Sample Category Title

Daily Pivots: (S1) 1.4645; (P) 1.4685; (R1) 1.4714; More...

Intraday bias in EUR/AUD remains neutral for consolidation below 1.4777 temporary top. We'd holding on to the view that correction from 1.5226 could have completed with three waves down to 1.4421 already. Therefore, another rally is expected in the cross. Break of 1.4777 will turn bias to the upside for 1.5073 resistance first. Break there will indicate resumption of whole rise from 1.3624. However, break of 1.4221 will invalidate our view and extend the decline from 1.5226.

In the bigger picture, we're holding on to the view that corrective decline from 1.6587 medium term has completed at 1.3624. Rise from 1.3624 is expected to resume to retest 1.6587. The corrective structure of the fall from 1.5226 is affirming this view. Above 1.5226 will target a test on 1.6587 key resistance. However, further downside acceleration will dampen our view and would drag EUR/AUD lower to retest key support zone around 1.3624.

Weekly
    •    Last Candlesticks pattern: Long white candlestick
    •    Time of formation: 10 Jul 2017
    •    Trend bias: Sideways

Daily
    •    Last Candlesticks pattern: Long white candlestick
    •    Time of formation: 18 Jul 2017
    •    Trend bias: Up



As aussie found decent demand at 0.7571 earlier this month and has rallied since, price broke above indicated previous resistance at 0.7835, reinforcing our bullish view that medium term erratic rise from 0.6827 has resumed and upside bias remains for this move to extend headway to psychological resistance at 0.8000, break there would encourage for subsequent rise to 0.8090-00 but near term overbought condition should prevent sharp move beyond 0.8150 and price should falter below 0.8200.

On the downside, whilst initial pullback to 0.7875-80 cannot be ruled out, reckon the Tenkan-Sen (now at 0.7833) would limit downside and the Kijun-Sen (now at 0.7763) should hold, bring another upmove later. A daily close below the Kijun-Sen would dampen this bullish view and suggest a temporary top is possibly formed, risk test of previous resistance at 0.7712 but break there is needed to add credence to this view.



Recommendation: Buy at 0.7840 for 0.8040 with stop below 0.7740.



On the weekly chart, aussie has surged after brief retreat to 0.7571 and the subsequent rally above previous resistance at 0.7835 formed a long white candlestick, signaling the erratic rise from 0.6827 low is still in progress, hence bullishness remains for this move to extend headway to psychological resistance at 0.8000, then 0.8090-00, however, near term overbought condition would limit upside to previous resistance at 0.8163 and price should falter well below resistance at 0.8295, bring retreat later.

On the downside, although pullback to 0.7875 is likely, reckon downside would be limited to previous resistance at 0.7835 (now support) and bring another rise later. Below 0.7785-90 would bring pullback towards previous resistance at 0.7712, break there would suggest top is possibly formed, bring test of the Tenkan-Sen (now at 0.7681) but break of the Kijun-Sen (now at 0.7660) is needed to provide confirmation, bring further fall towards said support at 0.7571 which should remain intact.

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

After momentarily surpassing the 1.17 handle on Tuesday and coming within an inch of clipping the underside of a H4 AB=CD 161.8% Fib extension at 1.1713 drawn from the low 1.1370, the single currency (influenced by a much higher-than-expected US consumer confidence report) turned aggressively lower.

What's also notable from a technical perspective is that the daily candles recently connected with an upper channel resistance line extended from the high 1.1263, and chalked in a reasonably strong-looking daily selling wick.

While the above paints a somewhat bearish picture, there are two strong cautionary points to consider here:

Daily support at 1.1615 is hovering nearby current price.

Last week we saw a large weekly supply zone at 1.1533-1.1278 taken out, which had managed to stay intact since mid-May 2015! This suggests that overall the bulls are in control of things for the time being.

Our suggestions: Based on the above findings, our desk is watching the green H4 area marked at 1.16/1.1615 for potential long opportunities. The area is comprised of a psychological band at 1.16, a H4 38.2% Fib support level at 1.1606 pegged from the low 1.1479 and the daily support mentioned above at 1.1615.

To be on the safe side here, we've elected to wait for additional confirmation before pulling the trigger. Preferably, we want to see a full, or near-full-bodied H4 bull candle materialize from the said H4 buy zone. This, of course, will not promise a winning trade, but what it will do is display buyer intent from a high-probability reversal zone.

Data points to consider: US New home sales at 3pm, FOMC Statement and the Fed funds rate at 7pm GMT+1.

