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Daily Pivots: (S1) 1.3077; (P) 1.3115; (R1) 1.3168; More...

Further rise could be seen in GBP/USD but outlook is overall unchanged. Price actions from 1.1946 are seen as a corrective pattern. Considering bearish divergence condition in 4 hour MACD, we'd stay cautious on strong resistance from 61.8% projection of 1.2108 to 1.3047 from 1.2588 at 1.3168 to limit upside. Break of 1.2932 support will be the first sign of reversal and will turn bias to the downside to target 1.2588 key support next. Though, sustained break of 1.3168 will bring further rise towards 1.3444 before completing the correction.

In the bigger picture, overall, price actions from 1.1946 medium term low are seen as a corrective pattern that is still in progress. While further upside is expected, larger outlook remains bearish as long as 1.3444 key resistance holds. Down trend from 1.7190 (2014 high) is expected to resume later after the correction completes. And break of 1.2588 will indicate that such down trend is resuming.

Daily Pivots: (S1) 1.1690; (P) 1.1726 (R1) 1.1783; More...

No change in EUR/USD's outlook. With 1.1612 minor support intact, further rise is expected at this point. Whole rise from 1.0339 low is still in progress and should target 1.2 handle next. Nonetheless, considering bearish divergence condition in 4 hour MACD, break of 1.1612 will indicate short term topping and bring lengthier consolidation first.

In the bigger picture, an important bottom was formed at 1.0339 on bullish convergence condition in weekly MACD. Sustained break of 55 month EMA (now at 1.1760) will pave the way to key fibonacci level at 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. While rise from 1.0339 is strong, there is no confirmation that it's developing into a long term up trend yet. Hence, we'll be cautious on strong resistance from 1.2516 to limit upside. But for now, medium term outlook will remain bullish as long as 1.1295 support holds, in case of pull back.

Yen and Dollar trade mildly firmer today as markets are staying consolidation mode ahead of the key events ahead, including RBA, BoE and US NFP. Economic data from Eurozone are positive but provide little inspiration to the common currency. Meanwhile, commodity currencies are trading generally lower even though WTI crude oil extends recent rise and breaches 50 handle briefly. Released from Canada, IPPI dropped -0.1% mom in June, below expectation of -0.3% mom. RMPI dropped -3.7% mom, below expectation of -2.2% mom.

Eurozone core inflation jumped to four year high

Eurozone headline CPI was unchanged at 1.3% yoy in July, in line with consensus. Meanwhile, core CPI unexpected ticked up by 0.1% to 1.2% yoy. That's the highest reading in four years since August 2013. Unemployment rate dropped to 9.1%, lowest since 2009. The data continued to paint a positive picture for the Eurozone. And that also affirm the view that ECB will at least announce tapering of asset purchases of some sort in September, or by latest October. ECB President Mario Draghi also indicated that QE discussion would begin in autumn. Also from Eurozone, German retail sales rose strongly by 1.1% mom in June, well above expectation of 0.2% mom.

ECB governing council member Sabine Lautenschlaeger said in a newspaper remarks that "the expansionary monetary policy has both advantages and side effects. As time passes, the positive effects get weaker and the risks increase." And, she urged that "it's important to prepare for the exit in good time." But she noted that "what's crucial in that context is a stable trend in the rate of inflation towards our objective of just under 2 percent. It's not quite there yet."

UK mortgage approvals dropped slightly

UK mortgage approvals dropped from 65.11k to 64.70k in June, indicating that lenders have approved fewest mortgages since last September. M4 money supply dropped -0.2% mom, below expectation of 0.2% mom rise. There are a number of interesting points to watch in the upcoming BoE Super Thursdays. One of the three MPC members who voted for a hike, Kristin Forbes, has left. It's uncertain what her replace will vote for. The calls for a rate hike in response to surging inflation cooled after CPI miss. If BoE doesn't raise it inflation forecast in the Quarterly Inflation Report, such rate hike talks will recede even quickly. Also, BoE might follow IMF and lower its own GDP forecast, which will be Sterling negative.

