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Copper contract for July delivery maintains firm tone and heads higher after Wednesday's upside rejection at $2.9040 (2-year high) and subsequent shallow pullback on profit taking. Strong bullish sentiment supports for further advance, as the price eyes targets at 2.9434 (FE 123.6% of current wave C from 2.4720) and 2.9550 (Fibo 138.2% projection). Conditions on daily chart remain strongly overbought but indicators are so far not showing signs of reversal. However, pullback on profit-taking of steep in past few sessions could be anticipated in the near-term. Thick hourly cloud (currently spanned between 2.8611 and 2.8105) continues to underpin near-term action and should contain corrective dips.

Res: 2.9040; 2.9310; 2.9434; 2.9550
Sup: 2.8790; 2.8611; 2.8435; 2.8305

Oil prices extended their latest gains on Wednesday, on the weekly US EIA crude inventory data. Inventories fell by 7.2 million barrels, far more than the consensus for a decline of 2.6 million barrels. The precious liquid began to recover earlier this week, following announcements by Saudi Arabia that it plans to limit its oil exports, and by Nigeria that it will cap its production. In addition, the consistent plunge in the US dollar in recent days probably boosted oil prices even further.

Even if oil prices remain supported on the back of this sentiment over the next few days, we do not believe that the latest rally will develop into a longer-term healthy uptrend in oil. Continued gains in prices would probably invite more US shale producers back into the market, something that could increase supply even further and thereby, put a lid on prices.

WTI continued trading higher in the aftermath of Saudi's and Nigeria's announcements. Nevertheless, today the precious liquid hit resistance at the crossroads of the 49.00 (R1) level and the upper bound of the medium-term downside channel that has been containing the price action since the beginning of February. Although the price is still trading above the short-term upside support line taken from the low of the 21st of June, the fact that it hit resistance at the upper bound of the channel makes us mindful that a slide may be on the cards soon.

The possibility for a setback is also supported by our short-term momentum indicators. The RSI just exited its above-70 territory and is pointing down, while the MACD, although above both its zero and trigger lines, shows signs of topping. A decisive close above the aforementioned crossroads is needed to make us confident oil is likely to continue higher in the next days.

Switching to the daily chart, given that WTI remains within the channel that has been containing the price action since February, we maintain our view that the longer-term path is cautiously negative and that the latest recovery is just a corrective phase.

Even if the bulls manage to overcome the upper bound of the channel, we are hesitant to call for a reversal and a newborn long-term uptrend. We expect any further gains to remain capped by the 51.00-55.00 range, where we believe US shale producers may be attracted to increase production.

USD/CHF - 0.9503

Original strategy :

Sold at 0.9570, stopped at break-even

Position : - Short at 0.9570

Target :  -

Stop : - 0.9570

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Although the greenback slipped to 0.9490 earlier today, renewed buying interest emerged and dollar has rallied from there, dampening our bearishness and suggesting a test of resistance at 0.9622 would be seen, however, break there is needed to confirm a temporary low has been formed at 0.9438, bring retracement of recent decline to 0.9655-60 but price should falter well below resistance at 0.9701.

In view of this, would not chase this rise here and would be prudent to stand aside in the meantime. Below 0.9580 would bring test of the Kijun-Sen (now at 0.9556) but break there is needed to signal an intra-day top is formed, bring weakness to the lower Kumo (now at 0.9521) but said support at 0.9490 should remain intact.

GBPUSD: The pair continues to retain its upside threats though with caution. Support lies at the 1.3100 level where a break will turn attention to the 1.3050 level. Further down, support lies at the 1.3000 level. Below here will set the stage for more weakness towards the 1.2950 level. Conversely, resistance stands at the 1.3200 levels with a turn above here allowing more strength to build up towards the 1.3250 level. Further out, resistance resides at the 1.3300 level followed by the 1.3350 level. On the whole, GBPUSD continues to face upside risk though with caution.

NZD/USD touched new highs today, has climbed as much as 0.7557 level, much above the 0.7528 yesterday's high, but failed to stay there and now is challenging the third warning line (WL3). Only a valid breakout above this line will confirm a further increase in the upcoming period, we may have a buying opportunity if will close above the WL3 and if will come back to retest the 0.7484 level. A selling opportunity will appear if will slip and will stabilize below the 0.7484 static support.

