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Market Update: June 26th 2017

The single currency has surrendered part of Friday’s gains vs. the buck, now sending EUR/USD to the area of 1.1190 ahead of the release of the German IFO. Spot has started the week on a negative fashion so far today amidst some tepid recovery in the demand for the greenback, while the US Dollar Index stays close to the critical 97.00 handle. The upbeat tone around USD has been also supported by earlier comments by San Francisco Fed J.Williams (2018 voter, centrist), who advocated for a gradual tightening by the Federal Reserve while he believes the Fed will start reducing its balance sheet later in the year. In the meantime, the pair is extending its sideline theme prevailing since late May between 1.1100 and (almost) 1.1300, although the low-1.1200s has been quite a tough barrier for EUR-bulls as of late. From the positioning view, EUR speculative net longs have retreated to 5-week lows in the week ended on June 20, according to the latest CFTC report. In the data space, the German IFO indicator is due next, while President Draghi is due to speak at the ‘ECB Forum on Central Banking’ in Portugal. Across the pond, May’s durable goods orders are only due. Immediate resistance is located at 1.1218 followed by 1.1245, while support is seen at 1.1155 ahead of 1.1117.

EUR/USD – 1 Hour Chart. Chart EURUSD, H1, 2017.06.26 06:09 UTC, WGM SERVICES LIMITED, MetaTrader 4, Demo

Resistance: 1.1218 / 1.1245

Support: 1.1155 / 1.1117

The GBP/USD pair kicked-off a brand new week on a stronger footing, opening with a 20-pips bullish gap, as investors brace for the central banks’ speeches-dominated week ahead. The spot extends its bullish run into a fifth day today, and builds onto Friday’s gains above 1.2750 levels, as risk-off remains in vogue amid a recovery in oil prices and higher Treasury yields. Moreover, the US dollar consolidates Friday’s sell-off so far this session, which also provide extra legs to the upmove. On Friday, the greenback fell sharply lower against its main competitors on the back of dovish comments from FOMC member Bullard and Mester. Both the Fed officials suggested that there is no immediate need to tighten policy, given softening US inflation outlook and potential tax and regulatory reforms. More so, the pound also benefits from a survey conducted by Lloyds, which showed that Business confidence in the UK jumped to an 18-month high of 24%, while comments by the UK’s Brexit Minister Davis also added to the ongoing strength in cable. Focus now shifts towards the fundamentals, with plenty of macro news due on the cards from both the UK and US later this week, following a data-light economic calendar last week. Next of note for the major remains the UK BBA mortgage approvals \ and US durable goods data due later on Monday. Immediate resistance is located at 1.2748 followed by 1.2780, while support is seen at 1.2679 ahead of 1.2641.

GBP/USD - 1 Hour Chart Chart GBPUSD, H1, 2017.06.26 06:13 UTC, WGM SERVICES LIMITED, MetaTrader 4, Demo

Resistance: 1.2748 / 1.2780

Support: 1.2679 / 1.2641

With the greenback extending its defensive mode into early Europe, the USD/JPY pair continues to keep its range-play intact around 111.30 levels. The spot is stuck in tight trading ranges, although manages to find support from a better risk tone prevalent in the markets, as oil prices extend their recovery path. More so, positive Asian equities combined with renewed uptick seen in the US yields across the curve, also continue to keep the bulls somewhat in control. Meanwhile, the yen markets paid little heed to the BOJ’s Summary of Opinions' for the June 15th and 16th meeting, which suggested that the Japanese economy has been turning toward a moderate expansion. Looking ahead, the major eagerly awaits the release of the US durable goods orders data due later in the NA session. In the meantime, the USD dynamics and risk trends will continue to drive the USD/JPY price-action. Immediate resistance is located at 111.42 followed by 111.56, while support is seen at 111.14 ahead of 111.01.

USD/JPY– 1 Hour Chart Chart USDJPY., H1, 2017.06.26 06:15 UTC, WGM SERVICES LIMITED, MetaTrader 4, Demo

Resistance: 111.42 / 111.56

Support: 111.14 / 111.01

 

The USD/CAD pair extends its consolidative-mode into early Europe, although looks vulnerable below 1.3250 levels amid more-than 1% jump in oil prices seen so far this Monday. The Loonie remains supported near mid-1.32s as oil prices jumped higher in Asia, reversing last week’s heavy sell-off. Moreover, subdued trading activity seen in the US dollar against its major rivals also collaborated to downside bias in the CAD pair. The USD index trades modestly lower just below 97 handle. On Friday, USD/CAD witnessed a volatile NA session, initially spiking above 1.33 handle on the release of worse-than expected Canadian CPI figures. However, the spot failed to sustain the rally and dropped back to the familiar range near 1.3250 levels, after the greenback slumped across the board on dovish Fedspeaks. Later today, the major will closely track oil-price action fur fresh incentives ahead of the US durable goods data due to be reported in the NA session. Immediate resistance is located at 1.3315 followed by 1.3360 while support is seen at 1.3218 followed by 1.3165.

USD/CAD – 1 Hour Chart Chart USDCAD., H1, 2017.06.26 06:22 UTC, WGM SERVICES LIMITED, MetaTrader 4, Demo

Resistance: 1.3315 / 1.3360

Support: 1.3218 / 1.3165

Following last week's positive closing for the sixth consecutive week, the NZD/USD pair had a quiet start on Monday and consolidated in a 15-pips narrow trading range below the 0.7300 handle. Last week, the pair regained traction after RBNZ held official cash rates at record lows but sounded less dovish than many investors had expected. This coupled with St. Louis Federal Reserve President James Bullard's remarks that the Fed should hold back from raising interest rates further and see how the economy is progressing, provided an additional boost to the major on Friday and lifted it back closer to the 0.7300 handle. Investors now look forward to the Fed Chair Janet Yellen's scheduled speech on Tuesday for some fresh insights over the central bank's monetary policy outlook. Hence, a modest pick-up in the US Treasury bond yields, which tends to underpin the US Dollar demand, kept a lid on any further up-move for higher-yielding currencies - like the Kiwi. On the economic data front, today's release of durable goods orders from the US, due for release during early NA session, would now be looked upon for some fresh impetus ahead of NZ trade balance data during early Asian session on Tuesday.  Immediate resistance is located at 0.7301 followed by 0.7322 while support is seen at 0.7254 ahead of 0.7254.

NZD/USD - 1 Hour Chart Chart NZDUSD., H1, 2017.06.26 06:25 UTC, WGM SERVICES LIMITED, MetaTrader 4, Demo  

Resistance: 0.7301 / 0.7322

Support: 0.7254 / 0.7254

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