Sample Category Title

Daily Pivots: (S1) 1.3133; (P) 1.3196; (R1) 1.3232; More...

USD/CAD lost upside momentum again after hitting 1.3258 and intraday bias is turned neutral. We'd holding on to the bullish view that pull back from 1.3385 has completed at 1.3063 already. And another rally should be seen. On the upside, above 1.3258 will target a test on 1.3385 high first. Break there will resume whole rally from 1.2061 for 1.3685 fibonacci level. In case of another fall, we'd still expect strong support from 1.3067 resistance turned support to contain downside.

In the bigger picture, as long as channel support (now at 1.2870) holds, we'll holding to the bullish view. That is, fall from 1.4689 (2015 high) has completed at 1.2061, ahead of 50% retracement of 0.9406 (2011 low) to 1.4689 (2015 high) at 1.2048. Further rally should be seen for 61.8% retracement of 1.4689 to 1.2061 at 1.3685 and above. However, sustained break of the channel support will argue that rise from 1.2061 has completed and will bring deeper fall to 1.2526 support to confirm.

General Trend:

• Asian equity markets trade mixed, in line with US session
• Shanghai Composite moves between gains and losses after 4 straight declines
• Australia June job adds were the most since Nov 2017, rose for 21st straight month; Participation rate also rose
• Japan June exports to the US drop for the first time in 17-months
• BoJ trims daily purchases of longer-term JGBs
• USD/CNY fixed above 6.70, 6th straight weaker fix for the yuan
• There is speculation that the PBoC might conduct another medium-term lending facility (MLF) in July
• Chinese banks purchased less foreign currency in June amid recent yuan weakness; Banks were more willing to purchase yuan versus foreign currencies in H1, according to fx regulator
• Indonesia Central Bank expected to leave rates unchanged at upcoming rate decision
• Upcoming earnings from Taiwan Semi in focus
• US and European companies which may report earnings on Thursday include Microsoft, Philip Morris, Nucor Publicis, Rec Silicon, SAP, The Blackstone Group, Unilever, Union Pacific and Volvo.
• US Commerce Dept is expected to hold hearing on Section 232 auto probe on Thursday

Headlines/Economic Data

Japan

• Nikkei 225 opened +0.3%
• TOPIX Retail Trade index -0.9%, Real Estate -0.7%; Marine Transportation +0.9%, Iron & Steel +0.8%, Securities +0.6%
• Japanese megabanks outperform
• Asahi Kasei [3407.JP] speculated to plan to pay ~¥100B to acquire Sage Auto Interiors (Japanese Press)
• (JP) Some Japan oil companies said to be considering halting imports of oil from Iran - Nikkei
• (JP) JAPAN JUN TRADE BALANCE: ¥721B V ¥531.2BE; ADJ TRADE BALANCE: ¥66.2B V ¥115.0BE
• (JP) BoJ announcement related to daily bond buying operation: Cuts buying of 10-25 yr and over 25-yr JGBs

Korea

• Kospi opened +0.4%
• (RU) Russia Envoy to North Korea: Possible to denuclearize NK in a year's time
• (KR) South Korea seizes ship carrying coal from North Korea - Korean press
• (KR) South Korea and Canada have agreed to jointly deal with the United States' move to levy tariffs on foreign autos and put on a united front against the rising protectionism in global trade - Korean press

China/Hong Kong

• Hang Seng opened +0.5%, Shanghai Composite +0.1%
• Hang Seng Consumer goods index -1.3%, Industrial Goods -0.7%, Info Tech -0.5% Services -0.4%; Financials +0.3%
• (CN) China planning to raise certain salaries and increase its middle-class population - Chinese Press
• (CN) China PBoC said to consider the introduction of incentives aimed at improving the liquidity of commercial banks and helping banks increase lending and bond investments - Japanese Press
• (US) White House Economic Adviser Kudlow: believe China Pres Xi is personally holding up a trade deal, talks are stalled
• (CN) China PBoC set yuan reference rate at 6.7066 v 6.6914 prior (6th consecutive weaker setting)
• (CN) China PBoC Open Market Operation (OMO): Injects CNY100B in 7-day and 14-day reverse repos v CNY80B prior; Net: CNY70B injects v CNY80B injection prior
• (CN) China govt survey found that China's leading industrial enterprises are almost completely reliant on imports for top-end computer chips and crucial components – SCMP
• (CN) China FX Regular SAFE: June China Banks bought net Forex CNY13.1B ($2.0B v $19.4B m/m); China companies are less willing to hold forex in H1 as they were more willing to purchase yuan versus foreign currencies
• (CN) China PBOC gives a window guidance for commercial banks that it would make available additional funding via its medium-term lending facility (MLF) in a bid to support lending and bond investment
• (CN) China to adopt measures to curb online finance violations - China news

