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USD/CAD attempts to bounce

The Canadian dollar softened after May’s CPI came out of expectations. The pair remains under pressure with a series of lower lows demonstrating a growing downward pressure after it fell through 1.3250, with a bearish MA cross on the daily chart likely to attract bearish followers. The buy side is trying to get back into the game from 1.3110 and a close above 1.3170 is an encouraging sign. But they still need to clear the supply area of 1.3240 from a previously faded bounce to turn the situation around.

NZD/USD breaks lower

The New Zealand dollar tumbled as traders bet on lower inflation in the region after a falling Australian CPI. The price has been drifting lower after coming across 0.6250 from the start of a sell-off in late May. This means that the sell side is pushing for a deeper correction in the medium-term. 0.6120 over the 30-day SMA has offered some support but its breach would trigger a new round of liquidation and make 0.6080 the next target. 0.6160 is a fresh resistance as an oversold RSI may cause a limited rebound.

XAU/USD grinds support

Gold slipped after US consumer confidence and home sales showed resilience in June. The price is still licking wounds after failing to hold above 1930 with a timid bounce to 1935 capped by stiff selling. A bearish MA cross on the daily chart and dynamic resistance from the 20 and 30-day SMA may attract more sellers. Only a break above 1966, the top range of a previous consolidation, might put the precious metal back on track. Otherwise, a fall below the fresh support of 1910 would open the door to 1850.

DXY:

The DXY (US Dollar Index) chart currently exhibits a neutral momentum, suggesting a lack of clear direction. There is a possibility for the price to fluctuate between the 1st support level at 102.27, which is an overlap support and coincides with the 61.80% Fibonacci Retracement and 100% Fibonacci Projection, indicating Fibonacci confluence, and the 1st resistance level at 102.70, which represents an overlap resistance. Additional levels to consider are the 2nd support at 101.69, an overlap support corresponding to the 78.60% Fibonacci Retracement, and the 2nd resistance at 103.05, an overlap resistance aligning with the 50% Fibonacci Retracement.

EUR/USD:

The EUR/USD chart currently shows a bearish momentum, indicating a downward bias in the market. There is a possibility for the price to continue its bearish movement towards the 1st support level at 1.0911, which is considered a pullback support and coincides with the 50% Fibonacci Retracement.

Additional support is found at the 2nd support level at 1.0847, identified as an overlap support. On the upside, the 1st resistance level at 1.0996 acts as an overlap resistance, potentially impeding upward price advancement. Furthermore, the 2nd resistance level at 1.1059 represents another overlap resistance.

It is also worth noting that an intermediate resistance level at 1.0911, coinciding with the 78.60% Fibonacci Retracement, may act as a pullback resistance, adding further significance to this level.

GBP/USD:

The GBP/USD chart currently indicates a bearish momentum, suggesting a downward trend in the market. There is a potential for the price to continue its bearish movement towards the 1st support level at 1.2678, which is identified as an overlap support.

Additional support is found at the 2nd support level at 1.2544, characterized as a pullback support and coinciding with the 61.80% Fibonacci Retracement.

On the upside, the 1st resistance level at 1.2771 acts as an overlap resistance, potentially impeding upward price advancement. Furthermore, the 2nd resistance level at 1.2847 represents a swing high resistance, indicating the presence of the 61.80% Fibonacci Projection and the 145.00% Fibonacci Retracement, which suggests Fibonacci confluence.

USD/CHF:

The USD/CHF chart currently demonstrates a neutral momentum, indicating a lack of clear direction in the market. There is a potential for the price to fluctuate between the 1st support level at 0.8907, identified as an overlap support, and the 1st resistance level at 0.8986, characterized as an overlap resistance.

Additional support is found at the 2nd support level at 0.8861, which coincides with the 78.60% Fibonacci Projection. Similarly, the 2nd resistance level at 0.9038 is considered an overlap resistance, further reinforcing its significance.