Levels to watch/live orders:

• Buys: 1.16/1.1615 ([waiting for a H4 bull candle to form before entering long is advised] stop loss: ideally beyond the candle's tail).
• Sells: Flat (stop loss: N/A).

GBP/USD

Kicking this morning's report off with a look at the weekly chart, we can see that the candles remain within the walls of a supply zone pegged at 1.3120-1.2957. In the event that the bears finally regain consciousness here, the next downside target resides at 1.2589-1.2759: a demand base. On the other side of the field, however, the daily chart shows price action to be trading from a support area coming in at 1.3058-1.2979. What's also interesting on this scale is the potential AB=CD bearish pattern that completes within the supply zone marked at 1.3278-1.3179 that converges with a channel resistance line drawn from the high1.2774.

Looking over to the H4 chart, recent action aggressively whipsawed through the mid-level resistance number at 1.3050 after a much higher-than-expected US consumer confidence report. As you can see, this has placed the candles within touching distance of the large psychological level 1.30, which happens to fuse nicely with July's opening level at 1.3003 and a 50.0% support at 1.3008 taken from the low 1.2932.

Our suggestions: Given that the unit is positioned within a daily support area at the moment, and the weekly candles have yet to show much bearish intent within its current supply, we feel longs from the 1.30 region could be an option today in light of the surrounding confluence.

Like the EUR chart above though, we've elected to wait for additional confirmation before pulling the trigger from 1.30. Preferably, we want to see a full, or near-full-bodied H4 bull candle materialize from here. Should this trade come to fruition; the 1.3050 zone will be the first level on our radar for partial profit taking and a reduction in risk.

Data points to consider: UK Prelim GDP q/q at 9.30am. US New home sales at 3pm, FOMC Statement and the Fed funds rate at 7pm GMT+1.

Levels to watch/live orders:

• Buys: 1.30 region ([waiting for a H4 bull candle to form before entering long is advised] stop loss: ideally beyond the candle's tail).
• Sells: Flat (stop loss: N/A).

AUD/USD

Since the 19th July, the H4 candles have been busy chiseling out a consolidation zone between 0.7969/0.79. A little above this area there is a large psychological band seen sitting at 0.80, whereas a few pips below is a support level marked at 0.7870.

Over on the bigger picture, the weekly resistance area at 0.7849-0.7752 was recently engulfed, potentially opening up the path north to a weekly resistance at 0.8075. Down on the daily timeframe on the other hand, the candles appear to be somewhat indecisive around a channel resistance line taken from the high 0.7732. Should this line eventually give way, the next area on the hit list is a Quasimodo resistance at 0.8030.

Our suggestions: Personally speaking, the current H4 range sparks little interest from us, due to there being no concrete higher-timeframe structure supporting the area. Nevertheless, we have noted the 0.80 level seen just above as a possible option for shorts, given its nearby connection to the daily Quasimodo resistance at 0.8030. Be that as it may, our desk would require additional confirmation before a sell from here would be considered, since there's a good chance weekly price could step in a drag the unit up to 0.8075!

Data points to consider: Australian Inflation figures at 2.30am, RBA Gov. Lowe speaks at 4.05am. US New home sales at 3pm, FOMC Statement and the Fed funds rate at 7pm GMT+1.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: 0.8030/0.80 ([waiting for a H4 bear candle to form before entering long is advised] stop loss: ideally beyond the candle's wick).

USD/JPY

The USD/JPY bulls, as you can see, went on the offensive amid Tuesday's segment, consequently lifting the pair above May's opening level at 111.29 and a H4 mid-level resistance at 111.50. Intensified by a much higher-than-expected US consumer confidence report, the pair was able to end the day challenging a H4 trendline resistance taken from the high 112.87.

Weekly price is not currently offering much right now, other than that the candles are seen trading mid-range between supply at 115.50-113.85 and demand at 108.13-108.95. The daily chart, nonetheless, reveals that the unit is currently touching gloves with a resistance level coming in at 111.91, after a solid bounce seen from support at 110.76.

Our suggestions: Shorting from the current H4 trendline resistance is tempting, considering that it is linked closely with the aforementioned daily resistance. However, we're a little cautious here. July's opening level at 112.09 and the 112 handle are both located a few pips above the line, and therefore may act as a magnet to price and cause a fakeout. From this, you may be thinking, ‘well, why not just short 112.09/112?' While the point is valid, one would still need to be prepared for this area to also be faked, due to a H4 Quasimodo resistance level lurking just above it at 112.23. Furthermore, by the time H4 price connects with this Quasimodo level, daily price may have already printed a close above the current resistance!

In light of the above notes, we're going to humbly step aside today and reassess structure going into tomorrow's segment.

