Sample Category Title

Daily Pivots: (S1) 135.50; (P) 136.10; (R1) 137.28; More...

Intraday bias in USD/JPY remains on the upside at this point. Break of 61.8% projection of 114.40 to 131.34 from 126.35 at 136.81 will target 100% projection at 143.29. On the downside, below 134.52 minor support will turn intraday bias neutral first. But outlook will remain bullish as long as 131.48 support holds.

In the bigger picture, current rally is seen as part of the long term up trend from 75.56 (2011 low). Next target is 100% projection of 75.56 (2011 low) to 125.85 (2015 high) from 98.97 at 149.26, which is close to 147.68 (1998 high). This will remain the favored case as long as 126.35 support holds.

Daily Pivots: (S1) 0.6941; (P) 0.6967; (R1) 0.7000; More...

Intraday bias in AUD/USD remains neutral at this point. On the downside, firm break of 0.6828 support will resume larger fall from 0.8006. Next target is 0.6756/60 cluster support. However, firm break of 0.7282 will be a sign of bullish reversal and bring stronger rebound to 0.7666 resistance.

In the bigger picture, price actions from 0.8006 are seen as a corrective pattern to rise from 0.5506 (2020 low). Deeper fall could still be seen to 50% retracement of 0.5506 to 0.8006 at 0.6756. This coincides with 100% projection of 0.8006 to 0.7105 from 0.7660 at 0.6760. Strong support is expected from 0.6756/60 cluster to contain downside to complete the correction. Meanwhile, firm break of 0.7660 resistance will confirm that such corrective pattern has completed, and larger up trend is ready to resume.

Daily Pivots: (S1) 1.2886; (P) 1.2938; (R1) 1.2969; More...

Intraday bias in USD/CAD remains neutral for consolidations first. Further rise will remain in favor as long as 1.2859 support holds. On the upside, break of 1.3077 and sustained trading above 1.3022 fibonacci level will carry larger bullish implications. Next target is 100% projection of 1.2005 to 1.2947 from 1.2401 at 1.3343.

In the bigger picture, focus stays on 38.2% retracement of 1.4667 (2020 high) to 1.2005 (2021 low) at 1.3022. Sustained break there should confirm that the down trend from 1.4667 has completed after defending 1.2061 long term cluster support. Further rise would then be seen towards 61.8% retracement at 1.3650. However, rejection by 1.3022 will maintain medium term bearishness.

Daily Pivots: (S1) 166.16; (P) 166.99; (R1) 168.63; More...

Intraday bias in GBP/JPY remains on the upside for retesting 168.67. Decisive break there will resume larger up trend. Next near term target is 100% projection of 155.57 to 168.67 from 159.97 at 173.07. On the downside, below 164.45 minor support will delay the bullish case and turn intraday bias neutral first.

In the bigger picture, up trend from 123.94 (2020 low) is still in progress. Sustained break of 61.8% retracement of 195.86 (2015 high) to 122.75 (2016 low) at 167.93 will be a long term bullish signal, and could pave the way back to 195.86 high. This will now remain the favored case as long as 155.57 support holds, even in case of deep pull back.

Daily Pivots: (S1) 142.57; (P) 143.28; (R1) 144.71; More....

Intraday bias in EUR/JPY remains on the upside for retesting 144.23 high. Firm break there will resume larger up trend. Next near term target is 100% projection of 132.63 to 144.23 from 137.83 at 149.43. On the downside, below 141.93 minor support will delay the bullish case and turn intraday bias neutral first.

In the bigger picture, up trend from 114.42 (2020 low) is in progress. Such rise is seen as the third leg of the pattern from 109.30 (2016 low). Sustained trading above 100% projection of 114.42 to 134.11 from 124.37 at 144.06 will indicate upside acceleration and target 149.76 long term resistance (2014 high). In any case, outlook will now remain bullish as long as 132.63 support holds, in case of deep pull back.

Daily Pivots: (S1) 1.0159; (P) 1.0187; (R1) 1.0209; More....

