Daily Outlook

The Australian Dollar is consolidating between 0.7200-0.7250 with the market weighing the divergence between the RBA and US Fed’s next move in monetary policy. The market is pricing in 13% chance of RBA’s cut on 7^th June and 33% chance of rate hike by US Fed on 15^th June. Fed members have been vocal last week after the release of hawkish FOMC minutes suggesting that the market is discounting the willingness of US Fed to hike if data permits. The market remains unconvinced with Brexit referendum looming and still struggling global economy. With lack of economic data today and no surprises from G7 meeting, the Australian Dollar is likely to consolidation further.

Soybean meal futures continued its uptrend breaking 18-month highs, with 3.7% increase on Friday and 8% last week. Concern about tightening exports from Argentina, world’s largest exporter of soybean meal, drove the market higher. Excess rain is expected to hurt Argentina’s soybean crop. As uncertainty builds around the global supply of soybeans, China’s demand continues to strengthen. With China consumption of total world soybean supply projected at 63.9% and growing, overall soybean demand for U.S supplies is expected to remain strong. With falling supply and growing demand, recent events are providing strong fundamentals for a bull market.

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Trade AUD/USD ST: watch 0.7100. Pivot: 0.7560 Our preference: short positions below 0.7560 with targets @ 0.7100 & 0.6815 in extension. Alternative scenario: above 0.7560 look for further upside with 0.7840 & 0.8080 as targets. Comment: the RSI is bearish and calls for further downside. Supports and resistances: 0.8080 ** 0.7840 *** 0.7560 *** 0.7224 Last 0.7100 ** 0.6815 *** 0.6700 ***

Trade AUD/USD Intraday: key resistance at 0.7245. Pivot: 0.7245 Our preference: short positions below 0.7245 with targets @ 0.7185 & 0.7160 in extension. Alternative scenario: above 0.7245 look for further upside with 0.7300 & 0.7335 as targets. Comment: the upward potential is likely to be limited by the resistance at 0.7245. Supports and resistances: 0.7335 0.7300 0.7245 0.7229 Last 0.7185 0.7160 0.7120

Trade Soybean Meal‏ (Jul 16 – CME) ST: the RSI is overbought Our pivot point is at 352.8. Our preference:the upside prevails as long as 352.8 is support. Alternative scenario: the downside breakout of 352.8 would call for 332.1 and 319.7. Comment: the RSI is trading above 70. This could mean that either the price is in a lasting uptrend or just overbought and that therefore a correction could shape (look for bearish divergence in this case). The MACD is positive and above its signal line. The configuration is positive. The price is trading above both its 20 and 50 day MA (respectively at 344.4 and 304.4). Soybean Meal (Jul 16 – CME) is currently trading near its 52 week high reached at 372.7 on 18/05/16. Supports and resistances: 435.2 ** 422.7 * 410.2 ** 397.7 370.4 last 361.0 352.8 ** 332.1 * 319.7 **

Trade Soybeans‏ (CME)‏ (N6) Intraday: bullish bias above 1063.75. Pivot: 1063.75 Our preference: long positions above 1063.75 with targets @ 1090.75 & 1104.50 in extension. Alternative scenario: below 1063.75 look for further downside with 1047.00 & 1034.00 as targets. Comment: the RSI advocates for further advance. Supports and resistances: 1120.00 ** 1104.50 ** 1090.75 *** 1075.75 Last 1063.75 *** 1047.00 ** 1034.00 **