Sample Category Title

• AUD/USD continues to rally
• Australia to release business, consumer confidence on Tuesday
• US to release inflation on Tuesday, FOMC rate announcement on Wednesday

The Australian dollar continues to rally and is higher on Monday, trading at 0.6766, up 0.33% on the day. The Aussie is coming off an excellent week with gains of 2.1%. Will the rally continue?

Australia kicks off the week with consumer and business confidence numbers early Tuesday. Consumers continue to struggle with the cost-of-living crisis, while businesses are grappling with uncertain economic conditions and high interest rates. Westpac Consumer Confidence plunged 7.9% in June while NAB Business Confidence climbed up 1 point to zero in May. An improvement in the numbers on Tuesday could give the Aussie a boost.

In the US, the week ended on a quiet note, with no releases on Friday. There is plenty of action on the economic calendar this week, with the inflation report on Tuesday and the FOMC rate announcement the following day.

Inflation is expected to continue to ease in May. Headline inflation is expected to fall from 4.9% to 4.1%, and the core rate is projected to ease from 5.5% to 5.3%. Market rate pricing has moved sharply, with the probability of a pause rising sharply from 70% on Friday to 80% today. The inflation release could be a game changer, coming just one day before the Fed meeting. If inflation falls, it could cement a pause. However, if inflation moves higher, all bets are off and we could see a rate hike.

If the Fed opts not to raise rates, as expected, the markets will be scrutinizing the rate statement and Jerome Powell’s press conference for insights as to whether the non-move is a skip, in which the Fed would take a short breather and resume tightening in July. We haven’t heard from Fed members over the past 10 days to the blackout period, but prior to that, several Fed members signalled that even if the Fed paused in June, the door would remain open to further tightening.

AUD/USD Technical

• There is resistance at 0.6804 and 0.6864
• 0.6729 and 0.6593 are providing support

Australian dollar continues to trend higher vs its US counterpart and hit five-week high and hit five-week high in European trading on Monday.

The Aussie remains underpinned by the latest RBA action, after the central bank surprised by 25 basis points rate hike and signals of further tightening, as inflation remains elevated despite strong measures.

On the other hand, the US Federal Reserve meets this week and is widely expected to keep interest rate on hold for the first time in over one year.

Near-term uptrend from 0.6458 (2023 low, posted on May 31) remains intact on daily chart, as fresh bullish signal was generated on Friday’s close above 0.6725/37 pivots (Fibo 38.2% of 0.0.7157/0.6458 / 100DMA), the last obstacle en-route towards key resistances at 0.6807/18 (50% retracement of 0.71570.6458 / May 10 high).

Firm break here would signal bullish continuation and expose targets at 0.6890/0.6915 (Fibo 61.8% / weekly cloud top).

Caution on strongly overbought stochastic on daily chart which signals that bulls may face headwinds in coming sessions.

Broken 100DMA / Fibo 38.2% (0.6737/25) reverted to solid supports which should keep the downside protected.

Res: 0.6818; 0.6864; 0.6890; 0.6915.
Sup: 0.6725; 0.6689; 0.6666; 0.6635.

Daily Pivots: (S1) 1.0732; (P) 1.0760; (R1) 1.0776; More...

Intraday bias in EUR/USD remains on the upside as rebound from 1.0634 short term bottom is extending. Sustained trading above 55 EMA (now at 1.0812) will pave the way back to retest 1.1094 high. Nevertheless, break of 1.0700 minor support should resume the fall from 1.1094 through 1.0634 support.

In the bigger picture, as long as 1.0515 support holds, rise from 0.9534 (2022 low) would still extend higher. Sustained break of 61.8% retracement of 1.2348 (2021 high) to 0.9534 at 1.1273 will solidify the case of bullish trend reversal and target 1.2348 resistance next (2021 high).

Daily Pivots: (S1) 138.85; (P) 139.29; (R1) 139.81; More...

Intraday bias in USD/JPY remains neutral as consolidation from 140.90 is extending. Further rally is expected as long as 138.22 minor support holds. On the upside, break of 140.90 will resume larger rise from 127.20 to 142.48 fibonacci level. However, considering bearish divergence condition in 4 hour MACD, break of 138.22 will confirm short term topping, and turn bias back to the downside for 55 D EMA (now at 136.77).

In the bigger picture, rise from 127.20 is seen as the second leg of the corrective pattern from 151.93 high. Stronger rally would be seen to 61.8% retracement of 151.93 to 127.20 at 136.34. Sustained break there will pave the way back to retest 151.93. On the downside, however, break of 133.73 support will argue that the pattern could have started the third leg through 127.20 low.

