Sample Category Title

EUR/USD

Current level - 1.1135

The pair is approaching 1.1110 lows and a reversal is likely around these levels, for a rebound towards 1.1170. Only a break through 1.1110 will signal a completion of the corrective phase and will challenge 1.1015

USD/JPY

Current level - 109.69

The intraday bias is positive, for a break through 109.90, towards 110.70 peak.

GBP/USD

Current level - 1.2631

The outlook remains positive above 1.2600, for a rebound towards 1.2750.

USDCAD shows a double zig-zag in play, currently moving into final phase of this correction. The reason for this count is a recent deep pullback to the lower trendline support which in fact caused a nice bounce so looks like that new high is in play. Ideally that's going to be an impulsive wave c that can be targeting 1.3550/1.3600 area for a possible top.

The most interesting part of this count is also that, if everything goes as expected, a nice and sharp bearish breakdown may follow, which could take price well below the 1.327 level. Early evidences that a top, and a bearish continuation is here would be a sharp drop, in impulsive fashion (no overlaps).

USDCAD, 4h

Italy has been thrown back into the spotlight this week after the European Commission (EC) asked for “clarification” on the nation’s deteriorating debt situation.

Should this development lead to another round of disagreements between the EC and Italian authorities, it certainly will not bode well for the Euro which is already hanging on cliff’s edge to reaching 1.10 for the first time since May 2017.

With the EC already writing a letter to the Italian government on its financial conditions and giving Rome only until Friday to respond before slapping them with a €3.5billion fine, another speedbump is on the road for the Euro and this risks becoming a nasty bump in the road fast. When considering how Italy’s debt is the second highest in the Eurozone after Greece with public debt reaching roughly around 132% of GDP in 2018, fears are looming over Rome potentially triggering another debt crisis – a highly unfavourable scenario for the Eurozone.

Renewed concerns over Italy’s budget policy have come at a time where headwinds are already circling around the Eurozone economy like a tornado on the downside risks it faces from the persistent US-China trade tensions, and also when question marks remain over whether the Trump administration will potentially impose tariffs on European cars and auto parts.

The Eurozone manufacturing sector is already raising eyebrows with its PMI results for May drifting further into contraction territory and auto tariffs will have terrible consequences for the European economy.

All in all, the threat of US-EU trade disputes negatively impacting growth coupled with political risks are the themes to watch for further punishment in the Euro moving forward. An appreciating Dollar due to the risk-off environment in global markets is also rubbing salt into the wound of an injured Euro, and the clock is ticking on the EURUSD tumbling towards 1.10 and beyond.

Looking at the technical picture, the EURUSD remains under prolonged pressure on the weekly charts with prices trading marginally above two year lows with prices narrowly above 1.113 as of writing. The path of least resistance points south with the next key level of interest at 1.11. A solid weekly close below this point opens a clearpath for the Euro to spiral below 1.10.

Nevertheless, the upcoming US GDP reading for later on Thursday could provide some light at the end of the tunnel for Euro buyers. The shining knight to protect the Euro from entering 1.10 would need to be a sharp downside revision to US GDP data, weakening the ongoing Dollar demand on the reminder that United States economy is also exposed to global growth concerns.

Commodity spotlight – WTI Oil

Oil prices are poised to become extremely sensitive and highly reactive to any news revolving around supply and demand factors ahead of the OPEC meeting in June.

This sensitivity has already been illustrated following prices attempting a push higher yesterday after an industry report showed a decline in US Crude inventories. The medium to longer-term outlook does remain in favour of further declines in the price of Oil.

Concerns over persistent US-China trade tensions, and more escalations ahead are a fast-moving steam train for downgrades to global growth. This will impact demand for Oil in a negative manner, which is good news for sellers.

Cable held within tight range in Asia on Thursday, consolidating after three-day fall and ahead of final attack at key 1.2605 support (23 May low).

Overall sentiment remains bearish on rising fears of no-deal Brexit, as probability for such scenario rose near 50%.

Strong US dollar which holds near two-year high against its major counterparts also weighs.

Wednesday's close below 1.2629 (Fibo 76.4% of 1.2397/1.3381) generated fresh bearish signal, adding to negative outlook, as daily studies maintain strong bearish momentum.

Strong bids at 1.2600 support zone may hold bears for extended consolidation, but bearish bias will remain intact while the price holds below falling 10SMA (1.2674). Break above 10SMA would provide temporary relief, but stronger bullish signal that would sideline bears, can be expected on lift above 1.2747 ( recovery high, posted on Monday).

