Sample Category Title

EUR/USD - 1.1727

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 1.1744

Kijun-Sen level                  : 1.1730

Ichimoku cloud top             : 1.1770

Ichimoku cloud bottom      : 1.1754

Original strategy  :

Sold at 1.1770, Target: 1.1670, Stop: 1.1770

Position : - Short at 1.1770

Target :  - 1.1670

Stop : - 1.1770

New strategy  :

Hold short entered at 1.1770, Target: 1.1670, Stop: 1.1770

Position : - Short at 1.1770

Target :  - 1.1670

Stop : - 1.1770

As the single currency found support at 1.1689 yesterday and rebounded, suggesting consolidation above this level would be seen, however, as long as resistance at 1.1770 holds, bearishness remains for the fall from 1.1910 top to bring retracement of early upmove, hence further weakness to 1.0670 would be seen but reckon support at 1.1650 would remain intact due to oversold condition. 

In view of this, we are holding on to our short position entered at 1.1770. Above 1.1800-05 would risk another test of 1.1824-30 resistance but only break there would signal the erratic fall from 1.1910 has ended, bring further gain to 1.1855-60 first.

EUR/CHF plunged in the yesterday's session and touched the upper median line (uml) of the minor ascending pitchfork. Has closed much above the mentioned support level and above the third warning line (WL3) of the former descending pitchfork. Personally, I still believe that will come down to test and retest the confluence area formed at the intersection between the WL3 with the upper median line (wl1), only a rejection will signal a rebound.

USD/CHF rebounded from the 0.9634 static support, a minor consolidation above this level will bring another bullish momentum. Could come to retest the first warning line (WL1) before will climb higher again. You should know that only a valid breakout above the median line (ml) of the minor descending pitchfork will confirm a larger rebound.

GBP/USD slides further on the daily chart and is almost to hit another downside target. Is trading in the red as the USD is still supported by the USDX’s increase. The dollar index increased again in the last hours and maybe will try again to take out the 93.81 static resistance. The greenback could dominate the currency market if the USDX will have enough energy to jump and to stabilize above the 94.00 psychological level.

You should pay attention at the fundamental events today because most likely will bring a high volatility, the UK’s Manufacturing Production may increase by 0.0% versus the 0.2% drop in May, the Goods Trade Balance may decrease from -11.9B to -11.0B. Moreover, the Construction Output could increase by 1.4% in June after the 1.2% drop in the previous reading period, the Industrial Production is expected to increase by 0.1%, so the Cable could be saved by the economic figures.

The United States could bring a high volatility in the afternoon, only some good data will boost the greenback.

Price is very close to reach and retest the first warning line (wl1) of the minor ascending pitchfork. Personally, I believe that a will breakdown if will touch it, but we have to be patient to see what will happen because we may have a false breakout as well.

The perspective remains bullish as long as the warning line (wl1) is unharmed. I want to remind you that the minor decrease was expected after the false breakout above the up sloping red line and after the failure to approach and reach the lower median line of the minor ascending pitchfork and the 1.3527 major static resistance.

We may have a Rising Wedge pattern on the Daily chart, a breakdown below the warning line and below the UML will confirm it.

USD/JPY - 109.99

Most recent candlesticks pattern   : N/A

Trend                      : Near term down

Tenkan-Sen level              : 110.04

Kijun-Sen level                  : 109.87

Ichimoku cloud top             : 110.33

Ichimoku cloud bottom      : 110.18

New strategy  :

Stand aside

Position :  -

Target :  -

Stop : -

Despite falling to 109.54 yesterday, the subsequent rebound suggests consolidation above this level would be seen and test of previous support at 110.25 cannot be ruled out, however, break there is needed to signal low has been formed there, bring a stronger rebound to 110.55-60 but reckon upside would be limited to resistance t 110.83 and price should falter below 111.05 (last week’s high).

On the downside, below 109.70-75 would bring retest of said support at 109.54, break there would signal recent decline has resumed and extend weakness to 109.20-25, having said that, loss of near term downward momentum should prevent sharp fall below there and price should stay above 109.00. As near term outlook is mixed, would be prudent to stand aside for now.

