Sample Category Title

Daily Pivots: (S1) 124.14; (P) 124.42; (R1) 124.83; More...

EUR/JPY rises notably today but it's staying below 125.80 resistance so far. Intraday bias stays neutral first as the consolidation from 125.80 might extend. Below 123.65 minor support will bring another falling leg towards 122.39. In that case, downside should be contained by 38.2% retracement of 114.84 to 125.80 at 121.61 to bring rebound and then rise resumption. On the upside, decisive break of 125.80/126.09 resistance zone will extend the whole rise from 109.03 to 100% projection of 109.03 to 124.08 from 114.84 at 129.89.

In the bigger picture, focus is staying on 126.09 support turned resistance. Decisive break there will confirm completion of the down trend from 149.76. And in such case, rise from 109.20 is at the same degree and should target 141.04 resistance and above. Meanwhile, rejection from 126.09 and break of 114.84 will extend the fall from 149.76 through 109.20 low.

Yen weakness broadly today as market sentiments improved. Major European indices open higher with FTSE and DAX up 0.5% at the time of writing while CAC is up 0.8%. The development is helped by recovery in oil prices as WTI is trading back above 43 after dipping to as low as 42.05 last week. Swiss Franc also follow Yen and trades mildly lower. Strength is seen in Sterling and commodity currencies but upside is limited so far. Gold, on the other hand, suffered steep selling to as low as 1236.5 earlier today and is back at 1244.

BoJ opinions: Crucial to maintain stimulus

According to summary of opinions of June BoJ meeting, policy members believed there is need to clear up communications to cool talk of stimulus exit. One member noted that "the price stability target cannot be achieved easily within a short time-frame." And, "it is crucial to maintain accommodative financial conditions and keep the economy expanding as long as possible". Another member noted that "it's necessary to continue with the current easy policy persistently and wait for a steady increase in demand and further falls in unemployment rate to lead to higher wages, prices and inflation expectations". Another member also said that "the timing of an exit cannot be foreseen as achievement of the price target is still considerably distant".

Fed Williams wants to continue with gradual tightening

In US, San Francisco Fed President John Williams emphasized that gradual tightening is needed to keep the economy healthy. And he warned that "if we delay too long, the economy will eventually overheat, causing inflation or some other problem." He said that "gradually raising interest rates to bring monetary policy back to normal helps us keep the economy growing at a rate that can be sustained for a longer time." He noted that "the very strong labor market actually carries with it the risk of the economy exceeding its safe speed limit and overheating, which could eventually undermine the stainability of the expansion.:" He also tried to talk down the slowdown in inflation and said it's "transitory".

BIS urges policy makers to accelerate the "great unwinding"

The Bank of International Settlement said that even though there are still risks to the global economy due to high debt levels and low productivity growth, policy makers have to accelerate the "great unwinding" of quantitative easing program and low interest rates. The bank's head of research Hyun Song Shin said that "if we leave it too late, it is going to be much more difficult to accomplish that unwinding. Even if there are some short-term bumps in the road it would be much more advisable to stay the course and begin that process of normalization."

Meanwhile, BIS also named some risks for the global economy. It warned that "attention shifted away from monetary policy, and political events took center stage." Other than that, "a significant rise in inflation could choke the expansion by forcing central banks to tighten policy more than expected. Bedsides, "a withdrawal into trade protectionism could spark financial strains and make higher inflation more likely. Also, "policy normalization presents unprecedented challenges, given the current high debt levels and unusual uncertainty". Finally, "banks' continued reliance on short-term U.S. dollar funding remains a pressure point," and "questions remain about the resilience of funding under more stressed conditions."

