Aussie is under pressure despite the strong employment report

The Australian macro data released today was not quite good to boost the Aussie. The AUD/USD pair is trading at weekly lows and is closing the day below the 0.8000 handle and having marked daily low at  0.7956.

Technically speaking the pair is showing bearish signs on the four-hour time frame. The price is moving well below its bearish 20-day SMA, while the 100-day and 200-day SMAs are staying flat and are providing good support levels. RSI and stochastic are located below their mid-lines and both had lost directional strength. 

Key support is seen at 0.7965 and if breaking below it, the pair could be dragged even lower towards 0.7930. Strong challenge for the bulls remains the psychological level 0.8000 and in case of conquering it, next target would be 0.8035.

USD/JPY: Bulls Aiming 111.00 Level

USD/JPY posted strong growth on Monday with daily gains of + 1.44%. The pair broke the important area at 107.50/107.80 and marked fresh high at 108.52.  

The Yen was influenced by the positive GDP data and Kuroda’s speech, who pointed that the inflation will rise slowly and monetary policy will not change until inflation reaches the target of 2%. Meanwhile Fed’s rate hike in December is also relevant to the pair with expectations have risen sharply after Trump’s win. 

Technically speaking, bulls are now fuelled to continue slowly upwards and test the next key resistance level at 111.00/111.60. RSI and Stochastic are placed now at overbought territory with the pair breaking the 200-day moving average, which is pointing that correction is not excluded. 

A new chapter is about to be written

The week ahead is expected to be exciting as the major event that will run the markets is the US presidential elections. The first data from the elections will be released (09:00 GMT) and inevitably will impact to the financial markets not only in the US, but in Europe and Asia as well. 

Theoretically and in general terms in case of Hillary Clinton win this would bring more predictability in both foreign and domestic policy in the United States. Clinton’s campaign  was largely predicting a continuation of Obama’s economic policy with some slight additions. This will increase US dollar’s strength against the yen, Swiss franc and the euro.

Donald Trump's intentions in foreign policy and the economy so far are not very clear. Therefore in case of win, that suggests that the US dollar will fall against other major currencies.

Who will be the new US president is of great importance for the energy sector in the US. Hillary Clinton’s victory would lead to shrinking of oil production, since her vision is that we must give priority to renewable energy sources. Donald Trump favors the traditional sources of energy and if he becomes president, the expected oil production in the United States will be maintained or increased - which will affect the price of the "black gold".

USD/JPY plummeted right after FBI reopenes Clinton’s mail case

Few hours before the end of the week markets tumbled. Only 10 days left to US elections and FBI reopened Clinton’s mail case. The news flashed into the market space and immediately affected the main currencies.

Since the beginning of October USD/JPY was moving higher and reached a 3 week high at 105.52. Last two days the pair is seen in consolidation phase around 105.00 level.

After the FBI story was posted, the pair plummeted and fell from 105.35 to 104.45 for just several minutes. Meanwhile the main indices at Wall Street and the equities also were significantly down. 

This story rocked the market mood, but 10 days is a lot of time. Outside the elections, next week promises to be interesting. High volatility is expected on Wednesday, when Fed and BoJ will declare their solutions on monetary policy.

EUR/USD retreats after US Presidential debate

The US dollar was seen slightly elevated this morning, following the US Presidential debate last night. But the EUR/USD pair is still under pressure as almost lost all gained during the previous session. As clearly seen on the 4-hour chart, the pair is staying above the 50-day, 100-day and 200-day moving averages and cannot find enough strength to set direction. 

First support is located at 1.1200 and if the drop extends to eventual daily close below, this could trigger further bearish pressure for testing next support at 1.1125. Looking upwards, the EUR/USD pair will definitely need to strengthen in order to overcome the resistance located at 1.1275. Only bulls will be able to bring back their power and set next target to the 1.1350.

USD/JPY retreated back to 102 handle on BoJ's statement

Earlier this morning BoJ presented the new policy framework and announced that will keep the main interest rate unchanged as well as the ETF purchases amount and the bond-buying program. New measures will be implement to control the yield curve together with QE and reaching the target of 0% in 10 yr bond yield.

Ahead of BoJ’s Kuroda speech USD/JPY slipped below the bullish channel, but after digesting the comment the pair pushed higher again. Looking to the downside, a clear break and daily close below 101.15 could lead the bears to 100.00 - 99.50 area. Immediate resistance is seen at 103.36 and if closing above 103.00 bulls may try to test it. Anyway key resistance level remains near 104.00. Currently the bearish scenario is preferable, but nothing is sure as higher volatility is expected to spur the markets this evening with Fed’s statement. 

GBP/USD slumped to mid point of 1.29 mark

During yesterday’s session GBP/USD pair was quite hesitant but overall still manages to retain the bearish bias. Following the BoJ’s statement this morning the pair slumped to 1.2945, but shortly afterwards retreated to 1.2967. The policy framework presented today by BoJ to keep rates unchanged fueled the US dollar’s strength and pushed the USD index 0.25% higher.

