Sample Category Title

USDCHF has recorded a stunning bullish rally over the last six weeks, creating a new one-year high of 1.0055. However, despite the gains, the pair is this week developing with weaker momentum than before and the technical indicators suggest that the market could ease a little bit in the short-term.

The RSI indicator is currently flattening in the overbought levels and if there is an exit from this region, this would provide a negative signal. In addition, the stochastic oscillator is falling above the 80 level, while the %K line posted a bearish cross with the %D line.

Should the market create losses, immediate support could be met at 0.9975. A significant leg below this area could send prices towards the 20-day simple moving average (SMA) which is currently fluctuating around 0.9811. Then, if the market fails to hold above this level, the next stop could be at the 0.9650 support barrier, which stands slightly below the 40-day SMA.

However, if the market manages to pick up speed again, the 1.01 level could offer nearby resistance. A potential upside violation of this area would open the way towards 1.0170, raising the likelihood for more advances.

Daily Pivots: (S1) 1.1887; (P) 1.1933 (R1) 1.1968; More....

EUR/USD's decline continues to as low as 1.1850 so far. Intraday bias remains on the downside for 261.8% projection of 1.2475 to 1.2214 from 1.2413 at 1.1730. It will be close to 1.1708 medium term fibonacci level. And some support could be seen around 1.1708/30 to bring rebound. Though, break of 1.1938 minor resistance is needed to be the first sign of short term bottoming. Otherwise, outlook will remain bearish in case of recovery.

In the bigger picture, current decline and firm break of 1.2154 support confirms rejection by 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. A medium term top should be in place at 1.2555 and deeper decline would be seen back to 38.2% retracement of 1.0339 to 1.2555 at 1.1708 first. With current downside acceleration, there is prospect of hitting 61.8% retracement at 1.1186 before completing the decline. But still, we'll need to look at the structure before deciding if it's a corrective or impulsive move.

Daily Pivots: (S1) 1.3522; (P) 1.3548; (R1) 1.3582; More...

Intraday bias in GBP/USD remains neutral for consolidation above 1.3485 temporary low. Stronger recovery cannot be ruled out. But upside should be limited by 38.2% retracement of 1.4376 to 1.3485 at 1.3825 to bring another decline. Break of 1.3485 will resume the fall from 1.4376 to 1.3448 fibonacci level next.

In the bigger picture, current development suggests that whole medium term rebound from 1.1936 (2016 low) has completed at 1.4376 already, with trend line broken, on bearish divergence condition in daily MACD, after rejection from 55 month EMA (now at 1.4223). Deeper decline should be seen to 38.2% retracement of 1.1936 (2016 low) to 1.4376 at 1.3448 first. Break will target 61.8% retracement at 1.2874 and below. Outlook will stay bearish as long as 55 day EMA (now at 1.3925) holds, even in case of strong rebound.

Daily Pivots: (S1) 0.9987; (P) 1.0022; (R1) 1.0060; More...

Outlook in USD/CHF remains unchanged. With 0.9982 minor support intact, intraday bias stays on the upside for further rally. Sustained trading above 1.0037 will pave the way to 1.0342 key resistance next. On the downside, though, below 0.9982 minor support will indicate short term topping. And, in that case, deeper retreat could be seen to 4 hour 55 EMA (now at 0.9939) and below before staging another rise.

In the bigger picture, medium term decline from 1.0342 has completed with three waves down to 0.9186. Rise from there is currently viewed as a leg inside the long term range pattern. Hence, while further rally would be seen, we'd be cautious on strong resistance from 1.0342 to limit upside. For now, further rise is expected as long as 0.9648 resistance turned support holds, even in case of pull back.

Daily Pivots: (S1) 108.76; (P) 109.07; (R1) 109.40; More...

USD/JPY drew support from near term rising channel again and recovers. But it's staying in range below 110.02 short term top. Intraday bias remains neutral and more corrective trading could be seen. Below 108.64 minor will bring deeper pull back. But downside should be contained by 38.2% retracement of 104.62 to 110.02 at 107.95 to bring rebound. On the upside, break of 110.02 will resume the rise from 104.62 to t 61.8% retracement of 114.73 to 104.62 at 110.86 next.

In the bigger picture, corrective decline from 118.65 (2016 high) has completed with three waves down to 104.62. Rise from 104.62 is possibly resuming the up trend from 98.97 (2016 low). This will be the preferred case as long as 55 day EMA (now at 107.95) holds. Decisive break of 114.73 resistance will confirm our view and target 118.65 and above. However, sustained break of 55 day EMA will dampen this bullish view and turn focus back to 104.62 low instead.

Daily Pivots: (S1) 1.2847; (P) 1.2872; (R1) 1.2907; More....

USD/CAD's rise from 1.2526 resumed by breaking 1.2913 and reached as high as 1.2984 so far. Intraday bias is back on the upside for retesting 1.3124 resistance next. On the downside, break of 1.2802 support is now needed to indicate near term topping. Otherwise, outlook will remain bullish in case of retreat.

