Sample Category Title

Pivot (invalidation): 1.1595

Our preference Short positions below 1.1595 with targets at 1.1540 & 1.1525 in extension.

Alternative scenario Above 1.1595 look for further upside with 1.1620 & 1.1645 as targets.

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

Our pivot (invalidation) point is at 6246.

Our preference under pressure below 6246.

Alternative scenario The upside breakout of 6246, would call for 6416 and 6518.

Comment The RSI is below its neutrality area at 50. The MACD is positive and below its signal line. The MACD must penetrate its zero line to expect further downside. Moreover, the pair stands below its 20 and 50 MAs (respectively at 6126 and 6102). Finally, the Bitcoin / Dollar is trading below its lower Bollinger band (standing at 6102).

The EUR/USD showed strong bearish momentum yesterday which could indicate a continuation of the downtrend if price manages to break below the previous bottom. In that case, price could be aiming at the weekly 50% Fib at 1.1450. A bullish bounce at support however could also confirm the current ABC (pink) wave pattern.

The EUR/USD has either completed a bearish ABC (purple) pattern or is building a bearish 123 (red) wave count. Price is probably a wave 3 if price manages to break below the support trend line (blue) whereas an ABC pattern is more likely if price breaks the resistance trend lines.

The GBP/USDis testing the bottom of the downtrend channel (green). A bearish breakout could indicate a bearish continuation whereas a bullish bounce could indicate a larger ABC correction.

The GBP/USD downtrend seems to be losing energy when taking into account the mild angle of the channel, which also created divergence between the bottoms and is making an ABC correction more likely at the moment. However, a bearish breakout changes the equation and indicates more downside.

The GBP/USD has either completed a bearish ABC (blue) within wave B (purple) or price is in an impulsive wave 3 (red). For a wave 3 to be valid, price needs to break below the support trend line (green).

The USD/JPY is building a bullish trend channel but price needs to break above the key resistance trend line (red) before a larger uptrend continuation can take place.

The USD/JPY could be in a wave Y (pink) correction as long as price stays above the support trend lines. A bearish breakout could indicate an expansion of the wave X (pink).

The USD/JPY completed a bullish ABC (blue) zigzag correction but a continuation is likely at the moment, which could be explained by an expanded WXY (purple) correction.

General Trend:

• Asian equity markets trade mixed after US declines
• Equities in China move between gains and losses
• Shanghai and Hong Kong property shares lag amid recent declines
• China property market remains in focus, government announced ‘special campaign’ against speculation
• China Commerce Ministry reiterates concerns related to potential US investment curbs
• Chinese yuan continues to weaken, seen as a move against pending trade war, some speculation now that this could turn into a currency war
• China announced crackdown related to sales of foreign bonds by corporates
• Japan May retail sales decline more than expected
• Reserve Bank of New Zealand (RBNZ) reiterated it was positioned to manage rate either up or down ; More analysts push back rate hike calls
• Australia government’s plan to cut corporate taxes derailed by political opposition

Headlines/Economic Data

Japan

• Nikkei 225 opened -0.3%
• TOPIX Retail Trade index -1.5%, Info & Communications -1.3%, Real Estate -1.1%, Iron & Steel -0.7%, Securities -0.6%; Marine Transportation +0.7%
• (JP) JAPAN PRELIM MAY RETAIL SALES M/M: -1.7% V -0.8%E
• JP) Japan Investors Net Buying of Foreign Bonds: +¥27.4B v +¥1.49T prior: Foreign Net Buying of Japan Stocks: -¥483.5B ¥ v -¥40.8B prior
• (JP) Japan MoF sells ¥2.1T v ¥2.1T indicated in 0.10% (prior 0.10%) 2-yr JGBs; avg yield -0.128% v -0.147% prior; bid to cover 4.88x v 4.91x prior
• 4502.JP Shareholders defeated proposal which was opposed to Shire deal

Korea

• Kospi opened -0.6%
• (KR) North and South Korea said to plan to hold talks later today on connecting border roads - South Korean Press
• (KR) South Korea Fin Min Kim: Weakness in Korean Won currency (KRW) in line with global trend; Closely watching FX markets
• (KR) South Korea May Department Store Sales y/y: +1.8% v -0.2% prior; Discount Store Sales y/y: -4.5% v -4.5% prior

