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Sterling Extends Its Gains In The Asian Session
For the 24 hours to 23:00 GMT, the GBP rose 1.19% against the USD and closed at 1.3024, after the European Union’s Brexit negotiator, Michel Barnier stated that EU will offer Britain a unique trade deal.
In the Asian session, at GMT0300, the pair is trading at 1.3032, with the GBP trading 0.06% higher against the USD from yesterday’s close.
The pair is expected to find support at 1.2906, and a fall through could take it to the next support level of 1.2779. The pair is expected to find its first resistance at 1.3099, and a rise through could take it to the next resistance level of 1.3165.
Trading trend in the Sterling today is expected to be determined by the UK’s net consumer credit and mortgage approvals, both for July, scheduled to release in a few hours.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
Japan’s Consumer Confidence Slid To Its Lowest Level In 12-Months In August
For the 24 hours to 23:00 GMT, the USD rose 0.50% against the JPY and closed at 111.73.
In the economic news, Japan's consumer confidence index dipped to a 12-month low level of 43.3 in August, meeting market expectations. In the prior month, the index had registered a reading of 43.5.
In the Asian session, at GMT0300, the pair is trading at 111.63, with the USD trading 0.09% lower against the JPY from yesterday's close.
Overnight data indicated that, Japan's retail trade rose 1.5% on an annual basis in July, higher than market expectations for an advance of 1.2%. In the preceding month, retail trade had recorded a gain of 1.8%. On the contrary, the nation's large retailer's sales eased 1.6% on a monthly basis in July, higher than market expectations for a drop of 0.7%. In the prior month, large retailer's sales had registered an advance of 1.5%.
The pair is expected to find support at 111.22, and a fall through could take it to the next support level of 110.82. The pair is expected to find its first resistance at 111.93, and a rise through could take it to the next resistance level of 112.24.
Moving ahead, investors will keep an eye on Japan's jobless rate and industrial production, both for July, set to release overnight.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
EUR/USD Daily Outlook
Daily Pivots: (S1) 1.1668; (P) 1.1690; (R1) 1.1728; More.....
Intraday bias in EUR/USD remains neutral at this point as consolidation continues below 1.1733 temporary top. At this point, further rise cannot be ruled out yet. But we'd continue to expect strong resistance from 38.2% retracement of 1.2555 to 1.1300 at 1.1779 to limit upside, at least on first attempt, to bring near term reversal. On the downside, break of 1.1529 minor will indicate completion of the rebound and turn bias to the downside for retesting 1.1300 low. After all, consolidation from 1.1300 will extend for a while before completion.
In the bigger picture, a medium term bottom should be in place at 1.1300, on bullish convergence condition in daily MACD and some consolidations would be seen. But still, note that EUR/USD was rejected by 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. That carries some long term bearish implications. Thus, we'd expect fall from 1.2555 high to resume after consolidation completes. Below 1.1300 should send EUR/USD through 61.8% retracement of 1.0339 to 1.2555 at 1.1186. And, in that case, EUR/USD would head to retest 1.0339 (2017 low).
Swiss Franc Trading Flat In The Morning Session
For the 24 hours to 23:00 GMT, the USD declined 0.59% against the CHF and closed at 0.9706.
In the Asian session, at GMT0300, the pair is trading at 0.9706, with the USD trading flat against the CHF from yesterday’s close.
The pair is expected to find support at 0.968, and a fall through could take it to the next support level of 0.9654. The pair is expected to find its first resistance at 0.9754, and a rise through could take it to the next resistance level of 0.9802.
Moving forward, investors will await Switzerland’s KOF leading indicator for August, scheduled to release in a while.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
Canada’s Current Account Narrowed Less Than Market Expectations In 2Q
For the 24 hours to 23:00 GMT, the USD declined 0.13% against the CAD and closed at 1.2912.
Data revealed that, Canada's current account deficit narrowed less than expected to C$15.9 billion in 2Q 2018, following a revised deficit of C$17.5 billion in the prior quarter. Market participants had expected the nation's current account deficit to narrow to C$15.3 billion.
In the Asian session, at GMT0300, the pair is trading at 1.2919, with the USD trading 0.05% higher against the CAD from yesterday's close.
