Currencies
EUR/USD – was finally able to move a bit further away of the 1.1375 level as the USD weakened yesterday, but today we see it strengthening again, moving once more towards the support around that level. Possibly that the data today could change that, but as mentioned yesterday, the likelihood of that happening increases as we get the German GDP data tomorrow.
USD/JPY – is moving up again as BOJ Governor Kuroda also said that the BOJ could further ease monetary policy if needed, which means that more stimulus is possible. As a reminder, the decision not to do so at the end of April it what led to a major strengthening of the JPY. Technically we can see that the resistance mentioned yesterday is also at the 61.8 Fibonacci level of the downwards move after the surprising BOJ decision at the end of April.
GBP/USD – remains trading in close proximity of the 1.44 level, but that is almost certain to change in the coming hours as we get very important data that should give a clear direction in the short term for the GBP. As always, Brexit fears are also looming in the background, at least until the referendum next month.
Indices
Dollar Index – it is still too early to say for sure, but it could very well be that we have seen a new lower high. We will know more in the coming days if that is indeed the case, and if so, we should be heading to marking a new lower low as well.
Commodities
Gold – tested the resistance around the 1276 level, but failed for now to breach this level, as also the USD is strengthening.
Oil – moved sharply higher as the inventories showed a surprising drop of nearly 3.5 million barrels and production in the US kept declining. With the sharp rise we also breached the recently established downwards trend line.
By Shawn Koopman