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The US inflation data for July was disappointing as data showed that consumer prices rose 0.1% on the month. This was below the forecasts of a 0.2% increase. However, on a year over year basis, consumer prices were seen rising 1.7% in July. This is slightly higher than June's 1.6%.

In the backdrop, the US - North Korea narrative continues to be the main theme. Investors continued to scale back their risky bets, as a result sending the safe haven currencies and assets higher. However, the markets were seen opening on an optimistic note earlier today.

Earlier in the day, Japan's GDP data showed a 1.0% increase in economic activity on a quarterly basis. This was stronger than the forecasts of a 0.6% increase that was penciled in by economists. On a year over year basis, Japan’s GDP has advanced 4.0%, beating estimates of a 2.5% increase and accelerated from the 1.5% increase registered during the first quarter.

Looking ahead, the economic calendar is light today with only the Eurozone industrial production numbers coming up. Forecasts point to a 0.4% decline.

Currency pair EUR/USD

The EUR/USD divergence between the tops (purple line) could create a larger bearish retracement via an ABC correction (purple). A break of the top and 100% Fibonacci level of wave B vs A at 1.1910 could indicate an uptrend continuation.

The EUR/USD potential break above the resistance (red) of the triangle chart pattern could see price move towards the next 78.6% Fibonacci level of wave B vs A whereas a break below support (green/blue) could see price complete wave B (purple) and start wave C.

Currency pair USD/JPY

The USD/JPY broke below the support trend line (blue) and could be building a downtrend continuation within wave C (brown).

The USD/JPY could be building a wave 4 (orange) pullback if price manages to stay below the bottom of wave 1 (orange) which is indicated by the resistance trend line (red).

Currency pair GBP/USD

The GBP/USD broke above the resistance trend line (dotted red) and could be building a potential bullish retracement as part of a wave 2 (red). The red trend lines and Fibonacci levels could act as a resistance zone. The purple boxes are indicating a potential head and shoulders reversal chart pattern.

The GBP/USD bullish breakout has probably started wave C (purple) of wave 2 (red).

A note on lower timeframe confirming price action...

Waiting for lower timeframe confirmation is our main tool to confirm strength within higher timeframe zones, and has really been the key to our trading success. It takes a little time to understand the subtle nuances, however, as each trade is never the same, but once you master the rhythm so to speak, you will be saved from countless unnecessary losing trades. The following is a list of what we look for:

• A break/retest of supply or demand dependent on which way you're trading.
• A trendline break/retest.
• Buying/selling tails ... essentially we look for a cluster of very obvious spikes off of lower timeframe support and resistance levels within the higher timeframe zone.
• Candlestick patterns. We tend to only stick with pin bars and engulfing bars as these have proven to be the most effective.

We typically search for lower-timeframe confirmation between the M15 and H1 timeframes, since most of our higher-timeframe areas begin with the H4. Stops are usually placed 1-3 pips beyond confirming structures.

EUR/USD

Weekly gain/loss: + 48 pips

Weekly closing price: 1.1821

Despite the weekly timeframe stamping in a strong-looking selling wick, price failed to generate anything noteworthy to the downside last week. Instead, what we saw was the pair decisively print a close above weekly resistance at 1.1768, which has directly exposed a weekly resistance level coming in at 1.2044 (not seen on the screen).

The daily timeframe initially highlighted both the demand at 1.1650-1.1733 and supply drawn from 1.1870-1.1786. The supply suffered multiple breaks to the upside the week prior, giving the impression that the bulls were heading higher. However, what we failed to see last week was the supply (formed by an overlapping tail/wick that broke the 7/6/2010 low at 1.1876) lurking just above this area at 1.1968-1.1862.

A brief look at recent dealings on the H4 timeframe saw the EUR/USD swallow the 1.18 handle after US inflation data came in slightly lower than expected. Price found refuge around the 1.1830 mark (August’s opening level), and ended the day chalking up a selling wick.

