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Daily Pivots: (S1) 108.19; (P) 108.37; (R1) 108.56; More...

Intraday bias in USD/JPY remains neutral first and more consolidation could be seen. In case of another recovery, upside should be limited by 109.02 support turned resistance to bring fall resumption. On the downside, sustained break of 61.8% retracement of 104.69 to 112.40 at 107.63 will pave the way back to 104.62/9 key support zone. Though, break of 109.02 support turned resistance will indicate short term bottoming and bring lengthier consolidations first.

In the bigger picture, decline from 118.65 (Dec 2016) is still in progress, with the pair staying indicate long term falling channel. Break of 104.62 will target 100% projection of 118.65 to 104.62 from 114.54 at 100.51. For now, we'd expect strong support above 98.97 (2016 low) to contain downside to bring rebound.

WTI prices marked some substantial gains yesterday as there were explosions on two tankers near the straits of Hormuz, according to media. The US was quick to accuse Iran of attacking the two vessels, while at the same time Iran denies the accusations. Whatever the case, the explosions add further tension to the region, which could threaten the normal supply chain for oil, hence increase the commodity’s prices. It should be noted that yesterday also the OPEC report was released and the organization states that ongoing global tensions have resulted in weaker growth in global oil demand. The organization also stated that the slowdown in the global economy of 1H is expected to be further challenged in 2H of 2019. The developments could force the organization to announce that its members will cut production levels even further in its meeting end of the month. We expect rising tensions and uncertainty providing bullish tendencies for the commodity’s prices. WTI prices rose yesterday, testing the 52.70 (R1) resistance line. Should there be further tensions or headlines implying further production cuts, we could see oil prices rising even further. Should the commodity’s long positions be favored again today, we expect them, to clearly break the 52.70 (R1) resistance line and aim for the 54.45 (R2) resistance level. Should the commodity come under the selling interest of the market, we could see it aiming if not breaking the 51.25 (S1) support line.

USD stabilizes ahead of Fed meeting

The USD seems to stabilize ahead of the Feds’ meeting next week, yet the week may be ending quit favorably for the greenback. Investors are expected to turn their attention towards the Fed’s meeting next week, for any hints about a possible rate cut. Analysts tend to point out that the market may be expecting dovish comments ahead of the meeting from Fed officials, which could subdue the USD. It should be noted though, that the poor performance of other currencies seems to keep the USD afloat for the time being. Also further tensions in the US-Sino relationships remain possible, especially ahead of the G20 meeting in Osaka, near the end of the month. We could see the USD be somewhat data driven today and new fundamental headlines could also influence its direction. EUR/USD dropped yesterday, aiming for the 1.1260 (S1) support line. We could see the pair dropping even further today, should today’s financial releases favor the USD. Should the bears take control over the pair’s prices, we could see them braking the 1.1260 (S1) support line and aim for the 1.1220 (S2) support level. If the bulls take over, we could see the pair’s price action, breaking the 1.1300 (R1) resistance line and aim for the 1.1340 (R2) resistance barrier.

Other economic highlights, today and early tomorrow

Today during the European session, we get from France the final HICP rate for May, from China the industrial production growth rate for May and Sweden’s CPI rate also for May. In the American session we get from the US the retail sales growth rates for May, the industrial production growth rate for May, the preliminary university of Michigan consumer sentiment for June and the Baker Hughes oilrig count. We do not expect any significant financial releases for Monday’s Asian session. As for speakers, please note that BoE Governor Carney and ECB’s Lautenschlaeger speak.

WTI H4

Support: 51.25 (S1), 49.50 (S2), 47.90 (S3)
Resistance: 52.70 (R1), 54.45 (R2), 56.00 (R3)

EUR/USD H4

Support: 1.1260 (S1), 1.1220 (S2), 1.1175 (S3)
Resistance: 1.1300 (R1), 1.1340 (R2), 1.1375 (R3)

Daily Pivots: (S1) 0.6898; (P) 0.6918; (R1) 0.6934; More...

Intraday bias in AUD/USD remains on the downside for retesting 0.6864 support. Break there will resume the decline from 0.7295 for retesting 0.6722 low. On the upside, above 0.6938 minor resistance will delay the bearish case and bring more consolidations first.

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.

Daily Pivots: (S1) 1.3300; (P) 1.3323; (R1) 1.3346; More...

No change in USD/CAD's outlook as it's staying in consolidation from 1.3239. Intraday bias remains neutral at this point. Upside of recovery should be limited by 1.3363 support turned resistance to bring fall resumption. Choppy rise from 1.3068 has completed at 1.3564 already. Fall from 1.3564 is likely resuming the decline from 1.3664 medium term top. Break of 1.3239 will turn bias back to the downside for 1.3052/68 cluster support. However, sustained break of 1.3363 will mix up the near term outlook and bring stronger rebound first.

In the bigger picture, the strong break of medium term channel support now argues that up trend from 1.2061 (2017 low) has completed at 1.3664 (2018 high), just ahead of 61.8% retracement of 1.4689 (2016 high) to 1.2061 at 1.3685, and 1.3793 resistance. Decisive break of 1.3068 cluster support (38.2% retracement of 1.2061 to 1.3664 at 1.3052) will confirm and pave the way to 61.8% retracement at 1.2673 next. For now, risk will remain on the downside as long as 1.3564 resistance holds, even in case of strong rebound.

