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EUR/USD

The EUR/USD pair closed the day a couple of pips above the 1.1200 level and having traded as low as 1.1194, weighed mostly by a disappointing ECB, and after Comey's testimony before a US Senate special committee brought nothing new.  The European Central Bank left its benchmark interest rate unchanged as largely expected, accompanying the decision with a mixed statement, less hawkish, however, than what markets were expecting. Despite saying that the risk in the region is now broadly balance, while removing references to lower rates, policymakers left doors opened for further QE, and downgraded inflation projections for the this year and the next, with 2017 inflation now seen at 1.5% from previous 1.7%.

Former FBI director Comey repeatedly called liar US President Trump, saying that's not his place to determinate whether there was obstruction of justice or not, but also said that he perceived Trump's request to drop Flynn probe as an order. Most of what Comey said was already known by the country, with stocks rallying on relief, and the greenback benefiting from the move, albeit so far, dollar's advance seems barely corrective.

From a technical point of view, and in the short term, the pair is poised to fall further, as in the 4 hours chart, a bearish 20 SMA contained advances, whilst the price battles around a bullish 100 SMA, and the RSI indicator heads south around 40. In the wider view, however, the risk of a stepper decline remains limited, as only below 1.1080 an interim top would be confirmed.

Support levels: 1.1160 1.1120 1.1080

Resistance levels1.1250 1.1300 1.1345

USD/JPY

The USD/JPY pair advanced for a second consecutive day, up intraday to 110.38, level that reached ahead of US opening, and from where it retreated after the release of US soft employment data. Weekly unemployment claims in the US came in at 245K, worse than the 240K expected for the week ended June 2nd, capping dollar's intraday advance. Weighing on the Japanese currency was a strong downward revision to Q1 GDP, down to 1.0% from an initial estimate of 2.2% and well below the expected 2.4%. Higher US yields, also helped the pair holding above 110.00. The positive tone seen over the past two days is far from enough to call for an interim bottom, as the recovery stalled short from the key resistance at 110.50, the 61.8% retracement of the latest daily bullish run. Furthermore, the 4 hours chart shows that the 100 SMA maintains its bearish slope well above the mentioned Fibo level, while the RSI indicator turned flat around 51, and the Momentum losses upward strength, but remains within positive territory. Beyond the mentioned static resistance, the pair can extend its upward corrective movement up to 111.60, but would take an unlikely weekly close beyond 112.00 to consider a bullish extension for next week.

Support levels: 109.50 109.10 108.85

Resistance levels: 110.50 111.00 111.60

GBP/USD

The GBP/USD pair plunged over 200 pips after the UK election's exit polls suggest the kingdom will end with a hung Parliament. The pair tumbled after the initial results showed that Conservatives are likely to get 314 seats, 12 short of majority, and down from current 330, whilst opposition Labor is now at 266 seats, up from previous 229 before the election. It's going to be a long night in the UK as the results are preliminary estimates, but the harm is done. Despite keeping the lead, this is a defeat for PM May ahead of Brexit negotiations, which will start on June 19th, as she was looking for popular support with this election, and clearly she didn't get it. If the final results confirm a hung parliament, PM May may have to resign. Technically speaking, and initial bounce after bottoming at 1.2706 was contained by selling interest at 1.2756, the lowest the pair traded ever since May called for the snap election, quite significantly bearish. In the 4 hours chart, the price has broken clearly below all of its moving averages, whilst technical indicators head south almost vertically after the large slide, entering oversold territory. 1.2705 is February 's high, the immediate support for the upcoming hours, and the level to surpass to confirm additional declines that can extend down to 1.2500 this Friday.

