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Daily Pivots: (S1) 0.8428; (P) 0.8435; (R1) 0.8441; More...

Intraday bias in EUR/GBP remains neutral and outlook stays bearish with 0.8585 resistance intact. Fall from 0.8720 is expected to resume sooner or later. Break of 0.8338 will turn bias to back to the downside for retesting 0.8201 low.

In the bigger picture, current development suggests rejection by 38.2% retracement of 0.9499 to 0.8201 at 0.8697. Medium term bearishness is maintained. Break of 0.8201 will resume larger down trend from 0.9499 (2020 high). Nevertheless, sustained break of 0.8697 will affirm the case that rise from 0.8201 is a medium term up trend itself.

Daily Pivots: (S1) 1.4533; (P) 1.4546; (R1) 1.4559; More...

Intraday bias in EUR/AUD remains neutral first, but further fall is expected. On the downside, break the 1.4508 will resume the decline from 1.5396 to retest 1.4318 low. Nevertheless, break of 1.4804 resistance will now turn bias back to the upside for stronger rebound.

In the bigger picture, down trend from 1.9799 is still in progress. Break of 1.4318 low will target 61.8% projection of 1.9799 to 1.5250 from 1.6434 at 1.3623, which is close to 1.3624 long term support (2017 low). This will remain the favored case now as long as 1.5396 resistance holds.

Daily Pivots: (S1) 0.9693; (P) 0.9719; (R1) 0.9734; More....

Intraday bias in EUR/CHF stays neutral at this point. On the downside, firm break of 0.9697 will resume larger down trend to 0.9650 long term projection level. Strong support could be seen there to bring rebound. On the upside, break of 0.9799 minor resistance will turn bias to the upside for stronger rise to 0.9948 resistance. However, firm break of 0.9650 will target 100% projection of 1.1149 to 0.9970 from 1.0513 at 0.9334.

In the bigger picture, long term down trend from 1.2004 (2018 high) is expected to target 100% projection of 1.2004 to 1.0505 to 1.1149 at 0.9650. Firm break there will target 138.2% projection at 0.9033. On the upside, break of 1.0513 resistance is needed to indicate medium term bottoming. Otherwise, outlook will stay bearish in case of strong rebound.

Daily Pivots: (S1) 1.0274; (P) 1.0290; (R1) 1.0297; More...

Intraday bias in EUR/USD stays on the upside with focus on 1.0348 support turned resistance, which is close to 55 day EMA (now at 1.0350). Decisive break there ague that rally from 0.9951 is at least correcting the fall from 1.1494. Further rise should then be seen to 38.2% retracement of 1.1494 to 0.9951 at 1.0540. On the downside, break of 1.0201 minor support will suggest that such rebound has completed and bring retest of 0.9951 low instead.

In the bigger picture, down trend from 1.6039 (2008 high) is still in progress. Next target is 100% projection of 1.3993 to 1.0339 from 1.2348 at 0.8694. In any case, outlook will stay bearish as long as 1.0773 resistance holds, in case of strong rebound.

Daily Pivots: (S1) 1.2095; (P) 1.2186; (R1) 1.2306; More...

Intraday bias in GBP/USD remains neutral with focus on 1.2292 resistance. Decisive break there will complete a head and shoulder bottom pattern (ls: 1.1932; h: 1.1769; rs: 1.2002). Further rally should then be seen to 1.2666 key resistance next. On the downside, however, break of 1.2002 will bring deeper fall back to retest 1.1759 low.

In the bigger picture, fall from 1.4248 (2018 high) could be a leg inside the pattern from 1.1409 (2020 low), or resuming the longer term down trend. Deeper decline is expected as long as 1.2666 resistance holds. Next target is 1.1409 low. However, firm break of 1.2666 will bring stronger rise back to 55 week EMA (now at 1.2925).

Daily Pivots: (S1) 0.9366; (P) 0.9455; (R1) 0.9517; More...

Intraday bias in USD/CHF stays on the downside for the moment. firm break of 61.8% projection of 0.9884 to 0.9468 from 0.9648 at 0.9391 will pave the way to 100% projection at 0.9232. On the upside, above 0.9509 minor resistance will mix up the outlook and turn intraday bias neutral first.

In the bigger picture, break of 0.9471 support turned resistance argues that medium term up trend from 0.8756 has completed with three waves up to 1.0063. Long term sideway pattern might have started another falling leg. Deeper decline would now be in favor as long as 0.9648 resistance holds, to 0.9149 structural support. Sustained break there could pave the way back to 0.8756.

Daily Pivots: (S1) 131.51; (P) 133.41; (R1) 134.79; More...

Focus stays on 132.50 support in USD/JPY. Firm break there will argue that whole decline from 139.37 is resuming. Intraday bias will be back on the downside for 130.38 first, and the 100% projection of 139.37 to 130.38 from 135.57 at 126.58. As such decline is seen as a corrective move, strong support should be seen from 126.35 to contain downside. On the upside, above 135.57 will resume the rebound from 130.38 to retest 139.37 high instead.

In the bigger picture, fall from 139.37 medium term top is seen as correcting whole up trend from 101.18 (2020 low). While deeper decline cannot be ruled out, outlook will stays bullish as long as 55 week EMA (now at 121.84) holds. Long term up trend is expected to resume through 139.37 at a later stage, after the correction finishes.

Daily Pivots: (S1) 1.2719; (P) 1.2808; (R1) 1.2866; More...