Australia/New Zealand

• ASX 200 opened 0.0%
• ASX 200 Financials index +0.7%, Resources +0.5%; Utilities -0.9%, Telecom -0.2%
• Santos, STO.AU Reports Q2 production 14.2 MMBOE v 14.7 MMBOE y/y; Sales 19.1 MMBOE v 21.5 MMBOE y/y
• Woodside, WPL.AU Reports Q2 production 22.1 MMBOE v 20.7 MMBOE y/y; Sales volumes 21.0 MBOE v 20.3 MMBOE y/y
• (AU) AUSTRALIA JUN EMPLOYMENT CHANGE: +50.9K V +16.5KE (21ST STRAIGHT MONTH OF GAINS); UNEMPLOYMENT RATE: 5.4% V 5.4%E
• (AU) Australia Jun RBA Govt FX Transactions (A$): -1.84B v -672M prior
• (NZ) New Zealand sells NZ$150M v NZ$150M indicated in April 2.75% 2037 bonds, avg yield 3.1730% v 3.2631% prior, bid to cover 4.57x v 1.2x prior
• CIMIC, [+13.5%], CIM.AU Reports H1 (A$) Net 363M v 322.9M y/y; EBITDA 794.3M v 713.3M y/y; Rev 6.9B v 6.3B y/y

North America

• US equity markets ended mixed: Dow +0.3%, S&P500 +0.2%, Nasdaq flat, Russell 2000 +0.3%
• S&P500 Financials +1.6%, Industrials +1.1%; Consumer Staples -0.7%
• (US) Fed Chair Powell: reduction of Fed balance sheet will take 3 or 4 years; goal is to return it to mostly Treasury holdings; Not made a decision on rate corridor or floor but will come back to that discussion soon - House committee testimony
• (US) Pres Trump: I hold Pres Putin personally responsible for election meddling; do not want to get into whether Putin is lying or not - CBS News interview
• (MX) Mexico Econ Min Guajardo: moving from NAFTA to bilateral talks would be difficult, like starting from zero; still want a 3-party NAFTA deal
• (US) DOE CRUDE: +5.8M V -3.5ME; GASOLINE: -3.2M V -0.5ME; DISTILLATE: -0.3M V +1ME; US production reaches 11M bpd for first time in history

Europe

• (JP) Japan Chief Cabinet Sec Suga: Welcomes the UK interest in joining the TPP
• (UK) EU negotiators reportedly are discussing Ariticle 50 extension. The UK invoked Article 50 of the Treaty on European Union on 29 March 2017, begging the United Kingdom's withdrawal from the European Union (Brexit). The UK govt has repeatedly said it will leave the EU on March 29th, 2019

Levels as of 01:30ET

• Hang Seng -0.1%; Shanghai Composite -0.6%; Kospi -0.5%; Nikkei 225 -0.0%; ASX 200 +0.4%
• Equity Futures: S&P500 -0.0%; Nasdaq100 +0.0%, Dax +0.1%; FTSE100 +0.1%
• EUR 1.1637-1.1657; JPY 112.65.-112.91; AUD 0.7394-0.7441;NZD 0.6781-0.6805
• Aug Gold -0.3% at $1,223/oz; Sept Crude Oil -0.1% at $67.69/brl; Sept Copper -0.4% at $2.75/lb

Pivot (invalidation): 67.95

Our preference Long positions above 67.95 with targets at 69.25 & 69.95 in extension.

Alternative scenario Below 67.95 look for further downside with 67.05 & 66.40 as targets.

Comment The RSI is mixed to bullish.

Pivot (invalidation): 15.3800

Our preference Long positions above 15.3800 with targets at 15.6100 & 15.7300 in extension.

Alternative scenario Below 15.3800 look for further downside with 15.2600 & 15.1800 as targets.

Comment The RSI is mixed with a bullish bias.

Pivot (invalidation): 1221.50

Our preference Long positions above 1221.50 with targets at 1229.00 & 1234.50 in extension.

Alternative scenario Below 1221.50 look for further downside with 1217.00 & 1214.00 as targets.

Comment The next resistances are at 1229.00 and then at 1234.50.

Our pivot (invalidation) point stands at 1.1615.

Our preference Rebound towards 1.1672.

Alternative scenario Below 1.1615, expect 1.1593 and 1.1580.

Comment The RSI is below 50. The MACD is above its signal line and negative. The configuration is mixed. Moreover, the pair is trading above its 20 MA (1.1632) but under its 50 MA (1.1638).

Pivot (invalidation): 0.8915

Our preference Short positions below 0.8915 with targets at 0.8890 & 0.8870 in extension.

Alternative scenario Above 0.8915 look for further upside with 0.8935 & 0.8950 as targets.

Comment The upward potential is likely to be limited by the resistance at 0.8915.

Pivot (invalidation): 0.7390

Our preference Long positions above 0.7390 with targets at 0.7440 & 0.7465 in extension.

Alternative scenario Below 0.7390 look for further downside with 0.7375 & 0.7355 as targets.

Comment The RSI is bullish and calls for further upside.

Pivot (invalidation): 1.3190

Our preference Short positions below 1.3190 with targets at 1.3145 & 1.3125 in extension.

Alternative scenario Above 1.3190 look for further upside with 1.3210 & 1.3230 as targets.

Comment The break below 1.3190 is a negative signal that has opened a path to 1.3145.

Pivot (invalidation): 1.0005

Our preference Short positions below 1.0005 with targets at 0.9975 & 0.9955 in extension.

Alternative scenario Above 1.0005 look for further upside with 1.0035 & 1.0065 as targets.

Comment A break below 0.9975 would trigger a drop towards 0.9955.