Released early today, official China PMI manufacturing dropped to 51.4 in July, down from 51.7 and missed expectation of 51.5. Official non-manufacturing PMI dropped to 54.5, down from 54.9. Japan industrial production rose 1.6% mom in June, housing starts rose 1.7% yoy. New Zealand building permits dropped -1.0% mom in June. Australia TD securities inflation rose 0.1% mom in July.

RBA to stand pat

The RBA meeting due tomorrow would bring no change in the monetary policy. However, the central bank's "neutral rate" rhetoric gave Aussie a boost. At the July meeting minutes, RBA noted that neutral nominal cash rate is currently at around 3.5%, "given that medium-term inflation expectations were well anchored around 2.5%, although there is significant uncertainty around this estimate". We would like to see if policymakers do any tweak or elaboration on such reference this week. RBA's Monetary Policy Statement due on Friday would provide update economic forecasts.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1690; (P) 1.1726 (R1) 1.1783; More...

No change in EUR/USD's outlook. With 1.1612 minor support intact, further rise is expected at this point. Whole rise from 1.0339 low is still in progress and should target 1.2 handle next. Nonetheless, considering bearish divergence condition in 4 hour MACD, break of 1.1612 will indicate short term topping and bring lengthier consolidation first.

In the bigger picture, an important bottom was formed at 1.0339 on bullish convergence condition in weekly MACD. Sustained break of 55 month EMA (now at 1.1760) will pave the way to key fibonacci level at 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. While rise from 1.0339 is strong, there is no confirmation that it's developing into a long term up trend yet. Hence, we'll be cautious on strong resistance from 1.2516 to limit upside. But for now, medium term outlook will remain bullish as long as 1.1295 support holds, in case of pull back.

Economic Indicators Update

GMT	Ccy	Events	Actual	Forecast	Previous	Revised
22:45	NZD	Building Permits M/M Jun	-1.00%		7.00%	6.90%
23:50	JPY	Industrial Production M/M Jun P	1.60%	1.50%	-3.60%
01:00	AUD	TD Securities Inflation M/M Jul	0.10%		0.10%
01:00	CNY	Manufacturing PMI Jul	51.4	51.5	51.7
01:00	CNY	Non-manufacturing PMI Jul	54.5		54.9
05:00	JPY	Housing Starts Y/Y Jun	1.70%	0.10%	-0.30%
06:00	EUR	German Retail Sales M/M Jun	1.10%	0.20%	0.50%
08:30	GBP	Mortgage Approvals Jun	65K	65K	65K
08:30	GBP	M4 Money Supply M/M Jun	-0.20%	0.20%	-0.10%
09:00	EUR	Eurozone Unemployment Rate Jun	9.10%	9.20%	9.30%	9.20%
09:00	EUR	Eurozone CPI Estimate Y/Y Jul	1.30%	1.30%	1.30%
09:00	EUR	Eurozone CPI - Core Y/Y Jul A	1.20%	1.10%	1.10%
12:30	CAD	Industrial Product Price M/M Jun	-1.00%	-0.30%	-0.20%	0.10%
12:30	CAD	Raw Materials Price Index M/M Jun	-3.70%	-2.20%	-1.80%	-1.70%
13:45	USD	Chicago PMI Jul		60.8	65.7
14:00	USD	Pending Home Sales M/M Jun		1.00%	-0.80%

The DAX index has moved higher in the Monday session. In the European session, DAX is trading at 12,196.00, up 0.25% on the day. On the release front, German Retail Sales climbed 1.1%, easily beating the estimate of 0.1%. Eurozone CPI Flash Estimate remained unchanged at 1.3%, matching the forecast. On Tuesday, the eurozone releases Preliminary Flash GDP, with an estimate of 0.6%.

The robust German economy continues to impress, and there was positive news on Monday, as retail sales climbed 1.1% in June. This marked the strongest gain since February. Last week, GfK German Consumer Climate strengthened for a fourth straight month, as the German consumer is optimistic about economic conditions and this has translated into strong spending. However, the fly in the ointment remains inflation, which is stuck at low levels. The lack of inflation is a pressing concern for ECB policymakers, and there is little chance that the bank will end its quantitative easing program before December, if inflation levels don't move upwards. German policymakers would like Brussels to tighten policy, but the ECB has to worry about other eurozone members, whose economies are not as strong as Germany. If the eurozone economy continues to improve in the third quarter, the ECB could send out some cautious hints about plans to tighten policy, which would send the euro to higher levels.