USD/CAD's break of 1.2766 support confirms resumption of whole decline from 1.3222. Intraday bias is staying on the downside for 61.8% projection of 1.3222 to 1.2766 from 1.2984 at 1.2702. Firm break there will target 100% projection at 1.2528, which is close to 1.2516 key support. On the upside, above 1.2837 minor resistance will turn intraday bias neutral first. But further decline will remain in favor as long as 1.2984 resistance holds, in case of recovery.

In the bigger picture, down trend from 1.4667 (2020 high) should have completed at 1.2005, after defending 1.2061 long term cluster support. Rise from there should target 61.8% retracement of 1.4667 to 1.2005 (2021 low) at 1.3650. This will remain the favored case now as long as 1.2516 support holds.

Daily Pivots: (S1) 0.6983; (P) 0.7046; (R1) 0.7145; More...

AUD/USD's rally from 0.6680 is still in progress and met 61.8% projection of 0.6680 to 0.7045 from 0.6868 at 0.7094. Intraday bias stays on the upside, and firm break of 0.7094 will target 100% projection at 0.7233. On the downside, below 0.7008 minor support will turn intraday bias neutral first. But further rally will remain in favor as long as 0.6868 support holds, in case of retreat.

In the bigger picture, price actions from 0.8006 (2021 high) is seen more as a corrective pattern to rise from 0.5506 (2020 low). Or it could be a bearish impulsive move. In either case, outlook will remain bearish as long as 0.7282 resistance holds. Next target is 61.8% retracement of 0.5506 to 0.8006 at 0.6461.

After yesterday's selloff, Dollar is recovering slightly in Asian session today. But the greenback remains the worst performing one for the week. New Zealand and Australian Dollars are taking most advantage for now, helped by risk-on sentiment. But Swiss Franc and Yen are also strong on falling major benchmark yields. Euro and Sterling are on the softer side, even though they still outperform Dollar.

Technically, while Dollar is under broad-based pressure, the weakness in Euro is also worth a mention. EUR/CHF is on the verge on breaking through 0.9697 low to resume long term down trend. Meanwhile, EUR/AUD is also eyeing a break of 1.4508 to resume the near term fall from 1.5396 towards 1.4318 low. Break of these levels could cap Euro's rally against Dollar.

In Asia, Japan is on holiday. Hong Kong HSI is up 1.83%. China Shanghai SSE is up 1.25%. Singapore Strait Times is up 0.46%. Overnight, DOW rose 1.63%. S&P 500 rose 2.13%. NASDAQ rose 2.89%. 10-year yield dropped -0.011 to 2.786.

Fed Kashkari wants rate at 3.9% by year-end, 4.4% next

Minneapolis Fed President Neel Kashkari said yesterday that in the June economic projections, he recommended interest rate at 3.9% by the end of this year, and 4.4% next. He added, "I haven't seen anything that changes that."

Even after yesterday's July CPI release, the Fed is "far away from declaring victory" on inflation, Kashkari said. "This is just the first hint that maybe inflation is starting to move in the right direction, but it doesn't change my path."

"I think a much more likely scenario is we will raise rates to some point and then we will sit there until we get convinced that inflation is well on its way back down to 2% before I would think about easing back on interest rates," he said.

Fed Evans: Inflation still unacceptably high, rates to rise to 3.5% by year end

Chicago Fed President Charles Evans said yesterday's CPI data was the first "positive" reading since Fed started tightening. Yet, inflation is still "unacceptably" high". He expects Fed to continue to raise interest rate to 3.25-3.50% by year end, and to 3.75-4.00 by the end of next year.

Evans was optimistic that the economy will "continue to grow" in H2. "I'm not looking for the economy to turn down in a significant fashion any time soon," he added. He expected growth to be 1.5-2.0% next year.

DOW to take on 55 W EMA after strong rally

US stocks staged a strong rally yesterday on hope that inflation has finally peaked. DOW gained 535pts or 1.63% to close at 33309.

The development affirms the case that whole correction from January's peak at 36952 .65 has completed with three waves down to 29653.29. 55 week EMA (now at 33169.39) is now the key hurdle to overcome. Sustained trading above that will add even more credence to the bullish case. That should set the stage for further rally to retest 36952.65 later in the year.

For the near term, in any case, further rise is expected as long as 32387.12 support holds.

Elsewhere

UK RICS house price balance dropped to 63 in July, above expectation of 60. Australia consumer inflation expectations eased from 6.3% to 5.9% in August. US PPI and jobless claims are the only feature in a light day.

AUD/USD Daily Report

Daily Pivots: (S1) 0.6983; (P) 0.7046; (R1) 0.7145; More...

AUD/USD's rally from 0.6680 is still in progress and met 61.8% projection of 0.6680 to 0.7045 from 0.6868 at 0.7094. Intraday bias stays on the upside, and firm break of 0.7094 will target 100% projection at 0.7233. On the downside, below 0.7008 minor support will turn intraday bias neutral first. But further rally will remain in favor as long as 0.6868 support holds, in case of retreat.

In the bigger picture, price actions from 0.8006 (2021 high) is seen more as a corrective pattern to rise from 0.5506 (2020 low). Or it could be a bearish impulsive move. In either case, outlook will remain bearish as long as 0.7282 resistance holds. Next target is 61.8% retracement of 0.5506 to 0.8006 at 0.6461.

Economic Indicators Update