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Even though both British and the US Manufacturing PMIs matched with experts' forecasts, the currency exchange rate did not manage to reach the weekly R2 located at the 1.3264 level. On the other hand, a strong support barrier set up by the weekly R1 at 1.3200 also did not let the pair to slip to the bottom. Thus, during the whole previous trading day the currency rate was moving along the above pivot point, basically, forming a head and shoulders pattern. From a technical perspective, the rate should leave the formation downwards and try to target the 1.3128 level. In order to do that, it would have to bypass the rising 55- and 100-hour SMAs. For this reason, the successful slip downstairs is doubtful. Most probably, the pair will continue attempts to climb upstairs.

Contrary to expectations, the weekly S1 located at the 110.11 level proved to be a very strong support barrier. Namely, it managed to neutralize multiple attempts of the currency exchange rate to slide downwards, including the 34-pip fall that happened in the middle of the day, under pressure from the 55-hour SMA. As soon as the pair made a fully-fledged rebound, it started to climb upstairs, crossing the above 55- and 100-hour SMAs. Most likely, the surge will be stopped somewhere between the 111.00 – 111.20 levels, as they represent a location of the combined resistance level formed by the 200-hour SMA and the weekly PP. On gradual decay of the upside momentum also point out certain technical indicators, suggesting that strength of the uptrend is coming to an end.

The first half of previous trading day the yellow metal spent in a confident upward movement, supported by the 55-hour SMA near 1,267.26 as well as the release of a number of disappointing US macroeconomic data. Once an upside momentum was over, the buck started to restore lost positions and dragged the rate to the bottom, passing through the 20-, 55- and 100-hour SMAs. Given that SWFX traders remain slightly bearish on the pair, it might slip a little bit further towards the bottom trend-line of an ascending channel that is backed up by the weekly PP at 1,261.80 and the approaching 200-hour SMA. On the other hand, certain technical indicators send a signal that the bullion is already oversold and, thus, might start the surge without reaching the pattern's boundary.

Weekly




 

•    Last Candlesticks pattern: Long white candlestick


   

•    Time of formation: 22 May 2017


   

•    Trend bias: Up
 


 

Daily




 

•    Last Candlesticks pattern: Hammer


   

•    Time of formation: 14 Mar 2017


 

•    Trend bias: Up


 





NZD/USD – 0.74

25
 

Kiwi has continued heading north in part due to broad-based weakness in the greenback and price just broke above previous resistance at 0.7486 , adding credence to our bullish view medium term erratic upmove from 0.6074 (2015 low) has resumed and upside bias remains for this move to extend gain to 0.7610-20, then towards 0.7690-00 (61.8% projection of 0.6074-0.7486 measuring from 0.6818), however, near term overbought condition should prevent sharp move beyond 0.7750 and reckon 0.7800-10 would hold from here, bring retreat later.

On the downside, whilst initial pullback to the Tenkan-Sen (now at 0.7440) is likely, reckon downside would be limited to 0.7401 support) and the Kijun-Sen (now at 0.7380) would hold, bring another upmove later. A daily close below the Kijun-Sen would defer and suggest a temporary top is possibly formed, bring retracement of recent rise to 0.7330-35, however, still reckon downside would be limited to support at 0.7262 and price should stay well above support at 0.7201, bring another rally.  


Recommendation: Buy at 0.7400 for 0.7600 with stop below 0.7300.



On the weekly chart, kiwi extended recent upmove and has finally penetrated indicated previous resistance at 0.7486, adding credence to our bullish view that medium term erratic upmove from 0.6074 (2015 low) has resumed and may extend gain to 0.7690-00 (61.8% projection of 0.6074-0.7485 measuring from 0.6818) and later towards 0.7780-85 (61.8% Fibonacci retracement of 0.8836-0.6074), however, reckon upside would be limited to 0.7890 and price should falter well below resistance at 0.8035.

On the downside, although initial pullback to 0.7400-10 is likely, reckon the Tenkan-Sen (now at 0.7336) would limit downside and bring another rise later. Below support at 0.7201 would defer and suggest top is possibly formed, risk test of the Kijun-Sen (now at 0.7188) first, however, a weekly close below there is needed to add credence to this view, bring correction of recent rise to the upper Kumo (now at 0.7140), then 0.7090-00 but reckon support at 0.7035 would hold from here. 


Weekly
    •    Last Candlesticks pattern: Long white candlestick
    •    Time of formation: 10 Jul 2017
    •    Trend bias: Up

Daily
    •    Last Candlesticks pattern: Long white candlestick
    •    Time of formation: 18 Jul 2017
    •    Trend bias: Up



Although aussie edged higher to 0.8066 late last week, lack of follow through suggests consolidation would be seen and minor consolidation would be seen with initial downside bias and pullback to support at 0.7878 cannot be ruled out, however, reckon the Kijun-Sen (now at 0.7819) would limit downside and bring another rise later. Above said resistance at 0.8066 would signal upmove has once again resumed and extend the medium term erratic rise from 0.6827 to 0.8163 resistance, then 0.8200, however, loss of near term upward momentum should limit upside and reckon another previous resistance at 0.8295 would hold from here.

On the downside, whilst initial pullback to 0.7935-40 and possibly 0.7878 cannot be ruled out, reckon the Kijun-Sen (now at 0.7819) would limit downside and bring another upmove later. A daily close below the Kijun-Sen would dampen this bullish view and suggest a temporary top is possibly formed, risk test of 0.7785-90 but break of previous resistance at 0.7712 is needed to add credence to this view, bring retracement of recent rise to 0.7650-60 first.



