EURUSD – technical overview

The market remains confined to a broader downtrend with any rallies classified as corrective. This latest bounce has stalled out yet again into the 100-Day SMA, setting up the possibility for a lower top and bearish resumption towards 1.0912. At this point, only back above the 100-Day SMA will delay the outlook and give reason for pause.

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  • R2 1.1234 – 2Aug high – Strong
  • R1 1.1204 – 15Aug high – Medium
  • S1 1.1112 – 10Aug low – Medium
  • S2 1.1046 – 5Aug low – Strong

EURUSD – fundamental overview

The Euro still isn’t really sure which way it wants to go but is having a hard time staying down at the moment, with a soft run of US data running into Monday via unimpressive Empire manufacturing numbers. Throw in higher OIL prices and record high US stocks and this has all been helping to push the major pair towards that illusive 100-Day moving average. Looking ahead, the calendar picks up in a big way. We get German ZEW, Eurozone trade and US CPI.

GBPUSD – technical overview

The latest break below internal range support at 1.3057 ends a period of bearish consolidation and opens the door for a direct retest of the +30 year low from July just under 1.2800. Once taken out, this will expose a fresh drop towards next major psychological barriers at 1.2500. At this point, only back above 1.3372 will take the immediate pressure off the downside.

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  • R2 1.3035 – 12Aug high – Strong
  • R1 1.2945 – 15Aug high – Medium
  • S1 1.2850 – Mid-Figure – Medium
  • S2 1.2798 – +30-Year low – Strong

GBPUSD – fundamental overview

It’s been a pretty pathetic period for the Pound these past several week’s with the currency continuing to get slammed post referendum. The uncertainty surrounding Brexit has been too much to bear, with the event casting a dark shadow over the outlook for the UK economy. Even this latest run of disappointing US economic data and broad based US Dollar selling has done nothing to prop the beleaguered currency. Looking ahead, all eyes on some very important inflation readings out of both the UK and US.

USDJPY – technical overview

The latest topside failure sets up a prospective lower top at 107.49 ahead of the next major downside extension below the recent yearly and multi-month low at 98.99. At this point, only a break back above 107.49 would negate this outlook and give reason for pause. In the interim, look for any rallies to be well capped ahead of 104.00.

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  • R2 102.66 – 8Aug high – Strong
  • R1 101.45 – 15Aug high – Medium
  • S1 99.99 – 8Jul low – Medium
  • S2 98.99 – 24Jun/2016 low – Strong

USDJPY – fundamental overview

The Yen hasn’t really been able to make up its mind in recent trade with the Japanese currency getting pulled in two directions. On the one hand, risk on trade and softer Japan GDP have been giving the market an excuse to be selling Yen, while at the same time, a soft run of US data and expectations the Fed won’t be looking to move on rates any time soon is inviting Yen demand. Looking ahead, the market will be focused on broader risk appetite with US equities once again at record levels, while also taking in an important US CPI print.

EURCHF – technical overview

Not much doing here over the past several days, with the market confined to a range trade, roughly between 1.0800 and 1.1000. At this point, a daily close above 1.1000 or back below 1.0800 will be required for clearer directional insight. Until then, look for dips to be supported and rallies well capped.

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  • R2 1.1014 – 24Jun high – Strong
  • R1 1.0945 – 12Jul high – Medium
  • S1 1.0790 – 29Jul low – Medium
  • S2 1.0778 – 16Jun low – Strong

EURCHF – fundamental overview

SNB smoothing activity to prop the EURCHF rate has been helping to elevate the cross, but at the same time, any upside moves haven’t been sustainable with the cross rate continuing to get sold aggressively into rallies. Overall, this is a market going nowhere right now and it seems sell-stops need to get taken out below 1.0750 or above 1.1000 for clearer insight. US stocks have been supporting EURCHF but are also looking extended which could invite Franc demand if the market starts to roll over from record highs in the sessions ahead.

AUDUSD – technical overview

The market has struggled on rallies above 0.7700 and this suggests the rate could be looking to carve a lower top below the 2016 high at 0.7835 in favour of the next major downside extension. Friday’s bearish close strengthens this outlook and should accelerate declines towards 0.7500. Ultimately, only back above 0.7758 will negate the newly adopted bearish outlook and invite a retest of the 2016 highs.

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  • R2 0.7758 – 11Aug high – Strong
  • R1 0.7700 – Figure – Medium
  • S1 0.7598 – 8Aug low – Strong
  • S2 0.7569 –3Aug low – Medium

AUDUSD – fundamental overview

The RBA Minutes haven’t produced any surprises, nor have they offered anything fresh in terms of forward guidance. Going forward, it looks like the RBA will try to leave policy on hold for a while, particularly after Governor Stevens flagged the limitations of monetary policy stimulus in his outgoing speech. Looking ahead, US CPI will be the main focus on the economic calendar for the remainder of the day, though broader macro themes and risk sentiment will also play a major role.

