Sample Category Title

Price increased sharply in the first part of the day, but has found strong resistance at the red downtrend line. Has also failed to stabilize above the WL2 and now could drop towards the upper median line (uml) again.

Only a breakout above the mentioned resistance levels and above the WL4 will confirm a further increase, but this scenario is less likely to happen because the behavior has changed (lower highs).

USD/CHF - 0.9650

Original strategy :

Buy at 0.9630, Target: 0.9730, Stop: 0.9595

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 0.9620, Target: 0.9720, Stop: 0.9585

Position : -

Target :  -

Stop : -

As the greenback has retreated after faltering below resistance at 0.9699, suggesting initial downside risk remains for weakness to 0.9620-30, however, as long as support at 0.9586 holds, prospect of another rebound remains, above said resistance at 0.9699 would signal the retreat from 0.9766 has ended at 0.9586 last week and mild upside bias is seen for gain to 0.9720, then 0.9740, having said that, reckon resistance at 0.9766-73 would cap upside and bring further consolidation. Only a break of 0.9773 would retain bullishness and signal early rise from 0.9438 has resumed and extend gain to 0.9800.

In view of this, we are looking to buy dollar on further pullback as 0.9620-30 should limit downside. Below 0.9600 would risk test of strong support at 0.9583-86 but only break there would signal a downside break of recent broad range has occurred, bring subsequent fall to 0.9550.

GBP/USD - 1.2802

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Although cable has remained under pressure after resuming recent decline and near term downside risk remains for weakness to 1.2775-80 (38.2% Fibonacci retracement of 1.1986-1.3269), loss of downward momentum should prevent sharp fall below 1.2750 and reckon 1.2725-30 would limit downside, price should stay above 1.2700-05 (100% projection of 1.3269-1.2940 measuring from 1.3032) and risk from there is seen for a rebound to take place later.

In view of this, would not chase this fall here and would be prudent to stand aside for now. Above 1.2840-45 would suggest a temporary low is possibly formed, bring rebound to 1.2870-75 and then 1.2890 but reckon resistance at 1.2917-18 would hold from here, bring another decline.

EUR/USD - 1.1795

Original strategy  :

Bought at 1.1765, Target: 1.1865, Stop: 1.1730

Position : - Long at 1.1765

Target :  - 1.1865

Stop : - 1.1730

New strategy  :

Hold long entered at 1.1765, Target: 1.1865, Stop: 1.1740

Position : - Long at 1.1765

Target :  - 1.1865

Stop : - 1.1740

Although the single currency slipped in European morning, as euro found support at 1.1740 and has rebounded, retaining our view that the pullback from 1.1828 has ended there and bring retest of said resistance, break there would extend the rise from 1.1662 low to resistance at 1.1847, above there would provide confirmation that the pullback from 1.1910 has ended and encourage for headway to 1.1870-80 but reckon said resistance at 1.1910 would hold from here. 

In view of this, we are holding on to our long position entered at 1.1765. Only below 1.1725-30 would abort and suggest the rebound from 1.1662 has ended instead, risk weakness to 1.1695-00 first. 

USD/JPY - 109.13

New strategy  :

Stand aside

Position :  -

Target :  -

Stop : -

Despite intra-day initial brief rise to 109.83, lack of follow through buying on break of resistance at 109.60-67 and the subsequent retreat suggest consolidation below this level would be seen and pullback to 109.00 cannot be ruled out, however, break there is needed to signal the rebound from 108.60 has ended there, bring further fall to 108.80, then test of said support. A break of this support would confirm recent decline has resumed and may extend further weakness to 108.30 (1.618 times projection of 110.95-109.67 measuring from 110.37), then towards 108.00.

On the upside, above 109.60 would bring test of said resistance at 109.83, break there would signal low has been formed at 108.60 and bring a stronger rebound to 110.00 and later towards resistance at 110.37 which is likely to hold from here. As near term outlook is still mixed, would be prudent to stand aside in the meantime.

Daily Pivots: (S1) 0.9157; (P) 0.9167; (R1) 0.9180; More

EUR/GBP's rally continues today and reaches as high as 0.9217 so far. Break of channel resistance suggests upside acceleration. Intraday bias remains on the upside for 0.9304 key resistance next. At this point, there is no clear sign of up trend resumption yet. Hence, we'll be cautious on strong resistance from 0.9304 to limit upside and bring another fall. But firm break of 0.9304 will confirm up trend resumption and pave the way to 0.9799. On the downside, below 0.9159 minor support 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. In that case, 2008 high at 0.9799 will be the next target.