Recommendation: Buy at 0.7840 for 0.8040 with stop below 0.7740.



On the weekly chart, aussie’s upmove has gathered momentum after breaking above previous resistance at 0.7835, adding credence to our bullish view that the erratic rise from 0.6827 low is still in progress and upside bias remains for this move to extend headway to previous resistance at 0.8163, then 0.8250, however, near term overbought condition should limit upside to another previous resistance at 0.8295 and price should falter below 0.8390-00, bring retreat later.

On the downside, although pullback to 0.7900 is likely, reckon downside would be limited to previous resistance at 0.7835 (now support) and bring another rise later. Below 0.7785-90 would bring pullback towards previous resistance at 0.7712, break there would suggest top is possibly formed, bring test of the Kijun-Sen (now at 0.7698) but break there is needed to provide confirmation, bring further fall towards said support at 0.7571 which should remain intact.

USD/CHF - 0.9662

Most recent candlesticks pattern : N/A

Trend                                    : Near term up

Tenkan-Sen level                  : 0.9662

Kijun-Sen level                    : 0.9658

Ichimoku cloud top                 : 0.9682

Ichimoku cloud bottom              : 0.9672

Original strategy :

Buy at 0.9600, Target: 0.9700, Stop: 0.9565

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 0.9600, Target: 0.9700, Stop: 0.9565

Position : -

Target :  -

Stop : -

Dollar has traded narrowly and near term sideways trading is likely to continue, although initial downside risk of another retreat to 0.9620-25 cannot be ruled out, reckon previous resistance at 0.9596 would turn into support and contain downside, bring another rise later, above resistance at 0.9727 would extend recent rise to 0.9750-60, then 0.9780 but reckon 0.9800 would hold from here.
 
In view of this, would not chase this rise here and would be prudent to buy dollar on subsequent pullback as previous resistance at 0.9596 should turn into support and contain dollar’s downside. Below 0.9580 (61.8% Fibonacci retracement of 0.9490-0.9727) would defer and suggest a temporary top is formed instead, bring correction to 0.9540-50 but price should stay well above support at 0.9490, bring another rise later. 

GBP/USD - 1.3218

Most recent candlesticks pattern   : N/A

Trend                                 : Near term up

Tenkan-Sen level                 : 1.3208

Kijun-Sen level                    : 1.3218

Ichimoku cloud top              : 1.3190

Ichimoku cloud bottom        : 1.3152

Original strategy :

Buy at 1.3130, Target: 1.3230, Stop: 1.3095

Position : - 

Target :  -

Stop : -

New strategy  :

Buy at 1.3130, Target: 1.3230, Stop: 1.3095

Position : -

Target :  -

Stop : -

Although cable eased after rising to 1.3245 yesterday and minor consolidation below this level would be seen, reckon downside would be limited to previous resistance at 1.3159 and 1.3125-30 should hold, bring another rise later, above said resistance at 1.3245 would extend gain to 1.3275-80, however, near term overbought condition should prevent sharp move beyond there and reckon 1.3300-10 would hold from here, risk from there has increased for a retreat to take place later.

In view of this, would not chase this rise here and would be prudent to buy cable on pullback as 1.3125-30 should contain downside, bring another upmove later. Only below indicated support at 1.3097 would abort and signal a temporary top is possibly formed, bring further fall towards previous support at 1.3052.

GBP gained solid ground on the back of reports showing Britain's manufacturing activity expanding more than anticipated in July. After the release, the Pound appreciated against the US Dollar by 0.05% to hit the 1.3215 mark. According to Markit, the UK Manufacturing PMI rose to 55.1 points in the reported month, surpassing expectations for a 54.3 reading. Manufacturing expanded for the first time in three months, being mainly driven by strong gains in new orders that were encouraged by higher exports. Furthermore, the overall expansion in the industry resulted in the strongest increase in job creation within the manufacturing sector in recent years. However, the data is still not likely to have a big impact on the BoE's policy decision due on Thursday.

EUR/USD - 1.1832

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 1.1819

Kijun-Sen level                  : 1.1815

Ichimoku cloud top             : 1.1808

Ichimoku cloud bottom      : 1.1764

Original strategy  :

Buy at 1.1725, Target: 1.1840, Stop: 1.1690

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.1765, Target: 1.1865, Stop: 1.1730

Position : -

Target :  -

Stop : -

As the single currency has maintained a firm undertone after recent rally above last week’s high at 1.1777, adding credence to our bullish view that recent upmove from 1.0340 low is still in progress and upside bias remains for further gain to 1.1850-55 (50% projection of 1.1370-1.1777 measuring from 1.1650), then 1.1875-80 but loss of near term upward momentum should prevent sharp move beyond 1.1900-05 (61.8% projection) and price should falter below 1.1940-50, risk from there has increased for a retreat later.

In view of this, would not chase this rise here and would be prudent to buy euro on pullback as 1.1760-65 should limit downside. Only below indicated support at 1.1723 would abort and suggest top is possibly formed, bring retracement of recent rise to 1.1680-85 first. 

Manufacturing growth in the US almost matched growth forecasts, but slightly weaker-than-expected figures failed to support the Greenback significantly. Right after the data were released, the USD/JPY currency pair went to the 110.145 area, or 0.01% higher, but paired gains after that. The Institute for Supply Management stated that its Manufacturing Activity Index came in at 56.3 in July, compared with 57.8 registered in the prior month, though 15 out of 18 industries still indicated expansion. Although production, employment and new orders rose at a slightly weaker pace, they kept pointing to stable economic growth in the US. In addition, experts suggested that some weakness in recent reports is unlikely to affect the normalisation of the Fed's monetary policy.