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Entering into US session, Dollar is back under broad based selling pressure as trade war fear receded. It's taking turn to be the weakest one with Japanese Yen. Sterling and Australian are not doing much better. Both are somewhat left behind in the general sell-off against the greenback. Swiss Franc overtakes Euro to be the strongest one today, followed by Canadian Dollar and then Euro. While the Loonie is strong on "NAFTA" progress, its fate will very much lies on the result of Foreign Minister Chrystia Freeland's visit to Washington today.

In other markets, Gold's upside momentum has apparently weakened somewhat. But its, nevertheless, staying in the rebound from 1160.36. It's on course for 1238.62 fibonnaci level. European stocks open higher today but apparently lost momentum quickly. FTSE hit as high as 7636.72, but it's now at 7601, up 0.32%. DAX reached 1259702 but is now back at 12550, up 0.10% only. CAD reaches 5494.53 stays firm at 5490, but it's just up 0.2%. European investors are not as excited on the US-Mexico trade deal as American traders.

At the same time, we'd also like to point to the developments in Asia too. Nikkei jumped to 23006.77 in initial trading and almost touched 23050.39 key resistance. But the index the turned south to close at 22417.23, just up 0.06%. It seems like after some impulsive stimulus, investors were quick to calm down.

Notes/Observations

• US-Mexico trade deal boosts sentiment; hopes of a similar outcome for U.S. talks with China
• Euro Zone July M3 Money Supply comes in below expectations
• Italian Aug Confidence data misses across the board; 10-year BTP yield edges towards the 3.20% area

Asia:

• PBOC: sets USD/CNY mid-point at 6.8052 vs 6.8508, the strongest fixing in over a year (since Jun 2017). Reminder: On Aug 27th reports circulated that PBoC resumed the counter-cyclical factor in the Yuan mid-point fixing mechanism

Europe:

• Italy Deputy PM Di Maio (Five Star party leader): Italy will definitely veto EU budget without assistance on migrants
• Greece PM Tsipras: to hold national elections in fall of 2019; our govt needs to be refreshed
• France PM Philippe said to have asked ministers to prepare contingency measures in the case of a ‘no-deal’ Brexit. Measures might include those related to UK citizens that are currently living in France.
• UK Trade Sec Fox: Would be an economic disadvantage if the UK did not get the Brexit it wants with the EU. In mutual interest of both sides to get a good trade deal ; expected an EU response on UK proposals by Oct

Americas:

• President Trump: There will be US-Mexico trade agreement; will call this US-Mexico trade agreement, dropping NAFTA name. To terminate existing NAFTA deal to go into this new deal. Have not started with Canada yet; wanted to see if could reach deal with Mexico first; expects to begin talks with Canada immediately. Could do a separate deal with Canada or make them part of the deal with Mexico
• Trade Rep Lighthizer: US-Mexico agreement to go to Congress for approval. Sunset clause had shifted to a review process every six years that would not cause NAFTA to expire; Would have 16-year life span that would be extended for another 16 years after completion of each 6-year review period. Mexico had agreed to eliminate Chapter 19 dispute settlement chapter as part of NAFTA agreement
• Mexico President Pena Nieto: goal is to conclude trilateral NAFTA talks this week. Hoped that Canada could be reincorporated into trade deal

Economic Data:

• (NO) Norway Q3 Consumer Confidence: 16.4 v 19.6 prior
• (FI) Finland July House Price Index M/M: -0.7% v -0.4% prior; Y/Y: 0.7% v 1.4% prior
• (FR) France Aug Consumer Confidence: 97 v 97e
• (CH) Swiss Q2 Non-farm payrolls: 5.048M v 4.961M q/q
• (SE) Sweden July Retail Sales M/M: -1.0% v +0.4%e; Y/Y: -1.2% v +0.5%e
• (SE) Sweden July Trade Balance (SEK): 0.0B (flat) v -0.3B prior
• (EU) Euro Zone July M3 Money Supply Y/Y: 4.0% v 4.3%e
• (IT) Italy Aug Consumer Confidence: 115.2 v 115.8e, Manufacturing Confidence: 104,8 v 106.5e, Economic Sentiment: 103.8 v 105.3 prior
• (IT) Italy July PPI M/M: 0.4% v 0.3% prior; Y/Y: 3.6% v 3.2% prior