GBP/USD - 1.3133

Original strategy :

Buy at 1.3085, Target: 1.3185, Stop: 1.3050

Position : - 

Target :  -

Stop : -

New strategy  :

Buy at 1.3085, Target: 1.3185, Stop: 1.3050

Position : -

Target :  -

Stop : -

Cable found decent demand just below 1.3000 level and has rallied on back of dollar’s broad-based selloff, signal recent upmove is still in progress and upside bias is seen for further gain to 1.3160, then 1.3185-90, however, near term overbought condition should prevent sharp move beyond 1.3210-20 and price should falter below 1.3240-50, risk from there is seen for a retreat later.

In view of this, would not chase this rise here and we are looking to buy sterling on subsequent pullback as previous resistance at 1.3084 should turn into support and contain cable’s downside, bring another rise. Below 1.3050 would risk weakness to 1.3030-35 but break of latter level is needed to signal top is formed, then correction to 1.2999 support would follow.

Price increased sharply after the FOMC and jumped much above the first warning line (wl1) of the minor ascending pitchfork, but found strong resistance at the 150% Fibonacci line (ascending dotted line). Is pressuring the wl1, a retest of this level followed by a decrease will open the door for a decline towards the upper median line (uml) of the ascending pitchfork. Support can be found also at the 0.7989 level and much lower at 0.7874 static downside obstacle.

Price has posted important gains in the last hours and is trying to stay higher as the USDX has managed to erase the morning gains and to recover after the morning sell-off. The dollar index is trading in the green ahead of the US data release, remains to see how will react after the reports will be published, another disappointment will send the dollar tumbling.

The US Unemployment Claims are expected to increase again, from 233K to 240K in the previous week, while the Core Durable Goods Orders may increase by 0.4% and could beat the 0.3% growth in the former reading period. The Durable Goods Orders are expected to increase by 3.5% in June, more after the 0.8% drop in the former reporting period, while the Goods Trade Balance is forecasted to increase from -65.9B to -65.0B in the last month. Prelim Wholesale Inventories could increase by 0.3%, less compared to the 0.4% in May.

USD/JPY continues to move sideways on the short term, has tried to increase, but was stopped by the 112.19 level. Now is trading below the 38.2% retracement level and much below the 150% Fibonacci line (ascending dotted line), a drop towards the 50% retracement level and towards the warning line (wl1) is favored. Will decrease only if the USDX will slide further and if the Nikkie stock index will stay below the 20058 major static resistance.

Is trapped between the 23.6% and the 50% retracement levels, that's why I've said that will approach the downside line of this range. A buying opportunity will appear only if will come down to retest the confluence area formed between the 50% retracement level and the warning line (wl1), or if will manage to breakout above the third warning line (WL3) of the descending pitchfork.

EUR/USD - 1.1698

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

The single currency rallied on dollar’s broad-based weakness after Fed, the breach of previous resistance at 1.1712 confirms recent upmove has resumed, hence gain to 1.1780-85 (50% projection of 1.1370-1.1712 measuring from 1.1613) cannot be ruled out, however, loss of near term upward momentum should prevent sharp move beyond 1.1820-25 (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 stand aside in the meantime. Below 1.1680 would suggest an intra-day top is formed, bring test of the lower Kumo (now at 1.1648) but break there is needed to bring correction of recent rise towards support at 1.1613 first.

USD/JPY - 111.51

Original strategy  :

Sold at 111.45, Target: 110.45, Stop: 111.80

Position :  - Short at 111.45

Target :  - 110.45

Stop : - 111.80

New strategy  :

Hold short entered at 111.45, Target: 110.45, Stop: 111.80

Position :  - Short at 111.45

Target :  - 110.45

Stop : - 111.80

The greenback found support at 110.78 and has rebounded, suggesting further consolidation above this week’s low at 110.62 would be seen and marginal gain from here cannot be ruled out, however, reckon the upper Kumo (now at 111.78) would hold and bring retreat later, below said support at 110.78 would signal decline has resumed for retest of 110.62, break there would extend recent fall to 110.30-35.

In view of this, we are holding on to our short position entered at 111.45. Above 111.75-80 would defer and prolong choppy trading, however, price should still falter below said resistance at 112.20, bring retreat later.