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USD Index hits one-month high, JPY Weakens post-BOJ

What are the implications of the recent US dollar strength and Japanese Yen weakness?

Read below what our desk thinks, and the important levels to watch this week.

This market brief is an overview of the week ahead and some of the events we see as being important to the markets.

Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes. For up-to-the-minute market analysis see our live trading room.

INDICES

AUSTRALASIA

ASX – 7713 (-53 or -0.68%)

The ASX dropped 0.68% this week, indicating a weak downtrend. The move isn’t significant, but it’s worth monitoring.

VOLATILITY ALERTS:

Tue 14:30 – AUD RBA Interest Rate Decision
Fri 09:00 – AUD Judo Bank Services PMI (Jun)
Fri 09:00 – AUD Judo Bank Manufacturing PMI (Jun)

For a move to the upside, we must now see this market close above 7733. Should this occur, we will look for a move into 7751, and if the upside momentum is strong, we could see a move higher into 7769 and potentially 7810.

If we cannot close above 7693, we could see a move back to test 7675 before a pause to the downside. A break below this level may result in a sharp move lower into 7657, and any further breaks to the downside may see a bigger move into 7614.

EUROPE

DAX (30) – 18011 (-662 or -3.55%)

The DAX has dropped by a significant 3.54% this week, indicating a strong downward trend and a sizable move.

VOLATILITY ALERTS:

Mon 21:30 – EUR ECB Guindos Speech
Tue 19:00 – EUR CPI (May)
Tue 19:00 – EUR ZEW Economic Sentiment Index (Jun)
Tue 23:30 – EUR ECB Guindos Speech
Fri 17:15 – EUR HCOB Services PMI (Jun)
Fri 17:15 – EUR HCOB Manufacturing PMI (Jun)
Fri 17:30 – EUR HCOB Services PMI (Jun)
Fri 17:30 – EUR HCOB Manufacturing PMI (Jun)
Fri 18:00 – EUR HCOB Manufacturing PMI (Jun)
Fri 18:00 – EUR HCOB Services PMI (Jun)

For a move to the upside, we must now see this market close above 18056. Should this occur, we will look for a move into 18081, and if the upside momentum is strong, we could see a move higher into 18116 and potentially 18136.

If we cannot close above 18056, we could see a move back to test 17906 before a pause to the downside. A break below this level may result in a sharp move lower into 17871, and any further breaks to the downside may see a bigger move into 17786.

US

S&P 500 – 5437 (+137 or +2.58%)

The SPX rose 2.58% from 5300 to 5437 this week, indicating a strong and significant upward trend.

VOLATILITY ALERTS:

Mon 22:30 – USD NY Empire State Manufacturing Index (Jun)
Tue 22:30 – USD Retail Sales Ex Gas/Autos MoM (May)
Tue 22:30 – USD Retail Sales YoY (May)
Tue 22:30 – USD Retail Sales Ex Autos MoM (May)
Tue 22:30 – USD Retail Sales MoM (May)
Thu 22:30 – USD Continuing Jobless Claims (Jun/08)
Thu 22:30 – USD Initial Jobless Claims (Jun/15)
Thu 22:30 – USD Jobless Claims 4-week Average (Jun/15)
Thu 22:30 – USD Building Permits (May)
Fri 23:45 – USD S&P Global Manufacturing PMI (Jun)
Fri 23:45 – USD S&P Global Services PMI (Jun)
Sat 00:00 – USD Existing Home Sales MoM (May)
Sat 00:00 – USD Existing Home Sales (May)

For a move to the upside, we must now see this market close above 5450. Should this occur, we will look for a move into 5464, and if the upside momentum is strong, we could see a move higher into 5477 and potentially 5504.

If we cannot close above 5423, we could see a move back to test 5409 before a pause to the downside. A break below this level may result in a sharp move lower into 5396, and any further breaks to the downside may see a bigger move into 5370.

FOREX

AUD/USD – 0.6614 (-32 or -0.48%)

The AUDUSD is trending downwards with a slight 0.48% decline, indicating a minor weakening from last week’s price.

