Sample Category Title

After a notable surge on Friday, the last day of July the bullion spent in a steady horizontal movement against the American Dollar. Most likely, today the pair will continue to climb upstairs, supported by the accompanying 55-hour SMA from the bottom. In addition, the surge might be accelerated by announcement of the US ISM Manufacturing PMI at 14:00 GMT. This scenario is supported by the fact that the pair faces no resistance levels up until the combination of the 61.80% Fibonacci retracement level at 1,278.96 and the weekly R1 at 1,279.64. And barrier, most probably, will cause a trend reversal at least in the short-run. By the way, this resistance level coincides with the breakout point of a symmetrical triangle that has recently formed within the two week long ascending channel.

The US dollar hit a more than two-and-a-half-year low against the euro during yesterday's late session, with the euro breaching the 1.18 mark. The dollar index fell to its lowest level since May 2016, as it traded at 92.79. During the Asian session today, the US currency was broadly steady against most major currencies. The aussie gained following the Reserve Bank of Australia decision to keep its cash rate unchanged.

The US dollar plunged against most major currencies in yesterday's last session as the currency has been battling several headwinds. The departure of White House communications director Anthony Scaramucci added to the uncertainty over the US political outlook and pushed the dollar lower. This was the latest political issue that accumulated in July, following the failure of the repeal of Obamacare in the Senate, the departure and replacement of key White House staff and political controversies and investigations surrounding Trump's family and close aids. The dollar is now down more than 9% so far this year, its worst performance for the first seven months of the year since 1986 when it fell 12.5%. During the Asian session, the dollar was relatively steady against most majors with the dollar/yen pair at 110.20, euro/dollar at 1.1825 and pound/dollar at 1.3214.

The euro gained the most against the dollar linked to the greenback weakness but also due to traders buying the common currency on the back of month-end portfolio adjustments and expectations that the European Central Bank will start tightening monetary policy soon. The eurozone economy is doing better with unemployment falling to 9.1% in June while the core CPI figure, which excludes food and energy prices, rose 1.3% year-on-year – the highest since August 2013, the Eurostat report revealed yesterday.

Australia's central bank kept interest rates unchanged at 1.5% on expectations that the strengthening currency is going to subdue inflation and weigh on the growth outlook. Many economists expected this decision and are also now forecasting the central bank to remain dovish in its outlook until the economy is put on a sustainable footing. The RBA Governor Philip Lowe said “The higher exchange rate is expected to contribute to subdued price pressures in the economy…It is also weighing on the outlook for output and employment.' The aussie gained in early Asian trading, but was relatively flat at 0.7993 as European traders were starting the day.

In other forex moves, the pound was broadly flat against the dollar following yesterday's surge with the pair last trading at 1.3211. The New Zealand dollar was pressured against the greenback to last trade at $0.7496.

Looking at commodities, oil prices have continued to rise for more than a week on tightening US supply and possible sanctions against Venezuela. WTI was last trading at $50.29 a barrel while Brent was at $52.79. Gold prices held steady near seven-week highs early Tuesday, supported by a slump in the U.S. dollar and political uncertainty. The precious metal was last trading at $1,268.22 an ounce.

GBP/USD - 1.3209

Most recent candlesticks pattern   : N/A

Trend                                 : Near term up

Tenkan-Sen level                 : 1.3213

Kijun-Sen level                    : 1.3166

Ichimoku cloud top              : 1.3123

Ichimoku cloud bottom        : 1.3106

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 : -

Yesterday’s rally above previous resistance at 1.3159 confirms recent upmove has resumed and upside bias is seen for further gain to 1.3240-50, however, near term overbought condition should prevent sharp move beyond 1.3275-80 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 the upper Kumo (now at 1.3123) should limit downside, bring another upmove later. Below 1.3105-10 would defer and risk test of support at 1.3097 but only break there would signal a temporary top is possibly formed, bring further fall towards previous support at 1.3052.

EUR/USD - 1.1813

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 1.1823

Kijun-Sen level                  : 1.1785

Ichimoku cloud top             : 1.1736

Ichimoku cloud bottom      : 1.1714

Original strategy  :

Buy at 1.1750, Target: 1.1850, Stop: 1.1715

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.1750, Target: 1.1850, Stop: 1.1715

Position : -

Target :  -

Stop : -

As the single currency has maintained a firm undertone after yesterday’s 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) but loss of near term upward momentum should prevent sharp move beyond 1.1875-80 and price should falter below 1.1900-05 (61.8% projection), 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 1.1750 should limit downside. Below said support at 1.1723 would defer and suggest top is possibly formed, bring retracement of recent rise to 1.1690-95 first but indicated support at 1.1650 should hold. 