Intraday bias in EUR/CHF remains neutral for consolidation above 1.0096 temporary low. Outlook is unchanged that corrective rebound from 0.9970 should have completed after failing 1.0505 long term resistance. Risk stays on the downside as long as 1.0513 resistance holds. On the downside, below 1.0096 will target a retest on 0.9970 low.

In the bigger picture, as long as 1.0505 support turned resistance (2020 low) holds, long term down trend from 1.2004 (2018 high) is expected to continue. Next target is 100% projection of 1.2004 to 1.0505 to 1.1149 at 0.9650. However, firm break of 1.0505 will suggest medium term bottoming, and bring stronger rebound towards 1.1149 structural resistance.

Daily Pivots: (S1) 1.5055; (P) 1.5133; (R1) 1.5187; More...

Intraday bias in EUR/AUD is back on the upside with break of 1.5187 resistance. Further rise would be seen to 1.5277 and then 1.5354 support turned resistance next. On the downside, below 1.5046 minor support will turn intraday bias neutral first. Further break of 1.4759 support will suggest that rebound from 1.4318 has completed. Intraday bias will be turn back to the downside for retesting 1.4318 low.

In the bigger picture, as long as 1.5354 support turned resistance holds, larger down trend from 1.9799 (2020 high) is still expected to continue. On resumption, next target is 61.8% projection of 1.9799 to 1.5250 from 1.6434 at 1.3623, which is close to 1.3624 long term support (2017 low). However, firm break of 1.5354 will indicate medium term bottoming and bring stronger rally back to 1.6434 key resistance.

UK CPI accelerated further from 9.0% yoy to 9.1% yoy in May, matched expectations. That's another record high since the series began in 1997. Also, based on indicate model, it's the highest since around 1982, which was at nearly 11% yoy. CPI core, on the other hand, slowed from 6.2% yoy to 5.9% yoy, below expectation of 6.0% yoy.

ONS said: "Rising prices for food and non-alcoholic beverages, compared with falls a year ago, resulted in the largest upward contribution to the change in both the CPIH and CPI 12-month inflation rates between April and May 2022 (0.17 percentage points for CPIH). The largest offsetting downward contributions to change in the rates were from recreation and culture (0.10 percentage points for CPIH) and clothing and footwear (0.08 percentage points for CPIH).

Full release here.

Also released PPI input came in at 2.1% mom, 22.1% yoy in May. PPI output was at 1.6% mom, 15.7% yoy. PPI output core was at 1.50% mom, 14.8% yoy.

Daily Pivots: (S1) 0.8563; (P) 0.8586; (R1) 0.8605; More...

Intraday bias in EUR/GBP remains neutral and further rise is expected with 0.8484 support intact. On the upside, break of 0.8720 and sustained trading above 0.8697 medium term fibonacci level will carry larger bullish implication. Next target is 0.9003 fibonacci level. However, break of 0.8484 will indicate rejection by 0.8697 and turn near term outlook bearish.

In the bigger picture, rise from 0.8201 medium term bottom could could either be a correction to the down trend from 0.9499 (2020 high), or a medium term up trend itself. Sustained break of 38.2% retracement of 0.9499 to 0.8201 at 0.8697 will affirm the latter case, and pave the way to 61.8% retracement at 0.9003. However, rejection by 0.8697 will maintain medium term bearishness.

Overall risk sentiment is rather indecisive in the markets. While US stocks staged a strong rebound overnight, there is no follow through buying in Asia. Dollar and Yen are trading mildly higher today, together with Swiss Franc. New Zealand Dollar is leading commodity currencies lower. Sterling is mixed for now but more volatility is likely with UK CPI release featured.

Technically, Sterling is at a juncture against Euro and Swiss. EUR/GBP is pressing medium term fibonacci level of 38.2% retracement of 0.9499 to 0.8201 at 0.8697. GBP/CHF is also pressing 61.8% retracement of 1.1107 to 1.3070 at 1.1857. Sustained break of these levels could prompt even sharper selloff in the Pound. Let's see.