Daily Pivots: (S1) 1.2547; (P) 1.2568; (R1) 1.2602; More...

Intraday bias in GBP/USD remains on the upside for retesting 1.2678 high. Firm break there will resume larger up trend to 1.2759 fibonacci level next. On the downside, however, break of 1.2532 minor support will turn bias back to the downside, to extend the pattern from 1.2678 with another falling leg back towards 1.2306 support instead.

In the bigger picture, as long as 1.1801 support holds, rise from 1.0351 medium term bottom (2022 low) is expected to extend further. Sustained break of 61.8% retracement of 1.4248 (2021 high) to 1.0351 at 1.2759 will add to the case of long term bullish trend reversal. However, firm break of 1.1801 will indicate rejection by 1.2759, and bring deeper decline, even as a correction.

Daily Pivots: (S1) 0.8998; (P) 0.9019; (R1) 0.9052; More...

Intraday bias in USD/CHF is neutral for the moment. But risk stays on the downside as long as 0.9146 resistance holds. Corrective recovery from 0.8818 has probably completed at 0.9146 already. Deeper decline could be seen to 0.8818 support and possibly below. But strong support is still needed at around 0.8756 long term support to bring another rebound.

In the bigger picture, fall from 1.1046 (2022 high) is seen as a leg in the long term range pattern from 1.0342 (2016 high), which might have completed at 0.8818 already, just ahead of 0.8756 long term support. Sustained trading above 0.9058 support turned resistance should confirm medium term bottoming. Further break of 0.9439 resistance will confirm bullish trend reversal.

Daily Pivots: (S1) 0.6708; (P) 0.6729; (R1) 0.6766; More...

Intraday bias in AUD/USD remains on the upside for 0.6817 structural resistance. Decisive break there will carry larger bullish implications. On the downside, however, break of 0.6640 minor support will turn bias back to the downside for retesting 0.6457 low again.

In the bigger picture, fall from 0.7156 is still in favor to continue as long as 0.6817 resistance holds. Prior rejection by 55 W EMA (now at 0.6801) keeps medium term outlook bearish. Break of 0.6457 will target 0.6169 key support (2022 low). Nevertheless, firm break of 0.6817 will indicate that fall from 0.7156 has completed in a three-wave corrective structure. Rise from 0.6169 would then be ready to resume through 0.7156.

Daily Pivots: (S1) 1.3312; (P) 1.3342; (R1) 1.3371; More....

Intraday bias in USD/CAD remains neutral for the moment, with focus on 1.3299 support. On the upside, break of 1.3460 resistance will turn bias back to the upside for 1.3653 resistance, to extend the triangle consolidation pattern from 1.3976. However, sustained break of 1.3299 will indicate that larger corrective fall is underway, and target 100% projection of 1.3860 to 1.3299 from 1.3653 at 1.3092.

In the bigger picture, rise from 1.2005 (2021 low) is expected to resume through 1.3976 after consolidation from there completes. On decisive break of 1.3976, next target will be 1.4667/89 long term resistance zone. This will remain the favored case as long as 38.2% retracement of 1.2005 to 1.3976 at 1.3233 holds. However, sustained break of 1.3233 will pave the way to 61.8% retracement at 1.2758, and raise the chance of bearish reversal.

Daily Pivots: (S1) 174.56; (P) 175.05; (R1) 175.80; More...

Intraday bias in GBP/JPY remains on the upside for the moment. Current up trend should target 100% projection of 148.93 to 172.11 from 155.33 at 178.51 next. Strong resistance could be seen from there to bring pull back, at least on first attempt. But break of 172.64 support is needed to indicate short term topping. Otherwise, outlook will remain bullish in case of retreat.

In the bigger picture, up trend from 123.94 (2020 low) is extending. Next target will be 161.8% projection of 122.75 (2016 low) to 156.59 (2018 high) from 123.94 at 178.69. For now, medium term outlook will remain bullish as long as 167.82 support holds, even in case of deep pull back.

Daily Pivots: (S1) 149.49; (P) 149.96; (R1) 150.28; More....

Intraday bias in EUR/JPY remains neutral for the moment. On the downside, below 148.58 will extend the corrective pattern from 151.60 with another falling leg. Deeper fall would be seen to 146.12 support and possibly below. On the upside, however, above 151.05 will target 151.60 high. Firm break there will resume larger up trend to 153.64 projection level.

In the bigger picture, rise from 114.42 (2020 low) is in progress. Next target is 61.8% projection of 124.37 to 148.38 from 138.81 at 153.64. Sustained break there will pave the way to 100% projection at 162.82. For now, medium term outlook will remain bullish as long as 139.05 support holds, even in case of deep pull back.