Given the neutral momentum, it is important to closely monitor these support and resistance levels for potential trading opportunities or a breakout that may provide clearer direction for the USD/CHF pair.

USD/JPY:

The USD/JPY chart currently exhibits a bullish momentum, characterized by the price movement within a bullish ascending channel, suggesting a potential for further upward movement.

There is a possibility of a bullish continuation towards the 1st resistance level at 145.01. This resistance level is considered a pullback resistance, potentially impeding upward price advancement. Additionally, the 2nd resistance level at 146.77 acts as another pullback resistance and coincides with the 78.60% Fibonacci Retracement.

On the downside, the 1st support level at 142.27 is identified as a pullback support, providing potential strength to the support zone. Furthermore, the 2nd support level at 141.28 is an overlap support and also aligns with the 78.60% Fibonacci Projection. An intermediate support level at 143.19 adds further significance as an overlap support.

USD/CAD:

The USD/CAD chart currently demonstrates a bullish momentum, indicating a potential for further upward movement.

There is a possibility of a bullish continuation towards the 1st resistance level at 1.3239. This resistance level is identified as an overlap resistance and is further reinforced by the presence of the 50% Fibonacci Retracement.

On the downside, the 1st support level at 1.3177 serves as a pullback support, potentially providing strength to the support zone. Additionally, the 2nd support level at 1.3107 is an overlap support and aligns with the 145.00% Fibonacci Retracement, adding further significance.

Furthermore, the 2nd resistance level at 1.3274 acts as an overlap resistance and coincides with the 61.80% Fibonacci Retracement and the 145.00% Fibonacci Extension, indicating Fibonacci confluence.

AUD/USD:

The AUD/USD chart currently exhibits a bullish momentum, indicating a potential for further upward movement.

There is a possibility of a bullish bounce off the 1st support level at 0.6637, which is identified as an overlap support. This support level is further strengthened by the presence of the 61.80% Fibonacci Retracement and the 78.60% Fibonacci Projection, indicating Fibonacci confluence.

Additionally, the 2nd support level at 0.6568 acts as a pullback support, adding further significance to the support zone.

On the upside, the 1st resistance level at 0.6805 represents an overlap resistance. Furthermore, the 2nd resistance level at 0.6884 is identified as a swing high resistance.

NZD/USD

The NZD/USD chart currently shows a bearish momentum, indicating a downward bias in the market. There is a potential for the price to temporarily rise towards the 1st resistance level at 0.6157 before reversing and moving towards the 1st support level at 0.6114.

The 1st support level at 0.6114 is considered an overlap support, with additional strength provided by the presence of the 50% and 61.80% Fibonacci Retracement levels, indicating Fibonacci confluence. Furthermore, the 2nd support level at 0.6082 acts as a pullback support, further reinforcing its significance.

On the upside, the 1st resistance level at 0.6157 functions as a pullback resistance. Additionally, the 2nd resistance level at 0.6206 represents a multi-swing high resistance, supported by the presence of the 100% Fibonacci Projection.

It’s important to note that the price has broken down a symmetrical triangle chart pattern, suggesting a bearish breakdown below the lower trendline

DJ30:

The DJ30 instrument is currently showing a bullish overall momentum. The factors contributing to this momentum are that the price could potentially drop further to 1st support in the short term before making a bounce and rising towards the first resistance.

1st support level is at 33870 and is considered reliable due to its status as an overlap support. There’ s 2nd support level at 33659, which is deemed beneficial as it’s an overlap support and located at the 50% Fibonacci retracement level.

Looking at resistance levels, 1st resistance is situated at 34283, notable for being an overlap resistance and positioned at the 61.80% Fibonacci retracement level. 2nd resistance stands at 34534 and is notable for its swing high resistance characteristic.

GER30:

The overall momentum of the chart is strongly bearish with high confidence. It’s predicted that the price could potentially make a bearish reaction off the first resistance and drop down to the first support level.

The first support level is at 15691.7 and is seen as advantageous due to its status as a multi-swing low support. The second support level is found at 15496.9, and it’s considered beneficial because of its quality as an overlap support.

