Sample Category Title

USD/CHF - 0.9705

Original strategy :

Bought at 0.9610, Target: 0.9710, Stop: 0.9600

Position : - Long at 0.9610

Target :  - 0.9710

Stop : - 0.9600

New strategy  :

Exit long entered at 0.9610 and stand aside

Position : - Long at 0.9610

Target :  -

Stop : -

Current anticipated rally above indicated resistance at 0.9675 adds credence to our view that the fall from 0.9773 has formed a low at 0.9583 on Friday and although near term upside bias remains for the rebound from there to extend gain to 0.9720-30, as broad outlook remains consolidative, reckon upside would be limited to 0.9750 and price should falter below said resistance at 0.9773, bring retreat later.

In view of this, would be prudent to exit our long position entered at 0.9610 and stand aside for now. Below the Kijun-Sen (now at 0.9656) would suggest an intra-day top is formed instead, bring weakness to the lower Kumo (now at 0.9619) but break there is needed to signal the rebound from 0.9573 has ended, bring weakness to 0.9600 first. 

The Canadian dollar has ticked higher in the Monday session. Early in North American trade, USD/CAD is trading at 1.2695, up 0.12% on the day. On the release front, there are no Canadian or US events on the schedule. On Tuesday, the US releases retail sales reports.

Tensions between North Korea and the US remain high, but the prevalent sentiment in the markets is that a diplomatic solution will be found to end the crisis. Still, Donald Trump and Kim Jon-un are unpredictable leaders, and any move by either side could easily ratchet up tensions and unnerve investors. Donald Trump continues to deal with domestic problems as well, and the White House faced stinging criticism from both Republicans and Democrats, as Trump failed to single out white supremacists for the violence in Charlottsville, Virginia, where one person was killed at a demonstration against far-right marchers.

More US inflation numbers, more disappointment for the markets. Consumer Price Index reports in June underscored a soft inflation picture, as both CPI and Core CPI showed negligible gains of 0.1%. This follows a 0.1% decline in the Producer Price Index for June. The persistently soft inflation indicators may hamper plans by the Federal Reserve to raise rates, as some FOMC members continue to advocate against a rate increase until inflation climbs closer to the Fed's inflation target of 2%. However, inflation is not showing any signs of moving higher, which means that a December rate hike remains very much in doubt. Early in the year, a third rate hike seemed a foregone conclusion, but the lack of inflation and the inability of President Trump to push any major legislation through Congress has hindered Fed plans to raise rates. The odds for a December rate have dropped to 36%, according to the CME Group, pointing to wide skepticism about a rate hike before 2018.

GBP/USD - 1.2975

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Despite falling marginally to 1.2940 last Friday, lack of follow through selling and the subsequent rebound has retained our view that further consolidation above this level would take place and another bounce to 1.3030-35 cannot be ruled out, however, reckon upside would be limited to resistance at 1.3059 and price should falter below 1.3085-90 and bring another decline later.

On the downside, below said support at 1.2940 is needed to signal recent fall from 1.3269 top has resumed and extend weakness to previous chart support at 1.2933 but reckon 1.2900 would hold from here, risk from there has increased for a rebound to take place later. As near term outlook is still mixed, would be prudent to stand aside for now. 

The DAX index has started the new week with strong gains. In the Monday session, the DAX is trading at 12,144, up 1.08% on the day. On the release front, there is just one event on the schedule. Eurozone Industrial Production declined 0.6%, missing the estimate of -0.4.%. On Tuesday, Germany releases Preliminary GDP for the first quarter, with an estimate of 0.7%.

It was a tough week for the DAX, which dropped 2.4%. Global stock markets had a rough week, which was dominated by the crisis between North Korea and the US, in which the two countries exchanged sharp warnings, and Pyongyang threatened to attack Guam, a US territory. Tensions between North Korea and the US remain high, but the prevalent sentiment in the markets is that a diplomatic solution will be found to end the crisis. The stock markets are excellent barometers of geopolitical tensions, and the gains in Monday point to a lowering of tensions. Still, Donald Trump and Kim Jon-un are unpredictable leaders, and a move by either side could easily ratchet up hostilities and send stock markets lower.

Eurozone inflation levels remain weak, as the July rate of 1.3% was well off the ECB's target of 2.0%. Germany's robust economy is the star of the continent, but it has not been immune to low inflation. Still, there was some positive news on Friday, as Final CPI in July climbed to 0.4%, up from 0.0% a month earlier. This marked a 4-month high. Later in the week, the ECB releases Final CPI, and a weak reading could dampen investor confidence and send the DAX downwards.

