- Geopolitical tensions in Ukraine and Gaza – but these are now beginning to reverse
- But possibility of “Stage 3” sanctions against Russia “far-reaching consequences for relations on a broad range of economic areas”
- US Earnings Season progressing well with strong showing on both earnings and revenues – big tech stocks in focus this week – Apple and Microsoft
- Geopolitics a key driver of oil – Brent Crude prices lost $10 in 3 weeks (due to recovering Libyan supplies) but has since recovered on events in Ukraine –
- Chinese flash PMIs to drive risk appetite on Thursday
EUR/USD – Bearish. Sell into strength, or on a key break of $1.3475
- The big February low at $1.3475 is being threatened now.
- A breach would open the way towards the pattern implied target of $1.3375.
- Momentum is poor but nearing a point at which a technical rally could set in.
- Selling in the resistance band $1.3550/$1.3600 would be ideal.
- Watch for: Eurozone flash PMIs
GBP/USD – Bullish. Looking for a buy signal in the support band $1.7000/$1.7060
- Strong UK economic data continues to underpin the rise in Cable.
- Positive technical indicators shows a support band $1.7000/$1.7060.
- A slight consolidation drift continues but the bulls remain in control medium/long term.
- Watch for a buy signal in the support band for a trigger to test the all-time highs again above $1.7191.
- Watch for: UK MPC meeting minutes
USD/JPY – Look to sell within the range for a retest of February low
- Risk aversion trade in forex, so yen has benefited from safe haven flows.
- Dollar/Yen increasingly weak and testing key lows.
- Deteriorating technical indicators suggest rallies are falling over at lower levels.
- 101.60 to 102.00 is decent band to sell.
- Pressure on key Feb low at 100.74
Gold – Longer term technical outlook is showing signs of improvement
- Support above $1280 with the 144 day moving average again the basis of support (currently $1293)
- Currently moving on geopolitical tensions, and is calming down slightly as tensions ease.
- But the longer term technical outlook is improving now – with longer term moving averages rising, downtrend since October 2012 broken
Indices – Continue to much prefer S&P 500
With earnings season doing well, S&P 500 is performing very strongly.
Interestingly though the FTSE 100 is now at an 8 month relative high versus the DAX Xetra.
DAX suffers more when Russian tensions surface due to reliance on its energy imports.
- S&P 500 set to burst to new all-time high ground above 1986 and push towards 2000
- DAX has breached the primary uptrend but support of the 144 day ma has held. Key support around 9600.
- FTSE looks very messy on technical, having broken its primary uptrend. However it is now testing the resistance at 6800, above opens 6875
WATCH OUT FOR
Wednesday 23rd July
- Australia – CPI
- UK – Bank of England meeting minutes
- New Zealand – RBNZ monetary policy
Thursday 24th July
- China – Manufacturing PMI (flash))
- Eurozone – Manufacturing PMI (flash))
- UK – Retail Sales
- US – Weekly Jobless Claims
- US – New Home Sales
Friday 25th July
- Eurozone – German Ifo Business Climate
- UK – GDP (Q2 preliminary)
- US – Core Durable Goods
Monday 28th July
Tuesday 29th July
- US – CB Consumer Confidence
Wednesday 30th July
- Eurozone – German CPI (July flash)
- US – ADP Employment Report
- US – GDP (Q2 Advance)
- US – FOMC statement
Thursday 31st July
- Eurozone – CPI (July flash)
- Canada – GDP
- US – Weekly Jobless Claims
Friday 1st August
- China – Manufacturing PMI (Govt and HSBC)
- UK – Manufacturing PMI
- US – Non-farm Payrolls
- US – ISM Manufacturing PMI