Sample Category Title

Daily Pivots: (S1) 1.1935; (P) 1.1959 (R1) 1.2002; More...

EUR/USD's rally extends to as high as 1.2069 so far. Intraday bias remains on the uprise for 61.8% projection of 1.1118 to 1.1908 from 1.1661 at 1.2149 first. Break there will target 100% projection at 1.2451 next. On the downside, below 1.1955 minor support will turn intraday bias neutral first. But retreat should be contained above 1.1661 support and bring rise resumption.

In the bigger picture, an important bottom was formed at 1.0339 on bullish convergence condition in weekly MACD. Sustained trading above 55 month EMA (now at 1.1768) will pave the way to key fibonacci level at 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. While rise from 1.0339 is strong, there is no confirmation that it's developing into a long term up trend yet. Hence, we'll be cautious on strong resistance from 1.2516 to limit upside. For now, medium term outlook will remain bullish as long as 1.1295 support holds, in case of pull back.

Daily Pivots: (S1) 1.2889; (P) 1.2915; (R1) 1.2959; More...

No change in GBP/USD's outlook as it's staying below 1.3030 resistance. Intraday bias remains neutral with mildly bearish outlook. We're favoring the case that correction from 1.1946 is completed at 1.3267. Below 1.2773 will target 1.2588 key near term support first. Decisive break of 1.2588 will confirm our view and target a test on 1.1946 low. Though, break of 1.3030 will dampen this bearish view and turn bias back to the upside for retesting 1.3267.

In the bigger picture, overall, price actions from 1.1946 medium term low are seen as a corrective pattern. While further rise cannot be ruled out, larger outlook remains bearish as long as 1.3444 key resistance holds. Down trend from 1.7190 (2014 high) is expected to resume later after the correction completes. And break of 1.2588 will indicate that such down trend is resuming.

USD/JPY - 108.51

Original strategy  :

Sell at 109.15, Target: 108.15, Stop: 109.50

Position :  -

Target :  -

Stop : -

New strategy  :

Sell at 109.15, Target: 108.15, Stop: 109.50

Position :  -

Target :  -

Stop : -

Dollar’s initial selloff below previous support at 108.60 signals recent decline from 114.50 is still in progress and further weakness to previous chart support at 108.13 (this year’s low) would be seen, break there would confirm early decline from 118.66 top has resumed and bring subsequent fall to 108.05-06 (50% projection of 114.50-108.73 measuring from 110.95) but reckon near term oversold condition would limit downside to 117.70 and 117.35-40 (61.8% projection) would hold from here, bring rebound later.

In view of this, would not chase this fall here and would be prudent to sell dollar on subsequent rebound as resistance at 109.41 (yesterday’s high) would cap upside and bring another decline. Only break of resistance at 109.85 would abort and signal a temporary low is formed instead.

Daily Pivots: (S1) 109.04; (P) 109.23; (R1) 109.43; More...

Intraday bias in USD/JPY remains on the downside as fall from 114.49 is in progress for 108.12 support. Whole corrective decline from 118.65 is possibly resuming and break of 108.12 will target 61.8% retracement of 98.97 to 118.65 at 106.48. On the upside, break of 109.83 resistance is needed to indicate short term bottoming. Otherwise, outlook will remain bearish in case of recovery.

In the bigger picture, the corrective structure of the fall from 118.65 suggests that rise from 98.97 is not completed yet. Break of 118.65 will target a test on 125.85 high. At this point, it's uncertain whether rise from 98.97 is resuming the long term up trend from 75.56, or it's a leg in the consolidation from 125.85. Hence, we'll be cautious on topping as it approaches 125.85. If fall from 118.65 extends lower, downside should be contained by 61.8% retracement of 98.97 to 118.65 at 106.48 and bring rebound.

Daily Pivots: (S1) 0.9526; (P) 0.9552; (R1) 0.9577; More....

USD/CHF's decline accelerates to as low as 0.9427 so far today. The break of 0.9437 key support level suggests that whole down trend from 1.0342 is resuming. Intraday bias remains on the downside and current fall will now target 61.8% projection of 1.0099 to 0.9437 to 0.9772 at 0.9363. On the upside, above 0.9526 minor resistance will turn intraday bias neutral first. But outlook will remain bearish as long as 0.9772 resistance holds.

