Sample Category Title

The pair is holding in the daily cloud and remains in range trading for the fifth consecutive day.

Several attempts higher last week did not manage to close above daily cloud top (111.80) which acts as solid resistance for now.

On the downside, range low at 110.85, posted on Tuesday, stayed intact on Friday's strong fall that was contained ticks above.

Near-term risk remains shifted lower as daily MA's are turning on bearish setup and daily Tenkan-sen / Kijun-sen bear-cross weighs on near-term action.

Firm break below 110.85, which also lies near Fibo 61.8% of 110.23/112.12 recovery leg, would signal fresh downside and risk return to 18 May low at 110.23 and daily cloud base / psychological support at 110.00.

Only break and close above daily cloud would neutralize downside threats and signal stronger correction of 114.36/110.23 downleg.

Res: 111.46, 111.68, 111.80, 112.12
Sup: 111.15, 110.85, 110.67, 110.23

The euro was quiet last week, as the euro stayed closed to the 1.12 level. Currently, EUR/USD is trading at 1.1190. On the release front, there are no major eurozone events. ECB President Mario Draghi will testify before the Economic and Monetary Affairs Committee in Brussels. US markets are closed for Memorial Day, so traders can expect the euro to remain subdued during the day. On Tuesday, Germany releases Preliminary CPI, and the highlight in the US is CB Consumer Spending.

The US economy expanded at an annual rate of 1.2%, according to its second estimate for GDP. This was considerably higher than the 0.7% gain which was reported in the first estimate in April. Still, this figure is the lowest in a year, and well of the 2.1% gain in Q4. Business spending remains weak, and although consumer confidence remains at high levels, consumer spending has not kept up, as retail sales was softer than expected in April. The manufacturing sector has hit some turbulence, with Core Durable Goods Orders posting a decline of 0.4% in April, its third decline in four months. After a shaky first quarter for the US economy, there are no indications as of yet that we’ll see a rebound in the second quarter? Will this lead to the Fed rethinking a June rate hike? The markets don’t think so, as the odds of a 0.25% rate hike have increased to 84%. At the same time, the likelihood of a rate hike in the second half of 2017 are low. The odds for a September rate are just 26%, with the markets unclear on whether the Fed will make further moves this year if inflation remains below the Fed target. Even if soft first quarter data was a blip, the markets (and possibly Fed policymakers) are concerned that President Trump, who is facing congressional investigations over his connections with the Russian government, may not be able to pass his agenda of cutting taxes and reigning in government spending.

The eurozone economy is looking brighter compared to a few months ago, as first quarter numbers have been solid. There were plenty of jitters at the start of the year, with the stunning election victory of Donald Trump, who ran on a protectionist campaign of “America first”. As well, the Brexit vote hung over Europe like a dark cloud, with EU members wondering who would pull out of the club next. Although Trump and Brexit still remain serious challenges for the EU, fears of a populist wave across the continent have receded, as nationalist parties in the Netherlands and France were handily defeated recent elections. Economic indicators continue to point upwards, as unemployment has dropped and growth is higher. The EU Spring Forecast has forecast Eurozone GDP to rise 1.7% in 2017, and 1.8% in 2018, with growth in the EU expected at 1.9% for both years. Investors have shown their approval by flocking to the euro, which has jumped 6.5% since the start of the year.

GOLD Riding uptrend channel.

Gold is pushing higher within uptrend channel. Hourly support is located at 1246 (18/05/2017 low). Stronger support is given at 1195 (10/03/2017 low). Expected to show further upside pressures.

In the long-term, the technical structure suggests that there is a growing upside momentum. A break of 1392 (17/03/2014) is necessary ton confirm it, A major support can be found at 1045 (05/02/2010 low).

SILVER Pausing around 50% Fibonacci retracement.

Silver increases. Strong support is given at 15.63 (20/12/2017 low). Closest support is given at 16.20 (04/05/2017 low). Key resistance is given at a distance at 19.00 (09/11/2017 high). Expected to push above 50% Fibonacci retracement around 17.30.

In the long-term, the death cross indicates that further downsides are very likely. Resistance is located at 25.11 (28/08/2013 high). Strong support can be found at 11.75 (20/04/2009).

CRUDE OIL Strong volatility.

Crude oil has collapsed after the bounce on short-squeeze move. Support is given at a distance 43.76 (05/05/2017 low). Demand was very strong and the road is wide-open for further increase.

In the long-term, crude oil has recovered after its sharp decline last year. However, we consider that further weakness are very likely. Strong support lies at 24.82 (13/11/2002) while resistance can now be found at 55.24 (03/01/2017 high).

EUR/JPY Pausing above 124.00.

EUR/JPY is trading slightly lower. Hourly support is given at 122.56 (18/05/2017 low). Major support is given at 114.90 (18/04/2017low). Expected to see further renewed buying pressures towards 126.00.

