Sample Category Title

Weekly
    •    Last Candlesticks pattern: Doji
    •    Time of formation: 26 Sep 2016
    •    Trend bias: Sideways

Daily
    •    Last Candlesticks pattern: Shooting star
    •    Time of formation: 25 Oct 2016
    •    Trend bias: Near term up

USD/CHF – 0.9978

Although the greenback opened lower yesterday and fell to as low as 0.9893, the subsequent rebound suggests consolidation above this level would be seen and as long as this support holds, prospect of another bounce 1.0000-08 resistance remains, a daily close above there would signal low is formed, then gain to 1.0025-30 (61.8% Fibonacci retracement of 1.0108-0.9893) would be seen, however, break of 1.0067 is needed to retain bullishness and signal the retreat from 1.0108 has ended, bring retest of this level later, break there would extend the rebound from 0.9813 towards key resistance at 1.0171. Looking ahead, only a sustained breach above this level would add credence to our view that the erratic decline from 1.0344 top has ended at 0.9813, bring further rise to 1.0200-10, then 1.0250 but price should falter well below said resistance at 1.0344 (2016 high).

On the downside, below said support at 0.9893 would abort and signal the rebound from 0.9813 has ended instead, bring another fall to this level. Looking ahead, only a drop below said support at 0.9813 would revive bearishness and signal the decline from 1.0344 top has resumed instead and extend further fall to 0.9735-40 (76.4% retracement of 0.9550-1.0344) and later towards 0.9700 but reckon 0.9650-60 would hold.

Recommendation: Hold long entered at 0.9990 for 1.0190 with stop below 0.9890.

On the weekly chart, although dollar opened lower yesterday, still reckon the upper Kumo (now at 0.9886) would limit downside and bring rebound later to the Tenkan-Sen (now at 0.9992) but break of resistance at 1.0067 is needed to retain bullishness and signal the retreat from 1.0108 has ended, bring retest of this level. A break above 1.0108 would extend the rebound from 0.9813 to resistance at 1.0171, however, a weekly close above this level is needed to confirm the fall from 1.0344 top has ended at 0.9813, bring further subsequent rise towards key resistance at 1.0248. A sustained breach above this level would signal early upmove has possibly resumed, bring test of 1.0335-44 resistance area, above there would provide confirmation and headway to 1.0400-10 and later 1.0500 would follow.

On the downside, below the upper Kumo (now at 0.9886) would defer but only break of indicated support at 0.9813 would abort and signal the erratic fall from 1.0344 top is still in progress, bring further decline for retracement of early upmove to 0.9735-40, then 0.9700 but reckon downside would be limited to 0.9640-50 and price should stay well above support at 0.9550.

USD/CHF - 0.9954

Most recent candlesticks pattern : N/A

Trend                                    : Near term down

Tenkan-Sen level                  : 0.9957

Kijun-Sen level                    : 0.9951

Ichimoku cloud top                 : 0.9947

Ichimoku cloud bottom              : 0.9945

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Despite dropping to 0.9893 yesterday, lack of follow through selling and the subsequent rebound suggest consolidation above this level would be seen and another bounce to 0.9975-80 cannot be ruled out, however, reckon 1.0000 (said resistance and 50% Fibonacci retracement of 1.0108-0.9893) would limit upside and bring another decline later. Below said support at 0.9893 would extend the fall from 1.0108 top to 0.9865-70 (2 times extension of 1.0108-1.0008 measuring from 1.0067) but support at 0.9831 would hold, bring rebound later.

In view of this, would be prudent to stand aside in the meantime. Above previous support at 1.0008 would suggest low is formed instead, bring rebound to 1.0025-30 (61.8% Fibonacci retracement of 1.0108-0.9893) but price should falter below resistance at 1.0067.

GBP/USD - 1.2807

Most recent candlesticks pattern   : N/A

Trend                                 : Near term up

Tenkan-Sen level                 : 1.2797

Kijun-Sen level                    : 1.2803

Ichimoku cloud top              : 1.2808

Ichimoku cloud bottom        : 1.2805

Original strategy :

Buy at 1.2710, Target: 1.2850, Stop: 1.2675

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.2710, Target: 1.2850, Stop: 1.2675

Position : -

Target :  -

Stop : -

Cable has remained confined within near term established range and further sideways trading is in store, whilst another test of Friday’s low at 1.2757 cannot be ruled out, reckon downside should be limited to 1.2700-10 (50% Fibonacci retracement of 1.2515-1.2906) and bring another rally, break of 1.2859 would signal the pullback from 1.2906 has ended, bring retest of this level, above there would extend recent upmove to 1.2920-30 (2 times extension of 1.2365-1.2575 measuring from 1.2500), then 1.2950 but loss of upward momentum should prevent sharp move beyond 1.2990-00 (1.236 times projection of 1.2109-1.2616 measuring from 1.2365 and psychological resistance). 

