Market Outlook for 9thJune 2016

Market Outlook for 9thJune 2016

New Zealand dollar was the top performer of the Asian session on Thursday, rallying to fresh one-year high after the Reserve Bank of New Zealand kept interest rates unchanged at 2.25%. The action was widely expected, although some investors were betting on a rate cut.
Kiwi was up around 1.7% vs the US dollar and hit session high at $0.7145.
US dollar remains at the back foot, with Dollar Index trading near 5-week low as prospects of Fed’s rate hike in the near-term are fading.
Euro cracked important 1.1400 resistance zone against the dollar, showing scope for further gains on weakening dollar.
The greenback remains weak against yen, holding near Monday’s low at 106.35, which is in near-term focus.
Sterling remains highly volatile and is back to strong 1.4500 support zone, after yesterday’s bounce on upbeat Industrial Production data, proved to be short-lived. As UK referendum on whether the country stays in European Union or not, nears. Pound was driven recently by results of the latest polls, but remains within recently established congestion within 1.4350 and 1.4650, lacking signs of clear direction for now.
US Crude oil price establishes above $51 per barrel, posting new 2016 highs, on fresh bullish acceleration, triggered by fall of US crude inventories for the third consecutive week and also being driven higher by weaker dollar.
Brent oil hit new yearly high at $52.80, eyeing strong barriers at $54.00/30 zone.
Spot Gold also benefited on weaker dollar and posted three-week high at $1266 on Thursday, following Wednesday’s strong acceleration higher. Yellow metal shows strong bullish sentiment and could travel higher, with technicals and profit taking actions, expected to hold the price in consolidation mode in the near-term.

 

Today’s highlights

German trade surplus widened in April to 24B Euros from 21.4B forecast and upward-revised March’s surplus at 23.7B Euros.
ECB’s chief Draghi said that euro zone productivity has been eroded by weak growth during past years that is rising risk of permanent damage to its economic health.
Draghi also said that the ECB do not let inflation undershoot the objective for longer than is avoidable.
US weekly jobless claims are the highlight of the American session, forecasted to edge higher, based on 269K forecast against last week’s 267K release.

 

Important levels

EURUSD consolidates around 1.1400 handle, which was cracked overnight. Strong bullish sentiment favors further upside extension, with break above key obstacles at 1.1414/16 (daily cloud top / Fibo 61.8%) required to confirm bullish resumption towards 1.1445/1.1500.
However, extended consolidation could be expected while the price action stays capped by daily cloud top.
Initial support lies at 1.1369, followed by 1.1352 and 1.1324, which marks downside trigger.

GBPUSD is at the back foot and broke below 1.4500 handle, following upside rejection at 1.4598 on Wednesday. Near-term focus turned lower, with immediate support at 1.4431 and 1.4413, guarding 1.4385 and key 1.4350 support which also marks the floor of near-term congestion.
Resistances lay at 1.4525; 1.4598 and 1.4655.

NZDUSD hit one-year high on on fresh bullish acceleration that emerged above weekly cloud top. Bulls are looking for next barriers at 0.7170 and 0.7230 in extension.
Initial supports lay at 0.7100 and 0.7074, followed by 0.7000/0.6980.

CRUDE OIL holds above $51 per barrel, after fresh bullish acceleration broke above daily cloud and took out strong $50.89 resistance.
Fresh upside action could stretch towards $52.81, with next target at $54.06.
Supports lay at $50.89 and $50.00, followed by $49.46/00. Technical easing could be expected before bulls resume., Market Analysis