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EURUSD

The EURUSD failed to continue its bearish momentum yesterday topped at 1.1953. The bias is neutral in nearest term. Overall I remain bullish but price is still trapped between 1.2090 – 1.1823 range area as you can see on my H4 chart below. Immediate resistance is seen around 1.2000. A clear break above that area could trigger further bullish pressure testing 1.2050 region. Immediate support is seen around 1.1900 but key support remains at 1.1823 which remains a good place to buy with a tight stop loss as a clear break below that area would take price to a bearish correction zone.

GBPUSD

The GBPUSD had a bullish momentum yesterday topped at 1.3586. The bias is bullish in nearest term testing 1.3615/50 key resistance area which need to be clearly broken to the upside to nullify the bearish pin bar scenario and continue the major bullish scenario targeting 1.3700 – 1.3750 region. Immediate support is seen around 1.3520. A clear break below that area could lead price to neutral zone in nearest term testing 1.3470 region or lower. Overall I remain bullish.

USDJPY

The USDJPY continued its bullish momentum yesterday topped at 112.71. The bias remains bullish in nearest term testing 113.10/50 resistance area. Immediate support remains around 112.15 – 111.85 region. A clear break below that area could lead price to neutral zone in nearest term but as long as stay above 111.00 my H1 chart bias remains bullish. My H4 and daily chart bias remains neutral.

USDCHF

The USDCHF attempted to push higher yesterday topped at 0.9747 but closed lower at 0.9704. The bias is neutral in nearest term probably with a little bearish bias as price printed a bearish pin bar formation as you can see on my daily chart below testing 0.9650 support area. Immediate resistance is seen around 0.9747. A clear break above that area could trigger further bullish pressure testing 0.9765 – 0.9807 key resistance which remains a good place to sell with a tight stop loss.

The yellow metal is going down like a rock and is expected to reach the 38.2% retracement level. Actually, it could hit the confluence area formed at the intersection between the 38.2% retracement level with the WL1. A breakdown through the mentioned confluence will accelerate the sell-off, while a rejection will send the rate much higher again.

Brent Oil resumes the upside movement and should approach and hit the median line (ML) of the major ascending pitchfork in the upcoming days. Price ignored the higher Crude Oil Inventories and is almost to reach the $57.00 per ounce. The median line (ML) is acting as a magnet and attracts the price, actually, it could be attracted by the confluence area formed at the intersection between the ML with the 250% Fibonacci line.

The EUR/USD has managed to rebound and to climb much higher again. Price continues to move in range on the short term, but I hope that we’ll have a significant move very soon. Technically, it was expected to decrease further on the short term, but seems like will develop a minor chart pattern. The pair increased a little as the USDX slipped lower after another false breakout above the 92.49 static resistance.

The dollar index move somehow sideways as well, but he still needs a bullish spark to be able to climb much higher on the short term. The USD wasn’t impressed by the good United States data, the Unemployment Claims plunged from 282K to 259K in the previous week, has come in much better versus the 302K estimate, while the Philly Fed Manufacturing Index increased from 18.9 to 23.8 points, beating the 17.3 estimate.

The Consumer Confidence was reported at -1 points, much below the -2 estimate, while the CB Leading Index rose by 0.4%, beating the 0.3% estimate.

Price increased after a failure to approach and reach the median line (ml) of the minor descending pitchfork. It could come higher to retest the upper median line (uml) of the descending pitchfork before will decide what to do on the short term.

The price action could develop a minor symmetrical triangle on the Daily chart, a breakout from this pattern will bring us a great trading opportunity. EUR/USD managed to stay above the 1.1910 static support.

The Canadian dollar is higher against its US counterpart on Thursday. The USD surged on Wednesday after the Fed’s September policy meeting left hawkish estimates for the path of rate hikes in the US. The US lost some of the momentum when Canadian data was released. Wholesale trade in Canada improved 1.5 percent in July adding another positive sign of a strong economy.

CAD traders will set their sights on retail sales and inflation data to be published on Friday, September 22 at 8:30 am EDT. Both indicators are expected to improve putting pressure on the US dollar. NAFTA negotiations will enter its third round on Saturday as the talks head to Ottawa. Canadian officials were on the record today saying that a deal by the end of 2017 or early 2018 was within reach. Mexico and the United States would be happy to hear as both have pushed for speedy negotiations to avoid the debate to last until the Mexican presidential elections and US primaries.

