Sample Category Title

Pivot (invalidation): 1.1640

Our preference Long positions above 1.1640 with targets at 1.1690 & 1.1720 in extension.

Alternative scenario Below 1.1640 look for further downside with 1.1610 & 1.1570 as targets.

Comment Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

Our pivot (invalidation) point stands at 6173.

Our preference As Long as 6173 is support look for 6687.

Alternative scenario The downside breakout of 6173 would call for 5976 and 5859.

Comment The RSI is above 70. It could mean either that the pair is in a lasting uptrend or just overbought and therefore bound to correct (look for bearish divergence in this case). The MACD is positive and below its signal line. The pair could retrace. Moreover, the pair is trading above both its 20 and 50 MAs (respectively at 6317 and 6059).

The AUD/USD monthly chart showed a strong bearish candle during last month of June, which fully closed below the support trend line and confirmed the breakout of the bear flag pattern.

The AUD/USD was building a long-term bear flag corrective pattern, which was most likely a wave 4 (dark red) pattern. The current breakout could indicate a bearish continuation within wave 5.

The weekly chart is building a neat downtrend channel. Price is now approaching a support trend line (green) and a bearish breakout is needed before price can confirm a continuation. The main target is the wizz level 5, which could cause a retracement.

The US dollar continues to struggle with key 111.00 level against the Japanese yen, after price was once again rejected from this key resistance area earlier today. The USDJPY pair now sits at a critical juncture, with a major medium-term technical breakout looming. A strong move above the 111.00 level supports further buying towards the 111.41 level and beyond, while a loss of the 110.46 level should encourage sellers to test the 110.00 support region.

The USDJPY pair is strongly bullish while trading above the 111.00 level, further upside towards the 111.41 and 112.20 levels seems possible.

If the USDJPY pair moves below the 110.49 level, key technical support is found at the 110.20 and 110.00 levels.

EURUSD has been trading slightly lower over today's trading session, after the pullback on the 20-day simple moving average (SMA) in the near-term. After the aggressive buying interest in the previous two days, the price is in the process of forming a triple bottom pattern with significant support the 1.1530 barrier and with neckline the 1.1840 resistance level.

Technically, in the daily timeframe, the momentum indicators seem to be in confusion for the next price movement. The RSI indicator is sloping downwards near its neutral threshold of 50, while the MACD oscillator is strengthening its positive momentum in the negative territory. Moreover, the %K line of the stochastic oscillator posted a bullish cross with the %D line in the neutral area.

In case of further gains and a jump above the 20-SMA of 1.1670 and the 38.2% Fibonacci retracement level of the upleg from 1.0340 to 1.2550, around 1.1710, as well as surpass the 40-SMA of 1.1715 at the time of writing, there is scope to test the aforementioned neckline of 1.1840. This is considered to be a strong resistance area which has been rejected a few times in the past. Moving above this barrier would see a completion of the pattern and would drive the price towards the 1.2000 psychological hurdle, which overlaps with the 200-day SMA.

Conversely, the next strong support to have in mind is the 1.1510 – 1.1530 area. If this support hurdle fails, then the focus would shift to the downside towards the 50.0% Fibonacci region of 1.1450. A break of this barrier would increase bearish pressure and bring about a resumption of the negative mode. From here, EURUSD would be on the path towards the 1.1300 handle.

To sum up, the world's most traded currency has been developing within a reversal pattern (triple bottom). Near-term weakness is expected to remain as long as price action takes place above 1.1530 and below the neckline (1.1840).

Daily Pivots: (S1) 143.96; (P) 144.33; (R1) 144.86; More...

Intraday bias in GBP/JPY remains neutral at this point. On the upside, break of 146.63 will target a test on 148.10 resistance first. Decisive break there will be a strong signal of near term reversal. Further rally would be seen to 149.99 resistance for confirmation. On the downside, break of 148.13 will extend the fall from 156.59 for 139.25/47 cluster support level.