On the data front

Japan corporate service price index rose 0.7% yoy in May. German Ifo business roe to 115.1 in June versus expectation of 114.5. Expectations rose to 106.8 versus consensus of 106.4. Current assessment also improved to 124.1 versus expectation of 123.2. US will release durable goods orders. Looking ahead, economic data is the main focus this week. In particular, US will release consumer confidence and personal income and spending. Eurozone will release CPI flash. Japan will also release consumer inflation. Meanwhile, China will release PMIs. Here are some highlights:

• Tuesday: BoE financial stability report; US S&P Case-Shiller house price, consumer confidence
• Wednesday: Swiss UBS consumption indicator; Eurozone M3 money supply; US trade balance, whole sale inventories, pending home sales
• Thursday: Japan retail sales; German Gfk consumer confidence, CPI; Eurozone confidence indicators; UK Q1 GDP final, jobless claims
• Friday: UK Gfk consumer confidence; Japan CPI, household spending, unemployment, industrial production; China PMIs; German retail sales, unemployment; Eurozone CPI flash; UK Q1 GDP final; Canada GDP, IPPI and RMPI; US personal income and spending, Chicago PMI

EUR/JPY Daily Outlook

Daily Pivots: (S1) 124.14; (P) 124.42; (R1) 124.83; More...

EUR/JPY rises notably today but it's staying below 125.80 resistance so far. Intraday bias stays neutral first as the consolidation from 125.80 might extend. Below 123.65 minor support will bring another falling leg towards 122.39. In that case, downside should be contained by 38.2% retracement of 114.84 to 125.80 at 121.61 to bring rebound and then rise resumption. On the upside, decisive break of 125.80/126.09 resistance zone will extend the whole rise from 109.03 to 100% projection of 109.03 to 124.08 from 114.84 at 129.89.

In the bigger picture, focus is staying on 126.09 support turned resistance. Decisive break there will confirm completion of the down trend from 149.76. And in such case, rise from 109.20 is at the same degree and should target 141.04 resistance and above. Meanwhile, rejection from 126.09 and break of 114.84 will extend the fall from 149.76 through 109.20 low.

Economic Indicators Update

GBPJPY continued advancing today after closing higher for three days in a row. Today's movement has led the pair to record a near one-week high of 142.22.

The RSI is close to the 50 neutral level but it has risen considerably in recent days in order to reach its current level at 51. The indicator's movement, which is also upward sloping at the moment, is hinting to a bullish momentum in place for the pair. The stochastics are painting a similar picture. Specifically, the %K line has steeply risen in recent days and is in bullish territory. Moreover, it has crossed above the slow %D line.

The near three-week high of 142.52 form June 20 could act as a barrier to up movements in price. Further up, a resistance area might be formed by the current level of the 50-day moving average (MA) and the 38.2% Fibonacci retracement level of the April 17 to May 10 upleg, ranging from 143.04 and 143.31.

On the downside, the 50% Fibonacci at 141.82, which was exceeded today as the price was moving higher, could instead act as an intra-day support level. Below this level, the 141.00 handle could serve as psychological support, while further down, the 61.8% Fibonacci mark at 140.35 could provide additional support.

Turning to the medium-term picture, it is currently neutral with the price ranging since the start of the year and currently being in between the 50- and 200-day MAs.

To sum up, the short-term bias looks bullish and the medium-term is neutral.

It was a relatively quiet start to the week for forex markets, as many Asian countries were closed because of the end of Ramadan.

The euro mostly held onto the gains it made before the weekend despite the news that the Italian government was going to rescue two of the country's regional lenders at the tune of 17 billion euros. Italian banking woes were seen as contained for now, given the positive political developments and the relative strength of the Eurozone economy.

In other news, San Francisco Fed President John Williams reiterated the Fed's mantra that monetary policy should continue to gradually tighten so as to prevent inflation from rising too fast. Although there have been some soft readings on inflation lately, the Fed's target of 2% should be met by next year, according to Williams. However, the seemingly hawkish talk failed to provide a boost to the US dollar as market participants remain skeptical about the chances of another Fed rate hike this year. Futures markets are currently putting the odds of such a rate hike at less than 50%.

Euro/dollar was trading around 1.12 during late Asian trading, while dollar/yen was at 111.48. The pound was doing relatively well as it traded around 1.2750 versus the dollar, as the chances of the DUP supporting a Tory government appeared improved during the weekend.

