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USD/CAD selling continues. Hourly support is given at a distance at 1.2414 (27/07/2017 low) while resistance is now given at a distance at 1.2778 (15/08/2017 low). Expected to show continued short-term bearish move.

In the longer term, the pair has broken longterm support that can be found at 1.2461 (16/03/2015 low) before bouncing back. Strong resistance is given at 1.4690 (22/01/2016 high). The pair should head further lower.

USD/CHF is heading lower. Higher resistance is given at 0.9771 (15/06/2017 high). Hourly support at 0.9584 (08/11/2017 low) has been broken. Expected to show growing continued bearish pressures.

In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours nonetheless a long term bullish bias since the unpeg in January 2015.

USD/JPY has bounced strongly off support. The pair is likely to retest towards former support at 108.13 (17/04/2017 low) . Expected to show another leg lower.

We favor a long-term bearish bias. Support is now given at 96.57 (10/08/2013 low). A gradual rise towards the major resistance at 135.15 (01/02/2002 high) seems absolutely unlikely. Expected to decline further support at 93.79 (13/06/2013 low).

GBP/USD bearish momentum has bounced around support given at 1.2774 (24/08/2017 high). Hourly resistance is given at 1.3031 (11/08/2017 high).Expected to show short-term bullish pressures.

The long-term technical pattern is even more negative since the Brexit vote has paved the way for further decline. Long-term support given at 1.0520 (01/03/85) represents a decent target. Long-term resistance is given at 1.5018 (24/06/2015) and would indicate a long-term reversal in the negative trend. Yet, it is very unlikely at the moment.

EUR/USD short-term bullish pressures are increasing. The pair has broken hourly resistance at 1.1910 (02/08/2017 high) while hourly support lies at 1.1662 (17/08/2017 low). Expected to show increasing bullish pressures.

In the longer term, the momentum is now turning largely positive. We favour a continued bullish bias. Key resistance holding at 1.1871 (24/08/2015 high) has been broken while strong support lies at 1.0341 (03/01/2017 low).

USD/JPY - 109.15

USD/JPY – Wave V of larger degree circle V has possibly ended at 75.31 and major correction has commenced and already met indicated target at 125.00.

Although the greenback fell briefly to 108.60, lack of follow through selling on break of previous support at 108.83 and the subsequent recovery suggest consolidation would be seen and another bounce to 109.85 cannot be ruled out, however, still reckon upside would be limited to 110.35-40 and renewed selling interest should emerge around resistance at 110.95, bring another selloff later. Below 108.60 would bring retest of 108.13 (this year’s low) but break there is needed to extend early decline to 107.50, then 107.00, having said that, reckon 106.50-55 (61.8% Fibonacci retracement of 99.01-118.66) would limit downside and price should stay above 105.00 psychological level. 

Our preferred count is that, triangle wave IV (with circle) ended at 101.45 and the circle wave V brought dollar down to the record low of 75.31 in 2011 and the subsequent rebound signal major correction has commenced with A leg ended at 84.19, followed by wave B at 77.14 and impulsive wave C is now unfolding (indicated upside target at 125.00 had been met) for gain towards 127.00 level. In the event dollar drops below support at 99.01, this would confirm medium term decline from 125.86 top (2015 high) has resumed for subsequent weakness to 98.00 and possibly 97.00.

Under this count, this wave C is unfolding as impulsive waves with (1) (2), 1 2 ended at 80.67, 79.07, 82.84 and 81.69 respectively, hence the extended wave 3 has ended at 103.74 and wave 4 correction of recent upmove should bring weakness to 92.57, then towards 90.88 but psychological support at 90.00 should limit downside and bring another rally later in wave 5, indicated target at 125.00 had been met and gain to 127.00 cannot be ruled out but reckon price would falter below 130.00.