The Japanese stages a strong rally today, possibly in response to US President Donald Trump's comments about shutting the the government. Strength in Yen is particularly apparent against New Zealand as NZD/JPY dives through recent support at 79.07. USD/JPY is being rejected from 4 hour 55 EMA and is possibly now heading back to 108.59. But at same time, Euro also surges broadly after solid PMI data that suggests growth momentum to continue. EUR/GBP extends recent rally through 0.92 handle. EUR/USD is at this point, staying is recently established range but looks set to retest 1.1846 minor resistance again. It looks like the forex traders are getting a bit impatient waiting for Jackson Hole symposium.

Trump threatens government shutdown over US-Mexican wall

While there were revived hope of tax reform by US President Donald Trump's administration, Dollar seemed to have struggle to gain momentum due to Trump's comments. To be more particular, Trump said yesterday that "if we have to close down our government, we're building that wall." If the Congress does not reach a funding deal by September 30, the US government will shut down. At the same time, even if Republicans and Democrats could agree on a deal that exclude the US-Mexico border wall, Trump can, in theory, veto it. And the government will still shut down. Secondly, Trump said that he didn't think there would be a deal in the renegotiation of the North American Free Trade Agreement with Mexico and Canada. And Trump said that "we'll end up probably terminating NAFTA at some point:.

Eurozone PMI: Best growth spell for a number of years

Eurozone PMI manufacturing rose to 57.4 in August, up from 56.6 and above expectation of 56.3. Eurozone PMI services, however, dropped to 54.9, down from 55.4 and below expectation of 55.4. Germany PMI manufacturing rose to 59.4, up from 58.1, beat expectation of 57.7. Germany PMI services rose to 53.4, up from 53.1 and beat expectation of 53.3. France PMI manufacturing rose to 55.0, up from 54.9 and beat expectation of 54.5. France PMI services dropped to 55.5, down from 56.0, below expectation of 55.8.

Markit noted that "this is another positive set of numbers for the euro area, which continues to enjoy its best growth spell for a number of years." And strength in factory orders "bodes well for the labor market as firms will likely look to hire extra staff to deal with outstanding work."

ECB Draghi: QE supported the economy and inflation

Ahead of Jackson hole symposium in US, ECB President Mario Draghi delivered a speech in Lindau, Germany. Draghi defended quantitative easing program. He noted that "a large body of empirical research has substantiated the success of these policies in supporting the economy and inflation, both in the euro area and in the United States." And, "policy actions undertaken in the last 10 years in monetary policy and in regulation and supervision have made the world more resilient."

UK May softens stance on European Court of Justice

In UK, it's reported that Prime Minister Theresa May is softening her stance on EU Court in Brexit negotiation in hope of speeding up the process to trade agreements. May was clear with her stance that UK could "take back control of our laws and bring an end to the jurisdiction". But now, May said that UK will avoid European Court of Justice's "direct jurisdiction". That is seen as a compromise for ECJ to have some say in governing and any post Brexit dispute. And of course, there could still be some influence from ECJ on UK laws.

Japan economy supported by a mixed of strengthened demand

Japan PMI manufacturing rose to 52.8 in August, up from 52.1 and beat expectation of 52.3. That's also the highest level in six months. Markit noted that expansion in the Japanese economy "continues to be supported by a mix of strengthened demand from both domestic and external sources: public work projects and stronger sales to South East Asia were both reported by panellists as areas of growth in August."

NZD/JPY heading to 75.65

NZD/JPY's break of 79.07 support confirms resumption of decline from 83.90. 61.8% retracement of 75.65 to 83.90 is taken out already. Intraday bias is now on the downside for 75.65 key support level next. As this point, it's slightly more likely that price actions fro 83.767 are forming a sideway pattern. Hence, we'll start to look for bottoming signal above 75.65. But break of 80.59 resistance is needed to indicate short term reversal. Otherwise, near term outlook will stay mildly bearish in case of recovery.

EUR/GBP Mid-Day Outlook

Daily Pivots: (S1) 0.9157; (P) 0.9167; (R1) 0.9180; More

EUR/GBP's rally continues today and reaches as high as 0.9217 so far. Break of channel resistance suggests upside acceleration. Intraday bias remains on the upside for 0.9304 key resistance next. At this point, there is no clear sign of up trend resumption yet. Hence, we'll be cautious on strong resistance from 0.9304 to limit upside and bring another fall. But firm break of 0.9304 will confirm up trend resumption and pave the way to 0.9799. On the downside, below 0.9159 minor support 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. In that case, 2008 high at 0.9799 will be the next target.

