Mild Market Weakness in Quiet Start to the Week

U.S. Dollar Trading (USD) gained on the back of Euro weakness with traders still buying the Dollar for its safe haven status. May Core PCE increased 0.2% vs. 0.1% previously and Personal income increased 0.4% m/m. In US stocks, DJIA -5 points closing at 10138, S&P -2 points closing at 1074 and NASDAQ -2 points closing at 2221. Looking ahead, June CB Consumer Confidence forecast at 62.8 vs. 63.3 previously.

The Euro (EUR) was the weakest currency in the market as European Banking concerns weighed and EUR/GBP pushed to fresh year lows. June German CPI was at 0.1% as expected m/m. EUR/JPY struggled and remained under the key Y110 level into the NY close. EUR/USD traded with a low of 1.2264 and a high of 1.2399 before closing at 1.2280. Looking ahead, June Economic Sentiment is forecast at 98.2 vs. 98.4 previously.

The Japanese Yen (JPY) USD/JPY found support at Y89.10 but the rebound was limited and the crosses remain soggy. AUD/JPY and EUR/JPY fell back but the selling was not aggressive and GBP/JPY finished higher as cable outperformed the rest of the market. Japanese Retail Sales Slumped to 2.8% y/y in May vs. 4.9% in April. Overall the USDJPY traded with a low of 89.05 and a high of 89.49 before closing the day around 89.35 in the New York session. UPDATE May Unemployment Rate increases to 5.2% vs. 5.0% forecast.

The Sterling (GBP) broke above 1.5100 as traders seized upon hawkish comments from BoE member Sentence that the Sterling could be undervalued. EUR/GBP continued its grind lower with 0.8100 the next target on the horizon. Overall the GBP/USD traded with a low of 1.5015 and a high of 1.5132 before closing the day at 1.5090 in the New York session. Looking ahead, May Mortgage Approvals are forecast at 51k vs. 49k previously.

The Australian Dollar (AUD) found resistance in Asia at .8780 before slumping with the Euro to test support at 0.8710. Sentiment towards the Aussie is mixed with risk appetite and political risk adding uncertainty to the medium term outlook. Overall the AUD/USD traded with a low of 0.8690 and a high of 0.8779 before closing the US session at 0.8710.

Oil & Gold (XAU) Gold failed in an attempt to break the previous high above $1260 and crashed on heavy profit taking nearly $30 an ounce. Overall trading with a low of USD$1235 and high of USD$1263 before ending the New York session at USD$1239 an ounce. Oil fell back as the rally from Friday ran out of steam. WTI Oil Closed -$0.61 at $78.25 a barrel.

TECHNICAL COMMENTARY

Currency
Sup 2
Sup 1
Spot
Res 1
Res 2

EUR/USD
1.2045
1.2209
1.2280
1.2487
1.2672

USD/JPY
87.95
88.97
89.40
90.59
91.48

GBP/USD
1.4646
1.4803
1.5105
1.5122
1.5219

AUD/USD
0.8506
0.8582
0.8710
0.8865
0.9027

XAU/USD
1215.00
1224
1241
1265
1300.00

OIL/USD
75.00
78.00
78.30
80.00
81.50

Euro - 1.2280

Initial support at 1.2209 (June 23 low) followed by 1.2045 (June 11 low). Initial resistance is now located at 1.2487 (June 21 high) followed by 1.2672 (May 21 high)

Yen - 89.40

Initial support is located at 88.97 (May 20 low) followed by 87.95 (May 6 low). Initial resistance is now at 90.59 (June 23 high) followed by 91.48 (June 21 high).

Pound - 1.5105

Initial support at 1.4803 (Jun 23 low) followed by 1.4646 (Jun 17 low). Initial resistance is now at 1.5122 (Jun 28 high) followed by 1.5219 (76.4% 0f 1.5524-1.4231).

Australian Dollar - 0.8710

Initial support at 0.8582 (June 16 low) followed by the 0.8506 (June 15 low). Initial resistance is now at 0. 8865 (May 17 high) followed by 0.9027 (May 17 high).

Gold - 1241

Initial support at 1224 (June 23 low) followed by 1215 (June 10 low). Initial resistance is now at 1265 (June 21 high) followed by 1300 (Round Number).

Oil - 78.30

Initial support at 78.00 (Intraday Support) followed by 75.00 (Intraday Support). Initial resistance is now at 80.00 (Intraday Resistance) followed by 81.50 (Intraday Resistance).