Suggestions: Selling conditions remain somewhat uninviting at the moment. This is due to the 1.18 handle – coupled with the EUR being entrenched within a strong uptrend at the moment and weekly price currently trading above resistance.

On the flip side, we do have the daily supply mentioned above at 1.1968-1.1862 in view, which has already managed to cap upside two weeks back. Still, the move from this area was, as you can see, quickly stopped by the daily demand at 1.1650-1.1733, which we’re sure you’ll agree, is not the most attractive in terms of its shape and momentum, thus further supporting a weaker sell side in this market.

Overall, our team remains biased to the upside, but at the same time still slightly weary of the daily supply at 1.1968-1.1862! To that end, we would like to see the bulls charge into this zone this week and make their presence felt, before we consider buying this market. A decisive H4 close above the 1.19 mark would be ideal here.

Data points to consider: No high-impacting events scheduled on the docket today.

Levels to watch/live orders:

• Buys: Watching for a decisive close above 1.19 before we consider buying.
• Sells: Flat (stop loss: N/A).

GBP/USD:  

Weekly gain/loss: – 25 pips

Weekly closing price: 1.3008

Following a dominant weekly selling wick that closed back within the walls of a weekly supply at 1.3120-1.2957, weekly sellers struggled to register anything noteworthy to the downside last week. In the event that the bears do regain consciousness here, nevertheless, this would likely place weekly demand at 1.2589-1.2759 back in view.

Down on the daily timeframe, the support area at 1.3058-1.2979 has, although it looked incredibly vulnerable all week, managed to bolster price going into the week’s end. A move below this zone would likely expose another support area located at 1.2818-1.2752, which happens to fuse with a channel support etched from the low 1.2365 and is also seen glued to the top edge of the said weekly demand.

Looking across to the H4 timeframe, we can see that the pair spent the majority of the week consolidating between 1.3015-1.2953 (yellow zone). As you can probably see, within the top edge of this range we have the large psychological number 1.30 as well as July’s opening level at 1.3003.

Despite price trading above the 1.30 line, a buy in this market is still challenging. Not only because of where weekly price is currently positioned, but also because of the nearby H4 resistance area seen at 1.3062-1.3032 that houses the mid-level resistance line at 1.3050. A sell on the other hand, would not be of interest to our team until a H4 close is seen below the current H4 range.

Suggestions: A close below the 1.2950 neighborhood, together with a successful retest would, in our humble view, be enough evidence to suggest a move down to the 1.29 handle, followed closely by June’s opening line at 1.2870/H4 Quasimodo support at 1.2857.

Data points to consider: No high-impacting events scheduled on the docket today.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Watch for H4 price to close below the 1.2950 region and then look to trade any retest seen thereafter ([waiting for a reasonably sized bearish candle to form following the retest – in the shape of either a full, or near-full-bodied candle – is advised] stop loss: ideally beyond the candle’s wick).

AUD/USD:  

Weekly gain/loss: – 37 pips

Weekly closing price: 0.7835

After the near-touch of a weekly resistance seen at 0.8075 two weeks back, the unit continued to slide lower last week and challenged the top edge of a weekly support area chiseled in at 0.7849-0.7752. The response seen from this area, coupled with daily price bouncing from just ahead of a demand base at 0.7786-0.7838 (encases a daily broken Quasimodo level at 0.7819), is likely going to be of interest to a lot of buyers this week!

Punching the buy button at current price, however, may not be the best path to take The 0.79 handle seen drawn on the H4 timeframe has been on the defensive since Wednesday, which was also a recognized support from the 20th July right through to the 8th August. A close above 0.79 would, in our humble view, accomplish two things. Firstly, it would likely confirm higher prices up to at least the mid-level resistance at 0.7950, followed closely by resistance at 0.7968. Secondly, it will help further validate the strength behind the higher-timeframe supports mentioned above.

