Last week was, once again, dominated by geopolitical developments and commodity markets. While the global media headlines expected a deepening conflict between Israel and Iran, the spot oil price crashed.
The price movement demonstrated how commodity traders understand the world better than most, as oil dropped as much as 12.5% on Monday, reaching around $68 per barrel, before closing the week at around $66. Gold also sank, reflecting the lower risk and a lack of hedging appetite, losing around 3.3% and closing at $3,274 per ounce.
This commodity price repositioning was more than enough to replace a news-light week for the forex market that has seen mixed results from eurozone PMI and Canadian and Australian CPI that ticked marginally higher than anticipated.
The week ahead will bring fewer geopolitical developments, but significant fundamental news, as heads of the Bank of Japan, the Bank of England, and the Federal Reserve will all speak on Tuesday. Thursday will bring the latest news about the Swiss CPI, potentially giving a green light to the return of negative interest rates. At the same time, the Non-Farm Payroll employment data will arrive on Friday, as the 4th of July holiday in the US falls on that day.
Key News:
- Tuesday: GBP – Governor Bailey Speech, JPY – Governor Ueda Speech, USD – Fed Chair Powell Speech, ISM Manufacturing PMI
- Wednesday: USD – ADP Non-Farm Employment
- Thursday: CHF – CPI m/m, USD – NFP, Unemployment, ISM Services PMI
Pairs In Focus
1. AUD SGD
This pair has been in a prolonged consolidation both on the daily and weekly charts, although the price action has started to turn bullish slowly.
AUD/SGD daily chart, Source: TradingView
Still, the key level to observe is at 0.83420. If the price clears this level and closes above it on the daily chart, it may provide bullish opportunities on pullbacks, with a short-term potential to reach 0.84430.
2. NZD JPY
This pair spent the entire month in a relatively tight range, but has been building a base for the next breakout with a bullish bias. The key resistance level to watch is 88, and a clean break above the daily could signal a move higher toward the next resistance at 89.
NZD/JPY daily chart, Source: TradingView
Notes:
- AUD NZD: Failed to sustain a bullish breakout, but the support at 1.07750 held. If it cannot break this support, it might remain in the range.
- AUD CAD: Swept the lows on Monday, before turning around and making an attempt at previous swing highs. However, it failed to sustain the impulse move, closing below the resistance of 0.89500.
- AUD CHF: Remains in a bearish trend. Still, it has not yet decisively closed below the previous swing low around 0.52100.
- AUD JPY: Price action is tightening, indicating that a breakout might be on the cards soon. Short-term potential is higher to the upside if it overcomes the resistance at 94.800.
- CHF JPY: Reached the 180 target for the previous breakout and exceeded, going as high as 181. No signs of weakness for now.
- CAD JPY: Indecisive price action, as it made a push higher and lower simultaneously. Short-term bias is tilting to the upside.
- EUR AUD: Remains in a bullish trend, and has reached intermediate highs from April.
- EUR/JPY: Established yet another yearly high, overcoming the short-term resistance at 169.270.
- EUR NZD: A temporary resistance level around 1.94880 has held the short-term bullish push.
- NZD CHF: Remains in a bearish trend, but found support around 0.48200.
- GBP AUD: Remains in the bullish trend, but it is failing to breach the multi-month resistance at 2.10250
- GBP JPY: Made fresh highs, but failed at the first attempt to breach 198.800. The trend remains bullish.
Note: Any opinions expressed in this article are not to be considered investment advice and are solely those of the authors. Singapore Forex Club is not responsible for any financial decisions based on this article's contents. Readers may use this data for information and educational purposes only.
