Sample Category Title

EUR/USD - 1.1969

Original strategy  :

Sold at 1.1970, Target: 1.1870, Stop: 1.2005

Position : - Short at 1.1970

Target :  - 1.1870

Stop : - 1.2005

New strategy  :

Hold short entered at 1.1970, Target: 1.1870, Stop: 1.2005

Position : - Short at 1.1970

Target :  - 1.1870

Stop : - 1.2005

As the single currency found good support at 1.1861 and has staged a strong rebound, suggesting consolidation above this level would be seen, however, as long as 1.2005 holds, mild downside bias remains for another decline, below 1.1915-20 would bring test of 1.1885-90 but break of latter level is needed to signal the rebound from 1.1861 has ended, bring another fall to this level, then retest of previous support at 1.1838 which is likely to hold on first testing.

In view of this, we are holding on to our short position entered at 1.1970. Above 1.2000 would dampen our bearishness and risk test of this week’s high at 1.2035 but only break there would shift risk back to upside and extend the rebound from 1.1838 to 1.2060-70 first.

USD/JPY - 112.13

Original strategy  :

Bought at 111.70, Target: 112.70, Stop: 111.60

Position :  - Long at 111.70

Target :  - 112.70

Stop : - 111.60

New strategy  :

Hold long entered at 111.70, Target: 112.70, Stop: 111.60

Position :  - Long at 111.70

Target :  - 112.70

Stop : - 111.60

Although the greenback retreated after rising to 112.72 yesterday and consolidation below said resistance would be seen initially, reckon 111.65 would contained downside and bring another rise later towards said resistance but only break there would confirm recent upmove has resumed and extend further gain to 112.90-00, then towards 113.25-30 (1.236 times projection of 107.32-111.04 measuring from 109.55), having said that, previous chart resistance at 113.58 would hold from here, bring retreat later.

In view of this, we are holding on to our long position entered at 111.70. Below said support at 111.65 would risk weakness to 111.40-45 but break there is needed to signal a temporary top has been formed at 112.72, bring retracement of recent rise towards support at 111.11 first.

The British pound continues to push higher against the U.S dollar, ahead of a key speech by British Prime Minister Theresa May on the terms of Brexit deal with European Union in Florence, Italy.

Yesterday, the GBPUSD pair reversed Wednesday's losses, after breaking back above the key 1.3515 technical level, creating a surge in buying interest back towards the 1.3600 region.

The GBPUSD pair remains strongly bullish in intraday trading while price-action is above the 1.3553 level, which represents the pairs weekly pivot point.

Key upside resistance is currently located at 1.3618, 1.3633 and the currently yearly high, at 1.3657. Above the yearly price-high, further resistance is found at 1.3680 and 1.3710.

To the downside, key intraday technical support is found at the 61.8 Fibonacci retracement of Wednesday daily range, at 1.3569 and the weekly pivot at 1.3553.

Below 1.3553, further support is seen at 1.3538 and 1.3515, with critical weekly support, at 1.3480.

The euro continues to push higher against the U.S dollar in Friday trading, with the EURUSD pair further supported by solid European economic data. The highlight of the eurozone's PMI'S came from the German economy, which came in at 60.6 for the month of September.

Going forward, the EURUSD pair has yet to close price-action above the key 1.2038 technical level on a higher-time frame basis, the pair may remain confined to the 1.2030 to 1.1884 range, until a break-out happens.

The euro has set a daily price high of 1.2004 and a daily low of 1.1938, indicating traders are bullish, but cautious to add long positions over the weekend.

Key EURUSD intraday technical support is found at the 1.1957 whilst the current daily price-low and daily pivot point are both found at 1.1938.

Below 1.1938, the 1.1915 and 1.1984 levels offer critical support.

To the upside, key intraday resistance above 1.2004 is found at 1.2031, 1.2069 and 1.2089. Once above 1.2089, the euro will likely target 1.2140 and 1.2260.

Good day traders! Today we are goiong to take a look at German DAX and its 4h look.

