Sample Category Title

Daily Pivots: (S1) 0.8864; (P) 0.8893; (R1) 0.8931; More...

Intraday bias in EUR/GBP remains on the downside for 0.8745 support. Break will resume whole fall from 0.9305 to 61.8% projection of 0.9305 to 0.8745 from 0.9032 at 0.8686, and then 100% projection at 0.8472. On the upside, break of 0.9032 is needed to confirm resumption of the rebound. Otherwise, risk will stay on the downside in near term.

In the bigger picture, there are various ways to interpret price actions from 0.9304 high. But after all, firm break of 0.9304/5 is needed to confirm up trend resumption. Otherwise, range trading will continue with risk of another fall. And in that case, EUR/GBP could have a retest on 0.8303. But we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside.

The Euro remains in red on Tuesday and accelerated further down against strengthening greenback which received fresh support on comments that President Trump favors more hawkish next head of the Federal Reserve.

The pair generated bearish signal on Monday's close below 1.1800 (Fibo 38.2% of 1.1669/1.1879 upleg) with fresh bearish acceleration on Tuesday, taking out daily Tenkan-sen support at 1.1774 and pressuring next pivot at 1.1749 (Fibo 61.8%).

Bearish daily studies support for further downside as recent weakness is on track to complete Head & Shoulders pattern on daily chart, which could spark further downside on break below the neckline at 1.1669.

Bears need clear break below 1.1749 Fibo support to unmask daily cloud base at 1.1702 and threaten 1.1669 (former low of 06 Oct / H&S neckline).

Broken Tenkan-sen / 10SMA offer immediate resistance at 1.1774/79, followed by falling 20SMA (1.1802).

EU CPI data are in focus today (Sep CPI m/m is forecasted at 0.4% vs 0.3% prev, while annualized inflation is expected to stay unchanged at 1.5% in September).

Divergence from forecasted levels would have stronger impact on pair's near-term action.

Res: 1.1774, 1.1802, 1.1851, 1.1879
Sup: 1.1749, 1.1702, 1.1669, 1.1620

GBPUSD has turned neutral in the near term after the recent bounce from the key 1.3000 area. It remains to be seen whether the market is making a lower top at 1.3337 and will continue the bearish phase from the 1.3656 peak.

Risk is still tilted to the downside and further weakness is expected since momentum signals are weak. MACD is bearish while RSI is flat.

Immediate support is at 1.3216, which is the 50% Fibonacci retracement level of the upleg from 1.2773 to 1.3656. Below this level support is expected at 1.3112, which is the 61.8% Fibonacci mark. A deeper decline would target the key 1.3000 area and from here the August 24 low at 1.2773 will come into view.

Immediate resistance is at 1.3319 (38.2% Fibonacci) and above this at 1.3446 (23.6% Fibonacci). From here GBPUSD would re-test the 1.3656 peak and then resume the uptrend that started from 1.2773.

In the bigger picture, the short-term bearish phase appears to still be in progress and the corrective move off 1.3000 has reversed back down. Only a rise back above 1.3300 would indicate that the short-term bearish phase from 1.3656 has ended.

Daily Pivots: (S1) 1.1500; (P) 1.1526; (R1) 1.1541; More....

Breach of 1.1497 minor support argues that recovery from1.1387 has completed at 1.1565 already. intraday bias is turned back to the downside. EUR/CHF is staying the third leg of correction from 1.1622 and should extend through 1.1387 support. Nonetheless, strong support in expect at 1.1257 cluster support (38.2% retracement of 1.0652 to 1.1622 at 1.1251) to contain downside and bring rebound.

In the bigger picture, long term rise from SNB spike low back in 2015 is still in progress. EUR/CHF should now be heading back to prior SNB imposed floor at 1.2000. For now, this will be the favored case as long as 1.1198 resistance turned support holds.

On Tuesday, the dollar drifted higher in Asia on speculations that a hawkish Fed candidate impressed the US President. On the other hand, the Australian dollar dipped into losses after the RBA meeting minutes reiterated concerns on overloaded household debt.

Markets were surprised to hear on late Monday that the Stanford Economist, John Taylor, who was in a lower position on Trump's shortlist of Fed chief candidates made an impression to Trump after an hour-long interview last week in the White House. Taylor is considered as more hawkish than the current Fed chair, Janet Yellen, as his studies on monetary policy suggest that interest rates should be three times higher than they currently are. Still, the former Fed board governor Kevin Warsh remains at the head of the list despite a group of economists criticizing his relative academic credentials.

