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The GBPUSD pair is currently neutral, with a slight negative bias ahead of the release of key UK PMI services data, for the month of August. Yesterday the pound fell sharply from the 1.2964 level, and printed a fresh weekly price low, at 1.2910.

At present, GBPUSD is testing above and below its weekly pivot point, around the 1.2934 level, as the pair searches for a medium-term directional bias.

The GBPUSD pair remains range-bound between the 1.2910 to 1.2993 region, a higher-time frame price close below the 1.2920 level should accelerate selling. To the upside, a higher-time frame price close above the 1.2984 level, should encourage pound buying.

Key trendline resistance is located at the 1.2948 level, with further resistance coming from the recent swing high, at 1.2964, and the former weekly high, at 1.2994.

To the downside, the 100-day moving average is located at 1.2920, with further support below at 1.2901-10

Below 1.2900, the H4 time-frame 100-period moving average is located at 1.2890, with the former weekly price low, at 1.2852. The GBPUSD 200-day moving average is currently located, at the 1.2722 level.

The Japanese Yen continues to gain strength against the U.S dollar, as escalating geopolitical tensions continue to keep investors on edge, with the Yen benefitting from Japan’s net creditor nation status.

During the Asian session, the USDJPY pair fell towards a five-day trading low, hitting 109.20, with price-action now trading around the 109.32 level.

The USDJPY remains strongly bearish on-all time frames, with the pair now trading below the daily, weekly and monthly pivot points.

Key intraday technical support is located at the current weekly price low, at 109.20, and the 50 percent Fibonacci retracement, of the 118.66 swing high to the 98.99 swing low, at 108.81.

The USDJPY remains strongly bearish on-all time frames, with the pair now trading below the daily, weekly and monthly pivot points.

Key intraday technical support is located at the current weekly price low, at 109.20, and the 50 percent Fibonacci retracement, of the 118.66 swing high to the 98.99 swing low, at 108.81.

The global financial markets are in full swing on Tuesday, as North American investors return from the Labour Day long weekend. Economic data will dominate the newswire amid geopolitical escalations on the Korean peninsula.

Action begins in Europe at 5:45 GMT with Swiss gross domestic product (GDP). The Swiss economy expanded 0.5% in the second quarter, based on a median estimate of economists. That translates into a year-over-year expansion of 1.1%.

The Swiss government will also report on consumer inflation at 07:15 GMT. The August consumer price index (CPI) is expected to be flat, following a decline of 0.3% in July.

PMI data will make headlines over the next few hours, with Composite reports for Italy, France, Germany and the 19-member Eurozone. The Composite PMI provides a snapshot of service and manufacturing activity.

IHS Markit will also report on UK services PMI at 08:30 GMT.

Sticking with the Eurozone, Eurostat will produce official retail sales data at 10:00 GMT. Receipts at retail stores are forecast to drop 0.1% in July. That translates into a year-over-year gain of 2.5%.

In North America, the US Commerce Department will report on factory orders for the world’s largest economy. Factory orders are projected to drop 3.2% in July after rising 0.3% the month before.

On the monetary policy front, Federal Open Market Committee (FOMC) member Lael Brainard will deliver a speech at 12:00 GMT. FOMC members Neel Kashkari and Robert Kaplan will also deliver speeches at 17:10 GMT and 22:05 GMT, respectively.

Earlier in the day, the Reserve Bank of Australia (RBA) kept interest rates on hold at 1.5%, where they’ve stood since August 2016.

EUR/USD

The EUR/USD held within a narrow range on Monday in a session that saw limited trading volume. The pair is trading just above 1.1900, having fallen sharply from the August high of 1.2064. Immediate trend line support is located at 1.1828. A break below that level would expose the 1.1709 region as the next support target. On the opposite side of the ledger, the psychological 1.2000 level continues to offer immediate resistance.

GBP/USD

Cable traded within a narrow range at the start of the week, as investors awaited fresh catalysts in the form of economic data and monetary policy speeches. The GBP/USD was last seen trading at 1.2924. The pound continues to find strong support near the 1.2900 area, but lacks momentum to extend gains north of 1.3000.