Economic Indicators Update

GBPUSD: The pair continues to retain its downside pressure as it reversed its Monday gains to close on Tuesday. Support lies at the 1.2800 level where a break will turn attention to the 1.2750 level. Further down, support lies at the 1.2700 level. Below here will set the stage for more weakness towards the 1.2650 level. Conversely, resistance stands at the 1.2900 levels with a turn above here allowing more strength to build up towards the 1.2950 level. Further out, resistance resides at the 1.3000 level followed by the 1.3050 level. On the whole, GBPUSD continues to face downside risk.

During early European hours, the euro pared almost half of yesterday's losses against its US counterpart after preliminary Markit composite PMI readings out of the Eurozone indicated that business activity in the block continued strengthening in August, despite a pullback in the previous month. Before the data release, ECB president, Mario Draghi, did not comment on future monetary policy plans during his public appearance in Germany.

Following a disappointing performance in July, flash IHS Markit PMI figures out of Eurozone came in better than expected in August, after higher activity in the manufacturing sector offset weaker activity in the services industry. Manufacturing PMI rose unexpectedly by 0.8 points to 57.4 instead of declining by 0.3 points to 56.3 as analysts had projected. On the other hand, services PMI dropped to 54.9, while analysts expected the index to remain steady at July's mark of 55.4. Overall, the IHS Markit composite PMI which summarizes surveys given to over 300 private manufacturing companies and 300 services companies, ticked up by 0.1 points to 55.8, exceeding the forecast of 55.5 and remaining close a multi-year high level of 56.8 reached during April-May.

Positive German and French PMI readings were also published along with the Eurozone data. Regarding the manufacturing sector, the German PMI jumped surprisingly to 59.4, while expectations were for the index to retreat to 57.7. The French one also came in above expectations at 55.8. Concerning the services PMI, the German index improved to 53.4 while the French index declined to 55.5 with projections being at 53.3 and 55.8 respectively.

Meanwhile, in Germany, ECB President Mario Draghi, avoided commenting on whether the ECB will tighten its monetary policy amid strengthening economic conditions across the Eurozone. Instead, Draghi made reference on how lower interest rates accompanied by quantitative easing has helped the block to recover from the global financial and Eurozone debt crises.

However, investors will closely watch Draghi's comments at the Jackson Hole symposium on Friday in Wyoming for any clues on monetary policy tightening in the future, as it is widely expected that improving economic data in the Eurozone will prompt the ECB to withdraw stimulus soon. Note that, flash GDP growth in the area remained steady at a one-year high of 0.6% q/q in the second quarter of the year.

Looking at the reaction in the forex markets, the euro climbed immediately by 0.30% versus the greenback to $1.1791 before sliding to 1.1781. Euro/yen also increased by 0.30% to 129.02 and then eased back to 128.90, while euro/pound touched a 10 ½ -month high of 0.9213 (eight-year high, excluding pound's short-lived flash crash in October 2016), supported by heightened uncertainties around Brexit.

WTI oil price is holding within tight range on Wednesday, showing a sign of indecision after Tuesday's trading ended in long-legged Doji candle.

Mixed signal from daily studies shows no clear near-term direction. Daily Tenkan-sen / Kijun-sen bear cross weighs along with yesterday's strong upside rejection at $48.19 and daily MA's in bearish setup.

Negative momentum studies add to bearish signals.

On the other side, thick daily cloud continues to underpin (cloud top lies at $47.01) and marks significant support.

From the fundamental side, concerns of oil oversupply increase after gasoline inventories rose despite being at the peak of summer driving season (API report showed rise of 1.4 million barrels in gasoline stocks on Tuesday) and improved Libyan oil output continue to weigh on oil price, while trend in reduction of US crude stocks is likely to extend and supports oil prices (API report on

Tuesday showed draw of 3.6 million barrels while forecast for EIA report today shows forecast for 3.45 million barrels draw).

Break out of Tuesday's range ($47.35/$48.19) would generate initial direction signal and expose key near-term points at $48.72 (Mon/Tue double upside rejection) or $47.01 (daily cloud top).

Res: 47.76, 47.90, 48.57, 48.72
Sup: 47.35, 47.01, 46.44, 46.22