It's become an all-too-familiar pattern out of Washington – trouble for the White House has soured investor appetite and weighed on global stock markets. It was déjà vu on Friday, as President's struggling healthcare bill gasped its final breath as the bill was defeated in the Senate after three Republican lawmakers joined the Democrats and voted against the bill. This is another setback for President Trump, who has been unable to get Congress to pass any significant legislation, despite the Republicans controlling both the House and the Senate. Trump will now be able to focus on other issues such as tax reform, but investors are skeptical as to whether the President will have the support he needs in Congress to pass major legislation. The euro climbed to 1.7777 on Friday, its highest level since January 2015. The currency's gains weighed on the DAX, which lost ground but managed to recover before the end of the Friday session.

Brent is trading right above the 52.50 level and was almost to reach the 53.03 major static resistance in the morning, but the sellers have stepped in and have forced it to slip below the 52.66 Friday's high. Is still expected to approach and reach the 53.03 and the 61.8% retracement level, where he may fid resistance again.

Price rallied in the last week, but failed to reach and retest the median line (ml) of the descending pitchfork. Could decrease to retest the 0.9634 level (resistance turned into support) before will try to take out the dynamic resistance. We could have a great buying opportunity if it will come to retest the second warning line (WL2) as well, while a valid breakout above the median line (ml) will confirm an important upside movement.

Price increased today as the USD has received a helping hand from the USDX, which has increased a little after the Friday's massive drop. USD/CAD is located in a major support area, needs a bullish spark to be able to really start a bounce back

The outlook is bearish because the dollar index could decrease further in the upcoming days till will reach the 92.49 static support. USD/CAD is under massive pressure on the Daily chart, could drop anytime, we'll see what impact will have the US and the Canadian data.

The Canadian RMPI is forecasted to drop by 3.2% in June, more versus the 1.8% decrease in the former reading period, while the IPPI is expected to decrease by 0.3%, more compared to the 0.2% drop in the former reading period.

You should know that the US data could shake the currency market, the Chicago PMI may drop from 65.7 to 60.8 points, signaling an expansion slowdown, while the Pending Home Sales are expected to increase by 0.9%, more after the 0.8% drop in the previous reporting period.

USD/CAD decreased sharply on Friday and invalidated the breakout above the fourth warning line (wl4) and above the lower median line (black down sloping line). Right now is pressuring the 1.2460 broken support, we'll see what will happen in the upcoming hours as the fundamental factors should take the lead.

A good US data and poor Canadian reports will help the USD to drag the price higher, but another disappointment from the US will send the rate much much below the 1.2413 level. We may have a larger rebound only if the rate will come back and will stabilize above the 1.2460 critical support.

GOLD - With the commodity seeing higher price close the past week, more strength is likely in the new week. On the downside, support comes in at the 1,260.00 level where a break will turn attention to the 1,250.00 level. Further down, a cut through here will open the door for a move lower towards the 1,240.00 level. Below here if seen could trigger further downside pressure targeting the 1,230.00 level. Conversely, resistance resides at the 1,280.00 level where a break will aim at the 1,290.00 level. A turn above there will expose the 1,300.00 level. Further out, resistance stands at the 1,310.00 level. Its weekly RSI is bullish and pointing higher suggesting further. All in all, GOLD looks to recover further higher.

Notes/Observations

Unemployment data continues to improve in Europe; Euro Zone at lowest level since 2009; Italy Unemployment hits a 5-year low but aided by temporary positions

Geopolitical risks simmer around the globe (Venezuela, North Korea and Russia)

Central bank policy decisions due from RBA and BOE this week with US jobs data scheduled on Friday

Overnight/weekend

Asia:

China July Manufacturing PMI (Govt Official) misses expectations but expands for the 12th straight month. ( 51.4 v 51.5e). Softer data seen as govt began to try to rein in a hot property market and rising corporate debt.

