Sample Category Title

Daily Pivots: (S1) 1.2423; (P) 1.2477; (R1) 1.2513; More....

Intraday bias in GBP/USD remains on the downside for 1.2391 low. Firm break there will resume larger down trend. On the upside, above 1.2539 minor resistance will turn intraday bias neutral first. But near term outlook will stay bearish as long as 1.2783 resistance holds.

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.

Daily Pivots: (S1) 0.9922; (P) 0.9937; (R1) 0.9951; More...

With 4 hour MACD crossed below signal line, intraday bias in USD/CHF is turned neutral first. On the upside, above 0.9951 will target 1.0014 resistance. Upside could be limited by 61.8% retracement of 1.0237 to 0.9695 at 1.0030. On the downside, below 0.9842 minor support will turn bias back to the downside for retesting 0.9695 low instead.

In the bigger picture, current development suggests that up trend from 0.9186 (2018 low) has 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) 108.66; (P) 108.81; (R1) 109.01; More...

Intraday bias in USD/JPY remains mildly up the upside. Sustained trading above 108.80 resistance will confirm short term bottoming at 106.78. Further rise should then been seen to 110.67 resistance next. However, on the downside, break of 108.28 minor support will turn bias back to the downside for 107.53 support and then 106.78 low.

In the bigger picture, decline from 118.65 (Dec 2016) is still in progress, with the pair staying inside long term falling channel. Break of 104.62 will target 100% projection of 118.65 to 104.62 from 114.54 at 100.51. For now, we'd expect strong support above 98.97 (2016 low) to contain downside to bring rebound. In any case, break of 112.40 is needed to the first serious sign of medium term bullishness. Otherwise, further decline will remain in favor in case of rebound.

Daily Pivots: (S1) 1.3100; (P) 1.3120; (R1) 1.3151; More...

Intraday bias in USD/CAD remains neutral as it's staying in range of 1.3037/3145. On the upside, break of 1.3145 resistance will indicate short term bottoming, with bullish convergence condition in 4 hour MACD. Further rise should then be seen to 1.3239 support turned resistance. On the downside, sustained trading below 1.3052/68 cluster support will carry larger bearish implication, and bring further fall to 1.2673 fibonacci level next.

In the bigger picture, medium term outlook stays neutral for now even though the case of bearish reversal is building 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.

AUDUSD has lost its short-term positive momentum over the last four days after the bounce off the 0.7050 resistance barrier. The market could retain the downward movement as the RSI dropped beneath the 50 level but is flattening and the MACD oscillator is weakening below the trigger line and near the zero line.

Should the pair stretch south, the 23.6% Fibonacci retracement level of the downleg from 0.7390 to 0.6746 near 0.6900 could be the immediate support level, slipping beneath the Ichimoku cloud and the short-term moving averages. A significant step lower could bring the bearish sentiment back into play, sending the price probably towards the five-month low of 0.6830. If the sell-off extends, attention could then turn to the ten-year low of 0.6746.

On the other side, the 20- and 40-simple moving averages (SMAs) and the lower surface of the Ichimoku cloud may halt upside movements. However, if traders continue to buy the pair, the price could rise until the 38.2% Fibo of 0.6990, while steeper increases could also touch the 0.7050 peak.

Looking at the bigger picture, AUDUSD has been trading within a falling trend over the last seven months and is expected to hold bearish in the short term as well.

The EUR/USD could in fact break into both directions and will probably depend on the FOMC news event later on Wednesday 10th of July in the US. A bullish USD could mean that the EUR/USD breaks lower and aims for 1.11 and 1.10 whereas a bearish USD could translate into a bullish reversal on the EUR/USD with an aim at the Fibonacci targets around 1.1450-1.15.

From a wave perspective, the EUR/USD seems to have completed a bearish ABC wave (purple) but this wave outlook is only valid if price stays above the 100% Fibonacci level and 1.1180 support. For price to confirm this wave pattern, it would need to break above 1.1250 and 1.13 resistance levels with decently strong impulsive price action.

Elliott Wave View suggests the move lower from March 13, 2019 high (1.3381) is unfolding as an impulse Elliott Wave structure. In the short term chart below, the bounce to 1.2784 ended wave 4 as part of the impulse move from March 13 high. Pair is currently within wave 5 and the internal also unfolds as a 5 waves impulse in lesser degree. Down from 1.2784, wave (i) ended at 1.2661 and wave (ii) ended at 1.2735. Pair then resumes lower in wave (iii) towards 1.248, and wave (iv) bounce ended at 1.254. Expect pair to end wave (v) of ((i)) soon, then pair should at least bounce in 3 waves within wave ((ii)) before the decline resumes.

