Sample Category Title

Daily Pivots: (S1) 0.9842; (P) 0.9857; (R1) 0.9880; More...

USD/CHF lost some upside momentum as seen in 4 hour MACD. But with 0.9809 minor support intact, rebound from 0.9695 is in favor to extend to 1.0014 resistance. Upside could be limited by 61.8% retracement of 1.0237 to 0.9695 at 1.0030. On the downside, below 0.9809 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.

Pivot (invalidation): 1.3085

Our preference Short positions below 1.3085 with targets at 1.3050 & 1.3030 in extension.

Alternative scenario Above 1.3085 look for further upside with 1.3105 & 1.3120 as targets.

Comment As Long as the resistance at 1.3085 is not surpassed, the risk of the break below 1.3050 remains high.

Pivot (invalidation): 0.9845

Our preference Long positions above 0.9845 with targets at 0.9875 & 0.9890 in extension.

Alternative scenario Below 0.9845 look for further downside with 0.9830 & 0.9810 as targets.

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

Daily Pivots: (S1) 107.56; (P) 107.80; (R1) 108.08; More...

Intraday bias in USD/JPY remains neutral at this point, with focus on 107.56 minor support. With 108.80 resistance intact, outlook remains bearish. On the downside, firm break of 107.56 minor support will bring retest of 106.78 low. Break there will extend recent fall from 112.40 to 104.69 low. Nevertheless, sustained break of 108.80 will confirm short term bottoming at 106.78. In this case, stronger rise should be seen back to 110.67 resistance.

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.

Pivot (invalidation): 107.90

Our preference Short positions below 107.90 with targets at 107.65 & 107.50 in extension.

Alternative scenario Above 107.90 look for further upside with 108.10 & 108.25 as targets.

Comment A break below 107.65 would trigger a drop towards 107.50.

Pivot (invalidation): 1.2555

Our preference Long positions above 1.2555 with targets at 1.2600 & 1.2615 in extension.

Alternative scenario Below 1.2555 look for further downside with 1.2535 & 1.2520 as targets.

Comment The RSI is above its neutrality area at 50%.

Daily Pivots: (S1) 1.3038; (P) 1.3079; (R1) 1.3100; More...

USD/CAD breached 1.3059 temporary low but cannot sustained below 1.3052/68 cluster support zone yet. Intraday bias remains neutral first. On the downside, sustained break of 1.3052/68 will carry larger bearish implication and target 1.2673 fibonacci level next. However, break of 1.3151 support turned resistance will indicate short term bottoming and bring rebound back to 1.3239/3432 resistance zone.

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.

Pivot (invalidation): 1.1310

Our preference Short positions below 1.1310 with targets at 1.1270 & 1.1250 in extension.

Alternative scenario Above 1.1310 look for further upside with 1.1325 & 1.1340 as targets.

Comment A break below 1.1270 would trigger a drop towards 1.1250.

• Rates: Bond markets to trade subdued ahead of payrolls
  Bonds oscillated near strong opening levels yesterday. Markets refused directional positioning ahead of the US holiday (today) and payrolls (tomorrow) despite disappointing data in the US. We expect low-volume trading today with very little guidance from the eco calendar.
• Currencies: Trump again accused EU and China of currency manipulation
  EUR/USD stabilized in the 1.13 area. Eco data brought no strong enough guidance to trigger a directional move. A tweet from president Trump on EU and China currency manipulation had only limited and temporary impact. Today trading will be order driven and develop in thin condition as US markets are closed. EUR/GBP is still holding within reach of the 0.90 barrier