The dollar gained 0.12% on the day versus its major rivals, with the index climbing to 93.42. Dollar/yen was trading flat around 112.14 during the session, while safe-haven gold fell by 0.32% to $1,290.30 per ounce despite North Korea's deputy UN ambassador warning that a nuclear war “could break out any moment”.

In a two-hour dinner in Brussels on late Monday, the British Prime Minister, Theresa May, and the chief of the European Commission, Jean-Claude Junker, agreed that Brexit talks should “accelerate over the months to come”, giving no details on the issues discussed. Today, the UK negotiator, David Davis and the EU negotiator, Michel Barnier will also join the meeting, three days before the EU summit in Brussels. However, the outcome of the May-Juncker meeting failed to provide support to the pound as the UK government worries that Brexit negotiations will break down unless the EU shows the willingness to move on to trade negotiations. The pound remained flat around five-day lows reached yesterday at $1.3251.

Later on the day, markets will keep a close eye on inflation readings out of the UK and on BOE chief Mark Carney's testimony before the parliament's Treasury select committee.

The euro was down by 0.25% at $1.1765 weighed by political risks in Germany, Austria, and Spain ahead of the CPI figures released during the European trading hours.

According to the RBA October's meeting minutes, the central bank has no intention to raise rates anytime soon as the statement supported that higher rates elsewhere “were a welcome development” but did not have any “mechanical implications” for Australia's rate setting. Moreover, the statement reiterated that household indebtedness continued to attract policymakers' attention as the debt level increased in an “environment of low interest rates and weak income growth”. Concluding, policymakers stated that economic growth is expected to grow gradually over the coming year, supported by the current accommodative monetary policy. Following the minutes, the aussie dropped to a two-day low of $0.7832 before it edged up to $0.7847.

The kiwi managed to touch a two-week high of $0.7204 in the wake of better-than-expected CPI figures released early in the Asian session but fell back to $0.7168 afterwards. The numbers showed that New Zealand's consumer prices jumped by 0.5% q/q in the third quarter after remaining unchanged at 0.0% in the previous quarter, while analysts projected a growth of 0.4%. On a yearly basis, prices rose by 1.9%, above the 1.8% forecasted and 1.7% seen previously.

Weekly
    •    Last Candlesticks pattern: Shooting star
    •    Time of formation: 7 Mar 2017
    •    Trend bias: Sideways

Daily
    •    Last Candlesticks pattern: Morning star
    •    Time of formation: 9 May 2017
    •    Trend bias: Near term up

USD/CHF – 0.9784

Although the greenback found support at 0.9705 and has rebounded, break of resistance at 0.9837 (this month’s high) is needed to signal the rise from 0.9421 low has resumed and extend gain to 0.9845-50 (61.8% Fibonacci retracement of 1.0108-0.9421), then 0.9900-10, however, reckon upside would be limited and price should falter below psychological resistance at 1.0000. If said resistance at 0.9837 continues to hold, then further consolidation would take place and another retreat to 0.9705 is likely but downside should be limited to 0.9642 support and bring another rebound later.

On the downside, whilst initial pullback to 0.9705, then minor support at 0.9670 cannot be ruled out, reckon downside would be limited and renewed buying interest should emerge around 0.9650-55 and bring another rise later. A daily close below indicated support at 0.9642 is needed to signal top is formed instead, bring retracement of recent rise to the upper Kumo (now at 0.9600), however, lower Kumo (now at 0.9574) should hold on first testing and price should stay well above support at 0.9565.

Recommendation: Buy at 0.9650 for 0.9850 with stop below 0.9550.

On the weekly chart, the greenback traded in relatively narrow range and further sideways trading is in store, although pullback from 0.9837 may bring pullback to 0.9670, reckon support at 0.9642 would limit downside and bring another rise later, above said resistance at 0.9837 would extend the rebound from 0.9421 low for retracement of recent decline to 0.9845-50 (61.8% Fibonacci retracement of 1.0108-0.9421), then test of the lower Kumo (now at 0.9894) but upside should be limited to the upper Kumo (now at 0.9970), price should falter well below resistance at 1.0100-08.

On the downside, although initial pullback to 0.9705 is likely, reckon support at 0.9642 would limit downside and bring another rise. A drop below the Tenkan-Sen (now at 0.9629) would suggest the first leg of rebound from 0.9421 low has ended, bring weakness to 0.9580 support but still reckon downside would be limited to support at 0.9565 and price should stay above 0.9490-00, bring another rebound later this month. .

The U.S dollar has moved above the 112 level against the Japanese Yen, hitting 112.30 during the Asian session, as the U.S dollar index strengthens across the board. The USDJP pair now awaits the London market open, where traders will watch further buying around the 93 mark in the U.S dollar index.