USDCAD – technical overview

Finally a major breakout in this pair, with the price clearing critical range resistance at 1.3189. The break ends a period of multi-week basing off the 2016 low and opens the door for a fresh upside extension towards a measured move objective into the 1.3500-1.4000 area. As such look for this latest round of setbacks to be very well supported ahead of 1.2800.

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  • R2 1.3080 – 11Aug high – Strong
  • R1 1.2993 – 12Aug high – Medium
  • S1 1.2902 – 15Aug low – Strong
  • S2 1.2862 – 15Jul low – Strong

USDCAD – fundamental overview

Another day and another run for the Canadian Dollar which has been having its way over the past week or so. The Canadian Dollar has emerged as an outperformer against the Buck over this timeframe, benefitting from the combination of softer US data, an impressive recovery in the price of OIL and broader risk on trade. Looking ahead, the economic calendar focus will be on US CPI and some Canada manufacturing shipments data, though OIL will continue to be watched closely.

NZDUSD – technical overview

Rallies to fresh 2016 highs above 0.7300 have been well capped, with the market looking to adhere to the broader downtrend. As such, look for this latest surge to once again fizzle out, in favour of a resumption of declines. Key support now comes in at 0.6952, but a break below 0.7087 will get things going to the downside.

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  • R2 0.7341 – 11Aug/2016 high – Strong
  • R1 0.7265 – 10Aug high  – Medium
  • S1 0.7159 – 10Aug low – Medium
  • S2 0.7087 – 8Aug low – Strong

NZDUSD – fundamental overview

US Empire manufacturing data is never much of a market mover, but it certainly was a factor in an otherwise quiet calendar day. The much weaker US reading opened the door for a Kiwi push back above 0.7200, with a concurrent record high surge in stocks also helping to support the risk correlated currency. Looking ahead, the key focus on Tuesday will be GDT dairy auction results and US CPI. But overall, additional Kiwi upside should prove to be a difficult prospect with the RBNZ talking down the currency and looking to cut rates some more in the coming months.

US SPX 500 – technical overview

The market continues to push to fresh record highs and there is scope from here for additional upside in the sessions ahead through next key psychological barriers at 2200. Still overall, the prospect for the formation of a longer-term top is very much alive and any signs of exhaustion and a rolling back over below 2147 in the sessions ahead will strengthen this outlook and invite renewed downside pressure.

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  • R2 2200.00 – Psychological – Strong
  • R1 2194.00 – 15Aug/Record – Medium
  • S1 2147.00 –2Aug low – Medium
  • S2 2136.00 – 12Jul low– Strong

US SPX 500 – fundamental overview

It continues to be full steam ahead for US stocks, with the market pushing to yet another record high. Everything is running well for investors with softer US data to likely keep the Fed from making any moves, while higher OIL is also helping risk appetite. Still, we continue to warn over the complacency in risk markets at present, with monetary policy reaching its limits and in reality very little left to truly incentivize this artificially supported market that much higher. The market isn’t ready to give up just yet but very well could at any moment.

GOLD (SPOT) – technical overview

The recent break above the previous 2015 peak at 1307 strengthens the case for a longer term base with the market confirming a medium-term higher low in the 1200 area, opening the door for the next major upside extension towards a measured move at 1400. Any setbacks should be very well supported ahead of 1300, with only a break below 1250 to compromise the outlook.

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  • R2 1375.20 – 6Jul/2016 high – Strong
  • R1 1367.30 – 2Aug high – Medium
  • S1 1310.90 – 21Jul low – Strong
  • S2 1303.90 – 1May low – Strong

GOLD (SPOT) – fundamental overview

Overall, GOLD has been very well supported in 2016, with the yellow metal finding solid demand from medium and longer-term players on the back of fears over the limitations of exhausted monetary policy and extended global equities. All of this will almost certainly continue to keep the commodity in demand, with many market participants fleeing to the hard asset as the grand dichotomy of record high equities and record low yields comes to an unnerving climax.

Feature – technical overview

USDTRY has recently broken up to another fresh record high after a period of multi-month consolidation. The latest break through the previous peak from 2015 now opens the door for a measured move upside extension towards 3.3500 in the weeks ahead. At this point, current setbacks should be limited in favour of a higher low, with only a break back below 2.8395 to take immediate pressure off the topside.

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  • R2 3.0970 – 20Jul/Record – Strong
  • R1 3.0270 – 4Aug high – Medium
  • S1 2.9260 –18Jul low – Medium
  • S2 2.8755 – 14Jul low – Strong

Feature – fundamental overview

The Lira has done a really good job recovering from record lows against the Buck, with the currency finding solid demand in recent sessions on the back of a run of softer US data and ongoing appetite for risk assets. Overall, these flows have been beneficial to the entire emerging market FX space, though going forward, the Lira will need to start looking inward again. Later this week, Moody’s is expected to deliver its rating assessment. There is concern the rating agency will follow in S&P’s footsteps and downgrade Turkey. While PM Simsek said such a downgrade would be unfair, he wouldn’t rule it out as a possibility.

Peformance chart: Five day performance v. US dollar

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