China/Hong Kong

• Hang Seng opened 0.0%, Shanghai Composite -0.5%
• Hang Seng Energy index +2.2%, Info Tech +1.1%, Industrial Goods -0.9%, Financials +0.6%; Services -0.9%, Utilities -0.6%, Property/Construction -0.2%
• (HK) There is speculation that Hong Kong may announce reduction in subsidized housing price - HK Media
• (CN) China NDRC said to consider banning the sale of 1-year US dollar denominated bonds - US financial press
• (CN) China May Swift Global Payments (CNY): 1.88% v 1.66% prior
• (CN) China PBoC Open Market Operation (OMO): injects CNY80B v CNY60B injected in 7-day reverse repos prior: Net: drain CNY100B v CNY150B drain prior
• (CN) China PBoC sets yuan reference rate at 6.5960 v 6.5569 prior (weakest setting since late Dec 2017)
• (US) Official: President Trump seeks to maintain investment environment open in the US, to use CFIUS to respond to China technology theft - closed door conference call (in-line with recent speculation)
• (CN) China Commerce Ministry (MOFCOM): US planned curbs on technology exports to China may 'backfire'
• (CN) China implements home purchase restrictions on 3 cities this week to stop companies from buying residential property, and experts predict other cities will adopt similar measures soon - China Daily
• (CN) China Ministry of Finance: China will adjust tariffs on an array of imports from a number of Asia-Pacific countries , effective July 1st
• (CN) China Housing Ministry: to start special campaign against property market violations; to crack down on property irregularities in 30 major cities from now to end of year
• (CN) China state think tank CASS researcher Zhang: PBOC overall wants a weaker CNY currency (Yuan) in response to trade concerns

Australia/New Zealand

• ASX 200 opened +0.1%
• ASX 200 Energy index +1.6%, Resources +1.4%, Telecom +0.5%, Financials +0.4%; Consumer Discretionary -1.2%, REIT -1.2%
• (NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE (OCR) UNCHANGED AT 1.75%, AS EXPECTED
• STO.AU Board approved new dividend policy, seeks to pay dividend at target range of 10-30% of free cash flow per year ; to also consider additional returns to holders
• BHP.AU CEO Mackenzie: Portfolio will be about right following US shale asset sale; will review Nickel West following the US shale disposal and will focus on internal options to grow the business – AFR
• (AU) Australia May Job Vacancies: 5.7% v 5.4% prior

Other Asia

• Indian Rupee (INR) trades at fresh record low, bond yields rise
• Indonesian assets decline ahead of Thursday-Friday central bank meeting

North America

• US equity markets ended lower: Dow -0.7%, S&P500 -0.9%, Nasdaq -1.5%, Russell 2000 -1.7%
• S&P500 Technology -1.4%, Financials -1.3%, Consumer Discretionary -1.3%
• (US) DOE CRUDE: -9.9M V -3ME
• TSLA Panasonic Exec said to note situation related to Tesla Model 3 has improved which has led to 'occasional' battery shortages - financial press
• CMG Exec: pleased with underlying sales trends we are seeing as sales trends from Q1 have continued into Q2; We expect to close 55-65 restaurants; to close half within next 30 days, rest under next several quarters; sees $50-60M in charges to hit in Q2
• AMZN Announces new offering that helps entrepreneurs build their own companies delivering Amazon packages

Europe

• (DE) Germany Interior Minister Seehofer: 'Very optimistic' that officials can solve coalition dispute over migration
• (GR) Greece said to be willing to take asylum seekers under a deal with Merkel - FT

Levels as of 01:30ET

• Hang Seng +0.3%; Shanghai Composite -0.0%; Kospi -1.2%; Nikkei225 +0.0%; ASX 200 +0.3%
• Equity Futures: S&P500 +0.3%; Nasdaq100 +0.3%, Dax +0.3%; FTSE100 +0.2%
• EUR 1.1553-1.1573; JPY 109.97-110.35; AUD 0.7335-0.7362;NZD 0.6769-0.6811
• Aug Gold -0.2% at $1,253/oz; Aug Crude Oil -0.4% at $72.50/brl; Sept Copper 0.0% at $2.99/lb

For the 24 hours to 23:00 GMT, the EUR declined 0.77% against the USD and closed at 1.1560

The US dollar gained ground against the basket of currencies, after the US President Donald Trump called for softer restrictions on Chinese investments.

