Sample Category Title

Pivot (invalidation): 0.9765

Our preference Long positions above 0.9765 with targets at 0.9830 & 0.9860 in extension.

Alternative scenario Below 0.9765 look for further downside with 0.9745 & 0.9720 as targets.

Comment The RSI shows upside momentum.

Pivot (invalidation): 107.65

Our preference Long positions above 107.65 with targets at 108.10 & 108.35 in extension.

Alternative scenario Below 107.65 look for further downside with 107.50 & 107.35 as targets.

Comment The RSI calls for a new upleg.

Pivot (invalidation): 1.2700

Our preference Short positions below 1.2700 with targets at 1.2670 & 1.2660 in extension.

Alternative scenario Above 1.2700 look for further upside with 1.2715 & 1.2730 as targets.

Comment As Long as the resistance at 1.2700 is not surpassed, the risk of the break below 1.2670 remains high.

Pivot (invalidation): 1.1390

Our preference Short positions below 1.1390 with targets at 1.1350 & 1.1320 in extension.

Alternative scenario Above 1.1390 look for further upside with 1.1410 & 1.1440 as targets.

Comment The RSI is bearish and calls for further decline.

NZDUSD stretched its seven-day rally to a more than two-month high of 0.6690 on Wednesday, remaining within the Ichimoku cloud. The price advanced above the bullish cross within the 20- and 40-simple moving averages (SMAs) and is trying to exit from the two-month congestion area of 0.6490 – 0.6680.

The near-term bias is looking neutral-to-bullish as the RSI is flatlining above the 50-neutral level, while the MACD is strengthening its positive momentum well above its trigger line, suggesting more upside pressure in the daily timeframe.

Should NZDUSD make another run higher, it’s likely to meet resistance at the strong area of the 200-day SMA and the 50.0% Fibonacci retracement level of the downfall from 0.6940 – 0.6480 at 0.6705. A successful break above this key area would open the way for the immediate resistance of the 61.8% Fibo of 0.6760 but before that the price might need to overcome another hurdle of 0.6720.

If the bullish movement fails to hold and prices turn lower, the 38.2% Fibonacci mark of 0.6655 is the nearest support that could halt steeper declines. A potentially more important support, though, is the 23.6% Fibo of 0.6590, which overlaps with the 20-day SMA. If breached, it would shift the focus to the downside and prices could slip until the lower bound of the range at 0.6490.

In the near-term picture, NZDUSD would need to make a sustained climb above the 200-SMA in order for the outlook to become convincingly bullish.

The British pound has gradually edged back under the 1.2700 level against the US dollar after bears failed to break the 1.2710 resistance level. The GBPUSD pair is currently neutral until a clear technical break from the 1.2660 to 1.2710 price range occurs. Overall, the GBPUSD pair is likely to be driven by the slew of macroeconomic data being released from the UK and US economies on Friday.

The GBPUSD pair is only bullish while trading above the 1.2710 level, key resistance is found at the 1.2810 and 1.2840 levels.

If the GBPUSD pair trades below the 1.2660 level, key support is found at the 1.2600 and 1.2550 levels.

The euro currency continues to trade towards the lower-end of its weekly range against the US dollar as the pair becomes increasingly driven by important US data. Bulls may need weak US data to break the 1.1400 level and take a shot at the 1.1440 resistance level. Much better than expected United States data over the coming sessions may prompt the EURUSD pair to reverse its post FOMC gains.

If the EURUSD pair trades above the 1.1400 level, key technical resistance is found at the 1.1440 and 1.1500 levels.

The EURUSD pair is only bearish while trading below the 1.1360 level, key support is found at the 1.1347 and 1.1321 levels.

Ethereum has started to reverse from the $360.00 level after following higher and surging to its highest level in over eighteen months. It maybe to early to call a top in the ETHUSD pair as a bullish pattern with a target of $490.00 is still in progress. Sellers need to move the ETHUSD pair under the $310.00 support level to encourage short-term sellers back into the game.

The ETHUSD pair is bullish while trading above the $300.00 level, key resistance is found at the $320.00 and $325.00 levels.

If the ETHUSD pair trades below the $300.00 level, key support is found at the $290.00 and $280.00 levels.

The price of crude oil rose in the Asian session after the EIA released inventories data yesterday. Data showed that there was a drawdown of more than 12 million barrels in the past one week. This was a bigger drawdown than the 2.5 million that investors were expecting previously. This data came shortly after the American Petroleum Institute (API) showed that there was a drawdown of more than 2 million barrels. This happened ahead of the OPEC meeting, which will happen on Monday and Tuesday next week in Vienna, Austria. It also came after it emerged that China was defying US sanctions and was actively buying crude oil from Iran.

The Japanese yen weakened against the USD after the country released retail sales data. Data from the Ministry of Economy, Trade and Industry showed that sales rose by an annualized rate of 1.2% in May. This was in line with what investors were expecting and was the fastest growth this year. On a MoM basis, sales rose by a seasonally-adjusted rate of 0.3%. This data came a day after Shinzo Abe said that his government will raise consumption tax from 8% to 10% in autumn. It also came as the country prepared to host the G20 meeting.

Today, in Spain, investors will receive CPI data. The headline CPI is expected to have remained unchanged at 0.8% while the harmonized CPI is expected to have declined from 0.9% to 0.8%. In the European Union, investors will receive the sentiment survey data. The business and consumer survey for June is expected to decline from 105.1 to 104.6. The business climate index is expected to decline from 0.30 to 0.23 while the services sentiment is expected to increase from 12.2 to 12.4. In Germany, the headline and harmonized CPI are expected to remain unchanged at 1.4% and 1.3% respectively. In the US, the country’s final reading of Q1 GDP is expected to remain unchanged at 3.1%.

