FOREX: USD Off NY Highs, UK CPI Firm
The broader USD (BBDXY) ticked lower overnight/in early London trade, after registering a fresh July high in the wake of yesterday’s U.S. CPI data.
- GBP benefits from firmer-than-expected UK CPI data (detailed in recent bullets) in early London trade. Reclaiming 1.3400. The pair breached and closed below trendline support on Tuesday, affirming the short-term bearish trend. Key short-term support comes in at yesterday’s low (1.3371). GBP STIR & gilt opens now eyed.
- EUR/USD traded through 1.1600 in late NY trade, before retaking the figure, last ~1.1620. The corrective bearish cycle within the longer running bullish theme has extended, with initial support and resistance now defined at 1.1593 & 1.1730. The EU’s multi-year Budget and fallout from yesterday’s French fiscal announcements eyed today.
- USD/JPY topped out at 149.18 in Tokyo trade, before moving back towards 148.70. Fresh bullish extension would target the 50% retracement of the Jan 10-Apr 22 bear leg (149.38). Japanese long end yields are lower, although the bearish steepening theme remains intact multi-month.
- U.S. PPI dominates the macro calendar during the remainder of the day, coming on the heels of CPI data that started to show feedthrough from the President trump’s tariffs.
- Elsewhere, a raft of Fedspeak will come via Williams, Barr, Hammack, Bostic & Barkin.
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BUNDS: Bonds are still trading on the heavier side
- Bund and Treasuries continue to trade on the heavy side, a little surprising given the escalation in Wars, although some may look at Inflation risks.
- Nonetheless, for now both contracts (RXU5 and TYU5) are trading flat going into the European session, and TYU5 is still just short of 110.14+, Friday's low.
- For the German Bund, support is still seen at 130.52, printed a 130.53 low last Week, and small resistance moves back down to the 131.00 figure.
- Italian Final CPI is the only release for Today, UK and Japan CPIs are the main release this Week, but CBs rate decision are at the forefront this Week.
- Global Investors will also be rolling their Equity Position into September, ahead of Triple Witching Friday.
- SPEAKERS: ECB Nagel (x2) Cipollone.
GOLD TECHS: Bullish Phase Still 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 - Intraday high
- PRICE: $3416.9 @ 07:25 BST Jun 16
- SUP 1: $3335.5/3262.2 - 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 this 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 $3262.2, the 50-day EMA.
BRENT TECHS: (Q5) Bull Cycle Intact But Overbought
- RES 4: $83.46 - 2.764 proj of the Apr 9 - 23 - May price swing
- RES 3: $82.13 - 2.618 proj of the Apr 9 - 23 - May price swing
- RES 2: $80.00 - Psychological round number
- RES 1: $78.50 - High Jun 13
- PRICE: $74.59 @ 07:11 BST Jun 16
- SUP 1: $70.41 - Low Jun 13
- SUP 2: $66.10 - 50-day EMA
- SUP 3: $62.09 - Low May 30
- SUP 4: $57.78 - Low Apr 9 and a key support
A bull cycle in Brent futures remains in play and last week’s impulsive rally reinforces bullish conditions. Price action is likely to remain volatile and from a technical standpoint, the trend is currently in an extreme overbought position. A continuation higher would expose the $80.00 handle next. A firm short-term support is seen at $70.41, the Jun 13 low. A break of this level would signal scope for a deeper retracement.