In the US, the flash durable goods orders slid 0.6% on a monthly basis, compared to a revised drop of 1.0% in the prior month. Market participants had expected durable goods orders to fall 1.0%. Moreover, the nation's advance goods trade deficit narrowed to $64.8 billion in May, while markets had anticipated a trade deficit of $69.0 billion. In the previous month, the nation had recorded a revised trade deficit of $67.3 billion.

Further, the US MBA mortgage applications declined by 4.9% in the week ended 22 June, marking its highest fall in 4-months, after registering a rise of 5.1% in the previous week. Pending home sales unexpectedly eased 0.5% on a monthly basis in May, defying market expectations for a rise of 0.5%. In the prior month, pending home sales fell 1.3%.

In the Asian session, at GMT0300, the pair is trading at 1.1571, with the EUR trading 0.10% higher against the USD from yesterday's close.

The pair is expected to find support at 1.1517, and a fall through could take it to the next support level of 1.1464. The pair is expected to find its first resistance at 1.1648, and a rise through could take it to the next resistance level of 1.1726.

Moving ahead, investors will closely monitor the Euro-zone's consumer confidence, economic confidence and business climate indicator, all for June, due to be released in a few hours. Also, the US initial jobless claims and annualised 1Q GDP, will garner significant amount of investor attention.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the GBP declined 0.80% against the USD and closed at 1.3118.

The Bank of England (BOE), in its Financial Stability Report (FSR), cautioned over the risks posed by Brexit to the UK financial system. Meanwhile, the BoE Governor, Mark Carney, warned that rising protectionism could hurt global growth. Further, he stated that the British government had committed to a temporary permissions regime from March 2019 onwards, however, the EU has not done enough to ensure financial stability in case of hard Brexit scenario.

Separately, UK’s Nationwide’s seasonally adjusted house prices rebounded by 0.5% on a monthly basis in June, compared to a fall of 0.2% in the prior month. Markets had envisaged the house prices to rise 0.2%.

In the Asian session, at GMT0300, the pair is trading at 1.3119, with the GBP trading a tad higher against the USD from yesterday’s close.

The pair is expected to find support at 1.3072, and a fall through could take it to the next support level of 1.3025. The pair is expected to find its first resistance at 1.3200, and a rise through could take it to the next resistance level of 1.3281.

Looking forward, traders will keep an eye on UK’s Gfk consumer confidence and Lloyds business barometer, both for June, scheduled to release overnight.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD rose 0.16% against the JPY and closed at 110.24.

In the Asian session, at GMT0300, the pair is trading at 110.17, with the USD trading 0.06% lower against the JPY from yesterday's close.

Overnight data showed that Japan's retail trade retreated by 1.7% on a monthly basis in May, declining at its fastest pace in 21 months and higher than market expectations for a fall of 0.8%. In the previous month, retail trade had climbed 1.4%. Additionally, the nation's large retailer's sales fell 2.0% on a monthly basis in May. In the prior month, large retailer's sales had declined of 0.8%.

The pair is expected to find support at 109.74, and a fall through could take it to the next support level of 109.32. The pair is expected to find its first resistance at 110.54, and a rise through could take it to the next resistance level of 110.92.

Going forward, traders would await Japan's flash industrial production and jobless rate, both for May, set to release overnight.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the USD rose 0.61% against the CHF and closed at 0.9969.

The Swiss National Bank (SNB), in its quarterly bulletin, signalled that the bank would remain active in the foreign exchange markets as necessary and added that the new conditional inflation forecast for the coming quarters is slightly higher than it was in March 2018.

In the Asian session, at GMT0300, the pair is trading at 0.9961, with the USD trading 0.08% lower against the CHF from yesterday’s close.

The pair is expected to find support at 0.9910, and a fall through could take it to the next support level of 0.9859. The pair is expected to find its first resistance at 0.9994, and a rise through could take it to the next resistance level of 1.0027.

In absence of macroeconomic releases in Switzerland today, investors would focus on global macroeconomic events for further clues.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.