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The focus of the market remains on the political situation in the US where Donald Trump recently fired his political strategist Steve Bannon hoping to improve the political situation. The American president is losing support amongst both business circles and Congress due to the lack of reforms which have been promised during elections. Another issue that traders are keeping a close eye on is the geopolitical tension between the USA and North Korea. Recent military drills by South Korea and the US may provoke the North Korean leader to new actions that traditionally sends investors into risk-off mode.

The euro today is growing after a confident statement from the German central bank, according to which economic growth remains strong at 2.5% on an annual basis on the background of rising exports. Investors are waiting for the statement by the Fed's chairwoman, Janet Yellen, at the economic symposium in Jackson Hole on Friday. This event is one the most important economic forums in the world – at previous sympsosiums central banks have made key announcements regarding monetary policies.

The GBP/USD keeps consolidating on the background of a weaker US dollar and negotiations on the Brexit terms with European Union. The increase of the pair was also restrained by the fall of the Rightmove house price index in the UK that declined by 0.9% in August after an increase of 0.1% in July.

The Japanese yen is still in demand as a safe haven asset due to uncertainty stemming from the political crisis surrounding Trump and the potential conflict between North Korea and the US. However, we do not exclude a price correction soon. All industries activity index in Japan increased by 0.4% in July after declining by 0.8% in the previous month.

EUR/USD

The EUR/USD is soaring and may reach the upper limit of the descending channel and resistance at 1.1800. Overcoming of these levels may become a strong stimulus for bulls to accelerate purchases. In this case the target levels will be 1.1900 and 1.1200. Optimism about growth prospects will be restrained by the RSI being in the overbought zone on the 15-minute chart. The closest targets if the pair changes direction are 1.1700 and 1.1620.

GBP/USD

The GBP/USD has left the limits of the local descending channel and keeps moving around 1.2890. If we see a switch to a positive trend, potential targets could go up to 1.3050 and 1.3250, but first the quotes will need to overcome the closest resistance at 1.2950. On the other side, the descending movement will be restrained by the support line at 1.2800.

USD/JPY

The USD/JPY is moving along the sloping resistance line. Fixing below the support at 108.85 may become the trigger for continued bearish dynamics with potential drops to 108.00 and 106.60. The RSI on the 15-minute chart is close to the oversold zone and this points to a possible rebound. Growth is likely if the price manages to gain a foothold above 109.60. The first goals in this case will be at 110.30 and 111.00.

EUR/USD has edged higher in the Monday session. Currently the pair is trading at 1.1815, up 0.45% on the day. On the release front, it's a very quiet start to week, so we're unlikely to see any significant movement from the pair on Monday. There are no US releases, and the sole euro zone event is the Deutsche Bundesbank monthly bulletin. On Tuesday, Germany releases ZEW Economic Sentiment, which is expected to slow to 15.3 points.

The euro took a dip on Thursday, following a terrorist attack in Barcelona, which killed 13 and wounded dozens. EUR/USD dropped below the 1.17 line and touched 3-week lows. However, the euro has quickly recovered, and is trading at 1.18. Barring any geopolitical crises, such as another terrorist attack, we can expect a few slow days until the Jackson Hole summit on Wednesday. Both the ECB and Federal Reserve find themselves pursuing a less accommodative monetary policy, and the markets will be listening closely to Janet Yellen and Mario Draghi. Will Yellen hint at a December rate hike? Will Draghi provide clues regarding the windup of the ECB's asset-purchases program? Any comments in this vein could be seized upon by the markets and trigger strong movement by the euro. This was the case in June, when Draghi spoke at a central bankers meeting in Portugal, and his upbeat comments about the euro zone economy sent the euro soaring.

The US economy remains strong, but political risk in the US has been rising, as the Trump administration continues to spend most of its focus and energy on damage control. The deadly alt-right protest in Charlottesville was a disaster for the White House, as Trump's belated condemnation of white supremacists and his insistence on blaming the violence on both the white supremacists and the counter-protesters drew wall-to-wall criticism from both Democrat and Republican lawmakers. Trump remains defiant and continues to attack his critics, but the events around Charlottesville have only served to tarnish his image and raised growing concerns about his presidency.

USD/CHF - 0.9616

Most recent candlesticks pattern : N/A

Trend                                    : Sideways

Tenkan-Sen level                  : 0.9643

Kijun-Sen level                    : 0.9643

Ichimoku cloud top                 : 0.9676

Ichimoku cloud bottom              : 0.9622

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Although the greenback has dropped quite sharply today after meeting resistance at 0.9686 and test of previous support at 0.9583 cannot be ruled out, break there is needed to retain bearishness and signal another leg of decline from 0.9773 is underway for further weakness to 0.9550, then 0.9515-20 which is likely to hold on first testing.

