seen to 61.8% retracement of 150.95 to 168.40 at 157.61. Strong support is expected there to complete the correction to bring rebound. On the upside, above 162.16 minor resistance will turn bias back to the upside for retesting 168.40 high. However, sustained break of 157.61 will bring deeper fall back to 150.95 key structural support.

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 150.95 support holds, even in case of deep pull back.

Economic Indicators Update

DXY:

On the H4, with price expected to reverse off the stochastics indicator, we have a bearish bias that price will drop from our 1st resistance in line with the swing high resistance to our 1st support where the swing low support is. Alternatively, price may break 1st resistance structure and head for 2nd resistance where the 127.2% Fibonacci extension is.

Areas of consideration:

• H4 time frame, 1st resistance at 103.989
• H4 time frame, 1st support at 103.221

XAU/USD (GOLD):

On the H4, with price moving below the ichimoku, we have a bearish bias that price will drop from our 1st resistance at 1869 where the horizontal pullback resistance is to our 1st support at 1834 in line with the swing low support. Alternatively, price may break 1st resistance structure and head for 2nd resistance where the horizontal pullback resistance is.

Areas of consideration:

• H4 time frame, 1st Resistance at 1869
• H4 time frame, 1st Support at 1834

GBP/USD:

On the H4, with price moving below the ichimoku, we have a bearish bias that price will drop from our 1st resistance at 1.22689 where the 23.6% Fibonacci retracement and pullback resistance is to our 1st support at 1.21723 in line with the 161.8% Fibonacci extension. Alternatively, price may break 1st resistance structure and head for 2nd resistance where the horizontal pullback resistance is.

Areas of consideration:

• H4 1st resistance at 1.22689
• H4 1st support at 1.21723

USD/CHF:

On the H4, with price moving above the ichimoku cloud, we have a bullish bias that price will rise to our 1st resistance at 1.00568 where the61.8% Fibonacci projection is from our 1st support at 0.98412 in line with the horizontal swing low support. Alternatively, price may break 1st support structure and head for 2nd support where the horizontal swing low support is.

Areas of consideration

• 1st support level at 0.98412
• 1st resistance level at 1.00568

EUR/USD :

On the H4, with price expected to bounce off the stochastics indicator, we have a bullish bias that price will rise to our 1st resistance at 1.05791 where the swing high resistance is from our 1st support at 1.04994 in line with the horizontal swing low support. Alternatively, price may break 1st support structure and head for 2nd support where the 127.2% Fibonacci extension is.

Areas of consideration :

• H4 1st resistance at 1.05791
• H4 1st support at 1.04994

USD/JPY:

On the H4, with price moving above the ichimoku cloud, we have a bullish bias that price will rise to our 1st resistance at 131.240 where the swing high resistance is from our 1st support at 129.028 in line with the horizontal swing low support. Alternatively, price may break 1st support structure and head for 2nd support where the horizontal swing low support is.

Areas of consideration:

• H4 time frame, 1st resistance at 131.240
• H4 time frame, 1st support at 129.028

AUD/USD:

On the H4, with price moving below the ichimoku, we have a bearish bias that price will drop from our 1st resistance at 0.70354 where the pullback resistance is to our 1st support at 0.68805 in line with the 61.8% Fibonacci projection and 161.8% Fibonacci extension. Alternatively, price may break 1st resistance structure and head for 2nd resistance where the horizontal pullback resistance is.

Areas of consideration

• H4 1st resistance at 0.70354
• H4 1st support at 0.68805

NZD/USD:

On the H4, with price moving below the ichimoku cloud, we have a bearish bias that price will drop from our 1st resistance at 0.63986 where the 23.6% Fibonacci retracement is to our 1st support at 0.62579 in line with the 200% Fibonacci projection. Alternatively, price may break 1st resistance structure and head for 2nd resistance.

Areas of consideration:

• H4 time frame, 1st support at 0.62579
• H4 time frame, 1st resistance at 0.63986

USD/CAD:

On the H4, with price moving above the ichimoku cloud, we have a bullish bias that price will rise to our 1st resistance at 1.30780 where the 78.6% Fibonacci projection is from our 1st support at 1.29118 in line with the horizontal pullback support. Alternatively, price may break 1st support structure and head for 2nd support where the horizontal pullback support is.

Areas of consideration:

• H4 time frame, 1st resistance at 1.30780
• H4 time frame, 1st support at 1.29118

OIL:

On the H4, with price expected to reverse off the ichimoku cloud, we have a bearish bias that price will drop from our 1st resistance at 105.86 where the 61.8% Fibonacci retracement is to our 1st support at 103.01 in line with the 38.2% Fibonacci retracement. Alternatively, price may break 1st resistance structure and head for 2nd resistance where the horizontal pullback resistance.

Areas of consideration:

• H4 time frame, 1st resistance of 105.86
• H4 time frame, 1st support of 103.01

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 to our 1st resistance at 32553 where the swing high resistance is from our 1st support at 31753 in line with the horizontal swing low support. Alternatively, price may break 1st support structure and head for 2nd support where the 161.8% Fibonacci extension is.

Areas of consideration :

• H4 time frame, 1st resistance at 32553
• H4 time frame, 1st support at 31753

In the Summary of Opinions of the April 27-28 meeting, BoJ noted that "as Japan is a commodity importer, the rise in commodity prices leads to an outflow of income from Japan and thus exerts downward pressure on the economy." And, "it is necessary for the Bank to continue with the current powerful monetary easing and thereby firmly support the economy"

One opinion noted that "one reason for the yen's recent depreciation is that economic conditions in Japan have been different from those in the United States and Europe, and it is not appropriate that the Bank change its policy with the aim of controlling foreign exchange rates."

"With a view to clarifying the Bank's stance to date of not accepting the long-term interest rate exceeding 0.25 percent and to avoiding a situation where daily operations are unnecessarily factored in by the market, it is appropriate for the Bank to announce in advance that it will conduct fixed-rate purchase operations at 0.25 percent every business day, unless it is highly likely that no bids will be submitted. "

Full Summary of Opinions here.

In a Yahoo Finance interview, St. Louis Fed President James Bullard said that a 75bps rate hike is "not my base case", and he gave a nod to the 50bps per meeting plan.

"We've got a good plan in place and the committee is, based on public comments anyway from my colleagues, has coalesced around a plan of 50 basis points per meeting. So I think we can proceed on that," he said.

Bullard added that whether there would be 50bps hike at each of the upcoming meeting, to bring interest rate to 3.5% by year end, would be data-dependent. "It's possible inflation could moderate a lot. It's possible the real economy could take twists and turns. And so I don't think we want to be promising today what we're going to do in December," he said.

Full interview here.

Atlanta Fed President Raphael Bostic said yesterday, "we are going to get our policy rate certainly to a neutral space where we are no longer providing accommodation. If inflation stays at high levels or levels that are too high -- by too high, it's really not moving back towards our 2% target -- then I am going to be supporting moving more."

"We moved our policy rate 25 basis points and the 30 year (mortgage) moved 2 percentage points. That is tremendous responsiveness," Bostic also noted. "The moves that we have seen in rates and in yields are a sign that the markets still believe the Fed has credibility. They have said what we are going to do and they have priced in us doing them … That is an important dimension in the marketplace."