Sample Category Title

GBP/USD - 1.2981

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Although the British pound has rebounded again after holding above indicated support at 1.2905 and gain to 1.2996-00 psychological level cannot be ruled out, break there is needed to retain bullishness and signal recent rise from 1.2774 has resumed and extend gain to previous resistance at 1.3032, however, near term overbought condition should limit upside to 1.3055-60 (100% projection of 1.2774-1.2979 measuring from 1.2852) and reckon 1.3080 (61.8% Fibonacci retracement of 1.3269-1.2774) would hold.

In view of this, would not chase this rise here and would be prudent to stand aside in the meantime. Below 1.2940 would prolong consolidation and bring weakness to 1.2905 but break of latter level is needed to signal top has been formed, bring further fall to 1.2875-80 and possibly towards previous chart support at 1.2852 which is likely to hold from here.

The GBPUSD pair has looked past a marginally weaker United Kingdom services sector PMI reading, and moved towards the higher-end of its recent trading range.

Today's 53.2 PMI services reading has yet to dampen demand for the British pound, with the pound gaining ground against the euro, and trading around the 1.2969 level against the greenback.

The GBPUSD pair remains confined to range-bound trading conditions between the 1.2910 and 1.2990 level, however, price-action is printing bullish higher daily price high's.

Key intraday technical resistance is located at the 50-day moving average, at 1.2984, with the former weekly price high and monthly pivot point, found at 1.2990-1.2994.

Above 1.3000 level, the GBPUSD June monthly price high offers strong resistance, at 1.3030, as does the 1.3047 level.

To the downside, key trendline support is located at 1.2948, with the weekly pivot point, at 1.2936. The daily time-frame, 100-period moving average, offers critical intraday support, at 1.2920.

EUR/USD - 1.1901

Original strategy  :

Sell at 1.1955, Target: 1.1855, Stop: 1.1990

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 1.1955, Target: 1.1855, Stop: 1.1990

Position : -

Target :  -

Stop : -

As the single currency has traded narrowly, suggesting further sideways trading would be seen and although another bounce to 1.1925-30 is likely, reckon 1.1950-55 would limit upside and bring another decline, below 1.1850 would signal the rebound from 1.1823 has ended, bring test of this level, break there would add credence to our view that top has been formed at 1.2070 earlier and extend the fall from there to 1.1815-18 (61.8% Fibonacci retracement of 1.1662-1.2070), then 1.1790-00 but downside should be limited and previous support at 1.1773 should remain intact. 

In view of this, we are looking to sell euro again on recovery as 1.1950-55 should limit upside. Only break of said resistance at 1.1980 would abort and signal the fall from 1.2070 has ended at 1.1823 yesterday, bring further gain to 1.2000 and possibly towards 1.2025-30.

Market sentiments continue to stabilize today with European indices trading mixed. DAX is trading up 0.55% at the time of writing, CAC flat and FTSE down -0.1%. US futures point to a mildly lower open as markets come back from holiday. In the currency markets, Yen is firm against most currency except Aussie and Kiwi. But Swiss Franc is trading broadly lower as risk aversion recedes. Euro and Dollar are trading as the second and third weakest for the day so far. In other markets, gold pares back some gain but maintains near term bullishness for a take on 1350 handle later in the week. WTI crude oil staging a strong rebound and is back above 48. Strength in oil might start to life Canadian Dollar later in the session.

US to push more sanction but Russia disagrees

Concerns over Korea tensions recede temporarily even though there are reports that North Korea is quietly moving another intercontinental ballistic missile towards its west coast, readying for another launch by the end of the week. The United Nations Security Council emergency meeting ended with no consensus yesterday. US is pushing for toughing sanctions for a vote on September 11. But Russian President Vladimir Putin said that "sanctions of any kind would now be useless and ineffective" as "they'd rather eat grass than give up their nuclear programme". Putin urged to "promote dialogue among all interested parties."

