- Iraq tensions have weighed recently but markets starting to look past it perhaps.
- Dollar Index back into the pivot range 80.4/80.6 but this should be a chance to buy – equates to the resistance band $1.3585/$1.3670 on Euro/Dollar.
- Indices are showing signs of support again after the minor correction.
- Gold has failed around the resistance band $1278 around the 144 day moving average
- Focus on the Fed this week with the FOMC decision Wednesday, expect a further taper by $10bn but question of whether Yellen gives a hawkish leaning – will higher US inflation and the increased capacity utilisation yesterday put pressure on the Fed?
- Support around $1.3500 remains intact but the ceiling of resistance that starts around $1.3585 is aping the gains.
- A lack to any real recovery signals on momentum suggests this is just another chance to sell.
- Selling rallies into $1.3580/$1.3670 resistance band
- Expect a retest of $1.3500 before $1.3475
- Lower UK inflation and higher US inflation (plus improved capacity utilisation for the US) could put downside pressure on Cable now in the run up to the Fed.
- There is support band $1.6880/$1.6920
- $1.7000 remains a big barrier with no clean break through yet.
- Abe looking to push through “Third Arrow” reform – also dovish leanings in monetary policy update last week.
- The rate was looking fairly neutral again but is now pushing above the 102.00 pivot level again.
- There is a sizeable resistance area 102.20/102.40 that needs to be overcome for the dollar bulls to claim control.
Equity indices have corrected as VIX volatility has jumped, but support is beginning to form once more.
- S&P 500 forming support around 1926 – chance to buy?
- DAX forming support above 9810.
- FTSE is lagging still and breaching support at 6782 completed a top pattern implying 100 points downside.
- Rallies as concern over Iraq increased.
- But technical overhead supply around $1278 and the 144 day ma has capped the recovery which is falling away again – chance to sell?
- Support for the US dollar could also pull gold lower.
- Expect a retest of $1231 in due course
WATCH OUT FOR
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
Monday 23rd June
- China – Flash Manufacturing PMI
- Eurozone – Flash Manufacturing PMIs
- US – Existing Home Sales
Tuesday 24th June
- Eurozone – German Ifo Business Climate
- UK – Inflation Report hearings
- US – Consumer Confidence
- US – New Home Sales
Wednesday 25th June
- US – Durable Goods
Thursday 26th June
- US – Weekly Jobless Claims
Friday 27th June
- Eurozone – German CPI