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.

Risk aversion dominates the global financial markets as geopolitical tension in Korea Peninsula escalates to a tipping point. North Korea fired a missile over Japan to land in the Pacific Ocean. Japan condemned the act as "an unprecedented, serious and significant threat. US warned that "all options are on the table". Nikkei responded by closing down -0.45% at 19362.55. Major European indices are trading deep in red with FTSE down -1.1%, DAX down -1.7% and CAC down -1.3%. US futures also point to sharply lower open. Gold rides on the sentiment and extends this week's rally, accelerating to as high as 1331.9 so far. In the currency markets, Dollar trades as the weakest ones, followed by commodity currencies and Sterling. Swiss Franc is leading the way up, followed by Yen.

US President Trump: All options are on the table

US President Donald Trump said in a statement that "the world has received North Korea's latest message loud and clear: This regime has signaled its contempt for its neighbors, for all members of the United Nations, and for minimum standards of acceptable international behavior." And he warned that "threatening and destabilizing actions only increase the North Korean regime's isolation in the region and among all nations of the world. All options are on the table."

Japan PMI Abe: US and Japan are "totally at one"

Japan Prime Minister Shinzo Abe said after a 40-minute phone call with Trump that the US and Japan "are totally at one" in the position on North Korea. Abe said he and Trump were in "total agreement" that a emergency meeting of the United Nations Security Council should be held. And Abe said that "President Trump expressed his strong commitment to defending Japan, saying he was 100 percent with Japan as an ally." Abe condemned earlier that "this reckless act of firing a missile over our nation is an unprecedented, serious and significant threat, one that seriously diminishes the peace and safety of the region, and as a result we have lodged a firm protest against North Korea."

China: "Tipping point approaching a crisis" but who to blame?

China urged retraint from all parties and warned that situation had reached "a tipping point approaching a crisis". China Foreign ministry spokeswoman Hua Chunying told a daily press briefing in Beijing: "Think hard about it, who do you think should take the blame, if China is urging all parties to calm down while one party holds constant military exercises … and the other is constantly launching missiles?"

EC Juncker: None of UK's Brexit paper "satisfactory"

European Commission President Jean-Claude Juncker criticized that "none" of UK's positions papers on Brexit is "satisfactory. He complained that "the UK government is hesitant in showing all its cards." Juncker also added that "there are still an enormous number of issues that need to be settled. Not only the border problems with Ireland and Northern Ireland, which is a very serious problem to which we have had no definitive response, but also the issue of European citizens living in the UK and UK citizens living on the continent."

Juncker also reiterated and emphasized that "we need to be crystal clear that there will be no negotiations, particular on trade between the UK and the EU, before all these issues, that is to say those under Article 50, are resolved. That is to say the divorce between the EU and the UK." A European Commission spokesperson later told reports in Brussels that "I will not go beyond what president Juncker said this morning. When the president speaks we never interpret or go beyond that."

EU Barnier urged UK to start "negotiating seriously"

Yesterday, EU chief negotiator Michel Barnier urged UK to begin "negotiating seriously" And Barnier emphasized "we need UK positions on all separation issues. This is necessary to make sufficient progress." And, "we need UK papers that are clear in order to have constructive negotiations and the sooner we remove the ambiguity, the sooner we will be in a position to discuss the future relationship and the transitional period."

US President Trump warned of pulling out from NAFTA

In other news, Trump stepped up his rhetorics on the relationships with Canada and Mexico this week. Trump tweeted that "we are in the NAFTA (worst trade deal ever made) renegotiation process with Mexico & Canada". And he told reporters that "I believe that you will probably have to at least start the termination process before a fair deal can be arrived at. In our opinion, the core of NAFTA renegotiation is to narrow US' trade deficit. With US' trade deficit with Canada on the fall, it would put harder pressure on Mexico in the negotiations.

