Sample Category Title

USDJPY (111. 76): Following a string of consecutive gains, USDJPY was seen easing back earlier today. This comes after the US dollar posted a two-month high yesterday. In the short term, support at 111.00 remains a key level that will be tested. This lever previously served as resistance and an unfilled gap from last Friday's close at 110.87 will most likely be filled. Further declines are unlikely unless USDJPY slips below this support level. To the upside, the next target is likely to be 113.00.

GBPUSD (1.3580): The British pound extended gains once again yesterday breaking past the bullish flag pattern. Price action is critically trading below the resistance level of 1.3589. A breakout above this level is needed for the GBPUSD to continue to extend the gains. However, a reversal near the resistance level could send the cable lower as the bullish flag pattern becomes invalidated. The price action in GBPUSD will most likely be determined by the PM May's speech today.

EURUSD (1.1953): Following a sharp decline of the 1.1950 level, the EURUSD managed to recover. Price action remains firmly range bound within the 1.2058 and 1.1822 levels of resistance and support. On the daily chart, the rising wedge pattern remains in play with the current level of 1.1950 proving to be a key level for the euro. A breakout above this level could signal a continuation to the upside, in which case we can expect gains towards 1.2090. To the downside, support at 1.1822 will be an important level as a breakdown below this level could signal a move to the lower support at 1.1672.

Daily Pivots: (S1) 133.68; (P) 134.03; (R1) 134.66; More...

Intraday bias in EUR/JPY remains on the upside for the moment. Firm break of 134.20 fibonacci level will pave the way to 141.04 resistance next. On the downside, below 133.26 minor support will turn intraday bias neutral and bring consolidations. But firm break of 131.39 resistance turned support is needed to be the first sign of near term reversal. Otherwise, outlook will remain bullish in case of retreat.

In the bigger picture, current rise from 109.03 is seen as at the same degree as the down trend from 149.76 (2014 high) to 109.03 (2016 low). as long as 124.08 resistance turned support holds, further rise is expected to 61.8% retracement of 149.76 to 109.03 at 134.20. Sustained break there will pave the way to key long term resistance zone at 141.04/149.76. On the downside, break of 127.55 support is needed to be the first signal of medium term reversal. Otherwise, outlook will remain bullish.

The US dollar was seen giving back the gains a day after the FOMC meeting. EURUSD managed to recover as the currency pair regained the 1.19 handle.

On the economic front, the Bank of Japan left interest rates and QE unchanged signaling that it could still maintain its easy monetary policy. This led to some weakening in the Japanese yen across the board. The ECB President Mario Draghi gave a speech yesterday but refrained from making any references to monetary policy or the euro's exchange rate.

Looking ahead an important day for the British pound as the Prime Minister, Theresa May will be giving a speech on Brexit to the UK Parliament. Investors are expecting that the UK will be moving towards a softer Brexit. However, the risks are balanced, and the GBP could be seen trading volatile today. ECB President Mario Draghi is also expected to speak later in the day.

USDCAD maintains a bearish market structure on the daily chart. The pair is clearly in a downtrend and making lower peaks and lower lows since the high of 1.3793 on May 5. The market paused a corrective move from the more than 2-year low of 1.2061 and is putting in a top at 1.2390.

USDCAD will likely remain under pressure as long as it trades below key resistance at 1.2400. The recent upside momentum from the bounce off 1.2061 on September 8 has run out of steam, as indicated by the RSI oscillator which has stopped rising.

The near-term risk is to the downside, with scope for a re-test of the 1.2061 low. This level is expected to provide support but should it fail to hold, then USDCAD will resume its downtrend to target the next major low at 1.1919.

Should prices turn back up and rise above the 1.2390-1.2400 resistance zone, the downside pressure would ease and open the way for a move towards next resistance areas at the previous highs of 1.2662 and 1.2777. But only a move above 1.3000 is likely to indicate that the longer-term downtrend has ended.

The underlying bias suggests that the bearish move from May is still in progress. The negatively aligned moving averages are supporting this view, as the 50-day MA is below the 200-day MA following a bearish crossover on July 13. The near-term bias is also bearish.

Key Highlights

• The US Dollar traded higher this week and moved above 111.50 against the Japanese Yen.
• There is a crucial ascending channel forming with support at 111.70 on the 4-hours chart of USD/JPY.
• US Initial Jobless Claims for the week ending 16th Sep 2017 decreased from the last revised reading of 282K to 259K.
• The US Manufacturing PMI preliminary reading (Sep 2017) will be released today, which is forecasted to increase from 52.8 to 53.0.

USDJPY Technical Analysis

The US Dollar remains in an uptrend and is currently positioned well above the 111.00 support against the Japanese Yen. However, the USD/JPY pair recently struggled to settle above 112.70 and is correcting lower.

Looking at the 4-hours chart of USD/JPY, there is a crucial ascending channel forming with support at 111.70. During the recent drop, the pair broke the 50% Fib retracement level of the last wave from the 111.09 low to 112.71 high.

However, the decline was prevented by the 111.60 support. The pair is once again moving north, but lacking momentum to break 112.20.

To sum up, the pair must stay above 111.70-111.60 to remain in the bullish trend.

US Initial Jobless Claims

Recently in the US, the Initial Jobless Claims figure for the week ending 16th Sep 2017 was released by the US Department of Labor. The forecast was slated for a rise from the last reading of 284K to 300K.