Support levels: 1.2705 1.2660 1.2620

Resistance levels: 1.2756 1.2800 1.2840

GOLD

Gold prices edged sharply lower, with spot settling at $1,278.40 a troy ounce, its lowest close for the week after trading as low as 1,271.25. The dollar edged higher against most of its major rivals following ECB's monetary policy announcement, which fell short from indicating normalization is on the Central Bank agenda. The ECB partially dropped its easing bias, by removing the reference to lowering rates, but maintained QE alive and kicking, while downgrading inflation forecasts for this year and the coming ones. The daily chart shows that the commodity held above a still bullish 20 DMA, currently at 1,267.20, while technical indicators retreated within positive territory, but with limited downward momentum. In the 4 hours chart, however, the technical outlook is bearish, as the metal trades below a flat 20 SMA, whilst the RSI indicator consolidates around 45 and the Momentum indicator heads south at fresh one month low, supporting additional declines for this Friday.

Support levels: 1,271.25 1,259.00 1,249.80

Resistance levels: 1,282.60 1,295.90 1,303.10

WTI CRUDE OIL

Crude oil prices remained under selling pressure with West Texas Intermediate futures settling at $45.63 a barrel, still weighed by concerns about an oversupplied market. OPEC's efforts to trim production are being overshadow by a continued increase in US production, fueled by latest US stockpiles data showing a large surge in US inventories. Dollar's intraday strength added to the bearish case of the commodity, which is now poised to extend its decline according to technical readings, as in the daily chart, technical indicators maintain their sharp bearish slopes within negative territory, whilst the 20 DMA gains bearish strength far above the current level. In the 4 hours chart, the 20 SMA has accelerated its decline below the largest, presenting a strong bearish slope, whilst technical indicators hold near oversold territory, with limited downward strength at the time being, but still supporting a downward extension for this last day of the month.

Support levels: 45.20 44.60 44.00

Resistance levels: 46.35 47.10 47.90

DJIA

US indexes closed with modest gains and off their daily highs, with the Dow Jones Industrial Average up roughly 9 points, to close at 21,182.53, while the Nasdaq Composite ended at 6,321.76, up by 24 points, a new record close. The S&P ended pretty much flat at 2,433.79, up 0.03%. The Dow peaked at 21,267 intraday, a record high, following former FBI director Comey statement, as despite critiquing President Trump, his tone was extremely cautious, and not enough to revive impeachment speculations. Supporting the advance in US stocks was Alibaba that soared 13% after forecasting sales growth of nearly 50%. Within the DJIA, Goldman Sachs led advancers with a 1.55% gain, followed by Caterpillar that added 1.50%. Walt Disney was the worst performer, down 1.48%. The technical stance is little changed due to the limited intraday range, with the index holding above its moving averages in the daily chart, and technical indicators holding within positive territory. Shorter term, and according to the 4 hours chart, the neutral stance persist, with the index hovering around a flat 20 SMA the Momentum heading nowhere around its 100 level, and the RSI aiming higher around 54.

Support levels: 21,125 20,080 20,041

Resistance levels: 21,228 21,267 21,300

FTSE100

The FTSE 100 settled at 7,449.98, down 28 points this Thursday, weighed by a stronger Pound and as the UK went to polls. Uncertainty over the result of the election weighed on investors' mood, while the absence of corporate news help maintaining the index within a limited range. Ashtead Group was the best performer, up 3.02%, followed by Glencore which added 2.08%. Imperial Brands led decliners with a2.19% lost, followed by Diageo that shed 1.93%. Randgold Resources also edged lower amid falling gold prices, shedding 1.90%. Ahead of the result of elections, the daily chart for the index seems poised to decline, as technical indicators head south around their mid-lines, whilst the index remained contained by its 20 DMA. In the 4 hours chart, the technical bias is also towards the downside, as the 20 SMA accelerated its decline above the current level, whilst technical indicators have barely managed to recover within negative territory, not enough to support further recoveries. Nevertheless, Friday's direction will depend solely on the outcome of the election, and how PM May ends poised to deal with the Brexit.