Suggestions: Essentially, a H4 close above 0.79 is required before our team can take any action. Following this, we will need to see a retest that (preferably) is accompanied by a lower-timeframe buy signal. For entries using lower-timeframe structure we primarily have three setups we look for, which are all detailed at the top of this report.

Data points to consider: RBA assist Gov. Kent speaks at 12.35am. Chinese industrial production at 3am GMT+1

Levels to watch/live orders:

• Buys: Watch for H4 price to close above 0.79 and then look to trade any retest seen thereafter ([waiting for a lower-timeframe signal to form following the retest is advised] stop loss: dependent on where one confirms this level).
• Sells: Flat (stop loss: N/A).

USD/JPY:  

Weekly gain/loss: – 151 pips

Weekly closing price: 109.17

The safe-haven Japanese yen remained well-bid last week as tensions between the US and North Korea escalated, consequently bringing weekly action into contact with demand based at 108.13-108.95. This area did a superb job in holding the market higher back in June, so we may see history repeat itself here this week. Should the zone suffer a break, nonetheless, there’s a large support area waiting just below at 105.19-107.54.

In addition to the weekly demand in play right now, we also can see that the daily Quasimodo support at 109.11 remained intact, despite a rather aggressive whipsaw to a low of 108.72. Assuming that this level continues to hold ground, we do not see much in the way of resistance on this scale until the 110.76 neighborhood.

Friday was a quiet day in the market, with H4 price seen clinging to the 109 handle. Collectively, as we mentioned in Friday’s report, all three timeframes show structure suggesting a buy in this market. The question still remains however, how does one go about finding an entry? Simply clicking the buy button, in our opinion, just won’t do given the strength of the approach seen into the above said supports.

Suggestions: Personally, for us to commit to a long from 109, we would want to see H4 price break back into the nearby channel edge taken from the low 110.30, and then retest 109 again as support (as per the black arrows). Ultimately, we’d be looking to target 109.62 initially, followed by the 110 handle which converges with a H4 channel resistance taken from the high 111.71.

Data points to consider: Japanese prelim GDP q/q figures at 12.50am GMT+1.

Levels to watch/live orders:

• Buys: 109 region ([watch for H4 price break back into the nearby H4 channel edge taken from the low 110.30 and then retest 109 again as support] waiting for a H4 bullish candle, preferably a full, or near-full-bodied candle, to form following the retest is advised] stop loss: ideally beyond the candle’s tail).
• Sells: Flat (stop loss: N/A).

USD/CAD:  

Weekly gain/loss: + 28 pips

Weekly closing price: 1.2677

Despite the stronger-than-expected rebound seen from the weekly support area given at 1.2433-1.2569 two weeks ago, weekly sellers came into the fray last week and formed a rather attractive selling wick, also known as a bearish pin bar. Unfortunately, as far as we can see, the candle lacks resistance on this scale.

The daily timeframe on the other hand, printed a bearish engulfing formation around a resistance area fixed at 1.2654-1.2734. This area – coupled with the bearish candle signal, could see the bears reassert their dominance this week. Should this come into view, the next area on the hit list is the demand penciled in at 1.2303-1.2423.

A quick recap of Friday’s segment on the H4 chart shows the supply coming in at 1.2747-1.2722 suffered a minor breach to the upside in early trading. After a small, yet clearly powerful, bearish selling wick took shape, the unit declined in value. The move was further intensified after US inflation numbers failed to meet market expectations, forcing price to break below/ retest the 1.27 hurdle during the later hours of the US session.

For those looking to sell the daily bearish engulfing formation, alongside the weekly bearish pin bar, we would strongly recommend waiting for H4 price to take out the nearby H4 mid-level support etched at 1.2650 beforehand.