The US dollar could get a lift this week if the US senate manages to pass a Healthcare bill that would revoke the Affordable Care Act, which in turn would facilitate tax cuts by the Trump administration. This could help revitalize the so-called ‘Trump rally' in the dollar, as the greenback has given back all the gains it made following the election of Donald Trump as President in November of 2016.

In commodities, front-month US oil futures were stronger at $43.60 a barrel, while gold was slightly softer at $1255 an ounce.

Looking ahead, the German Ifo business sentiment survey for June will be released, while later in the day May durable goods orders will come out of the United States. After the European close, a speech by ECB president Mario Draghi will also be closely watched.

EUR/USD

Current level - 1.1191

The intraday bias is positive above 1.1180 minor support, with a risk of a break through 1.1210 resistance, towards 1.1250 area. The latter should cap the upside, for another downswing to 1.1020 zone.

USD/JPY

Current level - 111.29

The consolidation pattern is still underway, with a risk of a dip to 110.30 before advancing beyond 111.80, towards 113.00 area. 

GBP/USD

Current level - 1.2743

The outlook is positive above 1.2700 support zone, for a rise towards 1.2825 major hurdle. 

Asia Mid-Session Market Update: Takata enters bankruptcy; FX majors quiet ahead of US durable goods report

Friday US Session Highlights

(US) JUN PRELIMINARY MARKIT MANUFACTURING PMI: 52.1 V 53.0E

(US) MAY NEW HOME SALES: 610K V 590KE; Median price: $345.8K v $310.2K prior

Major indices in New York are mixed, firming up after some early downward momentum. A weaker than expected Markit manufacturing PMI reading sent the Dollar to a session low against the Yen, but markets were buoyed by a beat in US new home sales data just minutes later. USD/CAD spiked after Canada May CPI came in lower than anticipated, which is seen as muting BOC rate hike expectations. The energy complex has been lifted by crude prices bouncing off their lows, and healthcare names have retreated from yesterday's highs as attention remains on Washington's ACA repeal efforts.

Politics

(US) Sen Collins (R-ME) awaiting Congressional Budget Office review of Senate healthcare legislation proposal before deciding on whether she will support the bill - US press

(DE) Germany Social Democratic chancellery candidate Martin Schulz rejects a grand coalition lead by Angela Merkel’s CDU/CSU; Calls for Chancellor Merkel to go further in spurring "erratic" US Pres Trump - press

(JP) Japan PM Abe cabinet approval rating falls another 9pts to 39% - Yomiuri

(JP) Ahead of July 2nd metropolitan assembly election in Tokyo, ruling LDP party trails Gov Yuriko Koike's new political group "Tokyoites first" by 26.7% to 25.9% margin - Nikkei

Key economic data:

none seen

Asia Session Notable Observations

Takata finally succumbs to bankruptcy in New York and Japan filings; Trading suspended.

BoJ summary of opinions from last meeting reiterates concerns over slow progress in wage and price inflation while praising improved Consumption sentiment. Recall the last BOJ decision raises Consumption assessment while maintaining policy settings unchanged.

Approval rating for Japan PM Abe continues to crater amid unfolding political scandals.

PBoC sets Yuan firmer for the first time in 5 days; FX majors in very narrow ranges.

Speakers and Press

China

(CN) China’s National Development and Reform Commission (NDRC) has asked all coal miners to curb thermal coal prices at CNY570/t

(CN) China Premier Li calls for more investment in industries such as artificial intelligence, quantum science, gene editing, new materials and new energy - Chinese press

Korea

(KR) Bank of Korea (BOK) regional growth report: Economy is expected to see gradual improvement this year thanks to manufacturing and services

(KR) South Korea President Moon said to be under pressure to drop protectionism

Asian Equity Indices/Futures (00:00ET)

Nikkei +0.1%, Hang Seng +0.4%, Shanghai +0.6%, ASX200 +0.1%, Kospi +0.4%

Equity Futures: S&P500 +0.1%; Nasdaq +0.1%, Dax +0.1%, FTSE100 +0.1%

FX ranges/Commodities/Fixed Income (00:00ET)

