Sample Category Title

Daily Pivots: (S1) 0.9522; (P) 0.9591; (R1) 0.9632; More....

USD/CHF's decline is still in progress and intraday bias remains on the downside for retesting 0.9437 low. Note again that the pair is bounded in medium falling channel and limited below 38.2% retracement of 1.0342 to 0.9437 at 0.9783. Break of 0.9427 will extend the whole decline from 1.0342 and carries larger bearish implications. On the upside, above 0.9619 minor resistance will turn intraday bias neutral again.

In the bigger picture, we're slightly favoring the case that USD/CHF has successfully defended 0.9443 key support level. And long term range trading in 0.9443/1.0342 is extending with another rise. At this point, there is no sign of an up trend yet. Hence, while further rise is expected in USD/CHF, we'll start to be cautious on loss of momentum above 61.8% retracement of 1.0342 to 0.9437 at 0.9996. However, firm break of 0.9443 will carry larger bearish implication and would target next key support at 0.9072.

USD/CHF - 0.9547

Original strategy :

Sell at 0.9590, Target: 0.9490, Stop: 0.9625

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 0.9590, Target: 0.9490, Stop: 0.9625

Position : -

Target :  -

Stop : -

Friday’s selloff together with the breach of previous support at 0.9583-86 confirm top has been formed at 0.9773 earlier and bearishness is seen for the erratic decline from there to extend weakness to 0.9520-25, then towards support at 0.9490, however, near term oversold condition should prevent sharp fall below latter level. Looking ahead, A drop below 0.9490 would signal early downtrend has resumed and extend far to 0.9455-60 but recent low at 0.9438 should hold from here.

In view of this, we are looking to sell dollar on recovery as previous support at 0.9583-86 should turn into resistance and limit dollar’s upside, bring another decline. Above another previous support at 0.9620 would defer and suggest a temporary low is possibly formed, bring rebound to 0.9650 but still reckon resistance at 0.9663 would hold from here.

GBP/USD - 1.2912

Original strategy :

Buy at 1.2850, Target: 1.2950, Stop: 1.2815

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.2850, Target: 1.2950, Stop: 1.2815

Position : -

Target :  -

Stop : -

Although cable retreated after intra-day initial brief rise to 1.2939, as last week’s rebound from 1.2774 suggests a temporary low has possibly been formed there, reckon downside would be limited to 1.2850 and bring another rebound later, above said resistance at 1.2939 would add credence to this view and extend the rise from 1.2774 low for retracement of recent decline to 1.2970-80, then towards 1.3000 but price should falter below previous resistance at 1.3032.

In view of this, we are looking to buy sterling on pullback as 1.2850 should limit downside. Below previous resistance at 1.2837 would defer and risk test of 1.2810-15 but only break there would abort and signal the rebound from 1.2774 (last week’s low) has ended instead, risk weakness to 1.2775-80 first.

Daily Pivots: (S1) 109.01; (P) 109.42; (R1) 109.74; More...

USD/JPY is staying in consolidation above 108.59 temporary and intraday bias remains neutral at this moment. Upside of recovery should be limited below 110.94 resistance and bring fall resumption. Break of 108.59 will target a test on 108.12 low. Whole corrective decline from 118.65 is possibly resuming and break of 108.12 will target 61.8% retracement of 98.97 to 118.65 at 106.48. Nonetheless, firm break of 110.94 will indicate short term bottoming and turn bias back to the upside.

In the bigger picture, the corrective structure of the fall from 118.65 suggests that rise from 98.97 is not completed yet. Break of 118.65 will target a test on 125.85 high. At this point, it's uncertain whether rise from 98.97 is resuming the long term up trend from 75.56, or it's a leg in the consolidation from 125.85. Hence, we'll be cautious on topping as it approaches 125.85. If fall from 118.65 extends lower, downside should be contained by 61.8% retracement of 98.97 to 118.65 at 106.48 and bring rebound.

Daily Pivots: (S1) 1.2816; (P) 1.2852; (R1) 1.2911; More...