VOLATILITY ALERTS:

Tue 14:30 – AUD RBA Interest Rate Decision
Fri 09:00 – AUD Judo Bank Services PMI (Jun)
Fri 09:00 – AUD Judo Bank Manufacturing PMI (Jun)
Mon 22:30 – USD NY Empire State Manufacturing Index (Jun)
Tue 22:30 – USD Retail Sales Ex Gas/Autos MoM (May)
Tue 22:30 – USD Retail Sales YoY (May)
Tue 22:30 – USD Retail Sales Ex Autos MoM (May)
Tue 22:30 – USD Retail Sales MoM (May)
Thu 22:30 – USD Continuing Jobless Claims (Jun/08)
Thu 22:30 – USD Initial Jobless Claims (Jun/15)
Thu 22:30 – USD Jobless Claims 4-week Average (Jun/15)
Thu 22:30 – USD Building Permits (May)
Fri 23:45 – USD S&P Global Manufacturing PMI (Jun)
Fri 23:45 – USD S&P Global Services PMI (Jun)
Sat 00:00 – USD Existing Home Sales MoM (May)
Sat 00:00 – USD Existing Home Sales (May)

For a move to the upside, we must now see this market close above 0.6630. Should this occur, we will look for a move into 0.6647, and if the upside momentum is strong, we could see a move higher into 0.6662 and potentially 0.6697.

If we cannot close above 0.6628, we could see a move back to test 0.6641 before a pause to the downside. A break below this level may result in a sharp move lower into 0.6662, and any further breaks to the downside may see a bigger move into 0.6682.

EUR/USD – 1.0704 (-145 or -1.34%)

EURUSD is trending downward with a notable 1.34% decline, indicating a relatively strong bearish move this week.

VOLATILITY ALERTS:

Mon 21:30 – EUR ECB Guindos Speech
Tue 19:00 – EUR CPI (May)
Tue 19:00 – EUR ZEW Economic Sentiment Index (Jun)
Tue 23:30 – EUR ECB Guindos Speech
Fri 17:15 – EUR HCOB Services PMI (Jun)
Fri 17:15 – EUR HCOB Manufacturing PMI (Jun)
Fri 17:30 – EUR HCOB Services PMI (Jun)
Fri 17:30 – EUR HCOB Manufacturing PMI (Jun)
Fri 18:00 – EUR HCOB Manufacturing PMI (Jun)
Fri 18:00 – EUR HCOB Services PMI (Jun)
Mon 22:30 – USD NY Empire State Manufacturing Index (Jun)
Tue 22:30 – USD Retail Sales Ex Gas/Autos MoM (May)
Tue 22:30 – USD Retail Sales YoY (May)
Tue 22:30 – USD Retail Sales Ex Autos MoM (May)
Tue 22:30 – USD Retail Sales MoM (May)
Thu 22:30 – USD Continuing Jobless Claims (Jun/08)
Thu 22:30 – USD Initial Jobless Claims (Jun/15)
Thu 22:30 – USD Jobless Claims 4-week Average (Jun/15)
Thu 22:30 – USD Building Permits (May)
Fri 23:45 – USD S&P Global Manufacturing PMI (Jun)
Fri 23:45 – USD S&P Global Services PMI (Jun)
Sat 00:00 – USD Existing Home Sales MoM (May)
Sat 00:00 – USD Existing Home Sales (May)

For a move to the upside, we must now see this market close above 1.073. Should this occur, we will look for a move into 1.076, and if the upside momentum is strong, we could see a move higher into 1.078 and potentially 1.084.
If we cannot close above 1.067, we could see a move back to test 1.065 before a pause to the downside. A break below this level may result in a sharp move lower into 1.062, and any further breaks to the downside may see a bigger move into 1.053.

GBP/USD – 1.2681 (-58 or -0.46%)

GBPUSD is trending downward, with a moderate 0.46% drop this week. It signals bearish momentum but not a strong sell-off.