Fist resistance that should be considered is located at 1.3050, above which 1.3100 would be tested. On the downside, a clear break and daily close below 1.2900 might bring the price down to test 1.2790. As long as the pair stays below 1.3500, the bearish scenario is still is pace.

USD/CHF stuck around 0.98 handle

USD/CHF couldn’t post any significant movement yesterday. The pair manages to stay around 0.98 mark, after the bulls trying to conquer 0.9820 last Friday. Currently the bias remains bullish with next target 0.9850 - 0.9900 area. The intraday support is seen at 0.9745, where the 100-day and 50-day moving averages are crossing. A clear break below that area could lead the pair to neutral zone for testing 0.9750 - 0.9700 area. Further downside next support is located at 0.9690. Looking to the upside, resistance is seen at 0.9850. Major macro data that could stir the markets is due today by the SECO (State Secretariat for Economic Affairs) and tomorrow all eyes will be on Fed’s meeting.

EUR/USD is treading water ahead of Fed’s meeting

EUR/USD performed quite hesitantly yesterday. The pair tried to push higher, but fails to break through 1.1200 for now. Seems that bears are likely to test 1.1125. Immediate resistance remains around 1.1200 and if the pair succeed to conquer it, this could lead to further bullish pressure for testing 1.1250 / 75. Buy key resistance remains 1.1350. On the downside, a clear break and daily close below 1.1125 will raise any bearish pressure for testing 1.1050. The main technical outlook still remains neutral. Anyway macro agenda for the week offers plenteous news that might set more clear direction for EUR/USD pair.

AUD/USD in consolidation around 0.7500

During today’s afternoon trading hours we witnessed slight weakness in the US dollar. AUD/USD pair slowly moved upwards and reached the intraday high at 0.7486, but couldn’t cross over the 0.7500 mark. The pair is currently seen in consolidation, still staying aside of the weekly low, having in mind that yesterday dropped with around 100 pips.

From the time of late trading hours the AUD/USD is hovering within a tight range. The pair is stuck between support, located at 0.74416 and the resistance, located at 0.7500. Consolidation is still in pace, close to the 20-day moving average.

US dollar fade out lines

The US dollar is going deeper down,
along with the poor GDP noticing,
the dovish Fed’s spelldown
and against the plethora of G20 under performing.

The clock is ticking some couple of tocks
and markets will re-estimate next Fed’s knocks.

Chipping around, kicked by EUR’s rally towards 1.12 mark
where EUR/USD pair more than a month couldn’t park.
RBA failed to weaken the Australian dollar
and the yen was seen in a new fresh 3-week spur.

These are the days – it never rains but it pours.
Circumstances laugh under the pressure the USD is cracking.
US dollar index as well regrettably sours
and in 3 months the biggest fall is posting.

Over the greenback the shadow grows, but shall it leave broken pieces to this priceless ballet?

NZD/USD trending higher

Since last Sunday, when lates polls showed that Bremain sentiment prevails and most probably United Kingdom will not leave the European Union, the apetite for riskier stocks and higher yielding currencies increased significantly. Seems like the kiwi cheered at this scenario and NZD/USD is boosted.
In the early hours today the pair was indecisive and trading lower. At noon the pair conquered the resistance level at $0.7170, where was marked yesterday’s high.
Current support level is located at $0.7173, standing together with the 5-day moving average. Immediate resistance level is seen at $0.7172 and should the pair break trough it, bulls next target is $0.7202.
The Relative Strenght Index is facing upwards with the momentum indicator also trending higher.
The current outlook is bullish with expectations for booking new 1-yr highs.

                                Chart: NZD/USD H4

USD/JPY in anticipation of FOMC meeting

USD/JPY was quite hesitant yesterday. The pair tried to push lower, formed bottom at 105.62 but closed higher at 106.09. Currently the pair is staying above 106 mark and hit an intraday high at 106.41 earlier today. In the short term bulls may try to conquer 106.70 - 107.00 area. On the downside, key support is located at 106.00 - 105.50 levels.

More clear direction will be set later on today, as the market is anticipating Federal Open Market Committee meeting. Still the expectations are that the monetary policy will not be changed. Tomorrow the Bank of Japan will decide on monetary policy and what measures should be taken against the appreciating yen.

Glowing dawn or the ultimate bubble

“When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold.”
These words came from George Soros in 2010. 
But something shifted the sentiments in his heart or he was attracted by the crackling sound of the golden mines. During the first quarter of the year George Soros cut by 37% US stock holdings owned by Soros Fund Management and purchased $ 264 million worth shares of the world's largest gold miner Barrick Gold Corporation (USA) (NYSE: ABX). 

In December 2015 gold price was flirting around $1050 level. As gold was staying logged into this low, we witnessed incredible sell-offs. All market participants were wondering whether gold mining companies could survive and this put the question how exactly is their profit. But at this time gold miners were not the losers. In particular Barrick Gold’s net production price in December 2015 was $850 per troy ounce.

XAU/USD D1

GDX 1Y

Several circumstances influence the gold strength and could support it in future.

Fears surrounding China’s economy, the currency devaluation and the capital outflow led to risk off tone in markets. While these volatile factors exist, Fed will keep its dovish policy. And as long as geopolitical risk persists, gold will sustainably grow.

