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Daily Pivots: (S1) 0.9593; (P) 0.9625; (R1) 0.9657; More...

Breach of 0.9595 minor support indicates that consolidation pattern fro 0.9551 has completed at 0.9699. Intraday bias is turned back to the downside for 0.9551 first. Break will extend the fall from 1.0342 to 0.9443 key support level next. At this point, we'd expect strong support from there to bring rebound. On the upside, above 0.9699 will extend the consolidation with another rise. But upside should be limited by 0.9770 resistance and bring fall resumption.

In the bigger picture, USD/CHF is still bounded in medium term range of 0.9443/1.0342 for the moment. Consolidative trading would likely continue and medium term outlook remains neutral. Break of 1.0342 key resistance is needed to confirm underlying bullish momentum in the pair. Meanwhile, downside attempts should be contained by 0.9443 key support level. However, sustained break of 0.9443 will carry larger bearish implication and target 0.9 handle.

Daily Pivots: (S1) 112.35; (P) 112.60; (R1) 112.88; More...

USD/JPY's fall from 114.49 continues today and reaches as low as 111.98 so far. Intraday bias remains on the downside for deeper decline. As noted before, he rejection from 114.36 resistance suggests that whole correction from 118.65 is possibly still in progress. Sustained break of 55 day EMA (now at 112.03) will pave the way to 108.12 and below. On the upside, above 112.86 minor resistance will turn intraday bias neutral first.

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.

Gold was the main beneficiary of the U.S. Dollars woes overnight as oil consolidates its recent gains.

Oil

Crude paused for breath overnight with both Brent and WTI trading in a one dollar range. It is perhaps unsurprising given the whipsaw nature of the market lately and no doubt open positioning from traders either long or short is much reduced.

Tonight's American Petroleum Institutes (API) Inventory numbers should spark some life back into trading with perhaps the top side more vulnerable if we get another larger than expected drawdown. Both contracts are trading quietly in early Asia near to their New York closes with Brent spot at 48.45 and WTI spot at 46.15 respectively.

Brent spot has initial resistance at 49.15 followed by the more important 49.70/50.00 region. Support appears at 48.00 and then 47.00.

WTI spot has initial resistance at 47.00/47.20 with a close above implying a technical move to test the 100-day moving average at 48.00. Support is just below at 45.80 followed by the more significant 45.00 area.

Gold

Gold continued its positive tone overnight, albeit at a more subdued pace than Friday's rally. Gold traded to a high of around 1236.00, and in the process, comfortably closed above the 200-day moving average at 1230.50, a bullish technical development.

With the street repricing its U.S. interest rate outlook following soft data and a dovish Yellen, and with President Trump's reflationary reforms seemingly lost in the legislative Bermuda Triangle of Congress, a weaker U.S. Dollar should continue to support gold.

Gold trades positively in Asia, up four dollars at 1237.50 with early Asia physical demand evident. Initial resistance is at the 1240.00 region followed by the 100-day moving average at 1247.50. Intraday support appears at 1232.80 followed by the 1230.00 area.

Daily Pivots: (S1) 1.2650; (P) 1.2674; (R1) 1.2721; More....

USD/CAD lost some downside momentum with 4 hour MACD crossed above signal line. But with 1.2770 minor resistance intact, intraday bias remains on the downside for further fall. Current decline is expected to target a test on 1.2460 low. Meanwhile, considering bullish convergence condition in 4 hour MACD, break of 1.2770 will indicate short term bottoming In such case, there will be lengthier consolidation before staging another decline.

In the bigger picture, price actions from 1.4689 medium term top are seen as a correction pattern. Fall from 1.3793 is seen as the third leg and should target 50% retracement of 0.9406 to 1.4869 at 1.2048. At this point, we'd look for strong support from there to contain downside and bring rebound. However, firm break there will target 100% projection of 1.4689 to 1.2460 from 1.3793 at 1.1564.

Daily Pivots: (S1) 0.7780; (P) 0.7809; (R1) 0.7826; More...

AUD/USD's rise resumed after brief consolidation and reaches as high as 0.7903 so far. The break of near term channel resistance indicates upside acceleration. Intraday bias stays on the upside for 61.8% projection of 0.6826 to 0.7833 from 0.7328 at 0.7950 next. Break there will target 100% projection at 0.8335. On the downside, below 0.7785 will turn intraday bias neutral and bring consolidations before staging another rally.

