Sample Category Title

EUR/USD - 1.1748

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Although the single currency staged a strong rebound after finding support at 1.1650, a break of last week’s high at 1.1777 is needed to signal recent upmove has resumed and extend gain to 1.1784-85 (50% projection of 1.1370-1.1712 measuring from 1.1613). then 1.1800 but loss of near term upward momentum should prevent sharp move beyond 1.1820-25 (61.8% projection), risk from there has increased for a retreat later.

In view of this, would not chase this rise here and would be prudent to stand aside for now. Below 1.1690-95 would bring test of said support at 1.1650 but break there is needed to signal a temporary top is possibly formed, bring further weakness towards support at 1.1613, having said that, price should stay well above previous resistance at 1.1583 (now support), bring another rise later.

AUDNZD is trading quite choppy and slow since last week of July, which gives us an indication that price may be unfolding a corrective wave. As we can see we expect wave 2 to unfold, ideally as a flat correction. A pattern that consist out of a 3-3-5 structure. As we can see on the chart, sub-waves a and b are completed, which means only wave c to the upside is needed for the completion of the pattern. Ideally more gains will step in on the pair and take price higher towards the 1.0710 resistance area, from where a turning point lower will later come in play.

AUDNZD, 1H

USD/JPY - 110.54

New strategy  :

Stand aside

Position :  -

Target :  -

Stop : -

The greenback finally resumed recent decline as the pair broke below indicated previous support at 110.62, adding credence to our bearishness, however, as dollar has recovered from 110.31, suggesting minor consolidation above this level would be seen and test of the Kijun-Sen (now at 110.80) cannot be ruled out but upside should be limited to 111.00-05 and resistance at 111.29 should hold, bring another selloff.

In view of this, would not chase this fall here and would be prudent to stand aside for now. Below said support at 110.31 would extend recent decline to 110.00-05 but near term oversold condition should limit downside to 109.75-80 and 109.50 would hold from here, risk from there is seen for a rebound later.

Key Highlights

• The Euro gained a lot of traction this past week and moved above 1.1750 against the US Dollar.
• There is a major contracting triangle pattern with support at 1.1720 forming on the 4-hours chart of EUR/USD.
• Today in the Euro Zone, the German Retail Sales for June 2017 was released, which posted an increase of 1.1% (MoM).
• Today in the US, the Pending Home Sales figure for June 2017 will be released, which is forecasted to increase by 1% (MoM).

EURUSD Technical Analysis

There were good gains in the Euro as the shared currency traded above 1.1750 vs the US Dollar. The EUR/USD is placed well above 1.1700 and currently approaching a short-term break.

Looking at the 4-hours chart, there is a major contracting triangle pattern forming with support at 1.1720. On the upside, the triangle resistance is near 1.1770, which is a confluence of two connecting trend lines.

On the downside, the triangle support at 1.1720 coincides with the 38.2% Fib retracement level of the last wave from the 1.1650 low to 1.1764 high. As long as the pair is above the 1.1720-00 support, there is a chance of it moving past 1.1770.

On the flip side, a break below 1.1700 could take the pair towards the last swing low of 1.1650. The overall trend is positive above 1.1700 for EUR/USD, as the 100 SMA is moving nicely higher along with the RSI (H4).

German Retail Sales

Today in the Euro Zone, the German Retail Sales for June 2017 was released by the Statistisches Bundesamt Deutschland. The market forecast was an increase of 0.2% compared with the previous month.

The actual result was better, as there was an increase of 1.1% in sales. Looking at the yearly change, there was an increase of 1.5%, which was less than the forecast of 2.7% and the last rise 4.9% (revised).

The report added that:

According to provisional data turnover in retail trade in June 2017 was in real terms 1.5% and in nominal terms 3.1% larger than that in June 2016. The number of days open for sale was 25 in June 2017 and 26 in June 2016.

Overall, the EUR/USD pair remains supported for more gains as long as the 1.1700 support is intact.

Copper posted fresh 26-month high on Monday, signaling bearish continuation after brief consolidation on Thu/Fri.

Contract for September delivery hit new high at $2.9190, but was so far unable to hold gains, as strongly overbought daily studies continue to warn of correction. However, indicators on daily chart are heading higher or in sideways mode and so far missing to generate stronger bearish signal.

Today's low at 2.8765 marks initial support, followed by 2.8508 (Fibo 23.6% of 2.6300/2.9190 and more significant Friday's spike low at 2.8400, which marks the first pivot.

Break here is needed for stronger bearish signal and extension towards next pivotal support at 2.8086 (Fibo 38.2%).

At the upside, next target lies at 2.9248 (FE 161.8% of the wave C from 2.6300, the third wave of five-wave cycle from 2.5385 (21 June trough), with the wave capable of travelling to its FE 176.4% at 2.9514.

