Sample Category Title

Pivot (invalidation): 0.9890

Our preference Long positions above 0.9890 with targets at 0.9915 & 0.9930 in extension.

Alternative scenario Below 0.9890 look for further downside with 0.9870 & 0.9850 as targets.

Comment Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

Pivot (invalidation): 108.45

Our preference Long positions above 108.45 with targets at 108.75 & 109.00 in extension.

Alternative scenario Below 108.45 look for further downside with 108.25 & 108.00 as targets.

Comment Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

Pivot (invalidation): 1.2470

Our preference Short positions below 1.2470 with targets at 1.2435 & 1.2415 in extension.

Alternative scenario Above 1.2470 look for further upside with 1.2500 & 1.2520 as targets.

Comment The RSI lacks upward momentum.

Pivot (invalidation): 1.1160

Our preference Short positions below 1.1160 with targets at 1.1135 & 1.1125 in extension.

Alternative scenario Above 1.1160 look for further upside with 1.1185 & 1.1205 as targets.

Comment As Long as the resistance at 1.1160 is not surpassed, the risk of the break below 1.1135 remains high.

Daily Pivots: (S1) 0.8908; (P) 0.8934; (R1) 0.8975; More...

EUR/GBP recovered after hitting 0.8891 and intraday bias is turned neutral first. Consolidation from 0.9051 could extend further, with another fall. But downside should be contained by 38.2% retracement of 0.8489 to 0.9051 at 0.8836 to bring rebound. Though, break of 0.9051 is needed to confirm rise resumption. Otherwise, such consolidation will likely extend further.

In the bigger picture, medium term decline from 0.9305 (2017 high) is seen as a corrective move. No change in this view. Current development argues that it might have completed with three waves down to 0.8472, just ahead of 38.2% retracement of 0.6935 (2015 low) to 0.9306 at 0.8400, after hitting 55 month EMA (now at 0.8545). Decisive break of 0.9101 resistance will confirm this bullish case. However, firm break of 55 week EMA (now at 0.8805) would possibly extend the correction another another fall to below 0.8472 before completion.

European markets are poised for a relatively flat end to the week, rather accurately reflecting investors' mood after Draghi unusually left them feeling disappointed.

It's not often that the ECB President is criticised for not being dovish enough but that appears to have been the key takeaway from the meeting. The statement which accompanied the rate announcement got traders very excited, in particular the reference to exploring all non-conventional stimulus options, but that enthusiasm soon petered out.

Draghi's claim that an interest rate cut was not even discussed at the meeting was the real kicker, traders had been banking on a September cut and had even attached a high probability to the bank pulling the trigger yesterday. Ultimately, I don't think this is a big deal, a 10 basis point cut would do very little anyway and would be largely symbolic

What seems to have disappointed traders most is the belief that this could be a sign of things to come from the Fed, with the central bank also not having a sense of urgency when it comes to reversing some of the tightening. Quite frankly, the fact that traders were more convinced by Draghi that there's not going to be a 50 basis point cut next week than the Fed's most dovish voter repeatedly saying 25 is sufficient is bizarre.

It's all a little quieter today but the week isn't quite over yet, with US GDP attracting lots of attention at a time when everyone is doom and gloom about the economic outlook. I almost feel that after the last 24 hours, traders will be more satisfied with a poor reading that supports the need for more aggressive cutting than a good one that suggests it's not needed.

The USD/CAD has formed a new bullish trend on 4h timeframe. At this point it seems that we will see a continuation towards higher levels.

1.3150-60 is the POC zone. The Marubozu candle has been formed exactly at the W H5 and there were no rejections there. Additionally, new Wizz levels have been shown so the price is effectively bullish as new trend has been formed. Targets are 1.3206 and 1.3227. Only a drop below 1.3080 can provide bearish with the hope that bearish trend will resume. At this point, the POC zone is confirmed and we should see upside price action.

Daily Pivots: (S1) 1.5938; (P) 1.6014; (R1) 1.6109; More...

