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The Euro fell 0.3% in Asia / early European trading on Monday, as US/China ceasefire deal boosted dollar.

The single currency holds in red at the first day of week / month and quarter and generates initial negative signals as two-legged recovery rally from 1.11 zone stalled at 1.14 area.

Fresh weakness after three consecutive long-legged daily Dojis already broke below important supports at 1.1342 (200DMA) and 1.1324 (Fibo 38.2% of 1.1181/1.1412 / 10DMA), generating initial reversal signal, which requires confirmation on break and close below 1.1298/96 (20DMA / 50% retracement).

The sentiment has soured after Trump/Xi agreement, with weakening daily techs supporting scenario.

Momentum is about to break into negative territory, stochastic is heading south, while 5DMA reversed and heading towards 200SMA, in attempt to form death cross.

Also, Evening Doji Star reversal pattern is forming on weekly chart that adds to negative outlook.

Solid resistance lays at 1.1342/50 zone (broken 200DMA / floor of three-day congestion) which is expected to cap upticks and keep fresh bearish bias.

Res: 1.1357, 1.1371, 1.1393, 1.1412
Sup: 1.1316, 1.1296, 1.1277, 1.1269

The EUR/GBP has been in a retracement mode, but if it holds above D L4 camarilla pivot point, we should see a continuation.

The POC zone 0.8930-40 could see the fresh buyers emerging due to the confluence of W L3, H1/H4 Bands and historical daily support. If the price closes above 0.8940 we should see 0.8959 and 0.8973 as next targets. However, if the price drops below the ATR projection low, bears could get the upper hand and the pair won't be bullish anymore. Ideally for bulls, the price should holds above the D L4 at 0.8923.

The precious metal posted solid gains in May, rising over 7.8% on the month. Gold was the second best commodity, next to crude oil. The gains in gold, however, saw prices turning flat near the highs. For two consecutive days, gold prices have closed flat despite being a bit volatile.

Will Gold Continue to Extend Declines?

Friday’s price action indicates that there is scope for gold prices to post a decline. This was evident from the lower opening this morning. The minor support is at the 1404 level. If this level gives way, then gold could potentially post declines much lower. The next main support is seen at 1354 which could be tested in the near term. Alternately, if gold continues to consolidate near the current levels, we expect to see flat price action for the short term.

Crude oil prices gave up some of the gains by Friday’s close. This comes ahead of the two-day OPEC meeting that starts today in Vienna, Austria. Some news reports indicate that OPEC will continue with its existing production cuts. Both Venezuela and Iran are currently cut off from the international oil markets due to the US-led sanctions. This raises concerns of a potential shortfall in OPEC production.

Will Crude Oil Correct Lower?

The current declines in crude oil remain somewhat muted compared to the price action over the past week. Still, the technical outlook remains somewhat bearish in the short term. If oil prices break down below the 57.50 level where support is likely to be formed, further declines could come. Alternately, to the upside, a continuation will see oil prices rising to test the $60 handle.

Daily Pivots: (S1) 0.8945; (P) 0.8964; (R1) 0.8990; More...

Intraday bias in EUR/GBP remains neutral for the moment as consolidation from 0.8992 is extending. Further rise is expected as long as 0.8872 resistance holds. But considering bearish divergence condition in 4 hour MACD, we'd look for topping signal as it approaches 0.9101 key resistance. On the downside, break of 0.8872 will indicate short term topping. Deeper pull back could be seen to 55 day EMA (now at 0.8815) 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 0.8527). 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.

The flash estimates on the inflation data for the eurozone showed some optimism. Headline inflation increased 1.2% on the year ending June 2019. This was in line with market expectations. The core inflation rate also rose by 1.1% on the year in June, beating estimates of a 1.0% increase. The inflation data comes a few weeks ahead of the ECB meeting.

Euro Settles Flat Below $1.1400

The common currency held flat for a third consecutive day. This comes as price briefly tested the 1.1400 level before giving up the gains. We expect the currency pair to remain muted in the near term. The longer-term range of 1.1400 and 1.1200 remains in play. A breakout from this level will potentially confirm the upside bias in price.

EURUSD remains under pressure and risk is still to the downside in the short-term as prices continue to drift below the 38.2% Fibonacci retracement level of the downleg from 1.1815 to 1.1110 near 1.1380. After the pullback on the three-month high of 1.1410, technical indicators reversed lower as well, suggesting a possible bearish bias again. The MACD oscillator is falling in the positive territory, while the stochastic is moving lower, approaching the 20 level.

If price action drops, there is scope to test the 20-day simple moving average (SMA) currently at 1.1300 before heading towards the 23.6% Fibo of 1.1275. Clearing this key level would see additional losses towards the 40-day SMA around 1.1240. Falling below this level the 1.1180 support could be the next level to watch.

On the flipside, if the pair surpasses the 38.2% Fibonacci mark, it could test the three-month high (1.1410). Above this barrier, the area within the 1.1450 and 1.1460, which encapsulates the 50.0% Fibonacci could attract traders’ attention, creating a higher high in the near term.

Overall, EURUSD is returning lower today, so investors could have a look for more bearish actions if it declines below the 23.6% Fibonacci region. Alternatively, a jump above 1.1410 could increase buying interest.

Daily Pivots: (S1) 1.6164; (P) 1.6209; (R1) 1.6235; More...

EUR/AUD's correction from 1.6448 is still in progress and outlook remains unchanged. While deeper decline cannot be ruled out, downside should be contained above 1.6052 support to bring rise resumption. On the upside, break of 1.6448 will resume the rally from 1.5683 and target 1.6765 high. However, firm break of 1.6052 support will near term outlook bearish for 1.5683 support again.

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) 1.1086; (P) 1.1102; (R1) 1.1123; More...

EUR/CHF recovers today consolidation from 1.1056 extends. Intraday bias remains neutral and outlook is unchanged. 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): 58.95

Our preference Long positions above 58.95 with targets at 60.10 & 60.50 in extension.

Alternative scenario Below 58.95 look for further downside with 58.20 & 57.75 as targets.

Comment The RSI calls for a new upleg.