EURJPY - Sees Recovery On Correction

EURJPY - The pair remains biased to the upside on correction though retaining its broader medium term downtrend. Support comes in at the 113.00 level where a break will aim at the 112.50 level. A turn below here will target the 112.00 level with a breach turning focus to the 111.50 level. Conversely, resistance lies at the 114.00 level. Further out, resistance comes in at the 114.50 level where a break if seen will threaten further upside towards the 115.00. Further out, resistance resides at the 115.50 level. All in all, EURJPY eyes further bearishness medium term but faces nearer term recovery.

FTSE Not Out of the Woods Yet

The bigger the drop, the bigger the rebound. That is what has happened with the FTSE 100 index in the aftermath of the UK's vote to leave the EU. In fact, the rebound has been so profound that the index has nearly made good all the losses suffered since the Brexit vote. Clearly, some investors who were lucky enough to come through the Brexit-stimulated drop relatively unscathed may now use this opportunity to either cut or reduce their stocks holdings or at least hedge their exposure by shorting the FTSE. This could especially be the case since we are approaching month-end; it would not look good on money managers who hold stocks in sectors that dropped massively post the Brexit vote. Added to this, bearish speculators who missed the original plunge may be tempted to step in and ride the next potential drop. So the FTSE could easily turn back lower.

US$ Index, Long Held Target above 100.50 Remains

Nearer term $ index outlook :
In the Jun 21st email, affirmed the bigger picture view of a bottoming (and potentially major bottoming, see longer term below) from that May 3rd spike low at 91.90. The market has indeed rallied since, breaking above the May 30th high at 95.95 and currently chopping near recent highs at 96.70/85 (also the ceiling of the bullish channel from that May 3rd low). Still a bigger picture bull with the recent break above the ceiling of the bearish channel from Dec adding to that view. On a short term basis however, there is scope for another few days/week of correcting before resuming the larger upmove (see in red on daily chart below). Nearby support is seen at 95.65/80 and the broken ceiling of the bearish channel from Dec (currently at 94.90/05). Resistance remains at the recent highs/ceiling of the bull channel from the May 3rd low (currently at 96.70/85) and 97.25/40 (62% retracement from the Dec high at 100.50). Bottom line : still a big picture bull but risk for a another few days/week of consolidating before resuming the larger upmove.

GOLD Completing Its Three Wave Recovery, 1260 Possible Turning Point

Gold made a nice pullback from the highs as expected and we are now looking for reversal signs as this corrective A-B-C may already be over. This corrective structure from the highs can be potentially completing here at 1.260. If we start to move up in impulsive manner we should reach a new high on this metal. As we know after every corrective pullback, a new impulsive structure tends to start.