In the bigger picture, current development suggests that rebound from 0.6826 is developing into a medium term rise. There is no confirmation of trend reversal yet and we'll continue to treat such rebound as a corrective pattern. But in any case, further rise is now expected to 55 month EMA (now at 0.8100) or even further to 38.2% retracement of 1.1079 to 0.6826 at 0.8451. Break of 0.7328 support is needed to confirm completion of the rebound. Otherwise, further rise is now expected.

STOCKS

Equity indices are looking bullish for the near to medium term and could be accompanied with interim dips.

Dow (21629.72, -0.04%) is almost stable the resistance turned support at 21600 if holds, could keep the prices higher. Above 21600, there is scope of rising towards 21900-22000 eventually.

Dax (12587.16, -0.35%) came off from levels below 12700 but while immediate support near 12500 holds, there is still some scope of rising towards 12700-12800 in the medium term.

Shanghai (3168.06, -0.26%) could see some movement in the 3190-3145 region before moving higher towards 3220 in the medium term. Near term looks bullish while above 3140.

Nikkei (19991.86, -0.63%) came down again breaking below 20100 as mentioned yesterday and signals that the upward momentum is getting weaker and the price may not possibly break above 20300 easily. Sideways consolidation within the broad 20300-19750 region may continue for some more time.

Nifty (9915.95, +0.30%) is moving up gradually and could test 10000 in the next few sessions. Near term looks strongly bullish.

COMMODITIES

Weakness in Dollar index (94.56 and highly oversold) has impacted positively across all the commodities. Gold (1236) has managed to break its crucial resistance of 1232 and open up 1245 levels respectively. The recent sideways range for Gold could be 1220-1245. Silver (16.15) is still within its downward channel though there are chances of a upside rally towards 16.54 regions.

Copper (2.73) moved higher within the trading range of 2.66-2.78. . A close above 2.78 regions could open up 2.85 levels as well.

The energy pack had closed marginally lower but it might remain stable while above 47.70 (Brent) and 45 (WTI) respectively. Most factors are supportive for oil at the moment. For the near term, Brent (48.58) and WTI (46.16)seems to be trading in a 47-51 and 45-48 range now and the medium term ranges are now 44-52 and 42-50. The big question is whether we will see a rise past 52 (Brent) and 50 (WTI) or not by the end of July and to get a clue on that, we will keep an eye on U.S Weekly crude oil inventories.

FOREX

Dollar Index (94.75) continues its fall and could test 94.00 before pausing. Trend remains firmly down just now.

Euro (1.1535) has broken above crucial resistance near 1.1495 and is now trading within the resistance zone of 1.15-1.16 which needs to break on the upside to keep the upward momentum intact. We need to be cautious at levels of 1.15-1.16.

Dollar-Yen (112.10) could be headed towards 111.35 in the next few sessions while below 112.65. the downward momentum has been triggered and the prices may not stop near 112 just now. We could expect a pause not before testing 111.50-111.35 on the downside. Near term looks bearish.

Aussie (0.7892) has moved up sharply yesterday as expected and would now head towards our initial target of 0.8150-75. But there could be a small dip from either current levels or from levels near 0.80 before resuming its upward rally. Overall near term looks bullish.

Pound (1.3087) is trading just at the earlier resistance turned support near 1.3050 and while that holds, there could be some more upmove in Pound in the near term. Else failure to hold above immediate support may take it back towards 1.30 or lower in the next few sessions.

Dollar-Rupee (64.35) has come down sharply from levels near 64.50-64.65 in the past few sessions and could now be headed to lower levels of 64.15-64.00 in the near term. The continued fall in Dollar Index may boost the emerging currencies along with the Rupee in the coming sessions.

INTEREST RATES

The US yields have started to come off in line with our expectation. The 5Yr (1.85%) is headed towards 1.80% while the 10Yr (2.31%) and the 30Yr (2.89%) could move towards 2.2% and 2.85% in the coming sessions.

The US 10-5YR differential (0.46%) has also started to come off and could head towards 0.4375% in the medium term.