Sustained break below 1.2605 support would signal continuation of larger downtrend and expose Fibo support at 1.2508 (Fibo 76.4% of 1.1930/1.4376), with extension towards 1.2397 (2019 low), not ruled out.

Res: 1.2640, 1.2658, 1.2674, 1.2707
Sup: 1.2605, 1.2588, 1.2508, 1.2476

The GBP/AUD has formed the POC zone between historical levels of resistance.1.8270-1.8300 is the place where we should look for short entries.

However, as the price is dropping, we also need to focus on lower levels. 1.8180 is the final ATR projection low with W L4 camarilla just below at 1.8170. Watch for possible bounces from any of those levels towards 1.8216. If 1.8216-34 hold (but only after 1.8180 has been tested) we should see another drop towards 1.8170 and eventually 1.8096 during the next week. Bears are dominating this market.

The US dollar index held strong on Wednesday amid a mixed sentiment in the market. The 10-year Treasury yields hit a fresh 20-month low while equity markets closed in the red.

A number of narratives have kept the risk assets in check across the US, Europe, and the UK. The Bank of Canada held its monetary policy meeting yesterday and left interest rates unchanged as expected

Brexit and Leadership Crisis Hits the GBP

The British pound was down 0.21% on the day. The declines came as the leading Prime ministerial candidate, Boris Johnson, is now required to appear in court. The allegations are that Johnson lied during the run-up to the Brexit referendum, in regards to the comments he made about the UK's payments to the EU.

GBPUSD Back Near a 4-Month Low

After failing to capitalize on the breakout above 1.2716, the GBPUSD currency pair has been gradually extending the declines. Price action briefly fell to the previous four-month low close to 1.2606. We expect a firm retest of this level. In the event of a break down below this support, the GBPUSD could extend the downside momentum further.

The precious metal initially rose to an intraday high of 1285 before erasing the gains to close the day flat. The flat price action indicates the mixed sentiment in the market. The trade war with China has reached an impasse despite some hopes that a deal could be made. Meanwhile, Chinese media published dire warnings of retaliation to the US-led measures.

XAUUSD on Track to Test the Lower End of the Range

Gold prices posted a reversal after testing the 1285 handle. Price action managed to briefly retrace the initial losses only to fail at the resistance level once again. This led to price pushing lower as a result. Following a successful close below 1277.50, we anticipate the precious metal to fall further in the near term. The lower range at 1270 is likely to be tested by price.

Crude oil prices were volatile on Wednesday as price initially tested a two-month low before recovering sharply to close the day flat. The volatility rose as the escalating trade wars are threatening global economic growth. Alongside the trade war narrative, supply concerns due to Venezuela and Iran are also adding to the concerns.

WTI Crude Oil Forming a Base at 57.50

Crude oil prices slipped back to the support area of 57.50 before posting a strong rebound. Price action remains anchored to the lower end of the support and could trade within the 60.33 and 57.50 handle for the moment. A breakout from this range will ascertain the next leg of the trend in prices. We expect the bias to the upside for a retest of 60.33 to establish resistance.

Bitcoin is once again testing towards the $9,000 resistance level after the recent technical pullback found strong buying interest from neckline support. The bullish pattern on the daily time frame still remains in play, which may eventually take the BTCUSD pair above the $12,000 level. Overall, the BTCUSD pair is set to close the month triple-digit gains and continues to ease towards the key $10,000 level.

The BTCUSD pair is bullish while trading above the $8,500 level, key resistance is found at the $9,000 and $9,600 levels.

If the BTCUSD pair trades under the $8,500 level, sellers may test towards the $8,300 and $8,000 support levels.

The euro is holding towards the worst trading levels of the week against the US dollar in early Thursday trade after the pair fell through key support, at 1.1150, on Wednesday. The EURUSD pair now needs to bounce from the 1.1130 region or it risks further downside towards the 1.1110 level and possibly lower. Overall, bulls need to close the four-hour candle above the 1.1200 level to change the bearish short-term bias.

The EURUSD pair is heavily bearish while trading below the 1.1130 level, key technical support is now found at the 1.1110 and 1.1080 levels.

If the EURUSD pair trades above the 1.1165 level, key technical resistance is found at the 1.1182 and 1.1200 levels.