From the city that loves to trade, my name is Kiana Danial, they call me Invest Diva, the go to investing advisor who helps you make money the right way. Here is your diamond analysis of a currency pair dancing the week away on the daily forex dance floor.
The pick of the day is EUR/USD as Mr. Euro drags Ms. USA down towards our target at 1.345 and 1.33 in extension.
Mr. Euro and Ms. USA are bouncing between the 23% and 38% Fibonacci levels after reaching a top at 1.39. The pair is dancing below the Ichimoku cloud after breaking below a Rising Wedge patter, which is a reversal patter. So we still see further down moves by Mr. euro as he dances against Ms. USA. Our next targets are 1.345 and 1.33 in extension. Now if the pair suddenly decides to go nuts and break above 1.378, we could see further upside with 1.4 & 1.4245 as targets.
Intraday we could see some up moves towards an intraday top at 1.363 and 1.365 in extension, so I’m planning to enter a sell position at one of these points.
Market News
A slow start to the European trading week yesterday, as markets didn’t pick up and run with the ball that China passed them. News that the world’s largest manufacturing sector had picked up for the first time in six months provided a kick start to Asian trading, but worries closer to home dragged European markets into the red from fairly early on in the day.
A positive to come from Ukraine is news of a ceasefire until the 27th June. The ceasefire has been called by the self-proclaimed prime minister of the Donetsk People’s Republic, who wants to see more dialogue between Kiev, Moscow and separatists. President Obama also spoke to Vladmir Putin yesterday, urging him to stop weapons flows in Ukraine and also end any support for separatists. Mr Obama gently reminded Mr Putin that more sanctions loom should that not happen. Angela Merkel might have backed up Mr Obama’s, otherwise empty, words by saying that Russia isn’t taking steps to end the destabilisation and that she expects a third level of sanctions to be imposed – given both leaders’ preference for conversation over action, we’re doubtful this had Vladmir Putin worried.
Russia might also be stepping on toes in Bulgaria, according to The FT. Russia’s largest state owned bank, VTB, has apparently stepped in to bail out a Bulgarian bank that was nationalised over the weekend. VTB is a large stakeholder in the bank and it is probably a fairly clean cut case of protecting its interests, but given the current tensions with Ukraine, the move is a reminder of just how closely tied Sofia and Moscow are.
Further cross-border M&A activity was talked about yesterday as American agriculture business Monsanto eyes up a tax driven takeover of Swiss business Syngenta. The $40bn takeover has been shot down by Syngenta, but may not be dead and buried yet. This comes after UK firm shire batted off advances from US pharmaceuticals business AbbVie and AstraZeneca managed to hold off the advances of Pfizer. The open plays towards finding a more tax efficient domicile must be infuriating members of the G8 who talked so tough on tax just a year ago.
Looking at today, we come in off the back of a very quiet Asian session, with light volumes and muted news flows. We do have Japanese PM shinzo Abe speaking in a couple of hours’ time, promising to give more details on his ‘third arrow’ of Abenomics – the third part of his plan to get the country out of the hole it was in.
On top of that, there will be a lot of focus on Mark Carney’s testimony to the Treasury Select Committee this morning. Mr Carney will sit alongside colleagues and speak about the May inflation report, which should give Sterling plenty of attention, particularly if we hear anything about inflation not posing downward threats.
If that wasn’t enough, German IFO data will be a market mover and Italian PM Renzi will be speaking about Italy’s six month presidency of the EU, which starts on July 1st, and his vision for the direction the EU will take during that time (and, quite possibly, who he wants as president). We’ll give you the summary of what went on, with all of the above, tomorrow.
Long term traders. Don’t sweat the small losses and look at the big picture. Short term traders, invest responsibly. And wait, are we hooked up on the social media? To get the most recent intraday updates, don’t forget to follow Invest Diva on Twitter and Facebook.
Intraday Forex Technical Levels
GBP/USD Intraday: under pressure.
Invest Diva likes: Short positions below 1.7 with targets @ 1.695 & 1.6915 in extension.
If pairs go nuts: Above 1.7 look for further upside with 1.7035 & 1.706 as targets.