German dax is trading bullish since end of August, when bigger correction was completed. We now see a five-wave bullish impulse in the making, with price currently trading in one of its sub-waves, wave 4). We know that wave 4) is a correction, which means it represent a pullback within an impulse and can go choppy, slow and overlapping. Ideally current wave 4) will search for a potential base near the 1.2450 region and later make a bounce higher, into final wave 5).

German DAX, 1H

Notes/Observations

• Euro rallies on strong PMI data out of Germany, France and the Eurozone
• European Indices trade mixed on continuing Geopolitical tensions in regards to North Korea
• ECB Chief Draghi notes that they are not there on inflation yet

Overnight

Asia:

• Geopolitical tensions rose again in the far east with North Korea responding to President Trumps executive order for additional US sanctions by considering the 'highest level of countermeasures'
• It was later reported that North Korea could conduct a Hydrogen-bomb test which has weighed on markets.
• S&P downgrades Hong Kong sovereign rating to AA+ from AAA (follows recent downgrade of China); Outlook revised to Stable from Negative; cites potential for spillover risks
• China's metals, including iron ore, have traded lower by over 2%, following reports that the Shanghai Metals Exchange raised trading fees

Europe:

• German, French and Eurozone prelim PMI readings handily beat estimates, French and German Composite PMI readings highest in over 6 years.
• UK PM May to give Speech in Florence, it is speculated that she will propose payments of €20B over a two year transitional period, in which she will emphasis it is a shared responsibility to make Brexit work 'Smoothly'.

Oil:

• OPEC panel to discuss export monitoring and and oil pact extension

Economic data

(DE) GERMANY SEPT PRELIMINARY MANUFACTURING PMI: 60.6 V 59.0E (34TH MONTH OF EXPANSION)

• Services PMI: 55.6 v 53.7e (50th month of expansion)
• Composite PMI: 57.8 v 55.7e

*(FR) FRANCE SEPT PRELIMINARY MANUFACTURING PMI: 56.0 V 55.5E (11TH MONTH OF EXPANSION)

• Services PMI: 57.1 v 54.8e (15th month of expansion)
• Composite PMI: 57.2 v 55.0e (15th month of expansion)

(EU) EURO ZONE SEPT PRELIMINARY MANUFACTURING PMI: 58.2 V 57.2E (50TH MONTH OF EXPANSION)

• Services PMI: 55.6 v 54.8e
• Composite PMI: 56.7 v 55.6e
• (FR) FRANCE Q2 FINAL GDP Q/Q: 0.5% V 0.5%E; Y/Y 1.8% V 1.7%E
• (NL) NETHERLANDS Q2 FINAL GDP Q/Q: 1.5% V 1.5%E; Y/Y: 3.3% V 3.3%E

Fixed Income Issuance:

• Non seen

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx50 +0.1% at 3,544, FTSE -0.1% at 7,256, DAX +0.1% at 12,613, CAC-40 +0.2% at 5,280, IBEX-35 -0.1% at 10,284, FTSE MIB +0.2% at 22,531, SMI +0.1% at 9,137, S&P 500 Futures -0.2%]

Market Focal Points/Key Themes: European stocks open lower but pair losses as session progressed; geopolitical concerns weighed on indices, supported safe haven flows; materials stocks impacted by drop in metal prices; L'Oreal heiress Bettencourt died, leading to moves in L'Oreal, Nestle and Sanofi; Israel closed for Jewish New year; attention turning to UK PM May's Brexit speech later in the day, and German elections over the weekend; upcoming earnings in the US session include Carmax

Equities

• Consumer discretionary: Adecco ADEN.CH -1.3% (strategy update)
• Energy: Lamprell LAM.UK -9.8% (outlook)
• Financials: Unicredit UCG.IT +0.9% (meeting to remove voting cap)
• Healthcare: Roche ROG.CH -0.2% (drug approvals)
• Industrials: Fincantieri FCT.IT +3.1% (press speculation STX deal near)
• Materials: Rio Tinto RIO.UK -0.8% (share buyback)
• Technology: Smiths Gorup SMIN.UK -5.2% (earnings)

