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Daily Pivots: (S1) 1.1519; (P) 1.1539; (R1) 1.1551; More...

EUR/CHF weakens mildly after hitting 4 hour 55 EMA. But it's held well above 1.1489 temporary low. Intraday bias remains neutral and more consolidation could be seen. In case of another recovery, though, upside should be limited by 1.1603 minor resistance to bring fall resumption. We're holding on to the view that corrective rebound from 1.1366 has completed at 1.1713. Break of 1.1478 support will confirm and target 1.1366 low and below. However, break of 1.1603 will turn bias back to the upside for 1.1713 resistance instead.

In the bigger picture, 1.2004 is seen as a medium term top with bearish divergence condition in daily and weekly MACD. 1.2000 is also an important resistance level. Hence, the corrective pattern from 1.2004 is expected to extend for a while before completion. We're not anticipating a break of 1.2004 in near term. Another decline cannot be ruled out yet. But in that case, strong support should be seen at 1.1198 (2016 high), 61.8% retracement of 1.0629 to 1.2004 at 1.1154 to contain downside.

Some highlights of ECB monthly bulletin

External environment:

• Global survey indicators continue to signal a steady growth momentum for the second quarter of 2018.
• At the same time downside risks to the global economy have intensified, amid actions and threats regarding trade tariff increases by the United States and possible retaliation by the affected countries.
• Global financial conditions remain supportive overall, but have tightened somewhat for emerging market economies.
• Global trade indicators recorded a loss in momentum.
• The outlook for economic activity in the United States remains solid, but concerns about tariffs have arisen among firms.
• In Japan, the economy is expected to recover from a mild contraction in the first quarter of 2018, but the outlook is surrounded by growing uncertainty.
• In the United Kingdom, the weakening in GDP growth over the first quarter of 2018 is considered to be temporary.
• In China, GDP growth moderated slightly in the second quarter of 2018 while financial markets recorded downward pressures.

Economic activity

• Although incoming data point to a loss in momentum following the very strong growth seen in 2017, the solid and broad-based growth pattern in the euro area is expected to continue.
• Employment growth remained robust in the first quarter of the year.
• Looking ahead, short-term indicators point to continued strength in the labour market in the coming quarters.
• Rising household incomes supported growth in private consumption.
• Gains in employment are expected to continue to support robust growth in private consumption.
• While investment growth eased in the first quarter of 2018, short-term indicators continue to point to robust growth.
• Investment is expected to continue to grow at a robust pace. Euro area trade growth remained moderate at the beginning of the second quarter of 2018.
• Overall, the latest economic indicators suggest ongoing solid growth.
• This easing reflects a pull-back from the high pace of growth observed last year and is related mainly to a weakening of external trade, compounded by an increase in uncertainty and some temporary and supply-side factors at both the domestic and the global level.
• The risks surrounding the euro area growth outlook can still be assessed as broadly balanced.

Prices and costs

• Euro area annual HICP inflation rose to 2.0% in June, up from 1.9% in May
• Measures of underlying inflation have remained generally muted but stand above earlier lows.
• Price pressures for HICP non-energy industrial goods remained robust, with signs of more upward pressure visible in the early stages of the pricing chain.
• Recent wage growth data points to a continued upward shift from a trough in the second quarter of 2016.
• Both market and survey-based measures of longer-term inflation expectations have remained broadly unchanged
• Residential property prices in the euro area continued to accelerate further in the first quarter of 2018.

Full report here.

Pivot (invalidation): 0.7415

Our preference Long positions above 0.7415 with targets at 0.7465 & 0.7490 in extension.

Alternative scenario Below 0.7415 look for further downside with 0.7400 & 0.7380 as targets.

Comment The RSI calls for a new upleg.

Pivot (invalidation): 1.3030

Our preference Short positions below 1.3030 with targets at 1.3000 & 1.2975 in extension.

Alternative scenario Above 1.3030 look for further upside with 1.3075 & 1.3095 as targets.

Comment A break below 1.3000 would trigger a drop towards 1.2975.

Pivot (invalidation): 0.9945

Our preference Short positions below 0.9945 with targets at 0.9915 & 0.9900 in extension.

Alternative scenario Above 0.9945 look for further upside with 0.9970 & 0.9985 as targets.

Comment As Long as the resistance at 0.9945 is not surpassed, the risk of the break below 0.9915 remains high.

Pivot (invalidation): 111.00

Our preference Short positions below 111.00 with targets at 110.70 & 110.45 in extension.

Alternative scenario Above 111.00 look for further upside with 111.20 & 111.45 as targets.

Comment A break below 110.70 would trigger a drop towards 110.45.

Pivot (invalidation): 1.2900

Our preference Short positions below 1.2900 with targets at 1.2850 & 1.2820 in extension.

Alternative scenario Above 1.2900 look for further upside with 1.2960 & 1.2990 as targets.

Comment The upward potential is likely to be limited by the resistance at 1.2900.

Pivot (invalidation): 1.1590

Our preference Long positions above 1.1590 with targets at 1.1630 & 1.1655 in extension.

Alternative scenario Below 1.1590 look for further downside with 1.1570 & 1.1550 as targets.

Comment The RSI calls for a new upleg.

Pivot (invalidation): 66.30

Our preference Long positions above 66.30 with targets at 67.45 & 68.00 in extension.

Alternative scenario Below 66.30 look for further downside with 65.75 & 65.35 as targets.

Comment The RSI has broken up its 30 level. Crude Oil rebounds after hitting the July 18 low at 66.3.

Pivot (invalidation): 15.3500

Our preference Long positions above 15.3500 with targets at 15.4800 & 15.5300 in extension.

Alternative scenario Below 15.3500 look for further downside with 15.3000 & 15.2500 as targets.

Comment The RSI shows upside momentum.