Market Commentary
DXY closes at highest in levels in 3 months; USD seen as best bet as global macro outlook weakens; commodities collapse, Gold down $50 in Asian trade overnight. US CPI as expected; benchmark rates end lower on the week; odds for September rate hike steady at 1 in 3.
EURUSD dropped more than 2 percent last week and tested the low at 1.0826 on Friday, a level last seen on May 27. Traders shifted attention from the Greek crisis to the economic fundamentals between euro zone and the US. The diverging policy outlook between the euro zone and the US should see the euro continue to weaken while the US economy is picking up.
GBPUSD remained stable after Bank of England Governor Mark Carney gave his strongest hint yet on the timing of a UK rate rise, saying a decision would come into focus around the end of 2015. The need for rate hike reflects the momentum in the economy and a gradual firming of underlying inflationary pressures, Carney said.
The USDJPY tested a one-month peak of 124.23 closing above the 124 handle last week. Congressional testimony by US Federal Reserve Chief Yellen said that a rise in interest rates may happen by year-end strengthened the dollar against the yen, considered a positive in export-oriented Japan.
Technical Commentary
EURUSD Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish
While 1.0950 caps intraday upside expect a test of 1.0780/1.08, failure here opens 2015 lows downside pressure only reduced on a break above 1.1050
Daily Order Flow bearish; OBV sideways, Linear Regression and Psychology rotate around midpoints with bearish bias
Monitoring intraday price and Order Flow indicators on a test of 1.13 or 1.08
GBPUSD: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bearish
While 1.57 caps upside a break back below 1.5550 suggests bearish symmetry target at 1.5285 remains in play a close above 1.57 negates near term bearishness and resets focus on the 1.60 upside psych objective.
Daily Order Flow bullish; OBV sideways to up, Linear Regression and Psychology pierce midpoints from below
Monitoring intraday price action and Order Flow indicators on a test of 1.5285 or 1.5750
USDJPY: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bullish
Close above 124 now targets 125.85 next and 128 in extension, expect intraday downside reactions to be supported at 123.50 a failure at 122.50 again opens 120 in retest of ascending triangle trend line.
Daily Order Flow bullish; OBV sideways, Linear Regression and Psychology bullish but lack momentum, retesting midpoints from above.
Monitoring intraday price action and Order Flow indicators on a test of 128 or 120
EURJPY: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish
Range trade persists, 133/34 range support a breach of 133 opens retest of 2015 lows while above 138 range resistance, opens 143
Daily Order Flow bearish; OBV sideways, Linear Regression and Psychology bearish
Monitoring intraday price action and Order Flow indicators at 138 and 133
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Editors’ Picks
AUD/USD remained bid above 0.6500
AUD/USD extended further its bullish performance, advancing for the fourth session in a row on Thursday, although a sustainable breakout of the key 200-day SMA at 0.6526 still remain elusive.
EUR/USD faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.