Fixed Income Issuance:

• (ID) Indonesia sold total IDR20T vs. IDR10T indicated in 3-month and 9-month Bills, 5-year, 15-year, 20-year bonds
• (IT) Italy Debt Agency (Tesoro) sold €1.75B vs. €1.25-1.75B indicated in Mar 2020 CTZ; Avg Yield: 1.277% v 1.75% prior; Bid-to-cover: 1.87x v 1.60x prior

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 0.0% at 385.4, FTSE +0.2% 7596, DAX 0.0% at 12538, CAC-40 0.0% at 5478, IBEX-35 -0.6% at 9601, FTSE MIB -1.1% at 20560, SMI -0.4% at 9059 S&P 500 Futures +0.0%]
• Market Focal Points/Key Themes: European Indices trade mixed, after a mixed session in Asia and flat futures in the US. The UK Ftse trades higher catching up with the positive session in Europe yesterday following the UK Bank Holiday. On the earnings front Royal Unibrew, Flughafen Zurich trade higher after earnings and raised outlook; Technolopolis trades higher after its to be acquires for €4.65/shr, while Agfa Gevaert trades over 5% higher after announcing a strategic partnership with Lucky. In the US Aspen Insurance is to be acquired for $42.75 in cash, KlX inc reported results and confirmed Sep14 as the spin off date for KLX Energy Services. Looking ahead notable earners include retailers Best Buy, BJ's Wholesale, DSW as well as Canadian names Bank of Nova Scotia and Bank of Montreal.

Movers

• Consumer Discretionary Bunzl (BNZL.UK) +0.8% (Earnings), Royal Unibrew (RBREW.DK) +4.6% (Earnings), IC Group [IC.DK]+5.3% (Earnings)
• Financials Technopolis [TPS1V.FI] +13.2% (To be acquired), Baloise [BALN.CH] -3.7% (Earnings)
• Industrials Flughafen Zurich [FHZN.CH] +2% (Earnings), Fincantieri [FCT.IT] +2.3% (might get contract to rebuild Genoa bridge), Renault (RNO.FR) +2.3% (Analyst upgrade)
• Technology Agfa Gevaert [AGFB.BE] +5.4% (Strategic partnership with Lucky)
• Consumer Staples Norwegian Royal Salmon [NRS.NO] 0.0% (Earnings)

Speakers

• France Labor Min reiterated view that unemployment was not falling fast enough
• Poland Central Bank's Lon stated that holding interest rates steady should suffice (in-line with majority view)
• China Fin Min Liu Kun reiterated stance to control local government debt risks, 'resolutely' curb rise in hidden debt
• Indonesia Finance Ministry official Nazara stated that govt sought to impose import tariffs to more goods
• Iran Parliament said not to be convinced by President Rouhani explanation of economy and refered questions to judiciary
• North Korea letter to US Sec of State Pompeo said to warn that denuclearization talks could fall apart (Note: President Trump recently asked Sec of State Pompeo to cancel North Korea trip at this time due to lack of denuclearization progress)
• UAE Energy Min (OPEC president) Mazrouei: OPEC production was rising; approaching full compliance. **Reminder: On Aug 27th reports circulated that OPEC+ monitoring compliance declined to 109% in July (from 120% in June and 147% in May)
• Saudi Energy adviser: Move by Iran to close the Strait of Hormuz would likely have UN Security Council authorize a military strike

Currencies

• The USD remained on soft footing as risk appetite continued to simmer following the US-Mexico trade agreement. Most emerging-market currencies received a boost on hopes of a similar outcome for U.S. talks with China
• EUR/USD probing 1-month highs as the pair edged back towards the 1.17 level. Euro firmer despite the higher Italian yields as the 10-year BTP tested the 3.20 area. Softer Euro Zone money supply data or disappointing Italian confidence could not derail the price action.
• GBP/USD lagged in advances compared to other majors but moved into in positive territory despite lingering concerns about a no-deal Brexit. Pair back above the 1.29 level
• The SEK currency was softer in the session after Swedish July retail sales data came in below expectations. SEB analyst pushed back its forecast for the 1st potential rate hike by the Riksbank until April 2019
• Turkey Lira maintained a soft tone for the 2nd straight session as local markets returned from holiday.