Support levels: 7,445 7,405 7,368

Resistance levels: 7,508 7,541 7,588

DAX

European equities closed modestly higher, but little changed with the German DAX settling at 12,713.58, up by 41 points or 0.32% higher. A weaker EUR also helped local shares advance, whilst particularly the German benchmark benefited from strong local data, as Industrial Production surged in April by more than expected, up 0.8% when compared to March and by 2.9% from a year earlier. Within the DAX, ThyssenKrupp was the best performer that closed up 3.66%, followed by E.ON that added 3.53%. Adidas topped losers' list with a 1.6% decline, followed by Vonovia that closed 1.49% lower. Technically, the index maintains a neutral stance, with the index above a horizontal 20 DMA, and technical indicators hovering above their mid-lines, with no directional strength. In the 4 hours chart, the index keeps hovering around its 20 and 100 SMAs, both within a tight range, whilst the Momentum indicator heading marginally higher within positive territory and the RSI indicator consolidating around 53, failing to provide clear directional clues.

Support levels: 12,671 12,620 12,575

Resistance levels: 12,745 12,791 12,834

Sterling plunged on political uncertainty after an inconclusive result in the UK general elections that took place on Thursday, with no single party having a clear claim to power. The dollar moved higher as it was unfazed by former FBI Director James Comey's testimony yesterday.

The British pound lost over 2% against the greenback, touching near a two-month low of $1.2634. The euro surged against sterling to a high of 88.58 pence. Exit polls showed the likelihood of a hung parliament since Prime Minister Theresa May's Conservative party is expected to win without a majority, just days ahead of the Brexit negotiations.

In other currencies, the euro tested the key $1.1200 level and last traded below it at $1.1185. The yen gave up early session gains as the dollar rose back up to 110.46 yen. The aussie traded in a range in Asia around $0.7535, with little reaction to inflation data out of China, its major trading partner.

Chinese data raised concerns over the broader health of the economy as producer prices tumbled, pointing to an easing of broader price pressures. PPI slowed for a third consecutive month with a reading of +5.5% year-on-year in May versus +5.7 % expected. CPI in May was in line with forecasts at +1.5% year-on-year, accelerating faster than April's +1.2%.

The dollar and US equities saw little impact from Comey's Senate testimony, which is perceived as not threatening President Donald Trump's administration for now.

In commodity markets, gold eased lower in Asian trading to $1,271.16 an ounce from a session high of $1281.48, but remained close to yesterday's lows. Oil prices remained weak, with WTI crude near one-month lows around $45.20 a barrel.

The Euro is standing at the back foot in early Friday's trading and probes again below 1.1200 handle, after ECB stayed unchanged on Thursday and chief Mario Draghi did not say anything new in his press conference that markets understood as dovish tone.

The pair is probing through sideways-moving daily Tenkan-sen (1.1197) and rising 20SMA (1.1191), clear break of which would generate stronger bearish signal for deeper pullback from fresh high at 1.1285.

Overall bulls may be hurt by such action, as ECB is unlikely to take any action in tightening in the near future while the Fed is widely expected to hike rates in FOMC next week's meeting that may further weigh on Euro's bulls.

However, current easing could be described as correction which should find ground at strong 1.1114/09 support zone (Fibo 38.2% of 1.0839/1.1285 upleg/30 May trough).

Otherwise, strong reversal signal could be expected on break below 1.1109 and extension towards psychological 1.1000 support seen as likely scenario. Broken 10SMA (1.1228) now acts as resistance which capped Asian trading, with close above here needed to sideline increasing downside risk.

Res: 1.1228, 1.1269, 1.1285, 1.1300
Sup: 1.1180, 1.1114, 1.1109, 1.1062

EUR/USD

Current level - 1.1207

The intraday bias is bearish, for a slide towards 1.1109 low. A break through the latter will signal a slide towards 1.1020 major support area.

Profit-taking affects gold curbing silver and platinum

USD/JPY

Current level - 110.18

The intraday bias is positive and an eventual break through 110.20-30 resistance will initiate a rise towards 111.20, en route to 112.10. Crucial on the downside is 109.70.

GBP/USD

Current level - 1.2726

The break through 1.2870 crucial low signals a reversal at 1.2977 peak and the bias is bearish, for a further slide towards 1.2610 area. Initial intraday resistance lies at 1.2800.

Daily Pivots: (S1) 0.8638; (P) 0.8668; (R1) 0.8685; More...

