Delay in Uk reopening weakens pound

The U.S. dollar held steady against major currencies on Monday, after posting its biggest weekly gain in more than a month, as traders closed short positions ahead of a Federal Reserve policy meeting this week. The greenback was little changed among caution ahead of the Fed meeting that runs two days to Wednesday. In recent weeks, the Dollar index has fluctuated as traders weighed if inflationary pressure as the economy reopens after the pandemic could force the Federal Open Market Committee (FOMC) into an earlier tapering of stimulus.

The Repeated comments from policy makers that inflation would be transitory calmed those jitters, but markets also now anticipate the Fed may be close to giving clues on the timing for slimming its asset-purchase programme. “The dollar repositioning shows some nerves heading into the FOMC policy update,” NAB strategist Jason Wong wrote in a note. “Over the past month there appears to have been a growing chorus that the time to talk about tapering bond purchases had been reached.”

French President Emmanuel Macron offered the UK Prime Minister (PM) Boris Johnson, in what seems to be the last chance, to reset the relations amid a Brexit divorce deal the latter signed with the European Union (EU), Reuters reports, citing an unnamed source. The president told Boris Johnson there needed to be a reset of the Franco-British relationship, “This can happen provided that he keeps his word with the Europeans.” Broad dollar’s strength coupled with softer-than-anticipated UK data to send the pair lower, exacerbated by Brexit and coronavirus jitters. The kingdom published April Industrial Production, which contracted by 1.3% MoM and Manufacturing Production for the same month, which was down by 0.3%. The monthly Gross Domestic Product increased by 2.3%, below the 2.4% expected.

Britain reported another 7,738 COVID-19 cases in the past 24 hours, bringing the total number of coronavirus cases in the country to 4,558,494, according to official figures released Saturday. On Friday, market talks suggested that the UK government will likely delay easing lockdown restriction to July 19, initially scheduled for June 21. British Prime Minister Boris Johnson expressed “serious concern” about the spread of the coronavirus Delta variant on Saturday, supporting Friday’s headlines. The weekend G7 summit saw European leaders pushing UK Johnson to fully implement the Brexit Withdrawal Agreement. Tensions persist around Britain´s desire to alter the protocol that imposed checks on British goods entering Northern Ireland.

GBP/USD 4 Hour Chart:

Support: 1.4074 (S1), 1.4040 (S2), 1.3984 (S3).

Resistance: 1.4164 (R1), 1.4219 (R2), 1.4253 (R3).

Amidst the US dollar’s strength and delay in the UK reopening, pound seems to be weaker. As of now we expect a bearish trend for GBPUSD.

BTC/USD Weekly Forecast (14th Jun 2021 – 18th Jun 2021)

Fundamental view:

Bitcoin has made an end to its downtrend as it bottomed on June 8 which indicated that a reversal was due. A bill has also passed to make BTC a legal tender in El Salvador on June 9. This created a historic win for the flagship cryptocurrency, which has come a long way. China was tightening the noose around Bitcoin miners’ necks as there were reports that Qinghai Province issued a document that calls for a ban on mining cryptocurrencies.

The major economic events deciding the movement of the pair in the next week are Retail Sales monthly report, Fed Industrial Production yearly report at Jun 15, EIA Crude Oil Stocks Change, Fed Interest Rate Decision at Jun 16, Philadelphia Fed Manufacturing Index, Initial Jobless Claims at Jun 17 and Baker Hughes US Total Rig Count at Jun 18 for US.

BTC/USD Weekly outlook:

Technical View:

Last week’s high was 2.52% lower than the previous week. Maintaining high at 38384.2 and low at 30909.3 showed a movement of 7474 pips.

In the upcoming week we expect BTC/USD to show a bearish trend. The Instrument is trading below the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout below 31607.4 may open a clean path towards 27520.9 and may take a way down to 24132.5. Should 39082.3 prove to be unreliable resistance, the BTCUSD may raise upwards 42470.7 and 46557.2 respectively. In H4 chart symmetrical triangle pattern breakout favors prospects of a bearish trend. Bearish harami pattern constructs a bearish outlook for the pair in the upcoming week.

