Sample Category Title

EUR/USD - 1.2046

Original strategy  :

Buy at 1.1985, Target: 1.2090, Stop: 1.1950

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.1985, Target: 1.2090, Stop: 1.1950

Position : -

Target :  -

Stop : -

Although the single currency surged again after breaking above previous resistance at 1.2070 and bullishness remains for recent upmove to extend gain to 1.2100, loss of upward momentum should prevent sharp move beyond 1.2130-40 and reckon 1.2150-55 (61.8% projection of 1.1119-1.1910 measuring from 1.1662) would limit upside, price should falter below 1.2175-80, bring retreat later. 

In view of this, would not chase this rise here and would be prudent to buy euro on subsequent pullback as support at 1.1980-84 should limit downside and bring another upmove later. Below 1.1950 (previous resistance turned support) would signal a temporary top is formed instead bring weakness to 1.1925-30 first. 

USD/JPY - 107.68

Original strategy  :

Sell at 108.45, Target: 107.45, Stop: 108.90

Position :  -

Target :  -

Stop : -

New strategy  :

Sell at 108.45, Target: 107.45, Stop: 108.90

Position :  -

Target :  -

Stop : -

The greenback only recovered to 108.71 before dropping again as suggested (missed our short entry at 108.75) and price exceeded our indicated downside target at 107.75, bearishness remains for recent decline to extend further weakness to 107.20-25, however, near term oversold condition should limit downside and reckon 106.80-82 (61.8% projection of 114.50-108.27 measuring from 110.67) would hold from here, bring rebound later.

In view of this, we are still looking to sell dollar on recovery as 108.45-50 should limit upside. Above said resistance at 108.71 would defer and risk rebound to 109.00, break there would suggest low is possibly formed but only break of indicated resistance at 109.40 would confirm and signal recent decline has ended instead.

Daily Pivots: (S1) 1.1936; (P) 1.1997 (R1) 1.2082; More...

Intraday bias in EUR/USD remains on the upside for the moment. Medium term rise from 1.0339 has just resumed and further rise should be seen to next key fibonacci level at 1.2516. On the downside, break of 1.1822 support is needed to indicate short term topping. Otherwise, outlook will remain bullish in case of retreat.

In the bigger picture, an important bottom was formed at 1.0339 on bullish convergence condition in weekly MACD. Sustained trading above 55 month EMA (now at 1.1774) will pave the way to key fibonacci level at 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. While rise from 1.0339 is strong, there is no confirmation that it's developing into a long term up trend yet. Hence, we'll be cautious on strong resistance from 1.2516 to limit upside. For now, medium term outlook will remain bullish as long as 1.1295 support holds, in case of pull back.

Daily Pivots: (S1) 0.9468; (P) 0.9530; (R1) 0.9568; More....

Intraday bias in USD/CHF remains on the downside for the moment. Whole decline from 1.0342 should be resuming. Next target will be 61.8% projection of 1.0099 to 0.9437 from 0.9772 at 0.9363. On the upside, above 0.9493 minor resistance will turn bias neutral first. But outlook will stay bearish as long as 0.9679 resistance holds.

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) 107.91; (P) 108.59; (R1) 109.13; More...

Intraday bias in USD/JPY remains on the downside as the medium term decline from 118.65 has just resumed. Further fall should be seen to 61.8% retracement of 98.97 to 118.65 at 106.48. We'll look for support from there again to bring rebound. On the upside, above 108.45 minor resistance will turn intraday bias neutral first. But outlook will now stay bearish as long as 110.66 resistance holds.

In the bigger picture, pull back from 118.65 is viewed as a corrective pattern for the moment and downside should be contained by 61.8% retracement of 98.97 to 118.65 at 106.48 and bring rebound. Rise from 98.97 is expected to extend later to retest 125.85 high. However, sustained break of 106.48 will dampen this view and bring deeper fall to retest 98.97 instead.

Daily Pivots: (S1) 1.3049; (P) 1.3082; (R1) 1.3132; More...

GBP/USD rises further to as high as 1.3223 so far and intraday bias remains on the upside for 1.3267 resistance. Break there will extend larger rally from 1.1946 to 1.3444 key resistance level next. Price actions from 1.1946 are still seen as a corrective pattern. Hence, we'd expect strong resistance from 1.3444 to limit upside to bring larger down trend reversal eventually. On the downside, below 1.3114 minor support will turn intraday bias neutral first.

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.

Dollar's selloff accelerates today as markets are concerned of any more geopolitical risks during the week end. It will be North Korea's Foundation Day on Saturday and Pyongyang might just launch another missile to celebrate. At the same time, another hurricane Irma will likely make landfall in Florida late Saturday of early Sunday. In the background, the surprised early resignation of Fed Vice Chair Stanley Fischer created even more uncertainty in Fed as Janet Yellen's future as Fed Chair is unknown. Euro, despite being lifted against Dollar after ECB, could follow as the second weakest for the week.

Meanwhile, Canadian Dollar is set to end as the biggest winner of the week, as boosted by BoC rate hike as solid job data. The Canadian job market grew 22.2k in August, above expectation of 15.0k. Unemployment rate dropped to 6.2%, below expectation of 6.3%. That matched recent low back in October 2008. Capacity utilization rose to 85.0% in Q2.

