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The US dollar continued to trade mixed across the board. Lack of clear fundamentals saw the markets trading mostly subdued.

On the economic front, data included the US initial jobless claims increased 3,000 to a seasonally adjusted 241,000 in the week ended June 17. This was slightly higher than the 240k that was forecast. In Canada, retail sales rose 0.8% on the month in April beating estimates of 0.2%. The stronger than expected retail sales push the Canadian dollar higher, which also got a boost from oil prices which snapped a 3-day losing streak.

Looking ahead, the economic data today will include the flash manufacturing and services PMI from the eurozone. Canada will be reporting the monthly inflation data which is expected to show a 0.2% increase on a month over month basis. In the US flash manufacturing and services PMI numbers will be coming out and the FOMC member, Powell will be speaking.

EURUSD intraday analysis

EURUSD (1.1161): EURUSD slipped lower yesterday, but with price action supported above 1.1129, we can expect the upside bounce to continue. We continue to watch the unfolding head and shoulders patterns currently. The upside in price will see a possibly lower high being formed near 1.1200 region. If we expect a reversal here, EURUSD will form the right shoulder of the head and shoulders pattern. Following this, a break down below 1.1129 which will become the neckline support of the H&S pattern will signal a move to the downside. However, the risks of upside continuation in prices could see EURUSD remaining biased to the upside.

GBPUSD intraday analysis

GBPUSD (1.2697): The British pound was trading subdued yesterday but the price action since earlier today has been bullish. The bias is flat at the moment unless we see a daily close above 1.2688. In this case, GBPUSD could be seen pushing higher towards 1.2800 where resistance could be tested even more firmly. If this scenario plays out, further upside in GBPUSD could be expected with a breakout above 1.2800 likely to push GBPUSD higher towards targeting 1.3000. To the downside, if the current consolidation fails, we can expect the bearish trend to resume with prices falling back to 1.2600 and possibly extending lower to 1.2400.

USDJPY intraday analysis

USDJPY (111.32): USDJPY is consolidating into a bullish flag pattern on the 4-hour chart. An upside breakout above the resistance level of 111.70 is required to confirm this bullish trend. The minimum price objective is towards 112.5 followed by 113.36. To the downside, in the event that USDJPY fails to break out above the 111.70 resistance, we can expect the downside in USDJPY to test support at 110.70 region. This would potentially invalidate the bullish outlook in price and could keep USDJPY range bound and possibly biased for further losses.

Daily Pivots: (S1) 1.3182; (P) 1.3260; (R1) 1.3311; More....

USD/CAD is still staying above 1.3164 and intraday bias remains neutral at this point. Consolidation from 1.3164 might extend but upside should be limited by 1.3387 support turned resistance and bring fall resumption. We're holding on to the view that corrective rise from 1.2460 has completed at 1.3793 already. Below 1.3164 will target 1.2968 cluster support, 61.8% retracement of 1.2460 to 1.3793 at 1.2969. However, firm break of 1.3387 will dampen our view and turn focus back to 1.3537 resistance next.

In the bigger picture, price actions from 1.4689 medium term top are seen as a correction pattern. The first leg has completed at 1.2460. Rise from 1.2460 is seen as the second leg and has completed at 1.3793, ahead of 61.8% retracement of 1.4689 to 1.2460 at 1.3838. Break of 1.3222 should now indicate the start of the third leg while further break of 1.2968 should confirm. In that case, USD/CAD should decline through 1.2460 support to 50% retracement of 0.9406 to 1.4869 at 1.2048.

EUR/JPY - 124.23

EUR/JPY: Wave v as well as larger degree wave (C) ended at 94.11 and first leg of larger degree wave C upmove has possibly ended at 149.79 and wave 2 correction has possibly ended at 109.49.