In view of this, would not chase this rise here and would be prudent to buy cable on subsequent pullback as downside should be limited to 1.2710 (50% Fibonacci retracement of 1.2515-1.2906), bring another rise. Below 1.2700 would defer and signal top has been formed, risk correction to 1.2660-65 (61.8% Fibonacci retracement of 1.2515-1.2906) and price should stay well above 1.2608-16 (previous resistance now support).

EUR/USD

Current level - 10865

The intraday bias is neutral above 1.0828 minor support, but a break through the latter will challenge 1.0780 area. Key resistance lies at 1.0940.

Profit-taking affects gold curbing silver and platinum

USD/JPY

Current level - 110.19

Yesterday's corrective pullback filled the gap above 109.40 and the outlook is positive, for a rise towards 111.50 area. 

GBP/USD

Current level - 1.2795

The lack of trend dynamics here signals a break through 1.2770, for a dip to 1.2705 support area. 

EUR/USD - 1.0887

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 1.0873

Kijun-Sen level                  : 1.0864

Ichimoku cloud top             : 1.0835

Ichimoku cloud bottom      : 1.0809

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Euro’s retreat after rising to 1.0936 yesterday suggests consolidation below this level would be seen but reckon downside would be limited to 1.0850 and support at 1.0821 should hold, bring another rise later, above 1.0936 resistance would signal recent erratic upmove from 1.0340 has resumed and extend gain to 1.0975-80 and possibly towards 1.1000 which is likely to hold from here due to loss of momentum.

In view of this, would not chase this rise here and would be prudent to stand aside in the meantime. Below 1.0850 would bring test of said support at 1.0821 but break there is needed to signal top has possibly been formed, then fall to previous resistance at 1.0778 (now support) would follow, break there would add credence to this view and extend weakness to 1.0750.

Near-term action remains unchanged and holding within 1.2770/1.2859 consolidation range under last week's fresh multi-month high at 1.2904.

Strong support has formed at 1.2770 (consolidation range floor, also former high of 06 Dec) where repeated downside attempts were contained.

The downside is reinforced by 1.2755 (Friday's spike low/Fibo 38.2% of 1.2513/1.2904 upleg), however, risk of deeper pullback remains in play as slow stochastic is turning down on daily chart, after reversing from overbought territory.

Firm break below 1.2770/55 supports would risk extension to 1.2700 (rising daily Tenkan-sen).

Otherwise, extended consolidation would look for bullish signal for renewed attempt at 1.2904 and possible extension towards 1.3000 barrier as overall structure is bullish.

Res: 1.2838, 1.2859, 1.2904, 1.2986
Sup: 1.2770, 1.2755, 1.2700, 1.2663

USD/JPY - 110.30

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 109.98

Kijun-Sen level                  : 109.98

Ichimoku cloud top             : 109.98

Ichimoku cloud bottom      : 109.66

Original strategy  :

Buy at 109.30, Target: 110.30, Stop: 108.95

Position :  -

Target :  -

Stop : -

New strategy  :

Stand aside

Position :  -

Target :  -

Stop : -

Although the greenback found good support at 109.59 and has rebounded, break of yesterday’s high at 110.60 is needed to signal recent upmove from 108.13 low has resumed and may extend further gain to 110.90-00, however, near term overbought condition should prevent sharp move beyond 111.25-30 and price should falter well below resistance at 111.58, risk from there is seen for a retreat later.

In view of this, would not chase this rise here and would be prudent to stand aside in the meantime. Below 109.90-95 would risk another retreat to 109.59 but break of previous resistance at 109.49 is needed to signal top is formed instead, bring correction of recent rise to 109.05-10 (61.8% Fibonacci retracement of 108.13-110.60).

The Euro pauses after Monday's surge to fresh 5 ½ month high at 1.0916, consolidating around the mid-point of Monday's 1.0819/1.0916 range. Monday's close above 200SMA is bullish signal, along with long-tailed daily candle, formed on strong downside rejection at 1.0819 (weekly Kijun-sen).

Dip-buying scenario for fresh upside attempts will remain favored while the price holds above 200SMA.

Daily Tenkan-sen / Kijun-sen cross, formed after yesterday's rally, underpins.

