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The EUR/USD currency exchange rate continues to trade in accordance with the medium term descending channel pattern, which is heading towards a large scale pattern's support line.

Most recently the pair reached the resistance of a junior channel up pattern, which was supported by the weekly PP near the 1.1790 mark. As a result of the encounter, the rate began to decline, and during the morning hours of Thursday's trading it had already passed the support of the 100 and 200-hour SMAs at the 1.1770 level.

It can be expected that by the end of the day the pair will continue to fall, as it faces the support of the 55-hour SMA at 1.1745, which might slow down the decline.

AUD/USD – 0.7940

Recent wave: Wave 5 ended at 1.1081 and major correction has commenced for fall to 0.7000 and then towards 0.6500-10

Trend: Near term up

New strategy :

Buy at 0.7895, Target: 0.8050, Stop: 0.7835

Position: -
Target:  -
Stop:-

As aussie found decent demand at 0.7808 and has staged a strong rebound above indicated resistance at 0.7919, adding credence to our view that low has possibly been formed there and consolidation with upside bias is seen for gain to 0.8000, however, break there is needed to signal the pullback from 0.8066 top (wave iii peak) has ended at 0.7808 (wave iv) and bring eventual retest of this level.

In view of this, we are looking to buy aussie on dips as 0.7890-00 should limit downside and bring another rise later. Below 0.7845 would dampen this bullish scenario and suggest the rebound from 0.9808 has ended, bring another test of this level, below there would signal the wave iv correction from 0.8066 is still in progress for weakness to 0.7786 support, however, oversold condition should prevent sharp fall below 0.7750 and price should stay above i top at 0.7712, bring rebound later. We are keeping our latest bullish count that recent impulsive waves is unfolding as (1 2, (i)(ii), i ii) and may extend headway towards 0.8150. 

On the 4-hour chart, the move from 0.8066 is the wave 5 with i: 0.8860, ii: 0.8315, wave iii is an extended move ended at 1.0183, iv: 0.9706 and wave v has ended at 1.1081 (also the top of entire wave 5). The subsequent selloff is the major correction which is unfolding as ABC-X-ABC and 2nd A leg has ended at 0.8848, followed by a-b-c wave B which ended at 0.9758, hence, 2nd C wave is now in progress and indicated downside target at 0.7000 and 0.6950 had been met, so further fall to 0.6710-20 cannot be ruled out.

Despite edging higher in the wake of solid earnings data, the Pound failed to sustain its upward momentum on Wednesday and returned near the 1.2850 mark—a level already proven to be a strong support.

The rate managed to accelerate in the second half of the session and push through the weekly S2 and the 55-hour SMA at 1.2885.

By and large, the Pound is expected to appreciate against the Greenback today, setting the weekly and monthly S1s as a near-term target. Reinforced by the 100-hour SMA, this area could be a possible stopping point. Meanwhile, weak fundamentals may guide the pair back to 1.2850.

After reaching the 111.00 mark early on Wednesday, the US Dollar plunged for the remaining session. As a result, the rate breached the weekly R1 and all three SMAs and reached the 109.60 area this morning.

The above fall set trend indicators in the strongly bearish territory, demonstrating that further momentum downwards may still occur. The failure to move above the 200-hour SMA should work as a confirmation that the rate is set to fall.

Nevertheless, this movement south has allayed slightly near the weekly PP. It is therefore expected that the rate remains above the given line and might even try to return near the weekly R1.

The yellow metal bounced off the support cluster just below the 1,270 mark, as it was expected on Thursday morning. As a result of the rebound, the pair broke the medium term channel down pattern.

On Thursday morning the possible borders of a narrow ranged channel up pattern were spotted. However, it is most likely that the channel is just a representation of the first move in the borders of another medium term pattern.

Although, a forecast for Thursday can be made easily. The metal is most likely going to surge up to the 1,292.91 level, where the next notable resistance level is located at. If it is broken, the commodity price might reach the 1,300 mark.

The combination of the stronger-than-expected average earnings growth and lower unemployment in the UK contributed to a sharp increase in the GBP/USD . The Sterling appreciated against the US Dollar by 40 base points or 0.31% to reach the 1.2896 mark, and, despite some weakness during the session, managed to finish it near the 1.2890 level.

The ONS reported that average earnings increased 2.1% year-over-year during three months to June, boosted by strong rise of 27% in bonus payments over the course of June alone. Meanwhile, the UK unemployment fell to the lowest level since 1975, edging down to 4.4% in the reported period. However, analysts expect the tepid economic growth to affect jobs further, as wages continued subdued increase.

The Euro zone's Flash GDP release had a little impact on the EUR/USD currency pair. The European single currency gained only 3 base points against the Greenback to find a temporary support above the 1.1729 level, which was overcome again in the Wednesday's evening. The pair is expected to gain further support in case of the strong performance of the EZ economy and higher political risks in the US.

The Eurostat reported that the GDP growth in the Euro zone was confirmed at 0.6% in the June quarter, in line with analysts' expectations. Despite the relatively strong Euro, the export sector kept on expanding amid solid global demand for German-made products, especially motor vehicles, while the largest economy remained the leading performer.

The Greenback extended losses against the Yen, as the US Building Permits report disappointed market expectations. The USD/JPY dropped by 5 base points to 110.77 mark just after the report and continued to gain advantages from the weaker US Dollar to finish the session in 109.99 area, following the FOMC meeting minutes release.

The Commerce Department revealed that the US Building Permits fell 4.1% to 1.22M units in July, suggesting the least contribution to the country's economic expansion anytime soon. Meanwhile, the FOMC minutes release showed that the Fed policymakers were split over the pace of interest rate increases as uncertainties over the inflation growth remained on the table.

The US dollar failed to sustain growth against the Aussie, as the Australian employment report surpassed expectations. The Australian dollar grew by 9 pips against the Greenback in the next couple of minutes after data were published, though the pair continued trading in a wide range in Thursday's morning.

The Australian Bureau of Statistics stated that the country's job market added 27K positions in July, showing an increase for tenth straight month in succession. Data revealed that the stronger employment growth was mainly driven by a surge in part-time jobs, which is unlikely to cause wage rise. Though, the labour market improved steadily during the year, the RBA remained concerned about further pay growth.

Daily Pivots: (S1) 129.31; (P) 129.85; (R1) 130.19; More...

EUR/JPY's recovery was limited at 130.38 and reversed. Intraday bias is turned neutral first. The consolidation from 131.39 could extend further. but downside should be contained by 38.2% retracement of 122.39 to 131.39 at 127.95 to bring rebound. On the upside, break of 131.39 will confirm up trend resumption. However, sustained break of 127.95 will bring deeper decline to 125.80 cluster support (61.8% retracement at 125.82) before completing the correction.

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.