In view of this, would not chase this fall here and would be prudent to stand aside for now. Above the Kijun-Sen (now at 0.9643) would bring another bounce towards 0.9686 but break of resistance at 0.9699 is needed to signal the fall from 0.9766 has ended and bring a stronger rebound to 0.9725-30 first.

GBP/USD - 1.2906

Most recent candlesticks pattern   : N/A

Trend                                 : Near term down

Tenkan-Sen level                 : 1.2884

Kijun-Sen level                    : 1.2875

Ichimoku cloud top              : 1.2887

Ichimoku cloud bottom        : 1.2880

Original strategy :

Sell at 1.2935, Target: 1.2835, Stop: 1.2970

Position : -

Target :  -

Stop : -

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

As cable has staged a strong rebound after marginal fall to 1.2832, suggesting consolidation above this level would be seen and another corrective bounce to 1.2932-33 (50% Fibonacci retracement of 1.3032-1.2832 and previous support) is likely, above there would suggest a temporary low has possibly been formed, bring a stronger rebound to 1.2955-60 (61.8% Fibonacci retracement) but reckon 1.2990-00 would hold from here.

On the downside, below 1.2870 would bring weakness to 1.2850 but break of said support at 1.2832 is needed to signal recent decline has resumed and extend weakness to 1.2800 and possibly towards 1.2770. As near term outlook is mixed, would be prudent to stand aside in the meantime. 

Major pairs were locked in tight ranges on Monday as a light economic calendar and thin summer trading volumes, as well as caution ahead of the Jackson Hole gathering of central bankers prevented traders from placing large bets. Keynote speeches by both Fed Chair Janet Yellen and ECB President Mario Draghi later in the week kept traders wary despite there being a consensus that neither will deliver any new policy messages at the event in Wyoming, United States on August 24-26.

The euro had a rollercoaster session as it came under pressure at the start of European trading to dip to a low of $1.1731 before shooting just above $1.1800 after the US market opened. The main focus for the euro this week will be Wednesday's flash PMI readings for the Eurozone. Draghi is scheduled to give two speeches this week, one in Germany (Wednesday) and the other at Jackson Hole (Friday). While he may try to avoid talking about the ECB's expected stimulus withdrawal in 2018, his comments on the inflation outlook could still help steer the forex market.

Similarly, Yellen is unlikely to add any fresh policy insight in her address on Friday but traders will nevertheless be looking for signs on whether the Fed chief is becoming increasingly worried about low inflation.

The US dollar drifted lower versus the yen for much of the day, coming close to erasing all of its gains from Friday's bump up that followed the stronger-than-expected consumer sentiment data from the University of Michigan. The greenback fell back below 109 yen and last stood at 108.75. It's broader measure, the dollar index, was slightly down at 93.18. Also lifting the US currency on Friday was the announcement that President Trump's chief strategist, Stephen Bannon, had been fired from his role.

However, the boost to the markets was short-lived as investors doubted whether the latest White House departure would smoothen the path for Trump's tax reforms plans in Congress. This weighed on the dollar, while it kept safe-havens in demand. In addition, anxiety over North Korea lingered in financial markets as the US and South Korea began a 10-day military exercise, further supporting safe-havens such as gold and the yen, though the Swiss franc was mixed.

Gold headed back up towards Friday's 9-month high of just above $1300 an ounce and was last trading around $1290 an ounce.

The pound was mixed at the start of the week, though it managed to firm slightly against the dollar. There was some support for sterling today as the British government further clarified its position on Brexit. The UK government is due to publish a series of Brexit position papers this week, following on from last week's paper on the Northern Irish border with the Republic of Ireland.

Today's publication outlined details on a post-Brexit customs agreement with the EU, with the British side pressing for "the freest and most frictionless trade possible in goods and services". However, there are fears the negotiations on the next phase of the Brexit talks could be delayed as EU officials insist that not enough progress has been made on the key issues of EU citizens' rights and the divorce bill, despite assurances to the contrary by the UK prime minister's spokeswoman.

The pound climbed to just above the $1.29 level in late European session, but was down versus the single currency, with euro/pound edging up to 0.9143.

The only notable data release today were Canadian wholesale trade figures. Wholesale trade in Canada missed estimates of a 0.2% drop to decline by 0.5% over the month in June. The loonie was little changed after the data, with dollar/loonie trading around 1.2580, not far from Friday's 2-week low, despite the weak data and lower oil prices.

Oil prices fell back on Monday as traders took profit from Friday's surge when they rose by over 3%. WTI oil fell by nearly 1% at $48.06 a barrel and Brent crude was down by a steeper 1.5% at $51.90.

