The GBP/USD has had a bullish week but is probably worth noting that we gave back significant gains on Friday as a jobs number in America came out much hotter than anticipated. Because of this, we continue to drift around in the same consolidation area that we have been in, with an eye on the 1.2550 level as resistance that extends to the 1.2650 level as well. On the downside, we have the 1.2350 level as support, followed by the 50-EMA. I think at this point time, we are more likely than not going to continue seeing back-and-forth trading.
The EUR/USD initially fell below the uptrend line that has been so important for so long, but then turned around to recover a bit. It’s probably worth noting that we also broke down below the 50-Week EMA as well, so that also comes into the picture as a potential sign of support. That being said, on June 14 and June 15 we have central bank meetings from both economies, so the next week could be a little bit noisy, with perhaps a slight tilt to the upside. That being said, if we were to break down below the bottom the candlestick, the bottom could fall out.
The USD/JPY fell significantly during the course of the week to reach the ¥138 level, an area that was the previous resistance. Market memory came into the picture and traders got long again. The candlestick looks as if it is a sign that we are getting ready to go higher, so if we were to break above the top of the candlestick from both this past weekend and one before it, then I think it’s probably only a matter of time before the US dollar goes racing higher against the Japanese yen, which of course is struggling with the idea of the Bank of Japan continuing its yield curve control policy.
The USD/CAD has gotten hammered against the Canadian dollar as oil markets took off for the week. That being said, we are approaching significant support so I’m looking for maybe a little bit more follow-through, and then eventually dip buying later this week. The US dollar breaking below the 1.33 level would be very negative, but right now I just don’t see having this type of momentum. This would be especially true considering the following week features a Federal Reserve meeting.
The West Texas Intermediate Crude Oil market initially fell during the trading week, only to turn around to show signs of life again. The weekly candlestick is a hammer, and it sits just below the crucial 200-Week EMA. Because of this, I would treat a breakout to the upside of the previous week as a very bullish sign, perhaps opening up the WTI market for a move to the $80 level, which consequently is where we have the 50-Week EMA. Alternatively, if we were to break down below the $70 level, we could see a significant selloff.
Gold markets initially rallied during the week but finished on a very negative note. At this point, we are testing a major uptrend line from the channel that I have been following, and if we were to break down below that channel, then I think we have a move to the $1900 level waiting to happen. In the short term, I do believe that the $2000 level could be targeted, and a move above there obviously would be very bullish.
The US dollar initially rallied against the Swiss franc, but then gave back gains near the 0.91 level. By doing so, it does show that we are going to struggle to go higher, it would not be overly surprising to see a bit of a pullback this week. However, if we were to break above the top the weekly candlestick that would be very bullish sign, opening up the 0.92 level, and then eventually the 0.94 level. On a break below the bottom of the weekly candlestick, we could see this market retest the 0.88 level underneath, which obviously has been important in the recent past, as well as historically speaking.
The AUD/USD initially fell during the week but then turned around to rally toward the 0.66 level. This is an area that I think a lot of people will be paying attention to as it was previous support from the consolidation area. Ultimately, if we break down below the 0.66 level, it’s very likely that we drop to the 0.65 level eventually. I don’t have any interest whatsoever in buying this pair, we started to weekly the 0.68 level above, which would take quite a bit of momentum.