Sample Category Title

GBP/JPY - 146.10

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

Original strategy:

Sold at 145.90, Target: 143.90, Stop: 146.50

Position: - Short at 145.90
Target: - 143.90
Stop: - 146.50

New strategy :

Hold short entered at 145.90, Target: 143.90, Stop: 146.50

Position: - Short at 145.90
Target:  - 143.90
Stop:- 146.50

Although sterling edged higher to 146.40 yesterday, the subsequent retreat has retained our bearishness and as long as this level holds, mild downside bias remains for another retreat, below 145.40-45 would bring test of 144.50 but break there is needed to signal the rebound from 144.05 has ended, bring retest of this level later. A drop below 144.05 would add credence to our view that a temporary top has been formed at 147.75 earlier this month, bring retracement of recent upmove to 143.50, then towards support at 143.30.

In view of this, we are holding on to our short position entered at 145.90. Above resistance at 146.40 would abort and signal low is formed instead, bring a stronger rebound to 146.90-00 and possibly towards 147.30.

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.


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 edged higher again and gain towards recent high at 130.77 cannot be ruled out, break there is needed to retain bullishness and signal recent upmove has indeed resumed, then further gain to 131.00-10 would be seen, 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 rise here and would be prudent to stand aside for now. Below 129.90-95 would bring weakness to 129.25, then a test of 128.57 support, however, break of support at 128.49 is needed to signal top has been formed and bring retracement of recent upmove to 128.00, then towards previous support at 127.44.

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).

Surprisingly or not, the USD/CHF is trading in the green, stay above the 0.9498 static support and is struggling to climb above the sliding line (SL). I’ve said in the previous reports that an accumulation above the 0.9440 will signal a reversal. Is trading much above the 0.9437 previous low, but another leg higher will appear only if the USDX will start another important upside movement.

AUD/USD – 0.8032

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 :

Buy at 0.7800, Target: 0.7990, Stop: 0.7740

Position: -
Target:  -
Stop: -

New strategy :

Buy at 0.7890, Target: 0.8090, Stop: 0.7830

Position: -
Target:  -
Stop:-

As aussie has rallied after finding renewed buying interest at 0.7878 yesterday and broke above psychological resistance at 0.8000, adding credence to our bullish view that recent upmove is still in progress and upside bias remains for the medium term impulsive wave to extend headway to 0.8100, however, near term overbought condition should limit upside to 0.8140-50, 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, would not chase this rise here and we are looking to buy aussie on subsequent pullback as 0.7878 support should limit downside, bring another upmove later. 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.

USD/CAD plunged below two important support levels in the yesterday’s session and now could try to stabilize under these broken obstacles.

Price is located below the 1.2460 log term support, a distribution below this level will confirm a further drop in the upcoming period, the next downside target will be at the lower median line (lml) of the descending pitchfork. Only a failure to reach the lower median line (lml) and a false breakdown below the 1.2460 will signal a reversal

Price rallied aggressively in the US session, after the FOMC Statement, has increased as much as 1.1776 level in the morning, where has found temporary resistance. As you already know, the USD has taken another punch from the Federal Reserve last night. The Federal Fends rate remains unchanged at 1.25% and could stay steady in the upcoming months if the United States data will come in mixed, only some impressive data will force the FED to take action again.

Price has decreased in the last few hours, but the retreat could be only temporary before will resume the upside movement. Could come to test and retest the 1.1712 long term broken resistance.

The European currency could receive support from the Spanish Unemployment Rate, which could decrease from 18.8% to 17.8% in the first quarter, the German Gfk German Consumer Climate climbed from 10.6 to 10.8 points, beating the 10.7 estimate.

EUR/USD closed much above the 1.1712 broken static resistance in the last session and has extended the latest gains, but the sellers have stepped in and have forced the rate to decrease below the seventh warning line (wl7) of the former descending pitchfork.

A consolidation above the 1.1712 level will confirm a breakout from the long term extended sideways movement. However, a failure to reach the upper median line (uml) of the minor ascending pitchfork will send the rate towards the median line (ml). We may have another buying opportunity if will move sideways till will reach and retest the median line (ml).

