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EUR/GBP is trading around its highest levels of the year. Hourly resistance at 0.9415 (07/10/2017 high) has been broken. Hourly support is given at a distance at 0.8742 (16/06/2017 low). Downside risks are nonetheless important.

In the long-term, the pair has largely recovered from recent lows in 2015. The technical structure suggests a growing upside momentum. The pair is trading above from its 200 DMA. Strong resistance can be found at 0.9500 psychological level.

AUD/USD's short-term technical structure is reversing. Hourly support can be found at 0.7786 (18/07/2017 low). Hourly resistance is given at 0.8066 (27/07/2017 high). Expected to edge lower.

In the long-term, we are waiting for further signs that the current downtrend is ending. Key supports stand at 0.6009 (31/10/2008 low) . A break of the key resistance at 0.8295 (15/01/2015 high) is needed to invalidate our long-term bearish view.

USD/CAD is having some weakness. Hourly support is given at a distance at 1.2414 (27/07/2017 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 pushing higher. Resistance is given at 0.9771 (15/06/2017 high). Hourly support lies at at 0.9584 (08/11/2017 low). Expected to show growing upside 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's volatility is growing. The pair is likely to head back towards former support at 108.83 (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 is edging lower. Hourly resistance is given at 1.2917 (18/08/2017 high). Hourly support can be found at 1.2812 (12/07/2017 low). Expected to show continued bearish 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 slowing down. Hourly resistance can be found at 1.1910 (02/08/2017 high) while hourly support lies at 1.1613 (26/07/2017 low). Expected to show renewed bearish 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).

EURJPY is neutral and is finding strong resistance at the key 129.00 level. After several tests of this area, the pair failed to make a successful break above it.

Upside momentum is not strong as indicated by the RSI, which is merely moving sideways along the 50 level. The risk is to the downside as EURJPY is below the Ichimoku cloud on the 4-hour chart. Note though that there was a bullish crossover of the Tenkan-sen line with the Kijun-sen line earlier today.

Failure to break above 129.00 soon would likely carve out a lower high. The market has been making lower highs and lower lows since the August 2 peak at 131.17. The next target would be at the August 18 low of 127.55. Such a move would increase downside pressure and a deeper decline is expected to target the 126 handle.

Only a clear break above 129.00 would shift the focus back to the upside to target 130.00. From here, 130.55 is a key level to break in order to see a re-test of the 131.17 peak, with scope to see a shift in the short-term trend to bullish.

Key Highlights

• The Euro recently recovered towards 129.00 against the Japanese Yen, but failed to gain momentum.
• There are two important bearish trend lines preventing further upsides near 129.00 on the 4-hours chart of EUR/JPY.
• Germany's preliminary Manufacturing PMI for August 2017 posted a rise from 58.1 to 59.4.
• Euro Zone's preliminary Manufacturing PMI for August 2017 posted a rise from 56.6 to 57.4.

EUR/JPY Technical Analysis

The Euro after consolidating near 128.00 against the Japanese Yen corrected higher. However, the EUR/JPY pair struggled near 129.00 and could decline back towards 128.00.

There is a major resistance zone forming near 129.00-129.10. There are two important bearish trend lines preventing an upside break near 129.00 on the 4-hours chart.

Furthermore, the 50% Fib retracement level of the last decline from the 130.39 high to 127.55 low is also at 128.97. The pair already struggled near 129.10 two times and currently following a bearish path.

On the downside, the 128.00 level is a crucial support zone. If the pair moves down from the current levels buyers might take a stand near 128.00.

To sum up, it seems like the pair might consolidate in the 128-129 range for some time before making the next move.

Euro Zone and Germany's Manufacturing PMI

Today in the Euro Zone, the preliminary readings of the Manufacturing Purchasing Managers Index (PMI) for August 2017 were released by the Markit economics.

The market was looking for Germany's preliminary Manufacturing PMI for August 2017 to decline from 58.1 to 57.7. However, the end result was positive, as there was a rise from 58.1 to 59.4.

The Euro preliminary Manufacturing PMI for August 2017 was forecasted to decline from 56.6 to 56.3. Again, the end result was positive, as there was an increase from 58.1 to 57.4.

The report added that:

The manufacturing sector performed strongly, with both output and new orders rising at sharper rates in August. The latter was boosted by the fastest rise in exports for six-and-a-half years. The service sector, on the other hand, saw growth of activity ease to a seven-month low.

The outcome was positive, and may lift EUR/USD and EUR/JPY. However, it won't be easy for buyers to break 129.00.

Spot Gold moved higher on Wednesday after repeated rejection at $1282 support (Tuesday’s low) and moved above rising daily Tenkan-sen ($1284) which contained dip to $1280 on Monday and being dented on Tuesday but the price closed above it, generating positive signal.

Near-term recovery may extend further while the price stays above Tenkan-sen support, however, downside is expected to remain at risk while key barrier at $1292 (Mon/Tue upside rejection) stays intact.

The notion is supported by daily RSI / MACD bearish divergence and loss of $1282 handle may risk extension of pullback from $1300 peak towards $1277/75 (bull-channel support line / rising 20SMA) with extension to $1267 (15/16 Aug higher base) seen on further bearish acceleration.

Sustained break above $1292 pivot is needed to signal higher low at $1280 and re-focus $1300 barrier.

Bullish technicals favor further upside, with consolidation phase expected to precede fresh upside.

Traders are awaiting comments from Fed chief Yellen in Jackson Hole meeting, regarding monetary policy and interest rate outlook, which would generate stronger direction signal.

Res: 1287, 1289, 1292, 1296
Sup: 1284, 1282, 1280, 1277