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Daily Pivots: (S1) 109.90; (P) 110.37; (R1) 111.14; More...

Intraday bias in USD/JPY remains mildly on the upside for the moment. As noted before, fall from 114.49 could have completed at 108.72. Further rise would be seen back to 112.18 resistance first. Break there will target 114.49 key near term resistance again. On the downside, break of 108.79 minor support will turn focus back to 108.72 instead.

In the bigger picture, the corrective structure of the fall from 118.65 suggests that rise from 98.97 is not completed yet. Break of 118.65 will target a test on 125.85 high. At this point, it's uncertain whether rise from 98.97 is resuming the long term up trend from 75.56, or it's a leg in the consolidation from 125.85. Hence, we'll be cautious on topping as it approaches 125.85. If fall from 118.65 extends lower, downside should be contained by 61.8% retracement of 98.97 to 118.65 at 106.48 and bring rebound.

USD/CHF - 0.9745

Original strategy :

Buy at 0.9690, Target: 0.9790, Stop: 0.9655

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 0.9690, Target: 0.9790, Stop: 0.9655

Position : -

Target :  -

Stop : -

As the greenback has maintained a firm undertone after staging a strong rebound from 0.9583 (last week’s low), adding credence to our view that the retreat from 0.9773 has ended there, hence consolidation with upside bias remains for another test of said resistance, however, break there is needed to confirm early rise from 0.9438 low has resumed and extend gain to 0.9808 and possibly 0.9825 resistance, having said that, near term overbought condition should limit upside and price should falter below previous support at 0.9859.

In view of this, we are looking to reinstate long on pullback as 0.9690-95 should limit downside and bring another rise later. Below previous resistance at 0.9675 would defer and risk weakness towards 0.9640 but downside should be limited to 0.9615-20 and bring another rise later.

Daily Pivots: (S1) 0.9699; (P) 0.9728; (R1) 0.9755; More...

Intraday bias in USD/CHF remains on the upside for 0.9772 resistance. Decisive break there will revive the bullish case of reversal. That is, whole decline from 1.0342 has completed at 0.9437 after defending 0.9443 support. USD/CHF should then target channel resistance (now at 0.9862) next. On the downside, below 0.9675 minor support will turn intraday bias neutral first. Also, the pair is bounded inside medium term falling channel and limited below 38.2% retracement of 1.0342 to 0.9437 at 0.9783 for the moment. Break of 0.9582 will dampen our bullish view and turn bias back to the downside for 0.9437. This could also extend the fall from 1.0342 through 0.9437/43 key support level.

In the bigger picture, current development argues that USD/CHF has successfully defended 0.9443 key support level. And long term range trading in 0.9443/1.0342 is extending with another rise. At this point, there is no sign of an up trend yet. Hence, while further rise is expected in USD/CHF, we'll start to be cautious on loss of momentum above 61.8% retracement of 1.0342 to 0.9437 at 0.9996. However, firm break of 0.9443 will carry larger bearish implication and would target next key support at 0.9072.

GBP/USD - 1.2858

Original strategy :

Sell at 1.2920, Target: 1.2820, Stop: 1.2955

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 1.2920, Target: 1.2820, Stop: 1.2955

Position : -

Target :  -

Stop : -

As cable has remained under pressure after breaking below support at 1.2933-40, adding credence to our bearish view that the decline from 1.3269 top is still in progress for retracement of early upmove, hence downside bias remains for further weakness to 1.2825-30 (61.8% projection of 1.3269-1.2940 measuring from 1.3032), having said that, near term oversold condition should limit downside to 1.2800 and reckon 1.2770 would hold from here, bring rebound later.

In view of this, would not chase this fall here and would be prudent to sell sterling on recovery as said previous support at 1.2933 should turn into resistance and cap cable’s upside, bring another decline. Above 1.2950 would defer and risk a stronger rebound to 1.2990-00 before another decline.

Daily Pivots: (S1) 1.2819; (P) 1.2894; (R1) 1.2943; More...

Intraday bias in GBP/USD remains on the downside as fall from 1.3267 is still in progress. Further fall should be seen to 1.2588 key near term support. As noted before, correction from 1.1946 is likely completed at 1.3267. Decisive break of 1.2588 will confirm our bearish view. On the upside, break of 1.3030 resistance is needed to indicate short term bottoming. Otherwise, outlook will stay cautiously bearish in case of recovery.

In the bigger picture, overall, price actions from 1.1946 medium term low are seen as a corrective pattern. While further rise cannot be ruled out, 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.

The Canadian dollar has posted slight gains in the Wednesday session. In North American trade, USD/CAD is trading at 1.2726, down 0.25% on the day. On the release front, Canadian Foreign Securities Purchases shocked the markets, recording a decline of $C0.92 billion, compared to an estimate of a gain of $C 23.45 billion. This marked the first decline since December 2015. In the US, housing numbers were softer than expected. Building Permits dipped to 1.22 million shy of the forecast of 1.25 million. Housing Starts slowed to 1.16 million, missing the estimate of 1.22 million. Later in the day, the FOMC will release the minutes of its July policy meeting. On Thursday, there are two major events in the US – unemployment claims and the Philly Fed Manufacturing Index.