Preference
Sell: 35400.5 target at 28405.7 and stop loss at 39088.6

 

Alternate Scenario
Buy: 39088.6 target at 46556.2 and stop loss at 35400.5

XAU/USD Weekly Forecast (14th Jun 2021 – 18th Jun 2021)

Fundamental view:

Gold showed a bearish trend last week. Gold has failed to capitalize due to falling US Treasury bond yields. Because of the absence of high-tier macroeconomic data releases, the benchmark 10-year US T-bond yield, lost more than 4% on the uninspiring May jobs report on Friday. University of Michigan said on Friday that the Consumer Sentiment Index improved modestly to 86.4 in June’s preliminary reading from 82.9 in May. This print came in slightly better than the market expectation. Amidst all the catalysts Gold showed a bearish trend.              

The major economic events deciding the movement of the pair in the next week are Retail Sales monthly report, Fed Industrial Production yearly report at Jun 15, EIA Crude Oil Stocks Change, Fed Interest Rate Decision at Jun 16, Philadelphia Fed Manufacturing Index, Initial Jobless Claims at Jun 17 and Baker Hughes US Total Rig Count at Jun 18 for US.

XAU/USD Weekly outlook:

Technical View:

Last week’s high was 0.67% lower than the previous week. Maintaining high at 1903.6 and low at 1869.6 showed a movement of 340 pips.

In the upcoming week we expect XAU/USD to show a bullish trend.  The Instrument is trading above the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 1896.5 may open a clean path towards 1917.1 and may take a way up to 1930.5. Should 1862.5 prove to be unreliable support, the XAUUSD may sink downwards 1849.1 and 1828.5 respectively. In H4 chart bullish bat pattern formation favors prospects of a bullish trend. Also to be noted three outside down formation exerts the expectation of uptrend for the pair.

Preference
Buy: 1876.9 target at 1909.4 and stop loss at 1857.5

 

Alternate Scenario
Sell: 1857.5 target at 1829.7 and stop loss at 1876.9

AUD/USD Weekly Forecast (14th Jun 2021 – 18th Jun 2021)

Fundamental view:

The Australian dollar initially tried to rally during the week but it gave up gains to form bear candle in the end. Risk appetite has offset demand for the American dollar, despite the US economy is among those improving the most. Australia is not more behind behind, as the Q1 Gross Domestic Product was up 1.8% which is officially above pre-pandemic levels. The imbalance between the two economies comes from inflation. In Australia, the Consumer Price Index rose 1.1% in the first quarter of the year, from 0.9% in the previous one, way below the Reserve Bank of Australia desired 2-3%.  In the US, inflation skyrocketed to 5% YoY in May, although there is a general sense that such a jump is temporal, in line with what Federal Reserve officials have said in the last couple of months.

However, inflationary pressures, employment recovery, and how they could affect central banks’ decision is the main theme.

Australia NAB Business Confidence on 8th June and Westpac-MI Consumer Sentiment monthly report on 9th June favored bearish trend for the pair whereas ANZ Job Advertisements monthly report on 7th June and Australia MI Inflation Expectations on 10th June favored bullish trend for the pair.

The major economic events deciding the movement of the pair in the next week are RBA Meeting Minutes, US Retail Sales monthly report, Fed Industrial Production yearly report at Jun 15, US EIA Crude Oil Stocks Change, Fed Interest Rate Decision at Jun 16, RBA Governor Lowe Speech, Australia Employment Change, US Philadelphia Fed Manufacturing Index and US Initial Jobless Claims at Jun 17.

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 0.04% higher than the previous week. Maintaining high at 0.7775 and low at 0.7687 showed a movement of 88 pips.

In the upcoming week we expect AUD/USD to show a bearish trend.  The currency pair is trading below the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout below 0.7668 may open a clean path towards 0.7633 and may take a way down to 0.7580. Should 0.7756 prove to be unreliable resistance, the AUDUSD may raise upwards 0.7809 and 0.7844 respectively. In H4 chart bearish shark pattern formation favors prospects of a bearish trend. Also to be noted bearish engulfing formation exerts the expectation of downtrend for the pair.

Preference
Sell: 0.7702 target at 0.7634 and stop loss at 0.7761

 

Alternate Scenario
Buy: 0.7761 target at 0.7843 and stop loss at 0.7702