Technical Forecasts

Good morning. The dollar keeps rising against some of its counter parts like EUR and GBP, and there’s a good chance that it will continue to post gains. Here’s an update to the charts posted yesterday.

EURUSD

61.8% fib support was breached and minor rallies toward $1.31 will provide more selling opportunities.
Market sentiment: intraday – bearish, short-term – bearish
Potential trade strategy: to sell at 1.3100, stop above 1.3160, target at 1.2900.



AUDUSD

Resistance around .9350 is in focus and the recovery seems corrective so far, hence a selling opportunity – while being ready to close or reverse in case of a strong breakout above .9350.
Market sentiment: intraday – bearish, short-term – bearish
Potential trade strategy: to sell around .9350, target at .9200, stop above .9420.



EURCAD

Support trendline was breached and the decline is quite strong. A pullback to 1.3680 should provide yet another selling opportunity.
Market sentiment: intraday – bearish, short-term – bullish
Potential trade strategy: to hold short, eventually sell more on pullback to 1.3680, target at 1.35 and maybe below.



USDJPY

Dollar is flirting with resistance around 98.30 and a breakout is in the cards.
Market sentiment: intraday – bullish, short-term – mixed
Potential trade strategy: to buy on break of 98.25/50, stop below 97.50, target at 100.




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Good morning everyone. Thursday’s forecast was in the right direction for the most part, in fact all pairs behaved close to what was thought possible. Yesterday we thought markets might range but that was not the case, but today we may see some ranging & markets could pick a direction in time to come. Will be taking a weak opinion on US Dollar, while Japanese Yen may gain some strength. I’m not adding any hedged pairs to offset the trading risk. Happy trading everyone!!

Forecasts Outlook US Dollar : Weak
Today we're expecting the EURUSD to proceed Long above the barrier levels of 1.30451 and 1.30155.

Fundamental Watch

- N/ A



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The U.S. Comex gold futures touched a low of $1,196.10 on Thursday, and are heading towards a loss of over 24 percent for Q2. Since the recent FOMC meeting on 18-19 June, the gold futures have lost 12 percent, the S&P 500 index has dropped 2.8 percent while the Euro Stoxx 50 index has declined 3 percent. The stocks and commodities markets have not only reacted negatively to a more definitive plan from the Fed to taper its bond purchases but also to the rising bond yields. The U.S. 10-year government bond yield has risen 63bp month-to-date to 2.477 percent. The S&P 500 index rebounded 1.58 percent while the Euro Stoxx 50 index surged 3 percent in the past two days. The Dollar Index finished at 82.902 on Thursday, down from 83.375 at the end of May.

Month-end Liquidation

A few factors have helped to push down the gold prices further this week. The latest catalyst came from the stronger U.S. data. The U.S. pending home sales surged 6.7 percent in May compared to a median forecast of 1 percent while the jobless claims fell 9,000 to 346,000 in the recent week. Institutional investors and traders are liquidating their gold positions for month-end and quarter-end window-dressing. The gold prices have also followed the break-even inflation rate of the 10-year TIPs lower. The holdings in the largest gold ETF, GLD, is now below 1,000 metric tons, back to the level in early 2009. Continuous selling by the ETF investors and the large speculators has led to an oversold position in gold as measured by the RSI, which reached 13.7 on Thursday.

Longer-run Offsetting Factors

While the momentum for gold is clearly down and the investors are disillusioned, several factors can help to prop up the gold market in the second half of 2013 according to GFMS. The sovereign debt crisis in Europe and the U.S. may resurface later this year. The U.S. economy may recover more slowly and cause the Fed to postpone the bond purchases tapering. The equity markets may hit a wall. The supply of gold will be cut as gold prices plunge below the cash costs. Also, the fabrication demand may rise as a result of the fall in gold prices.

What to Watch

We will watch the final June U.S. and China manufacturing ISM data and the E-17 unemployment rate on 1 July, the ECB’s interest rates decision and press announcement on 4 July as well as the U.S. June non-farm payrolls and unemployment rate on 5 July.


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The pair is trading along an downtrend.The downtrend may be expected to continue while pair is trading below resistance level 1.5355, which will be followed by reaching support level 1.5120 and then 1.4920.

An uptrend will start as soon, as the pair rises above resistance level 1.5355, which will be followed by moving up to resistance level 1.5535 and then 1.5705, 1.5880.
Supports: 1.5200, 1.5120, 1.4920
Resistances: 1.5535, 1.5705, 1.5880, 1.6000





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We have been quite vocal about the Chinese threat for a longer while. Even though Chinese equities were weak for some time, global markets ignored the issue. Even though the PBOC calmed the markets, the problem is structural and probably deeper than many realize.

