Sample Category Title

Daily Pivots: (S1) 1.5979; (P) 1.6007; (R1) 1.6041; More...

A temporary low is in place at 1.5945 and intraday bias in EUR/AUD is turned neutral first. Upside of recovery should be limited below 1.6231 resistance to bring another decline. Current fall from 1.6448 is seen as the third leg of the consolidation pattern from 1.6765 high. Break of 1.5945 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) 1.1066; (P) 1.1088; (R1) 1.1107; More...

EUR/CHF is staying in range above 1.1056 and intraday bias remains neutral at this point. More sideway consolidation could be seen. In case of another recovery, upside should be limited below 1.1264 resistance to bring fall resumption. On the downside, break of 1.1056 will extend the larger down trend for 61.8% projection of 1.2004 to 1.1173 from 1.1476 at 1.0962 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.

Pivot (invalidation): 1417.00

Our preference Long positions above 1417.00 with targets at 1430.00 & 1434.00 in extension.

Alternative scenario Below 1417.00 look for further downside with 1410.00 & 1406.00 as targets.

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

Daily Pivots: (S1) 1.3030; (P) 1.3061; (R1) 1.3087; More....

USD/CAD is staying in range of 1.3018/3143 and intraday bias remains neutral. Further decline is expected with 1.3143 resistance intact. Sustained trading below 1.3052/68 cluster support should confirm medium term reversal. Deeper decline should then be seen to 1.2781 support next. Nevertheless, break of 1.3143 resistance will confirm short term bottoming and bring stronger rebound.

In the bigger picture, the case of bearish reversal continues to build up. 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.

• Rates: Risk aversion lifts core bonds
  Disappointing earnings and negative headlines on the US-Sino trade talks weighed on risk sentiment. US Treasuries eventually followed Bunds higher. Risk sentiment will remain today's main driver for trading and could further underpin bonds in a daily perspective. Strong US eco data can provide some counterweight.
• Currencies: dollar declines even as sentiment turns risk-off
  The USD rebound ran into resistance yesterday. EUR/USD bottomed ahead of the key 1.1180/90 support area. A risk-off correction finally also pushed US yields lower, reducing interest rate support for the dollar. Risk sentiment will likely dominate USD trading today. The EUR/USD downside looks well protected. Sterling continues fighting an uphill battle.

The Sunrise Headlines

• US equities lost further momentum yesterday with stocks declining up to -0.65% (S&P500). Asian markets slip in the wake of WS's performance, Japan (-2%) underperforms as the yen strengthens.
• US/Sino trade talks have stalled. The White House is figuring out how to address China's demand to ease restrictions on Huawei after president Trump promised to do so at the G20 summit end-of-June.
• The central bank of South Korea unexpectedly cut rates from 1.75% to 1.50% as it lowered its 2019 GDP growth forecasts to 2.2% (from 2.5%) and cut inflation projections to 0.7% (from 1.1% in April).
• Australia's June job report showed a meagre 500 new jobs (part time -20.6k, full time +21.1k) after two strong months. The unemployment rate stabilised at 5.2% while the participation rate increased to 66%.
• Regional Fed districts suggested a modest eco expansion in the latest Beige Book. The outlook was generally positive with continued labour market tightness. They noted “widespread concerns” about the impact of trade policy.
• The House overwhelmingly blocked a Democratic member's bid to impeach president Donald Trump over his comments about several liberal congresswomen which the House condemned as racist yesterday.
• Today's eco calendar contains the US Philly Fed business outlook for July and the weekly jobless claims. June retail sales are due in the UK. Fed's Bostic and Williams are scheduled to speak. Spain and France tap the bond market

Currencies: Dollar Declines Even As Sentiment Turns Risk-Off

Dollar declines even as sentiment turns risk-off

The dollar rebound ran into resistance yesterday. Trading was mostly technical in nature. Still, slightly higher than expected EMU headline inflation (1.3% Y/Y) maybe helped stopping the EUR/USD downside drift. The pair bottomed in the 1.12 area. Later in the session, a further decline in US yields finally also weighed on the dollar. EUR/USD finished at 1.1224 (from 1.1211). Deepening US equity losses pushed USD/JPY back below the 108 handle (close at 107.95).