In the bigger picture, no change in the view that decline from 156.59 is a corrective move. In case of another fall, strong support should be seen above 139.29 cluster support (50% retracement of 122.36 to 156.59 at 139.47) to contain downside and bring rebound. Meanwhile, break of 153.84 should confirm that the correction is completed and target 156.59 and above to resume the medium term up trend.

Political tension in Germany is dominating the headlines as we start a new week. The EU Immigration deal reached last week gave a short term boost to the risk on side but now that the dust has settled cracks have appeared in the German Coalition. The increase in the number of migrants being accepted by Germany is fracturing the government and the leader of the CSU, Seehofer, has offered to resign if his party splits the coalition.

On the Brexit front a record 75% of companies said they were pessimistic about the outcome of leaving the EU. The UK Government's Chief Brexit Negotiator, Oliver Robbins, has said that they have no chance of striking a bespoke trade deal with the EU. The trade war rumbles on as US President Trump targeted the EU in his latest speech, saying they were “as bad as China, only smaller”. He highlighted the importing of EU made cars and agricultural produce saying that the trade in these areas in one sided. Chinese equity markets are down and European futures are pointing to a lower open.

UK Gross Domestic Product (Q1) was out with a reading of 0.2% (QoQ) and 1.2% (YoY) against an expected headline number of 0.1% (QoQ) and 1.2% (YoY) from a reading of 0.1% (QoQ) and 1.2% (YoY) previously with a revision up to 1.3% (YoY). Mortgage Approvals (May) were 64.526K against an expected 62.200K from a previous 62.455K which was revised up to 62.941K. The consensus was for a reading generally in line with expectations after the previous release was down as the economic output slows. The data increased (QoQ) and has remained positive since 2012. GBPUSD moved higher from 1.31214 to 1.31830 after this data release.

Eurozone Consumer Price Index – Core (YoY) (Jun) was 1.0% against an expected 1.0% from the previous 1.0%. Consumer Price Index (YoY) (Jun) was 2.0% against an expected 2.0% from the previous 1.9%. The data exceeded expectations and matched the 2017 high which was the highest reading since 2013, showing that last month's beat had some substance behind it. The ECB will be taking note of this increase. EURUSD moved up from 1.16389 to 1.16593 after this data release.

US Personal Consumption Expenditures – Price Index (May) were 0.2% (MoM) and 2.3% (YoY) against an expected 0.2% (MoM) and 2.2% (YoY) from 0.2% (MoM) and 2.0% (YoY) previously. Core Personal Consumption Expenditures – Price Index (May) were 0.2% (MoM) and 2.0% (YoY) against an expected 0.1% (MoM) and 1.9% (YoY) from 0.2% (MoM) and 1.8% (YoY) previously. Personal Income (MoM) (May) was 0.4% against an expected 0.4% from 0.3% previously which was revised down to 0.2%. Personal Spending (May) was 0.4% against an expected 0.4% from 0.6% previously which was revised up to 0.5%. This data came in largely as expected with a slip lower in personal spending along with a lower revision. USDJPY fell from 110.737 to 110.602 as a result of these data points.

Canadian Gross Domestic Product (MoM) (Apr) was 0.1% against an expected 0.0% from 0.3% prior. This showed that growth has flat lined and is has managed to remain above the zero mark but is vulnerable to a drop in negative territory. USDCAD fell from a high of 1.32592 to 1.31360 after the release.

EURUSD is down -0.36% overnight, trading around 1.16395.
USDJPY is unchanged in the early session, trading at around 110.677
GBPUSD is down -0.22% this morning trading around 1.31738
Gold is down -0.25% in early morning trading at around $1,249.33
WTI is down -1.31% this morning, trading around $72.55

Daily Pivots: (S1) 128.13; (P) 128.80; (R1) 130.00; More....

Intraday bias in EUR/JPY remains neutral for the moment. On the upside, break of 130.33 will resume the rebound from 124.61. And by then, EUR/JPY should have also taken out near term falling channel decisively. That would be a strong sign of trend reversal. In that case, further rise should be seen to 133.47 resistance for confirmation. On the downside, break of 127.13 will bring retest of 124.61 low instead.