The Federal Reserve releases its July minutes on Wednesday, and the markets will be listening closely. Although we're unlikely to learn anything new about the likelihood of a rate hike before the end of the year, analysts will be looking for further details about the Fed's balance sheet, which has ballooned to $4.2 trillion. At the June policy meeting, the Fed outlined plans to begin reducing the balance sheet, but shied away from providing any details regarding the size of the reductions or a start time for the plan. Analysts expect September will be the start date, and the Fed could start the process by slowing its asset purchases by modest amount, such as $10 billion/mth. Once the reductions start, the US dollar stands to make gains for two reasons. First, the move would mark a vote of confidence in the US economy. Second, a reduction of $60 billion is expected to have the same effect as a quarter-point rate hike, which would make the dollar a more attractive asset for investors.

The Canadian dollar has lost ground in August, but has still looked hot this summer, jumping 5.7% since June 1. Some of these gains are linked to oil prices, which jumped sharply in July. At the same time, Canadian indicators have generally been strong, with a GDP gaining 0.6% in May, and the labor market showing improvement. In July, the Bank of Canada raised interest rates by 25 basis points to 0.75%. This was the first time the BoC raised rates since 2010, and the move has helped boost the currency. Despite the economic growth, Canada continues to grapple with weak inflation. CPI declined in June (the first decline in 2017), and the markets are braced for another soft reading on Friday, with an estimate of a flat 0.0%.

The dollar index ticked lower after downbeat US housing data (building permits unexpectedly dropped by 4.1% in July, undershooting the forecast for 2% fall and well below 9.2% increase in June, while Housing starts were down 4.8% in July against forecasted rise of 0.5% and increase of 7.4% in June). Weaker than expected data so far did not show stronger impact dollar's bulls which were boosted by strong retail sales on Tuesday, however, the dollar continues to struggle at psychological 94.00 barrier (reinforced by falling daily Kijun-sen). Today's repeated rejection at 94.00 and yesterday's failure to close above 93.85 (Fibo 38.2% of 96.24/92.37) suggests that strong recovery rally from Monday might be running out of steam but also awaiting FOMC minutes, due later today, for further signals. Traders are expecting Fed to provide more guidance about next steps and timing on massive balance sheet reduction as well as firmer signals about possible rate hike towards the end of the year. More hawkish tone from minutes would further boost the greenback and index price would rise above 94.00 barrier towards Fibo barriers at 94.31 and 94.75, with psychological 95.00 resistance expected to come in focus. Softer tone from Fed, on the other side, would allow for deeper pullback and expose solid support at 93.30 (daily Tenkan-sen).

Res: 94.00; 94.31; 94.75; 95.00
Sup: 93.64; 93.30; 93.00; 92.82

EUR/USD - 1.1695

Original strategy  :

Sold at 1.1755, Target: 1.1655, Stop: 1.1790

Position : - Short at 1.1755

Target :  - 1.1655

Stop : - 1.1790

New strategy  :

Hold short entered at 1.1755, Target: 1.1655, Stop: 1.1755

Position : - Short at 1.1755

Target :  - 1.1655

Stop : - 1.1755

Euro’s selloff after meeting renewed selling interest at 1.1847 signals the erratic fall from 1.1910 top is still in progress and mild downside bias remains for further weakness to 1.1640-50 (50% Fibonacci retracement of 1.1370-1.1910 and previous support), below there would encourage for subsequent decline towards 1.1600-10 which is likely to hold from here due to near term oversold condition.

In view of this, we are holding on to our short position entered at 1.1755. Above 1.1755-60 would defer and risk a stronger rebound to 1.1790-95, break there would abort and signal a temporary low is possibly formed, bring subsequent gain to 1.1820 but price should falter below said resistance at 1.1847.

USD/JPY - 110.85

Original strategy  :

Buy at 110.20, Target: 111.20, Stop: 109.85

Position :  -

Target :  -

Stop : -

New strategy  :

Buy at 110.20, Target: 111.20, Stop: 109.85

Position :  -

Target :  -

Stop : -

As the greenback has risen again after brief pullback, adding credence to our bullish view that the rebound from 108.73 low is still in progress, hence gain to previous resistance at 111.05 cannot be ruled out, however, break there is needed to retain bullishness and extend this rise for a stronger correction of early decline to 111.25-30, having said that, near term overbought condition should prevent sharp move beyond previous resistance at 111.71, risk from there is seen for a retreat later.

In view of this, would not chase this rise here and would be prudent to buy dollar on pullback as 110.15-20 should limit downside. Only below previous resistance at 109.80 would abort and signal top is formed instead, bring weakness towards support at 109.42.

NZD/USD dropped as much as 0.7222 level, where has found support again. Price squeezed a little in the last hours, but this could be only temporary because remains under selling pressure. USD is expected to drive the rate much lower on the Daily chart as the dollar index is trading above the 94.00 psychological level. A valid breakout above the psychological level will confirm a larger rebound and a USD dominance.

The greenback needs more support from the United States data to be able to resume the upside movement. The US will publish the Building Permits later, which are expected to decrease from 1.28M to 1.25M in July, while the Housing Starts could remain steady at 1.22M for the second month in July. The main event will be the release of the FOMC Meeting Minutes, we may have a high volatility after this event.

NZD/USD tries to recover after the massive drop. You can see that has found strong support at the red downtrend line, a false breakdown below this obstacle will send it towards the 38.2% retracement level. Technically is expected drop further after the breakdown below the fourth warning line (wl4).

We may have a rebound only if the USDX will slide again. The next major downside targets remain at the fifth warning line (wl5) and at the WL2. A minor increase could signal a Head and Shoulders pattern on the Daily chart.