China State Researcher Long Guoqiang: US trade calculation exaggerates deficit with China

Japan Jun Preliminary Industrial Production registers a slight beat and hints at more stable growth (M/M: 1.6% v 1.5%e; Y/Y: 4.9% v 4.8%e)

North Korea said to have test fired another missile

South Korea and US conduct joint ballistic missile test in response to North Korea's most recent ICBM test

Europe:

ECB'S Lautenschlaeger (Germany): it's important to prepare for the exit from accommodative policy in good time; unwind will be a long process; Inflation is not quite there yet

Fitch affirmed France sovereign rating at AA; outlook Stable

Americas:

(VZ) At least 9 killed, including a candidate, amid Venezuela protests during election for new legislative body that will reform constitution

US said to be considering oil-related sanctions against Venezuela, which could be announced by as early as today; not expected to include ban on Venezuelan oil shipments to the U

Economic Calendar

(DE) Germany Jun Retail Sales M/M: 1.1% v 0.2%e; Y/Y: 1.5% v 2.7%e

(TR) Turkey Jun Trade Balance: -$6.0B v -$6.0Be

(IT) Italy Jun Preliminary Unemployment Rate: 11.1% v 11.2%e

(UK) Jun Net Consumer Credit: £1.5B v £1.5Be; Net Lending: £4.1 v £3.4Be

(UK) Jun Mortgage Approvals: 64.7K v 65.0Ke

(EU) Euro Zone July Advance CPI Estimate Y/Y: 1.3% v 1.3%e; CPI Core Y/Y: 1.2% v 1.1%e

(EU) Euro Zone Jun Unemployment Rate: 9.1% v 9.2%e (lowest level since 2009)

(IT) Italy July Preliminary CPI (NIC including tobacco) M/M: 0.1% v 0.0%e; Y/Y: 1.1% v 1.0%e

(IT) Italy July Preliminary CPI EU Harmonized M/M: -1.9% v -1.9%e; Y/Y: 1.2% v 1.2%e

Fixed Income Issuance:

None seen

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx600 +0.2% at 379, FTSE +0.4% at 7398, DAX flat at 12164, CAC-40 -0.1% at 5126, IBEX-35 +0.1% at 10550, FTSE MIB +0.3% at 21496, SMI +0.4% at 9055, S&P 500 Futures flat at 2471]

Market Focal Points/Key Themes: European Indices trade higher across the board with outperformance in the Swiss SMI and FTSE 100, after US indices closed around flat on Friday. HSBC shares outperform following their earnings beat and sharebuyback, whilst upgraded guidance helps Sanofi trade higher. On the downside Utilitywise trade lower by over 40% after lowering guidance, while Legrand trades lower after results. In what will be another busy week for earnings notable highlight this mornign include

Equities

Materials: [Umicore +2.2% (Earnings)]

Financials: [HSBC [HSBA.UK] +2.7% (Earnings)]

Technology: [RIB Software [RSTA.DE] +4.5% (Earnings), Rexel [RXL.FR] +1.4% (Earnings), Legrand [LR.FR] -4% (Earnings)]

Healthcare: [Sanofi [SAN.FR] +1.5% (Earnings)]

Utilities:[Veolia {VIE.FR] +2.2% (Earnings), Utilitywise [UTW.UK] -41% (Earnings, guidance)]

Speakers

Chancellor of Exchequer Hammond (Fin Min): Would not seek to bring the tax rate down to well below EU standards

VP Pence: US stood with Baltic nations, whose biggest threat is Russian aggression. US hoped for better relations with Russia. Recent diplomatic action taken by Moscow would not deter the commitment of the US

China PBoC Dep Gov Zhang Xiaohu reiterated China to balance yuan rate flexibility and stability

Currencies

USD consolidated its recent bout of weakness but the greenback was still facing headwinds from political uncertainty.

EUR/USD around 1.1740 as price developments and employment trends continued to play into the ECB playbook and keep potential scaling back of stimulus in the near future.

GBP/USD fractionally lower at 1.3110 with focus on the BOE rate decision this Thursday.