On the upside, whilst initial recovery to 109.85 and 110.30-35 cannot be ruled out, reckon upside would be limited to resistance at 110.95 and bring another decline. Above 111.70-75 would defer and suggest the fall from 114.50 has formed a temporary low instead, bring retracement of recent decline to 112.00, then test of resistance at 112.20 , however, still reckon upside would be limited to 112.85-90 and price should falter below resistance at 113.58, bring another selloff later.

Recommendation: Sell again at 110.90 for 108.90 with stop above 111.90.

On the monthly chart, we have changed our preferred count that an impulsive wave is unfolding with major wave III with circle ended at 79.75, then followed by wave IV with circle and is labeled as a triangle with A: 147.64 (11 August, 1998), B: 101.25, C: 135.20, D: 101.67 and E leg ended at 124.14 to end the wave IV with circle. Hence, wave V with circle commenced from there and hit a record low of 75.31, however, the subsequent strong rebound signals this circle wave V has possibly ended there, hence gain to (indicated upside target at 122.00 and 125.00 had been met), the retreat from 125.86 suggests wave A of major correction has ended there and wave B correction back to 99.00, then 95.00 would be seen, however, reckon downside would be limited to 90.00, bring another rebound in wave C next year.

GBP/USD – 1.2900





Original strategy :

Sold at 1.2910, Target: 1.2710, Stop: 1.2970

Position: - Short at 1.2910

Target:  - 1.2710

Stop: - 1.2970




New strategy :

Hold short entered at 1.2910, Target: 1.2710, Stop: 1.2940

Position: - Short at 1.2910

Target:  - 1.2710

Stop:- 1.2940



As cable opened higher earlier today, lack of follow through buying and the subsequent retreat from 1.2939 has retained our bearishness and as long as this level holds, bearishness remains for another retreat to 128.10-20, then retest of last week’s low at 1.2774, break there would extend recent selloff from 1.3269 top to 1.2750 but loss of downward momentum should prevent sharp fall below 1.2730-35 and previous support at 1.2706 should remain intact, bring rebound later,

In view of this, we are holding on to our short position entered at 1.2910. Above said resistance at 1.2939 would defer and risk a stronger rebound to 1.3000 and possibly test of resistance at 1.3032, however, only break of latter level would abort and signal the fall from 1.3269 has ended instead, bring a stronger rebound to 1.3059 and possibly towards 1.3100 but previous support at 1.3112 (now resistance) should remain intact.

Our preferred count on the daily chart is that cable's rebound from 1.3500 (wave (A) trough) is unfolding as a wave (B) with A ended at 1.7043, followed by triangle wave B and wave C as well as wave (B) has ended at 1.7192, the subsequent selloff is the larger degree wave (C) which is still unfolding with minor wave (III) of larger degree wave 3 ended at 1.1986, hence wave (IV) correction is in progress which could either be a triangle wave (IV) of a complex formation but upside should be limited to 1.3500 and price should falter well below 1.4000, bring another decline in wave (V) of 3 for weakness to 1.1500, then 1.1200. 


GBP/JPY - 140.92

Original strategy:

Sell at 141.40, Target: 139.40, Stop: 142.00

Position: -
Target: -
Stop: -

New strategy :

Sell at 142.00, Target: 140.00, Stop: 142.60

Position: -
Target:  -
Stop:-

Although the British pound retreated after meeting resistance at 141.35, reckon downside would be limited to 140.35-40 and near term upside risk remains for another corrective rebound, above 141.35 would extend the rebound from 139.35 (last week’s low) to 141.90-00 where renewed selling interest should emerge and bring another decline later, below 140.35-40 would bring weakness towards 139.80-85, break there would signal the rebound from 139.35 has ended, bring retest of this level, below would extend recent decline to 138.70 (previous support) but loss of downward momentum should prevent sharp fall below 138.30 and 138.00 should hold.

In view of this, we are looking to sell sterling on subsequent recovery as 141.90-00 should limit upside and bring such a decline. A firm break above resistance at 142.05 would suggest low is possibly formed instead, bring a stronger rebound to 142.50-60 but resistance at 143.20 should remain intact and bring another decline later.

