Sample Category Title

Daily Pivots: (S1) 0.8966; (P) 0.9024; (R1) 0.9066; More

Intraday bias in EUR/GBP remains on the downside for 38.2% retracement of 0.8312 to 0.9305 at 0.8926 first. Fall from 0.9305 is likely the third leg of the consolidation from 0.9304. Break of 0.8926 will target 61.8% retracement at 8691 and below. On the upside, above 0.9075 minor resistance will turn intraday bias neutral first.

In the bigger picture, price actions from 0.9304 are viewed as a medium term corrective pattern. It's uncertain whether it is finished yet. But in case of another fall, we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside and bring rebound. Whole up trend from 0.6935 is expected to resume after consolidation from 0.9304 completes. Firm break of 0.9799 high will target 61.8% projection of 0.5680 to 0.9799 from 0.6935 at 1.1054.

Weekly




 




•   Last Candlesticks pattern: N/A


   




•    Time of formation: N/A


  




•    Trend bias: Up
 

 
 


 


Daily




 




•    Last Candlesticks pattern: Long black candlestick


  




•    Time of formation: 1 Aug 2017







•    Trend bias: Up


 





 

NZD/USD – 0.7237
 


 

Although kiwi retreated from 0.7338, as the pair found support at 0.7217 and has rebounded again, suggesting further consolidation above support at 0.7132 would be seen and upside risk remains for gain to 0.7345 (50% Fibonacci retracement of 0.7558-0.7132), however, reckon upside would be limited to 0.7395-00 (61.8% Fibonacci retracement) and bring retreat later. A break of 0.7217 would suggest the rebound from 0.7132 has ended, bring retest of this level, break there would extend the fall from 0.7558 to 0.7095-00 but loss of downward momentum should prevent sharp fall below 0.7050 and price should stay well above psychological support at 0.7000, bring rebound later.

On the upside, whilst initial recovery to 0.7345 cannot be ruled out, reckon upside would be limited to the 0.7395-00 (61.8% Fibonacci retracement of 0.7558-0.7132) and bring another decline later. A daily close above 0.7400 would risk test of resistance at 0.7455-60, break there would signal the fall from 0.7558 has ended instead, risk a stronger rebound to 0.7495-00 but upside would still be limited and price should falter well below said resistance at 0.7558, bring another retreat later.

Recommendation: Sell at 0.7395 for 0.7195 with stop below 0.7495.


On the weekly chart, last week’s rebound formed a white candlestick, suggesting further consolidation above 0.7132 support would be seen and initial upside risk remains for recovery to 0.7395-00 (61.8% Fibonacci retracement of 0.7558-0.7132), as the sharp retreat from 0.7558 suggests top has possibly been formed there, reckon upside would be limited and bring another decline, below 0.7217 would bring retest of 0.7132 but break there is needed to retain bearishness and extend the retreat from 0.7558 for retracement of recent rise to the lower Kumo (now at 0.7077) and psychological support at 0.7000 would limit downside, kiwi shall stay above 0.6950.

On the upside, expect recovery to be limited to 0.7395-00 (61.8% Fibonacci retracement of 0.7558-0.7132) and bring another decline later. Above 0.7417 resistance would risk a stronger rebound to 0.7490-00 but still reckon said resistance at 0.7558 would limit upside and bring another retreat later. Only a break of 0.7559 would extend medium term erratic upmove from 0.6074 (2015 low) has resumed and may extend gain to 0.7690-00 (61.8% projection of 0.6074-0.7485 measuring from 0.6818) and later towards 0.7780-85 (61.8% Fibonacci retracement of 0.8836-0.6074), however, reckon upside would be limited to 0.7890 and price should falter well below resistance at 0.8035.

Daily Pivots: (S1) 1.4863; (P) 1.4901; (R1) 1.4957; More....

Intraday bias in EUR/AUD remains neutral for the moment and outlook is unchanged. With 1.5042 minor resistance intact, deeper decline is expected to 1.4732 support. Decisive break there will confirm that fall from 1.5173 is the third leg of consolidation pattern from 1.5226. In that case, further fall should be seen to 1.4421 again. But we'd expect strong support from there to contain downside and bring rebound. On the upside, above 1.5042 minor resistance will turn bias back to the upside for 1.5173/5226 resistance zone instead.

In the bigger picture, we're holding on to the view that corrective decline from 1.6587 medium term has completed at 1.3624. Rise from 1.3624 is expected to extend to retest 1.6587. The corrective structure of the price actions from 1.5226 is affirming this view. Above 1.5226 will target a test on 1.6587 key resistance. However, break of 1.4421 support will dampen our view and would drag EUR/AUD lower to retest key support zone around 1.3624.

Daily Pivots: (S1) 1.1432; (P) 1.1465; (R1) 1.1520; More... .