Sterling surges after solid production data

Sterling surges against dollar today as lifted by solid production data. Some strength is seen against Euro, but the pound struggles to breakout against Yen. Industrial production rose 0.2% mom, 0.4% yoy in July, versus expectation of 0.2% mom, 0.3% yoy. Manufacturing production rose 0.5% mom, 1.9% yoy versus expectation of 0.3% mom, 1.7% yoy. NEISR GDP estimate rose 0.4% in August. Trade deficit narrowed to GBP -11.6b in July versus expectation of GBP -12.1b. However, construction output dropped -0.9% mom in July. Also from Europe, German trade surplus narrowed to EUR 19.5b in July. Swiss unemployment rate was unchanged at 3.2% in August.

China exports softened as trade surplus narrowed

China's trade surplus narrowed to USD 42.0b in August, from USD 46.7B and missed expectation of USD 48.6b. Imports grew 13.3% yoy, well above expectation of 10.0% yoy. Imports also maintained July's pace at 11.0% yoy. However, exports softened and grew only 5.5%, below expectation of 6.0% yoy and notably slower than July's 7.2% yoy. China's foreign current reserves rose for a seven straight month in August. Reserves jumped USD 10.81b to USD 3.092T. But the number was well below economists expectation of USD 19b.

Also from Asia Pacific, Japan Q2 GDP was finalized at 0.6% qoq, down from prior estimate of 1.0% qoq and below expectation of 0.7% qoq. GDP deflator dropped -0.4% Yoy. Japan current account surplus widened to JPY 2.03T in July, bank lending rose 3.2% yoy in August. Australia home loan rose 2.9% in July. New Zealand manufacturing activity rose 3.9% in Q2.

GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.3049; (P) 1.3082; (R1) 1.3132; More...

GBP/USD rises further to as high as 1.3223 so far and intraday bias remains on the upside for 1.3267 resistance. Break there will extend larger rally from 1.1946 to 1.3444 key resistance level next. Price actions from 1.1946 are still seen as a corrective pattern. Hence, we'd expect strong resistance from 1.3444 to limit upside to bring larger down trend reversal eventually. On the downside, below 1.3114 minor support will turn intraday bias neutral first.

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

The EUR/JPY has been making lower highs and lower lows and the previous retracement has broken the trend line suggesting further downside. If the price gets to 130.10-28 POC (trend line, X cross, EMA89, D L3, WL3, 50.0) we might see another rejection towards 129.50. Break of 129.50 should target 120.20 and only a high downside momentum can push the price towards 128.69 - Weekly camarilla L5 support.

W L3 - Weekly Camarilla Pivot (Weekly Interim Support)

W H3 - Weekly Camarilla Pivot (Weekly Interim Resistance)

W H4 - Weekly Camarilla Pivot (Strong Weekly Resistance)

D H4 - Daily Camarilla Pivot (Very Strong Daily Resistance)

D L3 – Daily Camarilla Pivot (Daily Support)

D L4 – Daily H4 Camarilla (Very Strong Daily Support)

POC - Point Of Confluence (The zone where we expect price to react aka entry zone)

The DAX index is unchanged in the Friday session, trading at 12,297.50, up 0.01% on the day. On Thursday, the index climbed to a high of 12,363.60, its highest level since July 24. On the release front, there is only one event on the schedule. Germany's trade surplus narrowed to EUR 19.5 billion, short of the forecast of EUR 20.3 billion.

Is the ECB sending out mixed signals about its quantitative easing (QE) program? One could make that argument after the ECB policy meeting on Thursday. The QE program, in which the ECB purchases EUR 60 billion/month, is slated to end in December, and the markets were hoping for some guidance about the ECB's plans. The rate announcement was surprisingly dovish, as policymakers said that QE would not be tapered before December, and left the door open to further stimulus in 2018, if necessary. However, Mario Draghi presented a more hawkish stance in his follow-up press conference, saying that the ECB would make a decision on how to scale back stimulus in October. In his remarks, Draghi made direct reference to the exchange rate, noting that "the recent volatility in the exchange rate represents a source of uncertainty which requires monitoring". Draghi & Co. are clearly concerned by the euro's appreciation, as the EUR/USD has soared 14 percent in 2017. The stronger euro has made imports less expensive, thus reducing inflation and hampering the ECB's efforts to raise inflation levels. The ECB has now cut its inflation forecast to 1.2 percent in 2018 and 1.5 percent in 2019, well short of its target of just below 2 percent.

Germany's economy has been robust in 2017, and economic indicators have generally pointed upwards. However, this week's numbers have been unexpectedly soft. Earlier this week, Factory Orders declined 0.7%, well off the forecast of a 0.2% gain. This marked a 3-month low. German Industrial Production followed suit, as the reading of 0.0% missed the estimate of 0.5%. On Friday, Germany's trade surplus dropped to EUR 19.5 billion, the smallest surplus since January. Why the downturn? Global demand, which had been very strong in the first half of 2017, is showing signs of softening, and this had a negative impact on the manufacturing sectors in Germany and throughout the eurozone. This has also had a negative impact on exports, which was reflected in the Germany's smaller surplus in July.

The British pound has moved sharply higher against the U.S dollar during the European trading session, reaching 1.3190, after the UK economy posted much better than expected UK industrial output and manufacturing data.

This week's continuation of the recent fall in the value of the U.S dollars trade-weighted index, which is now at its lowest level since January 2015, is also pushing the GBPUSD pair higher.

The GBPUSD pair remains strongly bullish on all-time frames, with price-action fast approaching the current 2017 price high, located at 1.3268.

Key intraday technical resistance above the 1.3200 level, is located at the 1.3220, 1.3268, 1.3293 levels. Long-term trendline and Fibonacci resistance currently converge, at the 1.3333 level.

To the downside, intraday support is located the August 4th price high, at 1.3164, with further historical support at the 1.3125 level.

Below 1.3125, GBPUSD support is located at 1.3080 and the key 1.3047 level.