Sample Category Title

Pivot (invalidation): 1419.00

Our preference Long positions above 1419.00 with targets at 1430.00 & 1434.00 in extension.

Alternative scenario Below 1419.00 look for further downside with 1414.00 & 1410.00 as targets.

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

Daily Pivots: (S1) 1.3122; (P) 1.3137; (R1) 1.3154; More....

We're favoring the case the a short term bottom is formed at 1.3016 in USD/CAD, after drawing support from 1.3052/68 cluster support. Further rise is expected for 55 day EMA (now at 1.3212). For now, further rise will remain in favor in the near term as long as 1.3016 support holds, in case of retreat.

In the bigger picture, decisive break of 1.3068 cluster support (38.2% retracement of 1.2061 to 1.3664 at 1.3052) will confirm completion of up trend from 1.2061 (2017 low). Further fall should be seen to 61.8% retracement at 1.2673 next. On the upside, sustained break of 61.8% retracement of 1.4689 (2016 high) to 1.2061 at 1.3685, is needed to confirm resumption of up trend from 1.2061 (2017 low). Otherwise, risk will stay on the downside.

Pivot (invalidation): 3004.00

Our preference Long positions above 3004.00 with targets at 3030.00 & 3037.00 in extension.

Alternative scenario Below 3004.00 look for further downside with 2995.00 & 2986.00 as targets.

Comment The RSI is bullish and calls for further upside.

Pivot (invalidation): 12450.00

Our preference Long positions above 12450.00 with targets at 12556.00 & 12620.00 in extension.

Alternative scenario Below 12450.00 look for further downside with 12370.00 & 12290.00 as targets.

Comment The RSI is bullish and calls for further advance.

Currency and fixed income traders will have a busy day with the European Central Bank (ECB) monetary policy decision under the spotlight. Today's meeting may be the year's most important for ECB President Mario Draghi, who is due to step down in October. The latest economic figures from the Eurozone were not encouraging as the closely-watched manufacturing Purchasing Managers' Index (PMI) hit a six-and- a-half-year low in July. Inflation remains well below the central bank's target, and business sentiment is deteriorating. For Mr. Draghi, who pledged to do whatever it takes to save the Euro, action needs to be taken, and now the timing seems to be the most critical factor.

The ECB meeting comes six days ahead of a similarly crucial policy decision by the US Federal Reserve. While no one may admit it, we are likely living in a cold currency war. If the ECB acts now by lowering deposit rates by 10 basis points and introduces a new stimulus program, the effect on the Euro may be short-lived if the Federal Reserve takes a more aggressive stance later. Mario Draghi and his team need the Euro to remain low in order to revive the deteriorating manufacturing sector and help exporters. Given that the ECB has fewer tools in their toolkit compared to the Federal Reserve, they may want to wait and see the Fed's action first and act accordingly. That's why the ECB may need to wait until September to introduce fresh economic stimulus but use the meeting later today to provide guidance. If the ECB doesn't appear as overly dovish, this may lead to a sharp upward correction in the Euro to trade back within the range of 1.12 – 1.13.

However, we cannot rule out any surprises especially as there are more than 30% of market participants who believe that the ECB will reduce the deposit rate by 10 basis points today, taking it to -50 basis points. Out of the 67 economists surveyed by Reuters, five expect the ECB to lower the rate today, and Commerzbank is even anticipating a rate cut by 20 basis points. If the Commerzbank forecast plays out today, we may see the Euro easily dropping below its two-year low of 1.11.

Interest rates are not the only factor moving the Euro. Whether a new asset purchasing program is introduced is also of great importance, especially if it allows purchasing bonds yielding below -0.4%. This will put additional pressure on the Eurozone bond yields and hence the Euro.

Pivot (invalidation): 5.6930

Our preference Long positions above 5.6930 with targets at 5.7280 & 5.7400 in extension.

Alternative scenario Below 5.6930 look for further downside with 5.6770 & 5.6600 as targets.

Comment The RSI calls for a new upleg.

Pivot (invalidation): 0.6985

Our preference Short positions below 0.6985 with targets at 0.6945 & 0.6930 in extension.

Alternative scenario Above 0.6985 look for further upside with 0.7005 & 0.7020 as targets.

Comment The immediate trend remains down and the momentum is strong.

Pivot (invalidation): 1.3125

Our preference Long positions above 1.3125 with targets at 1.3150 & 1.3165 in extension.

Alternative scenario Below 1.3125 look for further downside with 1.3110 & 1.3095 as targets.

Comment A support base at 1.3125 has formed and has allowed for a temporary stabilisation.

Pivot (invalidation): 0.9840

Our preference Long positions above 0.9840 with targets at 0.9860 & 0.9875 in extension.

Alternative scenario Below 0.9840 look for further downside with 0.9825 & 0.9805 as targets.

Comment The RSI calls for a rebound.

Daily Pivots: (S1) 134.43; (P) 134.86; (R1) 135.46; More...

GBP/JPY staying in consolidation from 133.85 temporary low. Intraday bias remains neutral first. Outlook stays bearish with 136.05 resistance intact. On the downside, break of 133.85 will extend the decline from 148.87 to retest 131.51 low. Though, break of 136.05 will indicate short term bottoming and bring stronger rebound to 137.78 resistance.

In the bigger picture, medium term fall from 156.59 (2018 high) is still in progress. Break of 131.51 will target 122.36 (2016 low). Structure of such decline is corrective looking so far, arguing that it's just the second leg of consolidation from 122.36. Thus, we'd expect strong support from 122.36 to contain downside to bring reversal.