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Daily Pivots: (S1) 0.9857; (P) 0.9882; (R1) 0.9900; More...

Intraday bias in USD/CHF remains neutral as range trading continues. On the downside, below 0.9817 will resume the decline from 0.9951 to retest 0.9695 low first. On the upside, above 0.9951 will extend the rebound from 0.9695. In that case, upside should be limited by 61.8% retracement of 1.0237 to 0.9695 at 1.0030.

In the bigger picture, up trend from 0.9186 (2018 low) should have completed at 1.0237 already. Deeper decline would be seen to 61.8% retracement of 0.9186 to 1.0237 at 0.9587 and below. For now, USD/CHF is seen as in long term range pattern between 0.9186 and 1.0342. Hence, we'd pay attention to bottoming signal below 0.9587. However, sustained break of 1.0014 will revive medium term bullishness and turn focus back to 1.0237 high.

Daily Pivots: (S1) 1.2391; (P) 1.2424; (R1) 1.2466; More....

Intraday bias in GBP/USD remains neutral as consolidation from 1.2382 is extending. Upside of recovery should be limited by 1.2579 resistance to bring fall resumption. Sustained break of 1.2391 will resume larger down trend for 61.8% projection of 1.4376 to 1.2391 from 1.3381 at 1.2154 next. Though, break of 1.2579 will indicate short term bottoming and bring stronger rebound back to 1.2783 resistance.

In the bigger picture, down trend from 1.4376 (2018 high) is still in progress. Break of 1.2391 would target a test on 1.1946 long term bottom (2016 low). For now, we don't expect a firm break there yet. Hence, focus will be on bottoming signal as it approaches 1.1946. In any case, medium term outlook will stay bearish as long as 1.3381 resistance holds, in case of strong rebound.

WTI oil price bounced from new two-week low at $56.20 on Thursday, boosted by renewed tensions in the Persian Gulf after Iran seized a foreign tanker in the strait of Hormuz.

Oil price was down nearly $5 in past few sessions, following double-rejection at $60.90 and subsequent acceleration lower on news that the US administration might begin talks with Iran.

Negative signals were boosted by weak API Crude stocks report data, while stronger EIA report on Wednesday showed stronger than expected draw in crude inventories that partially offset negative impact.

Bears are taking a breather ahead of strong supports at $56.04/$55.75 (3 July trough/50% retracement of $50.59/$60.90 ascend), but near-term action remains biased lower while holding below falling 200DMA ($57.55).

Firm break below $56.04/$57.55 pivots would signal extension of bear-leg from $60.90 and expose pivotal Fibo support at $54.53.

Initial bullish signal could be expected on close above 200SMA, however, further recovery signals would require lift above converged daily MA's at $57.89/$58.44 zone.

Res: 57.28; 57.55; 57.89; 58.44
Sup: 56.39; 56.04; 55.75; 55.00

Daily Pivots: (S1) 1.1205; (P) 1.1220; (R1) 1.1239; More...

EUR/USD's recovery was rejected by falling 4 hour 55 EMA again but stays above 1.1193 support. Intraday bias remains neutral for the moment first. On the downside, break of 1.1193 will resume the fall from 1.1412 to retest 1.1107 low. On the upside, above 1.1285 resistance will turn bias back to the upside for 1.1412 resistance.

In the bigger picture, bullish convergence condition in daily and weekly MACD suggests that 1.1107 is a medium term bottom. However, rejection by 55 EMA retains medium term bearish. Outlook will be neutral for now. On the downside, break of 1.1107 will resume the down trend from 1.2555 (2018 high) to 78.6% retracement of 1.0339 to 1.2555 at 1.0813. Meanwhile, break of 1.1412 will resume the rebound to 38.2% retracement of 1.2555 to 1.1107 at 1.1660.

Manufacturing and job data released the US are pretty solid. But dollar shrugs off and stays soft. Though, Euro is even weaker on rumor that ECB is considering to revamp their inflation target, which could give policymakers rooms to pursue monetary stimulus for longer. Canadian Dollar is also among the worst performing ones as oil price extends this week's pull back. On the other hand, Sterling is shot higher on way better than expected retail sales data. Australian Dollar is also among the strongest.

Technically, EUR/GBP retreats sharply today and focus is back on 0.8594 support. Break will be an early indication of near term bearish reversal. GBP/USD rebounds strongly after drawing support from 1.2391 low. Break of 1.2579 will indicate short term bottoming too. USD/JPY recovers after dipping to 107.61 earlier today. But further decline is still in favor for the near term.

In Europe, currently, FTSE is down -0.45%. DAX is down -0.64%. CAC is down -0.07%. German 10-year yield is down -0.13 at -0.302. Earlier in Asia, Nikkei dropped -1.97%. Hong Kong HSI dropped -0.46%. China Shanghai SSE dropped -1.04%. Singapore Strait Times dropped -0.11%. Japan 10-year JGB yield dropped -0.011 to -0.136.

