Weekly Outlook: 2014, June 22 - 29

Dow Jones 30 forecast for the week of June 23, 2014, Technical Analysis

The Dow Jones 30 rose during the course of the week as you can see, moving to the 17,000 area. This area is resisting, so we would believe that a move above 17,000 on a daily close would be enough to get the longer-term traders involved as well. Regardless, this is without a doubt a very positive market, and we do feel that ultimately that does happen. Pullbacks should continue to see plenty of support below, so we will buy supportive candles as they appear after dips.

Silver forecast for the week of June 23, 2014, Technical Analysis

The silver markets had a very strong showing during the course of the week, breaking above the $20.50 level. In fact, Thursday was a source of most of the gains, and it now looks like we are heading towards the $22 handle. It’s at that area that we would expect see a bit of resistance, but if we can get above there we think that the market is probably going to head to the $25 level given enough time.

The silver markets do look bullish in general over the last couple of weeks, and a move above the $22 level would be enough to get us to start thinking that perhaps the trend is starting to change. If that’s the case, we could see explosive moves as the silver market tends to send very still for long periods of time and then suddenly take off in one direction or the other. We believe that the $25 level been at the site of a previous Will be difficult to get above, but once we get above that area, there can be no doubt as to what the future direction of the market will be overall.

If we do pullback from here, we feel that the market will more than likely find plenty of support below, so it’s almost impossible to short it at this point in time. Besides, there isn’t much in the way of room at this point time from a longer-term perspective as the area just below the $19 level has been so supportive. We need to break down significantly below that level in order to get very bearish, so with that being the case we feel that this is essentially at this point in time a “buy only” type of market.

Keep in mind that silver also has an industrial component to it, as it is used as a base metal from time to time in applications for industry. Because of that, it also is not only an anti-dollar play, but it is also reflective on economic conditions.

Gold forecast for the week of June 23, 2014, Technical Analysis

The gold markets initially dipped during the week, but the $1250 level provided enough support to keep the market somewhat afloat, thereby pushing it back above the $1300 level. If we can get to the $1400 level, we then have an inverse head and shoulders, signifying that we should head to the $1600 level where there is a convenient cluster placed. We do ultimately believe that the gold markets go higher, so therefore on a break of the highs from this past week, we would go ahead and start buying

USD/JPY forecast for the week of June 23, 2014, Technical Analysis

The USD/JPY pair went back and forth over the course of the week, as we continue to meander in a fairly tight consolidation area. It’s a bit difficult for longer-term traders to be involved in this market, and until we break well above the 103 level, we do not see much of a trade to the long side. As far selling is concerned, we think that there is simply far too much support below to even consider it at this point in time. Ultimately, we do believe that this market breaks out to the upside, but it might take a while.

USD/CAD forecast for the week of June 23, 2014, Technical Analysis

The USD/CAD pair initially tried to rally during the course of the week, but then fell through the 1.08 level as support came crashing down. However, it now looks as if we will probably test the uptrend line and that means that this market should continue to fall shortly. However, we believe that until that uptrend line is broken, we will not want to sell the market. We are looking for supportive candle below, and fully recognize that we will more than likely test support rather quickly. However, until we get the “all clear” by breaking below the massive support, we are still in “buy only” mode.

NZD/USD forecast for the week of June 23, 2014, Technical Analysis

The NZD/USD pair broke higher during the course of the week, but found enough resistance near the 0.87 level to be pushed back down and form a shooting star. The shooting star of course suggests that the market could pull back from here, but we believe that there is plenty of support below and therefore any pullback should simply be a buying opportunity. On supportive candles below, we would be buyers, even if it’s on the daily chart as we do believe ultimately the move higher prevails and we break above the 0.87 handle to go to the 0.90 handle.

GBP/USD forecast for the week of June 23, 2014, Technical Analysis

The GBP/USD pair went back and forth during the course of the week, but closed above the 1.70 handle, a significant move to the upside. That was a pretty strong barrier for us, and we believe that it opens the way to the 1.75 level as a target. It will probably take a bit of time, but we do believe that eventually that level gets hit. If we pull back from here, we would fully anticipate buyers stepping into the market and lifting the British pound yet again.

EUR/USD forecast for the week of June 23, 2014, Technical Analysis

The EUR/USD pair broke higher during the course of the week, using the 1.35 level as support. That being the case, it looks as we continue to bounce around in this general vicinity, using the 200 pips as the range for the market right now. Long-term traders will probably avoid this market, but short-term traders will probably find it very profitable as it looks very well contained and we have very obvious support and resistance levels. However, if we do get above the 1.37 level, we feel that the market will finally go back towards a 1.40 handle. A move below the 1.35 level since this market down to the 1.33 handle.

Forex - Weekly outlook: June 23 - 27

The dollar ended the week lower against a basket of other major currencies despite small gains on Friday, after the Federal Reserve indicated earlier in the week that rates are likely to remain on hold for some time.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up to 80.41 late Friday from lows of 80.24 on Thursday. For the week, the index lost almost 0.3%.

The greenback weakened broadly after the Fed gave no indication of when interest rates could start to rise at the conclusion of its two-day meeting on Wednesday. In addition, the Fed’s forecast of where interest rates might reach in the long term fell from 4% to 3.75%.