In the longer term, the technical structure validates a medium-term succession of lower highs and lower lows. As a result, the resistance at 149.78 (08/12/2014 high) has likely marked the end of the rise that started in July 2012. Strong support at 94.12 (24/07/2012 low) looks nonetheless far away.

EUR/GBP Growing demand.

EUR/GBP is strengthening despite ongoing bearish consolidation. The technical structure has turned positive since the pair has broken resistance at 0.8530 (25/04/2017 low). Strong support can be found at 0.8304 (05/12/2017 low). Expected to see further continued increase towards resistance at 0.8787 (13/03/2017 high).

In the long-term, the pair has largely recovered from recent lows in 2015. The technical structure suggests a growing upside momentum. The pair is trading above from its 200 DMA. Strong resistance can be found at 0.9500 psychological level.

EUR/CHF Continued decline.

EUR/CHF is trading lower. We believe that the medium-term pattern suggests us to see continued bearish pressures towards key support that can be found at 1.0623 (24/06/2016 low).

In the longer term, the technical structure is mixed. Resistance can be found at 1.1200 (04/02/2015 high). Yet,the ECB's QE programme is likely to cause persistent selling pressures on the euro, which should weigh on EUR/CHF. Supports can be found at 1.0184 (28/01/2015 low) and 1.0082 (27/01/2015 low).

USD/CHF Consolidating.

USD/CHF is now consolidating after the pair broke support located at 0.9814 (27/03/2017 low). Strong resistance is given at 1.0107 (10/04/2017 high). Expected to show continued weakness towards hourly support at 0.9692 (22/05/2017 low).

In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours nonetheless a long term bullish bias since the unpeg in January 2015

USD/CAD Riding downtrend channel.

USD/CAD keeps on weakening since the pair reached 1.3800. Hourly support can be found at 1.3411 (24/04/2017 high) then 1.3353 (20/01/2017 high). Expected to show continued bearish pressures within downtrend channel.

In the longer term, there is now a death cross with the 50 dma crossing below the 200 dma indicating further downside pressures. Strong resistance is given at 1.4690 (22/01/2016 high). Long-term support can be found at 1.2461 (16/03/2015 low).

AUD/USD Renewed bearish pressures.

AUD/USD is pushing lower. Hourly support is given at 0.7329 (09/05/2017 low). As long as prices remain below the resistance at 0.7608 (17/04/2017 high), there are strong downside risks. Expected to move below 0.7400.

In the long-term, we are waiting for further signs that the current downtrend is ending. Key supports stand at 0.6009 (31/10/2008 low) . A break of the key resistance at 0.8295 (15/01/2015 high) is needed to invalidate our long-term bearish view.

EUR/USD Consolidating below resistance at 1.3000.

EUR/USD is consolidating lower below strong resistance at 1.1300 (09/11/2017 high). Hourly support can be found at 1.1162 (22/05/2017 low). Stronger support lies at 1.0842 11/05/2017 low).and key support is given at 1.0494 (22/02/2017 low). Expected to continue growing higher.

In the longer term, the death cross late October indicated a further bearish bias. The pair has broken key support given at 1.0458 (16/03/2015 low). Key resistance holds at 1.1714 (24/08/2015 high). Expected to head towards parity.

GBP/USD Heading towards support at 1.2757.

GBP/USD is trading lower. Hourly resistance lies at 1.3048 (18/05/2017 high). Hourly support given at 1.2831 (04/05/2017 low) has been broken. The pair is heading towards stronger support at 1.2757 (21/04/2017 low). An unlikely break of this last support would indicate further weakness. Expected to show renewed bullish pressures.

The long-term technical pattern is even more negative since the Brexit vote has paved the way for further decline. Long-term support given at 1.0520 (01/03/85) represents a decent target. Long-term resistance is given at 1.5018 (24/06/2015) and would indicate a long-term reversal in the negative trend. Yet, it is very unlikely at the moment.

USD/JPY Ready for another leg lower.

USD/JPY has exited the symmetrical triangle and keeps pushing lower. Hourly support is given at 110.24 (18/05/2017 low). Stronger support is located at 108.13 (17/04/2017 low). Other key supports lie at a distant 106.04 (11/11/2016 low). The road is wide-open for further decline.

We favor a long-term bearish bias. Support is now given at 96.57 (10/08/2013 low). A gradual rise towards the major resistance at 135.15 (01/02/2002 high) seems absolutely unlikely. Expected to decline further support at 93.79 (13/06/2013 low).

US data to take centre stage

The FOMC meeting minutes that released last week has cemented expectations for a rate hike 14th June. While second estimate for 1Q GDP growth came in higher at 1.2%, the number remains subdued. Incoming soft data (especially disappointing inflation data) has lower our expectations for quicker economic momentum.