EUR/GBP's rally resumed after brief dip to 0.8639 and reaches as high as 0.8858 so far. Intraday bias is back on the upside and decisive break of 0.8851 will pave the way to retest 0.9304 high. There is no firm sign of up trend resumption yet. Hence, we'll be cautious on topping around 0.9304. On the downside, break of 0.8639 is now needed to indicate short term topping. Otherwise, outlook will stay bullish in case of retreat.

In the bigger picture, price actions from 0.9304 are viewed as a medium term corrective pattern. The leg from 0.9304 should have completed after testing 0.8332 structural support. But it's too early to say that larger rise from 0.6935 is resuming. Rejection from 0.9304 will extend the consolidation with another falling leg. Meanwhile, firm break of 0.9304 will target 0.9799 (2008 high). In case of another decline, we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside and bring rebound.

British pound was sharply down after results of UK general election were out and showing that Conservative Party lost majority in the parliament. Nightmare scenario for UK PM Theresa May’s party, as calls for May to resign came immediately after election results.

Since no single party having a clear majority to form the government, the country may fall into political turmoil that could also disrupt Brexit negotiations, just days before start of official negotiations on Britain’s divorce from the EU.

The pound surged through important support at 1.2770 (former higher base/daily cloud top) which generated strong bearish signal, as strong acceleration lower completed Failure Swing pattern on daily chart, confirming strong bearish stance.

Sterling resumed downmove in early hours of European session after consolidation attempts in late Asian hours, signaling strong bearish pressure is building up.

Immediate support at 1.2625/16 (Fibo 61.8% of 1.2365/1.3047/100SMA) is under pressure and further weakness may extend through 200SMA at 1.2576 towards 1.2548 (daily cloud base) and 1.2500 zone (the lowest level before PM May called for snap election).

Political uncertainty is expected to keep sterling under increased pressure, along with technical studies which are firmly bearish on lower timeframes and turning into bearish setup on daily chart.

Meantime, limited corrective actions could be expected, with former strong support at 1.2770 now acting as solid resistance and expected to cap.

Res: 1.2706, 1.3770, 1.2806, 1.2841
Sup: 1.2625, 1.2576, 1.2548, 1.2500

Daily Pivots: (S1) 141.25; (P) 141.81; (R1) 142.89; More....

GBP/JPY's fall from 148.09 resumed after brief consolidation and reaches as low as 142.44 so far. Now that 61.8% retracement of 135.58 to 148.09 at 140.35 is broken and there is no clear sign of bottoming yet. Intraday bias stays on the downside for 135.58 key support next. On the upside, break of 142.75 resistance is needed to indicate completion of fall from 148.09. Otherwise, near term outlook will say mildly bearish in case of recovery.

In the bigger picture, rise from 122.36 medium term bottom is still expected to extend to of 195.86 to 122.36 at 150.42. And decisive break there could pave the way to 61.8% retracement at 167.78. However, as the cross is starting to lose upside momentum, rejection below 150.42 and break of 135.58 support will indicate reversal and bring deeper fall back to retest 122.36 instead.

Asia Mid-Session Market Update: Super Thursday concludes with political chaos in UK and more White House scrutiny in US

US Session Highlights

(US) INITIAL JOBLESS CLAIMS: 245K V 240KE; CONTINUING CLAIMS: 1.917M V 1.92ME

(MX) MEXICO MAY CPI M/M: -0.1% V -0.1%E; Y/Y: 6.2% V 6.2%E; CORE CPI M/M: 0.3% V 0.3%E

(QA) Qatar Foreign Min: dispute with Gulf neighbors is threatening the stability of the entire region

(US) Former FBI Dir Comey: the shifting explanations of firing confused and concerned him; administration chose to defame me and the FBI; reasons for firing were lies, plain and simple; I don't think it's for me to say whether conversation with Trump over Flynn investigation was an effort to obstruct; My common sense was that Trump is looking to get something in exchange for granting my request to stay on the job

With all eyes on DC, former FBI Dir Comey's reiterated in testimony the accusations made in his statement released yesterday, and he also accused President Trump of lying about conversations regarding former National Sec Advisor Flynn. However, investors didn't see any cause for panic, and stock markets continued to value stocks positively. Techs and Small Caps made the largest gains on the day, while the broader S&P and blue chips were basically flat.