As the single currency found good support at 122.40 last week and rebounded, suggesting consolidation with mild upside bias would be seen for gain to 125.00, however, break of resistance at 125.31 is needed to confirm the pullback from 125.82 has ended at 122.40, bring retest of this recent high, above there would confirm recent upmove from 109.49 low has resumed and extend gain to resistance at 126.47 and possibly 127.50-60, having said that, reckon upside would be limited to 128.17 resistance and price should falter well below 129.00 (61.8% Fibonacci retracement of 141.06-109.49).

The daily chart is labeled as attached, early selloff from 169.97 (July 2008) to 112.08 is wave (A) of B instead of end of entire wave B and then the rebound from there to 139.26 is wave (B), hence, wave (C) has possibly ended at 94.12 with a diagonal triangle as labeled in the daily chart, hence upside bias is seen for further gain. Recent rally above indicated retracement level at 116.69 (50% Fibonacci retracement of the intermediate fall from 139.26-94.12) adds credence to this view and signal major reversal has commenced but first leg of this wave C has possibly ended at 149.79, hence wave 2 has commenced with wave A ended at 126.09, followed by wave B at 141.06, wave C commenced and could have ended at 109.49, above 126.00 would add credence to this view, then headway to 130.00 would follow. 



On the downside, expect pullback to be limited to 123.50-55 and bring another rise later. Only below said support at 122.40 would defer and risk another corrective fall to 122.00-10, however, reckon downside would be limited and 121.60-65 (38.2% Fibonacci retracement of 114.85-125.82) and bring another rise later. A daily close below 121.60-65 would defer and suggest top is formed instead, risk correction to 121.00 and possibly towards support at 120.60 but reckon 120.30-35 (50% Fibonacci retracement) would limit downside and psychological level at 120.00 should hold.



Recommendation: Buy at 123.50 for 125.50 with stop below 122.50.

To re-cap the corrective upmove from the record low of 88.93 (18 Oct 2000), the wave A from there is subdivided as: 1:88.93-113.72, 2:99.88 (1 Jun 2001), 3:140.91 (30 May 2003), 4:124.17 (10 Nov 2003) and 5 ended at record high of 169.97 (21 Jul 2008). The brief but sharp selloff to 112.08 is viewed as a-b-c x a-b-c wave (A) of B. The subsequent rebound to 139.26 is (B) of B and (C) of (B) has possibly ended at 94.12 and in any case price should stay well above previous chart support at 88.93, bring rally in larger degree wave C towards 150.00.

USD/CHF –  0.9723

 
USD/CHF – Wave IV ended at 1.1730 and wave V has possibly ended at 0.7068

 
Although the greenback has retreated after meeting resistance at 0.9771, if our view that a temporary low has possibly been formed at 0.9613 earlier this month is correct, downside should be limited to 0.9695-00 and bring another rebound later, above said resistance at 0.9771 would add credence to this view, bring test of resistance at 0.9808-13, however, a daily close above this level is needed to bring retracement of recent decline to 0.9855-60, then towards 0.9900. Having said that, near term overbought condition should limit upside and price should falter well below psychological resistance at 1.0000, bring another decline later.

Our preferred count on the daily chart is that early selloff to 0.9630 is an end of the larger degree wave III and major correction is unfolding from there with a leg ended at 1.2298 (Nov 2008 with (a): 1.0625, (b):1.0011 and (c):1.2298), wave b ended at 0.9910 with (a): 1.0370, (b): 1.1967, (c): 0.9910. The rise from there to 1.1730 is the wave c which also marked the end of wave IV and wave V has possibly ended at 0.7068.


On the downside, expect pullback to be limited to 0.9695-00 and bring another rebound. Below last week’s low at 0.9641 would risk another test of this month’s low at 0.9613 but break there is needed to revive bearishness and signal the decline from 1.0344 top has resumed for further weakness to 0.9600, then towards previous chart support at 0.9550 (Nov 2016 low), however, still reckon downside would be limited and price should stay well above another chart point at 0.9444 (2016 low).
 