GOLD

Gold prices surged to nearly one-year highs on Monday, as risk aversion drove investors into the safety of precious metals. Spot prices continued higher in Tuesday’s Asian session, where they approached $1,339 a troy ounce. The outlook on bullion remains tied to ongoing developments on the Korean peninsula.

EUR/JPY is trading in the red and seems poised to take out the support from the UML. Is under massive selling pressure after the failure to close the yesterday’s gap. Continues to stay much above the 130.00 psychological level, but a breakdown below it will signal a larger drop. Only a rejection from here will signal a further increase.

Price is trading in the red and should take out the static support from the 50% retracement level. A valid breakdown will attract more sellers which will lead it towards the 61.8% retracement level. I’ve said in the last weeks that the rate is somehow expected to drop further as the Nikkei stock index should hit fresh new lows. The JP225 dropped and resumed the yesterday’s bearish candle.

The AUD/USD increased in the morning and deleted the yesterday's losses. Is trading in the green despite the last hour's drop. Continues to stay in the green area and maintains a bullish perspective on the daily chart.

Is unlikely to talk about a reversal until we'll have a confirmation that the rate will start another leg lower. Technically has shown some exhaustion signs, but only a USDX's rally will force the rate to turn to the downside again.

Price remained steady after the RBA Rate Statement, wasn't impressed by the Reserve Bank decision to maintain the Cash Rate on hold at 1.50%. The rate didn't suffer any change since August 2016, we'll see what the RBA Gov Lowe speech will bring in the market, maybe we'll see some action only after the US data will be released.

AUD/USD moves sideways between the 0.7989 and the 0.7835 static support. Price maintains a bullish perspective as long as is trading within the minor ascending pitchfork's body. Could retest the lower median line (lml) before will climb much higher, only a valid breakdown below the LML will confirm a larger corrective phase. The major upside target remains at the 0.8065 horizontal level, will approach it if the USDX slides further. The US dollar still needs a bullish spark from the Federal Reserve, however, it could receive a helping hand from a dovish ECB on Thursday.

GBP/USD – 1.2939





Original strategy :

Buy at 1.2900, Target:1.3050, Stop: 1.2840

Position: -

Target:  -

Stop: - 




New strategy :

Buy at 1.2880, Target:1.3080, Stop: 1.2820

Position: -

Target:  -

Stop:- 



Cable’s retreat after Friday’s brief rise to 1.2996 suggests minor consolidation would be seen and pullback to 1.2900-05 cannot be ruled out, however, reckon downside would be limited to 1.2880 and as long as support at 1.2852 holds, prospect of another rise remains, above 1.2996-00 would add credence to our view that low has been formed at 1.2774 and extend the corrective rise from there for retracement of recent decline from 1.3269 to resistance at 1.3032, then towards 1.3090-00 later.

In view of this, would be prudent to buy sterling on dips. Below said support at 1.2852 would defer and risk weakness towards 1.2800-10, however, only break of latter level would suggest the rebound from 1.2774 has ended instead, risk retest of this level, break there would extend the selloff from 1.3269 top to 1.2750, then towards 1.2700-10 later. 

Our preferred count on the daily chart is that cable's rebound from 1.3500 (wave (A) trough) is unfolding as a wave (B) with A ended at 1.7043, followed by triangle wave B and wave C as well as wave (B) has ended at 1.7192, the subsequent selloff is the larger degree wave (C) which is still unfolding with minor wave (III) of larger degree wave 3 ended at 1.1986, hence wave (IV) correction is in progress which could either be a triangle wave (IV) of a complex formation but upside should be limited to 1.3500 and price should falter well below 1.4000, bring another decline in wave (V) of 3 for weakness to 1.1500, then 1.1200. 


GBP/JPY - 141.47

Original strategy:

Exit long entered at 141.60,

Position: - 141.60
Target: -
Stop: -

New strategy :

Stand aside

Position: -
Target:  -
Stop:-

Despite rising to 143.00 on Friday, lack of follow through buying on break of previous resistance at 142.90 and the subsequent retreat suggest top has possibly been formed there and downside risk is seen for weakness to 141.00, however, reckon support at 140.45 would limit downside and price should stay well above support at 140.05.

