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Daily Pivots: (S1) 142.89; (P) 143.28; (R1) 143.51; More...

GBP/JPY's rebound from 139.88 resumes after brief consolidation and reaches as high as 144.77 so far. Intraday bias is back on the upside for further rally. Sustained trading above 55 day EMA (now at 144.66) will bring further rise to 149.30 key resistance. On the downside, though, break of 142.81 will suggest that the rebound is completed and bring retest of 139.88 low.

In the bigger picture, at this point decline from 156.59 is still seen as a corrective move. But the downside acceleration makes this view shaky. Focus will be on 139.29 cluster support (50% retracement of 122.36 to 156.59 at 139.47). Strong rebound from there will re-affirm the bullish case that rise from 122.36 is still to extend through 156.59 high. However, sustained break of 139.29/47 should confirm medium term reversal. GBP/JPY would then target a retest on 122.26 (2016 low).

Daily Pivots: (S1) 1.2844; (P) 1.2888; (R1) 1.2914; More...

GBP/USD surges to as high as 1.2982 as rebound from 1.2661 resumes. Break of 1.2956 support turned resistance also suggests medium term bottoming at 1.2661, on bullish convergence condition in daily MACD. Intraday bias is back on the upside for 55 day EMA (now at 1.3054) and above. 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). Current downside acceleration argues that it's possibly resuming long term down trend. In any case, outlook will stay bearish as long as 38.2% retracement of 1.4376 to 1.2661 at 1.3316 holds. Retest of 1.1946 should be seen next.

Daily Pivots: (S1) 110.98; (P) 111.17; (R1) 111.39; More...

USD/JPY's break of 111.48 suggests that rebound from 109.76 is resuming. Intraday bias is back on the upside for 112.14 resistance. Note again that correction from 113.17 should have completed at 109.76 already. Break of 112.14 should target a test on 113.17 high. On the downside, however, break of 110.93 minor support will dampen the bullish case and turn focus back to 109.76 instead.

In the bigger picture, corrective fall from 118.65 (2016 high) should have completed with three waves down to 104.62. Decisive break of 114.73 resistance will likely resume whole rally from 98.97 (2016 low) to 100% projection of 98.97 to 118.65 from 104.62 at 124.30, which is reasonably close to 125.85 (2015 high). This will stay as the preferred case as long as 109.36 support holds. However, decisive break of 109.36 will mix up the outlook again. And deeper fall should be seen back to 61.8% retracement of 104.62 to 113.17 at 107.88 and below.

Sterling appears to be boosted by upbeat comments from Brexit Minister Dominic Raab. He said in the parliament that a Brexit deal with EU was "within our sights" and the negotiation would intensifies as the divorce date approaches. Raab also added that UK's Brexit plan received positive reactions from EU. He said the plan "had a reasonably positive landing" And "we're getting a lot of constructive engagement, and ... a lot of talk about the practical considerations rather than 'in principle' dismissal, and I think that's valuable from our point of view".

EU chief negotiator Michel Barnier also said that the EU is prepared to offer a partnership with UK unlike with another other country. That's seen as a gesture that EU is also committed to a deal. Barnier said in Berlin that "we are prepared to offer Britain a partnership such as there never has been with any other third country." And, "We respect Britain's red lines scrupulously. In return, they must respect what we are," he said. "Single market means single market ... There is no single market a la carte."

And the these comments invalidated fake news report that Raab is frustrated to get availability from Barnier on face-to-face talks.

GBP/USD surges through 1.2956 resistance on the news.

GBPJPY also picks up strong upside momentum again.

Daily Pivots: (S1) 1.5894; (P) 1.5926; (R1) 1.5969; More....

EUR/AUD surges to as high as 1.6028 so far today and intraday bias remains on the upside. Current rally should now target 100% projection of 1.5271 to 1.5886 from 1.5601 at 1.6216, which is close to 1.6189 high. On the downside, below 1.5953 resistance turn support will turn intraday bias neutral and bring consolidation first, before staging another rally.

In the bigger picture, EUR/AUD drew strong support from 55 week EMA and rebounded. And the development argues that medium term rally from 1.3624 (2017 low) is still in progress. Firm break of 1.6189 will target a test on 1.6587 (2015 high). On the downside, break of 1.5601 support will now be the first sign of medium term reversal, and will bring a test on 1.5271 key support for confirmation.

Daily Pivots: (S1) 0.9060; (P) 0.9080; (R1) 0.9107; More...

EUR/GBP retreats sharply after hitting upper channel resistance. A temporary top is in place at 0.9097 and intraday bias is turned neutral first. Deeper retreat could be seen to 4 hour 55 EMA (now at 0.9016). But downside should be contained well above 0.8895 and bring rise resumption. On the upside, above 0.9097 will resume the rally from 0.8620 and target 0.9305 key resistance.

In the bigger picture, EUR/GBP is staying in long term range pattern from 0.9304 (2016 high). The corrective structure of the fall from 0.9305 to 0.8620 is raising the chance that rise from 0.8312 to 0.9305 is an impulsive move. But we're not too confident on it yet. In any case, we'd stay cautious on strong resistance from 0.9304/5 to limit upside in case of further rally. Meanwhile, if there is another medium term decline, strong support will likely be seen from 0.8303 to contain downside.

