Sample Category Title

GBP/USD - 1.3565

New strategy  :

Buy at 1.3490, Target: 1.3600, Stop: 1.3455

Position : -

Target :  -

Stop : -

Although cable has eased after intra-day rally to 1.3617 and minor consolidation below this level would be seen and pullback to 1.3510-20 is likely, reckon 1.3490 would limit downside and bring another rise later, above said resistance at 1.3617 would extend recent upmove to 1.3650 and possibly towards 1.3675 but upside should be limited to 1.3700-10, bring retreat later.

In view of this, would not chase this rise here and would be prudent to buy cable on pullback as 1.3490-00 should limit downside. Below the Kijun-Sen (now at 1.3460) would defer and suggest an intra-day top is formed, risk correction to 1.3420, then 1.3400.

Daily Pivots: (S1) 109.85; (P) 110.44; (R1) 110.82; More...

USD/JPY's rise from 107.31 resumed after brief retreat. The development argues that fall from 114.49 is already completed at 107.31. Intraday bias is back on the upside for retesting 114.49 resistance first. Break will also confirm completion of correction from 118.65. On the downside, below 109.54 minor support will turn bias back to the downside for 107.31 instead.

In the bigger picture, rise from 98.97 (2016 low) is now seen as the second leg of the corrective pattern from 125.85 (2015 high). It's unclear whether this this second leg has completed at 118.65 or not. But medium term outlook will be mildly bearish as long as 114.49 resistance holds. And, there is prospect of breaking 98.97 ahead. Meanwhile, break of 114.49 will bring retest of 125.85 high. But even in that case, we don't expect a break there on first attempt.

Daily Pivots: (S1) 0.9598; (P) 0.9651; (R1) 0.9686; More....

Failure to sustain above 0.9679 and break of 0.9582 minor support maintains bearish in USD/CHF. Intraday bias is turned back to the downside for 0.9420 support first. Break there will resume whole decline from 1.0342. However, break of 0.9704 will turn focus to 0.9772 resistance. Break there will confirm near term reversal.

In the bigger picture, current development suggests that 0.9443 key support (2016 low) could be taken out firmly as down trend form 1.0342 extends. There are various interpretation of the price actions. But in any case, medium term outlook will stay bearish as long as 0.9772 resistance holds. Current down trend could extend to 38.2% retracement of 0.7065 (2011 low) to 1.0342 (2016 high) at 0.9090. However, break of 0.9772 will indicate that USD/CHF has successfully defended 0.9443 again and turn outlook bullish for 1.0099 resistance.

EUR/USD - 1.1970

Original strategy  :

Bought at 1.1855, met target at 1.1955

Position : - Long at 1.1855

Target :  - 1.1955

Stop : -

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

As the single currency found support at 1.1838 yesterday and has staged the anticipated rebound, our long position entered at 1.1855 met target at 1.1955 (with 100 points profit) and mild upside bias remains for gain to 1.1995-00 (previous resistance and 61.8% Fibonacci retracement of 1.2093-1.1838), however, break there is needed to signal the fall from 1.2093 has ended, bring subsequent rise to 1.2030-35 but overbought condition should cap price below 1.2050.

As we have taken profit on our long position entered at 1.1855, would not chase this rise here and would be prudent to stand aside for now. Below 1.1920-25 would signal an intra-day top is formed instead, bring weakness to 1.1900 but break there is needed to confirm, then fall to 1.1870-75 would follow.

Daily Pivots: (S1) 1.1862; (P) 1.1892 (R1) 1.1947; More...

Intraday bias in EUR/USD remains neutral at this point. With 1.1822 support intact, near term outlook stays bullish for another rally. Above 1.1994 minor resistance will turn bias to the upside for 1.2091 resistance first. Break will extend larger rise from 1.0339 and target next key fibonacci level at 1.2516. But considering bearish divergence condition in 4 hour MACD, break of 1.1822 will confirm short term topping and bring deeper fall back to 1.1661 support and below.

In the bigger picture, rise from medium term bottom at 1.0339 is still in progress for 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. However, it should be noted that there is no confirmation of trend reversal yet. That is, such rebound from 1.0399 could be a correction. And the long term fall fro 1.6039 (2008 high) could resume. Hence, we'd be cautious on strong resistance from 1.2516 to limit upside. But after all, break of 1.1661 is needed to indicate medium term topping. Otherwise, outlook will remain bullish in case of pull back.