The pair is expected to find support at 1.2894, and a fall through could take it to the next support level of 1.2869. The pair is expected to find its first resistance at 1.2953, and a rise through could take it to the next resistance level of 1.2987.
Going forward, traders will closely monitor Canada's gross domestic product (GDP) for June, due to be released later in the day.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
Australia’s Building Approvals Declined Sharply In August
For the 24 hours to 23:00 GMT, the AUD declined 0.41% against the USD and closed at 0.7308.
LME Copper prices declined 0.9% or $53.0/MT to $6065.0/MT. Aluminium prices rose 1.3% or $28.0/MT to $2116.0/MT.
In the Asian session, at GMT0300, the pair is trading at 0.7290, with the AUD trading 0.25% lower against the USD from yesterday's close.
Overnight data revealed that, Australia's seasonally adjusted building approvals dropped 5.6% on an annual basis in July, more than market consensus for a fall of 3.0%. Building approvals had registered a revised rise of 1.8% in the prior month.
The pair is expected to find support at 0.7260, and a fall through could take it to the next support level of 0.7231. The pair is expected to find its first resistance at 0.7334, and a rise through could take it to the next resistance level of 0.7379.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
Gold: Yellow Metal Reverses Its Gains In The Morning Session
For the 24 hours to 23:00 GMT, Gold rose 0.39% against the USD and closed at USD1212.90 per ounce.
In the Asian session, at GMT0300, the pair is trading at 1211.10, with gold trading 0.15% lower against the USD from yesterday’s close.
The pair is expected to find support at 1207.67, and a fall through could take it to the next support level of 1204.23. The pair is expected to find its first resistance at 1214.27, and a rise through could take it to the next resistance level of 1217.43.
The yellow metal is showing convergence with its 20 Hr and 50 Hr moving averages.
Silver: White Metal Trading Lower In The Asian Session
For the 24 hours to 23:00 GMT, Silver slightly rose against the USD and closed at USD14.80 per ounce.
In the Asian session, at GMT0300, the pair is trading at 14.76, with silver trading 0.27% lower against the USD from yesterday’s close.
The pair is expected to find support at 14.69, and a fall through could take it to the next support level of 14.64. The pair is expected to find its first resistance at 14.83, and a rise through could take it to the next resistance level of 14.91.
The white metal is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.
Crude Oil: Oil Reverses Its Gains In The Asian Session
For the 24 hours to 23:00 GMT, Crude Oil rose 1.58% against the USD and closed at USD69.65 per barrel, after the Energy Information Administration (EIA) report indicated that US crude oil stockpiles fell more than estimated by 2.6 million barrels to 405.8 million in the week ended 24 August.
In the Asian session, at GMT0300, the pair is trading at 69.64, with oil trading slightly lower against the USD from yesterday’s close.
The pair is expected to find support at 68.75, and a fall through could take it to the next support level of 67.86. The pair is expected to find its first resistance at 70.15, and a rise through could take it to the next resistance level of 70.66.
Crude oil is trading above its 20 Hr and 50 Hr moving averages.
GBP/USD Daily Outlook
Daily Pivots: (S1) 1.2904; (P) 1.2969; (R1) 1.3092; More...
GBP/USD's rebound from 1.2661 extended to as high as 1.3038 so far and intraday bias stays on the upside. Current development suggests medium term bottoming at 1.2661, on bullish convergence condition in daily MACD. Further rise should be seen to 55 day EMA (now at 1.3058) and then 1.3212 resistance. For now, we'd expect strong resistance from 1.3316 fibonacci level to limit upside, at least on first attempt. On the downside, break of 1.2844 support will argue that the rebound is completed and bring retest of 1.2661 low.
In the bigger picture, whole medium term rebound from 1.1946 (2016 low) should have completed at 1.4376 already, after rejection from 55 month EMA (now at 1.4091). The structure and momentum of the fall from 1.4376 argues that it's resuming long term down trend. And this will be the preferred case as long as 38.2% retracement of 1.4376 to 1.2661 at 1.3316 holds. However, firm break of 1.3316 would bring stronger rebound to 61.8% retracement at 1.3721. And, the eventual depth of the fall from 1.4376, and the chance of hitting 1.1946 low, will depend on the strength of the interim corrective rebound from 1.2661.