Meanwhile, North Korea ambassador to UN, Han Tae Song, said in the forum in Geneva that "the recent self-defense measures by my country, DPRK, are a 'gift package' addressed to none other than the U.S." And, he warned that "the U.S. will receive more 'gift packages' from my country as long as its relies on reckless provocations and futile attempts to put pressure on the DPRK." He also emphasized that "pressure or sanctions will never work on my country." He added that "The DPRK will never under any circumstances put its nuclear deterrence on the negotiating table." And, the military measures were "restraint and justified self-defense" to counter  "the ever-growing and decade-long U.S. nuclear threat and hostile policy aimed at isolating my country".

Fed Brainard: Fed should be cautious about more tightening

Fed Governor Lael Brainard said today that Fed should be " cautious about tightening policy further until we are confident inflation is on track to achieve our target." She also noted that "there is a high premium on guiding inflation back up to target so as to retain space to buffer adverse shocks with conventional policy." And she emphasized that " it is important to be clear that we would be comfortable with inflation moving modestly above our target for a time." Minneapolis Fed President Neel Kashkari and Dallas Fed President Robert Kaplan will speak later today.

UK PMI services sends warning signals

UK PMI services dropped to 53.2 in August, down from 53.8 and missed expectation of 53.5. That's also the lowest level in 11 months. Markit noted that the latest round of PMIs suggest 0.3% growth in the UK economy in the current quarter, same as Q2. However, Markit chief economist Chris Williamson warned that "momentum is being gradually lost." And, "robust manufacturing growth means the economy may be rebalancing towards goods production, aided by the weaker pound, but the slowdowns in services and construction send warning signals about the health of the economy." Also, "the overall level of optimism also remained subdued, mainly linked to Brexit uncertainty, close to levels that have previously been indicative of the economy stalling or even contracting."

Also from Europe, Swiss GDP grew 0.3% qoq, 0.3% yoy in Q2, much lower than expectation of 0.5% qoq, 1.0% yoy. CPI rose to 0.3% yoy in August, but missed expectation of 0.5% yoy. Eurozone retail sales dropped -0.3% mom in July, in line with consensus. Eurozone services PMI was revised down to 54.7 in August, Germany PMI services revised up to 53.5, France PMI services revised down to 54.9. Italy PMI services dropped to 55.1 in August.

RBA Lowe: Stimulatory policy continues to be appropriate

As widely anticipated, the RBA left the cash rate unchanged at 1.5%, historic low since August 2016. Policymakers remained confident over the economic outlook, but stayed cautious over the strength in property prices. Again, they warned that recent appreciation in Australian dollar would weigh on the outlook for growth and employment, and prolong soft inflation. It appeared that the central bank would keep its policy rate unchanged at the current level for some time. More in RBA Left Cash Rate At 1.5%.

Speaking at a dinner in Brisbane after the rate announcement, RBA governor Philip Lowe said that low interest rates are supporting job growth and inflation. And "these are positive developments." Though, he sounded cautious and said that ", it will be some time before we are at what could be considered full employment in Australia and before underlying inflation is at the mid-point of the medium term target range." Therefore, "stimulatory monetary policy continues to be appropriate."

Released earlier today, Australia current account deficit widened to AUD -9.6b in Q2. New Zealand ANZ commodity price dropped -0.8% in August. China Caixin PMI services rose to 52.7 in August.

AUD/USD Mid-Day Outlook

Daily Pivots: (S1) 0.7932; (P) 0.7952; (R1) 0.7963; More...

AUD/USD jumps notably in early US session but it's staying well below 0.8065 resistance. Intraday bias remains neutral for the moment as consolidation from 0.8065 might extend. But in case of another fall, downside should be contained by 0.7785 cluster support (38.2% retracement of 0.7328 to 0.8065 at 0.7783) to bring rebound. On the upside, break of 0.8065 will resume the medium term rise and target 100% projection of 0.6826 to 0.7833 from 0.7328 at 0.8335.