EUR/USD - 1.1810

Most recent candlesticks pattern   : N/A

Trend                      : Sideways

Tenkan-Sen level              : 1.1772

Kijun-Sen level                  : 1.1773

Ichimoku cloud top             : 1.1738

Ichimoku cloud bottom      : 1.1726

Original strategy  :

Bought at 1.1715, met target at 1.1815

Position : - Long at 1.1715

Target :  - 1.1815

Stop : -

New strategy  :

Buy at 1.1770, Target: 1.1870, Stop: 1.1735

Position : -

Target :  -

Stop : -

Current anticipated rally above previous resistance at 1.1790 has justified our bullishness, this move also adds credence to our view that pullback from 1.1910 has ended at 1.1662 last week, hence upside bias remains for test of resistance at 1.1847, break there would provide confirmation and encourage for headway got 1.1870-80, however, reckon said resistance at 1.1910 would hold from here. 

As we have taken profit on our long position entered at 1.1715, would not chase this rise here and would be prudent to buy euro again on pullback as 1.1760-70 should limit downside. 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 - 108.80

Most recent candlesticks pattern   : N/A

Trend                      : Near term down

Tenkan-Sen level              : 108.98

Kijun-Sen level                  : 109.12

Ichimoku cloud top             : 109.78

Ichimoku cloud bottom      : 109.23

New strategy  :

Stand aside

Position :  -

Target :  -

Stop : -

As dollar has slipped again after meeting resistance at 109.60, suggesting retest of last week’s low at 108.60 would be seen, break there would recent decline is still in progress and may extend further weakness to 108.30 (1.618 times projection of 110.95-109.67 measuring from 110.37), then towards 108.10-15 (61.8% projection of 110.95-108.60 measuring from 109.60), however, near term oversold condition should prevent sharp fall below latter level and reckon 108.00 would hold from here, bring rebound later.

In view of this, would not chase this fall here and would prudent to stand aside for now, then look to sell dollar on subsequent rebound, above 109.25-30 would bring another bounce to 109.60-67 resistance, however, break there is needed to signal low is formed, bring further gain to 110.00 and possibly towards 110.37 resistance. 

The EURUSD pair is currently trading back towards the key 1.1754 region, after euro sellers failed to take the pair below the 1.1730 support level during a quiet European trading session.

The monthly BUBA report, from the German Bundesbank, is supporting the euro's intraday trading sentiment, with the German bank continuing to forecast further bullish growth this fiscal quarter.

The intraday trading sentiment surrounding the EURUSD remains bullish above the 1.1754 level. In the medium term, the pair continues to range trade in a down slopping channel, with a sizeable break-out pending.

Short term resistance is located at the current daily price high, at 1.1769, the 200-week moving average at 1.1783, and the downward channel top adds critical resistance, at 1.1793.

Key intraday support for EURUSD pair is located at the current daily price low, at 1.1730 level, the 1.1713 level, and the former swing low, at 1.1681.

The GBPUSD pair has performed a strong intraday technical recovery from the weekly low, set at 1.2849, with British pound buyers now attempting to push price towards the key 1.2900 level.

Despite weaker than expected UK home data earlier today, which showed average house prices declining, sterling remains supported by a weaker U.S dollar index, and technical buying from the pairs 100-day moving average.

The GBPUSD pair remains bullish on an intraday basis, whilst price continues to trade above the daily pivot point, at 1.2877. However, sterling's medium outlook remains bearish whilst trading below the 1.3000 level.

Key intraday support is found at 1.2877, the 1.2859 level, and the channel bottom, at 1.2835.

GBPUSD intraday technical resistance is found at the 1.2900 level, the pairs weekly pivot point, at 1.2910, and the key 1.2932 level.

GBP/USD Posted little gains today and needs a spark to be able to start another bullish momentum. Is trading in the green right, but looks undecided. I hope that we'll have a trading opportunity very soon because looks like that the USD will decrease a little on the short term.

Price could increase as the USDX may slip lower in the upcoming days, the index is trading right below the 93.50 psychological level and could resume the Friday's bearish candle. USDX remains under pressure as long as stays below the 93.81 static resistance, it could come down to recapture more directional energy before will start another bullish momentum.

The Cable increased today, even if the United Kingdom Rightmove HPI dropped by 0.9% in August, versus a 0.1% growth in the previous reading period.

Price narrows on the short term right on the upper median line (ML) of the major descending pitchfork, only a retest of this dynamic support will signal another leg higher. Is premature to say that we'll really have a bullish momentum until will come to retest also the 1.2798 static support.

Support can be found at the second warning line (wl2) of the minor ascending pitchfork. We may have a sideways movement above the 1.2798 level in the upcoming period before we'll have a clear direction.

A further retreat will be confirmed only after a valid breakdown below the 1.2798 static support, this scenario will take shape only if the USDX will breakout above the 93.81 static resistance.