Suggestions: A H4 close below 1.2650, followed up with a retest and a reasonably sized H4 bearish candle, preferably in the shape of a full, or near-full-bodied candle, would make for a decent sell. The initial target base would have to be the 1.26 handle. Given how close this number is located, we would not be looking to take profits here, and instead reduce risk to breakeven in the hope that weekly and daily sellers force the market back down into the walls of the weekly support area at 1.2433-1.2569, thus providing us with a healthier risk/reward ratio.

Data points to consider: No high-impacting events scheduled on the docket today.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Watch for H4 price to close below 1.2650 and then look to trade any retest seen thereafter ([waiting for a reasonably sized bearish candle to form following the retest – in the shape of either a full, or near-full-bodied candle – is advised] stop loss: ideally beyond the candle’s wick).

USD/CHF:  

Weekly gain/loss: – 109 pips

Weekly closing price: 0.9618

The weekly trendline resistance extended from the low 0.9257 was brought into view over the past few weeks. At the outset, little bearish recognition was seen from this line. That was, of course, until last week where we saw the market selloff heavily from here! The move engulfed the prior week’s candle and has, in our opinion, firmly placed the weekly support area at 0.9443-0.9515 back on the hit list.

In line with weekly flow, the daily candles (after coming within touching distance of a Quasimodo resistance level at 0.9776) dove lower and re-entered the descending channel formation drawn from high to low 0.9808/0.9622. The next support on the hit list from here can be seen at 0.9546 – positioned 31 pips above the top edge of the aforesaid weekly support area.

Over on the H4 timeframe, however, the 0.96 handle remained intact despite an earnest attempt to push lower on the back of lower-than-expected US inflation figures. 0.96 – coupled with July’s opening level at 0.9580 is likely to throw a spanner in the works for anyone looking to sell on the basis of last week’s momentum from the weekly trendline resistance. Usually, in cases such as this we would simply wait for these levels to be consumed and then look to trade the retest. However, given the distance between 0.9580 and 0.9546 (the daily support) is only 34 pips, you’re unfortunately left with little room to maneuver for a short.

Suggestions: On account of the above notes, remaining flat until more conducive price action presents itself is the route we’ve chosen to take.

Data points to consider: No high-impacting events scheduled on the docket today.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).

DOW 30:  

Weekly gain/loss: – 206 points

Weekly closing price: 21865

US equities declined in value last week, consequently breaking a two-week bullish phase. The move, influenced by escalating tensions between the US and North Korea, wiped out the majority of the prior week’s losses and very nearly formed a weekly bearish engulfing candle! Providing that the bears remain dominant this week, we could see the index revisit weekly demand pegged at 21462-21645.

Looking down to the daily candles, we can see that price is now trading within a stone’s throw away from a channel support line etched from the low 20494 (which fuses with a 61.8% Fib support at 21733 taken from the low 21462) . If you overlap both the weekly and daily charts, you’ll notice that the channel support is in fact located a tad above the demand seen noted on the weekly timeframe. Therefore, a fakeout through the channel support line to the top edge of the weekly zone could be something to keep an eyeball on this week!

A closer look at price action on the H4 timeframe shows the unit closed the week just ahead of a channel support line extended from the low 21273. The trouble here is both the H4 and daily channel supports are positioned relatively close together. Also of particular interest on the H4 scale is August’s opening line coming in at 21913, which is currently lurking above current price.

Our suggestions: In view of the technical landscape at the moment, we initially believed that the H4 channel support will likely suffer a minor fakeout, as traders may press for the daily channel support and its converging 61.8% Fib support for long opportunities. However, seeing as how close the weekly demand is located below the daily channel support, we may be in for an even deeper fakeout than originally anticipated!

When anticipating a fakeout, we tend to always attempt to trade the extreme! And in this case we believe the extreme to be the top edge of the weekly demand at 21645. This may seem a long way off at 220 points from current price, but if the trade comes to fruition and does indeed prove to be a fakeout, the payout could be huge! As for stops and take-profit levels, this will be decided if and when price approaches our buy level. This is where patience comes into play, traders!