EUR 1.1190-1.1200; JPY 111.15-111.35; AUD 0.7560-0.7585; NZD 0.7270-0.7290; GBP 1.2730-1.2755

Aug Gold flat at 1,256/oz; Aug Crude Oil +1.3% at $43.55/brl; Sept Copper -0.1% at $2.63/lb

(US) Weekly Baker Hughes US Rig Count: 941 v 933 w/w (+0.8%) (23rd straight weekly rise)

SPDR Gold Trust ETF daily holdings fall 3.0 tonnes to 851.0 tonnes

(CN) PBOC SETS YUAN MID POINT AT 6.8220 V 6.8238 PRIOR; first firmer Yuan fix in 5 sessions

(CN) PBoC: To skip today's open market operation (OMO); 2nd straight skip; Drains CNY50B

(KR) South Korea Finance Ministry sells 20-yr treasury bonds; avg yield 2.190%

Asia equities/Notables/movers

Hong Kong

epring Group (1884) +5.7%; Reports FY17 (HK$) Net 22.2M v 29.7M y/y; Rev 390.6M v 382.8M y/y

ICBC (1398) +0.6%; Responds to media reports that it had been ordered to assess credit risks, saying checks of loans to companies that made overseas acquisitions is routine

International Entertainment Corporation (1009) -2.5%; Reports FY17 (HK$) Net 66.1M v 45.2M y/y; Rev 290.7M v 330.9M y/y

Upbest Group (335) -8.0%; Reports FY17 (HK$) Net 225.9M v 518.2M y/y; Rev 317.5M v 443.4M y/y

Australia

Metcash (MTS) +3.4%; Reports FY17 adj Net A$194.8M v A$186Me; EBIT A$296.7M v A$287Me; Rev A$14.13B v A$14.1Be

Rio Tinto (RIO) +0.9%; Confirms receipt of revised proposal from Glencore plc to acquire Rio Tinto's wholly-owned Australian subsidiary; Yancoal considering matching Glencore bid for Coal & Allied - AFR

Japan

Kirin (2503) +0.5%; Looking to sell its dairy business, have received some interest in parts of the business, but the company is aiming to sell the entire operation - AFR

Honda (7267) flat; Takata decision has limited impact on FY17 earnings; no decision reached over inflator recall responsibilities; Nissan (7201) +0.1%; set aside appropriate reserve related to Takata recall

Over the weekend, ECB Governing Council member and Bundesbank president Jens Weidmann told a German newspaper Welt am Sonntag that the time might be nearing for the European Central Bank to begin discussions on ending its stimulus program. Mr. Weidmann, is one of the staunch opponents of the ECB's QE program and his comments over the weekend were therefore not surprising.

Looking ahead the economic data today includes a speech by ECB president Mario Draghi while in the U., the durable goods orders will be released.Headline durable goods ordersare expected to fall, while core durable goods orders are expected to post a modest recovery, rising 0.4% according to economists polled.

EURUSD intraday analysis

EURUSD (1.1193): The EUR/USD is seen trading within Friday's range today with price action seen well supported above 1.1129. After testing 1.1200 resistance on Friday, we could expect to see some downside bias in the EURUSD prevailing. On the 4-hour chart, following the upside breakout from the triangle pattern and with theprice at resistance, EURUSD could be seen range bound between 1.1200 and 1.1171 levels. A breakout below 1.1171 will signal a continuation to the downside with 1.1129 support coming into focus. Below 1.1129 further declines could be seen coming. Alternately, above 1.1200, EURUSD could potentially target the upside towards 1.1300.

GBPUSD intraday analysis

GBPUSD (1.2744): The British pound is seen pushing higher this morning after Friday closed above 1.2688. Further upside could see GBP/USD attempt another go at the resistance level of 1.2800 which was briefly tested just a a week ago. The current rally to 1.2800 could, therefore, be a short term recovery before the bias opens to the downside. With the test of 1.2800, GBPUSD could be potentially forming a head and shoulders pattern. Therefore, watch for a higher low after the resistance at 1.2800 is tested. On the 4-hour chart, any near-term decline could be seen held near the support level at 1.2688.

