Financial markets are still all about the upcoming UK referendum

EUR/USD

Financial markets are still all about the upcoming UK referendum, although things stabilized this  Tuesday, with stocks edging generally higher, but within average ranges. Generally speaking, high yielders end up gaining against the greenback, while safe-haven assets fell, although the EUR/USD pair plummeted to 1.1242, and remains nearby at the end of the day,  finally filling the weekly opening gap.  On two separated events, Central Banks' heads, Draghi from the ECB and Yellen from the FED, gave testimony of the  ongoing monetary policies before parliamentary commissions, offering cautious approaches ahead of the UK referendum. 

Federal Reserve Chair Janet Yellen noted that the economy has picked up during the second quarter of the year, adding that low interest rates and job gains will likely support consumer spending. Draghi, on the other hand, said that the economy is expected to proceed at a moderate but steady pace, but added that inflation is expected to hover at low levels, and therefore “further stimulus is in the pipeline,” this last triggering EUR's decline. 

Trading a few pips above the mentioned daily low, the 4 hours chart for the EUR/USD pair shows that the technical indicators have pared losses around their mid-lines, indicating the downward potential is still limited, despite the intraday decline. In the same chart, the price is currently below a bullish 20 SMA, which converges with the 38.2% retracement of the May's decline, acting as immediate resistance around 1.1295. The pair will probably continue trading on sentiment rather than technical studies as the key UK date looms, with investors probably turning more cautious this Wednesday and keeping most major assets range bound.  

Support levels: 1.1245 1.1210 1.1160

Resistance levels: 1.1295 1.1330 1.1365 

USD/JPY

The  USD/JPY pair recovered from a daily low of 103.57, to pressure the higher end of its weekly range by the end of the day in the 104.70 region. The Japanese currency edged lower on easing concerns over a possible Brexit, and some comments from Japanese Finance Minster Aso, who said that there is no plan to react immediately should the JPY appreciate sharply on a Brexit. Still trading below the 105.00 figure, the dominant bearish trend seems to have an interim bottom, given that the pair has established a double bottom, clear in the daily chart around 103.55, while is currently pressuring the neckline of the figure at 104.84, with a break above it suggesting a 130 pips recovery. Nevertheless and with the Brexit referendum in the way, seems a too risky play. Technical readings in the 4 hours chart favors additional recoveries, given that indicators are heading modestly higher within positive territory, although the 100 SMA has extended further its decline, now around 106.80. Should the advance extend, 105.50 is the key level to break to confirm a steeper recovery over the upcoming sessions. 

Support levels: 104.65 104.20 103.70 

Resistance levels: 104.85 105.20 105.40

GBP/USD

The GBP/USD pair rallied up to 1.4783, it's higher since early January, and stalling not far from the year high set at 1.4815. The pair however, trimmed all of its daily gains to close it pretty much flat around 1.4670, as market's enthusiasm over a Bremain faded on new mixed polls, showing that both sides of the campaign remain neck-to-neck. Also, seems possible that the market has decided that it has been enough of pricing in a positive outcome. Anyway, the pair added advanced roughly 800 pips in less than a week, more than a good reason to correct lower.  Daily basis, the pair has managed to post a higher high and a higher low, leaving the technical outlook on the bullish side. In the 4 hours chart however, the technical indicators are correcting the extreme overbought readings reached earlier this week, although further slides are not confirmed, given that the RSI indicator turned flat around 68 whilst the Momentum indicator holds far above its 100 level, and the 20 SMA has continued advancing below the current level, now approaching the 1.4500 figure. Despite market is turning cautious, more wild spikes either side of the board can't be disregarded, ahead of the referendum. 

Support levels: 1.4685 1.4650 1.4620 

Resistance levels: 1.4745 1.4790 1.4815

Dow Jones

Wall Street gained for a second consecutive day this Tuesday, with market's attention still centered in the upcoming UK vote over their EU membership. Gains were moderated after Monday's sharp advances, and the Dow Jones Industrial Average rose 24 points, or 0.14%, to finish at 17,829.73. The S&P 500 rose 5 points, or 0.27%, to close at 2,088.90, while the Nasdaq Composite climbed 6 points, or 0.14% to close at 4,843.76. FED´s Chair, Janet Yellen testified before the US Congress and said it is unclear what effect a vote to leave the EU would have, but noted it could lead to volatility in world markets "that would negatively affect financial conditions and the US economy," in line with the cautious tone of most central bankers. The DJIA technical outlook is still neutral, as in the daily chart, the index converges with a horizontal 20 SMA, whilst the technical indicators head nowhere around their mid-lines. In the shorter term, the 4 hours chart shows that the index is slightly above a bullish 20 SMA, currently around 17,796, whilst the technical indicators head south within positive territory, limiting the upside at the time being. 

