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The USD/JPY exchange rate acted exactly as it was expected. Namely, it made the second attempt to break through the monthly S2 at 108.82, but failed. In result of a rebound, it broke through the upper boundary of a junior descending channel.

At the moment, it is heading upwards towards a combined resistance level set up a combination of the weekly PP at 109.59 in conjunction with the 100- and 200-hour SMAs. Most probably, their combined effort will force the pair to retreat. An aggregate of technical indicators support this possibility by sending strong sell signal. But in the meantime, the average market sentiment remains 68.24% bullish, which should not be disregarded in the larger perspective.

As it was expected, previous trading session the yellow metal spent in a steady surge against the American Dollar. However, the soar did not last for long, as it was stopped already at the closest resistance level set up by the monthly R1 at 1,292.91. At the moment, the pair is moving horizontally, being squeezed between two notable barriers. The first is made of a combination of the 100- and 200-hour SMAs as well as the weekly PP at 1,284.70. The other one is made of the above monthly R1, but most importantly of an area located around the 1,296.00 mark, which represents a crossroad of the two junior ascending channels' upper boundaries. Hence, it seems that the bullion will prefer to move either horizontally, or downwards.

The pair bounces on Tuesday after repeated rejection at strong support at 108.83 (weekly cloud base) that signals strong hesitation at key support zone.

Overall picture remains firmly bearish and favors further downside after completion of current consolidative phase.

Firm break below 108.83 and last Friday's low at 108.60 is needed to signal bearish continuation towards key med-term support at 108.11 (17 Apr low).

Upside attempts so far hold below initial resistance at 109.64 (falling 10SMA), which guards sideways-moving daily Tenkan-sen (109.77), and psychological 110.00 barrier, where extended upticks should be capped.

Res: 109.49, 109.64, 109.77, 110.00
Sup: 108.83, 108.60, 108.11, 107.88

WTI oil futures have been rising steadily and making a recovery following a big drop yesterday. On the 4-hour chart, MACD is trading in a bullish direction and has broken above zero while RSI is also rising and attempting to break above 50 into bullish territory.

The move to the upside has encountered resistance provided by the 50-period moving average and also by the 38.2% Fibonacci retracement (47.87) of the decline from 50.19 to 46.43. Immediate support is at the 20-period MA at 47.62. A break of this support area would likely see an acceleration of a fall towards 46.90 (August 18 low) ahead of 46.43 (August 17 low). From here, there would be a resumption of the downtrend that started from the 50.00 region.

For now there is no clear trend for the short-term and the bias is expected to stay neutral between the 20 and 50-period MA. Only a move above 48.85 would weaken downside risk and bring the market above the Ichimoku cloud. The next target would be the key 50.00 level. This is a strong resistance area and a break above it would indicate a shift to a bullish bias.

The weaker-than-expected report on Canadian wholesale sales was followed by a modest reaction in the market. The Loonie gained against the US Dollar only 4 base points to reach the 1.2582 mark and continue downmove in the Tuesday's morning session.

Statistics Canada reported that the country's wholesale sales fell 0.5%over the course of June, missing expectations for a 0.6% gain after an upwardly revised 1.0% rise in the prior month. Analysts suggested the weak report was unlikely to cause concerns, as only one monthly decline was registered. However, both retail and wholesale sales revealed generally strong growth momentum in previous months, which allowed the Bank of Canada to remain confident about the near-term outlook.

Daily Pivots: (S1) 140.14; (P) 140.49; (R1) 140.89; More

With 143.18 minor resistance intact, fall from 147.76 is still progress for 138.65 support first. Break there will extend the decline to 135.58 key support level. At this point, price actions from 148.42 are seen as a sideway consolidation pattern. Hence, we'll expect strong support from 135.58 to contain downside and bring rebound. Nonetheless, break of 143.18 resistance is needed to indicate short term bottoming first. Otherwise, near term outlook will remain bearish in case of recovery.

In the bigger picture, the sideway pattern from 148.42 is extending with another leg. We'd expect strong support from 135.58 and 50% retracement of 122.36 to 148.42 at 135.39 to contain downside. Medium term rise from 122.36 is still expected to resume later. And break of 38.2% retracement of 196.85 to 122.36 at 150.43 will carry long term bullish implications. However, firm break of 135.58/39 will dampen the bullish view and turn focus back to 122.36 low.

Daily Pivots: (S1) 128.11; (P) 128.44; (R1) 129.06; More...