In the bigger picture, for now, EUR/JPY is holding above 124.08 key resistance turned support. Fall from 137.49 could be proven to be a correction. Decisive break of 133.47 resistance will confirm its completion and should extend the rise from 109.03 (2016 low) through 137.49 high. However, firm break of 124.08 will confirm trend reversal. That is, whole rise from 109.03 (2016 low) has completed at 137.49 already. In that case, deeper fall should be seen back to 61.8% retracement of 109.03 to 137.49 at 119.90 and below.

At 07:55 GMT, German Markit Manufacturing PMI (May) is expected to be 55.9 against the previous 55.9. This data peaked in January at 63.3, when it exceeded the 2011 high of 62.7 and has been falling lower since. The data is expected to remain in line with the previous month’s reading today. EUR traders will be closely following this data release.

At 08:00 GMT, Italian Unemployment (May) is expected to be 11.1% against the previous 11.2%. This data is more relevant given the spotlight on the Political crisis in Italy. The data is expected to show a softening from the previous number suggesting more job vacancies are being filled but it has exceeded expects on the last two readings. EUR assets may see an increase in volatility following this data release.

At 08:00 GMT, Eurozone Markit Manufacturing PMI (May) is expected to be 55 against the previous 55. This data set reached its peak in January at 60.6, when it exceeded the 2011 high of 62.7. The data has continued since the high was reached, indicating a slowing of the manufacturing industry. EUR crosses can be impacted by this data release.

At 08:30 GMT, UK Markit Manufacturing PMI (May) will be out with an expected headline number of 54.0 and 54.4 prior. The consensus is for the reading to soften further from the high created in December at 58.2. Slower output growth was a factor cited in the weakening number despite stronger new order inflows, strengthening job creation and demand. GBP pairs may see prices move following this data release.

At 09:00 GMT, Eurozone Unemployment Rate (Mar) is expected to be 8.5% against the previous 8.5%. The Unemployment Rate is expected to hold steady at the low of 8.5%, a level not seen since April 2009. It has remained at this level for the last three readings showing that the labour has stabilised somewhat. EUR crosses can be impacted by this data release.

At 14:00 GMT, US ISM Prices Paid (May) is due out with a consensus of 76.2 expected. The previous reading was 79.5 and this shows a slight drop in the cost of goods and services. ISM Manufacturing PMI (May) is also out at this time with an expectation for a number of 58.1 from 58.7 prior. This number is falling after reaching a high of 60.8 in February. USD crosses can be impacted by this data release.

At 18.00 GMT, New Zealand NZIER Business Confidence (QoQ) (Q1) data will be released with the previous reading coming in at -11%. This data is showing that Business Confidence in New Zealand has been negative for the last two quarters. NZD pairs may be moved by this data release.

Major data releases for this week:

On Tuesday at 04:30 GMT, RBA Interest Rate Decision and Rate Statement will be released.

On Thursday at 10:00 GMT, Bank of England Governor Mark Carney is due to speak in Newcastle.

At 18:00 GMT, US FOMC Minutes will be released.

On Friday at 12:30 GMT, US Nonfarm Payrolls and Average Hourly Earnings data will be released.

At 14:00 GMT, Canadian Unemployment data will be released.

Daily Pivots: (S1) 0.8825; (P) 0.8858; (R1) 0.8879; More...

Intraday bias in EUR/GBP remains neutral for consolidation below 0.8890 temporary top. Downside of retreat should be contained well above 0.8724 support to bring rise resumption. Above 0.8890 will target 0.8967 cluster resistance (50% retracement of 0.9305 to 0.8620 at 0.8963).

In the bigger picture, EUR/GBP is staying in long term consolidation pattern from 0.9304 (2016 high). Such consolidation pattern could extend further. Hence, in case of strong rally, we'd be cautious on strong resistance by 0.9304/5 to limit upside. Meanwhile, in another decline attempt, we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside.