Improved market mood saw high yielders soaring this Monday

EUR/USD

Improved market mood saw high yielders soaring this Monday, with European currencies rallying alongside with stocks. The common currency advanced up to 1.1382 against the greenback at the beginning of the day, but overall remained subdued, retreating towards the 1.1300 level ahead of Wall Street's close, still above Friday's close of 1.1278. 

Markets were all about the upcoming Brexit referendum this Thursday, and whether the UK will maintain its EU membership or not. Polls released over the weekend, suggesting the "remain" vote intention has took the lead, were behind Monday's rallies, although they are no guarantee of the result, or if market´s sentiment will remain positive. 

The EUR/USD pair retreated towards the 1.1300 level ahead of Wall Street's close, still holding above Friday's close of 1.1278. Markets are all about the upcoming Brexit referendum, and will remain so, until the poll that will take place next Thursday. In the meantime, the 4 hours chart for the EUR/USD pair, shows that it was unable to settle above the 50% retracement of the May's decline around 1.1360, where selling interest has steadily rejected attempts of advancing. Nevertheless and according to the same chart, the bias is generally bullish, as the price is well above its moving averages, whilst the Momentum indicator keeps heading north above its 100 line and the RSI indicator turned lower, but stands around 54. The immediate support comes around 1.1295, the 38.2% retracement of the mentioned decline, with a break below it favoring a deeper correction down to 1.1245. 

Support levels: 1.1295 1.1245 1.1210 

Resistance levels: 1.1330 1.1365 1.1400 

USD/JPY

The USD/JPY pair resumed its decline late in the US afternoon, after failing to overcome the 105.00 level earlier in the day. As the week kicked in with risk aversion easing, the Japanese yen saw a moderate slide against most of its major rivals, but broad dollar's weakness prevented the pair from rallying. There were no macroeconomic releases in the US to motivate investors, neither news to trigger this current decline in the pair, which clearly indicates the strength of the dominant bearish trend. Now extending its decline below the 104.00 level, the pair is poised to retest the multi-year low set last week at 103.54, and even break lower, should the positive sentiment begins to fade. Short term technical readings support such decline, as in the 1 hour chart, the early intraday recovery stalled short from a strongly bearish 100 SMA, now around 104.90, whilst the technical indicators head strongly lower within bearish territory. In the 4 hours chart,  the Momentum indicator turned sharply lower from positive territory and is now crossing its mid-line towards the downside, whilst the RSI heads strongly south around 33, in line with the steeper decline seen in the shorter term. 

Support levels: 103.55 103.20 102.70

Resistance levels: 104.20 104.60 105.00 

GBP/USD

The GBP/USD pair hit a fresh June high of 1.4706, and remains nearby at the end of the day, with the Pound being the overall daily winner. Trading over 300 pips above Friday's close,  the British currency surged against all of its major rivals, but remains subject to large spikes out of the bloom, as the GBP/USD pair plummeted 100 pips and recovered them in a matter of minutes during the US afternoon. The financial world is all about the upcoming Brexit referendum, and speculation over the effects the result may have, whether if it's positive or not, although increasing speculation the "remain" side can now win, should see the ongoing recovery extending. Technically, the pair is biased higher, as in the 4 hours chart, the Momentum indicator keeps heading north, despite being in extreme overbought territory, whilst the RSI indicator consolidates around 76. The pair has set a year high at 1.4769 last May, the immediate bullish target, should the price extend beyond the 1.4710 level. Still, trading Pound crosses has turned extremely risky, and tight stops should be compulsories. 

Support levels: 1.4620 1.4555 1.4510

Resistance levels: 1.4710 1.4765 1.4800 

AUD/USD

The Australian dollar benefited from worldwide soaring stocks, rising against the greenback up to 0.7480, before retreating partially. The pair is finding some short term buying interest around 0.7450, the 38.2% retracement of this year's rally, but remains unable to confirm a clear breakout of the level. The RBA will release the Minutes of its latest meeting during the upcoming Asian session, whilst RBA Governor Debelle is due to speak about "Liquidity in Domestic Fixed Income Markets," in Sydney. There shouldn't be any surprise coming from the Minutes, although any comment refereeing to another possible rate cut over the near future should put the Aussie under selling pressure. Technically, the 4 hours chart shows that the technical indicators are retreating from near overbought territory, but are still within positive territory, with the RSI pretty much flat around 62 and the price holding well above a bullish 20 SMA, all of which should keep the downside limited. The immediate resistance comes at 0.7505, June 9th daily high and the level to surpass to confirm further gains for this Tuesday. 

Support levels: 0.7450 0.7410 0.7370 

Resistance levels: 0.7505 0.7540 0.7580

Dow Jones

Wall Street closed with solid gains, although indexes were off their daily highs, having retreated quite sharply ahead of the close, as uncertainty levels among investors are still high. The DJIA ended the day at 17,804.87, up by 129 points, whilst the Nasdaq added 0.77% to end at 4,837.21. The S&P surged by 0.58%, to finish the day at 2,083.25. US indexes benefited from their overseas counterparts, as Asian and European equities ended the day with solid gains amid receding Brexit fears. Now holding a few points above the mentioned close, the DJIA daily chart shows that the index is hovering around a horizontal 20 SMA, whilst the technical indicators have recovered some ground, but lack directional strength around their mid-lines. In the 4 hours chart, the index holds above all of its moving averages, but the technical indicators present strong bearish slopes after testing overbought readings, rather reflecting the late intraday decline than suggesting further slides ahead. 

