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On the back of today’s US macro data, which have all been stronger than expected, you would expect the dollar to rally. After all, the Consumer Price Index (CPI) rose by 0.4% in April, housing starts jumped 6.6% from a month earlier, industrial production increased 0.7% month-over-month and capacity utilization rose to 75.4 per cent. Yet the dollar has actually weakened while stocks have drifted lower. Buck-denominated precious metals have therefore shone. When positive data – like those mentio…
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NZD/USD: One to watch ahead of key NZ, US
Although the Federal Reserve is still the only major central bank looking to increase interest rates, the persistently soft US data of late means a rate rise this year is becoming less and less likely. Yet, the US dollar has managed to regain its poise today despite the release of further disappointing macro pointers from the world’s largest economy. The reaction of the dollar looks suspicious to us, especially ahead of the publication of some important data on Friday. Today, we found out that …
Gold To Set Ground For Prosperous Rebound
Outlook for gold prices is remaining moderately bullish, as long as the spot is holding the most immediate support line represented by the 20-day SMA at 1,262.44. The weekly S1 at 1,269.32 should become a subject to a primary test over the next 24 hours, while a success here should pave the way for a surge up to the weekly pivot and monthly R1 at 1,286/87. The vast majority of daily and weekly technical signals continue betting on growth as well. However, any retreat below the closest support wi…
GBP/JPY Daily Outlook
The consolidation pattern from 151.64 is still in progress and could extend. Another rebound might be seen but upside should be limited below 162.80 resistance. Below 153.64 will target 151.64. Break of 151.64 will extend the larger down trend to next long term fibonacci level at 147.01. In the bigger picture, fall from 195.86 medium term is viewed as a corrective move. There is no confirmation of completion yet and GBP/JPY might still target 61.8% retracement of 116.83 to 195.86 at 147.01. We'…
USDCHF: Bulls Breaking Higher, Correction In Wave 2 Can Be
On USDCHF we have seen a very strong turning point last week from 0.9442 where we see pair made a low, which means it completed wave 5) of an ending diagonal place in wave C-circled which is fully visible on a daily chart. Reason for a low in place is an impulsive rally from the low; that's a five wave pattern that confirms a change in trend from bearish now to bullish mode. Also, notice that price is above the red trendline from where we may see push up to 0.9794 and even higher after red wave …
EUR/JPY: turning a corner?
The EUR/JPY may have formed a reversal pattern at around 121.70-122.00 area at the end of last week. Price action has been bullish since, with some key short-term resistance levels broken down. However, there has been no confirmation of the reversal yet as the major bearish trend lines are still intact and the daily moving averages are all still pointing lower. Nevertheless, the EUR/JPY’s levels are clearly defined which makes it technically-friendly to trade even with a short-term focus. The E…
EU Referendum Watch: EUR/GBP faces key test this week
The EUR/GBP managed to bounce back relatively sharply just before the end of last month after receding Brexit fears had exerted strong downward pressure on the cross throughout the month of April. The recovery may have been driven by lingering ‘Brexit’ concerns and recent weakness in UK data, including last week’s Purchasing Managers’ Indices (PMI) which fell across all the three major sectors of the UK economy as caution prevailed ahead of the UK-EU referendum on June 23. The weakness in UK d…
USD/CAD upsurge impeded by recovering oil price
The USD/CAD’s recent upsurge has been halted by a rebounding price of oil today and on profit-taking given that the Loonie has reached a key resistance level around the 1.30 handle. What the USD/CAD does next will depend to a large degree on the direction of oil prices and economic data from the US later this week. The USD/CAD turned sharply higher ever since traders realised that there was a lack of supply beneath the psychological level of 1.25 last Tuesday, leading to a 500-pip rally to the…
Crude off highs as traders weigh impact of Canada fire
At the start of this week, oil prices found themselves sharply higher with Brent almost reaching $46.50 and WTI $46 a barrel overnight. Support for oil prices is coming from Canada due to the ongoing wildfires, which has reportedly reduced the nation’s daily crude output by a fifth already. Unfortunately it could take a very long time before the fire is brought under full control so its impact on oil production remains unclear. But this is obviously a temporary factor so it won’t have a long-la…
AUD/NZD arrives at key technical juncture
The AUD/NZD’s recent depreciation is mainly due to a surprisingly dovish RBA, which decided to follow the footsteps of the RBNZ by cutting interest rates. At 2.25%, interest rates in New Zealand are still one of the highest among the developed economies. In Australia, they are now at a fresh record low of 1.75%. The 50 basis point difference makes the NZD a more attractive currency than the AUD for yield-seekers. But it is not just about the current interest rates that impact a currency pair. Ra…