The rally in wave ((ii)) should unfold in 3, 7, or 11 swing to correct cycle from June 25 high. As far as pivot at 1.278 high stays intact in the bounce, pair can see further downside. We don’t like buying the pair. The alternate view suggests that pair can end the entire wave 5 with one more leg lower instead of ending only wave ((i)) of 5. In this alternate case, pair should rally in a larger degree in 3 waves at least to correct the bigger 5 waves move starting from March 13, 2019 high.

GBPUSD 1 Hour Elliott Wave Chart

General Trend:

• Chip-related firms trade generally lower in Japan as uncertainty remains regarding relations with South Korea
• Regional banks in Japan supported by business alliance speculation
• Financials outperform in Australia, miners lag
• Aussie consumer confidence hits 2-year low in June
• Brent Crude Futures rise in Asia amid US API data, storm threat in the Gulf of Mexico
• Some analysts talk deflation after China's weaker than expected PPI data, data weighed down by oil and steel prices
• China PBoC said banking system liquidity at reasonably ample level (previously said ‘relatively high level')
• Taiwan tech sector in focus: chipmaker Nanya expected to report quarterly earnings, Taiwan Semi expected to issue monthly/quarterly sales figures
• US Fed FOMC minutes due for release on Wed

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened +0.1%
• NZO.NZ Board recommends NZ$0.62/shr cash offer from Singapore's OG Oil & Gas for the 30% stake it doesn't already own
• (AU) Australia July Westpac Consumer Confidence Index: 96.5 v 100.7 prior (2-year low); M/M: -4.1% v -0.6% prior
• DCN.AU Received strong response to strategic review process; Guides FY20 Gold Production 150-170K oz at AISC A$1,400-1,500/oz; updates on 8-yr life of mine plan
• (AU) Australia Council of Financial Regulators quarterly statement: housing credit growth has stabilized but there has been some tightening in credit supply and lending may be affected by declining collateral values

Japan

• Nikkei 225 opened -0.3%
• (JP) Japan Center for Economic Research (JCER) quarterly survey on Asian economy: Outlook for Asian economies revised downward due to negative influence of US/China trade war
• (JP) Japan Jun PPI (CGPI) M/M: -0.5% v -0.1%e Y/Y: -0.1% v 0.4%e (first y/y decline since early 2017)

Korea

• Kospi opened +0.5%
• (KR) South Korea President Moon: Preparing counter measures to Japan export curbs; Will reflect impact of export curbs in extra budget and form emergency response system on Japan export curbs; hope Japan will respond and doesn't come to a dead end - speaking after meeting with domestic firms
• (KR) South Korea and Malaysia to hold free trade agreement talks this week - Yonhap
• 005930.KR Samsung and SK Hynix said to cut NAND output as early as Jul - Korean press

China/Hong Kong

• Hang Seng opened +0.5%; Shanghai Composite opened +0.2%
• (CN) CHINA JUN CPI M/M: -0.1% V +0.1% PRIOR; Y/Y: 2.7% V 2.7%E
• (CN) China Interbank trading platform has signaled limits for interbank rates
• (CN) China has asked some banks to limit loans for property - Chinese Securities Journal
• (CN) China Vice Premier Liu He confirms spoke with US's Lighthizer and Mnuchin on the phone
• (CN) China Foreign Ministry spokesperson Geng Shuang: calls on U.S. to withdraw arms sales to Taiwan; lodged complaints with U.S.
• (CN) China PBoC Open Market Operation (OMO): Skips for the 13th consecutive; Net drain CNY20B v nil prior; Banking system liquidity at reasonably ample level (prior relatively high level)
• (CN) China PBOC sets yuan reference rate: 6.8856 v 6.8853 prior
• (CN) China President Xi did not make any specific commitment to large scale US agricultural purchases during his meeting with US President Trump during G20 - SCMP

Other

• (TH) Thailand is prepared with measures to deal with short term inflows, will impose measures on capital flows when appropriate - financial press