If the USDJPY can hold price-action above the 112 level, further bullish advancement towards the 112.30, 112.57 and 112.90 level can be seen.

Should the USDJPY pair slip below the 112 level, further declines towards 111.89, 111.79, 111.64 and 111.40 can be seen.

The GBPUSD pair is trading around the 1.3250 level, after earlier slipped back to test its weekly pivot point, at 1.3233, as Brexit negotiations show no sign of progress between UK and EU officials in Brussels.

The British pound is now awaiting key UK inflation data for September, and a speech from Bank of England Governor Mark Carney.

Going forward, the GBPUSD pair is expected to remain bullish while trading above the 1.3233 level. Further buying towards 1.3310, 1.3333 and 1.3362 can be expected while price-action trades above the 1.3233 support level.

Trade should expect a sell-off towards 1.3220, 1.3190 and 1.3170 if price trade below the key 1.3233 technical support level.

The global financial markets will be drawn to headline inflation data on Tuesday, with final reports expected from the Eurozone and United Kingdom. A survey of German investor sentiment will also make headlines after a quiet start to the week.

Action begins at 08:00 GMT with a report on Italian trade. The Eurozone’s third-largest economy is expected to show an August trade surplus of €4.23 billion, down from €6.56 billion the month before.

A deluge of British inflation data will make its way through the financial markets at 08:30 GMT, including the retail price index, the producer price index and the consumer price index. Consumer prices are forecast to rise 3% annually in September, while core prices are projected to rise 2.8% over the same period.

Eurostat will produce euro-wide CPI data at 10:00 GMT. Annual CPI in the currency region is forecast to rise 1.5%. Core inflation is projected to come in at 1.1%, according to estimates.

About an hour earlier, the ZEW Institute will release its economic sentiment index for German and Eurozone investors. Confidence among investors is expected to rise in both jurisdictions.

Three central bankers will also deliver speeches on Tuesday, beginning at 08:00 GMT with Vitor Constancio, the Vice President of the European Central Bank (ECB). The ECB’s Peter Praet, who has served on the Executive Board since 2011, will also deliver a speech at 09:30 GMT.

Finally, Bank of England (BOE) Governor Mark Carney will deliver remarks at 10:15 GMT.

EUR/USD

Europe’s common currency resumed its descent on Monday, falling back below 1.1800 US. The EUR/USD could receive a boost from Eurozone data on Tuesday. An upward correction depends largely on the pair’s ability to reclaim the 1.1810 level. This would spark a rally back toward the mid-1.18 region.

GBP/USD

The British pound steadied on Monday, trading in the mid-1.32 region against the dollar. Cable has been stuck in a 100-pip range between 1.3250 and 1.3350 for the past week, as investors await fresh details concerning Brexit and the BOE. Rangebound is the name of the game for now. With neither the pound nor the greenback showing signs of pulling ahead.

USD/JPY

The dollar is off to a solid start against the yen this week, with the USD/JPY climbing back above 112.00 on Monday. The pair continues to hold that critical line, although upside momentum appears to be limited at time of writing. Looking at the rest of the week, the yen may carry favour with investors ahead of Japanese general election on 22 October. Prime Minister Shinzo Abe is expected to deliver a solid performance in his bid for re-election. For investors, this likely means the continuation of ultra-loose monetary policy.

USD/CHF - 0.9780

Most recent candlesticks pattern : N/A

Trend                                    : Near term down

Tenkan-Sen level                  : 0.9773

Kijun-Sen level                    : 0.9761

Ichimoku cloud top                 : 0.9746

Ichimoku cloud bottom              : 0.9739

Original strategy :

Sold at 0.9755, stopped at 0.9775

Position : - Short at 0.9755

Target :  -

Stop : - 0.9775

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

The greenback found renewed buying interest at 0.9730 and has staged another rebound, current break of resistance at 0.9772 suggests low has possibly been formed at 0.9705 last week and consolidation with mild upside bias is seen for gain to 0.9808 resistance but break there is needed to signal the fall from 0.9837 has ended instead, bring retest of this level which is likely to hold from here.

In view of this, would not chase this rise here and would be prudent to stand aside in the meantime. Below 0.9750 would bring test of said support at 0.9730 but break there is needed to signal the rebound from 0.9705 has ended, bring retest of this level. Once this support is penetrated, this would revive bearishness and extend the fall from 0.9837 to 0.9669-70 (61.8% Fibonacci retracement of 0.9565-0.9837 and previous support) but previous support at 0.9642 should remain intact.