The bond markets are yielding negative and a third of the sovereign debt has a negative yield.BoJ and ECB keep the negative interest rate policy and both have reached the largest increase in sub-zero yielding government debt. 

And last, but not least the trend of the accelerating government bonds that have zero to negative return.

It’s not clear yet how fundamental factors will shift in the nearest future, but in the long term gold will shine brighter.

Gold at 3-week high

Amid the overall economic instability gold shines with its safe haven status. The disappointing NFP data set the US dollar under pressure and this naturally influenced the growth of the yellow metal. 

Gold finished the week elevated after reaching a 3-week high. The test of the resistance at 1305 seemed to be inevitable, but  the market always reserves the right to surprise us.

Futures for gold climbed higher today to trade at $1,277.30 per troy ounce, as earlier marked intraday high at 1280.80, which is the highest level since 18 May.

As long as the key support located at $1,255 retains, gold bulls are steady.Currently gold hovers around $1,277 and eventual close above this level will target bulls to the resistance at $1,285.

NZD/USD at 1-year high

On Thursday the New Zealand dollar significantly rose against the greenback and hit a one-year high. The kiwi pinned a remarkable growth of 1.8% after the Reserve Bank of New Zealand left the official cash rate in the country unchanged at 2.25 percent,  which surprised some market participants who forecasted a rate cut. 

In the early trading NZD/USD increased to 0.71469, boosted by the RBNZ decision and the recently weak US data that might bring further gains for the kiwi. 

But RBNZ would be more confident to have a weaker exchange rate of the local currency in order to ensure that the future average inflation settle close to the middle of the target level. In view of the sharp appreciation this would be difficult to achieve without one further OCR cut in next months.  Most probably this will happen during the next meeting of the institution in August.

„In the coming months”

The long awaited speech of the Fed Chair Janet Yellen boosted the expectations for raising the benchmark interest rate in the next months.

Surely this will not happen in June, but she pointed out that the US central bank definitely will lift the rates. Yet the exact time frame is not put.

Yellen pointed out some „sizeable” instabilities encicled the US economy. The NFP data encouraged the thoughts of the central bankers. Also we must face the global development and in particular the UK referendum vote. So the future of the Fed’s monetary policy is tightly related to solvation of these fluctuations.

Following Yellen’s speech US dollar remained stuck around 3-week low. EUR/USD fell 0.08% and was trading lower. The intraday low was reached at 1.325.

USD/CAD dropped with 0.60% and was trading 1.2854. The daily low was hit at 1.2831, which pinned  a 3-week high.

Wall Street closed in green, as mostly profited the financial and energy sector.

S&P 500 closed 0.49% up at 2,109, DJIA finished 0.63% higher at 17,919 and Nasdaq rose with 0.53% to 4,968.

NFP weakened the US dollar

The NFP wave made the US dollar suffer with significant losses as the released data for May disappointed market participants. The results showed only 38,000 jobs created amid the expectations of 160,000 and the weak data dipped the US dollar 1.6% against the major currencies.
Following this the likelihood of an increase in interest rates by Fed next week slightly thinned, which reflected to the dollar. In view of the forthcoming referendum in Britain, central bankers may refrain from actions this month. Expectations for rates hike in July also decreased, but probably Janet Yellen will draw attention for possibly tightening the monetary policy later today in Philadelphia.
On Friday the dollar dipped against the yen to 106.50 as a result of negative data, but today started the week with declines again to return around the levels at 107 during the early trading. The pair nears the crucial level at 105 and this awakes the fluctuation about intervention by the Tokyo authorities in the foreign exchange market.
The greenback lost ground against the single currency. The euro climbed to 1.1373 after last week had depreciated to 1.1097. Despite the losses for the greenback due to weak data, overall  US economy remains framed and a rates hike is more likely to be postponed this month as now the focus is more on vote in UK rather than the employment report.
The British pound fell 0.8% against the US dollar this morning, because it became clear that the preliminary surveys showed Leave side ahead. Sterling dipped to 1.4351 dollars.

GBP/USD

During the last week GBP/USD performed tentatively and showed lack of strength.
The pair attempted to rise higher, slipping above the key resistance at 1.4700, but failed to make a clear break upside and closed lower at 1.4604. 

Currently the descending momentum prevails and bears are likely to test 1.4500. Immediate resistance is seen at 1.4650, followed by 1.4740, which is the 200-day moving average. 

Looking at the upside, any indicative break above and eventual daily close above 1.47 would awake the bulls and the pair might push towards 1.5000 level.

Silver runs out for short

Silver prices dragged slightly down as encountered bears creeping and conquering the key support at $16.31.

Latest peak marked by silver on April 19 at $16.90 was followed by a lower high of $16.63 and since then the short term sentiment turned to bearish.

Currently XAG/USD is trading around $16.255, 1,02% lower, hitting intraday high at 16.455 and low at 16.215.

Key resistance is located around $16.40 and support levels to watch are $16.21 and $16.09.

We witness perfectly incomplete performance, as silver suffers for short. A correction is taking a shape, which is seen by 20- and 55-day EMAs.