Data points to consider: US New home sales at 3pm, FOMC Statement and the Fed funds rate at 7pm GMT+1.

Levels to watch/live orders:

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

USD/CAD

Tuesday's session was incredibly quiet in the USD/CAD market. H4 price spent the day clinging to the 1.25 handle, printing several meaningless candles. This, as you can see by looking over to the daily chart, saw the market chalk up an indecision candle off of a Quasimodo support at 1.2506. Assuming that the bulls remain afloat above this level, we'd be looking for the market to retest 1.2592: a recently broken Quasimodo line. Up on the weekly chart, price recently came into contact with support at 1.2538. Although we have seen little evidence of bullish intent from here, it is far too early to count it out just yet!

Our suggestions: To confirm bullish strength in this market, we would like to see H4 price close above the mid-level resistance at 1.2550. This would, technically speaking, likely clear the runway north up to at least the 1.26 handle, which sits just above the aforementioned broken daily Quasimodo line.

Therefore, a H4 close above 1.2550 followed by a retest and a lower-timeframe confirming buy signal (see the top of this report) would, in our opinion, be enough to validate an intraday long up to at least the 1.26 region.

Data points to consider: US New home sales at 3pm, FOMC Statement and the Fed funds rate at 7pm. Crude oil inventories at 3.30pm GMT+1.

Levels to watch/live orders:

• Buys: Watch for H4 price to engulf 1.2550 and then look to trade any retest of this level seen thereafter ([waiting for lower-timeframe confirmation following the retest is advised] stop loss: depends on where one confirms this level).
• Sells: Flat (Stop loss: N/A).

USD/CHF

Influenced by a much higher-than-expected US consumer confidence report on Tuesday, the USD/CHF cleared the 0.95 handle and now looks poised to challenge the H4 mid-level resistance base at 0.9550. From a technical perspective 0.9550 is closely linked with a daily resistance level pegged at 0.9546. Although selling from the 0.9550 region seems reasonable, one has to remain cognizant of the weekly picture that currently shows price trading from a support area drawn in at 0.9443-0.9515.

As such, going short from 0.9550 would entail one selling into potential weekly flow! By the same token, buying would place one against both H4 and daily flow! Therefore, no matter which direction one chooses here, the odds are not really in your favor!

Our suggestions: In the absence of clearer price action, we have decided to remain flat during today's trading and will look to reassess the situation going into tomorrow's open.

Data points to consider: US New home sales at 3pm, FOMC Statement and the Fed funds rate at 7pm GMT+1.

Levels to watch/live orders:

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

DOW 30

Over the past few weeks, we have been seeing the US equity market chalk up a potential H4 bullish pennant formation (21677/21462). This – coupled with seeing daily price bouncing off of a support level at 21541 and showing absolutely no resistance on the horizon, we feel that this pennant will eventually breakout to the upside. To us, this would be a valid buy signal, however not one that we would personally consider trading on the breakout.

To that end, as long as the daily candles remain above the noted support, our team will continue to favor the upside in this market.

Our suggestions: An ideal situation here would be to see a decisive H4 close above the current H4 pennant formation. Following this, a retest of the broken line in the shape of a full, or near-full-bodied H4 bull candle would be enough for us to enter into a long position with stops pegged below the H4 bull candle's tail. This would, should it come to fruition, be an ideal time to try and join this seemingly undying trend!

Data points to consider: US New home sales at 3pm, FOMC Statement and the Fed funds rate at 7pm GMT+1.

Levels to watch/live orders:

• Buys: Watch for H4 price to engulf the current H4 pennant upper edge and then look to trade any retest seen thereafter ([waiting for a full, or near-full-bodied H4 bull candle to form following the retest is advised] stop loss: ideally beyond the candle's tail).
• Sells: Flat (stop loss: N/A).

GOLD

Since the yellow metal clipped the underside of a daily resistance at 1258.9, the unit has been trading in bearish territory and looks as though it will likely continue doing so until we reach daily support at 1242.0. Fusing closely with this level is a H4 trendline support etched from the low 1204.6 and a H4 38.2% Fib support also taken from the low 1204.6. Weekly price unfortunately offers very little support here as the candles are currently seen loitering mid-range between demand at 1195.1-1228.6 and an area comprised of two Fibonacci extensions 161.8/127.2% at 1312.2/1284.3 taken from the low 1188.1 (green zone).

Our suggestions: While we are seen trading from a daily resistance level at the moment, selling is difficult considering the noted H4/daily supports lurking nearby. In regard to buying, the H4 blue zone which is comprised of the above noted structures highlighted in bold is quite attractive for a bounce long today. With that being said, however, the area does lack weekly support, so in order to trade this area we would need to see additional confirming price action before pulling the trigger.

