Sample Category Title

Daily Pivots: (S1) 109.04; (P) 109.35; (R1) 109.85; More...

USD/JPY dips after being rejected by 4 hour 55 EMA but stays above 108.59 temporary low. Intraday bias remains neutral and more consolidation could be seen. But near term outlook stays bearish with 110.94 resistance intact and deeper decline is expected. 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.

Financial markets offered a muted response towards Mario Draghi's speech in Germany on Wednesday. Investors who were expecting fireworks left disappointed after the ECB chief maintained a safe distance from market-sensitive remarks.

While Draghi defended QE and stated that unconventional monetary policy was a success, the scant details on the ECB's quantitative easing exit strategy simply left market players empty handed. Although Euro bulls eventually found support in the form of strong Eurozone PMI reports, the threat of Draghi verbally intervening to weaken the currency at Jackson Hole is likely to limit the upside. With July's ECB meeting minute's already revealing concerns over how a resurgent Euro is obstructing the central bank's efforts to hit the 2% inflation target, Draghi's speech on Friday will be in sharp focus.

From a technical standpoint, the EURUSD remains bullish on the daily charts, as there have been consistently higher highs and higher lows. Prices are trading firmly above the 50 Simple Moving Average, while the MACD points to the upside. A breakout and daily close above 1.1830 should encourage a further move higher towards 1.1900. In an alternative scenario, sustained weakness below 1.1700 should encourage a further depreciation towards 1.1660 and 1.1600 respectively.

It's all about the Jackson Hole Symposium

A sense of anticipation can be felt across the financial markets ahead of the Jackson Hole Symposium later this week, which could offer an opportunity for central banks to signal policy shifts. Financial heavyweights such as Mario Draghi and Janet Yellen will be in the spotlight, with markets closely scrutinizing their speeches for fresh insight on the outlook for monetary policy and interest rates.

Although there have been reports that Draghi will not deliver a new policy message at the conference, this does not rule out the possibility of verbal intervention to weaken the Euro. While Federal Reserve Chair Janet Yellen will be speaking on financial stability, investors will most likely comb through the speech for further clues on when the Fed plans to unwind its balance sheet and raise rates.

If Draghi or Yellen surprise investors by announcing new policy messages, financial markets may experience explosive levels of volatility, which should jolt them from their summer lull.

NZD/USD plunged aggressively today and resumed the yesterday's bearish candle. Technically should drop much deeper on the short term, but was stopped by a strong confluence area. Price dropped significantly even if the USDX failed to stay higher and now is trading in the red. USDX failed once again to stay above the 93.50 psychological level and now is going down again.

The dollar index is moving sideways, but remains to see if this is an accumulation or a distribution movement. A further USDX's drop will send the greenback much lower versus its rivals. USD could receive support from the US New Home Sales, which is expected to increase from 610K to 611K. The Flash Services PMI and the Flash Manufacturing PMI could increase will be released as well.

Price dropped through the confluence area formed at the intersection between the red downtrend line with the minor red uptrend line. A valid breakdown below this confluence area will accelerate the sell-off and will validate the Head and Shoulders pattern.

Technically was expected to drop further after the retest of the fourth warning line (wl4) of the former ascending pitchfork. NZD/USD should drop more than 300 pips if the Head and Shoulders pattern will be confirmed. However, a false breakdown below the mentioned confluence area will send the rate towards the third warning line (WL3) of the former descending pitchfork.

Price drops after the retest of the 50% retracement level, the first warning line (wl1) and the minor red uptrend line. Technically is expected to drop much deeper on the short term as the Nikkei stock index is trading in the red and looks poised to resume the downside movement. Only a Nikkei's failure to close below the 19336 level will signal a Yen's exhaustion.

Price increased sharply in the first part of the day, but has found strong resistance at the red downtrend line. Has also failed to stabilize above the WL2 and now could drop towards the upper median line (uml) again.

Only a breakout above the mentioned resistance levels and above the WL4 will confirm a further increase, but this scenario is less likely to happen because the behavior has changed (lower highs).