From the fundamental side, weak dollar and positive outlook for the economy of the world's biggest copper consumer – China, keep copper price supported for further advance

Res: 2.9040; 2.9190; 2.9248; 2.9310
Sup: 2.8765; 2.8610; 2.8508; 2.8400

In the Monday session, the CAC index is almost unchanged. Currently the index is at 5,132.50, up 0.06% on the day. On the release front, Eurozone CPI Flash Estimate remained unchanged at 1.3% in July, matching the estimate. The Eurozone unemployment rate dropped to 9.1% in June, down from 9.3% a month earlier. On Tuesday, the eurozone releases Preliminary Flash GDP, with an estimate of 0.6%.

The CAC recorded slight losses on Friday, as French indicators were mixed. Consumer spending came in at -0.8%, missing the estimate of -0.3%. On the inflation front, Preliminary CPI declined 0.3%, just above the forecast of -0.4%. This marked the indicator's weakest reading since January. There was better news from Flash GDP for Q2, which improved with a gain of 0.5%, matching the forecast. This was the strongest quarter of growth since Q1 in 2016.

A stronger eurozone economy has seen unemployment levels drop, as the June rate of 9.1% marks the lowest level since 2009. However, major eurozone members such as France, Italy and Spain continue to grapple with high unemployment, with the notable exception being Germany. In France, for example, unemployment improved in the first quarter of 2017, but remains high at 9.6%. Even with the German locomotive firing on all 4 cylinders, the Eurozone flash estimate for inflation was unchanged at 1.3%, well below the ECB's target of just under 2%. The ECB's ultra-easy accommodative policy is set to wind up in December, but the cautious ECB has not hinted at an earlier termination date or tapering the current purchases of ECB 60 billion/month. The ECB has said it will not make any changes before inflation moves closer to its inflation target, but the euro continues to move higher. On Friday, EUR/USD touched a high of 1.7777, its highest level since January 2015. A stronger euro has been weighing on European stock markets, as export shares such as automobile makers have dropped since their products have become more expensive on world markets.

Daily Pivots: (S1) 0.9637; (P) 0.9682; (R1) 0.9730; More...

With 0.9633 minor support intact, intraday bias in USD/CHF remains on the upside for further rise. Prior break of 0.9699 resistance suggests near term reversal after defending 0.9443 key support. Further rally should be seen to 38.2% retracement of 1.0342 to 0.9437 at 0.9783 first. Break will target channel resistance (now at 0.9899). On the downside, below 0.9633 minor support will turn intraday bias neutral and bring consolidations first.

In the bigger picture, current development argues that USD/CHF has successfully defended 0.9443 key support level. And long term range trading in 0.9443/1.0342 is extending with another rise. At this point, there is no sign of an up trend yet. Hence, while further rise is expected in USD/CHF, we'll start to be cautious on loss of momentum above 61.8% retracement of 1.0342 to 0.9437 at 0.9996.

Daily Pivots: (S1) 110.36; (P) 110.84; (R1) 111.14; More...

Intraday bias in USD/JPY remains on the downside at this point. Current decline from 114.49 should extend to 108.81 support first. Break there will resume whole correction from 118.65 and target 61.8% retracement of 98.97 to 118.65 at 106.48. Nonetheless, break of 112.18 resistance will dampen this bearish view and turn focus back to 114.49 resistance instead.

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, down side should be contained by 61.8% retracement of 98.97 to 118.65 at 106.48 and bring rebound.

Daily Pivots: (S1) 1.3077; (P) 1.3115; (R1) 1.3168; More...

Further rise could be seen in GBP/USD but outlook is overall unchanged. Price actions from 1.1946 are seen as a corrective pattern. Considering bearish divergence condition in 4 hour MACD, we'd stay cautious on strong resistance from 61.8% projection of 1.2108 to 1.3047 from 1.2588 at 1.3168 to limit upside. Break of 1.2932 support will be the first sign of reversal and will turn bias to the downside to target 1.2588 key support next. Though, sustained break of 1.3168 will bring further rise towards 1.3444 before completing the correction.

In the bigger picture, overall, price actions from 1.1946 medium term low are seen as a corrective pattern that is still in progress. While further upside is expected, 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) 1.1690; (P) 1.1726 (R1) 1.1783; More...

No change in EUR/USD's outlook. With 1.1612 minor support intact, further rise is expected at this point. Whole rise from 1.0339 low is still in progress and should target 1.2 handle next. Nonetheless, considering bearish divergence condition in 4 hour MACD, break of 1.1612 will indicate short term topping and bring lengthier consolidation first.

In the bigger picture, an important bottom was formed at 1.0339 on bullish convergence condition in weekly MACD. Sustained break of 55 month EMA (now at 1.1760) 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.