Fixed Income

Bund futures trade at 161.89 down 14 ticks remaining contained with gamma likely to remain suppressed into another week of net negative supply and supportive month-end flows. Resistance lies near the 162.75 level followed by 163.50. A break of the 160.00 support level could see lows target 159.25 followed by 157.50.

Gilt futures trade at 126.24 higher by 5 ticks with the focus on Thursday's BOE rate decision, Inflation Report and monetary policy summary. Price finds key support at the 125.42 support level. An acceleration lower could test the 122.88 region. Resistance remains the noted 126.51 region, followed by 127.50.

Monday's liquidity report showed Friday's excess liquidity fell to €1.661T a drop of €16B from €1.677T prior. Use of the marginal lending facility fell to €207M from €225M prior.

Corporate issuance saw $36B issued last week. Next week's forecast is $25B

Looking Ahead

06:00 (IL) Israel to sell 2021, 2022 and 2027 bonds

06:00 (IT) Italy Jun PPI M/M: No est v -0.4% prior; Y/Y: No est v 3.1% prior

06:45 (US) Daily Libor Fixing

07:00 (IN) India announces details of upcoming bond sale (held on Fridays)

07:00 (IN) India Jun Fiscal Deficit (INR Crore): No est v 167739 prior

07:25 (BR) Brazil Central Bank Weekly Economists Survey

08:00 (PL) Poland July Preliminary CPI M/M: -0.2%e v -0.2 % prior; Y/Y: 1.6%e v 1.5 % prior

08:00 (ZA) South Africa Jun Trade Balance (ZAR): No est v 9.5B prior

08:00 (UK) Baltic Dry Bulk Index

08:00 (ES) Spain Debt Agency (Tesoro) announces size of upcoming actions in week

08:30 (CA) Canada Jun Industrial Product Price M/M: -0.3%e v -0.2% prior; Raw Materials Price Index M/M: -3.3%e v -1.8% prior

09:00 (FR) France Debt Agency (AFT) to sell combined €4.9-6.1B in 3-month, 6-month and 12-month Bills

09:00 (BE) Belgium Q2 Preliminary GDP Q/Q: No est v 0.6% prior; Y/Y: No est v 1.6% prior

09:00 (MX) Mexico Q2 Preliminary GDP Q/Q: No est v 0.7% prior; Y/Y: 1.8%e v 2.8% prior

09:00 (CL) Chile Jun Unemployment Rate: 7.1%e v 7.0% prior

09:30 (EU) ECB announces Covered-Bond Purchases

09:35 (EU) ECB calls for bids in 7-Day Main Refinancing Tender

09:45 (US) July Chicago Purchasing Manager: 60.0e v 65.7 prior

10:00 (US) Jun Pending Home Sales M/M: +1.0%e v -0.8% prior; Y/Y: No est v 0.5% prior

10:00 (MX) Mexico Jun Net Outstanding Loans (MXN): No est v 3743B prior

10:30 (US) July Dallas Fed Manufacturing Activity: 13.0e v 15 prior

11:30 (US) Treasury to sell 3-Month and 6-Month Bills

15:00 (AR) Argentina Jun Industrial Production Y/Y: 3.5%e v 2.7% prior; Construction Activity Y/Y: No est v 10.3% prior

16:00 (US) Weekly Crop Condition Report

EUR/USD

The EUR/USD pair closed the week at 1.1748, its highest settlement since January 2015, on fresh signs of decreasing inflationary pressures in the US. On Friday, the country released its advanced Q2 GDP figures, which showed that the economy expanded at a healthy annual rate of 2.6%, well above a previously revised 1.2% and in line with market's expectations, but the GDP price index for the three months to June resulted at 1.0%, down from previous 2.0% and the expected 1.3%. Also, the core PCE price index advanced by just 0.3% in the quarter, down from previous 2.2% and denting further expectations of a tighter monetary policy coming from the Fed. Additionally, German's preliminary July inflation came better-than-expected, growing annually by 1.7%, somehow increasing the pressure over the ECB on a sooner decision on tapering. The imbalance between central banks keeps shrinking, whilst the US in undermined by local political jitters, fundamentally poising a risk towards the upside.