Fixed Income

• Bund Futures trades at 162.61 down 6 ticks retracing some of the move as European Indices trade higher. Resistance moves to 163.82 then 164. A downside break of 163.00 sees 162.69 initially.
• Gilt futures trades at 123.01 down 29 ticks following the move in Treasuries. Continued support at 123.12, with a continued move higher targeting 123.93 then 124.00.
• Tuesday 's liquidity report showed Monday's excess liquidity fell from €1.851T to €1.848T. Use of the marginal lending facility rose from €55M to €70M.
• Corporate issuance saw no high grade issuers in the primary market

Looking Ahead

• (IT) Italy Fin Min Tria in China to help build economic dialogue (thru Sept 1st)
• 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO)
• 05:30 (HU) Hungary Debt Agency (AKK) to sell in 3-month Bills
• 05:30 (ZA) South Africa to sell combined ZAR2.4B in 2030, 2041 and 2048 bonds
• 06:00 (IE) Ireland July Retail Sales Volume M/M: No est v -3.4% prior; Y/Y: No est v 7.0% prior
• 06:45 (US) Daily Libor Fixing
• 07:00 (BE) ECB’s Preat (Belgium, chief economist)
• 07:45 (US) Weekly Goldman Economist Chain Store Sales
• 08:05 (UK) Baltic Dry Bulk Index
• 08:30 (US) July Advance Goods Trade Balance: -$69.0Be v -$67.9B prior (revised from 68.3B)
• 08:30 (US) July Preliminary Wholesale Inventories M/M: 0.2%e v 0.1% prior, Retail Inventories M/M: No est v 0.1% prior (revised from 0.0%)
• 08:55 (US) Weekly Redbook Sales
• 09:00 (US) Jun S&P/ Case-Shiller 20-City M/M: 0.20%e v 0.20% prior; Y/Y: 6.43%e v 6.51% prior; House Price Index (HPI): No est v 211.94 prior
• 09:00 (US) Jun S&P Case-Shiller (overall) HPI Y/Y: No est v 6.38% prior, Overall HPI Index: No est v 202.95 prior
• 09:00 (MX) Mexico July Unemployment Rate: 3.5%e v 3.4% prior; Unemployment Rate (Seasonally adj): 3.4%e v 3.4% prior
• 09:00 (EU) Weekly ECB Forex Reserves
• 09:00 (RU) Russia announces weekly OFZ bond auction (held on Wed)
• 10:00 (US) Aug Consumer Confidence: 126.6e v 127.4 prior
• 10:00 (US) Aug Richmond Fed Manufacturing Index: 17e v 20 prior
• 11:30 (US) Treasury to sell 4-week Bills
• 13:00 (US) Treasury to sell $37B in 5-Year Notes
• 16:30 (US) Weekly API Oil Inventories

EUR/USD has posted small gains in the Tuesday session. Currently, the pair is trading at 1.1703, up 0.22% on the day. On the release front, there are no key eurozone indicators. In the U.S, the key indicator is CB Consumer Confidence, which is expected to drop to 126.6 points. On Wednesday, Germany releases GfK Consumer Climate and France publishes consumer spending and Preliminary GDP. The US releases Preliminary GDP and Pending Home Sales.

The euro has been moving higher since Friday, gaining 1.4% against the dollar. Earlier on Tuesday, EUR/USD punched above the 1.17 line for the first time since August 1. The euro gained ground on Monday, responding to an unexpectedly strong business confidence report in Germany. The Ifo Business Climate report improved to 103.8, easily beating the estimate of 101.9 points. This marked the first time this year that business confidence has improved, thanks to a strong German economy and a pause in the global trade war.

Escalating trade tensions and tit-for-tit tariffs between the United States and its trading partners have shaken the markets since June. There was some good news in this regard on Monday, with the announcement that the U.S and Mexico have agreed to a new trade deal. Under the agreement, 75% of automobile content must be manufactured in North America, up from NAFTA’s current level of 62.5%. Trump has left the door open for Canada to join the new trade deal, but says he is also open to a separate trade agreement with Canada. The announcement of the new trade deal has improved risk appetite and pushed the U.S dollar lower.