AUD/USD remained at about the same level it was seen ahead of the release, as the Reserve Bank of Australia failed to surprise the market and decided to leave its trend-setting interest rate at the record-low level of 1.50% yet again. Following the release, the Aussie fell slightly versus its American counterpart, with the one-minute candle closing at the 0.80098 level. In the statement released by the RBA, the Governor Lowe was thrilled to note that the global economic conditions continued to improve and pointed out that Australia's largest trading partner, China, kept showing signs of economic stability. Lowe also said leaving interest rates at the current low level was consistent with the bank's path towards the sustainable growth and the inflation target.

Firmly confident figures for the Euro zone's inflation contributed enough to bring the EUR/USD currency pair to a new high on Monday. The Euro advanced against the US Dollar by 0.09% to reach the 1.17429 level following the release of the flash CPI data for July, which managed to satisfy analysts' expectations. Eurostat revealed its flash estimate for inflation in the Euro area rose 1.3% in the reported month, unchanged from June, while the core measure edged higher to 1.2%, above economists' forecasts for a 1.1% increase. Nevertheless, despite consumer prices growth remaining below the ECB's 2% target, the ongoing economic expansion across the 19-country bloc added to confidence that inflation would gradually rise towards the target level.

Stronger-than-expected US pending home did not manage to support the USD/JPY exchange rate. Following the release, the Yen appreciated against the US Dollar by 0.053% to be seen trading at 110.46. The National Association of Realtors reported that the Pending Home Sales Index rose twice as much as anticipated by a seasonally adjusted 1.5% in July, following an upwardly revised 0.7% drop in the prior month. Nevertheless, the strong increase offset previous declines only partially and suggested that existing home sales are likely to increase in the near term, as fewer available properties forced buyers to act immediately. Analysts expect housing sector to continue recovering after being stymied by the lack of homes, which led to higher prices.

USD/JPY - 110.21

Most recent candlesticks pattern   : N/A

Trend                      : Near term down

Tenkan-Sen level              : 110.22

Kijun-Sen level                  : 110.39

Ichimoku cloud top             : 111.01

Ichimoku cloud bottom      : 110.65

Original strategy  :

Sell at 111.20, Target: 110.20, Stop: 111.55

Position :  -

Target :  -

Stop : -

New strategy  :

Sell at 110.75, Target: 109.75, Stop: 111.10

Position :  -

Target :  -

Stop : -

As the greenback has fallen again after meeting renewed selling interest at 110.77 yesterday, adding credence to our bearish view that the decline from 114.50 is still in progress and downside bias remains for further weakness to 110.00, then 109.75-80 but near term oversold condition should limit downside to 109.50 and reckon 109.20-25 would hold from here, risk from there is seen for a rebound later.

In view of this, would not chase this fall here and would be prudent to sell dollar again on recovery as said resistance at 110.77 should limit upside. Above 111.00-05 would defer and risk test of 111.29 resistance but only break there would signal a temporary low is formed instead, bring rebound to 111.50-55 first.

AUDJPY has shifted to neutral in the near term after pausing a rally that took the pair above the key 88.00 level, which is now acting as strong support.

Prices rose sharply from the June 6 low of 81.77 but the market became overextended with RSI reaching into overbought territory above 70. Upside momentum faded and AUDJPY has entered into a consolidation phase between the key level of 88.00 and the June 27 high of 89.41.

Strong support at 88.00 is expected to contain downside moves, as it has been doing in recent days. If it is breached, then this would open the way for further declines towards next support at 87.00 (previous resistance). From here there is important support at 85.65 (a previous support level in late June until early July). It is also the 50% Fibonacci retracement level of the rise from 81.77 to 89.41. A deeper decline from this area would shift the short-term uptrend and a top would be put in place at 89.41.

There are no clear signs indicating a reversal in the uptrend. The pair is neutral in the near term but the overall market structure is bullish on the daily chart. The Tenkan-sen line is above the Kijun-sen line and the market is above the Ichimoku cloud. Meanwhile, RSI remains above 50 in bullish territory. The 200-day moving average is rising with the market above it.

A successful break above the 89.41 high would open the way towards the next significant high of 90.72 that was reached in November 2015. Such a move would strengthen both the short and medium-term bullish bias.

Daily Pivots: (S1) 129.86; (P) 130.22; (R1) 130.90; More...

EUR/JPY's consolidation from 130.76 is still in progress and intraday bias remains neutral first. Another fall could be seen. But downside should be contained by 127.43 cluster support (38.2% retracement of 122.39 to 130.76 at 127.56) and bring rebound. Above 130.76 will extend the larger rally to next key fibonacci level at 134.20.

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.