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Gold, Silver and Crude are battered and bruised as the week ends with a stronger U.S. Dollar twisting the knife.

Crude oil limps into the last day of the week with both Brent and WTI down about 30 cents from the previous day’s lows, but still mired at the bottom of their recent ranges. Oil is unlikely to find solace into the weekend either with tonight’s Baker Hughes Rig Count expected to deliver its now weekly increase of operational rigs which totalled 927 as of last week.

With both contracts now in sight of the May panic liquidation lows, Opec and Non- Opec may find some cold comfort that at these levels many U.S. shale producers are maybe breaking into a cold sweat now as well. Much will depend on how much forward production shale has hedged via the selling of oil futures and we should get more visibility into this as we roll into the end of the month. But with U.S. shale production expected to hit 10 million bpd in 2018, this will only put off the day of reckoning for them as well.

Brent spot was trading at 46.80 this morning with initial support at 46.50 followed by the all-important May low at 46.30 just behind. A break of this level potentially opens up a test of Novembers low at 43.00. Daily resistance lies distant at 49.00.

WTI spot was trading at 44.40 with initial support around the overnight low of 44.15 followed by May’s panic sell-off low at 43.50. Beyond this level potentially sees a test of the November low at 42.00. Again, resistance is distant at 46.50.

PRECIOUS METALS

U.S. short end yields surged overnight sending the U.S. Dollar higher across the board and nipping any nascent rally in gold and silver in the bud after a tough week for both. Wednesday’s potentially bullish technical indicators are now a distant memory as gold in particular eyes a critical support region.

In the absence of any geopolitical risk to help them, the price action in both gold and silver of late seems to imply that traders still have plenty of short-term long positioning on their books. Quite a lot of it most likely at less than salubrious levels above 1280.00 and 17.5000 respectively. It may leave both metals vulnerable to a further washout into the weekend if the U.S. Dollar strength persists.

GOLD

Gold is trading at 1254.15 this morning with the critical support region of 1240/1245 lying just below. It contains a daily double bottom and the 100 and 200-day moving averages with a daily close below signalling a deeper technical correction. Resistance lies at 1266 initially and then 1280 with the 1296/1300 but a distant memory.

SILVER

Silver broke it’s 100 and 200-day moving averages a week ago, and both lie at 17.5000 and form significant resistance now. Silver trades at 16.7900 this morning with support nearby at 16.6400, the overnight low and then 16.4150.

USDJPY is displaying a strong rally away from 108.50 region, where a corrective wave 2 of a higher degree was completed. Current impulsive activity can be now start of a minimum three wave rise, that will ideally reach levels at 113.0 and above. A breach above the 110.82 level is an indication and a confirmation, that a change in trend is happening, so more gains can be in for the pair.

USDJPY, 4H

Daily Pivots: (S1) 0.7554; (P) 0.7592; (R1) 0.7617; More....

Further rise remains mildly in favor in AUD/USD for 0.7748 resistance and above. There is no clear sign of range breakout yet. So, we'll be cautious on topping again as it approaches medium term fibonacci level at 0.7849. Meanwhile, break of 0.7523 will argue that rebound from 0.7328 is possibly completed. In that case, intraday bias will be turned back to the downside for 0.7370 support.

In the bigger picture, we're still treating price actions from 0.6826 low as a corrective pattern. And, as long as 38.2% retracement of 0.9504 to 0.6826 at 0.7849 holds, long term down trend from 1.1079 is expected to resume sooner or later. Break of 0.6826 low will target 0.6008 key support level. However, firm break of 0.7849 will indicate that rise from 0.6826 is developing into a medium term rebound, rather than a sideway pattern. In such case, stronger rise should be seen to 55 month EMA (now at 0.8091) and above.

The Bank of Japan held steady on its accommodative stance as its two-day meeting came to an end. At a time when major central banks around the world have either started normalizing rates or signaled that they're on a path of doing so, the BoJ's current stance is expected to add downside pressure on the Japanese currency.

As anticipated, the BoJ maintained the 0.1% interest it charges banks for holding reserves with the central bank. Moreover, it made no changes to the yield target of around zero percent for 10-year Japanese government bonds and maintained its flexibility in engaging in bond purchases depending on the state of the economy.

Additionally, the Bank was more optimistic on private consumption supporting the economy as well as on growth from overseas economies, signaling its confidence on the existence of positive momentum for the nation which heavily relies on exports to fuel growth.

In terms of reaction in the forex markets, the yen is falling for a second straight day versus the dollar. The Japanese currency is looking set to record its biggest weekly loss in more than a month as analysts are discounting any expectations of monetary tightening coming soon from the Japanese central bank.

As European markets were getting ready to commence their trading day, BoJ Governor Haruhiko Kuroda started giving his press conference explaining the Bank's policy decisions. Among others, Kuroda said that “there's some distance to achieving (the Bank's) 2% inflation” target and that it will “take some time” for inflation to pick up, adding that at the moment it is inappropriate to discuss exiting the Bank's ultra-loose monetary policy. As Kuroda talked dolar/yen rose to the two-week high of 111.37. Before his comments the pair was trading at 111.06.

Daily Pivots: (S1) 1.3225; (P) 1.3267; (R1) 1.3309; More....