Speakers

• (EU) ECB Chief Draghi: We aren't there on inflation yet; We see some local bubbles not systemtic
• (NO) Norway Central Bank (Norges) Gov Olsen: Flexible inflation target is more and more important
• (CH) SNB Gov Board member Moser: An end to Libor will challenge the private sector but will not hinder the SNB's ability to conduct monetary policy
• (VE) Venezuela Oil Min: Opec, Non-Opec evaluating all parameters when asked about export monitoring
• (EU) ECB Supervisory Board member Angeloni: Far from neutralising the transmission of risks between banks and public sector finances at the national level

Currencies

EUR/USD trades higher after stronger PMI readings out of Europe briefly topping 1.20. A clear break would see a move to 1.2027.

GBP/USD trades at the lower end of today's range after trading just below 1.36 earlier ahead of UK PM May's Brexit speech. Resistance seen just above $1.36.

Fixed Income

• Friday's liquidity report showed Thursday's excess liquidity rose to €1.734T from €1.729T, and use of the marginal lending facility fell to €116M from €137M.
• Corporate issuance saw $3.7B come to market via 3 deals led by 3M Co 3 part $2B offering, which brings weekly issuance to $16.7B.
• For the week ending Sep 20th Lipper US fund flows reported IG Funds net inflows of $2.86B bringing YTD inflows to $91.3B, High Yield funds reported net inflows of $865.8M bringing YTD outflows to $8.41B.

Looking Ahead

• 06:00 (UK) Sept CBI Industrial Trends Total Orders: 13e v 13 prior; Selling Prices: No est v 19 prior
• 06:00 (IE) Ireland Aug PPI M/M: No est v -1.1% prior; Y/Y: No est v -1.9% prior
• 07:00 (BR) Brazil Sept FGV Consumer Confidence: No est v 101.6 prior
• 07:30 (IN) India Weekly Forex Reserves
• 08:05 (UK) Baltic Dry Bulk Index
• 08:00 (PL) Poland Aug M3 Money Supply M/M: 0.3%e v 0.3% prior; Y/Y: 5.2%e v 5.0% prior
• 08:00 (CL) Chile Aug PPI M/M: No est v 1.7% prior
• 08:30 (CA) Canada Aug CPI M/M: 0.2%e v 0.0% prior; Y/Y: 1.5%e v 1.2% prior
• 08:30 (CA) Canada Aug CPI Core- Common YoY: No est v 1.4% prior; CPI Core- Trim YoY: No est v 1.3% prior; CPI Core- Median YoY: No est v 1.7% prior; Consumer Price Index: e v 130.4 prior
• 08:30 (CA) Canada Retail Sales M/M: 0.2%e v 0.1% prior; Retail Sales Ex Auto M/M: 0.4%e v 0.7% prior
• 09:00 (BE) Belgium Sept Business Confidence: -2.0e v -2.1 prior
• 09:00 (MX) Mexico Q2 Aggregate Supply and Demand Y/Y: 2.6%e v 4.0% prior
• 09:45 (US) Sept Preliminary Markit Manufacturing PMI: 53.0e v 56.0 prior; Composite PMI: No est v 55.3 prior
• 13:00 (US) Weekly Baker Hughes Rig Count data
• 15:00 (CO) Colombia July Economic Activity Index (Monthly GDP) Y/Y: No est v 1.4% prior

Currently we see a de-risking prior to the German Election on Sunday. The GBP/USD is trapped withing the engulfing master candle (candle that traps subsequent candles within it's range) which acts as important support and resistance. The price is dropping possibly targeting the POC 1.3520-35 (38.2, D L4, ATR pivot) and possibly the POC2 1.3465-75 (D L5, W L3, 38.2, historical buyers). The price could bounce from POC zones but have in mind that POC2 has a stronger confluence that the POC1. The drop below 1.3460 could put the pair in another bearish retracement wave towards 1.3345 zone.