The US-Japan 10Yr (2.24%) could come down towards 2.20% in the coming sessions pulling down both Nikkei and Dollar-Yen with itself.

The German-US 10Yr (-1.72%) has been moving up and could rise some more to test -1.70% before coming off from there. While the yield spread rises, Euro looks strong.

Just shy of being hawkish, the minutes revealed further confidence in the global and domestic economy, yet the usual suspect remain which are likely to cap any reason for a hike.

The RBA continued to acknowledge the positive developments with the employment sector which gave a slightly hawkish tone to the statement. This was carefully balanced with a reminder of low wage growth and inflation, yet as this is not new information traders took it as a net positive to send AUD broadly higher. The minutes provided just enough juice to break above Friday’s and the 2016 high where the currency is now poised to test 79c and likely head for 80c.

Released alongside the minutes were June’s motor vehicle sales which softened from 4.9% YoY to 3.6%. Whilst this was below expectations, the underlying volume of sales hit a record high and this marks the 4th consecutive expansion.

After breaking above the 2016 high AUD is now on a mission to test 79c. There is a tight zone of resistance between 0.7917-23 which may lower the odds of a runaway move initially, but the conditions are ripe for this breakout to not turn into a bull trap.

Several correlations point to AUD remaining supported although we are dubious the fundamentals fully justify recent gains. The gap between AU-US 2yrs is closing as the spread is finally moving higher, yet the trend still points lower which may add pressure onto the rising AUD. Higher copper and wheat prices have also tracked AUD higher these past few weeks to confirm the move so unless employment throws a curve ball in Thursday, AUD is likely to remain firm whilst USD remains on the back ropes. In fact, it appears to be more of a commodity play than a bond market play that has sent AUD hurtling higher.

As data is light from the US overnight it could be positive sentiment for the Dollar which supports the move from here. We doubt employment will disappoint as leading indicators suggest continued strength for the foreseeable future. In particular, capacity utilisation hints at lower unemployment which will be a positive development.

RBA Assistant Governor Guy Debelle speaks on Friday, which may be of interest if he opts to use the session to jawbone the currency. The Australian Dollar has been a main beneficiary of US Dollar weakness with added support provided by firmer copper and wheat prices in recent weeks.

Read the full RBA minutes from the July 2017 meeting

• GDP growth in the March quarter had slowed, largely reflecting temporary factors
• Quarterly growth was expected to have increased in the June quarter
• Labour market conditions had improved since late 2016
• Labour cost pressures remained subdued
• Wholesale electricity prices had risen sharply over the first half of 2017
• Estimates of the neutral real interest rate for Australia suggested that monetary policy had been clearly expansionary for the preceding five years or so.
• Reduction in risk aversion and/or an increase in the potential growth rate could see the neutral real interest rate rise again
• Broad-based recovery in the global economy had continued
• There were still risks to consumption growth should household income growth remain subdued, particularly given the high levels of household debt
• Recent improvement in labour market data had been a positive development
• Recent labour market strength had removed some of the downside risk wage growth forecasts
• Developments in the labour and housing markets continued to warrant careful monitoring

Soft inflation sent NZD broadly lower as traders were reminded that variable CPI data is likely to beep RBNZ in neutral territory, at best.

Annual inflation fell from 2.2% to 1.7% in Q2, missing forecasts of 1.9% and underscoring RBNZ's expectations of variable CPI.

Non-tradable inflation declined from 5.2% to 2.4% YoY, with quarterly moving to 0.2% compared with 1% in Q1. This is also firmly below the 1yr average of 0.5%. Tradable CPI contracted by -0.2% which dragged the annual read back to 0.9% (-1.6% prior).

Whilst RBNZ have hopes for inflation to return to the 2% area (on average) over the medium term, we doubt inflation will pick up to reverse the trend of inflation which has been moving gradually lower since the beginning of the data set. This is a patten which keeps on cropping up on the developed world and one which central banks are yet to truly challenge.

With the Bank of Canada leading the way with a hawkish hike, there had been hopes that inflation would continue to recover in NZ and pile the pressure on RBNZ to tighten. Yet RBNZ had also warned that CPI is likely to be variable throughout the year, so today's soft CPI is just a dose of reality. Also not helping the case for a hawkish RBNZ is the rebound of the TWI; Both RBA and RBNZ see higher exchange rates as a threat to trade, which puts them firmly in a different camp to their commodity peer Canada.

