The US$ finished the week mixed, but with a generally softer tone,while stocks had another day of gains, led by the FTSE which is storming higher, reversing the initial losses seen after the Brexit vote and the possibility of a BOE rate cut. Commodities, particularly Silver, finished the week with another strong session which, in turn, did the commodity bloc currencies no harm. Speaking of which, Australia being the focus on Monday, with both the currency and the stock market likely to trade nervously following Saturday’s general election, where no winner has so far emerged and we now have the prospect of a hung parliament – and another 3 years of political deadlock.The Aud$ is trading at 0.7450 in early Monday trade, down from the 0.7490 Friday close.
It may be a quiet start to the week elsewhere, today being US Independence Day although we could see some action after the release of the EU Sentix Investor Confidence Survey and then later, we have a speech from ECB Governor, Mario Draghi to contend with. Things will gear up through the week, beginning with the RBA Interest Rate Decision on Tuesday, where a move to an easing bias would not be a major surprise given the upheaval unleashed by the Brexit decision. There is even the outside chance of a rate cut. At this stage this seems a little premature although with the Fed looking set to keep US rates on hold, the RBA may be pushed towards a cut at some stage soon. For the time being the RBA look more likely to wait for a response from the BoE (14 July) and ECB (21 July). The FOMC Minutes will be released on Wednesday, as will the ADP Jobs data. The global Manufacturing PMIs will be in focus on Thursday although, with the US Employment data/NFP/Average Hourly Earnings due on Friday they may pass largely unnoticed, unless they are a long way from expectations. While there is plenty of data to keep traders busy it is likely that overall it will once again be the swings and flows in risk sentiment that dominate the price action as the ramifications of the Brexit vote continue to be digested by traders.
CURRENCIES
EURUSD: 1.1126
Res
1.1150
1.1170
1.1200
Sup
1.1100
1.1070
1.1050
USDJPY: 102.60
Res
102.75
103.00
103.40
Sup
102.35
102.15
101.75
GBPUSD: 1.3270
Res
1.3300
1.3345
1.3400
Sup
1.3245
1.3195
1.3115
USDCHF: 0.9719
Res
0.9750
0.9780
0.9820
Sup
0.9710
0.9680
0.9640
AUDUSD: 0.7450
Res
0.7500
0.7540
0.7560
Sup
0.7435
0.7400
0.7380
NZDUSD: 0.7169
Res
0.7185
0.7200
0.7215
Sup
0.7150
0.7135
0.7115
INDICES / COMMODITIES
S+P: 2096
Res
2100
2110
2120
Sup
2080
2070
2056
DJI: 17865
Res
17900
17965
18020
Sup
17800
17760
17675
ASX SPI: 5235
Res
5240
5260
5280
Sup
5222
5210
5190
GOLD: 1341
Res
1344
1350
1358
Sup
1336
1330
1320
SILVER: 19.75
Res
19.90
20.00
20.20
Sup
19.55
19.40
19.10
OIL (WTI): 49.26
Res
49.55
50.00
50.50
Sup
48.75
48.30
47.85
Indices/commodities
S&P Futures
2096
Resistance
Support
2133
19 May 2015, all time high
2081
Friday low
2125
20 July 2015 high
2065
Minor
2119
24 June high
2055
1 July low/200 HMA
2110
Minor
2035
Minor
2100
Friday high
2030
100 HMA
Bias
Risk appetite helped global stock markets to head higher again on Friday, with the FTSE leading the way by rising by another 1.1% following Mark Carney’s dovish comments on Thursday and then on the back of reports on Friday that the BoE is planning to lower capital requirements for banks as early as this week in response to the Brexit decision. The US Indices followed the FTSE, with the S+P hitting 2100, and closing nearby. The 4 hour and daily momentum indicators remain positive, so we could see further gains although the weeklies do not look so enthusiastic. As before, I would prefer to sell into strength, but with a tight stop loss, placed just above the 24 June high (2119), or preferably above the 2133 all time high. A word of caution though, as a break of the all time high could potentially lead to stronger gains, leading to look at 2150 and possibly higher.
24 Hour: Neutral
Medium Term: Prefer to sell rallies – but with tight stop loss in place.