GBP/USD's recovery from 1.2773 continues today but it's staying well below 1.3030 resistance so far. Intraday bias remains neutral with mildly bearish near term outlook. We're favoring the case that correction from 1.1946 is completed at 1.3267. Below 1.2773 will target 1.2588 key near term support first. Decisive break of 1.2588 will confirm our view and target a test on 1.1946 low. Though, break of 1.3030 will dampen this bearish view and turn bias back to the upside for retesting 1.3267.

In the bigger picture, overall, price actions from 1.1946 medium term low are seen as a corrective pattern. While further rise cannot be ruled out, larger outlook remains bearish as long as 1.3444 key resistance holds. Down trend from 1.7190 (2014 high) is expected to resume later after the correction completes. And break of 1.2588 will indicate that such down trend is resuming.

EUR/USD - 1.1933

Original strategy  :

Buy at 1.1870, Target: 1.1970, Stop: 1.1835

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.1870, Target: 1.1970, Stop: 1.1835

Position : -

Target :  -

Stop : -

The single currency finally rallied on Friday and upmove gathered momentum after breaking indicated resistance at 1.1828 (now support) and euro eventually surged above recent high at 1.1910, adding credence to our bullish view for a resumption of recent upmove, hence upside bias remains for further gain to 1.1970-80, however, near term overbought condition should limit upside to 1.1200-10 and reckon 1.1250-60 would hold from here. 

In view of this, would not chase this rise here and would be prudent to reinstate long on pullback as the Kijun-Sen (now at 1.1873) should limit downside and bring another upmove. Only below previous resistance at 1.1828 (now support) would abort and suggest a temporary top is possibly formed, risk test of 1.1800 but break of support at 1.1773 (Friday’s low) is needed to confirm.

Sterling recovers broadly today as markets are looking at the third round of Brexit negotiation between UK and EU in Brussels.. There are talks that selloff of the Pound is overdone, in particular against Euro. Technically that's a valid view as the cross, currently at 0.9240, is reasonably close enough to key resistance level at 0.9304 (2016 high). But the recovery in the Pound is so far rather weak and it's staying near term bearish against Euro, Dollar and Yen. There are still a lot of uncertainties over the outcome of Brexit and we believed that the worst is not priced in yet. There might be renewed selling in Sterling should there be no positive news coming our from the Brexit negotiators.

Davis called for flexibility and imagination

UK's Brexit secretary David Davis called for "flexibility and imagination" in the talks. And he emphasized that UK wants a Brexit deal "that works in the best interests of both". EU chief Brexit negotiator Michel Barnier warned in an article that UK will have "very practical consequences including on defence and security" after Brexit. Barnier noted that "the British defence minister will no longer be able to sit at the council of defence ministers, London will leave the European Defence Agency and Europol". Neither party touched on one of the biggest deadlock in the negotiation, the divorce bill. It's reported that EU officials have requested Davis to provide details on their side of the calculation on the bill but so far nothing is provided.

BCC and DIHK urge focus on practical business concerns

The British Chambers of Commerce (BCC) and the Association of German Chambers of Commerce (DIHK) issued a joint statement urging UK and EU to focus on shared economic interests in Brexit negotiations. BCC director general Adam Marshall said that "as Brexit talks continue, it's clear that companies in the UK and on the continent all want economic issues to rise to the top of the negotiations agenda. There is real business appetite from both sides for a focus on practical, day-to-day business concerns, and a desire for clarity on future trading arrangements." DIHK head Martin Wansleben said that "the terms of exit are still completely unclear. Many of our members are reporting that they are already shifting investments away from the UK in anticipation of these barriers."

BoJ Kuroda: Less need to purchase JGBs ahead

BoJ Governor Haruhiko Kuroda said in a television interview that 4% growth cannot be sustained and "around 2% growth is likely" for the country. He hailed the yield curve control frame work as "well managed" and noted that "despite the wide fluctuation of long-term interest rates in Europe and the United States, Japanese 10-year JGB interest rate has been very flat, around 0 percent." He also noted that the JGB markets are "functioning quite well" in spite of the central bank's massive asset purchase program. Meanwhile, he pointed out that "since JGBs remaining in the market is going to decline, that means that with one unit of JGB purchase, the impact on the interest rate could be bigger." Hence, "in coming months there will be less and less need to purchase JGBs in order to maintain the yield curve."