In the bigger picture, current development suggests that rebound from 1.2061 has not completed yet. Focus is back on 38.2% retracement of 1.4689 to 1.2061 at 1.3065. Sustained trading above there will confirm medium term bullish reversal. That is, down trend from 1.4689 has completed at 1.2061 already. In that case, next target will be 61.8% retracement at 1.3685.

GOLD: The commodity continues to face its downside pressure on price hesitation.. On the downside, support comes in at the 1,310.00 level where a break will turn attention to the 1,300.00 level. Further down, a cut through here will open the door for a move lower towards the 1,290.00 level. Below here if seen could trigger further downside pressure targeting the 1,180.00 level. Conversely, resistance resides at the 1,325.00 level where a break will aim at the 1,330.00 level. A turn above there will expose the 1,340.00 level. Further out, resistance stands at the 1,350.00 level. All in all, GOLD looks to consolidate further.

Oil Pares Gains Ahead of Iran Decision

US futures are tracking their European counterparts lower ahead of the open on Tuesday, as traders await an announcement from US President Donald Trump on Iran.

Trump is widely expected to announce that the US is withdrawing from the Iran nuclear deal later on today, despite the best efforts from his European partners to convince him to work with them to improve it. Should the US withdraw, investors will be keen to know what sanctions will be imposed as a result and what impact that will have on the country, most notably its oil output.

Oil prices are paring gains early in the European session after having peaked on Monday in response to Trump’s statement. WTI crude prices surpassed $70 a barrel for the first time since November 2014 on Monday and how they respond later will likely depend on how restrictive future sanctions – assuming there are any – are on the country’s ability to export.

It will be interesting to see what Trump’s approach will have on risk appetite, with US equities already struggling to generate much upside momentum. Some will naturally point to the progress being made in Korea as evidence that a more hard-line approach is effective, although every situation is different and so doing so again may not yield the same result.

DAX Slips on Concerns over Possible ECB Stimulus Extension

US indices continue to look vulnerable having repeatedly failed to surpass recent peaks. While the Dow has managed to find support just above 23,000 over the last few months, I’m not sure it can take many more challenges and a break of this could be the catalyst for another sharp decline in equities.

While the week is looking a little quiet on the economic events side – with the Bank of England decision on Thursday and US inflation data the highlights – we do still have some first quarter earnings releases, with 45 S&P 500 companies reporting. It’s been a very strong earnings season so far, although this has provided little comfort for investors that appear to have temporarily lost faith in stock markets.

The Canadian dollar has posted considerable losses in the Tuesday session. USD/CAD is trading at 1.2961, up 0.62% on the day. On the release front, Canadian Housing Starts dropped to 214 thousand, shy of the estimate of 218 thousand. The US will release JOLTS Jobs Openings and Federal Reserve Chair Jerome Powell will speak at an event in Zurich. Later in the day, US President Trump will make a major announcement, as he decides whether the US will leave the nuclear agreement with Iran. On Wednesday, the US releases PPI reports and Canada publishes Building Permits.

The NAFTA negotiations continue this week, as senior officials from Canada, the US and Mexico are meeting in Washington to try and hammer out a new trilateral trade agreement. However, progress has been slower than hoped for, and a major stumbling block remains a US demand to raise the North American content of automobiles in order to avoid tariffs. Mexico is suspicious that the US is pushing a deal that will bring manufacturing jobs from Mexico back to the US. There are serious time constraints on reaching an agreement. Mexico is holding a general election in early July, and US President Trump wants to wrap up a deal before mid-term elections in November.

The Federal Reserve’s newest regional Fed president, Thomas Barkin, delivered a major speech on Monday, and his tone was decidedly upbeat. Barkin said that the economy is “remarkably strong: above-trend growth, low unemployment, inflation at target”. Barkin added that although the labor market is strong, it is not causing pressure on wages, but low unemployment should lead to an increase in inflationary pressures. As for upcoming rate increases, Barkin was careful to remain mum on how many rate hikes he expects this year. The Fed raised rates in March by a quarter-point and continues to forecast two additional increases this year. However, some policymakers are calling for three more hikes, given the strong health of the US economy.

Daily Pivots: (S1) 0.7492; (P) 0.7517; (R1) 0.7542; More...

AUD/USD's decline resumed by taking out 0.7472 support and reaches as low as 0.7446 so far. Intraday bias is back on the downside. Sustained trading below 0.7500 will indicate medium term reversal and target next support at 0.7328. On the upside, break of 0.7559 resistance is needed to indicate short term bottoming. Otherwise, outlook will stay bearish in case of recovery.

In the bigger picture, medium term rebound from 0.6826 is seen as a corrective move. Decisive break of 0.7500 key support will suggest that such correction is completed. In that case, deeper decline would be seen back to retest 0.6826 low. In case of another rise, we'd expect strong resistance from 38.2% retracement of 1.1079 to 0.6826 at 0.8451 to limit upside to bring long term down trend resumption eventually.