Sample Category Title

Pivot (invalidation): 1.3115

Our preference Short positions below 1.3115 with targets at 1.3070 & 1.3050 in extension.

Alternative scenario Above 1.3115 look for further upside with 1.3135 & 1.3165 as targets.

Comment As Long as the resistance at 1.3115 is not surpassed, the risk of the break below 1.3070 remains high.

Pivot (invalidation): 0.9780

Our preference Short positions below 0.9780 with targets at 0.9740 & 0.9720 in extension.

Alternative scenario Above 0.9780 look for further upside with 0.9800 & 0.9815 as targets.

Comment The RSI is bearish and calls for further downside.

Pivot (invalidation): 107.85

Our preference Short positions below 107.85 with targets at 107.55 & 107.35 in extension.

Alternative scenario Above 107.85 look for further upside with 108.15 & 108.35 as targets.

Comment A break below 107.55 would trigger a drop towards 107.35.

Pivot (invalidation): 1.2685

Our preference Short positions below 1.2685 with targets at 1.2660 & 1.2640 in extension.

Alternative scenario Above 1.2685 look for further upside with 1.2705 & 1.2725 as targets.

Comment A break below 1.2660 would trigger a drop towards 1.2640.

Pivot (invalidation): 1.1355

Our preference Long positions above 1.1355 with targets at 1.1380 & 1.1390 in extension.

Alternative scenario Below 1.1355 look for further downside with 1.1345 & 1.1320 as targets.

Comment The RSI lacks downward momentum.

• Rates: Core bonds to gain as investors await G20
  Global core bonds gained ground amid nervous trading yesterday. Investors have difficulties in assessing the outcome of tomorrow's Trump-Xi meeting with headlines sending conflicting messages. The current fragile environment, the looming trade talks and today's economic data might favour bonds further today.
• Currencies: Will US president Trump call for a weaker dollar?
  The dollar showed no clear directional trend yesterday as investors await more clear guidance from the G20 summit. Aside for the G20, EMU (CPI) and US (spending and income, Chicago PMI) data have potential to move EUR/USD intraday. We look out for any change in the US FX policy at the G20. Sterling remains under pressure. EUR/GBP nears 0.90 barrier

The Sunrise Headlines

• Wall Street ended a nervous and choppy session mixed. The Dow Jones (-0.04%) underperformed. Asian stocks slip ahead of the much talked-about meeting between Trump and Xi tomorrow. China underperforms, losing up to 1.2%.
• Chinese President Xi lashed out at the US during a meeting of the BRIC countries in the sidelines of the G20 summit, saying that 'all this [protectionist measures by some developed countries] is destroying the global trade order'.
• Boris Johnson refuses to rule out setting Parliament aside if that's what it takes to push through a no-deal Brexit - although not his base assumption - on October 31.
• The White House is developing a tax cut plan by indexing capital gains to inflation, according to people familiar. It wants to advance the proposal soon to ensure it takes effect before facing re-election in 2020.
• During an interview IMF chief economist Gita Gopinath said Germany has scope for looser fiscal policy and that it should profit from the possibility to issue debt at negative interest rates.
• White House advisor Kudlow dismissed yesterday's WSJ report that President Xi would present Trump with a list of demands to resolve the conflict, saying that the meeting is “without preconditions”.
• Today's economic calendar contains US PCE (core) inflation and the Chicago PMI. Inflation is due in the EMU. The G20 summit kicked off today and will continue until tomorrow with a closely watched US/Sino meeting.

Currencies: Will US President Trump Call For A Weaker Dollar?

Will Trump advocate a weaker dollar at the G20?

EUR/USD trading was erratic yesterday. Investors didn't take any big directional positions ahead of this weekend's G20. US and EMU data also failed to give a consistent guidance for trading. The euro initially gained modest ground as regional German inflation data suggested a bigger than expected rise of June inflation, but the harmonized CPI finally printed unchanged at 1.3%. Headlines/expectations on the outcome of the meeting between presidents Trump and Xi were cautiously positive, but with little impact on the dollar. Both EUR/USD (1.1369) and USD/JPY (107.79) closed the day almost unchanged.

This morning, Asian equity indices show modest losses as investors keep sidelined ahead of tomorrow's meeting between presidents Trump and Xi that is supposed to revive the US-China trade talks. EUR/USD hovers in the 1.1360/65 area. The yen gains marginal ground (USD/JPY 107.65 area). AUD/USD regained the 0.70 market as investors are becoming a bit more cautious on an RBA rate cut next week.