The USD/CAD fell 0.11 percent on Thursday. The pair is trading at 1.2333 and has been trading in a tight range. The USD is losing some of the momentum from the hawkish Fed economic projections on Wednesday. 11 out of 16 policymakers still forecast a rate hike in US interest rates before the end of the year. The Canadian dollar started the session losing ground to the greenback as oil prices fell only to recover as the day wore on.

Canadian inflation and retail sales data due on Friday will close the week for CAD traders. The consumer price index (CPI) is expected to rise 0.2 percent and retail sales is forecasted to have risen by 0.4 percent. Both indicators could validate the strength of the Canadian economy and signal a third rate hike before the end of the year by the Bank of Canada (BoC).

Energy gained 0.096 percent in the last 24 hours. The price of West Texas Intermediate is trading at 50.23 ahead of the Organization of the Petroleum Exporting Countries (OPEC) meeting in Vienna on Friday. The group will meet with non-OPEC members to discuss the production cut agreement and sources have indicated a possible extension beyond the March 2018 could be in the works.

The Energy Information Administration (EIA) report of weekly US crude inventories on Wednesday showed a higher than expected rise at 4.6 million barrels. The glut is seen as a positive given the disruptions in American production and proof of the flexibility and speed of shale output. Shale producers and the OPEC have been engaged in both sides of a supply strategy. OPEC members tried a market share strategy that increased production to drive US shale operations out of business, but that approach backfired as oil prices tanked and has taken a coordinated effort with other major non-OPEC members.

Market events to watch this week:

Wednesday, September 20
6:45pm NZD GDP q/q
11:50pm JPY Monetary Policy Statement

Thursday, September 21
Tentative JPY BOJ Policy Rate
2:30am JPY BOJ Press Conference
8:30am USD Unemployment Claims

Friday, September 22
8:30am CAD CPI m/m
8:30am CAD Core Retail Sales m/m
8:30am All Day NZD Parliamentary Elections

The US dollar gave back some of its gains on Thursday but risks in China are rising after S&P downgraded its sovereign rating to A+ from AA-. The pound was the top performer while the Australian dollar lagged. Japan is on holiday. British PM Theresa May's speech about the EU on Friday followed by German elections on Sunday. A new Premium video was posted following the post-Fed moves in FX, indices and metals.

China undoubtedly has a debt problem but it's had one for years without causing any real spillovers or consequences. It's one of those looming problems that's impossible to ignore but equally impossible to bet against.

A rarely-talked-about driver of western growth in the past 30 years is credit. It's a magical wealth creator until exhausted and that's what happened in the US financial crisis. China has been endlessly extending credit to companies and individuals and it's helped to pull hundreds of millions out of poverty.

So far bumps in the road have been handled by central planners but virtually everyone believes there will one day be a true hiccup. Whether that's next month or next decade is the impossible question to answer. Other catalysts are needed.

When trouble erupts, it's not likely to be from a downgrade or even a shift in the market. Like we saw two years ago, it's likely to come on some kind of change in policy. For every percentage point higher in growth or incremental rise in credit, the stakes are raised for regulators and economic planners.

That's why we will be watching the once-every-five years Congress that opens on Oct 18. Murmurs from China are that a theme will be stability. That's something we've heard many times before and lends itself to mitigating problems, rather than tackling them.

In other news, the USD rally failed to follow through Thursday. That was despite a fall in initial jobless claims to 259K from 302K in the aftermath of Harvey. The Philly Fed also improved to 23.8 from 17.1.

Perhaps the most-telling indicator was eurozone consumer confidence. It rose to -1.2 from -1.5 – that's the best since 2001. After falling as low as 1.1853 Wednesday, the euro slowly climbed to 1.1938.

Expect a quiet wind down to the week in Asia with Japan on holiday.

The EUR/USD restored some positions that were lost yesterday on the background of hawkish rhetoric by the Fed's chief Janet Yellen yesterday. Following the Fed's statement on monetary policy it has become clear that 12 of the 16 FOMC members still support three rate hikes for 2017 which increases the chance of another round of monetary tightening in the US by this December. At the same time it was announced that the balance sheet reduction will start in October. Some pressure on the pair also came in from the better than expected unemployment claims in the US which were 259,000 versus the 302,000 expected and the Philly manufacturing index increased to 23.8 in September compared to 18.9 in August.