EUR/USD

The EUR/USD pair declined ahead of US GDP data. It is now trading at 1.1353, which is lower than the 25-day and 50-day moving averages. The RSI has dropped from 60 to the current 39 while the price is trading slightly above the support of 1.1242. The price is also along the lower line of the Bollinger Bands. The pair will likely remain along this level ahead of the US GDP data.

XBR/USD

The price of crude oil has been on an upward trajectory this month. Brent has moved from a monthly low of $59 to a high of $65.91. As shown on the hourly chart below, this trend started after the pair made a double bottom pattern. Today, the XBR/USD pair is trading at 65.25, which is slightly higher than the 25-day and 50-day moving averages. The RSI has remained unchanged slightly under the overbought level of 70. The pair will likely retest the important resistance level of 66 ahead of the OPEC meeting.

USD/JPY

The USD/JPY pair rose to a high of 108.07, which was the highest level since Tuesday this week. This price is above the weekly low of 106.75. On the four-hour chart, the 14-day and 28-day moving averages have made a crossover, which implies that the pair could continue the upward trend for the coming days. The price is also along the 23.6% Fibonacci Retracement level. There is a possibility that the pair will continue moving higher, to test the 38.2% Fibonacci Retracement level of 108.93.

• Rates: Yields recover amid trade hopes
  Core bond yields recovered moderately yesterday and early this morning as cautious trade optimism reigns. Today’s eco calendar is probably only of intraday significance. The trade theme dominates with the G20 summit and the Trump-Xi meeting looming. We expect some further consolidation in (core) bond markets in a currently constructive environment.
• Currencies: USD trading mixed ahead of G20 meeting
  The dollar tried a cautious comeback yesterday as speculation on an aggressive Fed rate eased. Hope on a trade truce also supported US yields. USD/JPY outperforms. The picture for other USD cross rates including EUR/USD was more mixed. Today, eco data will second tier for USD trading. Investors positioning ahead of the G20 will dominate

The Sunrise Headlines

• US equities opened higher on cautious trade optimism but eventually ended up mixed with only the Nasdaq ending in green (+0.32%). Asian markets rally as reports suggested a US/Sino trade truce. China outperforms.
• The Czech central bank left the policy rate unchanged at 2.0%. Governor Rusnok indicated that a rate pause could be relatively long and that he can’t rule out a move with Czech rates in any direction.
• US President Trump urged India to cancel the duties on American products it imposed this month, saying they are “unacceptable”. India slapped with higher tariffs as a retaliation against the US removing some key trade privileges.
• Tory leader finalist Boris Johnson scaled down rhetoric on a no-deal Brexit, saying chances are “a million to one against”. He also sides with his competitor Hunt in dismissing an election before the October 31 deadline.
• Iran will probably breach the 2015 nuclear deal today as the cap on uranium stock is likely to be exceeded. The move aims to put pressure on the EU to bring peace between the US and Iran after the former re-imposed Iranian sanctions.
• The Czech minority government survived a vote of no confidence yesterday. The opposition called for such a vote as PM Babis is facing investigations into alleged EU subsidy fraud which triggered a series of public protests recently.
• In today’s economic calendar we focus on German inflation and the EC economic confidence in the euro zone. US data (third GDP reading, jobless claims) is of secondary importance. The US taps the bond market.

Currencies: USD Trading Mixed Ahead Of G20 Meeting

USD trading mixed ahead of G20 meeting

An EUR/USD test above 1.14 was rejected on Tuesday as Fed governors Powell and Bullard downplayed the chance of a 50 bp rate cut soon. Calming of Fed rate cut speculation and rising hope on a trade truce at Saturday’s meeting between presidents Trump and Xi (slightly) lifted core/US yields. The impact on the dollar was mixed. EUR/USD hovered in the upper half of 1.13 to close little changed at 1.1369. USD/JPY outperformed to finish at 107.80 (from 107.20).

This morning, optimism on a trade truce is supporting Asian equities, even as president Trump is keeping the door open for additional tariffs if no progress will be made on Saturday. US yields are rebounding further and so does the dollar, with USD/JPY (108+) still taking the lead. EUR/USD is drifting back to the mid 1.13 area. The yuan is little changed (USD/CNY 6.88 area). Optimism on trade also (slightly) supports the Aussie (AUD/USD nearing 0.70) and the kiwi dollar (0.6685 area).

Today, the EC EMU confidence data and the German June CPI will be published. EC confidence is expected the decline marginally. German CPI is expected unchanged at 1.3%. Maybe there is a slight downside risk. US data (third revision GDP, jobless claims, pending home sales) will only be of intraday significance, at best. The market focus will remain on Saturday’s Trump- Xi meeting and on overall Osaka G20 meerting. A rebound in US yields, both due to an easing of Fed rate cut speculation and hope on a trade truce prevented further USD losses on Tuesday and yesterday. Even so, we remain cautious on the dollar ahead of the G20 meeting as we assume the US will raise the issue of what it considers a too strong dollar at the G20. The EUR/USD 1.13 should provide decent support. Topside resistance is coming in at 1.1412 and 1.1448.

EUR/GBP set a minor new ST top in the 0.8976 area yesterday, but a test of the 0.90 barrier didn’t occur. In a parliamentary hearing, the BoE maintained the scenario of limited rate hikes but acknowledged the divergent market pricing. Boris Johnson downplayed the chance of a no deal Brexit, but his comments didn’t help sterling much. There are no UK eco data today. More technical EUR/GBP trading near recent levels might be on the cards. We see no big case for a sustained sterling rebound. The EUR/GBP 0.90 barrier is within reach. EUR/GBP 0.9108 marks the early January peak

Dollar decline slows, at least temporarily, as markets await outcome of the G20 meeting.