NZDCAD is testing key support from the September 2015 trendline, and we see a downside break as imminent. BoC could raise one more time this year to further narrow the positive carry NZD offers (currently 1%) which is seeing a repricing on bonds and adds further downside pressure to NZDCAD. All RBNZ have to do is remain neutral or begin jawboning and NZDCAD is likely to be a preferred short over the near-term. A break of the trendline may find initial support at the 0.9168 low but we could see this move to 0.90 over the coming weeks if data from Canada continues to outperform expectations.

AUDNZD extended gains to an 8-week high although the RBA minutes and employment data on Thursday will be in focus. With RBA and RBNZ both standing neutral with rising currencies, the odds of jawboning are rising which may take some of the upside pressure away from AUDNZD. Resistance is close by at 1.0746 with key support sitting at today's low of 1.0634. A break of 1.0746 targets the 1.08 handle and 19th May high at 1.0820.

NZD/USD signalling an exhaustion

Price dropped aggressively and looks determined to erase the last day's gains, but is premature to say that we'll start another leg lower. The current decrease is natural after the last week's rally, we'll see what will happen in the upcoming days because the perspective remains bullish at this moment despite a minor decrease.

Has dropped as the USDX has tried to rebound in the fresh start of the week, unfortunately the index is still under massive selling pressure, so we'll have to wait for a reversal signal before we could say that we'll have another leg higher.

USDX found support right above the 95.00 psychological level, at 95.05 level, but we could still drop if the United States data will come in worse than expected. A further USDX's drop will send the greenback much lower versus its rivals.

Price dropped after the failure to reach the 0.7367 previous high, is trading below the 0.7324 static resistance and could drop to test and retest the 0.7277 and the warning line (wl4) in the upcoming days if the dollar index will have enough energy to climb higher.

NZD/USD is showing some exhaustion signs after the failure to reach the 0.7375 swing high, but maintains a bullish perspective after the false breakdown below the red downtrend line.

Is bullish as long as is located above the fourth warning line (wl4) of the former ascending pitchfork, only a valid breakdown below this level will open the door for a larger drop.

We may have a buying opportunity if the rate will test and retest the mentioned support levels because the pair is still located in the buyer's territory.

The greenback will appreciate significantly only if the USDX will find strong support and if will breakout from a potential Falling Wedge pattern. The Kiwi could receive support from the New Zeland CPI, which could increase by 0.2% in Q2.

AUD/USD focused on correction

Price found strong resistance and now is going down on the short term, the retreat is natural after the amazing rally. The correction could be temporary as the rate will come down only to recapture more directional energy to be able to resume the upside movement.

AUD/USD failed to reach and retest the upper median line (uml) of the ascending pitchfork, so the retreat is understandable. Failed also close above the 0.7835 major static resistance, showing that the bulls are too exhausted on the short term. The next downside level will be at the median line (ml) of the ascending pitchfork, could hit also the 0.7755 static support (resistance turned into support).

GOLD still in range

The yellow metal continues to move sideways on the Daily chart, so will be better to stay away till we'll have a valid breakout from this range. The rebound is natural after the false breakdown below the 50% retracement level and after the failure to reach and retest the median line (ml) of the minor descending pitchfork. Is trading above the 1233 level, targeting the upper median line (UML) of the major descending pitchfork and the upper median line (uml) of the minor descending pitchfork.

Remember the Silver flash crash?

Nope, me either!

Let's take a look at the charts to refresh our memory on just what happened:

XAG/USD Daily:

The daily chart shows the drop through trend line support and instant recovery the clearest.

What's key for me here, is the fact that it happened at that confluence of support between the daily trend line and horizontal swing low. The endless stops that would have been just below here added to the already illiquid Asian session trading no doubt compounded the drop.

XAG/USD Hourly:

But after zooming into the hourly, you can now see that price has essentially ignored the flash crash drop and reactivated the daily trend line support level.

With Silver known for its ability to maintain trends after higher time frame support/resistance levels hold, it will be interesting to see if we can get an intraday stepping pattern to build a long around down here.