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We started out today by looking at the US Dollar Index (DXY) as strength continues to be short-lived, and while we could be narrowing towards a tradeable low we don’t look to be there yet. GBPUSD has gone nuts the past couple of days after yesterday’s BoE meeting, where the central bank expressed a more hawkish than expected tone. GBPUSD is heading for a gap-fill around 13650 which occurred the day after the ‘Brexit’ plunge. GBPJPY is trading above major resistance back to December 2016 and could be headed towards erasing all ‘Brexit’ losses. We are staying away from EURUSD at this time as cross-winds of support and resistance are making the near-term outlook murky.
USDJPY continues to impress after the gap-n-run starting on Sunday. Yen crosses are all starting to look pretty solid, with breakout levels either being crossed or approached. Those include EURJPY, CHFJPY, AUDJPY, and CADJPY. The latter of the bunch is on the verge of closing above the neckline of a large inverse head-and-shoulders pattern extending back to January 2016. While it is a macro-sized pattern, trades can be shaped around it on the short-term term using daily and 4-hr time-frames.
Gold is edging lower back towards channel support, will be important to hold for the near-term upside bias to maintain. A break below will bring the double-tops at 1296 into focus. Silver similar situation, lower parallel matters.
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Global indices look good for the most part sans the FTSE 100. The UK index is crushing through big support at 7300. The DAX and CAC 40 look poised for higher prices after recent breakouts. The S&P 500 looks headed towards the 2515/25 region after spending some time in new record territory.
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---Written by Paul Robinson, Market Analyst
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