EUR/CHF strengthens to 1.1511 so far today but stays below 1.1537 resistance. Intraday bias remains neutral first and more consolidation could be seen. But in case of another fall, downside should be contained by 38.2% retracement of 1.0830 to 1.1537 at 1.1267 to bring rebound. On the upside, break of 1.1537 resistance will confirm resumption of larger rally from 1.0629. In that case, EUR/CHF should target 1.2 key resistance level next.

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 1.1087 resistance turned support holds.

The economic calendar features several high-profile events on Wednesday, with reports from the Eurozone, United Kingdom and United States set to make headlines.

Germany gets the ball rolling at 06:00 GMT with August inflation data. The final consumer price index (CPI) is forecast to come in at 1.8% annually in August. The harmonized index of consumer prices (HICP) is expected to see a similar level.

Spain will also release final inflation numbers at 07:00 GMT. About 15 minutes later, Switzerland will report on producer inflation for the month of August.

The United Kingdom’s National Statistics will report on August jobs data at 08:30 GMT. The claimant count change is forecast to rise by 600. The ILO unemployment rate likely held steady at 4.4% in the three months through July.

Meanwhile, average earnings excluding bonuses are forecast to rise 2.2% annually between May and July. Including bonuses, average earnings are projected to come in at 2.2% for the same period.

The European Commission’s statistical agency will also release a batch of headline data on Wednesday. At 09:00 GMT, reports on July industrial production and second quarter employment will make headlines.

Shifting gears to the United States, the Department of Labor will issue its monthly producer price index (PPI) at 12:30 GMT. Producer inflation is forecast to rise 0.3% in August and 2.5% annually.

Oil traders will be keeping a close eye on the weekly crude inventory report from the US Energy Information Administration (EIA). At 14:30 GMT the EIA is expected to show a stockpile increase of 2.285 million barrels in the week ended 4 September, following an increase of 4.58 million the week before.

EUR/USD

The euro fell back below 1.2000 US on Tuesday, as the dollar continued to stabilize against a basket of world peers. The EUR/USD was up 0.2% in Wednesday’s Asian session to trade 15 pips below 1.2000. The pair is trading well above the 21-day simple moving average (SMA) and appears poised to cross back over 1.2000.

GBP/USD

The British pound received a large boost on Tuesday after the release of upbeat inflation data, with the GBP/USD climbing above 1.3300 for the first time since last September. Cable continued to trade above 1.3300 on Wednesday after breaking above the 2017 high of 1.3266. The pair is now eyeing the 6 September 2016 high of 1.3447. On the opposite side of the ledger, immediate support is located at 1.3161, or the low from 11 September.

WTI OIL

US crude prices have swung back above $48.00 in the aftermath of Hurricane Irma. The contract was last seen trading around $48.30 a barrel. The 15-minute moving averages show a neutral outlook for the commodity, with the RSI hovering near 50 and the MACD slightly above the zero line.

Currencies were trading quietly during the Asian session ahead of a busy calendar on Wednesday, with markets reacting little to the latest North Korean threats. The dollar weakened slightly with investors expecting inflation data to be released later today, while the euro ticked up after news stated that the President of the European Commission Jean-Claude Junker will call for more EU integration in his speech at the European Parliament later today.

The dollar index was trading 0.08% down in Asia at 91.87 with investors being less concerned about the renewed North Korean warnings yesterday and more cautious about US inflation data released during the European trading hours. In particular, the US producer price index is anticipated to give more insight on the inflation path with analysts projecting the monthly index to turn positive to 0.3% in August after it dropped by 0.1% in the previous month. This could also affect the Fed’s judgment on interest rates next week when policymakers will kick off their policy meeting.

Dollar/yen slipped to 110.10 following a strong rally yesterday which led the pair to a two-week high of 110.28 early today.

Meanwhile, PPI figures out of Japan came in weaker than expected for the month of August but a business survey indicated an improvement in business confidence. Japanese producer prices rose from 2.6% y/y seen in July to 2.9%, missing the expectations of a rise of 3%. On the other hand, the Business Sentiment Large Manufacturing Conditions Index jumped by 9.4%, surprising analysts who expected the index to decrease by 2.8%.

In Europe, the President of the European Commission, Jean-Claude Junker, will give a speech in Strasbourg as the EU’s State of the Union address. Rumours are for the President to call for greater EU integration, highlighting the economic strength of the region. Besides that, the Daily Telegraph stated today that Junker’s top aide, Martin Selmayr, said in a meeting with EU diplomats that countries wishing to stay under the European concept after Brexit will have to switch their national currencies to euro.

Following the above news, the euro climbed to $1.1980, while the pound moved higher to $1.3323, a few hours before the Office for National Statistics publishes UK labor data.

In other currencies, the kiwi rebounded to $0.7300 during early Asian hours after New Zealand’s ruling National Party is marginally ahead of the opposition party in the latest average of polls. Its Australian cousin rose as well, climbing to $0.8032 as the Westpac Consumer Sentiment reached the highest growth since May 2016.