Support levels: 17,796 17,730 17,663

Resistance levels: 17,880 17,945 17,987 

FTSE 100

The FTSE 100 added 22 points or 0.36%, to close the day modestly higher at 6,226.55, weighed by the poor performance of commodity prices, which sent the mining-related sector into the red. Anglo American lost 1.75%, followed by BHP Billiton, down by 0.54% and Rio Tinto that gave up 0.44%. Glencore managed to add 0.42%, as oil prices bounced back from their lows before London's closing bell. The daily chart for the index shows that the technical indicators are currently entering positive territory, maintaining their bullish slopes, whilst the index has rallied beyond its moving averages that anyway lack clear directional strength and remain all together in a tight range. In the shorter term, the 4 hours chart the technical indicators are slightly retreating from overbought territory, but with the index firmly approaching June high and above its moving averages, the risk remains towards the upside. 

Support levels: 6,184 6,123 6,055 

Resistance levels: 6,282 6,330 6,388

DAX

European equities ended modestly higher, with the German DAX adding 53 points to close at 10,015.54. European stocks consolidated Monday's gains, but remained in the winning side, as ECB's Draghi left doors opened for further easing. In Germany, the ZEW survey for June showed economic sentiment improved more-than-expected in the country, surging to 19.2 from an expected 5.0.  In the EU, sentiment also beat expectations with the survey printing 20.2, also above expectations and previous 16.8. Technically, the daily chart for the German benchmark presents an increasing upward potential, as the technical indicators head higher around their mid-lines, whilst the index stands above its 20 and 100 DMAs, still struggling to advance beyond the 200 DMA.     In the 4 hours chart, the technical indicators maintain their bullish slopes near overbought level, whilst the index has extended its rally far above a bullish 20 SMA, supporting the longer term stance. 

Support levels: 10,010 9,952 9,893 

Resistance levels: 10,117 10,190 10,270

Nikkei

The Nikkei 225 extended its advance by 206 points or 1.28% to end the day at 16,169.11, still underpinned by hopes the UK will remain within the European Union. The index recouped the 16,000 level, an even extended up to an intraday high of 16.280, before easing alongside with US stocks, which closed in the red, but off daily highs. A weakening JPY also helped local shares, with export-oriented shares, such as Toyota and Fuji Heavy, leading the advance. Energy-related equities, however, ended lower as oil prices retreated at the beginning of the day. Now holding around 16,140, the daily chart shows that the index has managed to rally to a higher high, but still develops below its moving averages, while the technical indicators have posted a moderated advance within bearish territory. In the 4 hours chart, the 20 SMA heads sharply higher below the current level, while the technical indicators have lost upward momentum near overbought levels, and are currently beginning to retreat, supporting some additional declines on a break below 16,085, the immediate support. 

Support levels: 16,085 16,002 15,920

Resistance levels: 16,157 16,280 16,342

Gold

Spot gold fell down to $1,265.39 a troy ounce, to end around 1,269.30, roughly $20.00 lower daily basis, further retreating from the year high posted last week, on waning Brexit fears after an ORB telephone poll showed that the "remain" side is up to 53% in contrast to 46% to the "leave" side.  The  commodity is now at fresh 2-week lows, and the daily chart shows that the technical indicators have extended their declines within positive territory, and with sharp bearish slopes, almost ready to cross their mid-lines towards the downside, indicating an increasing bearish potential. In the same chart, the 20 DMA keeps heading higher, now around 1,259.80, which means an extension below this last should confirm a continued decline, probably towards the 100 DMA at 1,250.40. In the 4 hours chart, the price is now below a bearish 20 SMA, whilst the technical indicators head south near oversold readings, also supporting some further slides for the upcoming sessions. 

Support levels: 1,265.40 1,259.80 1,250.40

Resistance levels: 1,278.80 1,290.70 1,303.70

WTI Crude Oil

Crude oil prices fell early Tuesday,  on news that the Nigerian government brokered a 30-day truce with the Niger Delta Avengers, a terrorist group that declared war to oil companies and attacked multiple pipelines over the past months. West Texas Intermediate crude oil futures fell down to $48.83 a barrel, before bouncing back to end the day pretty much flat around 49.70. Ahead of US weekly stockpiles reports, which are expected to show declines, the daily chart present a neutral stance, as the price is still moving back and forth around a horizontal 20 SMA, whilst the technical indicators head nowhere around their mid-lines. Shorter term, the 4 hours chart shows that the price came back strongly after nearing a strongly bullish 20 SMA, whilst the Momentum indicator keeps heading lower within positive territory, and the RSI indicator consolidates around 61,  all of which points to keep the upside limited. 

Support levels: 49.20 48.55 47.90

Resistance levels: 50.00 50.65 51.30