Recommendation: Hold long entered at 0.9700 for 0.9900 with stop below 0.9600

Dollar's long-term downtrend started from 2.9343 (Feb 1995) and it was unfolding as a (A)-(B)-(C) with (A): 1.1100, (B): 1.8310 (26 Oct 2000), then followed by another impulsive wave (C) with wave III ended at 0.9630 (Mar 2008). Under this count, correction in wave IV has possibly ended at 1.1730 and wave V already broke below support at 0.9630 and met indicated downside target at 0.7500 and 0.7400. The reversal from 0.7068 suggests the wave V has possibly ended and the breach of resistance at 0.9595 add credence to this view and indicated upside target at 1.0000 had been met, however, the sharp retreat from 1.0296 to 0.7401 suggests choppy trading would be seen but price should stay above said record low at 0.7068.

Daily Pivots: (S1) 0.7527; (P) 0.7548; (R1) 0.7561; More....

Intraday bias in AUD/USD remains neutral for the moment. With 0.7523 intact, further rise is expected. Break of 0.7635 will extend the rise from 0.7328 to 0.7748 resistance and above. At this point, there is no clear sign of range breakout at. Hence, we'd be cautious on topping again as it approaches medium term fibonacci level at 0.7849. Meanwhile, break of 0.7523 will argue that rebound from 0.7328 is possibly completed. In that case, intraday bias will be turned back to the downside for 0.7370 support.

In the bigger picture, we're still treating price actions from 0.6826 low as a corrective pattern. And, as long as 38.2% retracement of 0.9504 to 0.6826 at 0.7849 holds, long term down trend from 1.1079 is expected to resume sooner or later. Break of 0.6826 low will target 0.6008 key support level. However, firm break of 0.7849 will indicate that rise from 0.6826 is developing into a medium term rebound, rather than a sideway pattern. In such case, stronger rise should be seen to 55 month EMA (now at 0.8116) and above.

Daily Pivots: (S1) 111.02; (P) 111.23; (R1) 111.52; More...

USD/JPY is staying in consolidation below 111.78 and intraday bias remains neutral. With 110.63 minor support intact, further rise is still expected. Break of 111.78 will target near term channel resistance (now at 112.85). Sustained break there will suggest that whole pull back from 118.65 has completed at 108.12 already. In such case, further rise should be seen to 114.36 resistance for confirmation. However, break of 110.63 will turn bias back to the downside for 108.81 instead.

In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. It's uncertain whether it's completed yet. But in case of another fall, downside should be contained by 61.8% retracement of 75.56 to 125.85 at 94.77 to bring rebound. Overall, rise from 75.56 is still expected to resume later after the correction from 125.85 completes.

GBP/USD – 1.2735

Recent wave: Wave V of larger degree wave (III) has ended at 1.1986 and major correction has commenced from there for gain to 1.3000 and 1.3140-50

Trend: Near term down

Original strategy :

Sold at 1.2675, stopped at 1.2735

Position: - Short at 1.2675
Target:  -
Stop: - 1.2735

New strategy :

Stand aside

Position: -
Target:  -
Stop:-

As sterling has surged again today, dampening our near term bearishness and suggesting a temporary low has been formed at 1.2589 earlier this week, hence upside risk remains for this rebound from there to bring retracement of recent decline, above 1.2758 would encourage for further gain to 1.2800, then test of resistance at 1.2818 but break there is needed to provide confirmation that recent decline from 1.3048 has ended at 1.2589, then headway to 1.2850-60 would follow.

Our preferred count on the daily chart is that cable's rebound from 1.3500 (wave (A) trough) is unfolding as a wave (B) with A ended at 1.7043, followed by triangle wave B and wave C as well as wave (B) has ended at 1.7192, the subsequent selloff is the larger degree wave (C) which is still unfolding with minor wave (III) of larger degree wave 3 ended at 1.1986, hence wave (IV) correction is in progress which could either be a triangle wave (IV) of a complex formation but upside should be limited to 1.3500 and price should falter well below 1.4000, bring another decline in wave (V) of 3 for weakness to 1.1500, then 1.1200.