The market reaction towards NAFTA renegotiation has been muted, overshadowed by other events including North Korean peninsula tensions, US debt ceiling, and central banks' monetary policy outlook. Indeed, we do not expect to see material developments for the rest of the year. However, the parties, especially the US and Mexico, would be eager to complete a deal by mid-2018, ahead of and Mexican election in July and US mid-term election in November." More in Second Round of NAFTA Renegotiation to Begin...

On the data front

Canada IPPI dropped -1.5% mom in July, RMPI dropped -0.6% mom. French GDP grew 0.5% qoq in Q2. German Gfk consumer sentiment rose 0.1 to 10.9 in September. UK nationwide house price dropped -0.1% mom in August. Japan unemployment rate was unchanged at 2.8% in July, household spending dropped -0.2% yoy.

*Quick update: US Case Shiller 20 cities house price rose 5.7% yoy in Jun. Consumer confidence rose to 122.9 in August.

USD/CHF Mid-Day Outlook

Daily Pivots: (S1) 0.9526; (P) 0.9552; (R1) 0.9577; More....

USD/CHF's decline accelerates to as low as 0.9427 so far today. The break of 0.9437 key support level suggests that whole down trend from 1.0342 is resuming. Intraday bias remains on the downside and current fall will now target 61.8% projection of 1.0099 to 0.9437 to 0.9772 at 0.9363. On the upside, above 0.9526 minor resistance will turn intraday bias neutral first. But outlook will remain bearish as long as 0.9772 resistance holds.

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.

Economic Indicators Update

The CAC index has posted strong losses in the Tuesday session. Currently, the index is at 5,079.75, down 1.23% on the day. On the release front, French Consumer Spending came in at 0.7%, matching the forecast. French Preliminary GDP improved to 0.5%, also matching the forecast. On Wednesday, the US releases Preliminary GDP, which is expected to post a strong gain of 2.7%.

Geopolitical tensions are back in the headlines this week, as North Korea fired a missile over Japanese territory on Tuesday. Japan and the US have sharply condemned the missile launch, and with tensions once again climbing in the Korean peninsula, investors are bracing for more stock market losses, and both gold and the Japanese yen, which are safe-haven assets, have posted strong gains this week.

The euro is enjoying a solid rally, and has climbed an impressive 2.1% since Friday. Earlier on Tuesday, the euro pushed above the 1.20 line, for the first time since January 2015. A stronger euro has weighed on exporters, and the CAC dipped below the 5,000 level earlier on Tuesday. On Friday, ECB President Mario Draghi took a page out of Janet Yellen's page book, opting to steer away from any discussion about ECB monetary policy in a speech at a meeting of central bankers in Jackson Hole. Draghi seems to have learned a lesson from a meeting of central bankers in Portugal in June, when the markets seized on his comments that the euro zone was undergoing a broad recovery, and the euro soared. With the euro zone enjoying solid growth in 2017, analysts expect the ECB to address its plans for its asset purchases program (QE), which is expected to terminate in December. The ECB is widely expected to taper its QE program early next year, and the euro has jumped 14% against the dollar in 2017.

At the Jackson Hole meeting, Yellen did not discuss interest rate policy, choosing instead to emphasize that the financial regulations put in place since the financial crisis in 2008 should not be undermined. Her message appeared aim at Donald Trump, who has expressed his intention to relax banking and financial regulations which he has argued are hampering business. The markets remain skeptical about a third and final rate hike this year, as the odds of an increase in December have been falling – currently, the odds a December hike are at 35%, down from 42% a month ago.

EURUSD

The EURUSD continued its bullish momentum yesterday topped at 1.1983. The bias remains bullish in nearest term testing 1.2000 – 1.2050 region as a part of the bullish continuation scenario after broke above the bullish flag formation as you can see on my daily chart below. Immediate support is seen around 1.1910. A clear break below that area could lead price to neutral zone in nearest term but as long as stay above 1.1830 the overall bullish bias should remain strong and any downside pullback should be seen as a good opportunity to buy. On the upside, a clear break and daily close above 1.2050 would expose 1.2100 – 1.2175 region.

