Sample Category Title

Pivot (invalidation): 0.9835

Our preference Long positions above 0.9835 with targets at 0.9855 & 0.9875 in extension.

Alternative scenario Below 0.9835 look for further downside with 0.9815 & 0.9805 as targets.

Comment The RSI advocates for further advance.

Pivot (invalidation): 107.80

Our preference Long positions above 107.80 with targets at 108.10 & 108.25 in extension.

Alternative scenario Below 107.80 look for further downside with 107.55 & 107.35 as targets.

Comment The RSI is bullish and calls for further upside.

Daily Pivots: (S1) 134.73; (P) 135.29; (R1) 135.63; More...

Break of 135.08 suggests resumption of decline from 148.87. Intraday bias is turned back to the downside for 131.51 low next. On the upside, above 136.05 minor resistance will turn intraday bias neutral again. But outlook will remain bearish as long as 137.78 resistance holds.

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.

Pivot (invalidation): 1.2535

Our preference Short positions below 1.2535 with targets at 1.2495 & 1.2475 in extension.

Alternative scenario Above 1.2535 look for further upside with 1.2560 & 1.2580 as targets.

Comment The RSI lacks upward momentum.

Pivot (invalidation): 1.1270

Our preference Short positions below 1.1270 with targets at 1.1250 & 1.1240 in extension.

Alternative scenario Above 1.1270 look for further upside with 1.1285 & 1.1305 as targets.

Comment As Long as the resistance at 1.1270 is not surpassed, the risk of the break below 1.1250 remains high.

Daily Pivots: (S1) 121.32; (P) 121.58; (R1) 121.75; More....

No change in EUR/JPY's outlook and intraday bias remains neutral first. We're still favoring the case that consolidation from 120.78 has completed with three waves to 123.35. Below 121.31 will target retest of 120.78 first. Break will resume fall from 127.50 to 118.62 low. In case of another rise as consolidation from 120.78 extends, upside should be limited by 123.73 resistance to bring fall resumption eventually.

In the bigger picture, down trend from 137.49 is still in progress with the cross staying inside long term falling channel. Break of 118.62 will extend the fall to 109.48 (2016 low). On the upside, break of 127.50 resistance is needed to be the first sign of medium term reversal. Otherwise, outlook will remain bearish in case of strong rebound.

Rates: Greece launches new 7-yr bond
The Greek treasury profits from the latest spread compression triggered by the ECB early June to keep all easing options alive. They launch a new 7-yr syndicated bond today. US retail sales and production data are expected to at least meet the consensus bar today, but won’t alter thinking about Fed policy. US Treasuries can nevertheless underperform Bunds.

Currencies: EUR/USD cemented in middle of the 1.11/1.14 consolidation pattern
The dollar lost modest ground last week as Powell confirmed market expectations for a July pre-emptive rate cut. However, the USD correction was modest. Today’s eco data might be slightly USD supportive, but probably won’t trigger a breach of technically important levels. EUR/GBP easily returned to the 0.90 area after last week’s temporary ‘dip’.

The Sunrise Headlines

• Wall Street ended a lacklustre trading session virtually unchanged with the Nasdaq (+0.17%) ‘outperforming’. Asian stocks trade mixed. Japan (-0.7%) underperforms following a long weekend.
• The EU is said to consider concessions to the UK for it to avoid a hard Brexit. Meanwhile, EC president to be (?) von der Leyen said she would support a further extension of Brexit if more time is required.
• US Treasury Secretary Mnuchin said the government is “very close” to a deal on raising/suspending the debt ceiling. It has been estimated that the government would run out of cash in early September (‘X-date’) otherwise.
• Minutes of the RBA’s July policy meeting showed that the board will “continue to monitor” eco developments and that they could cut rates even further “if needed” to support employment, wages and inflation.
• EU officials said they expected the WTO to approve a US demand to slap tariffs on products worth $5-7 bn as soon as the summer in their ongoing dispute over alleged illegal aircraft subsidies.
• Germany’s von der Leyen will resign as minister of Defense and offered European socialists, greens and liberals last minute concessions in a bid to win over support during tonight’s vote on the EC’s presidency.
• Today’s eco calendar contains US retail sales, UK’s May unemployment report and the German ZEW investor confidence. A slew of central bankers (ECB, Fed, BoE) are scheduled to speak. JP Morgan, GS & Wells Fargo report earnings.