Tuesday August 28: Five things the markets are talking about

Any trade deal is good for capital markets; even yesterday's U.S/Mexico “non-ratified” trade announcement has been able to push U.S stocks to new records, G10 currencies and commodities to multi week highs.

However, even the most bullish of investors should take heed about overreacting to what also might be the latest in an extended back-and-forth between the U.S and its trade partners.

President Trump's remarks on the U.S-Mexico breakthrough indicate that Canada may be presented with a “take-it-or-leave-it offer.” Which suggests that the U.S will take a tough stance in negotiations. Canada's trade negotiators are expected to start talks later today.

In a “take-it-or-leave-offer,” the Canadian economy will suffer, and could prompt the BoC to hold off on a rate hike on Sept 5. (Futures are pricing in a +43% odds for a +25 bps hike, down from +93% last week). This in turn should put pressure on the loonie (C$1.2970).

For the ‘big' dollar, long dollar positions are beginning to ask questions. A number of recent factors are beginning to weigh on its performance. U.S Fed chair Powell's ‘dovish' comments at Jackson Hole, he saw no reason to speed up interest rate increases, coupled with the lack of stronger U.S data momentum and flattening yield curve are somewhat negative for the ‘buck.'

1. Stocks see the light

Euro stocks have found support while U.S. futures drift and Asian shares edged higher as investors digest the latest developments on global trade.

In Japan, the Nikkei breached the psychological 23,000 level overnight on positive N. American trade steps, but managed to shed most of the gains on profit taking but still ended the day at its highest close in three months. The Nikkei share average finished the day up +0.1%, while the broader Topix closed +0.2% higher.

Down-under, Aussie shares also advanced on trade talks. The S&P/ASX 200 index gained +0.6% at the close of trade. The benchmark rose +0.4% on Monday, while in S. Korea, the Kospi closed out +0.17% higher.

In China, stocks ended slightly lower as investors took a breather after yesterday's very strong session, supported by the People's Bank of China (PBoC) supporting the yuan. The blue-chip CSI300 index fell -0.2%, while the Shanghai Composite Index slipped -0.1% as the Sino-U.S. trade dispute wears on.

In Europe, regional bourses trade mixed. The U.K's FTSE trades higher catching up with the positive session in Europe yesterday following the U.K bank holiday.

U.S stocks are set to open little changed (+0.0%).

Indices: Stoxx600 0.0% at 385.4, FTSE +0.2% 7596, DAX 0.0% at 12538, CAC-40 0.0% at 5478, IBEX-35 -0.6% at 9601, FTSE MIB -1.1% at 20560, SMI -0.4% at 9059 S&P 500 Futures +0.0%

2. Oil markets dip on rising output, gold little changed

Oil prices are a tad under pressure, weighed down by gradually rising output from OPEC but supported by supply risks from places such as Venezuela, Africa and Iran.

Brent crude oil futures are at +$76.14 per barrel, down -7c from yesterday's close, while U.S West Texas Intermediate (WTI) crude futures CLc1 are down -11c at +$68.76 per barrel.

The market is expecting U.S inventories to rise this week as some refineries go into maintenance.

So, expect investors to take their cue from today's weekly inventory data published by the private API this afternoon.

Ahead of the U.S open, gold prices are holding steady after hitting a two-week high yesterday, with the dollar under pressure in the wake of a trade deal between the U.S and Mexico. Spot gold is trading at +$1,211.31 an ounce. Prices hit their highest since Aug. 13 at +$1,212.38 on Monday, while the metal rose about +1.7% on Friday in its biggest one-day percentage gain in 15-months.

3. Sovereign yields drift higher

For now, risk-on mood continues to prevail in the sovereign government bond markets. Currently, the 10-year Bund yield is trading broadly unchanged at +0.37%.

However, Eurozone government bond supply is expected to pick up as the summer ends. Italy will offer +€1.25B to €1.75B in March 2020-dated zero coupon notes at auction, while Finland yesterday hired banks for its own 10-year bond syndication aiming to raise €3B, with the transaction expected to go ahead later today.

