Sample Category Title

GBP/USD - 1.2981

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Despite falling marginally to 1.2952 yesterday, lack of follow through selling and the subsequent rebound suggest further consolidation would take place and another bounce to 1.3025-30 cannot be ruled out, however, reckon upside would be limited to resistance at 1.3059 and price should falter below 1.3085-90 and bring another decline later.

On the downside, below support at 1.2950-52 would signal recent fall from 1.3269 top has resumed and extend weakness to previous chart support at 1.2933 but reckon 1.2900 would hold from here, risk from there has increased for a rebound to take place later. 

EUR/USD - 1.1818

Original strategy  :

Buy at 1.1725, Target: 1.1825, Stop: 1.1690

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.1790, Target: 1.1890, Stop: 1.1755

Position : -

Target :  -

Stop : -

Current rally in NY morning adds credence to our view that low has been formed at 1.1689 earlier this week and further gain to 1.1850, then 1.1880 would be seen, however, a firm break above latter level is needed to confirm correction from 1.1910 top has ended, bring retest of this level, break there would signal early upmove has resumed and extend headway towards 1.1940-50 first.

In view of this, we are still looking to buy euro on dips but at a higher level as 1.1790 should limit downside. Only below support at 1.1748 would defer and risk weakness to 1.1720, however, downside should be limited to 1.1700 and support at 1.1689 should remain intact, bring another rally next week.

• U.S July Consumer Prices +0.1%; Consensus +0.2%
• US Jul CPI Ex-Food & Energy +0.1%; Consensus +0.2%
• US Jul Consumer Prices Increase 1.7% From Year Earlier; Core CPI Up 1.7% Over Year

Data this morning showed that U.S inflation remained subdued in July, extending a slowdown this year.

The consumer-price index increased +0.1% in July m/m, excluding the often-volatile categories of food and energy, core-prices also rose +0.1%.

Market consensus was expecting the overall and core prices to both advance +0.2% on the month.

From a year earlier, overall consumer prices climbed +1.7%, as did core prices.

The Fed's preferred measure of inflation, the price index for personal-consumption expenditures, was unchanged in June from the prior month, the second straight flat reading. It was up +1.4% in June from a year earlier and has dropped for four consecutive months on an annual basis, from +2.2% in February.

Note: The consumer-price index tends to run a little bit higher than the personal-consumption index, reflecting different methods for calculating inflation.

The CAC index has posted sharp losses on Friday. Currently, the index is at 5,064.50, down 0.99% on the day. On the release front, French indicators were within expectations. Final CPI came in at -0.3%, matching the estimate, while Preliminary Nonfarm Payrolls posted a gain of 0.5%, edging above the forecast of 0.4%.

Rising tensions between North Korea and the US, with threats of military action from both sides, have soured investment sentiment and pushed Asian and European stock markets lower on Friday. Investors have dumped shares in favor of safe-haven assets, such as the Japanese yen, gold and German government bonds. North Korea has vowed to retaliate over new sanctions imposed by Washington and has outlined plans to attack Guam, a major US military base. The fiery rhetoric between President Trump and North Korean President Kim Jong-un is causing alarm in South Korea and Japan, strong allies of the US. The present situation is being compared to the Cuban Missile crisis, and although military action is unlikely to take place, the crisis has reached levels where the markets cannot ignore it.

French Final CPI weakened in July, with a decline of 0.3%. The previous two readings came in at 0.0%, underscoring that the French economy continues to grapple with weak inflation levels. The inflation picture continues to worry ECB policymakers, as stronger economic growth has not translated into higher inflation levels. Inflation in the eurozone stood at 1.3% year-on-year in July, well below the bank's inflation target of 2%. Next week, the ECB releases Final CPI, and a weak reading could dampen investor confidence and send the euro lower.

The cautious ECB has consistently said that it will not adjust its asset purchases program (QE) before inflation levels move higher, but the bank may be prepared to change that view. At its July policy meeting, the bank said it would hold discussions on the scheme in "the autumn", and analysts are split as to whether that means September or October. Either way, this means that the markets expect to hear shortly from the ECB that it will begin winding down its aggressive QE policy, given the stronger economic conditions in the euro zone, even if inflation does not move higher. The bloc's economy is forecast to expand a healthy 2.0% this year, and the eurozone outperformed both the US and the UK in the first half of 2017. Another factor which policymakers must deal with is the ECB's bloated balance sheet, which stands at more than EUR 2 trillion. The Federal Reserve expected to begin trimming its huge balance sheet as early as September, and this could have a significant effect on the currency markets, as a reduction of $60 billion in the Fed's balance sheet is equivalent to a rate hike of 25 basis points.

USD/JPY - 108.83

Original strategy  :

Sell at 109.70, Target: 108.70, Stop: 110.05

Position :  -

Target :  -

Stop : -

New strategy  :

Sell at 109.50, Target: 108.50, Stop: 109.85

Position :  -

Target :  -

Stop : -

As the greenback has fallen again after brief recovery and fell to a fresh 4-month low in NY morning, adding credence to our view that recent decline is still in progress and bearishness remains for weakness to 108.50, then towards previous chart support at 108.13, however, loss of near term downward momentum should prevent sharp fall below there and reckon 108.00 would hold on first testing. 

In view of this, would not chase this fall here and would be prudent to sell dollar on recovery as previous support at 109.54 should turn into resistance and cap dollar’s upside. Above 109.80 would risk test of indicated resistance at 110.18 but break there is needed to abort and signal recent decline has ended and risk a stronger rebound to 110.50 but price should falter below another previous resistance at 110.83. 

EUR/GBP - 0.9092

 
Recent wave: Major double three (A)-(B)-(C)-(X)-(A)-(B)-(C) is unfolding and 2nd (A) has possibly ended at 0.6936.