In June interest rates on the interbank in China spiked through the roof, reaching some 13% at a time. The PBOC reluctantly stepped in and a full blown crisis has been averted but the problems merely revealed a peak of an iceberg.

Heading into this year we were quite stunned how many institutions (including the World Bank and the IMF) saw growth in China above 8% and actually some acceleration. Instead we reiterated that the Chinese had two options: slowdown now or a crash later. A makeover at the top favored the first choice and indeed it seems the one that has been chosen. With a perspective of 10 years the authorities could digest few years with a slower growth as a price of avoiding a complete meltdown that would be inevitable without reforms.

The recent tensions on the Chinese market are a direct consequence of this choice. As the authorities try to cool down the residential market, the PBOC aims at doing as little as possible to avoid further escalation of the structural problem just to buy some time.

That means investors should not be misled by a return of interbank rates to normal levels. The authorities are very likely to maintain a tightening approach because there is a lot to cool. The investment to GDP ratio in the residential sector leaped to the new historical high and the demand remains strong. That means it will take more to actually make an impact here. And that means a deeper slowdown. And finally a word of caution – as the Chinese try to strike a balance between growth and restructuring they may overdose and as we saw during the last weeks – things may quickly become shaky.


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The pair is trading along an uptrend.

The uptrend may be expected to continue while pair is trading above support level 1180, which will be followed by reaching resistance level 1332.An downtrend will start as soon, as the pair drops below support level 1180, which will be followed by moving down to support level 1080.
Supports: 1180, 1080
Resistances: 1278, 1398, 1332, 1388





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Good morning everyone. Tuesday’s forecasts went in out direction for the most part, except for the two hedged pairs all others behaved close to what was thought possible, so looks like the hedge pairs correlated after all. As suspected markets were ranging and by the close could be hinting on a direction to come, we will have to wait and observe today’s performance to confirm any direction. For today I am going to take a mixed stance on US Dollar while Japanese Yen could loose some strength. I’m adding two hedged pairs to offset the trading risk. Happy trading everyone!!

Forecasts Outlook US Dollar : Mixed Sentiments
Today we're expecting the EURUSD to proceed Short below the barrier levels of 1.30423 and 1.30216.

Fundamental Watch - Services PMI
- ADP Non-Farm Employment Change
- Trade Balance
- Unemployment Claims
- ISM Non-Manufacturing PMI
- BOJ Gov Kuroda Speaks
- Building Approvals m/m






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Happy Independence Day to everyone in the US. Wednesday’s forecasts went in our direction for the most part, all pairs behaved close to what was thought possible. As suspected markets were ranging and by the close we thought it could be hinting on a direction to come, we will have to wait and observe today’s performance also to confirm any direction. We could have a slow day for the US Dollar due to the public holiday in the US. For today I am going to take a mixed stance on US Dollar while Japanese Yen could loose some strength. I’m adding a hedged pair to offset the trading risk. Happy trading everyone!!

Forecasts Outlook US Dollar : Mixed Sentiments
Today we're expecting the EURUSD to proceed Long above the barrier levels of 1.29864 and 1.29549.

Fundamental Watch - Asset Purchase Facility
- Official Bank Rate
- Tentative GBP
- MPC Rate Statement
- Minimum Bid Rate
- ECB Press Conference





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Resistance:	1.2910	1.2931-37	1.2955-65	1.2983
Support:	1.2882-90	1.2855	1.2837	1.2810-20

BIAS: We should see losses to 1.2855 - with any pullback holding below 1.2885-05 for further lossesMAIN ANALYSIS: Wednesday didn't develop as I had expected with the stronger recovery from 1.2925 reaching the 1.3030-40 resistance area. That held and from there we have seen losses down to 1.2882. From this corrective high we should see losses to 1.2855. This should provoke a shallow correction holding below 1.2880-05. From here we should see losses once again and down to 1.2837-55 and later (after a correction) to the 1.2773 projection target. I feel this will hold for a further correction higher.

COUNTER ANALYSIS: Only a direct break above 1.2945 would raise the prospect of the alternative complicated consolidation that would eventually imply gains back to 1.3040-50. I can't see this getting any higher but do note the 1.3130-50 area.
Good trading
Ian Copsey


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