US markets on close: Dow +0.2%, S&P500 +0.2%, Nasdaq +0.4%

Best Sector in S&P500: Financials

Worst Sector in S&P500: Utilities

Biggest gainers: JWN +10.3%; YHOO +10.2%; NVDA +7.3%

Biggest losers: URBN -10.3%; AAP -3.6%; BWA -3.0%

At the close: VIX 10.2 (-0.2pts); Treasuries: 2-yr 1.32% (+1bps), 10-yr 2.19% (+1bp), 30-yr 2.86% (+2bps)

US movers afterhours

LMNR Reports Q2 $0.24 v $0.18e, Rev $36.9M v $32.1Me; EBITDA $7.8M v $3.4M y/y ; +4.2% afterhours

PAY Reports Q2 $0.30 v $0.30e, Rev $473M v $474Me; Guides Q3 $0.35-0.36 v $0.40e, Rev $463-465M v $485Me; -3.1% afterhours

ENDP FDA requests removal of Opana ER from the market due to risks related to opioid abuse, concern that benefits of the drug may no longer outweigh its risks- FDA requested that Endo Pharmaceuticals remove its opioid pain medication ; -13.6% afterhours

CLDR Reports Q1 -$0.27 v -$0.36e, Rev $79.6M v $75.9Me; Guides Q2 -$0.26 to -$0.24 v $0.25e, Rev $85-86M v $84.0Me, subscription Rev $70-71M, +38-40% y/y ; -15.6% afterhours

Politics

(UK) HUNG PARLIAMENT RESULT CONFIRMED AS CONSERVATIVES FAIL TO SECURE 326 PARLIAMENT SEATS

(US) AG Sessions said to have had a 3rd undisclosed meeting with Russian officials - US press

(US) House passes Dodd-Frank financial law replacement bill - press

Key economic data

(CN) CHINA MAY CPI M/M: -0.1% V 0.1% PRIOR; Y/Y: 1.5% (4-month high) V 1.5%E

(CN) CHINA MAY PPI Y/Y: 5.5% V 5.6%E; 5-month low

(AU) AUSTRALIA APR HOME LOANS M/M: -1.9% V -1.0%E

Asia Session Notable Observations

Asia indices are mixed and volatility has finally settled after a near-24-hour spate of high-profile event risk. In the US, Pres Trump can find solace that he was not the target of FBI investigation. However the charged testimony by former FBI director Comey also paints him in a callous light, subsequent reports that AG Sessions may have had more undisclosed meetings with Russian diplomats, and indication that Democratic leadership is still prepared to pursue obstruction charges leaves the White House - along with its promise of tax reform and infrastructure spending - in peril.

Across the Atlantic, UK elections backfired on PM May, resulting in a hung Parliament rather than her initial intention of bolstering her Parliamentary majority going into Brexit negotiations. Tories' austerity-laden agenda was a tough sell, just as PM May's haphazard communication of policy commitment left her exposed to criticism of being unreliable in negotiations with EU. GBP plunged over 2 big figures to 1.27 after the initial exit polls suggested a strong showing for Labour, hit session lows near 1.2680 after Betfair briefly swung in favor of Labour's Corbyn becoming next PM, and then settled in mid 1.27 range once expectations were distilled to Conservatives ending the day with most votes but shy of the 326 seats needed to form a govt and likely relying on a coalition. PM May will likely pay the ultimate price in the Tory defeat, losing her post.

Asia region was much more subdued relative to ECB-US-UK activity, with developments limited to softer China wholesale and higher consumer inflation. This time around, food CPI decline was much smaller than in the prior month at -1.6% v -3.5% in April. AUD and commodities were little changed on the release.