This week's inflations and labour data, and most importantly wage growth, will be key in pricing the Fed next moves. However, the last two consumer price inflation reports highlighted a persistent weakness in core inflationary pressure. This lack of price growth may put the Federal Reserve back on the sidelines, forcing Janet Yellen to slowdown the ongoing tightening cycle. April's PCE deflator is due for release on Tuesday and is expected to ease further to 1.5%y/y, down from 1.6% a month earlier. A weaker reading could seriously jeopardize the pace of rate normalization beyond the June meeting.

Draghi speaks before European Parliament

The ECB 8th June meeting has become a critical event. With EU economic data continuing to outperform and French legislative elections further removing political risk, the ECB has additional freedom to adjust policy. Traders are listening for the slightest less dovish monetary guidance language from Draghi and the committee. German Chancellor Merkel's recent complaining that the euro is “too weak because of ECB policy' has publicly increased German dissatisfaction with inflation levels. While it's significantly too early for actions, we could get a shifting of forward guidance by removing the bias for lower interest rates or additional QE. This shift would be significantly bullish for the single currency.

EUR/USD was moving sideways at around 1.1170 this morning. The economic agenda is very light today; however Mario Draghi's speech before the European Parliament may trigger some volatile moves later this afternoon.

Political jitters drive ZAR

Anyone that that traded ZAR for an extended period of time should be numb to political and social instability. While the headlines of No Confidence vote against Zuma might have made splash news, we suspect most traders will thinking around the event risk. In our view the current political instability is a binary event both ending with higher ZAR. Should Zuma get impeached, a new and potentially better president will be elected, ZAR positive. If Zuma stay in power, then its business as usual and low volatility and higher interest rates environment will drive speculators back into ZAR.

This morning, USD/ZAR was up 0.35% to 12.9250 as Jacob Zuma apparently survived an attack from ANC's members to remove him.

EUR/USD

Current level - 1.1178

The intraday bias is slightly bearish below 1.1185 minor hurdle, for a slide towards 1.1080 area. Crucial on the upside is 1.1235 and a break through the latter will challenge 1.1300 resistance.

Profit-taking affects gold curbing silver and platinum

USD/JPY

Current level - 111.33

The outlook is negative below 111.50, for a slide towards 110.20 low. Initial support lies at 110.85.

GBP/USD

Current level - 1.2833

The downtrend is intact and current rebound should be considered corrective, preceding another leg downwards, to 1.2705 area. Initial intraday resistance lies at 1.2850 and crucial on the upside is 1.2930.

Markets are generally quiet as Markets in China, the UK and the US are closed for National Holidays. As a result, markets have seen overall subdued trading.

The recent gains in Asian equities have pushed back; falling short of pushing towards new two-year highs.

GBP is currently trading above 1.2830 as it moved off Friday's lows of 1.2775 (gaining 0.2%) after experiencing its biggest weekly decline since November as a result of UK Opinion Polls suggesting the Conservative lead over Labour has narrowed to 5%.

EUR has retraced from last week's 6 and a half month high of 1.1268 now trading around 1.1180.

The rand (ZAR) erased the recent 1.8% gain easing back 0.3% after South African President Jacob Zuma survived a bid by some members of the African National Congress's top leadership to order his removal from office.

The “safe haven” JPY saw a slight rise currently trading at 111.30 with little reaction to North Korea's recent missile launch as it appears the markets are now getting “accustomed” to such tests.

Crude Oil prices slipped back as the markets showed disappointment over last week's OPEC meeting and the extension to production cuts. Today WTI is trading below $50pb whilst Brent is trading around $52.5pb

Gold is trading close to a four week high as Geo-Political events have bolstered Gold's safe haven status. Gold was trading just below $1270 in early European trading.

'Economic indicators so far aren't entirely convincing on a second-quarter bounce in activity and show a U.S. economy struggling to surprise on the upside.' — Scott Anderson, Bank of the West

The US economy expanded at a stronger-than-initially-expected pace in the March quarter; however, an economic slowdown remained on the table in the second quarter. The Commerce Department reported on Friday that Q1 GDP growth came in at a seasonally adjusted annualised pace of 1.2%, compared to an originally reported pace of 0.7%. Meanwhile, analysts expected the economy to expand 0.9% in the reported quarter. However, that was the worst performance over the past 12 months. Back in the Q4 of 2016, the economy grew 2.1%. Analysts suggested that the Q1 slowdown was mainly driven by the US President Donald Trump's inability to boost economic growth as promised. Even though the Q1 figure was revised up sharply, weak retail sales, business investment, falls in investment inventories and an increase of the goods trade deficit destroyed hopes for a rebound in the Q2. A separate report released by the Commerce Department showed that new orders for US-manufactured durable goods dropped 0.7% last month, whereas orders for core durable goods fell 0.4%.