Data points to consider: No high-impacting events scheduled on the docket today.

Levels to watch/live orders:

• Buys: 21645 region (stops and take profits to be decided if/when price descends to this number.
• Sells: Flat (stop loss: N/A).

GOLD:  

Weekly gain/loss: + $30.3

Weekly closing price: 1288.7

As tensions between North Korea and the US intensified, demand for the safe-haven metal forced price action north last week and recently drove into the jaws of an interesting resistance area seen on the weekly chart. A green zone comprised of two weekly Fibonacci extensions 161.8/127.2% at 1312.2/1284.3 taken from the low 1188.1. Weekly price has, as you can see, responded each time this area has been challenged, therefore there’s a chance that we may see history repeat itself here.

The story on the daily timeframe reveals that price recently crossed above a trendline resistance extended from the high 1337.3. There is resistance seen directly overhead at 1295.4, but apart from the two occasions on 17/04/2017 and 06/06/2017, there’s little history registered with this number! For that reason, we may see price break above this line and head to the resistance carved from 1308.4, which boasts very attractive history dating back to early 2011.

Analyzing Friday’s sessions on the H4 timeframe, supply at 1288.8-1283.4 remained intact despite two aggressive whipsaws through the top edge of the zone. A close above this area would, in our view, confirm a test of the daily resistance level mentioned above at 1295.4.

Our suggestions: Based on the above notes, our desk will not be looking for (long-term) shorts until the daily resistance line plotted at 1308.4 is in play. This is due to the history surrounding this number and its position within the current weekly resistance area (allowing us to place stops tightly above this zone).

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: 1308.4 region. This is, given the location of this daily resistance on the weekly timeframe, a fantastic level to be looking for shorts if the number comes into view.

GBP/USD - 1.3011

Most recent candlesticks pattern   : N/A

Trend                                 : Near term down

Tenkan-Sen level                 : 1.3011

Kijun-Sen level                    : 1.2986

Ichimoku cloud top              : 1.2990

Ichimoku cloud bottom        : 1.2985

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 1.2975-80 would bring retest of said support at 1.2940, however, break there 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. 

Global Markets:

• Asian stock markets: Nikkei down 0.88 %, Shanghai Composite rose 0.72 %, Hang Seng climbed 1.13 %, ASX 200 gained 0.70 %
• Commodities: Gold at $1292.79 (-0.09 %), Silver at $17.13 (+0.40 %), WTI Oil at $48.77 (-0.10 %), Brent Oil at $52.02 (-0.15 %)
• Rates: US 10-year yield at 2.20, UK 10 year yield at 1.06, German 10 year yield at 0.38

News & Data:

• NZD Retail Sales q/q 2.0 % vs 1.5 % previous
• NZD Core Retail Sales q/q 2.1 % vs 1.2 % previous
• CNY Industrial Production y/y 6.4% % vs 7.6 % previous
• JPY Prelim GDP q/q 1.0 % vs 0.3 % previous
• USD CPI m/m 0.1 % vs 0.2% expected
• USD Core CPI m/m 0.1 % vs 0.2 % expected
• U.S. officials say nuclear war with North Korea isn’t imminent – RTRS

CFTC Positioning Data:

• EUR long 94K vs 83K long last week. Longs increased by 11K
• GBP short 25K vs 29K short last week. Shorts trimmed by 4K.
• JPY short 96K vs 112K short last week. Shorts trimmed by 16K
• CHF short 1K vs 1K long last week. 2K new longs
• CAD long 63K vs 41K short. CAD longs increased by 22K.
• AUD long 58k vs 61k last week. Longs trimmed by 3K.
• NZD long 33K vs 35K long last week. Longs trimmed by 2K

Markets Update:

Signs of tension between the USA and the North Korea eased off as Asian stocks bounced on Monday after three continuous losing sessions.