Trend: Near term up

Original strategy  :

Sold at 0.9080, stopped at break-even

Position : - Short at 0.9080

Target :  -

Stop : - 0.9080

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

 
The single currency continued finding decent demand just below 0.9010 and has risen again, dampening our near term bearishness for a correction and signaling recent upmove has resumed, hence further gain to 0.9120-25, then 0.9145-50 would be seen, however, weakening of near term upward momentum should prevent sharp move beyond 0.9175-80 and price should falter below 0.9100, bring correction later.

In view of this, would not chase this rise here and would be prudent to stand aside for now. Below 0.9050 would bring another test of 0.9008-10 support but break there is needed to suggest a temporary top is possibly formed, bring retracement of recent rise to 0.8965-70 and later towards 0.8922 support which is likely to hold from here.

Our preferred count is that, after forming a major top at 0.9805 (wave V), (A)-(B)-(C) correction is unfolding with (A) leg ended at 0.8400 (A: 0.8637, B: 0.9491 and 5-waver C ended at 0.8400. Wave (B) has ended at 0.9413 and impulsive wave (C) has either ended at 0.8067 or may extend one more fall to 0.8000 before prospect of another rally. Current breach of indicated resistance at 0.9043 confirms our view that the (C) leg has ended and bring stronger rebound towards 0.9150/54, then towards 0.9240/50.

Price posted humble gains today as the USD is undecided on the short term after the USDX's failure to close above the 93.81 static resistance. GBP/USD is pressuring an important support level, technically, is expected to rebound from this dynamic obstacle, but remains to see how will react after the United States data will be released later.

The US inflation numbers may bring a high volatility in the currency market, remains to see the direction because some good numbers will boost the greenback, which will resume the minor upside movement.

The United States CPI is expected to increase by 0.2% in July, more versus the 0.0% growth in June, could reach the highest growth on the last 3-months. While the Core CPI may increase by 0.2%, more compared to the 0.1% growth in the former reading period, the economic indicator could reach the highest level of the last 5-months and could lift the greenback.

Price dropped after the retest of the upside line of the up channel and now is retesting the first warning line (wl1) of the ascending pitchfork. A rebound will come only if the USDX will slide further because another bullish momentum will send the rate much below the dynamic support.

Support can be found at the upper median line (UML) of the ascending pitchfork as well. Price will be driven by the fundamental factors in the upcoming hours. The bias is bullish as long as the warning line (wl1) is unharmed.

Price dropped today and tried to reach new lows, but the sellers weren't strong enough. Has found support at 1.1271 level, much above the 1.1259 previous low and looks like that the corrective phase is at the end. It is trading much above the confluence area formed at the intersection between the WL3 with the upper median line (uml) of the minor ascending pitchfork.

You can see that has failed to close near it in the last two sessions, a retest of the confluence area or the upper median line (uml) will signal another leg higher.

USD/CAD - 1.2710

 
Recent wave: Only wave v of c has ended at 0.9407 and wave C of major A-B-C correction is underway with wave iii ended at 1.4690, wave v of C may bring one more marginal rise probably in 2018

Trend:  Down

 
Original strategy       :

Sell at 1.2770, Target: 1.2570, Stop: 1.2830

Position: -

Target:  -

Stop: -

 
New strategy             :

Sell at 1.2800, Target: 1.2600, Stop: 1.2860

Position: -

Target:  -

Stop:-

Dollar’s intra-day initial rise to 1.2753 suggests near term upside risk remains for the corrective rise from 1.2414 (tentatively wave iv) to extend gain to 1.2771 (previous resistance as well as 38.2% Fibonacci retracement of wave iii), however, reckon upside would be limited and renewed selling interest should emerge around 1.2800, bring retreat later, below 1.2670-75 would bring test of 1.2625-30, break there would suggest top is possibly formed but below 1.2540-50 is needed to add credence to this view and suggest the rebound from 1.2414 has ended instead, bring further fall to 1.2490-00, having said that, reckon support at 1.2451 would hold on first testing. We are keeping our count that wave v as well as wave (C) ended at 1.3794 and impulsive wave (i ii, i ii) is now unfolding with minor wave iii possibly ended at 1.2414, hence wave iv correction is underway.

In view of this, would be prudent to stand aside for now and look to sell on further subsequent rebound as 1.2800-10 should limit upside. Above 1.2800-10 would defer and risk a stronger correction to 1.2850, however, still reckon upside would be limited to 1.2880-85 (50% Fibonacci retracement of wave iii) and bring retreat later next week.

To recap, wave B from 1.3066 is unfolding as an a-b-c and is sub-divided as a: 1.2192, b: 1.2716 and wave c is a 5-waver with i: 1.1983, ii: 1.2506, extended wave iii with minor iii at 1.0206, wave iv ended at 1.0781 and wave v as well as wave iii has ended at 0.9931, hence the subsequent choppy trading is the wave iv which is unfolding as (a)-(b)-(c) with (a) leg of iv ended at 1.0854, followed by (b) leg at 1.0108 and (c) leg as well as the wave iv ended at 1.0674. The wave v is sub-divided by minor wave (i): 0.9980, (ii): 1.0374, (iii): 0.9446, (iv): 0.9913 and (v) as well as v has possibly ended at 0.9407, therefore, consolidation with upside bias is seen for major correction, indicated target at 1.3700 and 1.4000 had been met and further gain to 1.4700 would be seen later.

Price extends the bearish momentum, a retest of the 38.2% retracement level and the median line (ml) of the minor descending pitchfork will validate a further drop in the upcoming period. The next downside target will be at the lower median line (lml) of the minor descending pitchfork. We have a major support at the 126.05 level as well.