Near-term focus is on 1.0916 high and weekly 55SMA at 1.0934, break of which would expose psychological 1.1000 barrier, also weekly 100SMA.

Further bullish acceleration may extend towards weekly cloud base at 1.1067.

Negative scenario requires break below 1.0835/19 (200SMA / weekly Kijun-sen) to signal stronger downside action.

Res: 1.0887, 1.0916, 1.0934, 1.1000
Sup: 1.0849, 1.0836, 1.0819, 1.0777

The positive momentum driven by the outcome of the first round of voting in the French presidential elections extended into its second day. It now appears that investors are confident that Macron will be France’s next president and will win the battle on 7 May easily. Investors who lost confidence in pollsters after they failed to predict the outcomes of the U.S. elections and Brexit vote are all of a sudden viewing them as credible sources of information again. As a result, the French CAC rallied more than 4% to hit its highest levels since 2008, French bond yields declined sharply and the Euro jumped to a five-month high.

The importance of this one single event was reflected in asset classes across the globe, but whether this rally will have legs depends on how big Macron wins. Macron would need to win by a margin of more than 60% in the second round to unite a divided country and ensure that the spread of populism ends in France.

With concerns over the French election diminishing, traders will shift their attention towards monetary policy. While no changes to asset purchases or interest rates are expected during Thursday’s ECB meeting, Mario Draghi’s tone is what’s going to guide the Euro. Leading economic indicators have seen a fair improvement within the Eurozone, but inflation levels that have slipped to 1.5% in March from 2% in February are likely to keep Mr. Draghi on the defensive. I don’t expect much from this meeting, other than a reiteration of past statements, which is likely to cap Euro gains for now. Any hint of normalizing policy will push Euro above 1.10. However, I think this scenario is highly unlikely.

Before the ECB meets on Thursday, Trump is due to deliver a “big announcement” on tax reforms. I’m becoming little concerned over the President’s big announcements, especially since we haven’t seen any major legislative achievement so far and he will be marking his 100th day in the White House this Saturday. I believe that a repeat of the healthcare reform failure will end up sending the Euro above 1.10 without the need of ECB’s support.

Sunrise Market Commentary

• Rates: Frexit no longer discounted; neutral ahead of ECB?
  Yesterday's trading session suggests that the French presidential elections are no longer an issue for markets. In the run-up to Thursday's ECB meeting, we think the Bund will find some support. The US Note future remains strong despite upcoming supply and despite hints on a near-term announcement of Trump's tax reform plan.
• Currencies: Dollar hardly profits as sentiment remains risk-on
  EUR/USD and USD/JPY made a one-off rebound after the French election. However, especially the performance of USD/JPY was mediocre as the pair struggles to hold north of 110. Today, the focus turns to the US data and US politics. Will the Trump administration be able to cut taxes sufficiently to give the dollar interest rate support?

The Sunrise Headlines

• US equities managed to hold on to opening gains and closed more than 1% higher. Overnight, Asian risk sentiment remains positive with main bourses nearly 1% in the green.
• President Donald Trump has ordered White House aides to draft a tax plan that slashes the corporate tax rate to 15%, even if that means a loss of revenue, according to people familiar with the directive.
• The Trump administration will impose new tariffs on imports of Canadian softwood lumber after concluding that Canada subsidises the industry in a way that hurts the US. USD/CAD surged from 1.34 to 1.3550.
• US President Trump indicated an openness to delaying his push to secure funds for his promised border wall with Mexico, potentially eliminating a sticking point as lawmakers worked to avoid a looming government shutdown.
• Macron led Le Pen by at least 20 percentage points in three polls ahead of France's May 7 election. Ifop's daily survey showed him with a 60%-40% advantage, OpinionWay put it at 61%-39%, and Elabe put it at 64%-36%.
• The Home Office is trying to discourage EU nationals from applying for permanent residence in the UK to avoid being deluged by applications after the triggering of the Article 50 Brexit clause.
• Today's eco calendar contains US consumer confidence and Richmond Fed Manufacturing index. Germany, the Netherlands and the US supply the bond market. The ECB publishes its bank lending survey.

Currencies: Dollar Hardly Profits As Sentiment Remains Risk-On

Dollar remains in the defensive despite risk rally

On Monday, a (one-off) repositioning on the outcome of the French presidential election initially triggered good gains in the EUR/USD and USD/JPY. However, both cross rates soon found a new ST equilibrium and held tight ranges for the remainder of the session. EUR/USD held close to the 1.0850 pivot. USD/JPY initially drifted sideways in the low 110 area, but closed the session on a weak footing as US bond yields failed to maintain an earlier rise, despite a strong equity performance.