All the markets' attention is focused on the US & China Retail Sales and Industrial production. Despite the trade conflicts, very optimistic indicators are expected in both countries. In China, the annual growth rate of Retail Sales is expected to 8%, in the USA it could be 2.6%, also making a positive contribution to the GDP dynamics.

Despite this fact, world analysts and traders are increasingly waiting for the new measures of economic stimulus. At the moment, the political news definitely overshadowed the economical ones. Industrial production is attracting the investors' attention, as it's considered as an important leading indicator of business activity. Further decline can increase the demand for incentives from the Central Banks and the governments.

Stocks

US indices maintain their position after a gain of almost 0.5% the day before. This fact beat off the loss of the beginning of this week, and today's growth, for the most part, is caused by hopes for an early easing of the Fed's monetary policy. As expected, this will help the economy to overcome the slowdown.

At the same time, the Chinese indices were in antiphase with the upward trend from the beginning of the week, but then began to decline closer to the weekend.

EURUSD

The euro is developing a decline as well, dropping on Friday morning to 1.1270 dollars. Bears pressure was strong enough to deploy a single currency, not allowing EURUSD to consolidate above 1.1300. Further development of the recession opens up the opportunities to decline to the ​​1.1200 area, where the 50-day moving average is underway.

Gold

Gold continues to be in demand, returning to the peak levels of last week at 1346 and re-testing this year highs. On Friday, traditionally, market participants desire to take profits and close their positions that can turn into another test for the bulls. Nevertheless, it is worth to remember the global desire to get away from risky assets as it still provides tangible support for Gold.

Daily Pivots: (S1) 0.8875; (P) 0.8899; (R1) 0.8920; More...

For now, with 0.8829 minor support intact, further rise is expected in EUR/GBP to 0.9101 key resistance next. As upside momentum is diminishing as seen in 4 hour MACD, we'd be cautious on strong resistance from there to limit upside to bring retreat. On the downside, though, break of 0.8829 support will indicate short term topping and bring lengthier consolidation before staging another rise.

In the bigger picture, medium term decline from 0.9305 (2017 high) is seen as a corrective move. No change in this view. Current development argues that it might have completed with three waves down to 0.8472, just ahead of 38.2% retracement of 0.6935 (2015 low) to 0.9306 at 0.8400, after hitting 55 month EMA (now at 0.8526). Decisive break of 0.9101 resistance will confirm this bullish case. Nevertheless, as EUR/GBP is still staying inside long term falling channel, correction from 0.9305 could still extend to 0.8400 fibonacci level before completion, if upside is rejected by 0.9101.

Daily Pivots: (S1) 1.6266; (P) 1.6315; (R1) 1.6352; More...

With 1.6275 minor support intact, intraday bias in EUR/AUD remains on the upside for t 61.8% projection of 1.5683 to 1.6262 from 1.6052 at 1.6410 first. Break will target 100% projection at 1.6631 next. On the downside, below 1.6275 minor support will turn intraday bias neutral first. But retreat should be contained well above 1.6052 support to bring rise resumption.

In the bigger picture, as long as 1.5346 support holds, outlook will still remain bullish. Up trend from 1.1602 (2012 low) is expected to resume sooner or later. Break of 1.6765 will target 61.8% retracement of 2.1127 (2008 high) to 1.1602 at 1.7488 next. However, firm break of 1.5346 key support will indicate trend reversal, with bearish divergence condition in weekly MACD, and turn outlook bearish.

Daily Pivots: (S1) 1.1187; (P) 1.1219; (R1) 1.1238; More....

Intraday bias in EUR/CHF remains neutral at this point and consolidation from 1.1119 might extend. Upside of recovery should be limited below 1.1278 resistance to bring fall resumption. On the downside, below 1.1186 minor support will turn intraday bias back to the downside for 1.1119 first. Break there will extend recent down trend to 61.8% projection of 1.2004 to 1.1173 from 1.1476 at 1.0962 next limited.

In the bigger picture, current development firstly suggests that down trend from 1.2004 is still in progress. More importantly, it's likely a long term down trend itself, rather than a correction. Outlook will remain bearish as long as 1.1476 resistance holds. EUR/CHF could target 1.0629 support and below.

Daily Pivots: (S1) 137.07; (P) 137.43; (R1) 137.74; More...

GBP/JPY weakened after failing to sustain above 4 hour 55 EMA. But downside is contained above 136.55 temporary low. Intraday bias remains neutral first and more consolidation could be seen. In case of another rise, upside should be limited by 38.2% retracement of 146.50 to 136.55 at 140.35 to bring fall resumption. On the downside, break of 136.55 will turn bias to the downside and extend the fall from 148.87 to 131.51 low.

In the bigger picture, current development suggests that GBP/JPY's medium term fall from 156.59 (2018 high) is still in progress. Break of 131.51 will target 122.36 (2016 low). Structure of such decline is corrective looking so far, arguing that it's just the second leg of consolidation from 122.36. Thus, we'd expect strong support from 122.36 to contain downside to bring reversal.

Pivot (invalidation): 52.90

Our preference Short positions below 52.90 with targets at 51.70 & 50.90 in extension.

Alternative scenario Above 52.90 look for further upside with 53.45 & 54.00 as targets.

Comment As Long as the resistance at 52.90 is not surpassed, the risk of the break below 51.70 remains high.