When it comes to resistance levels, the first resistance is located at 15902.6, notable for being an overlap resistance and for its location at the 23.60% Fibonacci retracement level. The second resistance level stands at 16072.7 and is seen as strong due to its status as an overlap resistance and its position at the 50% Fibonacci retracement level.

US500

The overall momentum of the chart is weakly bearish with low confidence. It’s anticipated that the price could potentially make a bearish continuation towards the first support level.

The first support is located at 4327.1, and is seen as beneficial due to its status as a pullback support and its position at the 61.80% Fibonacci retracement level. The second support level is found at 4294.7, regarded as advantageous because of its quality as an overlap support and its position at the 78.60% Fibonacci retracement level.

In terms of resistance levels, the first resistance stands at 4386.2 and is notable for being an overlap resistance and located at the 50% Fibonacci retracement level. The second resistance level is at 4432.1, recognized for its swing high resistance characteristic.

BTC/USD:

The BTC/USD instrument is currently exhibiting a Neutral overall momentum. The price could potentially fluctuate between the first resistance and first support level.

The first support is at 29826 and is considered advantageous due to its quality as a pullback support and being at the 23.6% Fibonacci retracement level. There’s a second support level at 28441, which is beneficial because it provides an overlap support and is positioned near the 61.80% Fibonacci retracement level.

Looking at resistance levels, the first resistance is situated at 30996, notable for being an overlap resistance. The second resistance is at 32080 and is considered favorable due to its status as a swing high resistance and 0.618% Fibonacci projection.

ETH/USD:

The ETH/USD instrument is currently showing a neutral overall momentum. The price could potentially fluctuate between the first resistance and first support level.

The first support level is at 1820.2 and is considered strong due to its status as an overlap support and its location at the 38.20% Fibonacci retracement level.

An intermediate support level is found at 1867.3, appreciated for its quality as an overlap support.

Regarding resistance levels, the first resistance stands at 1933.8 and is notable for being an overlap resistance. The second resistance is at 2019.5, recognized for its swing high resistance characteristic and position at the 127.20% Fibonacci extension level.

WTI/USD:

The WTI (West Texas Intermediate) chart indicates a bullish momentum, suggesting a positive outlook for the market. There is a potential for the price to experience a bullish bounce off the 1st support level at 67.2400 and move towards the 1st resistance level at 70.2000.

The 1st support level at 67.2400 is considered a significant area of multi-swing low support, highlighting its potential for providing a supportive base. Similarly, the 2nd support level at 65.0100 also acts as a multi-swing low support, adding to its importance.

On the upside, the 1st resistance level at 70.2000 represents an overlap resistance, potentially impeding further upward price movement. Additionally, the 2nd resistance level at 72.8300 is classified as a multi-swing high resistance, further emphasizing its significance. It is worth noting that the 50% Fibonacci Retracement level coincides with the 1st resistance, indicating Fibonacci confluence.

XAU/USD (GOLD):

The XAU/USD (Gold/US Dollar) chart displays a bullish momentum, indicating a positive outlook for the market. Factors contributing to this momentum include the potential for a bullish bounce off the 1st support level and a move towards the 1st resistance level.

The 1st support level at 1913.73 is identified as an overlap support, suggesting its significance in providing potential price stability. Additionally, the 61.80% Fibonacci Retracement level adds further confirmation to its importance.

The 2nd support level at 1889.42 also acts as an overlap support, contributing to its potential role in providing support to the price.

On the upside, the 1st resistance level at 1932.11 represents an overlap resistance, potentially impeding further upward price movement. Traders should closely monitor this level for potential price reactions.

Furthermore, the 2nd resistance level at 1966.46 is classified as a multi-swing high resistance, further emphasizing its significance in hindering price advancement.

German Gfk Consumer Sentiment for July fell from -24.4 to -25.4, below expectation of 23.0. In June, economic expectations fell from 12.3 to 3.7. Income expectations fell from -8.2 to -10.6. Propensity to buy improved from -16.1 to -14.6.