The pair closed not far from a year high of 1.1776, the immediate resistance for this Monday, and the daily chart for the pair shows that technical indicators have resumed their advances after a modest correction, holding within overbought territory. The pair is also well above bullish moving averages in the daily chart, all of which favors additional gains. The pair also advanced for a third consecutive week, which increases the risk of a downward correction in the starting one, not expected to be significant at this point. In the 4 hours chart, technical indicators lost upward strength and turned modestly lower near overbought territory, whilst the 20 SMA aims north around 1.1690, in line with the dominant bullish trend, but also indicating that the pair may correct lower this Monday.

Support levels: 1.1715 1.1670 1.1620

Resistance levels 1.1780 1.1810 1.1845

USD/JPY

The USD/JPY pair reached a fresh July's low of 110.54 on Friday, settling not far above it and looking poised to extend its decline. The JPY appreciated on Friday, not only on US poor inflation within the Q2 GDP release, but also on headlines indicating new missile tests in North Korea, which once again hit the Japanese sea. Over the weekend, the US flew two bombers over the peninsula, in a show of force, while President Trump stated its "disappointment" over Chinese response to the matter. The escalating conflict could spur risk aversion at the beginning of the week, resulting in a JPY appreciation. Additionally, Japan will release industrial production and housing data early Monday, which may also have a saying on the pair's faith. In the daily chart, the pair settled well below its 100 DMA, while the RSI maintains a bearish slope around 36, as the Momentum consolidates near its July lows, all of which favors a bearish extension for the upcoming sessions. In the 4 hours chart, the 100 SMA accelerated lower, approaching the 200 SMA both well above the current level, while technical indicators hold near oversold territory, also in line with additional declines ahead.

Support levels: 110.50 110.00 109.65

Resistance levels: 110.90 111.25 111.60

GBP/USD

The GBP/USD pair closed the week with gains at 1.3134, level last seen in September 2016, and extending its yearly advance modestly, reaching 1.3158 on Thursday. There were no major macroeconomic of Brexit news this past week to move the Pound, with the pair's advance solely backed by persistent dollar's weakness. The mentioned yearly high was reached after late Wednesday, the US Federal Reserve made its monetary policy announcement, seen by the market as dovish on inflation. UK's Markit PMIs for July will release this week, whilst the BOE will meet next Thursday, the main events for the week. Changes of a change in monetary policy are limited given that, despite holding well above the BOE's 2% target, inflation has eased this past month. In fact, a dovish stance could be priced in ahead of the event, although broad dollar's weakness may result in a shallow retracement in the pair. From a technical point of view, the daily chart shows that the price is well above a bullish 20 SMA, while the RSI turned hither around 64 and the Momentum keeps consolidating within positive territory, favoring additional gains on an acceleration through 1.3160. In the 4 hours chart, technical indicators eased modestly within bullish territory, but the price also holds above a bullish 20 SMA, all of which limits chances of a steep decline ahead.

Support levels: 1.3100 1.3060 1.3020

Resistance levels: 1.3160 1.3200 1.3250

GOLD

Spot gold extended its advance to a fresh July high of $ 1,270.78 a troy ounce on Friday, ending the day slightly below it, but maintaining its bullish stance. Following a dovish Fed on Wednesday, the commodity got additional support from US GDP data, as despite the US is estimated to have grew by 2.6% in the second quarter, price inflation came in well below expectations, with core PCE up by just 0.3% in the same period. Gold settled at its highest since mid June, and technical readings in the daily chart favor an upward extension ahead, as indicators extended their advances to fresh 1-month highs, maintaining their bullish slopes, despite being in overbought territory. The same chart shows that the 20 DMA is gaining upward strength below the current level, while the 100 and 200 DMAs, remain flat, but also under the current price. In the 4 hours chart, technical indicators have turned lower within overbought territory, rather reflecting shrinking volumes at the end of the week than suggesting a downward movement, whilst the price remains well above all of its moving averages, keeping the risk towards the upside.

