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Mon 18th July 2016, 06:00 GMT GBPUSD NEUTRAL The Cable continued its disposition towards volatility throughout the week as the pair initially rallied in response to news that David Cameron was to be immediately replaced by Theresa May as the UKʼs Prime Minister. In addition, the Bank of England also provided a summer surprise as they held the official bank rate steady despite plenty of analysis which suggested cuts were on the way. Subsequently, the Cable was buoyed following this decision, only to then be cut back by the stronger than expected US Retail Sales data. Ultimately, the pair still finished the week up around the 1.3170 mark. The week ahead will be a busy one for the Cable as the pair faces a bevy of fundamental data that is likely to be closely monitored by the market. In particular, the UK Manufacturing and Services PMIʼs are due out and are forecast to fall into contraction at 48.5 and 48.7 respectively. In addition, keep a close watch on the US Unemployment Claims figures given the recent variability of those results. From a technical perspective, the pair remains under the auspices of a bearish trend despite the current sideways consolidation, albeit one with a wide range. Currently, the RSI Oscillator is trending higher away from overbought territory, but any upward moves by price action are likely to be capped by resistance at the 1.3532 mark. Subsequently, our bias remains neutral this week but with the caveat that a resumption of the medium term downtrend is likely in the coming month. Support is currently in place for the pair at 1.2794. Resistance exists on the upside at 1.3486. 21/07 12:30 USD Unemployment Claims 22/07 08:30 GBP Manufacturing PMI 22/07 08:30 GBP Services PMI 1.3486 1.2794
Mon 18th July 2016, 06:00 GMT USDJPY BEARISH Last week proved highly positive for the pair as markets reacted sharply to mounting speculation that the Abe government would reintroduce some form of helicopter money. However, this is yet to eventuate but certainly didnʼt stop the greenback from appreciating strongly against the Yen, with some help from a resurgent US Retail Sales result. In addition, the Japanese Final Industrial Production figures also proved disappointing at -2.6%. Subsequently, the USDJPY finished the week well up around the 104.72 mark. The week ahead is fairly quiet on the Japanese fundamental economic front with just the Manufacturing PMI and Machine Tool Orders results due out. However, there are a slew of US releases which are likely to impact the pair sharply with a focus on the US Philly Fed Manufacturing Index. Subsequently, keep a close watch on Thursdayʼs range of US economic data as it could provide plenty of surprises. From a technical perspective, the pair has managed to pullback from just below the key 100.00 handle which has largely eased the pressure on RSIʼs oversold status. In addition, the 12 EMA has started trending strongly towards the 30 and 100 EMAʼs but price action is likely to be capped by a cluster of resistance around the 106.78 mark. Subsequently, our bias remains bearish for the pair given the level of strong resistance just above price actions current position, which also coincides with the bearish trend line. Therefore, it is likely that the downtrend will recommence sometime in the latter part of the coming week. Support is currently in place for the pair at 103.54, 99.95, and 98.98. Resistance exists on the upside at 106.78, 110.16, and 111.86. 21/07 06:00 JPY Final Machine Tool Orders y/y 21/07 12:30 USD Philly Fed Manufacturing Index 21/07 12:30 USD Unemployment Claims 106.78 103.54
Page 1 and 2: WEEKLY OUTLOOK Monday, 18 Jul 2016
Page 3: Mon 18th July 2016, 06:00 GMT EURUS
Page 7 and 8: Mon 18th July 2016, 06:00 GMT NZDUS
Page 9: Mon 18th July 2016, 06:00 GMT Telep

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