June’s preliminary PMI data under the loupe

The escalation of the Israel-Iran conflict cannot escape the headlines as the US bombed Iranian nuclear facilities over the weekend. As the market braces for Iran’s response, the USD seems to have regained its safe-haven qualities as it got some support. Elsewhere in the market, oil prices jumped at today’s opening, yet corrected lower in the Asian session, while gold’s bulls remained passive as the precious metal’s price suffered from the strengthening of the USD. Any further escalation say for example if Iran hits US targets could enhance the market’s uncertainty thus weighing on riskier assets while at the same time providing support for safe-havens. Today we highlight the release of the preliminary PMI figures for June of France, Germany, the Euro Zone as a whole, the UK and the US. We intend to focus on the EUR related figures, especially Germany’s manufacturing sector and a beyond expectations rise of the indicator’s reading could provide some support for the EUR.

WTI’s price jumped and briefly broke the 75.65 (R1) resistance line reaching new 5 month highs, yet corrected lower in today’s Asian session. We maintain a bullish outlook for the commodity’s price as despite the correction lower, the upward movement does not seem to have been broken and the upward trendline guiding remains intact. Yet the fact that the RSI indicator is still above the reading of 70 signalling a strong bullish market sentiment for oil prices yet also that WTI’s price is still at overbought levels, and the correction lower may be extended. For a bullish outlook we would require WTI’s price, to break the 75.65 (R1) resistance line and start aiming for the 79.35 (R2) resistance level. Should the bears take over, WTI’s price could break the 72.00 (S1) support line and pave the way for the 68.40 (S2) support level.

In the FX Market EUR/USD seems to remain relatively stable, just above the 1.1450 (S1) resistance line. Given that the pair’s price action has broken the upward trendline guiding it last Wednesday, we switched our bullish outlook in favour of a sideways motion bias. Should the bulls take over, we may see the pair breaking the 1.1690 (R1) resistance line thus opening the gates for the 1.1905 (R2) resistance level. For a bearish outlook we would require the pair to break the 1.1450 (S1) support line and start aiming for the 1.1210 (S2) support level.

Other highlights for the day:

Today we get the UK’s nationwide house prices rate for June, France’s preliminary services PMI figure, Germany’s preliminary manufacturing figure and the Eurozone’s preliminary composite PMI figure all for June and the US S&P preliminary manufacturing PMI figure for June and on a monetary level the speech Chicago Fed President Goolsbee.

As for the rest of the week:

On Tuesday we get Germany’s Ifo indicators for June, UK’s CBI industrial orders for June and Canada’s CPI rates for May. On Wednesday, we note the release of New Zealand’s trade data for May, Japan’s BoJ is to release the summary of opinions for its last meeting, Australia’s CPI rates for May and from the Czech Republic CNB’s interest rate decision. On Thursday, we get Germany’s GfK consumer Sentiment for July, UK’s CBI distributive trades for June, the US durable goods orders for May, the final US GDP rate for Q1 and the weekly initial jobless claims figure. On Friday, we get from Japan, Tokyo’s CPI rates for June, France’s preliminary HICP rate also for June, the Czech Republic’s revised GDP rate for Q1, Euro Zone’s economic sentiment for June, Canada’s GDP rate for April, the US consumption rate for May, we highlight the release of the US PCE rates for May and finally note the final University of Michigan Consumer Sentiment for June.

WTI  Daily Chart

• Support: 72.00 (S1), 68.40 (S2), 64.00 (S3)
• Resistance: 75.65 (R1), 79.35 (R2), 83.90 (R3)

EUR/USD Daily Chart

• Support: 1.1450 (S1), 1.1210 (S2), 1.0940 (S3)
• Resistance: 1.1690 (R1), 1.1905 (R2), 1.2115 (R3)

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