The USD/JPY quotes are consolidating after confident growth during yesterday's trading session. The statement of the Bank of Japan on monetary policy had little influence on the mood of traders. The All Industries Activity index declined by 0.1% in August which was in line with the forecast.

The Light sweet crude oil quotes rolled back under pressure of US dollar appreciation and due to the recent crude oil inventories report which showed an increase of 4.6 million barrels in the US against the forecasted growth of 2.8 million barrels. Production levels also returned to levels seen before the hurricanes hit the American oil rigs. The OPEC meeting will be held tomorrow where oil production cuts will be discussed between most OPEC members and some other major oil producing countries, including Russia. News from this meeting may significantly influence the mood of traders.

EUR/USD

The EUR/USD quotes were not able to break through the inclined support line and returned to the resistance at 1.1925 due to profit taking after the strong descending movement. In case of further growth, the nearest targets will be 1.2000 and 1.2070. On the other hand, fixing under the inclined support line may lead to continued drops with potential targets at 1.1700 and 1.1620.

USD/JPY

The USD/JPY has stopped growing after touching the inclined resistance line. In case of growth resuming along this line, the next targets will be 113.00 and 114.70. In case of a downward correction, the price may fall to 111.00 and breaking through that may become a signal to sell with potential goals at 110.30 and 109.60.

USD/WTI

The American crude oil benchmark, WTI, is falling after testing the 51.00 mark. In case of a decline below the 50.00 mark we are likely to see further drops with the potential to hit 48.50 and even 47.75. The RSI on the 15-minute chart rebounded from the oversold zone which in turn indicates that the descending movement is not yet exhausted. The immediate target in case of growth resuming will be 52.00.

NZDUSD 1 Hour Elliott Wave Chart

Zigzag is a 3 waves corrective pattern which is labelled as ABC. The subdivision of wave A is in 5 waves, either as impulse or diagonal. The subdivision of wave B can be any corrective structure. Finally, the subdivision of wave C is also in 5 waves, either as impulse or diagonal. Thus, zigzag has a 5-3-5 structure. Wave C typically ends at 100% – 123.6% of wave A.

USD/CHF - 0.9715

Most recent candlesticks pattern : N/A

Trend                                    : Near term up

Tenkan-Sen level                  : 0.9727

Kijun-Sen level                    : 0.9669

Ichimoku cloud top                 : 0.9618

Ichimoku cloud bottom              : 0.9615

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

The greenback only fell to 0.9589 yesterday before staging another rally (after Fed) above resistance at 0.9705, suggesting recent rise from 0.9421 low is still in progress and may extend gain towards 0.9761-66 (50% Fibonacci retracement of 1.0100-0.9421 and previous resistance) but reckon another previous resistance at 0.9773 would hold on first testing due to near term overbought condition, risk from there is seen for a retreat later.

In view of this, would not chase this rise here and would be prudent to stand aside for now. Below 0.9685 would bring test of the Kijun-Sen (now at 0.9669) but break there is needed to signal an intra-day top is formed, bring retracement to 0.9635-40 but said support at 0.9589 should remain intact. 

GBP/USD - 1.3561

Most recent candlesticks pattern   : N/A

Trend                                 : Up

Tenkan-Sen level                 : 1.3520

Kijun-Sen level                    : 1.3555

Ichimoku cloud top              : 1.3550

Ichimoku cloud bottom        : 1.3537

Original strategy :

Sell at 1.3595, Target: 1.3480, Stop: 1.3630

Position : -

Target :  -

Stop : -

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Current cross-inspired rebound suggests near term upside risk remains for the bounce from 1.3452 (yesterday’s low) to extend gain to 1.3590-00, still reckon upside would be limited to 1.3630-35 and resistance at 1.3658 would hold from here, bring retreat later. Only a break above said resistance at 1.3658 would signal recent upmove has resumed and extend gain to 1.3690-00 later.

In view of this, would not chase this rise here and stand aside for now. Below the Tenkan-Sen (now at 1.3520) would bring weakness to 1.3500 but only break of 1.3470-75 would revive near term bearishness and bring test of yesterday’s low at 1.3452, below there would confirm temporary top has been formed at 1.3658, bring retracement of recent rise towards 1.3400-05 (50% Fibonacci retracement of 1.3153-1.3658).