In the bigger picture, rise from 0.6826 medium term bottom is still in progress. At this point, there is no confirmation of trend reversal yet and we'll continue to treat such rebound as a corrective pattern. But in any case, break of 55 month EMA (now at 0.8087) will target 38.2% retracement of 1.1079 to 0.6826 at 0.8451. Break of 0.7328 support is needed to confirm completion of the rebound. Otherwise, further rise is now in favor.

Economic Indicators Update

USD/JPY - 109.20

Original strategy  :

Sell at 109.80, Target: 108.80, Stop: 110.15

Position :  -

Target :  -

Stop : -

New strategy  :

Sell at 109.80, Target: 108.80, Stop: 110.15

Position :  -

Target :  -

Stop : -

As the greenback has remained under pressure after opening lower yesterday, adding credence to our view that top has possibly been formed at 110.67 last week and consolidation with downside bias remains for weakness to 109.15-19 (61.8% Fibonacci retracement of 108.27-110.67), however, break there is needed to provide confirmation and bring further fall to 108.80-85, however, reckon 108.55-60 would limit downside and support at 108.27 remain intact.

In view of this, we are looking to sell dollar on recovery as 109.80-85 should limit upside and bring another decline later. Above 110.00-05 would defer and risk rebound to 110.30 but only break of 110.49 would signal the pullback from 110.67 has ended, bring retest of this level first.

The CAC index is unchanged in the Tuesday session. Currently, the index is at 5,100.50, down 0.04% on the day. On the release front, Eurozone Final Services PMI dipped to 54.7, just shy of the estimate of 54.9 points. French Final Services PMI softened to 54.9, missing the forecast of 55.5 points. As well, Eurozone Retail Sales came declined 0.2%, shy of the estimate of -0.3%. On Wednesday, the eurozone publishes Retail PMI.

The eurozone economy continues to hum in the second half of 2017, as economic indicators have generally been positive. Germany continues to lead the eurozone with robust growth, but France has also enjoyed a recovery in 2017. Last week, French numbers impressed, as CPI and Consumer Spending rebounded with gains, following declines in the previous release. As well, Preliminary GDP improved to 0.5% in the second quarter.

All eyes are on the ECB, which will hold an important policy meeting on Thursday. With the economy looking brighter, what to do with the ECB quantitative easing program the main order of business. The current program terminates in December, and the bank will have to decide on a new scheme. However, analysts don't expect the details of the new program to be announced until October or possibly December. Still, every nuance from Mario Draghi's press conference will be analyzed, and any hints about changes in the ECB's monetary policy, such as withdrawing stimulus, is likely to have a sharp impact on the euro. The eurozone's strong performance in 2017 has raised speculation that the ECB will commence tapering in the near future, but the rejuvenated euro has complicated matters. The euro has gained some 13% against the dollar this year, with much of the appreciation due to speculation that the ECB will end its asset purchases. The stronger euro is equivalent to a raise in interest rates and has resulted in monetary tightening, so the ECB could decide on a slow exit from its asset purchase scheme. Aside from the headache of a stronger euro, ECB policymakers must wrestle with the dilemma of what monetary stance to take with a stronger eurozone economy that remains gripped by very low inflation.

The DAX index has posted gains in the Tuesday session. Currently, the DAX is currently trading at 12,170.50, up 0.54% on the day. On the release front, German and Eurozone Services PMI were within expectations. Eurozone Retail Sales declined 0.2%, shy of the estimate of -0.3%. On Wednesday, Germany releases Factory Orders and the eurozone publishes Retail PMI.

The DAX has responded positively to services sector numbers, as German and Eurozone Services PMIs both pointed to slight expansion. Eurozone Services PMI slowed to 54.7, shy of the estimate of 54.9 points. However, German Services PMI improved to 53.5, edging above the forecast of 53.4 points. Retail Sales was not as positive, posting a decline of 0.3%, compared to a gain of 0.5% a month earlier. This marked the first decline since January. If upcoming consumer spending data is weak, investor risk appetite could weaken and send stock markets lower.