Daily Pivots: (S1) 110.98; (P) 111.17; (R1) 111.39; More...

Intraday bias in USD/JPY remains neutral at this point. We're holding on to the view that correction from 113.17 should have completed at 109.76 already. Above 111.48 will turn bias to the upside for 112.14. Break will pave the way to retest 113.17 high. Meanwhile, below 110.74 minor support will dampen the bullish case and turn focus back to 109.76 instead.

In the bigger picture, corrective fall from 118.65 (2016 high) should have completed with three waves down to 104.62. Decisive break of 114.73 resistance will likely resume whole rally from 98.97 (2016 low) to 100% projection of 98.97 to 118.65 from 104.62 at 124.30, which is reasonably close to 125.85 (2015 high). This will stay as the preferred case as long as 109.36 support holds. However, decisive break of 109.36 will mix up the outlook again. And deeper fall should be seen back to 61.8% retracement of 104.62 to 113.17 at 107.88 and below.

Daily Pivots: (S1) 0.9736; (P) 0.9773; (R1) 0.9801; More.....

USD/CHF's decline continues to as low as 0.9734 so far today and intraday bias remains on the downside for 38.2% retracement of 0.9186 to 1.0056 at 0.9724. At this point, we're still view price actions from 1.0056 as a consolidation pattern. Thus, downside should be contained by 0.9724 to bring rebound. On the upside, above 0.9775 minor resistance will turn intraday bias neutral first. Break of 0.9865 resistance should confirm near term reversal. However, sustained break of 0.9724 will carry larger bearish implications.

In the bigger picture, current development suggests that the consolidation pattern from 1.0056 is extending. As long as 38.2% retracement of 0.9186 to 1.0056 at 0.9724 holds, we'd expect rise from 0.9186 to resume at a later stage to retest 1.0342 key resistance (2016 high). However, sustained break of 38.2% retracement of 0.9186 to 1.0056 at 0.9724 will at least bring deeper fall to 61.8% retracement at 0.9518 before completion.

Daily Pivots: (S1) 1.2844; (P) 1.2888; (R1) 1.2914; More...

GBP/USD is staying in range of 1.2798/2935 and intraday bias remains neutral at this point. No change in the bearish outlook with 1.2956 support turned resistance intact. Deeper decline is expected in the pair. On the downside, below 1.1798 minor support will target 1.2661 low first. Break will resume larger fall from 1.4376. However, considering bullish convergence condition in daily MACD, break of 1.2956 will indicate medium term bottoming. And stronger rebound would be seen back to 55 day EMA (now at 1.3054) and above.

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). Current downside acceleration argues that it's possibly resuming long term down trend. In any case, outlook will stay bearish as long as 38.2% retracement of 1.4376 to 1.2661 at 1.3316 holds. Retest of 1.1946 should be seen next.

The U.S. economy grew at a 4.2% annualized pace in the second quarter according to the BEA's second estimate. This is a tick better than the advanced estimate (4.1%), and also higher than market expectations of 4.0% growth. The upward revision to headline growth reflected stronger business investment and net trade.

Real personal consumer spending remained strong but was revised down slightly to 3.8% from the initial 4% estimate. This reflected slightly weaker growth in durable and non-durable goods. Growth in services spending was unchanged at 3.1%.

Business investment was revised up to 8.5% from the already healthy 7.3% initial estimate due to spending on equipment and intellectual property products.

Residential investment was revised down, now estimated to have declined 1.6% in the second quarter (previously: -1.1%).

Government spending was revised up a touch at both the federal and state and local level.

A small downward revision to exports (-0.2 to 9.1%) was more than offset by a downward revision to imports that are now estimated to have contracted 0.4% in the second quarter rather than rising 0.5%. This results in net trade contributing an additional 0.1 percentage points for a total contribution of 1.2 p.p. to headline GDP growth in the quarter.

Key Implications

Typically the second estimate of GDP for 18Q2 is uneventful and this time is no different. However, the additional information received by the BEA since the last estimate depicts an economy with a bit firmer domestic spending in the second quarter than previously estimated. Stronger business spending is consistent with tax reform and strong consumer and fiscal expenditures over the past few quarters. Moreover, although the new data does little to change the narrative of a U.S. economy firing on all cylinders in the first half of the year, ongoing strength in consumer and business confidence suggest that the expansion has more room to run.

Looking ahead, monthly indicators point to a strong expansion again in the third quarter, driven by healthy consumer, business, and government spending. We are tracking a modest slowing of GDP growth to 3.1% (annualized) in the third quarter as the bump from tax reform and export strength related to the front-running of tariffs fade. That said, trade policy uncertainty has undoubtedly dented business confidence domestically and abroad, possibly leading businesses to delay further investment. An escalation in trade tensions could push our forecast down.

Nevertheless, despite the downside risks from trade policy uncertainty and financial market volatility in emerging markets, the Fed is likely to remain on track to gradually normalize monetary policy. With inflation at target and the economy running hot, we anticipate that the Fed will raise rates twice more this year, bringing the upper end of the target range to 2.5% by the end of the year.