Support levels: 17,825 17,770 17,715

Resistance levels: 17,916 17,987 18,051

FTSE 100

The FTSE 100 added 188 points this Monday, ending the day at 6,204.00, its largest one-day rally in nearly four months, as the "remain" vote gained momentum according to polls released over the weekend, taking a modest lead ahead of Thursday's vote. As in all Europe, the banking sector led the advance, with Royal Bank of Scotland up by 7.02% and Lloyds Bank surging by 7.6%, followed by the energy-related sector, also up as oil prices recovered. Fresnillo ended down 0.2%, whilst Randgold resources shed 1.44% as gold prices continued retreating. The Footsie eased some after the close, and the daily chart shows that its standing a few points below its 20 DMA, although buyers surged on a decline towards the 100 DMA, currently at 6,123. In the same chart, the technical indicators extended their recoveries from near oversold levels, and are aiming to cross above their mid-lines. In the 4 hours chart, the technical indicators retreated from overbought territory, whist the index remains unable to extend above its 100 and 200 SMAs, this last around 6,205. 

Support levels: 6,123 6,055 6,000

Resistance levels: 6,210 6,265 6,330

DAX

European stocks surged amid fears over a Brexit eased, with the German DAX adding 3.43% to close the day at 9,962.02, the highest in over a week. The financial sector led the advance, with Commerzbank adding 2.74% and Deutsche Bank up by 5.89%, but most sectors gain, with export-oriented equities also ending sharply higher on limited EUR strength. The technical picture for the German benchmark favors some additional advances, but is not enough to confirm a longer term recovery, as in the daily chart, the index is now developing above its 100 DMA, but below the 20 DMA, both lacking directional strength, as the technical indicators recovered from oversold readings, but remain within negative territory. In the 4 hours chart, the rally stalled at the 100 SMA, while the technical indicators are retreating from near overbought levels, whilst the 20 SMA turned sharply higher well below the current level. The daily low was set at 9,844, which means that an extension below it could see the index giving up its recent gains. 

Support levels: 9,844 9,757 9,682 

Resistance levels: 9,990 10,043 10,102

Nikkei

The Nikkei 225 closed the day 374 points or 2.34% higher at 15,965.30, as easing Brexit concerns fueled market's optimism. The index however, retreated in after hours trading as the yen resumed its advance, now trading near the multi-year high posted against the greenback last week. Earlier in the day, the index reached 16,085, its highest since mid June, but the fact that it has been unable to hold above the 16,000 level may affect local investors. Daily basis, the technical picture is still far from suggesting a sharper recovery, although the downside seems limited, given that the 20 and 100 DMAs maintain their bearish slopes well above the current level, whilst the technical indicators turned modestly higher, but remain well below their mid-lines. In the 4 hours chart, the benchmark is currently above a horizontal 20 SMA, whilst the Momentum indicator heads strongly higher well above its 100 level, but the RSI indicator turned lower around 51, indicating that bulls are not yet back in full force.  

Support levels: 15,840 15,776 15,710

Resistance levels: 15,920 16,006 16,085

Gold

Gold prices fell at the beginning of the day, as fears over a possible Brexit receded with new polls released over the weekend, although spot gold managed to trim most of its intraday losses to close the day down anyway around $1,288.60 a troy ounce. Investors, however, are being reluctant to unwind their long positions in gold, as uncertainty over the outcome of the referendum prevails, with the "leave" and the "remain" now neck to neck. Technically, the daily chart shows that indicators have retreated from overbought territory, and keep heading lower, but still well above their mid-lines, whilst the 20 SMA maintains a strong upward slope around 1,256.80. In the 4 hours chart,  the price is below a horizontal 20 SMA, offering an immediate resistance at 1,290.70, while the RSI indicator is flat around 52 and the momentum indicator heads north within neutral territory, suggesting the commodity may extend its recovery on a break above the mentioned dynamic resistance. 

Support levels: 1,284.90 1,276.50 1,265.80

Resistance levels: 1,290.70 1,303.65 1,315.54

WTI Crude Oil

Crude oil prices extended their Friday's recovery, with US WTI futures flirting with $50.00 a barrel to end the day a few cents below the critical mark. A weaker dollar due to  improved market´s sentiment, was behind this intraday recovery that seems poised to extend, at least modestly, given that in the daily chart, the price is back above its 20 SMA, whilst the technical indicators head slightly higher around their mid-lines. The upward potential, however, is quite limited at this point given that gains beyond the current region still seem unlikely. Shorter term, the 4 hours chart shows that the technical indicators are beginning to look exhausted towards the upside near overbought levels, but also that they are far from suggesting the price may retrace. Additionally, the price is back above its moving averages, with the 100 SMA offering an immediate support around 49.20, the level to break to see the commodity shedding ground this Tuesday. 

Support levels: 49.20 48.55 47.90

Resistance levels: 50.00 50.65 51.30