Intraday bias in USD/CAD remains neutral for consolidation above 1.3164 temporary low. Upside of recovery should be limited by 1.3387 support turned resistance and bring fall resumption. We hold on to the view that corrective rise from 1.2460 has completed at 1.3793 already and deeper decline is expected. Below 1.3164 will target 1.2968 support first. Break there should confirm our view and target 1.2460 and below.

In the bigger picture, price actions from 1.4689 medium term top are seen as a correction pattern. The first leg has completed at 1.2460. Rise from 1.2460 is seen as the second leg and has completed at 1.3793, ahead of 61.8% retracement of 1.4689 to 1.2460 at 1.3838. Break of 1.3222 should now indicate the start of the third leg while further break of 1.2968 should confirm. In that case, USD/CAD should decline through 1.2460 support to 50% retracement of 0.9406 to 1.4869 at 1.2048.

Daily Pivots: (S1) 1.1109; (P) 1.1168 (R1) 1.1205; More....

At this point, EUR/USD is still holding above 1.1109 support and outlook is unchanged. Intraday bias remains neutral with focus on 1.1298 key resistance. Decisive break there will carry larger bullish implication and target 1.1615 resistance next. On the downside, break of 1.1109 support will indicate short term topping and rejection from 1.1298. In such case, intraday bias will be turned to the downside for 1.0838 support.

In the bigger picture, the case for medium term reversal continues to build up with EUR/USD staying far above 55 week EMA (now at 1.0922). Also, bullish convergence condition is seen in weekly MACD. Focus will now be on 1.1298 key resistance. Rejection from there will maintain medium term bearishness and would extend the whole down trend from 1.6039 (2008 high). However, firm break of 1.1298 will indicate reversal. In such case, further rally would be seen back to 1.2042 support turned resistance next.

Daily Pivots: (S1) 1.2697; (P) 1.2746; (R1) 1.2803; More...

GBP/USD is staying in range above 1.2633 and struggles to break through 4 hour 55 EMA. Intraday bias remains neutral first. Also, near term outlook stays bearish with 1.2977 resistance intact. We continue to favor the case that consolidation pattern from 1.1946 has completed at 1.3047 already. Decisive break of 1.2614 resistance turned support would confirm our bearish view and target a test on 1.1946 low next. However, break of 1.2977 will dampen our view and turn bias back to the upside for 1.3047 and above.

In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. Price actions from 1.1946 medium term low are seen as a consolidation pattern, which could have completed after hitting 55 week EMA. Break of 1.1946 low will target 61.8% projection of 1.5016 to 1.1946 from 1.3047 at 1.1150 next. In case the consolidation from 1.1946 extends, outlook will stay remain bearish as long as 1.3444 resistance holds.

Daily Pivots: (S1) 0.9654; (P) 0.9694; (R1) 0.9749; More.....

Despite extending the rebound from 0.9613, USD/CHF is still holding below 0.9807 resistance. Intraday bias remains neutral, with bearish near term outlook. Break of 0.9613 will extend the whole decline from 1.0342 to 0.9548 support and below. We'd start to look for bottoming signal again as it approaches 0.9443 key support level. However, considering bullish convergence condition in 4 hour MACD, break of 0.9807 will indicate near term reversal and turn outlook bullish for 1.0099 resistance next.

In the bigger picture, USD/CHF is still bounded in medium term range of 0.9443/1.0342 for the moment. Consolidative trading would likely continue and medium term outlook remains neutral. Break of 1.0342 key resistance is needed to confirm underlying bullish momentum in the pair. Meanwhile, downside attempts should be contained by 0.9443 key support level. However, sustained break of 0.9443 will carry larger bearish implication and target 0.9 handle.

Daily Pivots: (S1) 109.81; (P) 110.39; (R1) 111.52; More...

USD/JPY's break of 110.80 resistance suggests that fall from 114.36 has completed at 108.81 already. Intraday bias is turned back to the upside for channel resistance (now at 113.06). Sustained break there will argue that whole pull back from 118.65 has completed at 108.12 already. In such case, further rise should be seen to 114.36 resistance for confirmation. Nonetheless, break of 108.81 will still extend the fall from 118.65 through 108.12 low before completion.

In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. It's uncertain whether it's completed yet. But in case of another fall, downside should be contained by 61.8% retracement of 75.56 to 125.85 at 94.77 to bring rebound. Overall, rise from 75.56 is still expected to resume later after the correction from 125.85 completes.

Thursday's strong close in red and below 1.1166 (09 June trough) is seen as bearish signal, as the pair moved lower after three consecutive Dojis and repeated rejection under 1.1300 target.

Fresh bearish pressure is coming from 10/20SMA bear cross which is forming at 1.1212, with next key supports at 1.1121/09 (Fibo 38.2% of 1.0839/1.1295 upleg/30 May low) being in focus.

Sustained break below 1.1121/09 pivots would open way for extended correction towards initial target at 1.1075 (daily Kijun-sen) and 1.1020/00 (Fibo 61.8% of 1.0839/1.1295 upleg/psychological support) in extension.

Corrective rally on oversold studies should stay capped under 1.1200 handle to keep fresh near-term bears intact.

Res: 1.1185, 1.1212, 1.1268, 1.1295
Sup: 1.1132, 1.1121, 1.1109, 1.1075