- ECB easing should be: Euro negative, positive for European indices and positive for peripheral Eurozone bonds (yields lower)
- Dollar Index has broken above the pivot range 80.4/80.6 to a 4 month high
- S&P 500 positing 8 closing all-time highs in past 10 sessions – driven by the record lows on the VIX (can it last?)
- Gold has jumped into the resistance band $1260/$1268 but should be a chance to sell
- The short covering rally following the ECB monetary easing seems to be over.
- A failure to break above key resistance at $1.3670 has resulted in a sell off.
- Selling rallies into $1.3580/$1.3620 resistance band
- Expect a retest of $1.3502
- Despite strong UK Manufacturing data the dollar is strengthening.
- Cable falling below support at $1.6780 suggests selling into strength is the strategy.
- Expect weakness towards $1.6700.
- The resistance high at $1.6844 is strengthening as another potential lower high as the outlook for Cable continues to shift towards a stronger dollar.
- Is still a good gauge for the improvement in the Dollar Index and the higher low at 102.10 on Dollar/Yen needs to hold to maintain the recovery.
- The pivot level around 102.00 still seen as a key near/medium term sentiment gauge.
The record lows on the VIX (hitting the lowest since early 2007) is helping to guide S&P 500 higher. DAX is also pushing to all-time highs, but the FTSE 100 continues to struggle.
- S&P 500 is though overbought on RSI (which is now over 73 and the highest since January 2013).
- DAX will look to hold above 10,000 but has a support band now 9900 to 9990.
- FTSE is lagging still and continually failing to break through resistance – lagging on a day of strong data is a concern.
- On-going lack of demand from Asia and now the removal of the “war premium” as Ukrainian tensions ease.
- Arguable support from a global central bank easing monetary policy, but Dollar strength should counter that.
- Therefore any bounces should be short-lived.
- The price has rallied today through $1260 on increased volume as COMEX opened.
- This move is still likely to be seen as a chance to sell.
- Now into a resistance band $1260/$1268.
- Expect a retest of $1231 in due course
Watch out for:
Wednesday 11th June
- UK – Unemployment
- New Zealand – monetary policy
Thursday 12th June
- Australia – Unemployment
- Eurozone – German & French CPI
- US – Retail Sales
Friday 13th June
- Japan – BoJ monetary policy
- China – Industrial Production
- US – University of Michigan sentiment (Prelim)
Monday 16th June
- Eurozone – CPI (May revision)
Tuesday 17th June
- Australia – RBA meeting minutes
- UK – CPI (May)
- Eurozone – German ZEW Economic Sentiment
- US – CPI (May)
- US – Building Permits
Wednesday 18th June
- UK – Bank of England Meeting Minutes
- US – FOMC monetary policy PLUS press conference
- New Zealand – GDP
Thursday 19th June
- Switzerland – SNB monetary policy
- UK – Retail Sales
Friday 20th June
- Canada – CPI