Philadelphia Fed manufacturing index rose sharply to 21.8, jobless claims rose to 216k

In the Philadelphia Fed manufacturing business outlook survey, the diffusion index for current general activity jumped sharply to 21.8 in July, up from 0.3 and beat expectation of 5.0. Current shipment index rose 8 points while new orders index rose 11 pts.

Overall, the responses to the survey suggest "an improvement in regional manufacturing conditions compared with last month. The new orders index, which reflects demand for manufactured goods, showed improvement this month, and more firms added to their payrolls. The survey's future indexes indicate that respondents continue to expect growth over the next six months."

US initial jobless claims rose 8k to 216k in the week ending July 13, matched expectations. Four-week moving average of initial claims dropped -0.25k to 218.75k. Continuing claims dropped -42k to 1.686m in the week ending July 6. Four-week moving average of continuing claims rose 5k to 1.701m.

UK retail sales rose 1% in June, way over expectations

UK retail sales in June came in much better than expected. Sales including auto and fuel rose 1.0% mom, 3.8% yoy, versus expectation of -0.3% mom, 2.6% yoy. Sales excluding auto and fuel rose 0.9% mom, 3.6% yoy, versus expectation of -0.2% mom, 2.6% yoy.

Over the month, all four main sectors contributed positively the growth, including fuel, non-store retailing, non-food stores and food stores. Non-food stores provided the largest contribution to the month-on-month growth, with both the amount spent and quantity bought at 0.7 percentage points.

Also released in European session, Swiss trade surplus widened to CHF 4.1B in June, above expectation of CHF 3.21B.

EU Barnier: Current Brexit agreement the only way to leave in an orderly manner

In a BBC interview, EU chief negotiator Michel Barnier insisted that the current, thrice defeated Withdrawal Agree is the "only way to leave the EU in an orderly manner". And, UK will "have to face the consequences" of no-deal Brexit if it's the chosen path. Additionally, he said EU has "never been impressed" by a no-deal Brexit threat.

In another interview, European Commission First Vice President Frans Timmermans complained the UK ministers "haven't got a plan" in Brexit negotiations. "We thought they are so brilliant," he added. "that in some vault somewhere in Westminster there will be a Harry Potter-like book with all the tricks and all the things in it to do."

Conservative Party leadership contender Jeremy Hunt said the fact the EU "never believed that no deal was a credible threat" was "one of our mistakes in the last two years".

Australian employment grew 0.5k, unemployment rate unchanged at 5.2%

Australia employment grew just 0.5k in June, below expectation of 9.1k. Full-time jobs increased 21.1k while part-time jobs decreased -20.6k. Unemployment rate was unchanged at 5.2% with participation rate steady at 66.0%.

ABS Chief Economist Bruce Hockman said, "Australia's participation rate was at 66 per cent in June 2019, which means nearly two of every three people are currently participating in the labour market. The participation rate for 15 to 64 year olds was even higher and closer to four out of every five people."

Australian NAB quarterly business confidence improved, but likely short-lived

Australia NAB quarterly Business Confidence index rose from 0 to 6 in Q2. Current Business Conditions index dropped from 4 to 1. Next 12 months Business Conditions index rose from 22 to 23. Next 12 months Capex Plans rose from 22 to 24.

Alan Oster, NAB Group Chief Economist said the down tend in conditions continued. And, the quarterly survey has now show a below average reading, for the first time since 2014. The decline in conditions suggests "business sector has lost significant momentum over the past year", and "we are unlikely to see a substantial pickup in growth in the Q2 national accounts".

On the other hand, "the strong lift in confidence appears to be related to the outcome of the Federal election, with the bulk of the survey conducted post election day and also around the time of firming expectations of rate cuts". But such lift should be short-lived as already shown in the June monthly business survey.

Japan's export dropped for the seventh straight month

In non seasonally adjusted terms, Japan exports dropped -6.7% yoy to JPY 6.585T in June. That's the seventh straight month of decline. Imports dropped -5.2% yoy to JPY 5.995T. Trade surplus came in at JPY 0.589T.

Looking at some details, exports to China dropped -10.1 yoy and imports dropped -5.3% yoy. That's the fourth straight month of decline in exports to China. Exports to US rose 4.8% yoy while imports dropped -2.5% yoy. That's the ninth straight month of increase in exports to US.

In seasonally adjusted terms, exports rose 4.8% mom to JPY 6.554T in June. Imports dropped -4.4% mom to JPY 6.568T. Trade deficit came in at JPY -0.014T.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1205; (P) 1.1220; (R1) 1.1239; More...