GBPUSD

The GBPUSD printed a bullish pin bar formation on daily chart after a rejection to move below the daily EMA 200 as you can see on my daily chart below and closed above 1.2915 key resistance. Overall I remain neutral but the bias is bullish in nearest term testing 1.3000 – 1.3030 resistance area. Immediate support is seen around 1.2870 (daily EMA 200). A clear break below that area could lead price to neutral zone in nearest term as direction would become unclear.

USDJPY

The USDJPY was indecisive yesterday. Price attempted to push lower earlier today in Asian session, slipped below 108.70 key support, hit 108.33 but traded higher and struggling around 108.70 at the time I wrote this comment. Overall I still prefer a bearish scenario but need a clear break and daily close below 108.70 to confirm the bearish continuation scenario testing 108.00 – 107.50 area as nearest bearish target. Immediate resistance is seen around 109.25 (current high). A clear break and daily close back above that area could trigger further bullish pressure retesting 109.85 key resistance.

USDCHF

The USDCHF was indecisive yesterday but overall still able to maintain its bearish bias and hit 0.9498 earlier today in Asian session. The bias remains bearish in nearest term testing 0.9450 key support which remains a good place to buy with a tight stop loss. Immediate resistance is seen around 0.9580. A clear break and daily close above that area could trigger further bullish pressure testing 0.9650 – 0.9700 region. On the downside, a clear break and daily close below 0.9450 would expose 0.9350 – 0.9250 region.

WTI oil stays in red on Tuesday and holds below daily cloud top, former strong support which was taken out on yesterday's strong fall. Today's action is holding within narrower range compared to yesterday's span, with upside attempts being capped under daily cloud top (now acting as resistance at $47.01) but also holding above yesterday's low at $46.14. Bearish signal was generated after break below triangle support line as well as break and close below daily cloud top. Bears need the final negative signal on close below cracked support at $46.44 (17 Aug trough) to confirm continuation of downmove from $50.41 (01 Aug peak). Bearish extension below $46.44 would target $45.39/24 (24 July trough/Fibo 61.8% of $42.04/$50.41 rally).

Res: 46.94, 47.01, 47.43, 47.67
Sup: 46.14, 45.80, 45.39, 45.24

Geopolitical tensions came back to haunt markets today after North Korea fired an unidentified ballistic missile over Japan. The missile flew over the northern Japanese island of Hokkaido before falling into the Pacific. This was the first missile to pass over Japanese territory since 2009 and comes after North Korea recently backed down from its threat to strike the US military installation in Guam in the Pacific Ocean earlier this month.

The latest provocation has reignited fears of a serious escalation of tensions between the United States and North Korea, raising the stakes to a new level. Although some reaction from the North was expected to the recent UN sanctions and joint military drill currently underway between the US and South Korea, today's actions could prompt a tougher response by President Trump. Military action seems unlikely at this point but not totally improbable. The Japanese government would likely be supportive of a US-led military response, though the new South Korean President is seen as favouring dialogue as long as that remained an option.

Gold was the biggest gainer from the latest flight to safety caused by today's strike. The precious metal jumped more than 1%, reaching a 9½-year high of $1325.94 an ounce in European trading. Exasperating gold's gains has been broad dollar weakness on fading expectations of a third rate hike by the Fed this year. The combined effect has pushed gold into oversold territory according to many technical indicators, so further gains in the near term may be limited.

In forex markets, the dollar fell to a 4-month low of 108.25 yen, while its broader measure, the dollar index, slid to its lowest since January 2015, tumbling to 91.62. The possibility of conflict involving Japan failed to deter the safe-haven yen (although it did hurt the Korean won). The Japanese currency was also up sharply against the Australian dollar and the pound, rising by around 0.5% to 86.51 and 140.54 respectively. The Swiss franc posted even larger gains versus the greenback, surging by more than 1% to a two-year high. The dollar was last trading at 0.9435 francs, not far from its session low of 0.9428 francs.

Stocks were also hit by the latest bout of risk aversion, with European bourses following their Asian counterparts in negative territory. The pan-European Stoxx 600 index was last trading 1.4% lower at 367.22