The Sunrise Headlines

• Triple jackpot on WS yesterday with the S&P (+0.77%), DJI (+0.67%) and Nasdaq (+0.75%) all closing at record highs during a holiday shortened session. Asia is trading mixed. Japan (+0.6%) outperforms.
• President Trump again said China and the EU are manipulating their currencies to compete with the US. He added that the US should take measures to counter this what he earlier called competitive disadvantage.
• The Hong Kong dollar strengthened to the highest level in two years over the past days as the highest interbank lending rate since 2008 makes the currency more attractive to hold vs. the US dollar.
• US and Chinese Representatives have been holding phone talks to revive trade negotiations since Trump and Xi met last Saturday. They said those talks will continue next week but didn't elaborate on the timing for physical meetings.
• Poland's central bank kept rates stable at 1.50% yesterday. Governor Glapinski said rates will stay stable until the end of 2021. A next move could be either up or down. The central bank expects CPI to rise next year before declining in 2021.
• Australia's upper house Senate is set to approve a $110 bn tax cut plan after the lower house of parliament backed it on Tuesday. The Australian central bank said earlier fiscal stimulus was required to boost spending to revive its economy.
• Today's event calendar won't inspire markets. The US is closed (4th of July), (outdated) retail sales are due in the EMU. ECB's chief economist Lane is scheduled to speak. Spain and France tap the bond market

Currencies: Trump Again Accused EU And China Of Currency Manipulation

Bonds to show little direction ahead of payrolls

Global core bonds started on a stronger footing yesterday after Trump picked two Fed nominees who are expected to support the case for lower rates while the ECB's president to be Lagarde is likely to at least continue with Draghi's very accommodative monetary policy. EMU figures (services PMI) was largely better than expected but the US data batch (ADP, non-manufacturing ISM) didn't meet consensus. The impact on markets was surprisingly limited however. Investors chose not to position in a particular direction ahead of the 4th of July holiday and await the June payrolls on Friday. Bonds oscillated near opening levels instead. The US yield curve bull flattened with daily yield changes ranging from -0.2 bps (2-yr) to -2.4 bps (10-yr). German bond rates changed +0.5 bps (2-yr) to -1.8 bps (10-yr). The 10y yield tested the -0.40% depo rate. Greek spreads (-11 bps) narrowed significantly. The Italian spread (-24 bps!) fell below 200 bps for the first time since May 2018 as BTP's received additional support after the European Commission decided to withhold the excessive debt procedure.

Wall Street staged a record breaking performance yesterday. All three major indices (DJI, S&P500, Nasdaq) closed at all-time highs. But Asian stocks couldn't take heart from US optimism. Equities are trading mixed this morning. Markets are looking for guidance during a rather dull session with limited volumes. The US bond market is closed. The German Bund opens at yesterday's closing levels.

Today's economic calendar contains little to inspire trading. US financial markets are closed in observance for the 4th of July holiday. EMU retail sales are outdated (May) and we doubt they'll have any impact whatsoever. ECB's chief economist Lane's speech might be worth following. Trading is likely to be trapped within narrow ranges and under low volumes however. We expect (European) bonds to hold near recent highs throughout the day.

Long term view: The onus of the ECB is back on potential easing measures including revamping asset purchases or cutting rates. The German 10-yr yield is hovering near all-time lows and is close to the ECB depo rate. There's no trigger available at this stage to escape these lows, let alone negative territory. The Fed opened the door for cutting rates with a July rate cut discounted. The US 10-yr yield dipped below the 2.01% support and is hovering near 2016 levels. A weekly close below (after Friday's payrolls) would strengthen the case for a sustained break and pave the way south.

Italian/German spread slips below 200 bps for the first time since May 2018.

Daily Pivots: (S1) 0.6998; (P) 0.7019; (R1) 0.7051; More...

AUD/USD's rebound from 0.6831 resumed by breaking 0.7034 temporary top. Current development confirmed short term bottoming at 0.6831. Intraday bias is turned back to the upside for 61.8% retracement of 0.7295 to 0.6831 at 0.7118 first. Sustained break till target 0.7295 resistance next. On the downside, break of 0.6956 support, however, will indicate completion of the rebound. Intraday bias will be turned back to the downside for retesting 0.6831 low.

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.