Currencies: EUR/USD Cemented In Middle Of The 1.11/1.14 Consolidation Pattern

EUR/USD cemented in the 1.11/1.14 range

EUR/USD lost a few ticks in the 1.12 figure yesterday, but there was no driver to support a real directional USD or euro move. Interest rate differentials widened in favour of the dollar as Bunds outperformed Treasuries, but the spread was only of second tier significance for FX trading. At the kick-off off the earnings season, Citigroup earnings printed slightly better than expected and the NY Empire manufacturing also beat consensus. Both events triggered a tentative intraday USD bid, but the dollar held within established ranges. EUR/USD closed at 1.1259 (from 1.1270). USD/JPY finished unchanged at 107.91.

This morning, Asian equities are trading mixed in thin holiday market conditions. EUR/USD (1.1260) and USD/JPY (107.95) are going nowhere. The Aussie dollar is holding well north of the 0.70 mark. The RBA continues to monitor the labour market and might cut rates further of needed, but an additional cut probably won’t happen in the very near future, providing a floor for the Aussie dollar short term.

Today, the eco calendar is well filled. German ZEW investor confidence is expected to stay at rather depressed levels. US June retail sales are expected at 0.2% (headline)/0.3% (control group). This reference should be achievable and that also applies to the US production data. Also keep an eye at the NAHB housing sentiment. The data might be a marginally USD supportive. That said, we have to impression that the dollar is currently slightly more sensitive to price rather than activity data. In Europe, the approval process of the new EC commission head might also create some (euro negative?) political noise. EUR/USD drifted lower in the 1.11/1.14 range but rebounded from recent lows after Powell paving the way for a July rate cut. A rebound to the 1.13 would further ease the downside momentum. With the most important eco data before the FOMC July meeting printed, we expect little inspired trading. End of last week, sentiment on sterling turn less negative and EUR/GBP drifted (temporarily) off the 0.90 area. However, any GBP rebound is still used to sell the UK currency as investors expect Brexit related tensions to return soon. Today, UK labour data are expected to remain solid despite mediocre activity data of late. We don’t expect today’s data to improve fortunes for sterling in a profound/lasting way. The EUR/GBP EUR/GBP cross rate is still attacted to the 0.90 area.

EUR/USD rebounded from recent lows after Powell paved the way for a July rate cut

Daily Pivots: (S1) 1.1065; (P) 1.1084; (R1) 1.1102; More...

EUR/CHF is staying in consolidation from 1.1056 and intraday bias remains neutral first. More sideway trading 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.

Daily Pivots: (S1) 1.5965; (P) 1.6019; (R1) 1.6049; More...

EUR/AUD's break of 1.6025 support indicates resumption of fall from 1.6448. Intraday bias is now back on the downside for further decline. Fall from 1.6448 is seen as the third leg of the consolidation pattern from 1.6765 high. Next target will be 1.5683 support and below. On the upside, above 1.6073 minor resistance will turn bias neutral and bring consolidations. But upside of recovery should be limited below 1.6231 support to bring another fall.

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) 0.8969; (P) 0.8985; (R1) 0.9011; More...

EUR/GBP is staying in range below 0.9010 temporary top and intraday bias remains neutral. With 0.8954 minor support intact, another rise cannot be ruled out yet. But considering loss of upside momentum, we'd look for topping signal as it approaches 0.9101 key resistance. On the downside, break of 0.8954 support will indicate short term topping. In this case, deeper pull back could be seen to 55 day EMA (now at 0.8868) first.

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. Nevertheless, as EUR/GBP is still staying inside long term falling channel, correction from 0.9305 could still extend to 0.8400 fibonacci level before completion, if upside is rejected by 0.9101.