USD/JPY (and yen crosses) traded a little higher on the session; The Yen dropped close to 0.3 Percent trading at fresh session highs of 109.64 per dollar.

EUR/USD: The prevailing tensions failed to generate anything noteworthy last week with an overall gain of mere 48 pips. Opening this week, the Euro has done very little on the session trading at just 0.1 percent higher against the USD at $1.1824.

The Aussie gained few points earlier today despite disappointing Chinese Industrial production data. It was seen trading marginally up at 0.7919 against the USD earlier today. NZD/USD is barely net changed on the session trading close to it’s opening price of 0.7303

GBP/USD is seen trading a tad higher on the day crossing the 1.30000 barrier from it’s opening price of 1.29937. The pound had closed last week with a mere 25 pip loss as weekly sellers struggled to register anything noteworthy to the downside

Upcoming Events:

• 09:00 GMT – (EUR) CPI Industrial Production m/m

The Week Ahead:

Tuesday, August 15th

• French Bank Holiday
• Italian Bank Holiday
• 01:30 GMT – (AUD) Monetary Policy Meeting Minutes
• 06:00 GMT – (EUR) German Prelim GDP q/q
• 07:15 GMT – (CHF) PPI m/m
• 08:30 GMT – (GBP) CPI y/y
• 08:30 GMT – (GBP) PPI Input m/m
• 08:30 GMT – (GBP) RPI y/y
• 12:30 GMT – (USD) Core Retail Sales m/m
• 12:30 GMT – (USD) Retail Sales m/m
• 12:30 GMT – (USD) Empire State Manufacturing Index
• 12:30 GMT – (USD) Import Prices m/m

Wednesday, August 16th

• 01:30 GMT – (AUD) Wage Price Index q/q
• 08:30 GMT – (GBP) Average Earnings Index 3m/y
• 08:30 GMT – (GBP) Claimant Count Change
• 08:30 GMT – (GBP) Unemployment Rate
• 09:00 GMT – (EUR) Flash GDP q/q
• 12:30 GMT – (CAD) Foreign Securities Purchases
• 12:30 GMT – (USD) Housing Starts
• 12:30 GMT – (USD) Building Permits
• 14:30 GMT – (USD) Crude Oil Inventories
• 18:00 GMT – (USD) FOMC Meeting Minutes
• 22:45 GMT – (NZD) PPI Input q/q

Thursday, August 17th

• 01:30 GMT – (AUD) Employment Change
• 01:30 GMT – (AUD) Unemployment rate
• 08:20 GMT – (AUD) RBA Assist Gov Ellis Speaks
• 08:30 GMT – (GBP) Retail Sales m/m
• 09:00 GMT – (EUR) Final CPI y/y
• 11:30 GMT – (EUR) ECB Monetary Policy Meeting Accounts
• 12:30 GMT – (CAD) Manufacturing Sales m/m
• 12:30 GMT – (USD) Unemployment Claims
• 12:30 GMT – (USD) Philly Fed Manufacturing Index

Friday, August 18th

• 12:30 GMT – (CAD) CPI m/m
• 12:30 GMT – (CAD) Core Retail Sales m/m
• 12:30 GMT – (CAD) Common CPI y/y
• 12:30 GMT – (CAD) Retail Sales m/m
• 14:00 GMT – (CAD) Prelim UoM Consumer Sentiment
• 14:15 GMT – (USD) FOMC Member Kaplan Speaks

For the 24 hours to 23:00 GMT, the AUD rose 0.36% against the USD and closed at 0.7893 on Friday.

LME Copper prices declined 1.0% or $63.0/MT to $6353.5/MT. Aluminium prices rose 0.8% or $16.5/MT to $2040.5/MT.

In the Asian session, at GMT0300, the pair is trading at 0.7904, with the AUD trading 0.14% higher against the USD from Friday's close.