Levels to watch/live orders:

• Buys: 1238.4/1241.6 ([waiting for a reasonably sized H4 bull candle – preferably a full-bodied candle – to form before pulling the trigger is advised] stop loss: ideally beyond the candle's tail).
• Sells: Flat (stop loss: N/A).

Currency pair USD/JPY

The USD/JPY has broken above the resistance trend lines (dotted) after completing wave 3 (orange). The bullish price action could still be part of a wave 4 (orange) as long as price stays below the 61.8% Fibonacci level.

The USD/JPY could be building an ABC (purple) correction within wave 4 (orange). The resistance top (red) at 112.50 is a key resistance level for wave 4.

Currency pair EUR/USD

The EUR/USD continued the uptrend and managed to reach 1.17. The new higher high is most likely completing the wave 3 (orange) and starting a wave 4 (orange) correction. Price could use the Fibonacci levels of wave 4 vs 3 as potential bounce spots.

The EUR/USD could be building an ABC (grey) correction within wave 4 (orange).

Currency pair GBP/USD

The GBP/USD respected the 78.6% Fibonacci level of the WXY (purple) pattern. A break below the small channel (blue) would indicate the potential for price to retrace lower towards the 61.8% Fibonacci target of wave Y vs W.

The GBP/USD completed multiple ABC (green) corrections within wave X (purple). Price is now at a new bounce or break spot at the bottom of the channel.

USD/CHF - 0.9532

Most recent candlesticks pattern : N/A

Trend                                    : Near term down

Tenkan-Sen level                  : 0.9529

Kijun-Sen level                    : 0.9496

Ichimoku cloud top                 : 0.9479

Ichimoku cloud bottom              : 0.9466

Original strategy :

Sell at 0.9555, target: 0.9455, Stop: 0.9590

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 0.9570, target: 0.9470, Stop: 0.9605

Position : -

Target :  -

Stop : -

As the greenback has maintained a firm undertone after staging a strong rebound from 0.9438 late last week, suggesting near term upside risks remains for this corrective bounce to extend gain to 0.9550-55, however, reckon upside would be limited to 0.9570-75 (50% Fibonacci retracement of 0.9701-0.9438) and bring retreat later, below the Kijun-Sen (now at 0.9496) would suggest an intra-day top is possibly formed but break of 0.9450-55 is needed to signal the rebound from 0.9438 has ended, bring retest of this level first.

In view of this, we are looking to sell dollar on further subsequent recovery as 0.9570 should limit upside and bring another decline. Above 0.9600-05 (61.8% Fibonacci retracement of 0.9701-0.9438) would suggest a temporary low is formed instead, bring a stronger rebound towards resistance at 0.9622.

Daily Pivots: (S1) 144.82; (P) 145.35; (R1) 146.25; More

Intraday bias in GBP/JPY remains neutral for the moment. With 146.27 minor resistance intact, further decline is still mildly in favor. On the downside, below 144.01 will extend the fall from 147.76 and target 138.65 support and below. But we'd expect strong support from 135.58 to contain downside and bring rebound. On the upside, above 146.27 minor resistance will turn bias back to the upside for 147.76 instead.

In the bigger picture, rise from medium term bottom at 122.36 is expected to continue to 38.2% retracement of 196.85 to 122.36 at 150.43. Decisive break there will carry long term bullish implications and pave the way to 61.8% retracement at 167.78. In case the sideway pattern from 148.42 extends, we'd be looking for strong support from 135.58 and 50% retracement of 122.36 to 148.42 at 135.39 to contain downside.

Global Markets:

• Asian stock markets: Nikkei gained 0.50 %, Shanghai Composite fell 0.40 %, Hang Seng rose 0.05 %, ASX 200 rallied 0.95 %
• Commodities: Gold at $1247 (-0.40 %), Silver at $16.38 (-1.00 %), WTI Oil at $48.40 (+1.00 %), Brent Oil at $50.60 (+0.80 %)
• Rates: US 10-year yield at 2.32, UK 10-year yield at 1.26, German 10-year yield at 0.57

News & Data:

• Australia CPI q/q 0.2 % vs 0.4 % expected
• Australia CPI y/y 1.9 % vs 2.2 % expected
• Australia Trimmed Mean CPI q/q 0.5 % vs 0.5 % expected
• Australia Trimmed Mean CPI y/y 1.8 % vs 1.8 % expected
• New Zealand Trade Balance m/m NZ$242mln vs NZ$100mln expected
• New Zealand Trade Balance y/y -NZ$3.66bln vs -NZ$3.7bln expected
• New Zealand Exports NZ$4.7bln vs NZ$4.6bln expected
• New Zealand Imports NZ$4.46bln vs NZ$4.39bln expected
• Asia stocks, dollar steady as investors await Fed clues – RTRS

Markets Update:

The US Dollar is strengthening a bit ahead of the Fed interest rate decision tonight. The market is not expecting any changes from the Fed, and it is unlikely that there will be any surprises. Therefore, the Fed meeting should be an USD-neutral event.