What’s up on the forex dance floor: The pair stands below its new resistance and remains under pressure.
Supports and resistances:
1.706
1.7035
1.7
1.6965 Last
1.695
1.6915
1.688
USD/JPY Intraday: bullish bias above 101.8.
Invest Diva likes: Long positions above 101.8 with targets @ 102 & 102.15 in extension.
If pairs go nuts: Below 101.8 look for further downside with 101.7 & 101.6 as targets.
What’s up on the forex dance floor: A support base at 101.8 has formed and has allowed for a temporary stabilisation.
Supports and resistances:
102.3
102.15
102
101.94 Last
101.8
101.7
101.6
USD/CHF Intraday: under pressure.
Invest Diva likes: Short positions below 0.8955 with targets @ 0.892 & 0.8905 in extension.
If pairs go nuts: Above 0.8955 look for further upside with 0.8975 & 0.8985 as targets.
What’s up on the forex dance floor: The pair stands below its resistance and remains under pressure.
Supports and resistances:
0.8985
0.8975
0.8955
0.8941 Last
0.892
0.8905
0.8895
NZD/USD Intraday: turning up.
Invest Diva likes: Long positions above 0.8655 with targets @ 0.8725 & 0.875 in extension.
If pairs go nuts: Below 0.8655 look for further downside with 0.8635 & 0.86 as targets.
What’s up on the forex dance floor: The RSI is bullish and calls for further advance.
Supports and resistances:
0.878
0.875
0.8725
0.8696 Last
0.8655
0.8635
0.86
AUD/USD Intraday: under pressure.
Invest Diva likes: Short positions below 0.9405 with targets @ 0.9345 & 0.9325 in extension.
If pairs go nuts: Above 0.9405 look for further upside with 0.9445 & 0.9465 as targets.
What’s up on the forex dance floor: The RSI is mixed with a bearish bias.
Supports and resistances:
0.9465
0.9445
0.9405
0.9363 Last
0.9345
0.9325
0.93
USD/CAD Intraday: the downside prevails.
Invest Diva likes: Short positions below 1.078 with targets @ 1.071 & 1.0675 in extension.
If pairs go nuts: Above 1.078 look for further upside with 1.0805 & 1.0835 as targets.
What’s up on the forex dance floor: Even though a continuation of the technical rebound cannot be ruled out, its extent should be limited.
Supports and resistances:
1.0835
1.0805
1.078
1.0741 Last
1.071
1.0675
1.064
US Indexes Levels
S&P500 (CME)
Short positions below 1960 with targets @ 1937 & 1924 in extension.
Alternative scenario: Above 1960 look for further upside with 1967 & 1975 as targets.
Dow Jones (CBT)
Short positions below 16910 with targets @ 16625 & 16550 in extension.
Alternative scenario: Above 16910 look for further upside with 17000 & 17090 as targets.
Nasdaq 100 (CME)
Short positions below 3828 with targets @ 3772 & 3755 in extension.
Alternative scenario: Above 3828 look for further upside with 3849 & 3855 as targets.
Russell 2000 (ICE)
Short positions below 1188 with targets @ 1162 & 1155 in extension.
Alternative scenario: Above 1188 look for further upside with 1195 & 1200 as targets.
Precious Metals
Gold
Gold is challenging a key declining trend line drawn from the top of October 2012. Despite new bullish technical developments from technical indicators we remain cautiously bearish as long as the key declining trend line drawn from the top of October 2012 is still in place. A new down leg towards 1235 cannot be ruled out as long as 1332 (76.4% Fibonacci retracement of the previous bullish run started in December 2013) remains a resistance
Alternatively, a break above 1332 would turn the outlook bullish and would call for a recovery towards 1390 and 1434
Silver
Silver has broken above a key declining trend line which has been in place since April 2011. This breakout is a significant bullish development and calls for a strong up move. Both the 20-day and the 50-day moving average are turning up increasing upward momentum. Therefore, as long as 19.70 is a support, a new bullish run towards 21.65 or even 22.17 in extension is likely
Alternatively, the break below 19.70 would negate this bullish stance and would call for a drop to 18.20 at least.
Invest responsibly
