NEWS / Monetary Policy

Daily Technicals: High risk for a Euro pullback

by Marc Spaelti

EURUSD: Bearish trend held and the Dollar advanced to 1.2565, short-term bearish trend-line advanced to 1.2595 this morning. It still is bearish, however long-term support around the 1.2500 is attracting lots of buyers and we have come a long way from 1.2965, risk to bottom out around and to reverse is high. Buy on a break of the trend-line for a minimum pullback to 1.2645, 1.2685 is likely. Key resistance at 1.2750, with the underlying view that the week will end underneath of 1.2640, the idea is to trade a 1.2550/1.2750 range over the coming days, so sell any tops above 1.27 for a return back lower.

GBPUSD: Cable continues to trade in uncommon narrow ranges around 1.8420, we feel there is only little space to the downside, 1.8350 is key support, and lots of space to swing back to at least 1.8530, 1.8600 is possible. Initial support 1.8405, initial resistance 1.8460.

USDJPY: The Dollar held, but did not push further. 114.60 resistance, 115.10 strong, we get the feeling the last 10-days bull-run is choking, expect to pull back to 113.85 or better, test the 113.40 key support. Medium-term trend-line lies at 112.70. On top, bypassing 115.30 is bullish for 116.75.

USDCHF: Went nowhere on Monday, chart-levels unchanged with key support at the 1.2240/60 area and bullish outlook towards 1.25. Initial resistance 1.2365, strong 1.2430 and key 1.2470 ??“ this is the expected ???cross-over-point??™ where EURUSD rate = USDCHF, an important barrier the Dollar needs to overcome to return to a medium-term bullish outlook.

@08:30GMT UK CPI May
@09:00GMT German ZEW Economic Sentiment Index June
@12:30GMT US PPI, Retail Sales May
@14:00GMT US Business Inventories April