The one exception is Italian yields. The 10-year BTP yield is trading around 2018-high, up +3 bps, at +3.20% with news out of Italy remaining intense. Investors are concerned that Italy will overshoot its budget deficit target, along with the possibility of clash between the Italian government and the European Commission on budget and migration issues.

Elsewhere, the yield on 10-year U.S notes has gained +1 bps to +2.85%, the highest in more than a week, while in the U.K, the 10-year Gilt yield gained +18 bps to +1.451%, the highest in nearly four months on the biggest gain in five-years.

4. Dollar looking for direction

The mighty U.S dollar remains on softer footing as market risk appetite continues to simmer following yesterday's verbal U.S-Mexico trade agreement. Most emerging-market currencies received a boost on hopes of a similar outcome for U.S talks with China.

EUR/USD (€1.1693) is probing its four-week high as the pair edges back towards the €1.17 level. EUR is firmer despite the higher Italian yields.

GBP/USD (£1.2902) is lagging a tad on lingering concerns about a no-deal Brexit.

The SEK (€10.6473) is a tad softer after Swedish July retail sales data came in below expectations. This has convinced the rates market to push back its forecast for the first potential rate hike by the Riksbank until April 2019.

TRY ($6.2120 up +1%) maintains its soft tone for a second consecutive session as local markets returned from their weeklong holiday.

Yesterday, the MXN rallied +0.8% and the CAD gained +0.5% outright. Fresh optimism over global trade also boosted the currencies of other exported-dependent countries, including the KWN South Korea and Chile.

Finally, China boosted the yuan to new records. Overnight, China guided the yuan +0.7% stronger outright, boosting the Chinese currency by the most since June 1, 2017. The PBoC fixed the dollar's midpoint for daily trading at ¥6.8052, compared with ¥6.8508 on Monday.

5. Eurozone bank lending steady in July

Data this morning showed Eurozone bank lending grew at a steady rate last month, a trend that should support corporate investments in the region.

The ECB said that lending to non-financial corporations grew at an annual rate of +4.1%, the same rate as in June and the fastest pace since May 2009.

Lending to eurozone households remained robust too, growing at an annual rate of +3.0% in July.

Note: But despite a noticeable recovery in bank lending from the 2014, lending rates have remained well below pre-crisis levels.

Swiss Franc overtakes Euro as the strongest currency for today and the week so far as buyers jump in during early part of European session. On the other hand, Sterling was left behind by others in the broad based selloff in Dollar. As a result, GBP/CHF dips notably to as low as 1.2588 so far today and is set to recent down trend. As planned in the last weekly report, we'll now lower the stop of our GBP/CHF short (sold at 1.2971) to 1.2725, which is slightly above 1.2722 minor resistance.

Overall view is unchanged that fall from 1.3854 is in progress and should target cluster level at 100% projection of 1.3854 to 1.3049 from 1.3265 at 1.2460 and 61.8% retracement of 1.1638 to 1.3854 at 1.2485. We plan to exit our short position at 1.2500, which is slightly above this 1.2460/85 support zone. Consider that there is loss of downside momentum, as seen it daily MACD's stay above signal line. There is no compelling reason to change this plan.

• Trump has another political victory
• NAFTA is out and the new terms is in
• China and US trade spat became more difficult

US futures are trading higher as investors are hopeful that the new US and Mexico trade agreement will open many other locked doors for Donald Trump. All the pessimism about the Trump presidency is out of the window once again and it is more about the optimistic side. Trump has another political victory and successful trade deal is written all over it. This is driving the futures higher. But before we dwell into this further, let's focus on the two major economies and their negotiations because after the US has struck a trade agreement with one of its major trade partner, things would only become more arduous for China.

There is simply no standoff when it comes to US-China trade war. Both sides are in their own delusion that they have upper hand and the other side will be throwing the towel first. Neither side is ready to admit that there has been enough bloodshed and the pain caused due their standoff had damaged the global economic sentiment. And yet there are no signs that one can say that enough is enough.

Both sides have slapped new tariffs on each other last week and their two-day meeting has failed to produce any positive outcome. $16 billion worth of new tariffs on Chinese import kicked in on last Thursday and Beijing retaliated with a tit-for-tat reaction.

