Sample Category Title

Cable is holding firm above broken 1.3200 barrier which now acts as initial support and marks European session low.

Bullish acceleration in past two days confirms strong bullish stance for extension of larger bull-phase from 1.2000 zone and bull-leg from 1.2588 trough towards its Fibo 161.8% projection at 1.3330 and key barrier at 1.3473 weekly cloud top) in extension).

Near-term price action probes above session high at 1.3235 after better than expected UK Manufacturing PMI data inflated the pair, signaling further advance.

Initial support lies at 1.3200/ 1.3190 zone, below which next supports levels are 1.3158 (27 July former high) and 1.3100 (Monday’s low).

Res: 1.3200' 1.3250' 1.3300' 1.3330
Sup: 1.3200' 1.3858' 1.3125' 1.3100

GBP/JPY – 146.05






 

GBP/JPY – Wave 5 as well as wave (III) has possibly ended at 116.85






 

As stealing met resistance at 146.55 and has retreated, retaining our bearishness (we recommended to sell sterling at 146.50 and a short position was entered) and as long as said resistance holds, mild downside bias remains for another retreat to 144.85, then towards support at 144.05, however, break of latter level is needed to add credence to our view that top has been formed at 147.75 last month, bring further fall to 143.25-30, break there would signal the rebound from 138.70 has ended and bring at least a retracement of this rise to 142.50 (previous resistance), then 142.00 but price should stay well above 140.00, bring rebound later.  



Our preferred count is that larger degree wave V with circle is unfolding from 251.12 with wave (I) 219.34, (II): 241.38 and wave (III) is subdivided into 1: 192.60, 2: 215.89 (23 Jul 2008) and wave 3 ended at 118.87 earlier in 2009. The correction from there to 162.60 is wave 4 which itself is a double three and is labeled as first a-b-c ended at 151.53, followed by wave x at 139.03, 2nd a ended at 162.60, 2nd b at 146.75 and 2nd c leg of wave 4 ended at 163.00. Therefore, the decline from 163.00 to 116.85 is now treated as wave 5 which also marked the end of larger degree wave (III), hence wave (IV) major correction has commenced for retracement of the wave (III) from 241.38 and upside target at 183.95-00 (50% Fibonacci retracement of the wave (II) from 241.38) had been met, a drop below 160.00 would suggest wave (IV) has ended at 195.85, bring decline in wave (V) for initial weakness to 130 (already met) and 120.




On the upside, above said resistance at 146.55 would abort and suggest the retreat from 147.75 has ended instead, bring a stronger rebound to 147.00. Only break of said resistance at 147.75 would revive bullishness and bring test of previous chart resistance at 148.10, break there would signal early rise from 135.60 (this year’s low) has resumed for gain to 148.45 (another previous resistance) and later 149.00-10 but price should falter below psychological level at 150.00, bring retreat late.






Recommendation: Hold short entered at 146.50 for 144.50 with stop above 146.60.

The long-term downtrend from 570.99 (29 Feb 1980) is labeled as an impulsive wave with III with circle ended at 129.77 (20 Apr 1995) and the corrective rebound to 251.12 (20 Jul 2007) is treated as wave IV with circle and the wave V with circle selloff from 251.12 has possibly ended at 116.80 (almost reached our indicated target at 116.00) and major correction has commenced from there and indicated upside target at 183.90-00 (50% Fibonacci retracement of 251.10-116.85) had been met, reckon upside would be limited to 199.80-90 (61.8% Fibonacci retracement) and bring wave (V) decline in later part of 2017.

GBP/USD – 1.3230




Recent wave: Wave V of larger degree wave (III) has ended at 1.1986 and major correction has commenced from there for gain to 1.3000 and 1.3140-50




Trend: Near term up




Original strategy :

Buy at 1.3070, Target: 1.3250, Stop: 1.3010

Position: -



Target:  -



Stop: - 




New strategy :

Buy at 1.3130, Target: 1.3330, Stop: 1.3070

Position: - 



Target:  -



Stop:- 



As sterling has surged again after finding renewed buying interest at 1.3097 yesterday and broke above previous resistance at 1.3126, adding credence to our bullishness for recent upmove to extend further gain to 1.3250, then towards 1.3300, having said that, as this move is still viewed as the final wave v of larger degree wave C, reckon upside would be limited to 1.3340-50 and price should falter below 1.3390-00, then sterling shall retreat sharply from there.

Our preferred count on the daily chart is that cable's rebound from 1.3500 (wave (A) trough) is unfolding as a wave (B) with A ended at 1.7043, followed by triangle wave B and wave C as well as wave (B) has ended at 1.7192, the subsequent selloff is the larger degree wave (C) which is still unfolding with minor wave (III) of larger degree wave 3 ended at 1.1986, hence wave (IV) correction is in progress which could either be a triangle wave (IV) of a complex formation but upside should be limited to 1.3500 and price should falter well below 1.4000, bring another decline in wave (V) of 3 for weakness to 1.1500, then 1.1200. 