However, the actual result was well above the forecast, as there was a decline in claims to 259K. The last reading was also revised down to 282K. The 4-week moving average now stands at 268,750, which is around 6,000 more than the previous week’s revised average from 263,250 to 262,750.

The report added that:

The advance number for seasonally adjusted insured unemployment during the week ending September 9 was 1,980,000, an increase of 44,000 from the previous week’s revised level.

The result was positive, and might continue to support USD/JPY above the 11.70-50 levels in the near term.

Economic Releases to Watch Today

US Manufacturing PMI for Sep 2017 (Preliminary) – Forecast 53.0, versus 52.8 previous.

US Services PMI for Sep 2017 (Preliminary) – Forecast 55.9, versus 56.0 previous.

Canadian Retail Sales July 2017 (MoM) – Forecast 0.1%, versus +0.1% previous.

Canadian Retail Sales ex Autos July 2017 (MoM) – Forecast +0.4%, versus +0.7% previous.

Canadian Consumer Price Index August 2017 (MoM) – Forecast +0.2%, versus 0% previous.

Canadian Consumer Price Index August 2017 (YoY) – Forecast +1.5%, versus +1.2% previous.

Daily Pivots: (S1) 1.4871; (P) 1.4967; (R1) 1.5145; More....

With break of 1.5031 resistance, intraday bias is turned to the upside for 1.5173/5226 resistance zone first. Break will resume medium term rally from 1.3624. On the downside, below 1.4791 will turn bias to the downside and extend the fall from 1.5173 to retest 1.4421 support.

In the bigger picture, we're holding on to the view that corrective decline from 1.6587 medium term has completed at 1.3624. Rise from 1.3624 is expected to extend to retest 1.6587. The corrective structure of the price actions from 1.5226 is affirming this view. Above 1.5226 will target a test on 1.6587 key resistance. However, break of 1.4421 support will dampen our view and would drag EUR/AUD lower to retest key support zone around 1.3624.

Daily Pivots: (S1) 1.1537; (P) 1.1571; (R1) 1.1622; More... .

Intraday bias in EUR/CHF remains on the upside for the moment. Current rally is expected to target 61.8% projection of 1.0830 to 1.1537 from 1.1355 at 1.1792 next. On the downside, below 1.1511 minor support will turn intraday bias neutral and bring consolidations first.

In the bigger picture, long term rise from SNB spike low back in 2015 is still in progress. EUR/CHF should now be heading back to prior SNB imposed floor at 1.2000. For now, this will be the favored case as long as 1.1087 resistance turned support holds.

It did not take long for North Korea to react to President Trump's recent address to the United Nations General Assembly. Kim Jong-un had responded with a personal statement where he said he was considering retaliating at the “highest level' following Trump's warning that the US would “totally destroy

North Korea' if Washington was forced to defend itself or its allies. This comment was subsequently followed up by comments from North Korea's Foreign Minister, Ri Yong-ho, who said “Pyongyang could respond to Trump's recent threat of military action by testing a powerful nuclear weapon in the Pacific'. Ri Yong-ho told reporters in New York that “It could be the most powerful detonation of an H-bomb in the Pacific. We have no idea about what actions could be taken as it will be ordered by leader Kim Jong-un.' Needless to say, these comments have caused a degree of risk off in the markets with safe-havens benefitting.

Initial Jobless Claims released by the US Department of Labor on Thursday showed those claiming benefits unexpectedly declined 23,000, to a seasonally adjusted 259,000 for the week ended Sept. 16. A Labor Department official commented that “Harvey and Irma affected claims for Texas and Florida'. With Hurricane Maria causing havoc in Puerto Rico, weather is likely to affect near-term claims data and likely hurt job growth in September.

The markets were surprised at the news on Thursday that, the last of the 3 major ratings agencies, Standard & Poors Global Ratings, cut China's sovereign credit rating for the first time since 1999, based on the risks from China's soaring debt, and revised its outlook to stable from negative. China's sovereign rating was cut by one step, to A+ from AA-. This is the second downgrade by a major rating company this year, which suggests concern that China is struggling to maintain a balance between economic growth and improving its financial sector. China had yet to respond to this latest downgrade, but the markets will be wary following the last downgrade which China was strong to refute.

EURUSD gained 0.45% on Thursday trading, as high as 1.19535, and the upward momentum has continued in early trading with EURUSD currently trading around 1.1965.

USDJPY strengthened up to 112.712 on Thursday but weakened in early Friday trading as the markets move into safe-havens following the latest comments from North Korea. Currently, USDJPY is trading around 111.95.

GBPUSD gained nearly 0.7% on Thursday, trading up to 1.35863. Currently, GBPUSD has given up some of those gains to trade around 1.3565.

Gold continued its slide against USD, losing nearly 1% on Thursday, before retracing higher as the markets take a risk-off sentiment into the weekend. Gold is currently trading around $1,296.50.

WTI continues to strengthen and currently trades around $50.75pb, although the markets will be keenly watching the OPEC meeting for any extensions to the current output limits.

Major economic data releases for today:

At 09:00 BST, ECB President Mario Draghi is scheduled to provide a keynote speech at Henry Grattan Lecture Invitation, organized by Trinity College (School of Social Sciences and Philosophy) in Dublin, Ireland.

Sometime between 09:00 BST & 11:00 BST, UK Prime Minister Theresa May is scheduled to speak in Florence, Italy. Mrs. May is expected to give fresh details about the future relationship she wants with the EU.