Donald Trump, the US president, warned China before that if it doesn’t give in, he will collect another 25 percent in duties on Chinese imports and the $16 billion worth of new tariffs is the result of this. China has targeted steel, medical equipment, fuel and autos in its counter tariff attack of $16 billion. The net result is that manufacturers on both sides, especially over in America, have started to place orders in advance which has resulted in the higher ocean and air freights and the warehouse cost over in the US has also spiralled. This is just the kind of situation which should be avoided at any cost but of course, the two biggest economies of the world are not ready to pay attention to this.

Under the current circumstances, especially that the two-day meeting between the two counties have ended up with no result, it is likely that the current situation may very well extend into the mid-term election which may not gel well with Donald Trump.

For market participants, the number which matters now is $200 billion. These are the new tariffs which will be imposed on the Chinese goods. It is arduous for China to continue to play the game of dollar for dollar tariffs just because the import size isn’t the same. Having said this, China can take this to another level by involving US services sector or by targeting the US companies which are operating over in China - something which has been hinted by Beijing.

Of course, it is not all doom and gloom for Donald Trump. Something which has worked in Trump’s favour is the US and Mexico trade deal. Market participants have openly cheered it, and Trump has branded this as the new United States- Mexico Trade agreement. Basically, NAFTA is out and the new terms is in. The new deal will last for 16 years and every six years there will be a review of this deal and Congress will also have a say in it. The current Aluminum and steel tariffs will stay as it but the new deal will not cap imports of light vehicles.

What the market participants are excited about is that the US and Mexico deal will bring Canada back on the table and a similar deal can be done with other country. On top of this, Trump could very well change his stance all together and may try to bend China's arm to adopt structural reforms. So the game of reducing the imbalances may not remain relevant any more for Donald Trump.

GOLD - The commodity continues to hold on to its upside pressure closing higher on Monday and opening the door for additional gain. On the downside, support comes in at the 1,200.00 level where a break will turn attention to the 1,190.00 level. Further down, a cut through here will open the door for a move lower towards the 1,180.00 level. Below here if seen could trigger further downside pressure targeting the 1,170.00 level. Conversely, resistance resides at the 1,220.00 level where a break will aim at the 1,230.00 level. A turn above there will expose the 1,240.00 level. Further out, resistance stands at the 1,250.00 level. All in all, GOLD looks to strengthen further higher.

The euro continues to test towards the 1.1700 level against the US dollar, with price currently capped by key trendline resistance from a well-defined triangle pattern. EURUSD buyers will likely test towards the 1.1750 if they breach key trendline resistance, while sellers may test towards the 1.1650 area if rejected from current levels.

The EURUSD pair is strongly bullish while trading above the 1.1700 level, key resistance is found at the 1.1750 and 1.1800 levels.

If the EURUSD pair fails at current levels, sellers will likely target the 1.1681 and 1.1650 support levels.

The US dollar is holding above the 111.00 level against the Japanese yen currency, although price continues to struggle to find a directional bias. Buyers need to hold price above the 111.39 level for further bullish advancement, while intraday sellers need to hold price below the 110.70 level to change the sentiment surrounding the USDJPY pair bias to bearish.

The USDJPY pair is only intraday bullish while trading above the 111.39 level, key resistance is found at the 111.50 and 112.05 levels.

If the USDJPY pair moves below the 110.70 level, sellers will likely test towards the 110.40 and 110.00 support levels.

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.16160
Open: 1.16776
% chg. over the last day: +0.33
Day's range: 1.16625 – 1.16970
52 wk range: 1.0571 – 1.2557

Yesterday, the US dollar continued to lose grounds relative to the single currency. The EUR/USD quotations growth exceeded 70 points. Support was provided by positive data on the business climate in Germany from IFO. At the moment, the trading instrument is testing the round level of 1.17000. The local support is 1.16450. In the near future, the further growth of the EUR/USD quotes is not excluded. We recommend opening positions from the key levels.

The news feed on 2018.08.28:

CB consumer confidence index in the USA at 17:00 (GMT+3:00).

Indicators point to the power of buyers: the price has fixed above 50 MA and 200 MA.