On the downside, whilst pullback to 1.3170-80 cannot be ruled out, reckon 1.3120-30 would hold and bring another rise. Only below said support at 1.3097 would abort and signal top is formed instead, bring retracement of recent rise to 1.3052 support but break there is needed to add credence to this view, bring correction to 1.3000, then 1.2980.  


As widely anticipated, the Reserve Bank of Australia kept its cash rate unchanged at 1.5%. Traders who wereanticipating a dovish statement were disappointed, despite the central bank saying that a rise in the Aussie would slow the economy. It is no surprise that RBA Governor, Philip Lowe is not excited about the appreciating exchange rate. He stated that the recent currency strength is weighing on the outlook for economic growth and employment, which will result in slower momentum in economic activity and inflation.

The AUDUSD has appreciated by more than 4% in July alone. However, this was mainly due to the weaker U.S. dollar and a spike in commodity prices. The economy which relies on commodity exports, has seen iron ore prices jumping to 4-month highs, after activity in China’s construction sector surged to a new high in more than three years. Similarly, copper prices gained more than 6% to trade at a new 2-year high.

The AUD above 0.8 looks expensive, but without action from the central bank, yield differentials will continue to be the primary driver for the currency pair. The spread between the U.S. and Australian 10-year bond yields has historically served as a key indicator for the Aussie dollar;if the spread continues to widen, I still see further appreciation in AUDUSD.

The Euro also made headlines yesterday, after the single currency traded above 1.18 against the USD, reaching its highest levels in 2.5 years. The EURUSD is up by more than 12% from April lows, and we haven’t seen any meaningful correction since then, thanks topositive European economic data, a hawkish ECB, and the ongoing drama at the Oval Office. As we get closer to the 1.20 benchmark, short positions are likely to come in. The sharp appreciation of the Euro is not only causing problems for European exporters, but soon this will be reflected in prices, thus delaying ECB’s plan to normalize monetary policy. I believe that EURUSD is due to a correction, but this requires strong data from the U.S. to convince traders that the Fed will hike rates again in December -this iswhy Friday’s U.S. labor report will be crucial for traders.

It is a busy economic calendar in the Eurozone - manufacturing PMI’s are due today and most European countries are expected to show continued expansion in activity, but no big surprises. The preliminary Eurozone Q2 GDP is expected to show 0.6% growth on a quarterly basis and 2.1% annualized. It would take a significant event to send the Euro higher from current levels

The RBA kept its policy unchanged today, as was widely anticipated. The statement accompanying the decision contained few surprises, with the Bank appearing content with the strong employment growth over recent months, but maintaining its concerns regarding subdued wage growth. Perhaps the most noteworthy point was that policymakers expressed their discomfort with the latest AUD appreciation. They noted that the higher exchange rate is expected to contribute to subdued prices, and that it is weighing on the outlook for growth and employment.

AUD/USD traded somewhat lower following the RBA decision. Nevertheless, the decline triggered fresh buy orders near the round figure of 0.8000 (S1) and then it recovered all the meeting-related losses. Given that the Bank's attempt to jawbone the currency appeared unsuccessful, we maintain our view that the outlook for AUD remains positive, at least in the short-term. We expect the bulls to remain in the driver's seat and perhaps challenge once again the 0.8070 (R1) resistance, marked by the peak of the 27th of July. A break above that level would confirm a forthcoming higher high and may open the way for our next resistance hurdle of 0.8160 (R2).

As for the bigger picture, we stick to our guns that as long as the rate continues to trade above 0.7800, the upper bound of the long-term wide sideways range that had been containing the price action since the 2nd of March, the broader outlook remains positive as well. In addition, there is little on the Australian economic calendar over the next couple of weeks that could change the sentiment currently surrounding the Aussie. The next major market mover for AUD may be the wage growth data for Q2, due out in mid-August, as they may determine whether the RBA will turn hawkish anytime soon.

USD retreat in full swing as White House turmoil escalates

The US dollar came under renewed selling interest yesterday, particularly against the euro and sterling. End-of-month portfolio rebalancing flows and the latest turmoil at the White House may have been the drivers of the greenback's retreat. In an unexpected turn of events, President Trump fired his communications director, Anthony Scaramucci, just ten days after appointing him. Combined with the replacement of the President's Chief of Staff a few days ago, this frequent recycling of key White House figures likely enhanced speculation that the fiscal-reform promises of the US administration may be further delayed, or perhaps completely derailed. We should also note that there have been media reports recently suggesting Trump's influential Secretary of State, Rex Tillerson, is considering to quit. Bearing all these in mind, we think that the dollar could continue to underperform for a while, amid these political uncertainties and subdued expectations for another Fed hike this year.

