Friday, June 25, 2021 marketupdate@ICMCapital.co.uk
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Market Comment
Market Wrap: Stocks, Bonds, Commodities

On Thursday, the three major U.S. stock indices closed higher. The Dow Jones Industrial Average rose 322 points (+1.0%) to 34,196, the S&P 500 gained 24 points (+0.6%) to 4,266 and the Nasdaq 100 added 91 points (+0.6%) to 14,365.

The Automobiles & Components (+2.6%), Banks (+1.6%) and Semiconductors & Semiconductor Equipment (+1.5%) sectors led the advance, while the Retailing (-0.7%), Real Estate (-0.5%) and Utilities (-0.1%) sectors were under pressure.

Regarding U.S. economic data, first quarter annualized GDP growth was unrevised at 6.4% as expected, while initial jobless claims fell to 411,000 in the week ended June 19, more than the estimated 380,000. Later today, personal income is expected to drop 2.5% over month in May, while personal spending is estimated to grow 0.4%. Also, final readings of June University of Michigan consumer sentiment index is anticipated at 86.5.

European stocks were broadly higher. Germany's DAX 30 climbed 0.9%, France's CAC 40 rose 1.2%, and the U.K.'s FTSE 100 was up 0.5%.

The U.S. 10-year Treasury Yield edged up to 1.492% from 1.487% Wednesday.

U.S. WTI crude futures gained 0.3% to $73.30 a barrel.

Gold price slipped 0.2% to $1,775 an ounce.


Market Wrap: Forex

The U.S. dollar was broadly flat against its major peers, as the ICE dollar index closed at 91.80.

GBP/USD dropped 37 pips to 1.3922. The Bank of England kept its benchmark rate unchanged at 0.10% as expected, though pointing out that "policy should both lean strongly against downside risks to the outlook and ensure that the recovery was not undermined by a premature tightening in monetary conditions".

EUR/USD added 7 pips to 1.1932. The German IFO Business Climate Index climbed to 101.8 in June from 99.2 in May, better than the expected 100.7.

USD/JPY fell 8 pips to 110.86.

Both AUD/USD and NZD/USD posted a four-day rally, gaining 7 pips and 16 pips respectively.

Bitcoin bounced 5.4% to $34,859, and Ether advanced 3.9% to $2,004.


Morning Trading

In Asian trading hours, EUR/USD edged up to 1.1940 and GBP/USD climbed to 1.3930.

USD/JPY was little changed at 110.88.

Gold remains subdued at $1,778 an ounce.

Bitcoin extended its rebound to $35,140.


Expected Today

The eurozone's M3 money supply is expected to increase by 8.5% over year in May.

Germany's July GfK consumer confidence index is estimated at -4.0.

In the U.S., personal income is expected to drop 2.5% over month in May, while personal spending is estimated to grow 0.4%. Also, final readings of June Michigan consumer sentiment index is anticipated at 86.5.
Calendar
13:30 US MAY Personal Income exp: -3.1% prev: -13.1%
13:30 US MAY Personal Spending exp: 0.3% prev: 0.5%
15:00 US JUN F U. of Michigan Confidence exp: 86.5 prev: 86.4
Forex Last %1D %YTD
EUR/USD 1.1939 0.06 -2.30
USD/JPY 110.89 0.01 7.30
GBP/USD 1.3932 0.07 1.90
Commodities Last %1D %YTD
Gold 1,778.0100 0.16 -6.30
Silver 26.0514 0.40 -1.30
Crude Oil 73.3900 0.12 51.70
EUR/USD Intraday: under pressure. Next
Pivot: 1.1955

Our preference: short positions below 1.1955 with targets at 1.1910 & 1.1895 in extension.

Alternative scenario: above 1.1955 look for further upside with 1.1970 & 1.1985 as targets.

Comment: as long as 1.1955 is resistance, look for choppy price action with a bearish bias.

Green Lines Represent Resistances | Red Lines Represent Support Levels | Light Blue is a Pivot Point |  Black represents the price when the report was produced
EUR/JPY intraday: the upside prevails as long as 132.11 is support Previous  | Next
Our pivot point stands at 132.11.

Our preference: the upside prevails as long as 132.11 is support.

Alternative scenario: below 132.11, expect 131.81 and 131.62.