Our preferred count is that larger degree wave V with circle is unfolding from 251.12 with wave (I) 219.34, (II): 241.38 and wave (III) is subdivided into 1: 192.60, 2: 215.89 (23 Jul 2008) and wave 3 ended at 118.87 earlier in 2009. The correction from there to 162.60 is wave 4 which itself is a double three and is labeled as first a-b-c ended at 151.53, followed by wave x at 139.03, 2nd a ended at 162.60, 2nd b at 146.75 and 2nd c leg of wave 4 ended at 163.00. Therefore, the decline from 163.00 to 116.85 is now treated as wave 5 which also marked the end of larger degree wave (III), hence wave (IV) major correction has commenced for retracement of the wave (III) from 241.38 and upside target at 183.95-00 (50% Fibonacci retracement of the wave (II) from 241.38) had been met, a drop below 160.00 would suggest wave (IV) has ended at 195.85, bring decline in wave (V) for initial weakness to 130 (already met) and 120.


Gasoline was the top winner in early Monday's trading. Contract for September delivery surged to the highest levels since July 2015 after opening with gap higher of 5.3% on Monday (1.6721 Fri close/1.7611 Mon open). Gasoline hit session high at 1.7783, before easing to 1.7232 in late Asian/early European trading. The price soared after markets started to digest the impact o hurricane Harvey on the US Gulf coast. This was the most powerful hurricane that hit the state of Texas in more than 50 years which caused a big damage, casualties and prompted the closure of several refineries. Gasoline ended Friday's trading in red after wide-amplitude trading action showed strong hesitation at 1.6835 barrier (former high of 01 Aug) but closed positively for the second consecutive week. Firmly bullish daily studies are supportive for clear break above dented key med-term barrier at 1.7697 (12 Apr high) to signal resumption of broader recovery rally from 0.8975 (Feb 2016 low). Meanwhile, deeper correction before fresh rally could be anticipated. Thick hourly cloud (spanned between 1.6993 and 1.6583) is expected to contain extended dips.

Res: 1.7697, 1.7783, 1.8000, 1.8306
Sup: 1.7223, 1.7000, 1.6993, 1.6835

Key Highlights

• The Euro surged higher this past week and traded towards 1.1960 against the US Dollar.
• The EUR/USD pair broke a couple of important bearish trend lines near 1.1800 on the 4-hours chart.
• Euro Zone's M3 Money Supply for July 2017 was up by 4.5%, compared with the forecast of +4.9% (YoY).
• The Dallas Fed Manufacturing Business Index for August 2017 will be released today, which is forecasted to decline from 16.8 to around 15.5.

EUR/USD Technical Analysis

The Euro is an excellent bullish run from the 1.1650 swing low against the US Dollar. The EUR/USD pair recently traded to a new 2-year high and eyes more gains towards 1.2000 in the near term.

The pair started a strong uptrend from the 1.1650 low and traded above the 100 simple moving average (H4). During the upside move, there was a break above a couple of important bearish trend lines near 1.1800 on the 4-hours chart.

A new monthly high was formed at 1.1959 before the pair started a short-term correction. It already tested the 23.6% Fib retracement level of the last wave from the 1.1773 low to 1.1959 high.

Downsides remain supported by the 1.1900 level and any further declines would face strong buying interest near 1.1850.

Euro Zone's M3 Money Supply

Today in the Euro Zone, the M3 Money Supply report for July 2017 was released by the European Central Bank. The forecast was slated for a rise of 4.9% in the supply compared with the same month a year ago.

The actual result was on the lower side, as there was an increase of 4.5% in the M3 Money Supply. Looking at the narrower aggregate M1, comprising currency in circulation and overnight deposits, it was up by more than 9% July 2017 compared with the same month a year ago.

Referring to the 3-month change, the M3 Money Supply rose 4.8%, less than the last 4.9%. Private loans were up by 2.4% in July 2017 (YoY), more than the last reading of 2.1%.

To sum up, the overall trend for EUR/USD is bullish and any dips towards 1.1860 or 1.1820 remains supported.