"The current development in consumer sentiment indicates that consumers are once again more uncertain. This is reflected in the fact that the propensity to save increased again this month," explains Rolf Bürkl, GfK consumer expert.

"After eight consecutive increases, the consumer sentiment must suffer a first setback. Continued high inflation rates, currently at around six percent, are noticeably eroding the purchasing power of households and preventing private consumption from making a positive contribution."

Full Germany Gfk consumer sentiment release here.

Daily Pivots: (S1) 0.6663; (P) 0.6692; (R1) 0.6716; More...

AUD/USD's fall from 0.6898 resumed after brief recovery and intraday bias is back on the downside. Sustained break of 61.8% retracement of 0.6457 to 0.6898 at 0.6625 will path the way back to 0.6457 key support level. On the upside, above 0.6719 resistance will turn intraday bias neutral again first.

In the bigger picture, outlook is mixed up by the deeper the expected pull back from 0.6898. Still, price actions from 0.7156 are seen as a correction to rebound from 0.6169. Break of 0.6457 will resume the fall towards 0.6169 low. On the upside, though, break of 0.6898 resistance will argue that rise from 0.6169 is ready to resume through 0.7156.

Australian Dollar is experiencing a wild ride this week, tumbling in Asian trading hours due to lower-than-anticipated CPI results. The "encouraging" data has raised speculation about a potential pause in RBA's tightening plans next week. There are also talks that the hike month was the last in the cycle. This decline is also dragging down New Zealand Dollar, which is following suit as one of today's weakest performers.

Japanese Yen, meanwhile, is attempting to recover from its losses, but with limited success. Market chatter suggests that the Japanese government is likely to resort to verbal intervention tactics until 150 level against Dollar is under serious threat, reserving actual market intervention as a last resort. Dollar is faring marginally better, gaining some ground, albeit without much enthusiasm when matched up against European currencies.

Today's economic data release schedule remains light, shifting investor attention towards the upcoming remarks from top officials of Fed, ECB, BoJ and BoE at the ECB Forum, in Sintra, Portugal

Technically, some attention should be paid on developments in the US stock markets for the rest of the week. Yesterday's strong bounce in S&P 500 affirms the case that fall from 4448.47 is merely a near term pull back. Up trend from 3491.58 is not being threatened with 4261.07 support safe by a big margin. Further rise in S&P 500 will put 4448.47 short term top in focus in the early part of next week, for reacting the heavy weight US data like NFP.

In Asia, at the time of writing, Nikkei is up 1.60%. Hong Kong HSI is down -0.13%. China Shanghai SSE is down -0.52%. Singapore Strait Times is up 0.14%. Japan 10-year JGB yield is up 0.0118 at 0.393. Overnight, DOW rose 0.63%. S&P 500 rose 1.15$. NASDAQ rose 1.65%. 10-year yield rose 0.049 to 3.768.

Australia CPI slowed to 5.6% yoy in May, lowest in more than a year

Australia monthly CPI slowed notably from 6.8% yoy to 5.6% yoy in May, below expectation of 6.1% yoy. That's also the lowest reading in more than a year since April 2022. Excluding volatile items and travel, CPI also ticked down from 6.5% yoy to 6.4% yoy.

The most significant contributors to the annual increase in the monthly CPI indicator in May were Housing (+8.4 per cent), Food and non-alcoholic beverages (+7.9 per cent), and Furniture, household equipment and services (+6.0 per cent). Partly offsetting the rise was a fall in Automotive fuel (-8.0 per cent).

AUD/CAD's fall taking off after CPI from AU and CA

Australian Dollar falls broadly after data showed that CPI slowed much more than expected in May. Some economists are now seeing consumer inflation, at 5.6% and around the very lower end of forecasts, being soft enough to give confidence for RBA to pause again next week. On the other hand, without any downside surprise from Canadian CPI released overnight, BoC is more likely to continue tightening next month than not.