Overnight, Asian equities make more gains. Global markets are pondering the impact of President Trump's tax proposals and a spending bill that the needs to be approved soon to avoid a government shutdown. For now, it nurtures the global risk-on rally, but he rise in core bond yields remains modest. The yen weakens slightly after yesterday evening's set back. USD/JPY is again trading in the 110 area. EUR/USD is holding near 1.0865. The Canadian dollar declined against the USD (see headlines). USD/CAD trades at 1.3550, nearing the key 1.36 technical resistance.

Today, EMU calendar only contains second tier data. The US calendar is more important. US New Home sales rose a strong 6.1% M/M in February. After February's strong gains, we expect small additional gains for March. US Consumer confidence surged in March to a 16-year high and rose stronger than other measures of confidence. Consensus sees a slight drop to 122.5 from 125.6. Given the recent outperformance and the weak headline payrolls, we see some downside risks, but without compromising the strong underlying confidence. The Richmond Fed survey is expected to have dropped to 16 from 22. We have no reasons to distance ourselves from consensus.US consumer confidence has the most potential to move FX market. However, unless there is a sharp deviation from consensus, the reaction of the dollar should only be of intra-day significance. The USD reaction might be a bit more pronounced in case of a negative compared to a positive surprise.

Yesterday, the dollar hardly profited from the risk-on rebound as it was driven by a non-US event ( the French election result). The focus will now turn more to the US with markets keeping a close eye on the Trump tax proposals and on the approval of the spending bill in Congress. If a shutdown is avoided, it might support a risk rally and give the dollar some interest rate support. However, the dollar wasn't in good shape of late. So, we assume more consolidation in both EUR/USD and USD/JPY till there is more clarity on the US tax proposals and/or on the budget bill. A new failure to implement a workable fiscal policy would weigh on the dollar.

From a technical point of view, USD/JPY broke below the 110 key support. We downgraded our USD/JPY assessment to bearish. Next key support (62% retracement) comes in at 107.18. Yesterday's ‘rebound' suggested that a bottoming out process might be in store. However, the pair needs to regain the 112.20 level (neckline ST double bottom) to really improve the technical picture. EUR/USD extensively tested the topside of the MT range (1.0874/1.0906 area) late March, but the test was rejected and EUR/USD returned lower in the 1.0875/1.05 range. The move met support in the 1.06 area and the pair again tested the range top after the French election. We look out how this test turns out, but we are not convinced of a sustained break higher. If EUR/USD would regain the 1.10 barrier, next resistance comes in in the 1.1145/1.13 area (US pre/post-election swings).

EUR/USD holding near the recent highs. USD remains in the defensive

EUR/GBP

Euro strength supports EUR/GBP

Sterling trading was driven by the impact of the French election result on global markets yesterday. The euro jumped higher across the board. EUR/GBP filled offers north of 0.85 early in Asia, but the EUR/GBP rally stalled, as was the case for EUR/USD. The pair settled in a relatively tight range in the upper half of the 0.84 big figure. The price swings in cable were limited. The pair hovered around the 1.28 pivot. The CBI total orders trends were slightly softer than expected at 4 (from 8 in March). The report suggests softer growth at the start of Q2, but the impact on sterling was limited. EUR/GBP closed the session at 0.8493. Cable finished the day at 1.2796.

Today, the eco calendar contains the monthly UK budget data. These data are usually only of second tier importance for sterling trading, at best. Of late sterling held strong. For now Brexit uncertainty is a bit off the radar for sterling trading as there will probably be few concrete developments before UK election on June 8. At the same time, the UK eco data were good enough for investors not to add to sterling shorts or even reduce stale short positions. Yesterday's EUR/GBP rebound was a euro move. The price moves in cable suggested that sentiment on sterling remains rather constructive for now.

We had a neutral short-term bias on EUR/GBP. Early last week, EUR/GBP dropped below the bottom of the EUR/GBP 0.84 support, improving the sterling picture. The pair came within reach of the key 0.8305 support (Dec low), but no real test occurred. After yesterday's rebound, the range bottom looks better protected. Longer term, Brexit-complications remain a potential negative for sterling. Of late, this was not the focus of sterling trading. Nevertheless on technical considerations, we are inclined to reconsider a cautious EUR/GBP buyon- dips approach.

EUR/GBP: jumps on French election. 0.83 range bottom looks safe for now

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