The ECB will hold a crucial policy meeting on Thursday, with the bank's quantitative easing program the main order of business. The ECB's current asset-purchase program terminates in December, and the bank will have to decide on a new scheme. However, analysts don't expect the details of the new program to be announced until October or possibly December. Still, every nuance from Mario Draghi's press conference will be analyzed, and any hints about changes in the ECB's monetary policy, such as withdrawing stimulus, is likely to have a sharp impact on the euro. The eurozone's strong performance in 2017 has raised speculation that the ECB will commence tapering in the near future, but the rejuvenated euro has complicated matters. The euro has gained some 13% against the dollar this year, with much of the appreciation due to speculation that the ECB will end its asset purchases. The stronger euro is equivalent to a raise in interest rates and has resulted in monetary tightening, so the ECB could decide on a slow exit from its asset purchase scheme. Aside from the headache of a stronger euro, ECB policymakers must wrestle with the dilemma of what monetary stance to take with a stronger eurozone economy that remains gripped by very low inflation. Will the ECB address these concerns at the Thursday meeting?

As we could see on my yesterday's Session Recap webinar, the GBP/USD has perfectly rejected from the POC zone I showed making a total of 60 pips that accounts for 90 % of its ATR(14). Today we can see that 2 POC(S) zones could be above the price as sellers might be waiting there. A slight miss in UK CPI could encourage fresh seller to kick in within 1.2990-1.3000 and possibly 1.3030. We can see how the price respects W L3- W H3 standard camarilla range (70 % of the time) so we might see another rejection towards the 1.2900 zone. However due to bullish SHS pattern (inverted head and shoulders) now moment buyers are exactly at the same spot where historical buyers where so we can see a buying interest within 1.2900-10 zone. The change of a trend is only possible if the price gets below 1.2900 with a strong momentum and 4h candle closes below 1.2870.

Notes/Observations

• Global markets relatively quiet despite renewed Korea tensions
• Major European PMI Services mainly revised lower but firmly remain in expansion territory (Beats: Germany; Misses: France, Euro Zone, UK, Italy and Spain)
• Swiss GDP misses while Inflation remains largely absent; SNB can keep its deposit rate at -0.75% for the foreseeable future

Overnight

Asia:

• North Korea seen moving ICBM towards west coast for a possible launch before Saturday
• China President Xi reiterated view that economic downward risks and uncertainties were rising; called for opposing protectionism
• China Aug Caixin PMI Services: 52.7 v 51.5 prior
• - Reserve Bank of Australia (RBA) left its Cash Rate Target unchanged at 1.50% (as expected). Reiterated view that recent rise in AUD currency weighing on outlook for output/employment,

Europe:

• EU Parliament Brexit coordinator Verhofstadt: UK PM May to make speech on Thursday, Sep 21st; will make case for continuous Brexit talks with view to inject urgency into negotiations and steer the direction towards trade. Association agreement with the UK is a way forward following Brexit
• UK said to be prepared to intensify Brexit talks with EU rather than stick with current one week a month schedule (**Note: in-line with comments last week following 3rd round of talks)
• UK Aug BRC Sales LFL Y/Y: 1.3% v 0.9% prior (fastest pace for 2017)

Americas:

• Multiple Republican aides note that they are looking to President Trump for leadership on supporting a clean debt ceiling raise, and averting a government shutdown with a short-term spending bill