EUR/USD edged north on Monday, breaking above the resistance (now turned into support) barrier of 1.1775 (S1). The move confirms a forthcoming higher high on the 4-hour chart, and keeps bias to the upside, in our view. Even if the pair corrects lower to challenge the 1.1775 (S1) as a support this time, we expect buyers to take charge again soon and perhaps target the 1.1880 (R1) hurdle in the near future. A break above that resistance is possible to open the way for our next obstacle of 1.1980 (R2).

Today's highlights:

During the European morning, the UK manufacturing PMI for July will be in focus. The forecast is for the figure to remain unchanged, in which case the reaction in GBP is likely to remain relatively limited. In Eurozone, the flash preliminary estimate of GDP for Q2 is due out and the forecast is for the bloc's economy to have grown at the same robust pace as previously. We also get Eurozone's final manufacturing PMI for July.

From the US, we get a raft of economic data: The core PCE price index for June, personal income and spending data for the same month, as well as the ISM manufacturing PMI for July. Kicking off with the core PCE index, without a forecast available, we see the case for the yearly rate to have held steady, given that the core CPI rate for the month remained unchanged too. Turning to personal income and spending, expectations are for both figures to have risen at the same pace as previously. Last but not least, the ISM manufacturing PMI for July is expected to decline. We think that the reaction in USD may depend primarily on any surprises in the core PCE as well as personal income rates, given the recent softness in US inflation. However, even if we were to see a positive surprise in these indicators, we would expect any positive reaction in USD to remain relatively short-lived, considering the negative sentiment currently surrounding the currency.

AUD/USD

Support: 0.8000 (S1), 0.7950 (S2), 0.7900 (S3)

Resistance: 0.8070 (R1), 0.8160 (R2), 0.8250 (R3)

EUR/USD

Support: 1.1775 (S1), 1.1710 (S2), 1.1615 (S3)

Resistance: 1.1880 (R1), 1.1980 (R2), 1.2100 (R3)

GBP/JPY - 146.05

Recent wave: Medium term low formed at 120.50 and (A)-(B)-(C) major correction has commenced with (A) leg ended at 148.45, hence wave (B) is unfolding for retreat to 131.00-10.

Trend: Near term up

New strategy :

Buy at 145.55, Target: 147.55, Stop: 144.95

Position: -
Target:  -
Stop:-

As sterling found renewed buying interest at 144.85 and has staged a strong rebound, suggesting the retreat from 146.55 has ended there and consolidation with upside bias is seen for another test of this level, above there would signal low has been formed at 144.05 early last week and bring a stronger rebound to 146.90-00 and possibly towards 147.30.

In view of this, we are looking to buy sterling on dips. Below said support at 144.85 would abort and prolong consolidation, risk weakness to 144.45-50 but said support at 144.05 would hold from here, bring recovery later. A break of said support at 144.05 would add credence to our view that a temporary top has been formed at 147.75 earlier last month, bring retracement of recent upmove to 143.50, then towards support at 143.30.

Our preferred count is that larger degree wave V with circle is unfolding from 251.12 with wave (I) 219.34, (II): 241.38 and wave (III) is subdivided into 1: 192.60, 2: 215.89 (23 Jul 2008) and wave 3 ended at 118.87 earlier in 2009. The correction from there to 162.60 is wave 4 which itself is a double three and is labeled as first a-b-c ended at 151.53, followed by wave x at 139.03, 2nd a ended at 162.60, 2nd b at 146.75 and 2nd c leg of wave 4 ended at 163.00. Therefore, the decline from 163.00 to 116.85 is now treated as wave 5 which also marked the end of larger degree wave (III), hence wave (IV) major correction has commenced for retracement of the wave (III) from 241.38 and upside target at 183.95-00 (50% Fibonacci retracement of the wave (II) from 241.38) had been met, a drop below 160.00 would suggest wave (IV) has ended at 195.85, bring decline in wave (V) for initial weakness to 130 (already met) and 120.


The EUR/JPY has been in a steady uptrend marking a zig zag pattern followed by a huge bullish W pattern. At this point we have a possible continuation and a possible retracement to POC zone 129.95-130.10 (D L4, EMA89, 61.8, ATR pivot, historical buyers, bullish order block). Continuation should happen above 130.59 towards 130.80 and 131.10. In the case of retracement to POC, the price should be rejected towards upper levels. However should the price break below 124.90, traders should watch for 129.77, 129.66 and 129.50.

