USD/JPY nears its 61.8% Fibo

It was an interesting day for the USD/JPY today, as the Japanese yen gained momentum, boosted by the consolidation in equity prices in negative territory in Wall Street amid the treasuries recovery.

The pair is currently trading at 110.78 and is about to close the day below the key level at 111.00, that has not been visited for the past two weeks. 

On the four-hour time frame the 20-day SMA has turned sharply to south, while the price is standing well below the 100-day and 200-day SMAs that are staying flat and are loosing directional strength.

RSI and stochastic are located far form their mid-lines and are displaying bearish momentum.

Immediate support is seen at the 61.8% Fibonacci retracement of latest up leg (110.50) and in case of breaking it to below, next bears’ target is seen at 110.20 (May 18th’s low) and this would confirm short term downwards movement. 

It’s a long way to the top (if you wanna rock 'n'roll)

Over the past few days the Aussie is struggling to deliver clear direction and closed flat today, keeping away from further decline due to the lack of volume as markets were closed for holidays.

The four-hour time frame is showing that the AUD/USD pair bounced from the 50% Fibonacci retracement of latest up leg in May at 0.7420,which is acting as immediate support. The 20-day SMA has turned to downside, while the 200-day SMA is staying flat and is acting as resistance with current level at 0.7470.

RSI is located slightly below its mid-lines and has lost directional strength. Stochastic is retreating from the negative territory and is displaying bullish momentum. 

The pair failed to surpass the 0.75 handle last week, but it will be interesting to observe the moves this week. Tomorrow will be released the April Building Permits figures with expectations significantly above after March's sharp decline.

As the famous Australian band AC/CD sing, it’s a long way to the top. In fact this song describes their struggle to make themselves big by delivering a top notch. They were nonexistent in short dates, but never gave up and finally were paid off. 

Will Aussie succeed to struggle if ECB and Fed turn to more hawkish measures with the odds about the cut of rates by RBA and with the markets growing increasingly concerned about demand for Iron Ore? 

„Stop in all the byways, playing rock’n’roll, gettin’ robbed, gettin’ stoned,gettin’ bet up”.
I'd rather prefer rock and roll, but in medium term the pair is seen neutral, so take your time as it's a long time to the top.

Gold may shine brighter

On Thursday Gold regained some of its losses that had the previous day, but on Friday broke out of its weekly range and marked 3-week high at $1267. This move clearly speaks that markets have already priced-in the upcoming rate hike next month. The latest release of macro data in USA also supported the precious metal and bulls are back on the stage after being behind the scene near two months.

Bulls would be eyeing to conquer higher levels are here five reasons that will build on their strategy for up-surge:

Failure in index growth

US indices may be close to new record values, but the risk of correction is greater than ever. Trump's election victory was the last factor to accelerate the rise in the indexes. It is Trump, however, that will be the basis of the next bigger correction or bearish market.

The dollar may continue to become cheaper

The Fed’s  Minutes pointed out that the reserve might not hurry with aggressive action on interest rates. This is very likely to initiate a further decline in the dollar, which is good for the price of gold.

Negative interest rates in an environment of rising inflation

A slower rise in interest rates in the United States, in the midst of seeing the first signs of inflation, could result in negative real interest rates. Such an environment is extremely beneficial for assets that do not bear interest, such as gold.

Geopolitical risks

Geopolitical risks are serious. From the UK election next month to the potential escalation of North Korea's tensions. Gold has always been well-prone to risks.

Growing stocks of India

India is one of the largest users of gold. The jewellers add to the gold stocks before the new sales tax comes in on July 1st.

Keep calm and get your popcorn ready. Trump is overseas!

Putin knows what to do and has already prepared.

Besides multiple chances to embarrass the USA now President Trump is performing on the worldwide scene and is acting deeply and truly as himself, providing the audience sovereign cringeworthy moments.

And here are several highlights on what I found awkward, interesting and not be missed:

As the current First Lady is always in the spotlight, I can not point out that she appeared to refuse her husband's attempt at holding hands when climbed the stairs on Air Force One and, which also happened in Israel when brushed away Tump’s hand. And there was no holding hands as they stepped off Air Force One in Rome. The body language says a lot.

Being in Israel the Republican seems to had forgotten that this country is a part of the Middle East.
“We just got back from the Middle East,” Trump told the room.

And the note he left at Yad Vashem sounds to be written by a rock & roll star, just compare it to Obama’s one!

Look at this shot at Vatican! Do you find Pope Francis enthusiastic about this photo opportunity?

The Handwriting Handbook was impressive on the meeting of world leaders in Belgium. Once Trump called Brussels a „hellhole”, but thanked for the warm welcome. Below photo is showing Trump and France’s newly elected President Emmanuel Macron awkward power handshake at their first face-to-face meeting.

At a NATO summit in Brussels Trump showed his muscles and pushed aside the leader of soon-to-be member Montenegro.

This one is my favourite. He just has not been the same since touched the glowing orb. 

Do you know how the orcs first came into being? They were elves once, taken by the dark powers, tortured and mutilated, a ruined and terrible form of life.. (Saruman)

USD/JPY at neutral stance

During the past week the USD/JPY pair has been caught in tight range and today was seen hovering below the 112.00 mark. 

The absence of significant macro data releases reflects and the pair can’t find enough strength to set clear direction.

On the four-hour time frame the price is moving below the 20-day SMA and it’s between it and the 100-day SMA, both horizontally positioned. Technical indicators are not showing much. RSI is located around its mid-lines, while stochastic is slight above its and is heading to north.  

Immediate resistance is the 38.2% Fibonacci retracement of latest April to May up leg at 112.00 and next is seen at 23.6% (112.90). Looking to downside, the important level to consider is 111.00 as is a good turning point and might switch the trend into bearish in case of crossing it to below. 

Aussie meets strong resistance at 0.7500

Commodities currencies are best performers this Monday along with Aussie extending up to 0.7488, highest level seen since May 3rd.  It’s an important level to consider as staying slightly below 0.7500 and it’s an area defined by 38.2% Fibonacci retracement of latest March to May decline together with the upper line of descending trend line. 

The immediate upside momentum is seized by the this threshold. Temporary support  is lying at  the overnight lows having in mind possible close below 0.7385, that would put back the downtrend on the table.

Aussie is approaching key resistance confluence and we should focus on the 0.7429 – 0.7490 range, but upside is capped by the  61.8% Fibonacci retracement at 0.7589 of above mentioned decline. 

The economic calendar has nothing to offer during the upcoming session, but the positive momentum in equities and commodities will possibly drive Aussie gains. 

However, the we should focus  on the structural resistance that is heading towards  0.7500 mark  ans in case of breach, there would be more meaningful breakout in the pair.

GBP/USD Range Bounded

Having Brexit drama in play the Cable succeeded to regain the 1.3000 handle, due to greenback’s weakness. The GBP/USD opened lower undermined by Minister Davis, who pointed out that UK may leave the negotiation's table should the EU insist  on the payment of a Brexit bill of around €100 billion, which lead the pair downwards to 1.2965. 

Well the US session brought US dollar's selling and the pair moved higher.

Technically speaking the pair is currently range bounded and is keeping neutral stance. The price is slightly above the 20-day SMA. RSI is consolidating around 55 level while stochastic has retreated form overbought conditions and has lost directional strength.

Ahead of UK election the most likely scenario is neutral with a limited downward scope on standing greenback's weakness.