Support levels: 1,267.90 1,254.75 1,245.20

Resistance levels: 1,274.10 1,283.30 1,290.10

WTI CRUDE OIL

Crude oil prices extended their advance on Friday to levels last seen in May, with West Texas Intermediate crude futures settling at $49.73, up on the week by 8.6%. Oil prices surged on the back of positive market news, as US inventories fell by more than expected, while Saudi Arabia pledged to reduce further its oil output in August. The Baker Hughes report released on Friday, showed that the number of active rigs drilling oil in the US rose by 2 to 766 this past week, indicating the upward pace of US production began to decelerate. WTI's daily chart favors additional gains ahead, given that the price is above its 20 and 100 SMAs, with the shortest advancing below the largest, and the 200 DMA holding flat above the current level, around 50.00. Indicators in the mentioned time frame resumed their advances after a modest correction, now entering overbought territory with strong upward slopes. In the 4 hours chart, the RSI indicator turned modestly lower, but holds around 79, while the Momentum indicator is diverging lower, but still within positive territory, a first sign that the rally won't extend much more before at least correcting. The 20 SMA in this last time frame heads north around 48.80, providing a strong dynamic support.

Support levels: 49.45 48.80 48.20

Resistance levels: 50.10 50.65 52.20

DJIA

Wall Street closed mixed on Friday, with the Dow Jones Industrial Average ending up 33 points or 0.15% at new all-time highs of 21,880.31. The Nasdaq Composite lost 7 points, to 6,374.68, while the S&P settled at 2,472.10, down 3 points or 0.13%. The technology sector was the worst performer, dragged lower by a mixed quarterly result from Amazon, as the company beat revenue estimates, but fell short on earnings. Chevron led advancers, up 1.89%, while Exxon mobile was the worst performer, shedding 1.52%, both led by earnings reports, the main driver these days. The daily chart for the Dow shows that the index closed at its highs, up for a fourth consecutive day, and with moving averages still heading north below the current level, but technical indicators paring gains near overbought readings. In the 4 hours chart, however, the risk remains towards the upside, as the 20 SMA accelerated north below the current level, while the Momentum indicator turned modestly higher well into bullish territory, and the RSI consolidates around 71.

Support levels: 21,814 21,766 21,718

Resistance levels: 21,900 21,945 21,990

FTSE100

The FTSE 100 lost 1.0% or 73 points last Friday to close at 7,368.37. A US regulatory decision about the tobacco industry led the way lower, as the FDA proposed to lower nicotine levels to non-addictive levels. British American Tobacco plunged 6.80%, leading the way lower, followed by Imperial Brands that shed 3.79%. Miners and energy-related equities led the advance, with AstraZeneca leading the way higher, up 3.62%. The daily chart for the Footsie shows that the index closed below its 20 and 100 DMAs, that anyway remain flat and within a tight range, whilst technical indicators turned south, currently pressuring their mid-lines, all of which is not enough to confirm a bearish extension. In the shorter term, and according to the 4 hours chart, however, the bearish stance is clearer, given that technical indicators head south within negative territory, whilst the index develops below all of its moving averages, and particularly with the 20 SMA gaining downward strength.

Support levels: 7,340 7,294 7,257

Resistance levels: 7,398 7,434 7,587

DAX

The German DAX lost 49 points last Friday to settled at 12,162.70, down for a second consecutive week and at levels last seen in April, as EUR's strength kept local shares under pressure. All European indexes closed in the red, led by automakers and chemicals companies. Emissions scandal hit all German big names in the automotive sector, on allegations they had colluded for decades to limit the pace of technological advances in their vehicles and stifle competition. Within the DAX, only 9 members closed up on Friday, with Adidas leading the way, up 4.04%. Line on the other hand, was the worst performer, shedding 2.36%, and Volkswagen closing 1.01% lower. The daily chart for the benchmark shows that the index is further below its 20 and 100 DMAs, with the shortest crossing below the larger and technical indicators maintaining their bearish slopes within negative territory. In the 4 hours chart, technical indicators turned flat well into negative territory, as the index develops below all of its moving averages, also maintaining the risk towards the downside.

Support levels: 12,146 12,098 12,053

Resistance levels: 12,199 12,235 12,292