Comment: the RSI is above 50. The MACD is positive and above its signal line. The configuration is positive. Moreover, the price is above its 20 and 50 period moving average (respectively at 132.31 and 132.30).

Green Lines Represent Resistances | Red Lines Represent Support Levels | Light Blue is a Pivot Point |  Black represents the price when the report was produced
GBP/USD Intraday: the downside prevails. Previous  | Next
Pivot: 1.3950

Our preference: short positions below 1.3950 with targets at 1.3890 & 1.3875 in extension.

Alternative scenario: above 1.3950 look for further upside with 1.3970 & 1.3985 as targets.

Comment: as long as the resistance at 1.3950 is not surpassed, the risk of the break below 1.3890 remains high.

Green Lines Represent Resistances | Red Lines Represent Support Levels | Light Blue is a Pivot Point |  Black represents the price when the report was produced
GBP/JPY intraday: rebound Previous  | Next
Our pivot point stands at 154.07.

Our preference: rebound.

Alternative scenario: the downside breakout of 154.07 would call for 153.64 and 153.39.

Comment: the RSI is above its neutrality area at 50. The MACD is above its signal line and negative. The MACD must break above its zero level to call for further upside. Moreover, the price stands above its 20 period moving average (154.39) but below its 50 period moving average (154.49).

Green Lines Represent Resistances | Red Lines Represent Support Levels | Light Blue is a Pivot Point |  Black represents the price when the report was produced
USD/JPY Intraday: intraday support around 110.65. Previous  | Next
Pivot: 110.65

Our preference: long positions above 110.65 with targets at 111.10 & 111.25 in extension.

Alternative scenario: below 110.65 look for further downside with 110.50 & 110.35 as targets.

Comment: a support base at 110.65 has formed and has allowed for a temporary stabilisation.

Green Lines Represent Resistances | Red Lines Represent Support Levels | Light Blue is a Pivot Point |  Black represents the price when the report was produced
USD/CAD Intraday: bullish bias above 1.2300. Previous  | Next
Pivot: 1.2300

Our preference: long positions above 1.2300 with targets at 1.2340 & 1.2365 in extension.

Alternative scenario: below 1.2300 look for further downside with 1.2280 & 1.2255 as targets.

Comment: even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

Green Lines Represent Resistances | Red Lines Represent Support Levels | Light Blue is a Pivot Point |  Black represents the price when the report was produced
Crude Oil (WTI) (Q1) Intraday: the bias remains bullish. Previous  | Next
Pivot: 72.80

Our preference: long positions above 72.80 with targets at 73.95 & 74.25 in extension.

Alternative scenario: below 72.80 look for further downside with 72.35 & 72.05 as targets.

Comment: the RSI is above its neutrality area at 50%.

Green Lines Represent Resistances | Red Lines Represent Support Levels | Light Blue is a Pivot Point |  Black represents the price when the report was produced
Brent (ICE) (Q1) Intraday: bullish bias above 75.10. Previous  | Next
Pivot: 75.10

Our preference: long positions above 75.10 with targets at 76.00 & 76.60 in extension.

Alternative scenario: below 75.10 look for further downside with 74.50 & 74.10 as targets.

Comment: the RSI is mixed to bullish.

Green Lines Represent Resistances | Red Lines Represent Support Levels | Light Blue is a Pivot Point |  Black represents the price when the report was produced
Dow Jones (CME) (U1) Intraday: further advance. Previous  | Next
Pivot: 33965.00

Our preference: long positions above 33965.00 with targets at 34370.00 & 34500.00 in extension.

Alternative scenario: below 33965.00 look for further downside with 33850.00 & 33750.00 as targets.

Comment: the RSI shows upside momentum.

Green Lines Represent Resistances | Red Lines Represent Support Levels | Light Blue is a Pivot Point |  Black represents the price when the report was produced
Gold Intraday: the bias remains bullish. Previous 
Pivot: 1771.00

Our preference: long positions above 1771.00 with targets at 1788.00 & 1795.00 in extension.

Alternative scenario: below 1771.00 look for further downside with 1766.00 & 1760.00 as targets.

Comment: the RSI is mixed with a bullish bias.

Green Lines Represent Resistances | Red Lines Represent Support Levels | Light Blue is a Pivot Point |  Black represents the price when the report was produced

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