In Asia, at the time of writing, Nikkei is down -0.07%. Hong Kong HSI is down -1.19%. China Shanghai SSE is down -0.62%. Singapore Strait Times is down -0.16%. Japan 10-year JGB yield is up 0.0030 at 0.239. Overnight, DOW rose 2.15%. S&P 500 rose 2.45%. NASDAQ rose 2.51%. 10-year yield rose 0.068 to 3.307.

BoJ firm on maintaining ultra-loose monetary policy

In the minutes of April 27-28 meeting of BoJ indicated that while the board was concerned with fluctuation in Yen's exchanger rate, it remained firm on the stance to continue with ultra-loose monetary policy.

One board member noted that Japan's economy was "still on its way to recovery". As a "commodity importer", the rise in commodity prices would "lead to an outflow of income from Japan and thus exert downward pressure on the economy." Hence, it's "necessary" to "continue with the current powerful monetary easing and thereby firmly support the economy."

Another member noted that "the challenge of monetary policy in Japan was not to curb inflation, as in the case of the United States and Europe, but to overcome inflation that was still too low". A different member commented that," with the addition of Russia's invasion of Ukraine to the existing downside risks to the economy, the situation had further changed significantly; against this backdrop, it was not appropriate for the Bank to make any big changes to its monetary policy stance."

Regarding Yen's depreciation, "a few members said excessive fluctuations in the foreign exchange market over a short period of time, such as those observed recently, would raise uncertainties about the future and make it more difficult for firms to formulate their business plans".

Some member noted, "it was necessary for the Bank to clearly communicate to the public that the aim of monetary policy conduct was to fulfill its mandate of achieving price stability, rather than to control foreign exchange rates."

Australia Westpac leading index dropped to 0.58 in May

Australia Westpac leading index dropped form 1.09% to 0.58% in May, still indicating above trend growth for 2022. Westpac said, "the components of the Index are indicating an important emerging theme around Australia's growth prospects – a significant shock to consumer confidence."

On RBA policy, Westpac expects the central bank to hike a further 50bps in July. It assessed that at 1.35% after the hike, interest rate is still below the neutral setting. Given the tight labor market and rising inflation, further monetary tightening can be expected through 2022.

New Zealand goods exports rose 18% yoy in May, imports rose 24% yoy

New Zealand goods exports rose 18% yoy or NZD 1.1B to NZD 7.0B in May. Goods imports rose 24% yoy or NZD 1.3B to NZD 6.7B. Monthly trade surplus narrowed from NZD 440m to NZD 263m, smaller than expectation of NZD 580m.

Exports to all top destinations rose except to China: China (down -3.8%), Australia (up 49%), US (up 18%), EU (up 23%), Japan (up 0.7%).

Imports from most partners rose except from the US: China (up 25%), EU (up 12%), Australia (up 18%), US (down -5.5%), Japan (up 41%).

Looking ahead

UK CPI and PPI are the main focus in European session. Canada will also release CPI later in the day.

EUR/GBP Daily Outlook

Daily Pivots: (S1) 0.8563; (P) 0.8586; (R1) 0.8605; More...

Intraday bias in EUR/GBP remains neutral and further rise is expected with 0.8484 support intact. On the upside, break of 0.8720 and sustained trading above 0.8697 medium term fibonacci level will carry larger bullish implication. Next target is 0.9003 fibonacci level. However, break of 0.8484 will indicate rejection by 0.8697 and turn near term outlook bearish.

In the bigger picture, rise from 0.8201 medium term bottom could could either be a correction to the down trend from 0.9499 (2020 high), or a medium term up trend itself. Sustained break of 38.2% retracement of 0.9499 to 0.8201 at 0.8697 will affirm the latter case, and pave the way to 61.8% retracement at 0.9003. However, rejection by 0.8697 will maintain medium term bearishness.

Economic Indicators Update