Earlier today in China, Australia's largest trading partner, industrial production recorded a less-than-expected rise of 6.4% in July, compared to market expectations for a rise of 7.1%. In the previous month, industrial production had registered a rise of 7.6%. Also, the nation's retail sales climbed less-than-expected by 10.4% YoY in July, compared to an advance of 11.0% in the previous month. Market participants had envisaged retail sales to gain 10.8%.

The pair is expected to find support at 0.7856, and a fall through could take it to the next support level of 0.7807. The pair is expected to find its first resistance at 0.7936, and a rise through could take it to the next resistance level of 0.7967.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the EUR rose 0.49% against the USD and closed at 1.1823 on Friday.

In economic news, data revealed that Germany's final consumer price index (CPI) climbed 1.7% on an annual basis in July, confirming the preliminary print. The CPI had risen 1.6% in the previous month.

The greenback lost ground against a basket of currencies, after weaker-than-expected US inflation data dashed hopes of another Federal Reserve interest rate hike before the year-end.

Data showed that consumer price inflation in the US rose less-than-expected by 0.1% on a monthly basis in July, offering fresh signs that price pressures in the world's largest economy remain muted. In the previous month, the CPI had registered a flat reading, while markets participants had expected for an advance of 0.2%. Meanwhile, on an annual basis, the CPI increased less-than-anticipated by 1.7% in July. In the prior month, the CPI had risen 1.6%.

Meanwhile, the US President, Donald Trump issued a new warning to North Korea, stating that the US military was “locked and loaded” on the nation.

Separately, Russia's Foreign Minister, Sergei Lavrov, stated that there was a Russian-Chinese plan to defuse tensions between the US and North Korea.

In the Asian session, at GMT0300, the pair is trading at 1.1829, with the EUR trading a tad higher against the USD from Friday's close.

The pair is expected to find support at 1.1770, and a fall through could take it to the next support level of 1.1710. The pair is expected to find its first resistance at 1.1868, and a rise through could take it to the next resistance level of 1.1906.

Moving ahead, investors will keep a close watch on the Euro-zone's industrial production data for June, slated to release in a few hours.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

EUR/USD - 1.1827

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 1.1822

Kijun-Sen level                  : 1.1798

Ichimoku cloud top             : 1.1758

Ichimoku cloud bottom      : 1.1737

Original strategy  :

Bought at 1.1790, Target: 1.1890, Stop: 1.1755

Position : - Long at 1.1790

Target :  - 1.1890

Stop : - 1.1755

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.

For the 24 hours to 23:00 GMT, the GBP rose 0.29% against the USD and closed at 1.3014 on Friday.

In the Asian session, at GMT0300, the pair is trading at 1.3016, with the GBP trading marginally higher against the USD from Friday’s close.

The pair is expected to find support at 1.2960, and a fall through could take it to the next support level of 1.2905. The pair is expected to find its first resistance at 1.3051, and a rise through could take it to the next resistance level of 1.3087.

With no macroeconomic releases in the UK today, investor sentiment will be determined by global macroeconomic factors.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.06% against the JPY and closed at 109.09 on Friday.

In the Asian session, at GMT0300, the pair is trading at 109.37, with the USD trading 0.26% higher against the JPY from Friday’s close.

Overnight data indicated that Japan’s preliminary gross domestic product (GDP) advanced 1.0% on a quarterly basis in second quarter of 2017, beating market expectations for a rise of 0.6%, amid robust consumer spending and capital expenditure. In the prior quarter, GDP had climbed 0.3%.

The pair is expected to find support at 108.92, and a fall through could take it to the next support level of 108.48. The pair is expected to find its first resistance at 109.63, and a rise through could take it to the next resistance level of 109.90.

Going ahead, market participants will focus on Japan’s final industrial production data for June, slated to release tomorrow.

The currency pair is trading above its 20 Hr moving average and showing convergence with its 50 Hr moving average.