EUR/USD's recovery was rejected by falling 4 hour 55 EMA again but stays above 1.1193 support. Intraday bias remains neutral for the moment first. On the downside, break of 1.1193 will resume the fall from 1.1412 to retest 1.1107 low. On the upside, above 1.1285 resistance will turn bias back to the upside for 1.1412 resistance.

In the bigger picture, bullish convergence condition in daily and weekly MACD suggests that 1.1107 is a medium term bottom. However, rejection by 55 EMA retains medium term bearish. Outlook will be neutral for now. On the downside, break of 1.1107 will resume the down trend from 1.2555 (2018 high) to 78.6% retracement of 1.0339 to 1.2555 at 1.0813. Meanwhile, break of 1.1412 will resume the rebound to 38.2% retracement of 1.2555 to 1.1107 at 1.1660.

Economic Indicators Update

Silver is having one of its best trading sessions of this year, gaining strong momentum above the descending triangle that was holding since April 2017. This week the price continues to attract buying interest, with the price registering a fresh five-month high of 16.10.

The technical indicators are still located in bullish area, with the MACD stretching further above its red trigger line and the RSI moving above 70. Yet the latter could also be an indication that the rally is overdone, and hence negative corrections should not be a surprise in the coming sessions.

The 16.17 resistance level could be a trigger point for steeper bullish action, while if the price manages to break the line, immediate resistance is coming from the 50.0% Fibonacci retracement level of the downward wave from 18.63 to 13.90 near 16.25. Higher, resistance could run towards the 61.8% Fibonacci of 16.82.

However, if the pair reverses back to the downside, investors could rest near the 38.2% Fibo of 15.00, which coincides with the 200-day simple moving average (SMA) before meeting the 14.90 support area.

In brief, the market changed the negative outlook to bullish in the short-term and if there is a jump above the 61.8% Fibo, this would switch the long-term view to positive as well.

In the Philadelphia Fed manufacturing business outlook survey, the diffusion index for current general activity jumped sharply to 21.8 in July, up from 0.3 and beat expectation of 5.0. Current shipment index rose 8 points while new orders index rose 11 pts.

Overall, the responses to the survey suggest "an improvement in regional manufacturing conditions compared with last month. The new orders index, which reflects demand for manufactured goods, showed improvement this month, and more firms added to their payrolls. The survey's future indexes indicate that respondents continue to expect growth over the next six months."

Full release here.

US initial jobless claims rose 8k to 216k in the week ending July 13, matched expectations. Four-week moving average of initial claims dropped -0.25k to 218.75k. Continuing claims dropped -42k to 1.686m in the week ending July 6. Four-week moving average of continuing claims rose 5k to 1.701m.

Full release here.

A short-term buyer’s pullback from a 5-month low generated a few days ago, of 15.5395, had the pair move north to tackle the heavyweight 50-day simple moving average (SMA), coupled with the cloud of the Ichimoku indicator. Nevertheless, some consolidation seems to have come in the last sessions.

The MACD crossed above the zero line and is pointing up, whilst the RSI seems to have hit previous highs and turned slightly down after the previous positive divergence that helped to move up in the short-term. The ADX is still showing strong up trend.

In a negative scenario, the strengthened obstacle of the 50-SMA and Ichimoku cloud would need to hold, pushing the price back down to test initial support of 15.6150. Next level would be the five-month low of 15.5395, which if fractured, could see the short- to medium-term bearish bias continue.

For a jump higher, upward momentum would need to propel the price through the 50-SMA, the cloud and initial resistance of 15.8230, before the 100-SMA around 15.8680 and the 23.6% Fibonacci of the down move from 17.0760 to 15.5395, of 15.9015 could be considered.

Overall the short- and medium-term seem to still be bearish, although if there is a shift to the upside, passing the resistance of 15.95, a bullish bias would take control.

Entering into US session Euro is trading as the weakest one for today. The common currency is weighed down by a Bloomberg report saying that ECB staff have begun studying a revamp of their inflation target. Lowering the "below, but close to, 2%" inflation objective  could embolden policy makers to pursue monetary stimulus for longer. On the other hand, Sterling is boosted strongly higher by much better than expected UK retail sales.

Looking ahead, US data are the major focuses in the upcoming session Initial jobless claims and leading indicator will be featured. But more attention could be on Philadelphia Fed business outlook. It's be repeated said by Fed officials that consumer spending remained strong. But businesses turned more cautious in investment, due to uncertainties on trade and global slowdown. Fed's insurance cut, if any, is directed to this uncertainty issue.

In Europe, currently:

• FTSE is down -0.40%.
• DAX is down -0.51%.
• CAC is up 0.12%.
• German 10-year yield is down -0.022 at -0.310.

Earlier in Asia:

• Nikkei dropped -1.97%.
• Hong Kong HSI dropped -0.46%.
• China Shanghai SSE dropped -1.04%.
• Singapore Strait Times dropped -0.11%.
• Japan 10-year JGB yield dropped -0.011 to -0.136.