On the data front

US trade deficit widened slightly to USD -65.1b in July. Wholesale inventories rose 0.4% in July. Eurozone M3 rose 4.5% yoy in July.

GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.2816; (P) 1.2852; (R1) 1.2911; More...

GBP/USD's recovery from 1.2773 continues today but it's staying well below 1.3030 resistance so far. Intraday bias remains neutral with mildly bearish near term outlook. We're favoring the case that correction from 1.1946 is completed at 1.3267. Below 1.2773 will target 1.2588 key near term support first. Decisive break of 1.2588 will confirm our view and target a test on 1.1946 low. Though, break of 1.3030 will dampen this bearish view and turn bias back to the upside for retesting 1.3267.

In the bigger picture, overall, price actions from 1.1946 medium term low are seen as a corrective pattern. While further rise cannot be ruled out, larger outlook remains bearish as long as 1.3444 key resistance holds. Down trend from 1.7190 (2014 high) is expected to resume later after the correction completes. And break of 1.2588 will indicate that such down trend is resuming.

Economic Indicators Update

USD/JPY - 109.33

Original strategy  :

Bought at 109.25, Target: 110.25, Stop: 108.90

Position :  - Long at 109.25

Target :  - 110.25

Stop : - 108.90

New strategy  :

Hold long entered at 109.25, Target: 110.25, Stop: 109.00

Position :  - Long at 109.25

Target :  - 110.25

Stop : - 109.00

Although the greenback retreated quite sharply after Friday’s marginal rise to 109.85, outlook remains consolidative, reckon downside would be limited to 109.00 and bring rebound later, above 109.50-55 would bring test of said resistance at 109.85, break there would extend the erratic rise from 108.60 low to 110.00, then towards resistance at 110.37 which is likely to hold from here. 

In view of this, we are holding on to our long position entered at 109.25. Only below said support at 108.84 would abort and bring retest of said support at 108.60, break there would revive bearishness and confirm recent decline has resumed for further weakness to 108.30 (1.618 times projection of 110.95-109.67 measuring from 110.37), then towards 108.00.

The USDJPY pair remains under selling pressure as the new trading week begins, with price action hovering just above the 109 level, following Friday's strong rejection from the 109.84 level.

Technically, the USDJPY is strongly bearish, with the pair now trading back below all key short, medium and long-term moving averages, with price now risking extended losses towards fresh 2017 lows, below the key 108.13 level.

Later today the Japanese economy releases household spending data and the July unemployment rate, with the U.S economic calendar remaining fairly light, the upcoming Japanese data points should impact the USDJPY.

Key upside technical resistance is found at the weekly pivot point, at 109.28, and the daily pivot point, at 109.42. Above 109.42, the 109.59 level comes back into focus, with the 109.80 level again the key to further upside above the 110 level.

To the downside, the triple bottoms created on the lower time-frame charts come into focus, with support layered below the 109 level, at 108.86, 108.69 and 108.60.

The GBPUSD pair has moved back above the 1.2900 level, as traders continue to buy British pounds and sell U.S dollars, in a busy Monday session, despite many London trading desks closed for the UK Summer Bank Holiday.

At present, sterling is finding strong technical resistance from the daily time frame, upsloping trendline, which began at the 1.2108 price low, and is found currently capping price action at the 1.2906 level.

Going forward, the 100-day moving average, at 1.2920 should define the GBPUSD pairs trading action, ahead of the UK Inflation Report Hearings on Wednesday.

Key intraday technical support below the 1.2900 level, is found at the channel top, at 1.2890, and the current weekly price low, at 1.2872.

Key GBPUSD technical resistance above the 1.2920 level, is found at the August 11th price low, at 1.2939, with further upside resistance found at the 38.2 percent Fibonacci retracement of the 1.2774 low to the yearly price high, at 1.2960.

Above 1.2960, the 50-day moving average, at 1.2984, is the final barrier before the crucial 1.3000 level.