In view of this, would not chase current retreat and would be prudent to stand aside for now. Above 141.90-95 would suggest low is possibly formed, bring rebound to 142.50-60 but only break of said Friday’s high at 143.00 would revive bullishness and extend the rise from 139.35 to 143.20 and then 143.50-60, however, upside should be limited to 144.00-10.

Our preferred count is that larger degree wave V with circle is unfolding from 251.12 with wave (I) 219.34, (II): 241.38 and wave (III) is subdivided into 1: 192.60, 2: 215.89 (23 Jul 2008) and wave 3 ended at 118.87 earlier in 2009. The correction from there to 162.60 is wave 4 which itself is a double three and is labeled as first a-b-c ended at 151.53, followed by wave x at 139.03, 2nd a ended at 162.60, 2nd b at 146.75 and 2nd c leg of wave 4 ended at 163.00. Therefore, the decline from 163.00 to 116.85 is now treated as wave 5 which also marked the end of larger degree wave (III), hence wave (IV) major correction has commenced for retracement of the wave (III) from 241.38 and upside target at 183.95-00 (50% Fibonacci retracement of the wave (II) from 241.38) had been met, a drop below 160.00 would suggest wave (IV) has ended at 195.85, bring decline in wave (V) for initial weakness to 130 (already met) and 120.


EUR/JPY - 130.03

Original strategy:

Bought at 130.30, stopped at 129.90

Position: - Long at 130.30
Target: -
Stop: - 129.90

New strategy :

Stand aside

Position: -
Target:  -
Stop:-

As the single currency has fallen again today after meeting renewed selling interest at 130.71 yesterday, suggesting near term downside risk remains for the retreat from 131.71 top to bring test of support at 129.66, however, break there is needed to retain near term bearishness, bring retracement of recent upmove to 129.10-15, then towards 128.70-75 but support at 128.49 should remain intact.

In view of this, would not chase this fall here and would be prudent to stand aside in the meantime. Above said resistance at 130.71 would revive bullishness and suggest low is possibly formed, bring rebound to 131.00, then test of 131.35, break of latter level would indicate the retreat from 131.71 has ended, bring rest of this level first, above there would confirm recent upmove has resumed and extend gain to 132.00-10 but reckon upside would be limited to 132.50-60 and 133.00-10 should hold from here.

Our latest preferred count is that wave (ii) is ABC-X-ABC which ended at 123.33 and wave (iii) is unfolding with wave iii ended at 100.77, followed by wave iv at 111.57 and wave v as well as the wave (iii) has ended at 97.04, followed by wave (iv) at 111.43 and wave (v) has ended at 94.12 which is also the end of the larger degree v, this also implied the major wave (C) has also ended there, hence major correction has commenced from there with (A) leg unfolding in its lower degree wave c which has possibly ended at 145.69. Under this count, A-B-C wave (B) has commenced with A leg ended at 136.23, wave B at 143.79 and wave C has possibly ended at 149.79.

Our larger degree count is that the decline from 139.26 is wave (C) and is sub-divided into a diagonal triangle i-ii-iii-iv-v with wave i - 105.44, wave ii- 123.33, wave iii - 97.03, wave iv - 111.43, followed by the final wave v as well as the end of wave (C) at 94.12, this also mark the bottom of larger degree wave B. Under this count, major rise in wave C has commenced as an impulsive wave with minor wave III ended at 145.69, wave V is still in progress for further gain to 150.00. Having said that, this so-called wave V could well be the first leg of larger degree 5-waver wave C and this wave C should bring at least a retest of wave A top at 169.97 (July 2008).

Daily Pivots: (S1) 1.4913; (P) 1.4951; (R1) 1.5003; More....

With 1.5042 minor resistance intact, intraday bias in EUR/AUD remains mildly on the downside for 1.4732 resistance. Decline from 1.5173 is viewed as the third leg of the consolidation pattern from 1.5226. Break of 1.4372 will target 1.4421 again. But we'd expect strong support from there to contain downside and bring rebound. On the upside, above 1.5042 minor resistance will turn bias back to the upside for 1.5173 resistance instead.

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 will dampen our view and would drag EUR/AUD lower to retest key support zone around 1.3624.