USDJPY intraday analysis

USDJPY (111.32): USDJPY which has been struggling to break the resistance level at 111.61 is likely to see a near term pullback in price. However, price action is attempting to retest this resistance level once again. This comes following the bullish breakout from the descending wedge pattern on the daily chart. On the 4-hour chart, we notice the bull flag pattern which signals continuation. Resistance at 111.72 - 111.61 will be key, and a breakout above this level is required for USDJPY to extend gains to a minimum of 113.360.

USD/CHF - 0.9691

Most recent candlesticks pattern : N/A

Trend                                    : Near term up

Tenkan-Sen level                  : 0.9697

Kijun-Sen level                    : 0.9698

Ichimoku cloud top                 : 0.9726

Ichimoku cloud bottom              : 0.9717

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Last week’s selloff below previous support at 0.9695 signals the erratic fall from 0.9771 top is still in progress and near term downside risk remains for this move to bring retracement of recent rise, hence further weakness to 0.9660 would be seen, however, as broad outlook remains consolidative, still reckon downside would be limited to 0.9641 support, risk from there is seen for another rise to take place later.

On the upside, expect recovery to be limited to resistance at 0.9720 and price should falter below resistance at 0.9743, bring another decline later. Only a firm break above resistance at 0.9743 would revive bullishness and signal low is formed, bring test of 0.9766-71 resistance first. Once this resistance is penetrated, this would confirm recent rise from 0.9613 low has resumed for test of resistance at 0.9808, then towards another previous resistance at 0.9825.

EUR/USD

The EUR/USD pair recovered ground on Friday, to close the week pretty much unchanged right below 1.1200. It's been the second consecutive weekly doji for the pair, with the absence of key macroeconomic drivers and rising uncertainty leaving speculative interest clueless on what's next. Fed's speakers were behind dollar's late decline as St. Louis Fed President James Bullard said that the Fed can afford pausing raising rates, and wait for Washington before making next move. Indeed, Bullard is a well-known dove, but Cleveland Fed President Loretta Mester, a hawk, said that there is no "immediate need" to tighten monetary policy, although she added that considers recent slowdown in inflation is temporary. Adding to dollar's weakness, were soft readings in new home sales up just by 2.9% in May amid rising prices, and preliminary June Markit PMIs, coming below market's expectations, and at multi-month lows.

The week ahead has plenty of data to offer, with the US offering Durable Goods Orders a GDP revision, and more relevant, core PCE inflation, among others. In the EU, attention will center in Germany, with the IFO survey and inflation revisions leading the list. There are no Central Banks meetings or big speakers scheduled, but these lasts can surprise the market any time.

Technically, the pair has been confined to the lower half of its 5-week range of 1.1100/1.1300, building bearish pressure, but held ground, amid lack of dollar's demand. The daily chart shows that the pair found buying interest around the 23.6% retracement of its latest bullish run around 1.1125, with a previous relevant low having been set at 1.1109, making of the area a critical support to break to confirm additional declines ahead. In the same chart, the price was unable to advance beyond a horizontal 20 DMA, the immediate resistance, whilst technical indicators have managed to turn higher within neutral territory, lacking momentum. In the 4 hours chart, the 20 and 200 SMAs converge around 1.1160, reinforcing a static support area, whilst technical indicators eased modestly within positive territory. Overall, the downside potential seems limited, despite diminishing EUR's buying interest.