DJI Futures
17865
Resistance
Support
18160
3 June 2015 high
17800
Minor
18100
Minor
17760
Minor
18020
24 June high
17675
(23.6% of 16957/17902)
17965
Minor
17600
Minor
17902
Friday high
17553
1 July low
Bias
Ditto S+P. The steep rally has taken us almost back to the 14 June 18020 high. I would now prefer to sell into further strength, towards 18000, should we see it, but with a tight stop placed above 18020. A break of 18020/50 could potentially lead to stronger gains, leading to another look at the all time high of 18330.
24 Hour: Neutral
Medium Term: Prefer to sell rallies towards 18000 with SL above 18020
ASX SPI
5235
Resistance
Support
5298
23 June high
5200
Minor
5285
Minor
5170
(23.6% of 5982/5230)
5275
Minor
5160
Minor
5250
Descending trend resistance
5135
(38.2% of 5982/5230)
5239
Friday high
5105
(50% of 5982/5230)
Bias
The SPI consolidated its gains into the weekend following the steep rally off last week’s lows and finished Friday unchanged, at 5235. The election result is likely to have investors looking rather nervously at how the market opens today and possibly over the rest of the week if a hung parliament appears to be the final outcome. In the long term, the result is likely to have limited impact but the short term volatility could see a bit of a knee jerk move to the downside, where buying dips may be an option. Technically, from the look of Friday’s close, selling into strength at the descending trend resistance (5235) may be a plan, but the momentum indicators do look positive so a tight stop should be put in place above 52.50. I doubt that we see it up here today though and a downside gap seems more likely.
24 Hour: Neutral
Medium Term: Neutral
GOLD
1341
Resistance
Support
1378
(38.2% of 1921/1046)
1330
Minor
1366
Major descending trend resistance
1320
Friday low
1357
23 June high
1312
200 WMA /1 July low
1350
Minor
1305
28 June low
1344
Friday high
1297
(38.2% of 1200/1358)
Bias
Gold ended $20 higher on Friday, assisted by soft manufacturing data in China and further indications of a delayed interest rate hike by the Fed. With the daily momentum indicators still looking positive, further gains could be on the cards, although plenty of offers will arrive at the descending trend resistance, at around 1365, should we see it.
24 Hour: Cautiously prefer to buy dips
Medium Term: Mildly bullish
SILVER
19.75
Resistance
Support
20.72
(61.8% of 25.10/13.64)
19.40
Minor
20.40
Minor
19.10
Minor
20.20
200 WMA
18.92
(23.6% of 15.80/19.88)
20.00
Psychological
18.70
Minor
19.88
Friday high
18.30
(38.2% of 15.80/19.88)
Bias
As we said last week, someone appears to be awfully short of Silver judging by the recent price action, and it did not disappoint by rising another 6.6% on Friday in what is looking increasingly as though it may be in the process of forming a “blow-off ” top. While not wishing to trade against the trend, I would be very cautious of being long at these levels, particularly given the extremely overbought nature of the shorter term momentum indicators. Selling Silver/Buying Gold may be worth considering.
24 Hour: Neutral
Medium Term: Neutral
OIL (WTI)
49.26
Resistance
Support
51.63
9 June high
48.75
Minor
51.00
Minor
47.85
Friday low
50.51
22 June hi
47.30
Weekly Tenkan/Cloud Top
49.97
30 June high
46.51
28 June low
49.54
1 July high
45.89/81
16 June low/27 June low
Bias
WTI headed higher on Friday in relatively quiet pre-holiday trade, as the U.S. oil rig count rose sharply last week, hitting its highest level since late-April and provide leading indications that US producers are ready to return online as prices stabilise near $50 a barrel. Technically momentum indicators appear to be turning mildly more positive, although I would not be getting too excited as further consolidation near 50.00 may lie in store.
24 Hour: Neutral
Medium Term: Neutral
EURUSD: 1.1126
Resistance
Support
1.1305
(76.4% of 1.1426/1.0910)
1.1071
Friday low
1.1270
Minor
1.1054/48
1 July low/30 June low
1.1227
(61.8% of 1.1426/1.0910)
1.1010
28 June low
1.1168/70
Friday high/(50% pivot of 1.1426/1.0910)
1.0970/60
27 June low/Weekly cloud base
1.1150
200 HMA
1.0910
23 June low
Bias
The Euro squeezed a bit higher into the weekend but the overall choppy consolidation near to 1.1100 continues. It is a busy week ahead, starting with the Sentix and then with Mario Draghi speaking later in the day. Most of the focus this week though will remain on the Brexit headlines and then on Friday, on the US employment data. Given the look of the daily momentum indicators I still prefer to trade it from the short side, although I am not overly convinced and it could well be more of the same choppy sideways trade over the next day or two.