Speakers and Press

China

(CN) China property investment to keep growing next 1-2 years - Chinese Press

Japan

(JP) BOJ's Kuroda: Japan is no longer experiencing deflation; long way to go until Japan price stability target is achieved - comments in UK

Australia/New Zealand

(AU) Australia Senate to hold inquiry into bank levy plan on Friday, June 16th – Australian Press

Korea

(KR) Korea Joint Chiefs said to investigate report of a small flying object in Gangwon - press

Asian Equity Indices/Futures (01:00ET)

Nikkei +0.4%, Hang Seng -0.4%, Shanghai Composite flat, ASX200 +0.1%, Kospi +0.7%

Equity Futures: S&P500 +0.1%; Nasdaq flat, Dax flat, FTSE100 flat

FX ranges/Commodities/Fixed Income (01:00ET)

EUR 1.1180-1.1235; JPY 109.75-110.35; AUD 0.7525-0.7545; NZD 0.7190-0.7220

Aug Gold -0.1% at 1,278/oz; July Crude Oil flat at $45.66/brl; July Copper -0.3% at $2.60/lb

SPDR Gold Trust ETF daily holdings rise 2.1 tonnes to 867.0 tonne (4th consecutive increase)

(CN) PBOC SETS YUAN MID POINT AT 6.7971 V 6.7930 PRIOR; weakest Yuan fix since June 2nd

(CN) PBOC to inject combined CNY60B v CNY150B prior

(AU) Australia Finance Ministry (AOFM) sells A$800M in 2.75% 2028 bonds; avg yield 2.519%; bid-to-cover 3.08x

Asia equities notable movers

Australia

BlueScope (BSL) +3.6%; Guides H1

SpeedCast (SDA) +1.0%; To be added to ASX200 index

Japan

Toshiba (6502) +8.2%; Bain Capital said to replace KKR in consortium that will include Western Digital and INCJ

FujiFilm (4901) -4.0%; Accounting problems found to extend to Australia operations - Nikkei

Hong Kong

Aac Technologies Holdings (2018) +1.8%; Announces strategic cooperation agreement with Citic Bank for CNY10B

Dongfeng Motor (489) +1.0%; May vehicle sales

China SCE Property (1966) -1.0%; May sales

Nan Nan Resources (1229) -3.6%; FY17 profit alert

Longfor Properties (960) -4.2%; May sales

Daily Pivots: (S1) 1.4821; (P) 1.4885; (R1) 1.4919; More...

The correction from 1.5226 is still in progress and intraday bias stays on the downside. Deeper fall could be seen to 38.2% retracement of 1.3980 to 1.5226 at 1.4750. At this point, we'd expect strong support from 1.4669 to contain downside and bring rebound. Larger rise from 1.3642 is expected to resume later after the pull back completes.

In the bigger picture, price actions from 1.6587 medium term top are viewed as a corrective pattern. Such correction should be completed at 1.3624 after defending 1.3671 key support. Rise from 1.3642 is now expected to target 61.8% retracement of 1.6587 to 1.3624 at 1.5455. Sustained break there will pave the way to retest 1.6587. In any case, outlook will now stay cautiously bullish as long as 1.4669 support holds.

Daily Pivots: (S1) 123.01; (P) 123.51; (R1) 123.87; More...

No change in EUR/JPY's outlook as consolidation from 125.80 is still in progress. In case of deeper pull back, downside should be contained by 38.2% retracement of 114.84 to 125.80 at 121.61 to bring rise resumption. We're staying mildly bullish in the cross. And, break of 126.09 key resistance will extend the whole rebound from 109.03 to 100% projection of 109.03 to 124.08 from 114.84 at 129.89. Nonetheless, firm break of 121.61 will dampen our bullish view and bring deeper fall to 61.8% retracement at 119.02.

In the bigger picture, focus is staying on 126.09 support turned resistance. Decisive break there will confirm completion of the down trend from 149.76. And in such case, rise from 109.20 is at the same degree and should target 141.04 resistance and above. Meanwhile, rejection from 126.09 and break of 114.84 will extend the fall from 149.76 through 109.20 low.