W H3 - Weekly Camarilla Pivot (Weekly Interim Resistance)

W H4 - Weekly Camarilla Pivot (Strong Weekly Resistance)

D H4 - Daily Camarilla Pivot (Very Strong Daily Resistance)

D L3 – Daily Camarilla Pivot (Daily Support)

D L4 – Daily H4 Camarilla (Very Strong Daily Support)

POC - Point Of Confluence (The zone where we expect price to react aka entry zone)

The pair stays in red on Friday following double upside rejection at 3.5183 (Fibo 76.4% of 3.5585/3.3883 downleg / near falling 100SMA) on Wed /Thu and yesterday’s Doji with long upper shadow, signaling formation of reversal pattern.

Fresh weakness of the greenback on geopolitical tensions works in favor of such scenario, as slow stochastic is reversing from o/b territory and generating negative signal.

Dips were so far contained by 200SMA (3.4838) with close below needed to confirm and signal deeper correction of 3.3883/3.5194 upleg and expose its Fibo 38.2% retracement at 3.4693.

The pair may stay in extended consolidation before generating fresh direction signal while 200SMA support holds.

Res: 3.5065, 3.5194, 3.5394, 3.5488
Sup: 3.4838, 3.4693, 3.4590, 3.4384

September 22: Five things the markets are talking about

Global equities have retreated a tad overnight as the market purchased safe haven assets, including gold and yen (¥111.82), after N. Korea intensified their threats against the U.S. The EUR (€1.1957) remains better bid as German voters prepare to go to the polls this weekend.

N. Korea's overnight threats have managed to temporarily divert attention away from this week's monetary-policy decisions that have dominated the markets focus in the past three-sessions.

Expect investors to continue to eye speeches by Fed officials, as they may serve up some clues on what the central bank is thinking after bets for higher rates by year-end were raised following this week's Fed meeting.

In Europe, U.K PM Theresa May is set to give a speech on her Brexit strategy in Florence (9:00 am EDT), while Germany is preparing to go to the polls on Sunday, with Chancellor Merkel expected to secure a fourth-term, although she may not win an outright majority.

In Vienna, OPEC prepares to meet today and there is mixed signals on whether they will discuss deeper or longer cuts.

Down-under, New Zealand heads to the polls tomorrow.

1. Stocks mixed results

In Japan, the Nikkei slipped from its two-year high overnight after N. Korea threatened to test a hydrogen bomb in the Pacific Ocean, again heightening tension with the U.S.

Despite the rhetoric, Japanese equities have recorded their second consecutive week of gains, led by financial shares, which have found support from sovereign bond yields backing up after the Fed's policy statement midweek. The Nikkei slipped -0.3%, while the broader Topix Japan's fell -0.2%.

Down-under, Australia's S&P/ASX 200 Index added +0.5%, while S. Korea's Kospi index slid -0.7%.

In Hong Kong, stocks posted their biggest decline in a month, erasing this week's gains, as the market cashed out following S&P's downgrade of China's sovereign credit rating and N. Korea's nuclear threats. The Hang Seng index dropped -0.8%, while the Hong Kong China Enterprises Index lost -0.9%.

Note: S&P downgrades Hong Kong sovereign rating to AA+ from AAA – outlook is revised to stable from negative.

In China, domestic equities recovered most of their early losses as investors played down S&P's downgrade of China's sovereign rating and N. Korea's threat of another nuclear test. The blue-chip CSI300 index closed changed, while the Shanghai Composite Index shed -0.2%.

In Europe, regional indices trade mixed on continuing geopolitical tensions. Investors attention now turns to U.K PM May's Brexit speech later this morning, and German elections over the weekend.

U.S stocks are set to open in the ‘red' (-0.2%).

Indices: Stoxx50 +0.1% at 3,544, FTSE -0.1% at 7,256, DAX +0.1% at 12,613, CAC-40 +0.2% at 5,280, IBEX-35 -0.1% at 10,284, FTSE MIB +0.2% at 22,531, SMI +0.1% at 9,137, S&P 500 Futures -0.2%

2. Oil prices higher as producers meet on output pact, gold rallies

Oil prices are a tad higher as the market waits to see whether OPEC and non-OPEC producers back an extension to output cuts beyond next March.