Support levels: 1.1160 1.1110 1.1075

Resistance levels: 1.1220 1.1260 1.1300

USD/JPY

The USD/JPY pair closed the week higher at 111.26, although with a third consecutive doji on Friday, as investors struggled to find a driver. Soft US data released on Friday offset early Fed's speakers hawkish stance, while a worse-than-expected manufacturing index in Japan prevented the JPY from appreciating, as the Nikkei Flash Japan PMI fell to a seven-month low of 52.0 in June from 53.1 in May, also missing expectations of 53.4. Japan will release its May inflation data next Thursday, expected modesty higher. Despite the BOJ has said that it plans to maintain its accommodative policy, higher inflation may trigger speculation of retrieving easing sooner than expected. In the meantime, the daily chart shows that the price met selling interest on approaches to the 100 DMA, currently converging with the 50% retracement of the latest daily slide around 112.00, while technical indicators head nowhere, but remain within positive territory. Shorter term, the 4 hours chart presents a neutral-to-bearish stance, with the price stuck around a modestly bearish 200 SMA, and technical indicators heading marginally lower around their mid-lines. A critical support comes at 110.90, the 38.2% retracement of the mentioned rally, with a break below it favoring a bearish extension towards the 110.00 region.

Support levels: 110.90 110.50 110.10

Resistance levels: 111.60 112.00 112.45

GBP/USD

The GBP/USD pair closed up for a third consecutive day on Friday at 1.2715, still down for the week. Theresa May has been unable to form a government so far, raising concerns over her ability to retain the UK's leadership, with news indicating the DUP is not ready to support her sending the pair to a two months low of 1.2588 mid-week. The rally was reverted by BOE's Haldane, who said he could vote for a rate hike in the next meeting, after voting to keep them on hold the last one. That will mean that at least half of the MPC is ready to tighten amid rising inflation, against Governor's Carney call for patient. On Friday, the kingdom released its CBI Industrial Trends Survey, up to 16, its highest since 1988, indicating strength in the manufacturing sector and partially helping to neutralize political concerns. Technically, the risk remains towards the downside, given that in the daily chart, the price remains below a strongly bearish 20 SMA now at 1.2785, whilst the Momentum indicator remains flat within negative territory and the RSI indicator heads marginally higher around 43. In the 4 hours chart, the price is above a modestly bullish 20 SMA, while technical indicators retreat within positive territory, not enough to confirm a bearish move ahead.

Support levels: 1.2665 1.2635 1.2590

Resistance levels: 1.2750 1.2785 1.2830

GOLD

Spot gold trimmed all of its early losses and closed the week with modest gains at $1,256.72 a troy ounce amid lackluster dollar's performance, and uncertainty over the upcoming Fed's move. Despite softening inflation in the US, monetary policymakers have been sending mixed signals over next move, most supporting further hikes ahead, in spite of poor data. Markets are not yet convinced over another hike in the current macroeconomic environment, and weakening equities helped gold to bounce. In the daily chart, the price has settled above a flat 100 DMA, but still trades below a modestly bearish 20 DMA, this last at 1,265.01, whilst technical indicators have managed to bounce from near oversold levels, heading higher, but still well-below their mid-lines. In the 4 hours chart the commodity presents a bullish stance, with technical indicators resuming their advances within positive territory and the price firmly above a bullish 20 SMA. The 200 SMA caps the upside, providing an immediate resistance at 1,258.00.

Support levels: 1,252.40 1,241.95 1,230.90

Resistance levels: 1,258.00 1,265.10 1,273.90

WTI CRUDE OIL

West Texas Intermediate crude oil futures closed in the red for a fifth consecutive week and at its lowest since November 2016, when the OPEC announced its output cut deal. WTI traded as low as 42.04 before bouncing modestly to settle at $43.11 a barrel on Friday. The commodity was weighed by rising concerns of a worldwide glut, on news production increased in different productive countries. Within the OPEC, Libya and Nigeria rose their output, both countries exempt from the cut, while in the US, the Baker Hughes report released on Friday showed that the number of active rigs drilling for oil rose by 11 to 758 this past week, marking a 23nd consecutive weekly advance. In the daily chart, the latest recovery looks merely corrective, given that the price remains far below all of its moving averages, with the 20 SMA heading sharply lower, now around 45.60, the RSI indicator aiming higher but still in oversold territory, and the Momentum also heading north, but well-below its mid-line. In the 4 hours chart, technical indicators have managed to correct oversold conditions, but lost upward strength and turned flat below their mid-lines, whilst the price is stuck around a bearish 20 SMA, in line with the longer term perspective.