Has erased the morning gains as the USDX has squeezed after the earlier sell-off, the index maintains a bullish perspective and could approach and reach the 92.49 major static support.

The Federal Reserve ended its 2-day meeting on Wednesday with, as expected, no change in US interest rates. The Fed commented that US inflation had declined, notably removing the often said 'recently' which has been conceived as meaning the slowdown might not be temporary. The Fed also said it expected to start winding down its massive holdings of bonds 'relatively soon,' with many believing this will start in September. This would result in a tightening in financial conditions and is likely to lessen the need for actual hikes in rates.

Oil rose to the highest in almost 2 months after government data showed US crude and products stockpiles tumbled again last week to their lowest levels since the start of 2017. The US EIA report showed Crude inventories had a drawdown of 7.21 million barrels last week, its lowest level since January 6th. This has been a good week for Oil with the energy ministers' meeting in St. Petersburg seeing Saudi Arabia pledging to cut its crude oil exports to 6.6 million barrels daily starting in August and Nigeria stating it was willing to cap its output at 1.8 million bpd. However, the markets are wary as Ecuador recently stated it was quitting any output cut deal and Iraq stating that it is planning to raise production by the end of the year.

The UK Office for National Statistics released GDP that showed the UK economy grew by 0.3% in the second quarter. Whilst a modest improvement on the 0.2% growth of Q1 it lags 2016.

EURUSD saw little movement on Wednesday, trading in a less than 50 pip range, until the FOMC statement which saw a USD sell-off. EURUSD climbed to a high of 1.17761 overnight – a level not seen since January 2015. Currently, EURUSD is trading around 1.1740.

USDJPY gathered strength throughout Wednesday, reaching a high of 112.156 before succumbing to USD weakness to reach a low of 110.777 overnight. However, USD pressure is likely to be limited as the markets expect the Bank of Japan to keep its ultra-easy policies in place longer than other central banks. Currently, USDJPY is trading around 111.05.

GBPUSD recovered from early lows of 1.2999, rebounding on the 'better than expected – but not great' Q2 GDP release that showed a rise in growth, albeit small. GBPUSD has traded as high as 1.31565 overnight and is currently trading around 1.3140.

Risk-on sentiment saw Gold climb to as high as $1,264.69. Currently, Gold is trading close to these highs around $1,264.

Following the latest US inventories drawdown data, WTI gained 0.8% on day to trade as high as $48.86. Currently, WTI is trading around $48.75.

At 13:30 BST US Initial Jobless Claims (Jul 21) will be released with the consensus looking for 241K, slightly higher than the previous release of 233K. The US Labour market has shown great strength recently and, whilst the forecast is expected higher, it should not be overly negative for USD – unless it is significantly higher, which will see result in USD pressure.

At the same time, US Durable Goods Orders (Jun) will be released, with a healthy 3.0% consensus predicted – a significant improvement on the previous reading of -0.8%

Weekly
    •    Last Candlesticks pattern: N/A
    •    ime of formation: N/A
    •    Trend bias: Near term up

Daily
    •    Last Candlesticks pattern: Hammer
    •    Time of formation: 3 Feb 2016
    •    Trend bias: Up

EURGBP – 0.8776

The single currency only retreated to 0.8743 earlier this month before finding renewed buying interest and euro has surged again from there, adding credence to our bullish view for recent upmove to extend further gain (indicated upside targets at 0.8900 and 0.8940-50 - 50% Fibonacci retracement of 0.9576-0.8304 had been met), upside bias remains for further gain to psychological resistance at 0.9000, break there would extend headway to 0.9090 (61.8% Fibonacci retracement), however, loss of momentum should prevent sharp move beyond 0.9150-60, bring retreat later. 

On the downside, whilst initial pullback to the Tenkan-Sen (now at 0.8869), then 0.8800 is likely, reckon support at 0.8743 would remain intact, bring another upmove later. A drop below this support would abort and suggest a temporary top is possibly formed instead, bring retracement of recent upmove to 0.8695-00, however, still reckon downside would be limited to previous support at 0.8652 and price should stay above the lower Kumo  (now at 0.8589) and bring rebound later. 

Recommendation: Buy again at 0.8795 for 0.8995 with stop below 0.8695.