USD/CHF - 0.9650

Original strategy :

Buy at 0.9630, Target: 0.9730, Stop: 0.9595

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 0.9620, Target: 0.9720, Stop: 0.9585

Position : -

Target :  -

Stop : -

As the greenback has retreated after faltering below resistance at 0.9699, suggesting initial downside risk remains for weakness to 0.9620-30, however, as long as support at 0.9586 holds, prospect of another rebound remains, above said resistance at 0.9699 would signal the retreat from 0.9766 has ended at 0.9586 last week and mild upside bias is seen for gain to 0.9720, then 0.9740, having said that, reckon resistance at 0.9766-73 would cap upside and bring further consolidation. Only a break of 0.9773 would retain bullishness and signal early rise from 0.9438 has resumed and extend gain to 0.9800.

In view of this, we are looking to buy dollar on further pullback as 0.9620-30 should limit downside. Below 0.9600 would risk test of strong support at 0.9583-86 but only break there would signal a downside break of recent broad range has occurred, bring subsequent fall to 0.9550.

GBP/USD - 1.2802

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Although cable has remained under pressure after resuming recent decline and near term downside risk remains for weakness to 1.2775-80 (38.2% Fibonacci retracement of 1.1986-1.3269), loss of downward momentum should prevent sharp fall below 1.2750 and reckon 1.2725-30 would limit downside, price should stay above 1.2700-05 (100% projection of 1.3269-1.2940 measuring from 1.3032) and risk from there is seen for a rebound to take place later.

In view of this, would not chase this fall here and would be prudent to stand aside for now. Above 1.2840-45 would suggest a temporary low is possibly formed, bring rebound to 1.2870-75 and then 1.2890 but reckon resistance at 1.2917-18 would hold from here, bring another decline.

EUR/USD - 1.1795

Original strategy  :

Bought at 1.1765, Target: 1.1865, Stop: 1.1730

Position : - Long at 1.1765

Target :  - 1.1865

Stop : - 1.1730

New strategy  :

Hold long entered at 1.1765, Target: 1.1865, Stop: 1.1740

Position : - Long at 1.1765

Target :  - 1.1865

Stop : - 1.1740

Although the single currency slipped in European morning, as euro found support at 1.1740 and has rebounded, retaining our view that the pullback from 1.1828 has ended there and bring retest of said resistance, break there would extend the rise from 1.1662 low to resistance at 1.1847, above there would provide confirmation that the pullback from 1.1910 has ended and encourage for headway to 1.1870-80 but reckon said resistance at 1.1910 would hold from here. 

In view of this, we are holding on to our long position entered at 1.1765. Only below 1.1725-30 would abort and suggest the rebound from 1.1662 has ended instead, risk weakness to 1.1695-00 first. 

USD/JPY - 109.13

New strategy  :

Stand aside

Position :  -

Target :  -

Stop : -

Despite intra-day initial brief rise to 109.83, lack of follow through buying on break of resistance at 109.60-67 and the subsequent retreat suggest consolidation below this level would be seen and pullback to 109.00 cannot be ruled out, however, break there is needed to signal the rebound from 108.60 has ended there, bring further fall to 108.80, then test of said support. A break of this support would confirm recent decline has resumed and may extend further weakness to 108.30 (1.618 times projection of 110.95-109.67 measuring from 110.37), then towards 108.00.

On the upside, above 109.60 would bring test of said resistance at 109.83, break there would signal low has been formed at 108.60 and bring a stronger rebound to 110.00 and later towards resistance at 110.37 which is likely to hold from here. As near term outlook is still mixed, would be prudent to stand aside in the meantime.

Daily Pivots: (S1) 0.9157; (P) 0.9167; (R1) 0.9180; More

EUR/GBP's rally continues today and reaches as high as 0.9217 so far. Break of channel resistance suggests upside acceleration. Intraday bias remains on the upside for 0.9304 key resistance next. At this point, there is no clear sign of up trend resumption yet. Hence, we'll be cautious on strong resistance from 0.9304 to limit upside and bring another fall. But firm break of 0.9304 will confirm up trend resumption and pave the way to 0.9799. On the downside, below 0.9159 minor support will turn intraday bias neutral first.

In the bigger picture, price actions from 0.9304 are viewed as a medium term corrective pattern. It's uncertain whether it is finished yet. But in case of another fall, we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside and bring rebound. Whole up trend from 0.6935 is expected to resume after consolidation from 0.9304 completes. In that case, 2008 high at 0.9799 will be the next target.