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Daily Pivots: (S1) 1.2001; (P) 1.2046 (R1) 1.2079; More...

EUR/USD's retreat from 1.2091 temporary top extends lower today. And intraday bias stays neutral for more corrective trading. Overall, outlook remains bullish as long as 1.1822 support holds. Above 1.2091 will extend larger rise fro 1.0339 and target next key fibonacci level at 1.2516. But considering bearish divergence condition in 4 hour MACD, break of 1.1822 will confirm short term topping and bring deeper fall back to 1.1661 support and below.

In the bigger picture, rise from medium term bottom at 1.0339 is still in progress for 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. However, it should be noted that there is no confirmation of trend reversal yet. That is, such rebound from 1.0399 could be a correction. And the long term fall fro 1.6039 (2008 high) could resume. Hence, we'd be cautious on strong resistance from 1.2516 to limit upside. But after all, break of 1.1661 is needed to indicate medium term topping. Otherwise, outlook will remain bullish in case of pull back.

Daily Pivots: (S1) 0.9404; (P) 0.9456; (R1) 0.9490; More....

Intraday bias in USD/CHF remains neutral for consolidation above 0.9420 temporary low. But after all, near term outlook remains bearish as long as 0.9679 resistance holds. Deeper fall is still expected. Sustained break of 0.9420 will target 61.8% projection of 1.0099 to 0.9437 from 0.9772 at 0.9363 first. Break will target 100% projection at 0.9110 next.

In the bigger picture, current development suggests that 0.9443 key support (2016 low) could be taken out firmly as down trend form 1.0342 extends. There are various interpretation of the price actions. But in any case, medium term outlook will stay bearish as long as 0.9772 resistance holds. Current down trend could extend to 38.2% retracement of 0.7065 (2011 low) to 1.0342 (2016 high) at 0.9090. However, break of 0.9772 will indicate that USD/CHF has successfully defended 0.9443 again and turn outlook bullish for 1.0099 resistance.

Daily Pivots: (S1) 107.27; (P) 107.88; (R1) 108.44; More...

Intraday bias in USD/JPY remains neutral for consolidation above 107.31 temporary low. But overall, outlook will remain bearish as long as 110.66 resistance holds. And, deeper decline is expected. Below 107.31 will extend the whole fall from 118.65 to 61.8% retracement of 98.97 to 118.65 at 106.48 first. We'd look for support from there to bring rebound. But firm break of 106.48 will extend the decline to 100% projection of 118.65 to 108.12 from 114.49 at 103.96 or below.

In the bigger picture, rise from 98.97 (2016 low) is now seen as the second leg of the corrective pattern from 125.85 (2015 high). It's unclear whether this this second leg has completed at 118.65 or not. But medium term outlook will be mildly bearish as long as 114.49 resistance holds. And, there is prospect of breaking 98.97 ahead. Meanwhile, break of 114.49 will bring retest of 125.85 high. But even in that case, we don't expect a break there on first attempt.

Highlights:

• Housing starts were little changed at 223k annualized units in August. Market expectations were for a slight moderation to 215k from July's 222k pace.
• On a trend basis, starts averaged 220k over the past six months, the strongest pace in nearly five years.
• Single-unit starts edged lower after having picked up strongly earlier this year. Multi-unit starts rose in August and the six-month trend was the strongest on record.
• On a regional basis, a jump in Ontario starts was partly offset by a decline in BC. Year-to-date, starts remain elevated in both provinces. Quebec and the Prairies have also seen an improvement in homebuilding activity this year.

Our Take:

Canada's homebuilding sector continued to defy the trend in resales with housing starts remaining elevated in August. On a trend basis, starts are running at their fastest pace since September 2012 even as changes in housing policy are slowing sales of existing homes. Recent strength in permit issuance argues for that divergence to continue in the near-term. However, as starts do tend to follow resales with a lag, we think some slowing in the former is in order toward the end of the year. The fact that housing starts continue to strongly outpace the estimated underlying rate of household formation also argues for some slowing going forward. But for now, it looks like Q2's decline in residential investment won't be repeated in the current quarter.