W L3 - Weekly Camarilla Pivot (Weekly Interim Support)

W H3 - Weekly Camarilla Pivot (Weekly Interim Resistance)

W H4 - Weekly Camarilla Pivot (Strong Weekly Resistance)

D H4 - Daily Camarilla Pivot (Very Strong Daily Resistance)

D L3 – Daily Camarilla Pivot (Daily Support)

D L4 – Daily H4 Camarilla (Very Strong Daily Support)

POC - Point Of Confluence (The zone where we expect price to react aka entry zone)

EUR/JPY - 130.39

Recent wave: wave v of (C) ended at 94.12 and major correction in wave A has ended at 149.79

Trend: Near term up

New strategy :

Stand aside

Position: -
Target:  -
Stop:-

Although the single currency has rebounded again after brief pullback and test of recent high of 130.77 cannot be ruled out, break there is needed to confirm recent upmove has resumed and bring further gain to 131.00-10, above there would encourage for headway to 131.50, however, loss of upward momentum should prevent sharp move beyond latter level and reckon 132.00 would hold from here, risk from there is seen for a retreat later.

In view of this, would not chase this move here and would be prudent to stand aside for now. Below 129.95-00 would bring another test of 129.54 support but break there is needed to prolong consolidation below 130.77, bring another corrective fall to 129.20, then 128.90-00, however, reckon downside would be limited and 128.49-57 support should hold, bring another rise later.

Our latest preferred count is that wave (ii) is ABC-X-ABC which ended at 123.33 and wave (iii) is unfolding with wave iii ended at 100.77, followed by wave iv at 111.57 and wave v as well as the wave (iii) has ended at 97.04, followed by wave (iv) at 111.43 and wave (v) has ended at 94.12 which is also the end of the larger degree v, this also implied the major wave (C) has also ended there, hence major correction has commenced from there with (A) leg unfolding in its lower degree wave c which has possibly ended at 145.69. Under this count, A-B-C wave (B) has commenced with A leg ended at 136.23, wave B at 143.79 and wave C has possibly ended at 149.79.

Our larger degree count is that the decline from 139.26 is wave (C) and is sub-divided into a diagonal triangle i-ii-iii-iv-v with wave i - 105.44, wave ii- 123.33, wave iii - 97.03, wave iv - 111.43, followed by the final wave v as well as the end of wave (C) at 94.12, this also mark the bottom of larger degree wave B. Under this count, major rise in wave C has commenced as an impulsive wave with minor wave III ended at 145.69, wave V is still in progress for further gain to 150.00. Having said that, this so-called wave V could well be the first leg of larger degree 5-waver wave C and this wave C should bring at least a retest of wave A top at 169.97 (July 2008).

AUD/USD – 0.8000

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

Original strategy :

Sold at 0.8030, Target: 0.7880, Stop: 0.8090

Position: - Short at 0.8030
Target:  - 0.7880
Stop: - 0.8090

New strategy :

Hold short entered at 0.8030, Target: 0.7880, Stop: 0.8090

Position: - Short at 0.8030
Target:  - 0.7880
Stop:- 0.8090

Although aussie recovered after finding support at 0.7937 on Friday, as long as last week’s high at 0.8066 holds, further consolidation would be seen with mild downside bias for another retreat, below said support at 0.7937 would add credence to our view that wave iii top is possibly formed at 0.8066, then near term bearishness remains for correction in wave iv to 0.7900, however, reckon previous support at 0.7875-78 would hold and renewed buying interest should emerge there, bring another rise later. Above said resistance at 0.8066 would signal recent upmove is still in progress for headway to 0.8100, then 0.8140-50 but overbought condition should limit upside to 0.8190-00, bring retreat 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 to aforesaid upside targets. 

In view of this, we are holding on to our short position entered at 0.8030. A sustained breach below support at 0.7875 would defer and risk correction to 0.7810-20, however, still reckon downside would be limited to 0.7786 and price should stay well above wave i top at 0.7712.

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.

EURGBP remains neutral as consolidation continues on the 4-hour chart since the pullback from the high of 0.8994 that was hit on July 21.

The shorter-term 20-period moving average (MA), currently at 0.8941, is providing immediate support.

The bullish breakout from 0.8860 on July 20 (top of a recent range), coincided with the bullish crossover of the 20-period MA with the 50-period one. The 20-period MA has stopped rising and has turned horizontal, while RSI is moving sideways, suggesting that consolidation is likely for EURGBP in the near term.

A move to the downside would find support at the July 27 low of 0.8890. From here, further support is located at 0.8860 and at 0.8760. These are important levels that acted as support and resistance levels in the past.

Looking at the bigger picture, there are no clear signs of a reversal in the slow uptrend that has been taking place since May. In the near term, the market is in a corrective mode, with scope to bounce higher to clear 0.8941 and target the key 0.9000 level which has not been reached since November 2016.