Economic data

• (IE) Ireland Aug Services PMI: 58.4 v 58.3 prior, Composite PMI: 58.2 v 57.0 prior
• (IN) India Aug PMI Services: 47.5 v 45.9 prior (2nd straight contraction), PMI Composite: 49.0 v 46.0 prior
• (CH) Swiss Q2 GDP Q/Q: 0.3% v 0.5%e; Y/Y: 0.3% v 1.0%e
• (RU) Russia Aug PMI Services: 54.2 v 53.9e (19th month of expansion), PMI Composite: 54.2 v 53.4 prior
• (SE) Sweden Aug PMI Services: 55.4 v 58.9 prior
• (TR) Turkey Aug CPI M/M: 0.5% v 0.2%e; Y/Y: 10.7% v 10.2%e; CPI Core Index Y/Y: 10.2% v 9.8%e
• (CH) Swiss Aug CPI M/M: 0.0% v 0.0%e; Y/Y: 0.5% v 0.5%e
• (CH) Swiss Aug CPI EU Harmonized M/M: -0.1% v +0.1% prior; Y/Y: 0.5% v 0.6% prior
• (ES) Spain Aug Services PMI: 56.0 v 57.0e, Composite PMI: 55.3 v 56.0e
• (ZA) South Africa Aug PMI (Whole Economy): 49.8 v 50.1 prior
• (IT) Italy Aug Services PMI: 55.1 v 55.5e (15th month of expansion), Composite PMI: 55.8 v 55.8e
• (FR) France Aug Final Services PMI: 54.9 v 55.5e (confirms 14th month of expansion), Composite PMI: 55.2 v 55.6e
• (DE) Germany Aug Final Services PMI: 53.5 v 53.4e (confirms 49th month of expansion), Composite PMI: 55.8 v 55.7e
• (TW) Taiwan Aug CPI Y/Y: 1.1% v 1.2%e; WPI Y/Y: +1.0% v -0.7% prior
• (EU) Euro Zone Aug Final Services PMI: 54.7 v 54.9e (confirms 50th month of expansion, Composite PMI: 55.7 v 55.8 prelim
• (UK) Aug Services PMI: 53.2 v 53.5e (13th month of expansion),Composite PMI: 54.0 v 54.0e
• (UK) Aug Official Reserves Changes: $1.6B v $1.3B prior
• (EU) Euro Zone July Retail Sales M/M: -0.3% v -0.3%e; Y/Y: 2.6% v 2.6%e

Fixed Income Issuance:

• (ID) Indonesia sold total IDR17.0T in 3-month and 12-month Bills; 5-year, 10-year and 15-year bonds
• (AT) Austria Debt Agency (AFFA) sold total €1.38B vs. €1.38B indicated in 2027 and 2037 RAGB bonds
• (UK) DMO opened its book to sell Feb 5% 2065 gilts via syndicate; guidance seen +0.5-0.75bps to UK Treasuries

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx600 +0.4% at 375.6, FTSE +0.2% at 7429, DAX +0.9% at 12206, CAC-40 +0.4% at 5122, IBEX-35 +0.2% at 10257, FTSE MIB +0.4% at 21877, SMI +0.6% at 8917, S&P 500 Futures -0.2%]

Market Focal Points/Key Themes:

European Indices trade higher across the board rebounding from yesterday's falls, led by the Dax which trade over 0.8% higher. The rises come despite mostly lowered PMI figures in Europe, while geopolitical tensions continue to exist in the far east. Aveva outperforms rising sharply after agreeing to combine with Schneider Electric Software business, while Cellectis trades over 25% lower after reporting a clinical hold of UCart123 study. On the earnings front SAS, Halfords and BKW are in focus, while in the US United Technologies agreed to acquire Rockwell Collins in a $30B mega deal.

Equities

• Consumer discretionary [Ryanair [RYA.UK] +1.1% (Aug metrics), Halfords [HFD.UK] +4.0% (Earnings), SAS [SAS.SE] +6.9% (Earnings)]
• Technology: [ Aveva [AVV.UK] +25% (Combination with Schneider Electric)]
• Healthcare: [Cellectis [ALCLS.FR] -26% (Reports Clinical Hold of UCART123 Studies)]
• Energy: [Petrofac [PFC.UK] +2% (Contract), BKW [BKW.CH] -1% (Earnings)]