USD/CHF - 0.9529

Original strategy :

Bought at 0.9450, Target: 0.9550, Stop: 0.9420

Position : - Long at 0.9450

Target :  - 0.9550

Stop : - 0.9420

New strategy  :

Hold long entered at 0.9450, Target: 0.9550, Stop: 0.9480

Position : - Long at 0.9450

Target :  - 0.9550

Stop : - 0.9480

As the greenback found support at 0.9439 and has rebounded, retaining our view that low is possibly formed at 0.9421 on Friday and consolidation with mild upside bias remains for retracement of recent decline, hence gain to 0.9550-55 would be seen, however, break above there is needed to add credence to this view, bring a stronger rebound towards resistance at 0.9595 which is likely to hold from here.

In view of this, we are holding on to our long position entered at 0.9450. Below said support at 0.9421 would risk weakness to 0.9390-00, having said that, further sharp fall below 0.9370-75 should not be repeated and reckon 0.9350 would hold from here, bring rebound later. 

The currency seems too heavy to be stopped on the short term. Is trading in the red and resumes the bearish momentum. EUR/GBP is focusing on correction right now, so the perspective is bearish on the short term. Remains to see how long this retreat will be because is approaching some major downside obstacle.

Price has opened with a gap down in the morning, signaling that the bears are very strong on the short term. Technically, the corrective phase could be only temporary, could drop only to recapture more directional energy before will resume the upside movement.

The Euro drop versus the Cable even if the Italian Industrial Production rose by 0.1% in July, the economic indicator was expected to decrease by 0.5%. The Industrial Production remains in the positive territory for the third consecutive month, but the Euro wasn't inspired.

Price goes down after the false breakout above the upper median line (UML) of the major ascending pitchfork and above the 0.9226 static resistance. Has managed to slip below the 50% Fibonacci line, a valid breakdown will signal a further drop towards the next downside targets.

The near term support will be at the 0.9000 psychological level, could also be attracted by the lower median line (lml) of the minor blue ascending pitchfork. Technically, is somehow expected to be attracted by the confluence area formed at the intersection between the median line (ML) with the third warning line (wl3) of the descending pitchfork and with the lower median line (lml) of the minor ascending pitchfork.

The NZD/USD is pressuring the 38.2% retracement level, a valid breakout will confirm an increase towards the third warning line (WL3) of the descending pitchfork. Price remains under pressure as long as is trading under the WL3, only a breakout above it will signal a further increase towards the next upside targets, from 0.7375, respectively to 0.7484 level.

GBP/USD - 1.3196

Original strategy :

Buy at 1.3125, Target: 1.3225, Stop: 1.3090

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.3125, Target: 1.3225, Stop: 1.3090

Position : -

Target :  -

Stop : -

Last week’s rally to 1.3224 adds credence to our bullish view that recent upmove from 1.2774 is still in progress and upside bias remains for further gain to 1.3225-30, then towards 1.3250, however, loss of near term upward momentum should prevent sharp move beyond latter level and price should falter below recent high at 1.3269, bring retreat later.

In view of this, would not chase this rise at current level and would be prudent to buy cable on subsequent pullback as 1.3120-25 should limit downside. Only below 1.3082 (previous resistance turned support) would abort ad suggest top is possibly formed, risk test of 1.3062 but reckon support at 1.3033 would hold.

USD/CHF has opened with a gap up and continues to increase on the daily chart. Looks like we had a false breakdown below the 0.9440 static support and under the lower median line (lml) of the minor descending pitchfork. A retest of the lower median line (lml) will confirm a further increase in the upcoming period, the next important upside target will be at the median line (ml) of the minor descending pitchfork.

EUR/USD - 1.1984

Original strategy  :

Bought at 1.1985, Target: 1.2090, Stop: 1.1950

Position : - Long at 1.1985

Target :  - 1.2090

Stop : - 1.1950

New strategy  :

Hold long entered at 1.1985, Target: 1.2090, Stop: 1.1950

Position : - Long at 1.1985

Target :  - 1.2090

Stop : - 1.1950

Euro’s retreat after rising to 1.2093 late last week suggests consolidation below this level would be seen and marginal weakness from here cannot be ruled out, however, reckon downside would be limited and bring another rise later, above 1.2030 would suggest an intra-day low is formed, bring test of 1.2070-75, break there would signal the pullback from 1.2093 has ended, then retest of this resistance would follow but break there is needed to extend recent upmove towards 1.2150-55 (61.8% projection of 1.1119-1.1910 measuring from 1.1662). 

In view of this, we are holding on to our long position entered at 1.1985. Below 1.1950 (previous resistance turned support) would signal a temporary top is formed instead bring weakness to 1.1925-30 first.