USD/JPY - 110.95

New strategy  :

Stand aside

Position :  -

Target :  -

Stop : -

The greenback found renewed buying interest at 109.55 yesterday and has resumed recent upmove as price broke above resistance at 111.04 on active cross-selling in yen, however, loss of upward momentum should prevent sharp move beyond 111.40-45 (50% projection of 107.32-111.04 measuring from 109.55) and price should falter well below 111.85-90 (61.8% projection), bring correction later.

In view of this, would not chase this move here and would be prudent to stand aside for now. Below the Kijun-Sen (now at 110.45) would bring correction to the lower Kumo (now at 110.11) but only break there would signal an intra-day top is formed, weakness to 109.80 would follow but said support at 109.55 should remain intact. 

Financial markets offered a fairly muted response towards North Korea's latest ballistic missile launch over Japan during Friday's trading session, with stocks in Asia concluding on a mixed note and investors strolling towards the sidelines. This cautious tone from Asia has already pressured European equities, with Wall Street potentially coming under pressure this afternoon if geopolitical tensions encourage market players to avoid riskier assets.

Sterling bulls are back in town

Sterling has stolen the spotlight in the foreign exchange arena today. It rose to its highest level since the results of the Brexit vote, following hawkish comments from BoE policymaker Gertjan Vlieghe. Vlieghe, a notorious dove, has backed the central bank's hawkish rhetoric, ultimately reinforcing expectations of a UK interest rate hike before the end of 2017. With the markets now pricing in a very high possibility of a rate hike before year end, Sterling is likely to regain its attitude and remain supported moving forward.

Sterling/Dollar is undeniably bullish on the daily charts, and this upside momentum is likely to roll over into the new trading week. A weekly close above the 1.3400 region should offer enough encouragement for bulls to target 1.3700.

Dollar lower ahead of retail sales

The Dollar extended declines against a basket of major currencies on Friday, despite consumer price inflation for August exceeding market expectations by rising 0.4%.

It is becoming increasingly clear that the growing disappointment over Trump's failure to enact tax reforms and move forward with the proposed fiscal spending has damaged buying sentiment towards the Greenback. With concerns over low inflation in the U.S still clouding the prospects of higher interest rates and adding to the Dollar's woes, further downside is on the cards. Investors will direct their attention towards the pending Retail Sales Report, which could offer investors a rough idea on consumption and GDP in the US economy.

Dollar bulls are in desperate need of inspiration, and this may come in the form of a positive retail sales figure. In an alternative scenario, the Greenback may be in store for further punishment, if the economic report fails to meet market expectations. From a technical standpoint, the Dollar Index still remains bearish on the daily charts. A breakdown below 91.50 should encourage a further deprecation towards 91.00 and 90.00, respectively.

Commodity spotlight - Gold

Gold has been a battleground for bulls and bears this week, and this is reflected in the metal's chaotic price action. Bulls found support in the form of geopolitical tensions, Dollar weakness and fading rate hike expectations, which kept prices above $1315. Sellers were inspired by reports of Republicans releasing their tax reform framework later this month, which boosted the Dollar. Thursday's positive US CPI report compounded the initial downside, as expectations over higher US rates increased.

This tough tug of war is reaching a climax, and the victor is likely to be determined by where prices conclude this week. A weekly close below $1315, signals the end of the bullish trend on the daily charts, with the next target being $1300. In an alternative scenario, a weekly close above $1340 should open the gates towards $1350 and higher.

Daily Pivots: (S1) 1.3224; (P) 1.3315; (R1) 1.3485; More...

GBP/USD's rally accelerates to as high as 1.3615 so far and intraday bias remains on the upside. Current rally should now target 1.3835 medium support turned resistance next. On the downside, below 1.3522 minor support will turn intraday bias neutral and bring consolidations, before staging another rally.

In the bigger picture, the strong break of 1.3444 key resistance now argues that the long term trend in GBP/USD has reversed. That is a key bottom was formed back in 1.1946 on bullish convergence condition in monthly MACD. Current rise from 1.1946 will target 38.2% retracement of 2.1161 to 1.1946 at 1.5466 next. In any case, medium term outlook will now stay bullish as long as 1.2773 support holds.