AUD/CAD's decline could finally be taking off with today's selloff. Technically, further fall is expected as long as 0.8836 minor resistance holds. The whole fall from 0.9545 should target 61.8% projection of 0.9545 to 0.8781 from 0.9114 at 0.8642, or further to 0.8596 (2022 low). Nevertheless, break of 0.8836 will argue that the sentiment could have flipped again and mix up the outlook.

Looking ahead

Germany Gfk consumer sentiment, Swiss Credit Suisse economic expectations and Eurozone M3 will be released in European session. US will release goods trade balance later in the day.

AUD/USD Daily Report

Daily Pivots: (S1) 0.6663; (P) 0.6692; (R1) 0.6716; More...

AUD/USD's fall from 0.6898 resumed after brief recovery and intraday bias is back on the downside. Sustained break of 61.8% retracement of 0.6457 to 0.6898 at 0.6625 will path the way back to 0.6457 key support level. On the upside, above 0.6719 resistance will turn intraday bias neutral again first.

In the bigger picture, outlook is mixed up by the deeper the expected pull back from 0.6898. Still, price actions from 0.7156 are seen as a correction to rebound from 0.6169. Break of 0.6457 will resume the fall towards 0.6169 low. On the upside, though, break of 0.6898 resistance will argue that rise from 0.6169 is ready to resume through 0.7156.

Economic Indicators Update

GMT	Ccy	Events	Actual	Forecast	Previous	Revised
01:30	AUD	Monthly CPI Y/Y May	5.60%	6.10%	6.80%
06:00	EUR	Germany Gfk Consumer Confidence (Jul)		-23	-24.2
08:00	CHF	Credit Suisse Economic Expectations Jun			-32.2
08:00	EUR	Eurozone M3 Money Supply Y/Y May		1.50%	1.90%
12:30	USD	Goods Trade Balance (USD) May P		-92.3B	-96.8B
12:30	USD	Wholesale Inventories May P		0.10%	-0.10%
14:30	USD	Crude Oil Inventories		-1.4M	-3.8M

Short term Elliott Wave View in E-mini S&P 500 Futures (ES) suggests the rally from 3.13.2023 low is in progress as a 5 waves impulse Elliott Wave structure. Up from 3.13 low, wave ((i)) ended at 4206.25 and dips in wave ((ii)) ended at 4062.25. The Index extends higher in wave ((iii)) towards 4493.75. Pullback in wave ((iv)) completed at 4368.59 with internal subdivision as a zigzag structure.

Down from wave ((iii)), wave i ended at 4410.5 and wave ii ended at 4444.75. Index then resumes lower in wave iii towards 4403.5, and rally in wave iv ended at 4430.75. The last leg lower wave v ended at 4393 which completed wave (a). Index then rally in wave (b) towards 4427 and wave (c) lower ended at 4368.59 which completed wave ((iv)) in higher degree. Index has turned higher in wave ((v)). Up from wave ((iv)), wave i ended at 4387.75 and pullback in wave ii ended at 4371.50. Index then resumes higher in wave iii towards 4424.75 and dips in wave iv ended at 4407. Near term, as far as pivot at 4368.59 low stays intact, expect Index to extend higher.

S&P 500 Futures (ES) 1 Hour Elliott Wave Chart

ES_F Elliott Wave Video

https://www.youtube.com/watch?v=gE9Mfu7WCKI

Australian Dollar falls broadly after data showed that CPI slowed much more than expected in May. Some economists are now seeing consumer inflation, at 5.6% and around the very lower end of forecasts, being soft enough to give confidence for RBA to pause again next week. On the other hand, without any downside surprise from Canadian CPI released overnight, BoC is more likely to continue tightening next month than not.

AUD/CAD's decline could finally be taking off with today's selloff. Technically, further fall is expected as long as 0.8836 minor resistance holds. The whole fall from 0.9545 should target 61.8% projection of 0.9545 to 0.8781 from 0.9114 at 0.8642, or further to 0.8596 (2022 low). Nevertheless, break of 0.8836 will argue that the sentiment could have flipped again and mix up the outlook.