The Australian Dollar came a bit under pressure overnight, following weaker than expected CPI data. However, losses were limited as the trimmed mean and weighted CPI arrived in line with expectations. AUD/USD traded as low as 0.7890 and strong support is seen between 0.7830 and 0.7840.

NZD/USD is approaching support at 0.74. A break below would suggest that the pair will test support at 0.7340 soon. NZD/USD is heavily overbought in the short-term, and it is likely that there will be retracement before the uptrend continues.

USD/JPY managed to recover as well, amid the broad USD strength and rising equity markets. However, it would need a clear break above 112.50 resistance to confirm the recent low and pave the way for a rally towards 114.

Upcoming Events:

• 09:30 BST – UK GDP
• 15:00 BST – US New Home Sales
• 19:00 BST – Fed Interest Rate Decision

GBP/USD - 1.3015

Most recent candlesticks pattern   : N/A

Trend                                 : Near term up

Tenkan-Sen level                 : 1.3016

Kijun-Sen level                    : 1.3042

Ichimoku cloud top              : 1.3025

Ichimoku cloud bottom        : 1.3009

Original strategy :

Sell at 1.3100, Target: 1.2980, Stop: 1.3135

Position : - 

Target :  -

Stop : -

New strategy  :

Sell at 1.3100, Target: 1.2980, Stop: 1.3135

Position : -

Target :  -

Stop : -

Although cable has retreated after rising to 1.3084 yesterday, break of 1.2980-85 is needed to signal top is formed, bring further fall to 1.2950-55 but only below there would confirm the rebound from 1.2933 has ended, then another test of this support would follow, once this level is penetrated, this would add credence to our view that early fall from 1.3126 top has resumed for further weakness to previous support at 1.2912 which is likely to hold on first testing. 

In view of this, would not chase this fall here and we are looking to sell cable on subsequent recovery as 1.3100-10 should limit upside. A firm break above 1.3100 would abort and suggest the fall from 1.3127 has ended instead, bring retest of this level but only break there would shift risk back to upside for further gain to 1.3150-60.

For the 24 hours to 23:00 GMT, the AUD rose 0.19% against the USD and closed at 0.7940.

LME Copper prices jumped 2.5% or $150.0/MT to $6150.0/MT. Aluminium prices rose 0.3% or $6.5/MT to $1896.5/MT.

In the Asian session, at GMT0300, the pair is trading at 0.7913, with the AUD trading 0.34% lower against the USD from yesterday’s close.

Earlier in the session, the Reserve Bank of Australia (RBA) Governor, Philip Lowe, diminished the odds of an interest rate hike, stating that interest rates will stay lower for longer amid subdued wage growth and high household debt.

In economic news, data showed that Australia’s consumer price index rose less-than-anticipated by 0.2% on a quarterly basis in the second quarter of 2017, compared to an advance of 0.5% in the previous quarter, while markets had expected the index to climb 0.4%.

The pair is expected to find support at 0.7881, and a fall through could take it to the next support level of 0.7848. The pair is expected to find its first resistance at 0.7958, and a rise through could take it to the next resistance level of 0.8002.

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

EUR/USD - 1.1636

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 1.1637

Kijun-Sen level                  : 1.1666

Ichimoku cloud top             : 1.1654

Ichimoku cloud bottom      : 1.1649

Original strategy  :

Sell at 1.1680, Target: 1.1580, Stop: 1.1715

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 1.1680, Target: 1.1580, Stop: 1.1715

Position : -

Target :  -

Stop : -

Although the single currency moved higher to 1.1712 yesterday, the subsequent retreat suggests consolidation below this level would be seen and as long as 1.1712 holds, mild downside bias is seen for test of 1.1617-20 support, break there would signal a temporary top is formed, bring retracement of recent rise towards previous resistance at 1.1583 but price should stay above 1.1550, bring another rally later.

In view of this, we are looking to turn short on recovery but one should exit on such fall. Above said resistance at 1.1712-14 would signal the rise from 1.0340 low is still in progress and may extend headway towards 1.1750, then 1.1775-80.