On the downside, expect pullback to be limited to 1.2675-80 and support at 1.2640 should hold, bring another rebound later. Only a drop below 1.2640 would suggest the rebound from 1.2589 has ended, bring retest of this level, break of this support would revive bearishness and signal recent decline from 1.3048 top has resumed for retracement of early upmove to 1.2550, then towards previous support at 1.2515.

Daily Pivots: (S1) 0.9705; (P) 0.9723; (R1) 0.9735; More.....

USD/CHF's consolidation from 0.9613 is still in progress and intraday bias stays neutral at this point. With 0.9087 resistance intact, near term outlook stays bearish. Break of 0.9613 will extend the whole decline from 1.0342 to 0.9548 support and below. We'd start to look for bottoming signal again as it approaches 0.9443 key support level. However, considering bullish convergence condition in 4 hour MACD, break of 0.9807 will indicate near term reversal and turn outlook bullish for 1.0099 resistance next.

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) 1.2660; (P) 1.2675; (R1) 1.2697; More...

GBP/USD's rebound continues today but it's staying below 1.2813 minor resistance. Intraday bias stays neutral first. At this point, we're still favoring the bearish case that consolidation pattern from 1.1946 has completed at 1.3047 already. Sustained break of 1.2614 resistance turned support should confirm our bearish view and target a test on 1.1946 low next. However, break of 1.2813 resistance will dampen our view and turn bias back to the upside for 1.3047 and above.

In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. Price actions from 1.1946 medium term low are seen as a consolidation pattern, which could have completed after hitting 55 week EMA. Break of 1.1946 low will target 61.8% projection of 1.5016 to 1.1946 from 1.3047 at 1.1150 next. In case the consolidation from 1.1946 extends, outlook will stay remain bearish as long as 1.3444 resistance holds.

GBP/JPY - 141.45

Recent wave: Medium term low formed at 120.50 and (A)-(B)-(C) major correction has commenced with (A) leg ended at 148.45, hence wave (B) is unfolding for retreat to 131.00-10.

Trend: Near term down

New strategy :

Stand aside

Position: -
Target:  -
Stop:-

Although sterling found support at 139.85 earlier this week and has rebounded, a break above 141.75-80 is needed to revive bullishness and signal the retreat from 142.50 has ended, bring another test of this level. Once this resistance is penetrated, this would signal the erratic rise from 138.70 is still in progress or test of indicated previous resistance at 142.75, above there would signal recent decline has ended and encourage for at least a strong retracement of recent selloff to 143.05-10.

On the downside, below 140.45-50 would bring test of said support at 139.85, break there would suggest the rebound from 138.70 has ended there and downside risk remains for weakness towards support at 139.15, however, break there is needed to add credence to this view and signal recent decline has resumed for retest of 138.70, then towards 138.00-10 later which is likely to hold from here due to near term oversold condition.

Our preferred count is that larger degree wave V with circle is unfolding from 251.12 with wave (I) 219.34, (II): 241.38 and wave (III) is subdivided into 1: 192.60, 2: 215.89 (23 Jul 2008) and wave 3 ended at 118.87 earlier in 2009. The correction from there to 162.60 is wave 4 which itself is a double three and is labeled as first a-b-c ended at 151.53, followed by wave x at 139.03, 2nd a ended at 162.60, 2nd b at 146.75 and 2nd c leg of wave 4 ended at 163.00. Therefore, the decline from 163.00 to 116.85 is now treated as wave 5 which also marked the end of larger degree wave (III), hence wave (IV) major correction has commenced for retracement of the wave (III) from 241.38 and upside target at 183.95-00 (50% Fibonacci retracement of the wave (II) from 241.38) had been met, a drop below 160.00 would suggest wave (IV) has ended at 195.85, bring decline in wave (V) for initial weakness to 130 (already met) and 120.