Australia monthly CPI slowed notably from 6.8% yoy to 5.6% yoy in May, below expectation of 6.1% yoy. That's also the lowest reading in more than a year since April 2022. Excluding volatile items and travel, CPI also ticked down from 6.5% yoy to 6.4% yoy.

The most significant contributors to the annual increase in the monthly CPI indicator in May were Housing (+8.4 per cent), Food and non-alcoholic beverages (+7.9 per cent), and Furniture, household equipment and services (+6.0 per cent). Partly offsetting the rise was a fall in Automotive fuel (-8.0 per cent).

 

Full Australia CPI release here.

Key Highlights

• Gold price is struggling to clear the $1,935 resistance.
• A major bearish trend line is forming with resistance near $1,928 on the 4-hour chart.
• EUR/USD is aiming for a fresh high above 1.1010.
• GBP/USD could gain pace if it clears the 1.2800 resistance.

Gold Price Technical Analysis

Gold price remained in a bearish zone below the $1,980 level against the US Dollar. The price traded below the $1,950 support to move into a short-term bearish zone.

The 4-hour chart of XAU/USD indicates that the price settled below the $1,950 support, the 200 Simple Moving Average (green, 4 hours), and the 100 Simple Moving Average (red, 4 hours).

There was also a close below the $1,935 pivot level. The recent low was formed near $1,910 before there was a decent increase. The price struggled to recover above the $1,932 and $1,935 resistance levels.

There is also a major bearish trend line forming with resistance near $1,928 on the same chart. The next major resistance is near the $1,935 level, above which the price could rise toward $1,945 or the 100 Simple Moving Average (red, 4 hours).

Any more gains might send the price toward the $1,960 resistance level. Initial support is near the $1,910 level. The next major support is near $1,900.

If the bulls fail to protect the $1,900 support, there is a risk of a major decline. In the stated case, the price could decline toward the $1,860 level.

Looking at EUR/USD, the pair is showing positive signs above 1.0880 and might aim for a fresh high above the 1.1010 level.

Economic Releases to Watch Today

• Federal Reserve Chair Jerome Powell Speech.

USDJPY

Yen sellers remain in control as traders become skeptical that Japan officials follow through on intervention threats. The yen has steadily weakened this quarter on US economic resilience and as the BOJ vowed to keep rates low for now along with a weak signal for a chance of future hike.

Dollar Technicals

The dollar index could be flashing an oversold signal and that could lead to further bets against the yen and not necessarily with European currencies that might see much more tightening.

Potential Trigger

• On Wednesday, starting around 930am est, BOJ Governor Ueda will speak on an ECB forum panel with BOE Gov Bailey, ECB President Lagarde, and Fed Chair Powell.  Yen watchers are awaiting any sign that BOJ is getting ready to tweak its control of the yield curve.
• Quarter-end could also spark a reversal for the steadily weakening yen (132 to 144).
• Traders will also pay close attention to Friday’s US PCE data as softer inflation data could cement the market’s expectation that the Fed will be done after one more hike.

Key Levels

Intraday moves have supported a steadily weakening yen, but it may have a neutral bias until we hear from BOJ Gov Ueda on Wednesday morning.  Upside resistance  may come from 144.70, which is the 70.7% Fibonacci retracement of the October high to January low move.  If a daily close occurs above the 145 level, further bullish momentum could target 146.11.  To the downside, 143.10 provides initial support.  Any hawkish fireworks from Ueda could support the case for a test of the 142.50 region.

If Ueda stays the course, the yen could continue to weaken.  Japan intervened last fall when the yen weakened towards 145 and after prices breached 150.  Sustained weakness won’t be tolerated and expectations for action will grow if yen weakens beyond 145.  Everyone has their eye on the 150 level, so it will be interesting to see if that makes that barrier to hard to reach.