Investor sentiment is deteriorating further in Asia. Investors fear disappointing corporate earnings. Trade talks between the US and China are said to be deadlocked on the US restrictions versus Huawei. Japan June trade data disappointed (both imports and exports declined). A surprise Bank of Korea rate cut fails to change investor sentiment for the better. The yen is also well bid. USD/JPY extends its decline (currently 107.70 area). The dollar is also ceding modest ground against the euro with EUR/USD trading in the 1.1240 area. Later today, there are no EMU data. The US Philly Fed business outlook is expected to improve (5.0 from 0.3) and jobless claims to stay low (216k). However, even a positive US data surprise probably won't change investors' mindset. Earnings and equity sentiment will set the tone for trading. A risk-off correction might incur further USD/JPY losses. The impact on EUR/USD is less straightforward. European assets often underperform in a risk-off context. At the same time, the low-yielding euro is an important funding currency for carry trades. Unwinding of those trades might cause euro buying. Lower US yields are a USD-negative too. The jury is still out, but the EUR/USD 1.1181 support looks solid short-term. Global picture: EUR/USD drifted lower in the 1.11/1.14 range but rebounded (temporary?) after Powell paved the way for a July rate cut. A rebound to the 1.13 would further ease the downside momentum. With the most important data before the July FOMC meeting printed, more trading near current levels is likely.

Sterling remained in the defensive yesterdat as investors see a growing chance that the political turmoil might finally lead to a no deal Brexit This sentiment was reinforced by comments of Brexit Secretary Barclay as he said that the risk of a no-deal Brexit is ‘underpriced'. EUR/GBP retained recent gains and hovered lower half of the 0.90 big figure. Today, UK June retail sales are expected to show a third consecutive monthly decline. Even in case of a positive surprise, we expect any GBP-rebound to stay limited as Brexit uncertainty continues to dominate.

EUR/USD rebounds even as sentiment turns risk-off

Daily Pivots: (S1) 0.6996; (P) 0.7010; (R1) 0.7025; More...

Intraday bias in AUD/USD remains neutral for the moment. With 0.6982 minor support intact, further rise is in favor. On the upside, break of 0.7047 will resume the rebound from 0.6831 for 61.8% retracement of 0.7295 to 0.6831 at 0.7118. Sustained trading above will pave the way to 0.7205 resistance next. On the downside, break of 0.6983 minor support will turn bias to the downside for 0.6910 support instead.

In the bigger picture, with 0.7393 key resistance intact, medium term outlook remains bearish. The decline from 0.8135 (2018 high) is seen as resuming long term down trend from 1.1079 (2011 high). Decisive break of 0.6826 (2016 low) will confirm this bearish view and resume the down trend to 0.6008 (2008 low). However, firm break of 0.7393 will argue that fall from 0.8135 has completed. And corrective pattern from 0.6826 has started the third leg, targeting 0.8135 again.

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

Intraday bias in EUR/USD remains neutral as range trading continues. 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.

Pivot (invalidation): 2997.00

Our preference Short positions below 2997.00 with targets at 2973.00 & 2958.00 in extension.

Alternative scenario Above 2997.00 look for further upside with 3008.00 & 3015.00 as targets.

Comment The RSI is bearish and calls for further downside.

Pivot (invalidation): 12405.00

Our preference Short positions below 12405.00 with targets at 12300.00 & 12240.00 in extension.

Alternative scenario Above 12405.00 look for further upside with 12465.00 & 12510.00 as targets.

Comment The RSI is bearish and calls for further decline.

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

A temporary low is in place at 1.2382 in GBP/USD after failing to sustain below 1.2391 low. Intraday bias is turned neutral first. Near term outlook remains bearish as long as 1.2579 resistance holds. 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.