FOREX: USD Bid, Antipodeans Struggle
The broader USD (BBDXY) has recovered ~80% of losses it sustained on the back of the fresh questions surrounding Fed Chair Powell’s future on Wednesday, with some light pushback from President Trump seemingly geared at quelling any related market worry.
- The combination of Trump’s pushback and some hawkish words from NY Fed President Williams proved enough to support the USD through Asia trade.
- More granularly, a softer than expected Australian labour market report leaves the Antipodeans at the bottom of the G10 FX table. A resilient labour market had factored into the RBA’s patient stance when it comes to cutting rates.
- AUD/USD trades below its 50-DMA (0.6488), with bears threatening a break below the June 23 base (0.6373) at typing. The latter presents key support and a reversal trigger.
- GBP/USD ticked to fresh session lows at 1.3376 in the wake of the UK labour market data, albeit with revisions meaning that the data screened a little stronger than expected on net. We think that that 25bp BoE cut in August still looks likely, although a move in November is less than certain now. The short-term technical theme remains bearish after the breach of the uptrend drawn off the Jan 13 low, as well as both the 20- & 50-day EMAs. Next support at yesterday’s low (1.3365), followed by the May 20 low (1.3335).
- Broader USD demand seen in recent trade, both EUR/USD & USD/JPY remain within yesterday’s ranges.
- Cross-market, note that TSMC earnings have driven a bid in equities.
- U.S. retail sales and final Eurozone CPI data due today, as well as U.S. weekly initial jobless claims.
- Central bank commentary from Fed’s Waller, Cook, Daly & Kugler, as well ECB’s Villeroy due through the day.
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STIR: SFRZ7/H8 Spread Sold
A burst of activity in the late SOFR greens and early blues, seemingly centred on 16K of the SFRZ7/H8 spread being sold at 5.0, market left 5.0/5.5.
WTI TECHS: (N5) Impulsive Bull Wave Intact
- RES 4: $84.23 - 3.000 proj of the Apr 9 - 23 - May 5 price swing
- RES 3: $81.93 - 2.764 proj of the Apr 9 - 23 - May 5 price swing
- RES 2: $80.00 - Psychological round number
- RES 1: $77.62 - High Jun 13
- PRICE: $71.95 @ 07:21 BST Jun 17
- SUP 1: $68.49 - Low Jun 13
- SUP 2: $63.94 - 50-day EMA
- SUP 3: $59.74 - Low May 30
- SUP 4: $54.33 - Low Apr 9 and a key support
WTI futures traded sharply higher last week and Friday’s early rally marked an acceleration of the current bull phase. Price action is likely to remain volatile near-term, and from a technical standpoint, the trend is currently in an extreme overbought position. A continuation higher would expose the $80.00 handle. A firm support is noted $68.49, the Jun 13 low. A breach of this level would signal scope for a deeper retracement.
GOLD TECHS: Bullish Phase Remains In Play
- RES 4: $3578.0 - 2.000 proj of the Dec 19 - Feb 24 - Feb 28 swing
- RES 3: $3547.9 - 1.764 proj of the Feb 28 - Apr 3 - Apr 7 price swing
- RES 2: $3500.1 - High Apr 22 and bull trigger
- RES 1: $3451.3 - High Jun 16
- PRICE: $3388.1 @ 07:29 BST Jun 17
- SUP 1: $3340.2/3267.0 - 20- and 50-day EMA
- SUP 2: $3204.7 - Low May 20
- SUP 3: $3121.0 - Low May 15 and key support
- SUP 4: $3100.0 - Round number support
A bullish theme in Gold remains intact and last week’s gains reinforce current conditions. Medium-term trend signals are bullish too - moving average studies are in a bull-mode position, highlighting a dominant uptrend. Resistance at $3435.6, the May 7 high, has been pierced. A clear break of this level would strengthen the uptrend and open $3500.1, the Apr 22 all-time high. Initial key support to monitor is $3267.0, the 50-day EMA.