No change in EUR/JPY's outlook as fall from 131.39 is still in progress. Such decline is seen as correcting whole rise from 141.84 with break of channel support. Deeper decline would be seen to 38.2% retracement of 114.84 to 131.39 at 125.05 before completion. On the upside, break of 130.38 resistance is needed to confirm completion of the pull back. Otherwise, deeper decline is expected even in case of recovery.

In the bigger picture, the down trend from 149.76 (2014 high) is completed at 109.03 (2016 low). Current rally from 109.03 should be at the same degree as the fall from 149.76 to 109.03. Further rise is expected to 61.8% retracement of 149.76 to 109.03 at 134.20. Sustained break there will pave the way to key long term resistance zone at 141.04/149.76. Medium term outlook will remain bullish as long as 124.08 resistance turned support holds. However, firm break of 124.08 will argue that rise from 109.03 is completed and turn outlook bearish.

Weekly
    •    Last Candlesticks pattern: Long white candlestick
    •    Time of formation: 16 Jan 2017
    •    Trend bias: Down

Daily
    •    Last Candlesticks pattern: Long white candlestick
    •    Time of formation: 18 Apr 2017
    •    Trend bias: Near term up

GBP/USD – 1.2857

Cable has remained under pressure after recent selloff below indicated support at 1.2933, adding credence to our view that a temporary top has been formed earlier at 1.3269 and further consolidation below this level would take place with mild downside bias for at least a strong retracement of recent upmove to support at 1.2812, then 1.2775-80 (38.2% Fibonacci retracement of 1.1986-1.3269), however, near term oversold condition should prevent sharp fall below 1.2700 and reckon 1.2620-30 (50% Fibonacci retracement) would hold from here and price should stay above previous chart support at 1.2589.

On the upside, whilst initial recovery to 1.2932-33 (current level of the Tenkan-Sen and previous support turned resistance) cannot be ruled out, reckon upside would be limited to 1.2970-80 and resistance at 1.3032 should remain intact, bring another decline later. A daily close above said resistance at 1.3032 would would defer and suggest first leg of decline from 1.3269 has ended instead, risk a stronger rebound to 1.3100 and then 1.3150 but still reckon upside would be limited to 1.3200, bring another leg of corrective decline later. A daily close above 1.3200 would risk another test of said resistance at 1.3269 but break there is needed to confirm recent upmove has resumed and extend gain to 1.3300-10, having said that, loss of upward momentum should prevent sharp move beyond resistance at 1.3425 and price should falter well below 1.3500-05 (50% Fibonacci retracement of 1.5018-1.1986).

Recommendation: Sell at 1.3050 for 1.2850 with stop above 1.3150.  


On the weekly chart, cable’s retreat from 1.3269 (with a shooting star) has kept price under pressure, adding credence to our view that a temporary top is possibly formed there and consolidation with mild downside bias is seen for test of 1.2812 support, break there would extend weakness to 1.2775-80 (38.2% Fibonacci retracement of 1.1986-1.3269), then towards 1.2705-10, however, reckon downside would be limited to the Kijun-Sen (now at 1.2689) and previous support at 1.2589 should hold from here. Looking ahead, only a sustained breach below 1.2589 would signal the entire correction from 1.1986 has ended at 1.3269, bring further decline to 1.2500, then towards support at 1.2365.

On the upside, expect recovery to be limited to 1.2930-40 and 1.2980 should hold, bring another decline. Above 1.3032 would defer and suggest the retreat from 1.3269 has ended, risk a strong rebound to 1.3100 but upside should be capped at resistance at 1.3165, bring another decline. Break of 1.3165 resistance would defer and risk retest of 1.3269 but only break there would shift risk back to upside and extend the erratic rise from 1.1986 low for retracement of early downtrend to 1.3300-10 and 1.3350-60, however, upside should be limited to previous resistance at 1.3425 and reckon 1.3500-05 (50% Fibonacci retracement of 1.5018-1.1986) would hold, price should falter below 1.3670-75, bring another decline in Q4.

Daily Pivots: (S1) 0.9126; (P) 0.9144; (R1) 0.9176; More

No change in EUR/GBP's outlook and current rise is in progress for 0.9304 high. 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. On the downside, break of 0.9007 support will indicate short term topping. Intraday bias will then be turned back to the downside for 0.8742/8948 support zone.

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.

Daily Pivots: (S1) 1.4824; (P) 1.4862; (R1) 1.4915; More...

Intraday bias in EUR/AUD remains neutral for the moment. Consolidation pattern from 1.5226 is possibly still in progress. Below 1.4732 will bring another fall. But we'd expect 1.4421 cluster support (50% retracement of 1.3624 to 1.5226 at 1.4427) to hold and bring rebound. On the upside, above 1.5019 will target a test on 1.5226 high 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 fall 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.