Speakers

• German Chancellor Merkel annual address to Parliament noted that her govt had shown that fiscal discipline and growth could be combined. Europe needed to avoid divisions on future ties with Turkey; and was willing to discuss ending EU-Turkey membership talks. Govt would do everything to prevent bans on diesel engines
• Italy Stats Agency (Istat) Monthly Economic Note: reiterated that it saw positive signal for domestic growth
• - Czech Central Bank Gov Rusnok: Would prefer to wait for next staff projections before any additional monetary tightening; information is not complete at this time. CZK currency (Koruna) to remain a major factor for rate debate but fast wage growth was not an automatic trigger for hikes. Central bank acted autonomously but could not ignore ECB policy steps
• Russia President Putin: North Korea will not drop its nuclear program unless it feels secure; diplomacy is only path to solving crisis. Tighter sanctions on NK would not change its behavior. Made no sense to accuse Russia of violating North Korea sanctions and them ask for its support on additional ones. ussia to propose UN peace keepers for Eastern Ukraine
• Russia Energy Min Novak: Confirms that Russia discussed extending oil production cuts beyond Q1 with Saudi Arabia
• China Foreign Ministry: Sanctions alone are no way out for North Korea issue
• Japan LDP policy chief Kishida: as planned, Japan should raise sales tax to 10%
• RBA Gov Lowe: Stimulatory policy continues to be appropriate

Currencies

• Despite the increasing tensions between the US and North Korean overall market reactions the past 48 hours had been relatively muted.
• The JPY currency (Yen) has been the main beneficiary of the Korean Peninsula situation. USD/JPY lower by 0.2% but well above the late Aug low of 108.30
• USD/CHF was fractionally higher by 0.3% hovering around the 0.96 level. Swiss Q2 GDP missed expectations while Aug inflation remained largely absent. The SNB very likely to leave its deposit rate at -0.75% for the foreseeable future (**Note: next meeting on Sept 14th).
• EUR/USD holding below the 1.19 level ahead of Thursday ECB meeting where analysts will try to gauge when and how ECB would begin its tapering process from extraordinary measures.One of the key points this week will be how ECB chief Draghi addresses the pace of EUR appreciation.

Fixed Income

• - Bund futures trades at 161.99 down 17 ticks, as futures show topside exhaustion. Downside targets 160.50 followed by 160.29. To the upside the 163.75 to 165.00 remains key resistance.
• Gilt futures trades at 127.94 down 12 ticks as overnight risk-off moves pare from European open and impending supply weighs on bund futures. A resumption to the upside could eye 128.71 then 130.10. A move back below 126.51 targets 125.04
• - Tuesday's liquidity report showed Monday's excess liquidity rose to €1.776T from €1.769T and use of the marginal lending facility fell to €106M from €196M.
• Corporate issuance issuers are focusing on geopolitics and some are not as confident as they have been for the last couple of weeks.