Today, (FX) markets will keep a close eye on the headlines from the G20 meeting. However, the data still deserve some attention too. The first estimate of EMU June CPI is expected unchanged at 1.2% Y/Y. We don't expect the report to change expectations on ECB policy. US income (0.3% M/M) and spending (0.5% M/M) are expected solid, but expectations for the deflators remain soft (0.2% M/M). Soft inflation indicators might be supporting the case for (preemptive) Fed rate cuts and might be a (slightly) negative for the dollar. This also applies for in case of a negative surprise for the Chicago PMI (expected at 53.5). Regarding the Osaka G20 meeting, a trade truce might be modestly positive for USD/JPY but rather neutral for EUR/USD. We still expect the US to put the issue of a what they consider a too strong dollar on the table. The EUR/USD 1.1300/1.1250 should provide decent support. Topside resistance is coming in at 1.1412 and 1.1448.

EUR/GBP initially hovered in the mid 0.89 area yesterday, but finally sterling weakness pushed the pair for a rest of the recent top in the 0.8975/80 area. Boris Johnson keeping the option of suspending Parliament open if MP's try to block a no deal Brexit, didn't help the UK currency. This morning's UK GFK consumer confidence dropped more than expected (-13 from -10). The EUR/GBP 0.90 barrier is within reach. EUR/GBP 0.9108 marks the early January peak

Dollar going nowhere as markets await outcome of the G20 meeting.

Daily Pivots: (S1) 0.6991; (P) 0.7000; (R1) 0.7018; More...

Outlook in AUD/USD remains unchanged. We'd still expect strong resistance from 0.7022 to limit upside to complete corrective rise from 0.6813. On the downside, below 0.6941 minor support will turn bias to the downside for retesting 0.6831 low first. Break there will resume the decline from 0.7295 to 0.6722 low next. However, firm break of 0.7022 will indicate near term reversal and turn outlook bullish for 0.7205 resistance instead.

In the bigger picture, with 0.7393 key resistance intact, medium term outlook remains bearish. The decline from 0.8135 (2018 high) is seen as resuming long term down trend from 1.1079 (2011 high). Decisive break of 0.6826 (2016 low) will confirm this bearish view and resume the down trend to 0.6008 (2008 low). However, firm break of 0.7393 will argue that fall from 0.8135 has completed. And corrective pattern from 0.6826 has started the third leg, targeting 0.8135 again.

Gold prices managed to rebound after price fell close to the $1400 an ounce level. The rebound in gold prices comes as investors wait for further catalysts. On the economic front, the first quarter GDP from the US was unrevised at 3.1%. Meanwhile, pending home sales rose 1.1% matching estimates.

Will Gold Continue to Rise Higher?

The precious metal retreated off the highs to establish support at the $1404 level. Gold posted a lower high on the rebound off the support level. Failure to post further gains could see gold once again easing back to the 1404 level. A break down below this level could signal further declines. The next support level is at 1354.00

Daily Pivots: (S1) 1.3079; (P) 1.3109; (R1) 1.3126; More...

Intraday bias in USD/CAD remains on the downside for 1.3052/68 cluster support. Decisive break there will carry larger bearish implication and target 1.2673 fibonacci level next. On the upside, break of 1.3239 support turned resistance is needed to indicate short term bottoming. Otherwise, outlook will stay bearish in case of recovery.

In the bigger picture, medium term outlook stays neutral for now even though the case of bearish reversal is building up. Decisive break of 1.3068 cluster support (38.2% retracement of 1.2061 to 1.3664 at 1.3052) will confirm completion of up trend from 1.2061 (2017 low). Further fall should be seen to 61.8% retracement at 1.2673 next. On the upside, sustained break of 61.8% retracement of 1.4689 (2016 high) to 1.2061 at 1.3685, is needed to confirm resumption of up trend from 1.2061 (2017 low). Otherwise, risk will stay on the downside.

Crude oil prices were trading flat on Thursday. The OPEC meeting is due to take place from July 1st and 2ndin Vienna, Austria. So far, the markets are mixed on whether the OPEC members will cut production even further. Preliminary reports suggest that OPEC members will maintain the production cuts currently in place.

WTI Crude Oil Likely to Consolidate Near $60 Handle

WTI Crude oil managed to clear the resistance level of 57.50 and is now trading close to the $60 price point. We expect oil prices to consolidate near this level into next week. With the rally in oil price, it is likely that the markets are already discounting the existing production cuts. Failure to expect a further production cut that would be bullish for oil prices could signal a possible move back to the $57.50 level of support.