Support levels: 42.70 42.10 41.65

Resistance levels: 43.35 43.80 44.50

DJIA

Wall Street closed mixed on Friday, with the DJIA down 2 points to 21,394.76, but the Nasdaq Composite up 0.46%, to 6,265.25, and the S&P also in the green, up by 4 points to 2,438.30. US indexes closed the week with small gains, with tech and energy-related equities on the rise. Back stocks, on the other hand, were undermined by a flattening yield curve. Within the Dow, Visa led advancers with a 1.73% gain, followed by Boeing that added 1.40%. Home Depot shed 2.68% being the worst performer, followed by Goldman Sachs that shed 1.17%. The daily chart for the DJIA shows that the index held above a still bullish 20 SMA, currently at 21,294, whilst technical indicators kept retreating within positive territory, although with limited downward momentum. In the 4 hours chart, the benchmark is below a bearish 20 SMA, whilst the Momentum indicator heads nowhere below its 100 level, as the RSI indicator heads lower around 41, all of which favors a downward extension on a break below the mentioned support.

Support levels: 21,389 21,351 21,303

Resistance levels: 21,449 21,495 21,542

FTSE100

The FTSE 100 shed 15 points on Friday to end at 7,424.13, down for a third consecutive week. A stronger Pound weighed on the Footsie, alongside with oil prices, as despite bouncing modestly at the end of the week, the commodity settled at a multi-month low. The best performer was ITV, up 3.34% after receiving a rating upgrade from Morgan Stanley, from equal-weight to overweight, followed by Fresnillo that added 2.88%. Smurfit Kappa led decliners with a 2.48% loss, followed by Shire that shed 2.32%. In the daily chart, the index is still trading above a bullish 100 DMA, currently at 7,380, but the 20 DMA gains bearish strength above the current level, whilst technical indicators lack directional strength within bearish territory, leaning the scale towards the downside. In the 4 hours chart, the London benchmark presents a bearish stance, with the 20 SMA presenting a strong downward slope and capping advances around 7,440, and technical indicators having turned south after failing to overcome their mid-lines.

Support levels: 7,403 7,376 7,327

Resistance levels: 7,440 7,499 7,541

DAX

The German DAX closed the week lower, down on Friday by 60 points, to 12,733.41. Most major European indexes closed lower in the last day of the week, amid a decline in healthcare and utilities stocks. Within the German benchmark, only five components closed in the green, with Deutsche Lufthansa leading the winners' list with a 1.04% gain, followed by Vonovia that added 0.39%. RWE AG was the worst performer, down 2.49%, followed by E.ON that shed 1.29%. Banks and carmakers were also trading heavily across the region. In the daily chart, the index has settled right below a modestly bullish 20 SMA, whilst technical indicators turned lower within neutral territory, with the Momentum limited, but the RSI gaining downward traction around 48, this last anticipating some further slides ahead. In the 4 hours chart, the index closed below all of its moving averages, with the 20 SMA crossing below the 100 SMA far above the current level, and technical indicators having turned south within negative territory, also supporting additional declines ahead.

Support levels: 12,674 12,638 12,604

Resistance levels: 12,748 12,805 12,851

GBP/USD - 1.2755

Most recent candlesticks pattern   : N/A

Trend                                 : Near term down

Tenkan-Sen level                 : 1.2750

Kijun-Sen level                    : 1.2733

Ichimoku cloud top              : 1.2699

Ichimoku cloud bottom        : 1.2661

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

As cable has continued moving higher after last week’s strong rebound from 1.2589, suggesting near term upside risk remains for this move to bring retracement of recent decline to 1.2780-85 (50% Fibonacci retracement of 1.2978-1.2589), however, reckon upside would be limited to 1.2800 and price should falter below resistance at 1.2818, bring another selloff later.

In view of this, would not chase this move here and would be prudent to stand aside for now. Below 1.2705-10 would suggest an intra-day top is formed, bring weakness towards 1.2675-80 but break of latter level is needed to signal the rebound from 1.2589 has ended, bring retest of this level later.