Brent crude futures are at +$56.51 a barrel, up +6c or +0.11%, while U.S West Texas Intermediate (WTI) crude futures are up +10c, or +0.2% at +$50.65 per barrel.

In January, OPEC and its allies agreed to reduce output by about -1.8m bpd until March 2018 in an attempt to empty inventories. The market is now anticipating an extension to that deal, possibly to the end of next year.

Note: Both contracts have risen more than +15% over the last three-months as global oil supply has tightened.

Ahead of the U.S open, gold has rebounded from its four-week low on sabre ratting rhetoric from N. Korea which prompted investors to seek safe-haven assets. Spot gold is up +0.4% at +$1,296.41 an ounce, after having hit a month low of +$1,287.61 Thursday.

Note: Bullion is down -1.7% for the week and heading for a second consecutive weekly decline.

3. Sovereign yield curves flatten

It appears that the Fed is determined to hike in December even if policy makers realize that inflation prints undershoot.

This week, Fed Chair Janet Yellen indicated that the drop in core price pressures this year – below the Fed's +2% target – a “mystery” while the board downgraded its long-run estimate for the fed-funds rate that keeps supply and demand balanced.

Since Wednesday, FI dealers have scrambled to price in a Dec. hike, pushing front-end U.S yields much higher (U.S 2's backed up to +1.43% for the first time since 2008). The net result is a flatter U.S yield curve, with the yield spread between 2-year Treasury's and U.S long-bond near the narrowest since June.

According to the CME, Fed fund future odds moved from pre-meet +50% to +73% possibility for a Dec. Fed rate hike.

Overnight, the yield on 10-year Treasuries fell -2 bps to +2.26%, the first retreat in more than a week, while in Germany the 10-year Bund yield declined less than -1 bps to +0.46%. In the U.K, the 10-year Gilt yield has advanced +1 bps to +1.375%, the highest in almost eight-months.

4. Where to for the EUR?

The EUR (€1.1957) remains better bid ahead of the U.S open, supported by stronger PMI data (see below) out of Germany, France and the Eurozone this morning.

Ahead of this weekend's German election, market consensus believes that if Chancellor Merkel's CDU party forms a coalition with the social democrats SPD party – the most likely scenario – then the EUR should trade little changed, focusing on regional data and ECB policy. However, if CDU allies itself with the liberal FDP and excludes the SPD, then the ‘single' currency could eventually come under pressure as politics will most likely shift towards a German domestic agenda, rather than Europe priority.

Note: Forming a German coalition could take weeks of negotiation.

5. Eurozone composite PMI higher than expected

Euro data this morning revealed that this months flash composite PMI for the region came in higher than expected, rising to 56.7 from 55.7 as against a market consensus forecast for a dip to 55.6.

The jump was led by manufacturing, which suggests that the EUR's (€1.1957) strength has not been much of a problem for growth.

Overall, today's report is another positive surprise from the eurozone economy, which many had been predicting slowing in H1 after a strong six-months.

The pickup is the latest positive surprise from an economy that has already outperformed most expectations this year.

Note: IHS Markit says the average PMI for Q3 points to acceleration in growth to +0.7%.

WTI oil price moves lower on Friday after Thursday's action ended in long-tailed Doji, signaling hesitation ahead of $51.00 barrier which was dented on Wednesday.

Today's easing was so far mild and suggesting the price may hold in extended consolidation while initial support at $50.00 (Thursday's low and strong downside rejection) holds.

Overall bullish structure was reinforced by formation of 10/200 SMA golden-cross, which underpins the action.

Sustained break above $50.83/$51.09 (cracked FE 100$ of the wave C from $46.99 trough/Wednesday's fresh four-month high) would signal bullish continuation and extension of the third wave (of five-wave sequence from $45.57) towards its FE 123.6% at $51.74.

Caution on break below $50.00 (as slow stochastic is reversing from o/b zone on daily chart and generating bearish signal) which may spark deeper pullback towards next pivotal support at $49.55 (200SMA).

Res: 50.83, 51.09, 51.55, 51.74
Sup: 50.44, 50.00, 49.74, 49.55