24 Hour: Neutral
Medium Term: Mildly bearish
Economic data highlights will include:
M: US Independence Day, EU Sentix Investor Confidence Survey, PPI, ECB Governor, Mario Draghi Speech
T: EU Services PMIs, Retail Sales, US Factory Orders
W: German Factory Orders, ECB Non-MP Meeting, US ADP Jobs data, Trade Balance, Markit Services/Composite/Non-Mfg PMIs, FOMC Meeting/IR Decision Minutes, API Weekly Crude Oil Stock Inventory
T: German Industrial Production, US Jobless Claims, EIA Crude Oil Stocks Weekly Change
F: German Current Account, Trade Balance (May), US Jobs/NFP/Average Hourly Earnings data, Consumer Credit .
Meta Trader – AxiTrader
EURUSD: 4 Hour
…
USDJPY: 102.55
Resistance
Support
103.80
(61.8% of 106.80/98.94)
102.35
1 July low
103.65
(38.2% of 111.45/98.94)
102.16
30 June low
103.38
Friday high
101.75
Minor
103.00
Minor
101.55
28 June low
102.75
Minor
101.39
27 June low
Bias
US$Jpy is chopping around either side of 103.00 and the charts suggest that we could be in for more of the same this week, at least ahead of Friday’s US Jobs data. Further Brexit fallout could alter that theory though so stops on long dollar (short Yen) positions should be kept fairly tight. As before, the daily momentum indicators do appear to be turning higher from an oversold condition, so buying dips with a tight stop could be a plan while safe haven demand for the Yen subsides. The BOJ would not like any move towards 100.00 so be prepared for an increase in the rhetoric coming from Kuroda if the Yen does begin to accelerate higher.
24 Hour: Neutral
Medium Term: Mildly bullish
Economic data highlights will include:
M:
T:
W:
T: Foreign Bond/Stocks Investment, Coincident Index, Leading Economic Index
F: Current Account, Eco Watchers Survey, Trade Balance, Bank Lending (yy – June)
Meta Trader – AxiTrader
USDJPY: 4 Hour
…
GBPUSD: 1.3270
Resistance
Support
1.3533
30 June high
1.3250
Minor
1.3500
Minor
1.3205/01
1 July low/28 June low
1.3400
Minor
1.3150
Minor
1.3349
Friday high
1.3118
27 June low
1.3300
Minor
1.3000
Psychological
Bias
Cable continued to trade under pressure on Friday, not helped by Eur/Gbp, which rose to a 3 year high of 0.8405, ending the session pretty much on its highs. There is some UK construction/manufacturing data out this week but most of the focus will be on political developments, and with the charts looking rather mixed and also becoming oversold, further volatile trade, but with a downside bias would seem the most likely outcome.
24 Hour: Neutral
Medium Term: Mildly bearish
Economic data highlights will include:
M: UK Construction PMI
T:
W:
T: Manufacturing/Industrial Production, Halifax House Prices, NIESR GDP Estimate (3 month – June)
F: UK Goods Trade Balance
Meta Trader – AxiTrader
GBPUSD: 4 Hour
…
USDCHF: 0.9719
Resistance
Support
0.9900
Weekly cloud top
0.9715
200 HMA/(38.2% of 0.9521/0.9837)
0.9850
(76.4% of 0.9955/0.9552)
0.9678
(50% of 0.9521/0.9837)
0.9836
28 June high
0.9640
(61.8% of 0.9521/0.9837)
0.9820
1 July high
0.9625
Minor
0.9780
Friday high
0.9595
(76.4% of 0.9521/0.9837)
Bias
US$Chf had another rangebound session (0.9710/0.9780) on Friday but once again with a slightly heavy bias. The daily charts still look constructive, although the 4 four momentum indicators are heading lower as they unwind their overbought condition so it may be another choppy one today, but the medium term strategy of buying dips still seems to be the plan
24 Hour: Mildly bearish
Medium Term: Prefer to buy dips
Economic data highlights will include:
M:
T:
W:
T: Swiss Foreign Currency Reserves, CPI (June)
F: Unemployment
Meta Trader – AxiTrader
USDCHF: 4 Hour
…
AUDUSD: 0.7455
Resistance
Support
0.7600
Weekly Cloud Top
0.7450
Minor
0.7560
Minor
0.7435
Friday low / 100, 55 DMAs
0.7540
Minor
0.7415
Minor
0.7510
24 June high
0.7380/70
30 June low/Daily Cloud Base
0.7502
Friday high
0.7323
28 June low/27 June low
Bias