Looking at energy markets, oil prices were down on the session digesting the results from the monthly OPEC report and the API weekly numbers both released yesterday. The API figures for the week ending September 12 showed an increase of 6.181mn barrels in US crude oil stocks while the OPEC report revealed higher demand forecasts for 2018.

WTI crude edged down by 0.12% to 48.17 and Brent fell by 0.24% to $54.15.

Regarding gold, the precious metal weakened to $1,331 per ounce amid stronger risk-on sentiment

Weekly
    •    Last Candlesticks pattern: Long white candlestick
    •    Time of formation: 10 Jul 2017
    •    Trend bias: Up

Daily
    •    Last Candlesticks pattern: Long white candlestick
    •    Time of formation: 18 Jul 2017
    •    Trend bias: Up



Aussie finally resumed recent upmove and surged to as high as 0.8126 in line with our bullish expectations (our long position entered at 0.7920 met target at 0.8120 with 200 points profit), this anticipated resumption of upmove suggests the medium term erratic rise from 0.6827 may extend gain to 0.8163 resistance, however, loss of near term upward momentum should limit upside to 0.8200 and reckon 0.8260-65 (61.8% projection of 0.7329-0.8066 measuring from 0.7808) would hold, price should falter well below another previous resistance at 0.8295, bring retreat later.

On the downside, expect pullback to be limited to the Kijun-Sen (now at 0.7967) and bring another rise later. A daily close below the Kijun-Sen would bring weakness to 0.7900 and possibly test of 0.7871 support, however, downside should be limited to indicated previous support at 0.7808 and bring rebound later. In the event aussie drops below said support at 0.7808, this would signal a top is indeed been formed, bring further weakness to 0.7760 but reckon downside would be limited to previous resistance at 0.7712 and 0.7670-75 would hold from here.


Recommendation: Long entered at 0.7920 met target at 0.8120 with 200 points profit and would turn short at 0.8175 for 0.7975 with stop above 0.8275



On the weekly chart, although last week’s anticipated breach of previous resistance at 0.8066 adds credence to our bullishness that the erratic rise from 0.6827 low has resumed and upside bias remains for this move to extend gain previous resistance at 0.8163, then 0.8200 but near term overbought condition should limit upside to 0.8260-65 (61.8% projection of 0.7329-0.8066 measuring from 0.7808) and another previous resistance at 0.8295 should hold, price should falter well below 0.8390-00, bring retreat later.

On the downside, although pullback to the Tenkan-Sen (now at 0.7956) cannot be ruled out, reckon minor support at 0.7871 would limit downside and bring another rise later. Below 0.7871 would bring test of support at 0.7808 but a weekly close below there is needed to signal top is formed, brig retracement of recent rise to 0.7750, however, a sustained breach below previous resistance at 0.7712 is needed to retain bearishness, bring subsequent fall to 0.7650-60, then towards 0.7600-10 but support at 0.7571 should contain weakness.

XAUUSD (1332.13): Gold prices gapped down at the start of the week, but price action is showing a sign of reversal after support looks to be established at 1324.72. This completes the gap from September 1st and looks to be a minor support level that has been established. It also puts the bias in gold to the upside in the near term. The support at 1324.72 also coincides with the lower median line which also offers a dynamic support level. A rebound is, therefore, expected which will see gold prices pushing higher to retest the 1345.87 resistance level. A retest of this level will fill the gap from Friday's close. Gold prices are likely to remain range bound in the near term within the 1345.87 and 1324.72 levels of resistance and support. A breakout off these levels will suggest further gains or declines to come. The bias, however, remains to the downside with gold prices likely to target 1300.00 region of support which is pending a retest.

GBPUSD (1.3309): The British pound maintained the strong gains yesterday. The gains came as the UK's parliament voted on the new Brexit bill. The faster than expected inflation data also added to the bullish sentiment. Having cleared the 1.3300 level, the British pound could be seen posting higher gains. However, watch for a potential retest towards 1.3236 levels which could now be tested for support. This level initially served as resistance, but the price action shows the strong breach of this resistance which came on the back of the inflation data. Thus, it is quite likely that the GBPUSD could be seen falling back to this support level ahead of maintaining further gains. In the event that GBPUSD slips below 1.3236, then expect prices to consolidate above the support level of 1.3161

EURUSD (1.1982): The EURUSD closed with some minor gains yesterday, and price action is looking to retest the 1.2058 resistance level once again. The strong consolidation near this resistance level suggests that the bullish momentum could be intact. The reversal near the minor support at 1.1936 shows a potential cup and handle pattern in the making. Price needs to break out above 1.2058 in order to push higher. This also puts the minimum upside in EURUSD towards 1.2180 - 1.2200. However, in the event that EURUSD fails to breakout above 1.2058, we can expect the consolidation to keep the currency pair trading flat within 1.2058 and 1.1882 levels of resistance and support.