Sterling continues to shine today as firmly boosted by BoE rate hike in near term, possibly in November. The Pound also takes other European majors higher with it, including the Swiss Franc. On the other hand, Yen is sold off deeply against others and it seems market's theme is back on global monetary stimulus exit. Dollar initially yawned at news of North Korea firing another missiles over Japan. But the greenback gives way to European majors and pares back much of its gain. Mixed economic data released in US session also provide little support to the greenback.

US headline retail sales dropped -0.2% in August, below expectation of 0.1%. Ex-auto sales rose 0.2% in August, below expectation of 0.5%. Empire state manufacturing index to 24.4 in September, but beat expectation of 18.0. Released earlier today, Eurozone trade surplus narrowed to EUR 18.6b in July. New Zealand business manufacturing index rose to 57.9 in August.

ECB hawks push for scaling back stimulus

ECB Executive Board member Sabine Lautenschlaeger, a known hawk, said that "it is time to take a decision now on scaling back our bond purchases at the beginning of next year." She noted that "the buoyant growth coupled with the monetary accommodation will take us back to an inflation rate which is in line with our goal." And, "there's little doubt about that". She still believe that inflation was "taking a bit longer than usual to pick up". But in her view, the EUR 2b worth of bonds bought by ECB and the "standard monetary policy measures" are already enough accommodation. Bundesbank head Jens Weidmann also said that ECB should "ease up on the accelerator" even though accommodation is still needed.

However, chief economist Peter Praet sounded cautious and said that the central bank needs to be persistent in keep up the massive monetary stimulus. He noted that "we are undoubtedly experiencing a solid, broad-based and resilient economic recovery that is contributing to a narrowing of the output and unemployment gaps, but a seeming disconnect between growth and inflation remains." And he emphasized that "the baseline scenario for inflation going forward remains crucially contingent on very easy financing conditions which, to a large extent, depend on the current accommodative monetary policy stance."

Ex-BoJ economists said rates could rise in fiscal 2019

In Japan, a former BoJ economist, Hideo Hayakawa said that the core-core consumer inflation could accelerate to 1% in the fiscal year ending March 2019. And by that time, BoJ could adjust the long term rate target and let it rise. Nonetheless, it would still take several more years before hitting the 2% inflation target. Meanwhile, Hayakawa criticized the Yield Curve Control framework and said it "doesn't have the power to dramatically boost inflation." And he warned that "if the BOJ fails to hit its price target during the current economic expansion, it's left with a pretty bad situation."

GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.3224; (P) 1.3315; (R1) 1.3485; More...

GBP/USD's rally accelerates to as high as 1.3615 so far and intraday bias remains on the upside. Current rally should now target 1.3835 medium support turned resistance next. On the downside, below 1.3522 minor support will turn intraday bias neutral and bring consolidations, before staging another rally.

In the bigger picture, the strong break of 1.3444 key resistance now argues that the long term trend in GBP/USD has reversed. That is a key bottom was formed back in 1.1946 on bullish convergence condition in monthly MACD. Current rise from 1.1946 will target 38.2% retracement of 2.1161 to 1.1946 at 1.5466 next. In any case, medium term outlook will now stay bullish as long as 1.2773 support holds.

Economic Indicators Update

The USDJPY pair has risen to a seven-week trading high, hitting 111.33, as traders sell the Japanese Yen, and move into British pounds. Speculation is building that the Bank of England will soon raise interest rates, while the Bank of Japan will continue to keep rates at ultra-low levels.

So far, the USDJPY pair has moved to above its 100-week moving average, at 111.23, with price-action further rejected by its 50-week moving average, at 111.33.

The USDJPY pair is trading at a critical point, with price-action now moving through a key confluence of technical resistance, with the pairs 200-week moving average and monthly pivot point nearing.

Key technical resistance above 111.33 is located at the pairs 200-week moving average, at 111.54 and the USDJPY monthly pivot point, situated at 111.65.

To the downside, key USDJPY intraday technical support is found at the former daily price high, at 111.04, and the key 110.80 level. Below 110.80, further support is found at 110.68 and 110.33.