VOLATILITY ALERTS:

Wed 16:00 – GBP Inflation Rate YoY (May)
Thu 21:00 – GBP BoE Interest Rate Decision
Fri 16:00 – GBP Retail Sales MoM (May)
Fri 16:00 – GBP Retail Sales YoY (May)
Fri 16:00 – GBP Retail Sales ex Fuel MoM (May)
Fri 16:00 – GBP Retail Sales ex Fuel YoY (May)
Fri 18:30 – GBP S&P Global Services PMI (Jun)
Fri 18:30 – GBP S&P Global Manufacturing PMI (Jun)
Mon 22:30 – USD NY Empire State Manufacturing Index (Jun)
Tue 22:30 – USD Retail Sales Ex Gas/Autos MoM (May)
Tue 22:30 – USD Retail Sales YoY (May)
Tue 22:30 – USD Retail Sales Ex Autos MoM (May)
Tue 22:30 – USD Retail Sales MoM (May)
Thu 22:30 – USD Continuing Jobless Claims (Jun/08)
Thu 22:30 – USD Initial Jobless Claims (Jun/15)
Thu 22:30 – USD Jobless Claims 4-week Average (Jun/15)
Thu 22:30 – USD Building Permits (May)
Fri 23:45 – USD S&P Global Manufacturing PMI (Jun)
Fri 23:45 – USD S&P Global Services PMI (Jun)
Sat 00:00 – USD Existing Home Sales MoM (May)
Sat 00:00 – USD Existing Home Sales (May)

For a move to the upside, we must now see this market close above 1.271. Should this occur, we will look for a move into 1.274, and if the upside momentum is strong, we could see a move higher into 1.278 and potentially 1.284.

If we cannot close above 1.266, we could see a move back to test 1.262 before a pause to the downside. A break below this level may result in a sharp move lower into 1.258, and any further breaks to the downside may see a bigger move into 1.252.

USD/JPY – 157.54 (+16 or +0.1%)

The USDJPY is trending slightly upwards with a small move of 0.10%, indicating a weak bullish trend.

VOLATILITY ALERTS:

Wed 09:50 – JPY Balance of Trade (May)
Fri 09:30 – JPY Inflation Rate YoY (May)
Mon 22:30 – USD NY Empire State Manufacturing Index (Jun)
Tue 22:30 – USD Retail Sales Ex Gas/Autos MoM (May)
Tue 22:30 – USD Retail Sales YoY (May)
Tue 22:30 – USD Retail Sales Ex Autos MoM (May)
Tue 22:30 – USD Retail Sales MoM (May)
Thu 22:30 – USD Continuing Jobless Claims (Jun/08)
Thu 22:30 – USD Initial Jobless Claims (Jun/15)
Thu 22:30 – USD Jobless Claims 4-week Average (Jun/15)
Thu 22:30 – USD Building Permits (May)
Fri 23:45 – USD S&P Global Manufacturing PMI (Jun)
Fri 23:45 – USD S&P Global Services PMI (Jun)
Sat 00:00 – USD Existing Home Sales MoM (May)
Sat 00:00 – USD Existing Home Sales (May)

For a move to the upside, we must now see this market close above 157.93. Should this occur, we will look for a move into 158.33, and if the upside momentum is strong, we could see a move higher into 158.72 and potentially 159.51.

If we cannot close above 157.93, we could see a move back to test 158.33 before a pause to the downside. A break below this level may result in a sharp move lower into 158.72, and any further breaks to the downside may see a bigger move into 159.51.

COMMODITIES

GOLD – 2328 (+7 or +0.3%)

Gold is trending up with a modest 0.3% increase this week, indicating a steady but cautious upward momentum.

For a move to the upside, we must now see this market close above 2334. Should this occur, we will look for a move into 2339, and if the upside momentum is strong, we could see a move higher into 2345 and potentially 2357.

If we cannot close above 2323, we could see a move back to test 2316 before a pause to the downside. A break below this level may result in a sharp move lower into 2310, and any further breaks to the downside may see a bigger move into 2299.

CRYPTOS

BITCOIN – 66593 (-1775 or -2.6%)

Bitcoin’s price has dropped by 2.59% this week, indicating a noticeable, but not drastic, downward trend.

For a move to the upside, we must now see this market close above 66759. Should this occur, we will look for a move into 66892, and if the upside momentum is strong, we could see a move higher into 67026 and potentially 67322.

If we cannot close above 66759, we could see a move back to test 66260 before a pause to the downside. A break below this level may result in a sharp move lower into 66094, and any further breaks to the downside may see a bigger move into 65798.

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