Looking Ahead

• (UK) House of Commons reconvenes after summer recess
• (GR) Greece Fin Min Tsakalotos with EU's Moscovici in Brussels
• (UK) Brexit Min Davis to address Parliament
• 05:30 (ZA) South Africa Q2 GDP Annualized Q/Q: +2.3%e v -0.7% prior; Y/Y: 0.5%e v 1.0% prior
• 05.30 (UK) Weekly John Lewis LFL sales data
• 05:30 (HU) Hungary Debt Agency (AKK) to sell in 3-month Bills
• 05:30 (EU) ECB allotment in 7-day Main Financing Tender (MRO)
• 05:30 (BE) Belgium Debt Agency (BDA) to sell €1.8B in 3-Month and 6-Month Bills
• 06:00 (IE) Ireland Aug Unemployment Rate: No est v 6.4% prior
• 06:00 (IE) Ireland July Industrial Production M/M: No est v -7.5% prior; Y/Y: No est v -7.5% prior
• 06:30 (EU) ESM to sell €1.5B in 3-Month Bills
• 06:45 (US) Daily Libor Fixing
• 07:30 (CL) Chile July Economic Activity (Monthly GDP) M/M: 0.6%e v 0.5% prior; Y/Y: 2.2%e v 1.4% prior
• 07:30 (US) Fed's Barinard (voter, dove) in NY
• 07:45 (US) Weekly Goldman Economist Chain Store Sales
• 08:00 (BR) Brazil July Industrial Production M/M: 0.3%e v 0.0% prior; Y/Y: 1.5%e v 0.5% prior
• 08:05 (UK) Baltic Dry Bulk Index
• 08:30 (SI) Slovenia Debt Agency to sell 6-month and 12-month Bills
• 09:00 (RU) Russia Aug CPI M/M: -0.2%e v +0.1% prior; Y/Y: 3.7%e v 3.9% prior; CPI YTD: 2.2%e v 2.4% prior
• 09:00 (RU) Russia Aug CPI Core M/M: 0.1%e v 0.1% prior; Y/Y: 3.1%e v 3.3% prior
• 09:00 (MX) Mexico Aug Consumer Confidence: 87.6e v 88.7 prior
• 09:00 (MX) Mexico Jun Gross Fixed Investment: -0.5%e v +2.3% prior
• 09:00 (BR) Brazil Aug PMI Services: No est v 48.8 prior, Composite PMI: No est v 49.4 prior
• 09:00 (EU) Weekly ECB Forex Reserves
• 09:00 (RU) Russia announces weekly OFZ bond auction
• 09:30 (NZ) Fonterra Dairy Auction
• 09:50 (UK) BOE to buy £1.125B in in APF Gilt purchase operation (over 15 years)
• 10:00 (US) July Factory Orders: -3.3%e v +3.0% prior, Factory Orders (ex Transportation): No est v 0.1% prior
• 10:00 (US) July Final Durable Goods Orders: +1.0%e v -6.8% prelim; Durables Ex Transportation: No est v 0.5% prelim; Capital Goods Orders (Non-defense/ex-aircraft): No est v 0.4% prelim; Capital Goods Shipment (Non-defense/ex-aircraft): No est v 1.0% prelim; Durables Ex-Defense: No est v -7.8% prelim
• 10:00 (MX) Mexico weekly International Reserves
• 11:00 (BR) Brazil to sell I/L 2022, 2026, 2035 and 2055 Bonds
• 11:30 (US) Treasury to sell 4-Week Bills
• 11:30 (US) Treasury to sell 3-Month and 6-Month Bills
• 13:10 (US) Fed's Kashkari (dove, voter) holds Townhall Event in Minneapolis
• 13:30 (DE) German Chancellor Merkel in Stuttgart
• 15:00 (MX) Mexico Citibanamex Survey of Economists
• 16:00 (US) Weekly Crop Progress Report

Spot Gold is consolidating under fresh high at $1339 on Tuesday after Monday's action ended in Doji candle, signaling indecision and possible stall of broader uptrend.

The price also failed to close above cracked barrier at $1337 (FE 123.6%) of current wave C (part of five-wave cycle from $1204).

Broken upper boundary of larger bull-channel from $1204, so far contained dips, keeping immediate focus at the upside, however, overbought daily studies warn of deeper correction.

If the situation over North Korea doesn't deteriorate, corrective pullback could be seen as likely scenario in coming sessions.

We will also watch today's close which would complete Evening Doji Star reversal pattern on stronger bearish close (minimum below $1330, broken channel upper trendline) and generate stronger bearish signal. Daily Tenkan / Kijun-sen lines turned sideways and reinforce negative signals.

Stronger bearish acceleration could extend towards $1321 (broken FE 100%) and $1316 (Friday's low).

Conversely, scenario of narrow consolidation and fresh upside action would look for target at $1347 (FE 138.2%) on sustained break above $1339 high.

Res: 1337, 1339, 1343, 1347
Sup: 1329, 1325, 1321, 1316