EUR/AUD recovers further today but such recovery is seen as a corrective move. Stronger rise cannot be ruled out but upside should be limited below 1.6231 resistance to bring another fall. Decline from 1.6448 is seen as the third leg of the consolidation pattern from 1.6765 high. Break of 1.5894 will target 1.5683 support and below.

In the bigger picture, as long as 1.5346 support holds, outlook will still remain bullish. Up trend from 1.1602 (2012 low) is expected to resume sooner or later. Break of 1.6765 will target 61.8% retracement of 2.1127 (2008 high) to 1.1602 at 1.7488 next. However, firm break of 1.5346 key support will indicate trend reversal and turn outlook bearish.

Daily Pivots: (S1) 1.0986; (P) 1.1021; (R1) 1.1079; More...

EUR/CHF formed short term bottom at 1.0962 after drawing support from 61.8% projection of 1.2004 to 1.1173 from 1.1476 at 1.0962. Bullish convergence condition is also seen in 4 hour MACD. Stronger recovery could be seen to 55 day EMA (now at 1.1146). But strong resistance should be seen at 1.1172 to limit upside to bring fall resumption. On the downside, break of 1.0962 will target 100% projection at 1.0645 next.

In the bigger picture, current development firstly suggests that down trend from 1.2004 is still in progress. More importantly, it's likely a long term down trend itself, rather than a correction. Outlook will remain bearish as long as 1.1476 resistance holds. EUR/CHF could target 1.0629 support and below.

The euro pared some of the losses made yesterday after the ECB announced its interest rates decision. As expected, the bank left interest rates unchanged and directed its economists to come up with a plan for complementing the low rates. This was interpreted to mean that the bank will slash interest rates in September. The bank could also restart the quantitative easing program that was ended in December last year. Later today, the market will receive the import price index from Germany and the consumer confidence from France.

US futures rose in the aftermarket trading after better-than-expected results from key companies. Google announced that it made an EPS of $14.21 on revenues of $38.9 billion. The company had an after-tax profit of more than $9.9 billion. It also announced a $25 billion share buyback plan. Starbucks was another good-performing company. It generated net earnings of more than $1.32 billion, which was higher than last quarter’s $852 million. Intel was another good performer after reporting a net income of more than $4.18 billion. On the negative side, Amazon disappointed after the quarter’s profit of $2.63 billion missed the forecast of analysts.

Earlier today, Tokyo released its CPI data. In July, the city’s headline CPI rose by 0.9%, which was below the previous 1.1%. The core CPI rose by 0.9%, which was slightly higher than the consensus estimate of 0.8%. Later on, Germany will release the import price index for June. This data will come a day after survey data from the country showed the manufacturing sector in a “freefall”. It will be two days after the country released weak PMI data. Sweden will release its retail sales numbers while Russia’s Central Bank will deliver its interest rates. In the US, the first preliminary reading of the second quarter GDP will be released. Investors expect that the economy grew by 1.8% after expanding by 3.1% in the previous quarter.

EUR/USD

The EUR/USD pair dropped sharply yesterday after the ECB decision. It reached a low of 1.1100, which was an important support as shown below. In the American and Asian sessions, the pair moved up, which was partly because of technical reasons after the company completed the first part of the cup and handle pattern. The pair is trading along the 14-day moving averages and slightly below the 28-day moving averages. The pair will likely continue moving up to test the 1.1220 resistance level, which is the 38.2% Fibonacci Retracement level.

GBP/USD

The GBP/USD declined sharply after Boris Johnson made his first speech in Parliament during which he vowed to get rid of the Irish border Brexit. EU’s Chief Negotiator, Michel Barnier said that removing the backstop guarantee was unacceptable. The GBP/USD pair is trading at 1.2448, which is below the 28-day and 14-day moving averages. The accumulation/distribution indicator continued to move higher. The pair will likely see major movements in either direction ahead of US GDP data.

AUD/USD

The AUD/USD pair continued the declines started on Friday last week. The pair reached a low of 0.6940, which is slightly below the 23.6% Fibonacci Retracement. On the hourly chart, the pair is slightly below the 14-day and 28-day moving averages. The momentum indicator remains below the 100-level while the stochastic indicator is moving lower. The pair will likely continue moving lower to 0.6900 in the next few weeks.