The MACD histogram is located in the positive zone, but below the signal line, which gives a weak signal to buy EUR/USD.

Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which indicates the bullish sentiment.

Trading recommendations

Support levels: 1.16450, 1.16000, 1.15350
Resistance levels: 1.17000, 1.17500

If the price fixes above the round level of 1.17000, further growth of the EUR/USD currency pair is expected. The movement is tending to 1.17400-1.17600.

Alternative option. If the price fixes below the support level of 1.16450, we recommend considering selling EUR/USD. The movement is tending to 1.16000.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.28370
Open: 1.28893
% chg. over the last day: +0.31
Day's range: 1.28615 – 1.29014
52 wk range: 1.2361 – 1.4345

Yesterday, the bullish sentiment prevailed on the GBP/USD currency pair. At the moment the quotes are moving in the flat. The key levels of support and resistance are: 1.28600 and 1.29000 respectively. The trading instrument is tending to recover. We recommend you to keep track of the latest information on Brexit. Positions must be opened from the key levels.

Today, the news feed on the UK economy is calm.

Indicators point to the power of buyers: the price has fixed above 50 MA and 200 MA.

The MACD histogram is in the positive zone, but below the signal line, which gives a weak signal to buy GBP/USD.

Stochastic Oscillator is located in the neutral zone, the %K line is above the %D line, which indicates the bullish sentiment.

Trading recommendations

Support levels: 1.28600, 1.28300, 1.28000
Resistance levels: 1.29000, 1.29350, 1.29500

If the price fixes above 1.29000, further growth of the GBP/USD currency pair is expected. The target level of movement is 1.29350-1.29500.

Alternative option. If the price fixes below 1.28600, we recommend to consider sales of GBP/USD. The target movement level is 1.28300-1.28000.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.30135
Open: 1.29669
% chg. over the last day: -0.36
Day's range: 1.29495 – 1.29823
52 wk range: 1.2059 – 1.3795

Yesterday, the USD/CAD currency pair held the offer zone of 1.30500-1.30650, which triggered aggressive sales. The trading instrument has updated local extremes. The United States and Mexico reached a new agreement on the future of the North American Free Trade Area (NAFTA). Currently, the quotes are consolidating in the range of 1.29500-1.29850. The USD/CAD currency pair is tending to decrease. Positions must be opened from the key levels.

The news feed on Canada's economy is calm.

Indicators point to the power of sellers: the price has fixed below 50 MA and 200 MA.

The MACD histogram is in the negative zone, but above the signal line, which gives a weak signal to sell USD/CAD.

Stochastic Oscillator is located in the neutral zone, the %K line is below the %D line, which indicates the bearish sentiment.

Trading recommendations

Support levels: 1.29500, 1.29000
Resistance levels: 1.29850, 1.30150, 1.30500

If the price fixes below 1.29500, the USD/CAD quotes are expected to decline further. The movement is tending to the round level of 1.29000.

Alternative option. If the price fixes above the resistance level of 1.29850, it is necessary to consider buying USD/CAD. The movement is tending to 1.30150-1.30300.

The USD/JPY currency pair:

Technical indicators of the currency pair:

Prev Open: 111.314
Open: 111.048
% chg. over the last day: -0.14
Day's range: 110.989 – 111.356
52 wk range: 104.56 – 114.74

There is an ambiguous technical pattern on the USD/JPY currency pair. The quotes are in a sideways trend. Local support and resistance levels are: 111.100 and 111.350, respectively. Investors expect additional drivers. We recommend you to pay attention to the news feed on the US economy.

The publication of important economic reports from Japan is not planned.

Indicators do not send accurate signals: the price has crossed 50 MA.

The MACD histogram is near the 0 mark.

Stochastic Oscillator is located in the neutral zone, the %K line is below the %D line, which indicates a fall in USD/JPY.

Trading recommendations

Support levels: 111.100, 110.750
Resistance levels: 111.350, 111.500

If the price fixes above the resistance level of 111.350, it is necessary to consider buying USD/JPY. The movement is tending to 111.500-111.700.

Alternative option. If the price fixes below the 111.100 level, the correction of the USD/JPY currency pair is expected. The movement is tending to 110.750-110.600.