Will the ECB shake up the markets at the September policy meeting? The bank has consistently said that will not begin winding down its asset purchases program until inflation rises, but last month, the bank appeared to change its tune. In July, the ECB said it would hold discussions on the quantitative easing (QE) scheme in "the autumn", and analysts are split as to whether that means September or October. Either way, this means that the markets expect to hear an announcement regarding QE. The bank tapered QE earlier in 2017, from EUR 80 billion to 60 billion/mth, and there are calls to reduce this to EUR billion/mth. The ECB is scheduled to terminate the asset purchases program in December, and could start tapering in early 2018. The bloc's economy is forecast to expand a healthy 2.0% this year, and the eurozone outperformed both the US and the UK in the first half of 2017. The sore point remains inflation, which is stuck at low levels, despite the ECB's ultra-accommodative monetary policy. Another factor which policymakers must deal with is the ECB's bloated balance sheet, which stands at more than EUR 2 trillion.

EUR/USD - 1.1793

Original strategy  :

Bought at 1.1790, Target: 1.1890, Stop: 1.1770

Position : - Long at 1.1790

Target :  - 1.1890

Stop : - 1.1770

New strategy  :

Hold long entered at 1.1790, Target: 1.1890, Stop: 1.1770

Position : - Long at 1.1790

Target :  - 1.1890

Stop : - 1.1770

As the single currency found renewed buying interest at 1.1748 on Friday and rallied, adding credence to our view that low has been formed at 1.1689 last week and mild upside bias remains for further gain to 1.1850, then 1.1880, however, a firm break above latter level is needed to confirm correction from 1.1910 top has ended, bring retest of this level, break there would signal early upmove has resumed and extend headway towards 1.1940-50 first.

In view of this, we are holding on to our long position entered at 1.1790. Only below support at 1.1748 would defer and risk weakness to 1.1720, however, downside should be limited to 1.1700 and support at 1.1689 should remain intact, bring another rally later.

Copper contract for September delivery eased from fresh high at $2.9535 posted last week, after bull-leg from early May's trough at $2.4720, ran out of steam just ticks ahead of strong resistance at $2.9540 (05 May 2015 high). Pullback from 2.9535 peak marks the fourth (corrective wave) of five-wave cycle from $2.5385 (21 June low), which should ideally end at $2.8665 (length of wave 2) according to wave theory, before broader bulls resume. Strong downside rejection on Friday ($2.8705) has generated initial reversal signal, but sustained break above $2.9200 barrier is needed for confirmation. However, risk of deeper pullback remains on the table as daily RSI has just emerged from overbought territory after forming bearish divergence pattern that is seen as negative signal. Extension below Friday's low at $2.8705 and violation of daily higher base at $2.8590 would generate negative signal and risk extension towards rising 20SMA at $2.8487.

Res: 2.9200; 2.9339; 2.9450; 2.9540
Sup: 2.8865; 2.8705; 2.8665; 2.8590

USD/JPY - 109.59

Original strategy  :

Sell at 110.10, Target: 109.10, Stop: 110.45

Position :  -

Target :  -

Stop : -

New strategy  :

Sell at 110.10, Target: 109.10, Stop: 110.45

Position :  -

Target :  -

Stop : -

As the greenback has staged a strong rebound after Friday’s brief fall to 108.73, suggesting a temporary low has been formed there and consolidation with mild upside bias is seen for retracement of recent decline to 109.80, however, reckon upside would be limited to resistance at 110.18 and bring retreat later, below 109.00 would signal the rebound from 108.73 has ended, bring retest of this level, break there would extend recent decline to 108.50 but previous chart support at 108.13 should remain intact. 

In view of this, we are inclined to sell dollar on further subsequent rebound as resistance at 110.18 should cap upside. Above previous support at 110.25 would risk a stronger corrective rise to 110.50 but still reckon upside would be limited and resistance at 110.83 should remain intact, bring another selloff.

Daily Pivots: (S1) 1.1763; (P) 1.1805 (R1) 1.1862; More...

EUR/USD is staying in consolidation below 1.1908 and intraday bias remains neutral first. Another fall cannot be ruled out. But downside should be contained by 38.2% retracement of 1.1119 to 1.1908 at 1.1606 to bring rebound. On the upside, break of 1.1908 will extend recent up trend to 1.2042 long term support turned resistance next.

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. But for now, medium term outlook will remain bullish as long as 1.1295 support holds, in case of pull back.

Daily Pivots: (S1) 1.2953; (P) 1.2992; (R1) 1.3045; More...

Intraday bias in GBP/USD remains neutral for the moment. Near term outlook Stays bearish with 1.3111 resistance intact and deeper decline is expected. As noted before, price actions from 1.1946 are seen as a corrective pattern and could have completed at 1.3267. Break of 1.2932 will affirm this bearish case and target 1.2588 key near term support for confirmation. However, break of 1.3111 resistance will turn bias back to the upside for retesting 1.3267 high instead.

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.

Daily Pivots: (S1) 108.78; (P) 109.09; (R1) 109.46; More...

Intraday bias in USD/JPY remains neutral for consolidation above 108.72 temporary low. While further recovery might be seen, near term outlook remains bearish as long as 110.61 support turned resistance holds. And, deeper decline is still expected. Firm break of 108.81 support will resume whole corrective fall from 118.65 and target 61.8% retracement of 98.97 to 118.65 at 106.48.

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.