USDJPY (110.01): The USDJPY continued to trade within the range of 110.80 where resistance has been formed and the support at 109.58. The sideways price action does signal a near-term breakout off these levels. Price action so far suggests a sideways movement on the daily and higher time frame charts. The falling trend line will be a key indicator as USDJPY is showing signs of turning flat near the support of 109.85. An upside breakout from the trend line could see further gains back to the resistance level of 110.81.

GBPUSD (1.2997): The British pound briefly retested the resistance level at 1.3025. We could expect some consolidation around this level in the near term although the bias to the downside is quite clear. Support at 1.2800 is the likely target to the downside. In the event that GBPUSD rises above 1.3025, then we could expect a retracement towards 1.3117. Still, the bias is to the downside. This is likely to change only on a continuation of the rally above 1.3117.

EURUSD(1.1740): The EURUSD touched an eight day-low yesterday before prices pulled back to close near the day's open. The pullback in prices coincided with price action bouncing off the support level at 1.1730. A break down below this support level is required for the EURUSD to post further declines. The next support level that will be tested is 1.1635. Further downside in prices can be expected in the near term below 1.1635. The current support level at 1.1730 is likely to be tested on a rebound off 1.1635. If resistance is established here, then we can expect further downside although EURUSD could remain range bound between these levels in the near term.

The Japanese yen, the Swiss franc and gold prices were supported as investors flocked to the safe haven assets. This comes amid mounting tensions between the United States and North Korea. Still, despite the gains, the US dollar was seen managing to maintain its gains from the previous days.

On the economic front, the RBNZ's monetary policy meeting yesterday saw the central bank holding the OCR unchanged. The central bank decision was widely in line with economists' forecasts. The RBNZ's decision saw the Kiwi give up some of the gains.

Looking ahead, the economic data today includes the UK's manufacturing, industrial and construction output data. The median estimates suggest a recovery in most of the sectors. The US producer prices data is also expectedtoday, and the forecasts show a 0.1% increase on a monthly basis.

Market movers today

Market focus will be on the escalating tension between the US and North Korea over North Korea's missile programme.

In the UK, industrial production and construction data for June are out today. This is of interest given the negative growth contributions from manufacturing and construction. The NIESR GDP estimate for July (usually a good predictor of actual GDP growth) and trade balance figures will be announced too.

In the US, FOMC member Dudley's speech is likely to be the main event. PPI data and the Monthly Budget Statement are also due for release.

In Scandi markets, Danish and Norwegian inflation data as well as Swedish industrialand services production data are released today. Please see the Scandi section on page 2 for further details.

Selected market news

North Korea sabre-rattling continues as US seeks to ease tensions. Overnight, state media reported that North Korea is examining plans to fire four intermediate-range ballistic missiles at Guam. The missiles would be fired by mid-August, pass over Japan and land near the island which holds strategically important US military bases. The statement came in response to US President Trump's 'fire and fury' warning on Tuesday. Earlier, US secretary of state Tillerson had sought to downplay tensions, saying that North Korea posed no 'imminent threat'.

UK real estate slump spreads. The RICS survey released overnight showed prices stagnating in July, as the price decline of prime properties in the centre of London spread to neighbouring areas. Meanwhile, prices in Northern Ireland, the West Midlands and the southwest increased.

RBNZ remains on the sidelines. In New Zealand, the central bank left the official cash rate unchanged at 1.75% overnight, in line with expectations. Reflecting recent subdued economic data, the RBNZ said that monetary policy would be kept accommodative for a considerable period.

Geopolitical concerns triggered by North Korea tensions set the course for a modest riskoff reaction on markets yesterday. In Europe, the Euro Stoxx 50 index closed down 1.3% and 10yr Bund yields declined 4bp. In the US, the S&P500 index pared earlier losses to close the day flat. US 10yr Treasury yields held steady around 2.25%. This morning, Asian stocks have reversed earlier gains, while emerging markets sold off more broadly.