BOJ April meeting minutes show heightened fears surrounding overseas economies

During Today’s Asian session, we highlight the release of the BOJ’s April meeting minutes in which  a member indicated that the bank’s monetary policy responses should not fall behind underlying developments. In addition to the minutes clearly stating the banks worries surrounding overseas economies. Furthermore, we note the continued support to maintain the bank’s current ultra loose monetary policy. In Yesterday’ American session, we note the release of the US Preliminary building permits figure for May, coming in higher than anticipated , indicating that the US Housing market continues its resiliency, at least for now. Furthermore, prepared remarks from Fed members Jefferson and Cook before their Senate confirmation hearing, that the Fed must remained focused on returning inflation to 2%. With Fed Governor Jefferson stating that inflation has “started to abate”, hinting that the Fed may be more open to potentially keeping interest rate levels steady. In the US stock markets we note the announcement of Rivians agreement with Tesla (#TSLA) to use their charging network, with Rivian now joining major car manufactures such as General Motors and Ford in utilizing Tesla’s existing charging networks. Furthermore, the American state of Texas stated that state-funded EV charges must include Tesla plugs, supporting Tesla’s dominance over the current EV market. The Swedish Krona fell to all record lows against the EUR in yesterday’s trading session, dropping below levels last seen in 2009.Oil prices remain above the key psychological of $70, despite concerns of China’s economic slowdown. Lastly, we note the changing of the guard at Alibaba (#BABA), with Eddie Wu and Joseph Tsai taking over as chairman and CEO respectively.

WTICash appears to be moving in an upwards fashion despite China’s perceived economic woes, with the liquid gold now aiming for resistance at the 71.90 (R1) level. We maintain a bullish outlook for oil and supporting our case is the upwards moving trendline incepted on the 13^th of June, in addition to the RSI indicator below our 4-Hour chart, bouncing of the 50 figure, implying a slightly bullish market sentiment. For our bullish outlook to continue, we would like to see a clear break above the 71.90 (R1) resistance level if not also moving to test resistance at the 74.50 (R2) resistance ceiling. For a bearish outlook, we would like to see a clear break below the 70.88 (S1) support level, with the next possible target for the bears being the 68.50 (S2) support base.

EUR/USD appears to have been stopped in its tracks at the 1.0940 (R1) resistance ceiling yet has failed to break below our upwards moving trendline incepted on the 6^th of June. We maintain a bearish outlook for the pair and supporting our case is the RSI indicator below our 4-Hour chart, which broke below the reading of 70 and is now moving towards the 50 figure, implying a potential shift in market sentiment to a bearish outlook. For our bearish outlook to continue, we would like to see a clear break below the 1.0890 (S1) support level, with the next possible target for the bears being the 1.0815 (S2) support base. On the other hand, for a bullish outlook, we would like to see a clear break above resistance at 1.0940 (R1) with the next possible target for the bulls being the 1.1025 (R2) resistance ceiling. However, we note that Fed Chair Powell’s testimony before the House today may influence the pairs movement in either direction.

Other highlights for the day:

During today’s European session we note the UK’s Core CPI rates for May, Sweden’s Unemployment rate, the UK’s CBI figure. In the American session, we note Canada’s retail sales rate for April. On a monetary level, we note the speech by ECB’s Schnabel, the Czech’s Republic’s interest rate decision, the US Senate Banking Committee hearings for the nominations of Kugler,Cook and Jefferson to positions within the Fed, Fed Chair Powell’s testimony before the House, Chicago Fed President Golsbee’s and Cleveland Fed President Mester’s speeches.

WTICash H4 Chart

Support: 70.88 (S1), 68.50 (S2), 65.50 (S3)

Resistance: 71.90 (R1),  74.50 (R2), 76.70 (R3)

EUR/USD H4 Chart

Support: 1.0890 (S1), 1.0815 (S2), 1.0735 (S3)

Resistance: 1.0940 (R1), 1.1025 (R2), 1.1125 (R3)

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Disclaimer:
This information is not considered as investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.

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