North America

• (US) Fed's Bostic (dove, non-voter): Fed is debating the merits and risks of running a hot labor market; there are risks to the labor market becoming too tight
• (US) Weekly API Oil Inventories: Crude: -8.1M v -5.0M prior
• (CN) White House Adviser Kudlow: China has not started buying more US agricultural goods yet; market shows Fed should take back last years rate cut
• (US) White House adviser Kudlow: US and China officials held constructive phone conversations today, US-China call this week will be followed by an in-person meeting
• (MX) Mexico incoming Fin Min Herrera Gutierre: Fiscal responsibly and Mexico Central Bank autonomy still hold; 1% primary surplus still the goal Europe-

Europe

• (EU) Belgium's Charles Michel named incoming head of European Council; German Defense Minister Ursula von der Leyen waiting to be approved next European Commission president; effective Dec 1st

Levels as of 1:20 ET

• Nikkei 225, flat, ASX 200 +0.3%, Hang Seng +0.2%; Shanghai Composite -0.1%; Kospi +0.6%
• Equity Futures: S&P500 flat; Nasdaq100 flat, Dax -0.1%; FTSE100 +0.1%
• EUR 1.1211-1.1201 ; JPY 108.99-108.82 ; AUD 0.6932-0.6918 ;NZD 0.6610-0.6566
• Gold -0.4% at $1,394/oz; Crude Oil +1.4% at $58.61/brl; Copper +0.3% at $2.635/lb

Market movers today

In the US, markets will look out for two interesting events on the agenda: the release of the June FOMC minutes and Fed chief Powell's semi-annual testimony before the House Financial Services Committee. In his prepared remarks, Powell will not address monetary policy but he is sure to face questions about the Fed's view on the economy in the Q&A afterwards. The central question remains when and by how much the Fed will cut interest rates. After a strong jobs report on Friday, markets have scaled back expectations of an aggressive 50bp cut already in July. Apart from the timing and preconditions for Fed easing, the minutes will also shed some light on the different stances within the Fed. We stick to our view of a 25bp 'insurance' cut in July and a total of 75bp in the second half of 2019 (i.e. July, September and December)

As news about Brexit remains limited ahead of the Conservative Party leadership contest concluding on 22 July, focus for once reverts to UK economic data. Today we will get more clarity on where growth in Q2 19 will arrive with the monthly GDP estimate for May. After a strong start to the year helped by pre-Brexit stockpiling, the manufacturing sector has struggled of late as PMIs have fallen back. Overall, we remain sceptic that the economy can maintain its 0.5% q/q growth momentum from Q1.

Bank of Canada is widely expected to keep rates unchanged at today's monetary policy meeting. Consequently, focus will turn to the bank's forward guidance and its monetary policy report amid rising speculations of a rate cut in neighbouring US. We expect unchanged rates over the next 12 months going into the meeting, whereas markets price a roughly one-third probability of a 25bp cut until next summer.

In Norway and Denmark, inflation data for June is in focus. In Norway, core inflation slowed rather unexpectedly to 2.3% in May. With wage growth accelerating, there is little reason to expect domestic inflation to fall and we expect to see a correction in June, with core inflation printing at 2.4%, with the risk slightly to the upside. In contrast, we expect Danish inflation to remain unchanged at 0.7%, as package holidays and gasoline prices continue to exert a drag.

Selected market news

Asian equity markets are trading mixed this morning, following lacklustre sessions in the US and Europe yesterday as markets await the next catalyst in the form of either policy clues from central banks - notably the Fed today - or progress on the US-China trade talks. On the latter, US and Chinese negotiators had their first 'constructive' talks after the G20 ceasefire according to White House economic adviser Kudlow. However, no further meetings have been set, supporting our view that a trade deal is not just round the corner

For the 24 hours to 23:00 GMT, the EUR declined 0.08% against the USD and closed at 1.1206.

In the US, data showed that the NFIB small business optimism index fell to a level of 103.3 in in June, compared to a reading of 105.0 in the previous month. Market participants had expected the small business optimism index to drop to a level of 103.1. Moreover, the nation’s JOLTs job openings unexpectedly drop to a level of 7323.0K in May, declining for a second straight month and defying market consensus for rise to a level of 7470.0K. In the prior month, the JOLTs job openings had recorded a revised level of 7372.0K.

In the Asian session, at GMT0300, the pair is trading at 1.1209, with the EUR trading slightly higher against the USD from yesterday’s close.

The pair is expected to find support at 1.1195, and a fall through could take it to the next support level of 1.1182. The pair is expected to find its first resistance at 1.1220, and a rise through could take it to the next resistance level of 1.1232.

Amid lack of economic releases in the Euro-zone today, traders would await the FOMC meeting minutes followed by the US MBA mortgage applications, slated to release later in the day.

The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.