Sample Category Title

Pivot (invalidation): 6.0400

Our preference Short positions below 6.0400 with targets at 5.9390 & 5.8680 in extension.

Alternative scenario Above 6.0400 look for further upside with 6.0890 & 6.1390 as targets.

Comment The RSI is bearish and calls for further downside.

Pivot (invalidation): 0.6995

Our preference Short positions below 0.6995 with targets at 0.6965 & 0.6945 in extension.

Alternative scenario Above 0.6995 look for further upside with 0.7010 & 0.7025 as targets.

Comment The RSI is bearish and calls for further decline.

Pivot (invalidation): 1.3405

Our preference Long positions above 1.3405 with targets at 1.3445 & 1.3475 in extension.

Alternative scenario Below 1.3405 look for further downside with 1.3375 & 1.3350 as targets.

Comment The RSI has just landed on its neutrality area at 50% and is turning up.

Pivot (invalidation): 1.0130

Our preference Short positions below 1.0130 with targets at 1.0090 & 1.0070 in extension.

Alternative scenario Above 1.0130 look for further upside with 1.0145 & 1.0160 as targets.

Comment As Long as the resistance at 1.0130 is not surpassed, the risk of the break below 1.0090 remains high.

Pivot (invalidation): 110.05

Our preference Short positions below 110.05 with targets at 109.50 & 109.30 in extension.

Alternative scenario Above 110.05 look for further upside with 110.30 & 110.55 as targets.

Comment The RSI lacks upward momentum.

Pivot (invalidation): 1.2990

Our preference Long positions above 1.2990 with targets at 1.3035 & 1.3055 in extension.

Alternative scenario Below 1.2990 look for further downside with 1.2970 & 1.2945 as targets.

Comment The RSI calls for a rebound.

Pivot (invalidation): 1.1225

Our preference Long positions above 1.1225 with targets at 1.1240 & 1.1255 in extension.

Alternative scenario Below 1.1225 look for further downside with 1.1210 & 1.1190 as targets.

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

US-China trade tensions are expected to continue being the dominant theme this week, as Asian markets kicked off Monday in risk-off fashion. Except for the Japanese Yen, most Asian currencies are now weaker against the US Dollar. The Shanghai Composite Index opened 1.5 percent lower before paring losses at the time of writing, as most Asian equities also declined on Monday morning. Meanwhile, S&P500 futuresare now down one percent, potentially adding more pain to US stocks which last week saw their biggest weekly decline so far in 2019.

Over the weekend, US President Donald Trump offered mixed signals regarding his approach to trade negotiations with China. On one hand, he tweeted that talks will continue in a 'congenial' manner, with 'absolutely no need to rush'. On the other hand, he also said he loves 'collecting big tariffs' and told China to 'act now'. The tweets came amid reports that US trade negotiators gave their Chinese counterparts a one-month deadline to reach an accord or risk having US tariffs imposed on all Chinese imports.

Markets' base case on shifting sands?

Given Trump's unpredictability, attempts to predict the end result of US-China trade talks risk placing any base case on shifting sands. At the time of writing, markets are still waiting for details on China's 'countermeasures' to the higher US tariffs imposed on the $200 billion worth of Chinese goods on May 10. Keep in mind that President Trump has also cited the possibility of a 25 percent tariffon a further $325 billion of Chinese goods that are currently tariff-less. While it appears that some market participants are still holding out for some form of a formalized US-China trade deal, last week's selloff from risk assets could set markets up for more trade-related volatility ahead.

Potential deviations for US, China economic trajectories may add to market uncertainty

Besides commentary from either government on the trade front, investors will also keep a close eye on major economic indicators out of both the US and China this week. The respective sets of industrial production and retail sales data out of both countries are due Wednesday, set against the backdrop of re-emerging tensions between the world's two largest economies. The US economic growth momentum is expected to remain steady, while China has been showing signs of stabilizing in recent months; any significant deviation from those trajectories may add another layer of uncertainty to markets.

Safe havens strengthen as Trump tells China to 'act now'

While Trump has asked China to 'act now', investors didn't have to wait for such a call from the US President before taking risk off the table. Gold is now holding around the mid $1,280 while the Japanese Yen is strengthening, with USDJPY falling further below the 110 level. Meanwhile, the Dollar Index (DXY) is steadying around the 97.3 level at the time of writing, having wrapped up two straight weeks of declines.

A lack of progress in the US-China trade impasse should create a supportive environment for safe haven assets, while a major deterioration in tensions could see a major upwards move for the likes of Bullion and JPY.

Daily Pivots: (S1) 142.58; (P) 142.92; (R1) 143.32; More...

Intraday bias in GBP/JPY remains neutral for consolidation above 142.22 temporary low. In case of stronger recovery, upside should be limited well below 146.50 resistance to bring fall resumption. Current development argues that whole rebound from 131.51 has completed at 148.87 already, ahead of 149.48 key resistance. On the downside, break of 142.22 will resume the decline from 148.87 to 61.8% retracement of 131.51 to 148.87 at 138.14 next.

In the bigger picture, current development suggests that GBP/JPY was rejected by 149.98 key resistance. And medium term fall from 156.59 is still in progress. Break of 131.51 will target 122.36 (2016 low). On the other hand, decisive break of 149.98 should confirm that medium term fall from 156.59 (2018 high) has completed at 131.51 already. Further rally would be seen back to 156.59 resistance and above.

Daily Pivots: (S1) 123.17; (P) 123.39; (R1) 123.77; More....

Intraday bias in EUR/JPY remains neutral for consolidation above 122.48 temporary low. In case of stronger recovery, upside should be limited by 124.09/125.29 resistance zone to bring fall resumption. Current development suggests that rebound from 118.62 has completed at 127.50 already. On the downside, break of 122.48 will target retest of 118.62 low.

In the bigger picture, current development argues that rebound from 118.62 is merely a correction and has completed at 127.50. EUR/JPY is staying in long term falling channel from 137.49 (2018 high). Decisive break of 118.62 will confirm resumption of this medium term fall and target 109.20 low. For now, this will be the favored case as long as 125.23 resistance holds.