The Aud remained firm on Friday, underpinned by stronger commodity prices and the slightly softer US$. However, the Australian General Election, held over the weekend ensures that traders will be nervous at this morning’s open and indeed the currency is already trading lower in early inter-bank trade, currently at AudUsd 0.7450 on the back of the uncertainty and also due to the possibility that Australia could lose its AAA credit rating. We might not know the final result of the election until the weekend and with the prospect of a hung parliament, we could see the currency come under some downside pressure as the week progresses. Despite all eyes being on the election result, focus will tomorrow turn to the July RBA meeting. It could be that, in the wake of the recent UK Brexit vote and the possibility of the negative flow-on effect to global economic growth the Bank moves to an easing bias, priming the market for an August rate cut, which would be unlikely to help the currency but which would suit the RBA. The 4 hour charts look mildly constructive; the dailies less so. It would seem to me that the downside risk has more potential than any move to the upside, although if the RBA do stay on hold tomorrow, the yield players will be back, to buy it in a hurry, and we could then see a quick spike higher. Watch out for the Building Permits/TD Inflation and Job Ads today.
24 Hour: Neutral
Medium Term: Prefer to sell rallies
Economic data highlights will include:
M: TD Inflation, ANZ Job Ads, Building Permits
T: AIG Services PMI, China Caixin Services PMI, RBA Interest Rate Decision, Statement
W: China Foreign Currency Reserves
T: AIG Construction PMI
F:
Meta Trader – AxiTrader
AUDUSD: 4 Hour
…
NZDUSD: 0.7169
Resistance
Support
0.7250
Minor
0.7150
Minor
0.7230
Minor
0.7115
Friday low/200 HMA
0.7216
(76.4% of 0.7292/0.6970)
0.7100
Minor
0.7197
Friday high
0.7056
1 July low
0.7185
Minor
0.7040
30 June low
Bias
The Kiwi had a firm session on Friday, underpinned by some US$ weakness and stronger stock/commodity prices. As with the Aud, if the RBA stay on hold tomorrow, the carry trade will be back in fashion which will help the Kiwi and we could then see a quick spike higher. Overall though, with regard to the medium term I think the greater risk remains to the downside and would prefer to trade it from the short side. In the meantime the 4 hour charts to remain supportive. The Global Dairy Trade Index will be the main domestic focus in the coming week.
Watch out for any spillover effect from Friday’s Australian Election result, which could cause an early gap lower in the Kiwi.
24 Hour: Neutral
Medium Term: Prefer to sell rallies
Economic data highlights will include:
M:
T: NZIER Business Confidence, Global Dairy Trade Index
W:
T:
F:
Meta Trader – AxiTrader
NZDUSD: 4 Hour
…
DXY: 95.64
Resistance
Support
98.58
2 March high
95.25
200 DMA
97.78
Descending trend resistance
94.80
Minor
97.06
61 March high
94.30
Minor
96.53
100 DMA
93.30
Minor
96.00
Minor
93.02
23 June low
Bias
The DXY has had a choppy week following the steep Brexit inspired rise of 24 June and with the daily and weekly momentum indicators appearing to be lining up to look quite constructive, it could be that we are in for further dollar gains in coming sessions. Forth the time being the DXY is contained within the 100/200 DMAs (95.25/96.53) and this may continue to be the case, but if we do see a topside break then the dailies would suggest the possibility of a bull flag, with an eventual target of 100.00. It is too early to think of this prospect yet as most of the majors currently show little sign of such a move. The outlier is Cable, where should we see another collapse to below 1.3000, would drag the Euro lower with it, thus underpinning the DXY. Buying dips, with a SL below the 200 DMA support seems to be the plan.
Mildly bullish
Mildly bullish
www.tradingview.com
DXY: Daily
DXY: Weekly …
The post 4 July: FTSE leads stocks higher. Aud lower after election. RBA & US Jobs data in focus this week. appeared first on FX Charts Daily.