The central bank cut its bond purchases by $10 billion a month, to $35 billion, saying there was "sufficient underlying strength" in the U.S. economy to continue tapering.

Despite this, the Fed also lowered its forecast for growth this year to a range of 2.1% to 2.3% from 2.8 to 3.0% previously, due to "unexpected contractions" in the first quarter as a result of the unusually harsh winter.

The Fed acknowledged the recent increases in inflation and drop in unemployment, but Chair Janet Yellen said no formula was in place for when interest rates would start to rise.

EUR/USD dipped 0.06% to 1.3598 late Friday, but posted a weekly gain of 0.47%.

The dollar pushed higher against the yen, with USD/JPY easing up to 102.07 late Friday from 101.93 on Thursday. For the week, the pair eked out a gain of 0.10%.

The pound slipped lower, with GBP/USD ending Friday’s session at 1.7014, 0.15% lower for the day. For the week, the pair gained 0.22% as demand for sterling continued to be underpinned by the view that the Bank of England will raise interest rates ahead of other central banks.

Elsewhere, the greenback slumped to a five-and-a-half month low against the Canadian dollar on Friday, following the release of stronger-than-forecast data on Canadian inflation and retail sales.

USD/CAD was down 0.56% to 1.0757 late Friday, the weakest level since January 7. For the week, the pair lost 0.93%.

In the coming week, the U.S. is to release data on consumer confidence, durable goods orders and home sales. Preliminary data on manufacturing activity from China and flash estimates on euro zone private sector activity will also be closely watched.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, June 23

• China is to publish the preliminary reading of the HSBC manufacturing index.
• BoJ Governor Haruhiko Kuroda is to speak at an event in Tokyo; his comments will be closely watched.
• The euro zone is to release data on manufacturing and service sector activity, while Germany and France are to release individual reports.
• The U.S. is to release preliminary data on manufacturing activity and private sector data on existing home sales.

Tuesday, June 24

• Switzerland is to publish data on the trade balance, the difference in value between imports and exports.
• In the euro zone, the Ifo Institute is to publish data on German business climate.
• The U.S. is to release private sector data on consumer confidence, as well as a report on new home sales.

Wednesday, June 25

• Market research group Gfk is to publish a report on German consumer climate.
• The U.K. is to release private sector data on retail sales.
• The U.S. is to publish data on durable goods orders, as well as revised data on first quarter growth.

Thursday, June 26

• The Bank of England is to publish its financial stability report and Governor Mark Carney is to hold a press conference to discuss the report.
• The U.S. is to release data on personal income and expenditure, as well as data on inflation linked to personal spending.

Friday, June 27

• New Zealand is to publish data on the trade balance.
• Japan is to release data on retail sales, household spending and inflation.
• In the euro zone, Germany and Spain are to release preliminary data on consumer price inflation, while France is to publish data on consumer spending.
• Elsewhere in Europe, Switzerland is to publish its KOF economic barometer.
• The U.K. is to produce data on the current account and final data on first quarter growth.
• Canada is to release data on raw material price inflation.
• The U.S. is to round up the week with revised data on consumer sentiment.

USD/JPY weekly outlook: June 23 - 27

The U.S. dollar edged higher against the yen on Friday, to eke out a small weekly gain after the Federal Reserve indicated that rates would remain on hold despite the improving U.S. economic outlook.

USD/JPY edged up to 102.07 late Friday from 101.93 on Thursday. For the week, the pair eked out a gain of 0.10%.

The pair is likely to find support at 101.60 and resistance at 102.40.

The greenback came under pressure after the Fed gave no indication of when interest rates could start to rise at the conclusion of its two-day meeting on Wednesday. In addition, the Fed’s forecast of where interest rates might reach in the long term fell from 4% to 3.75%.

The central bank cut its bond purchases by $10 billion a month, to $35 billion, saying there was "sufficient underlying strength" in the U.S. economy to continue tapering.

Despite this, the Fed lowered its forecast for growth this year to a range of 2.1% to 2.3% from 2.8 to 3.0% previously, due to "unexpected contractions" in the first quarter as a result of the unusually harsh winter.

The Fed acknowledged the recent increases in inflation and drop in unemployment, but Chair Janet Yellen said no formula was in place for when interest rates would start to rise.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up to 80.41 late Friday from lows of 80.24 on Thursday. For the week, the index lost almost 0.3%.

Elsewhere, the yen ended the week lower against the firmer euro, with EUR/JPY ending Friday’s session at 138.84, for a weekly gain of 0.59%.

In the coming week, the U.S. is to release what will be closely watched data on consumer confidence, durable goods orders and home sales. Friday’s Japanese data on retail sales and inflation will also be in focus.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, June 23

• Bank of Japan Governor Haruhiko Kuroda is to speak at an event in Tokyo; his comments will be closely watched.
• The U.S. is to release preliminary data on manufacturing activity and private sector data on existing home sales.

Tuesday, June 24

• The U.S. is to release private sector data on consumer confidence, as well as a report on new home sales.

Wednesday, June 25

• The U.S. is to publish data on durable goods orders, as well as revised data on first quarter growth.

Thursday, June 26

• The U.S. is to release data on personal income and expenditure, as well as data on inflation linked to personal spending.

Friday, June 27

• Japan is to release data on retail sales, household spending and inflation.
• The U.S. is to round up the week with revised data on consumer sentiment.