On the weekly chart, last week’s rally together with the breach of previous resistance at 0.8950 adds credence to our bullish view that the rise from 0.8304 is still in progress and upside bias remains for this move to extend gain to 0.9000, then towards 0.9090 (61.8% Fibonacci retracement of 0.9576-0.8304) would be seen, however, a weekly close above resistance at 0.9142 is needed to retain bullishness and signal the entire correction from 0.9576 top has ended at 0.8304 and encourage for further subsequent gain to 0.9200-10.

On the downside, although pullback to the Tenkan-Sen (now at 0.8824) cannot be ruled out, reckon downside would be limited to 0.8795-00 and bring another rise later. Below support at 0.8743 support would defer and risk correction to 0.8700 but reckon downside would be limited to the Kijun-Sen (now at 0.8654) and the lower Kumo (now at 0.8551) should remain intact, bring another rally later.

Weekly

    •    Last Candlesticks pattern: Doji
    •    Time of formation: 20 Feb 2017
    •    Trend bias: Up

Daily

    •    Last Candlesticks pattern: Doji
    •    Time of formation: 1 Sep 2016
    •    Trend bias: Near term down

EUR/CHF – 1.1151

The single currency has finally resumed medium term upmove from 1.0622 (2016 low), adding credence to our bullish view and our long position entered at 1.0865 met indicated upside target at 1.1065 (with 200 points profit), hence upside bias remains for test of previous resistance at 1.1201, above there would encourage for headway to 1.1300 but loss of upward momentum should prevent sharp move beyond 1.1400-10 and price should falter well below 1.1500, bring correction later next month.

On the downside, whilst initial pullback to the Tenkan-Sen (now at 1.1081) cannot be ruled out, reckon downside would be limited to 1.0995-00 and support at 1.0984 would hold, bring another rally later. A daily close below this support would defer and suggest a temporary top is possibly formed, bring correction to 1.0940-50, then towards 1.0890-00 and price should stay well above previous support at 1.0833, bring another rally later. 

Recommendation: Long entered at 1.0865 met target at 1.1065 with 200 points profit and would buy again at 1.1020 for 1.1220 with stop below 1.0920.

On the weekly chart, euro’s upmove has accelerated after breaking above indicated previous resistance at 1.0988 (now support), adding credence to our bullish view that recent rise from 1.0622 is still in progress and upside bias remains for another test of recent high at 1.1201, break there would encourage for headway to 1.1290-00, then towards 1.1390-00 but near term overbought condition should prevent sharp move beyond 1.1500, risk from there has increased for a retreat to take place next month or in late Q3. 

On the downside, although pullback to 1.1080-90, then 1.1020-30 cannot be ruled out, reckon the Tenkan-Sen (now at 1.1004) would limit downside and bring another rise later. Below previous resistance at 1.0988 (now support) would defer and risk correction towards the Kijun-Sen (now at 1.0903) but only a weekly close below there would signal a temporary top is formed instead, bring further fall to 1.0850-60, then test of previous support at 1.0833 which is likely to hold from here, bring rebound later.

USD/CHF - 0.9519

Most recent candlesticks pattern : N/A

Trend                                    : Near term down

Tenkan-Sen level                  : 0.9507

Kijun-Sen level                    : 0.9543

Ichimoku cloud top                 : 0.9511

Ichimoku cloud bottom              : 0.9490

Original strategy :

Sold at 0.9570, target: 0.9470, Stop: 0.9605

Position : - Short at 0.9570

Target :  - 0.9470

Stop : - 0.9605

New strategy  :

Hold short entered at 0.9570, target: 0.9470, Stop: 0.9570

Position : - Short at 0.9570

Target :  - 0.9470

Stop : - 0.9570

Although the greenback rose to as high as 0.9596, the subsequent selloff on dollar’s broad-based weakness signals top is formed there, retaining our bearishness and consolidation with downside bias remains for weakness to 0.9470, however, break of 0.9450-55 is needed to signal the rebound from 0.9438 has ended there, bring retest of this level first. 

In view of this, we are holding on to our short position entered at 0.9570. Above 0.9560-70 would risk test of 0.9596-01 (said resistance and 61.8% Fibonacci retracement of 0.9701-0.9438), break there would suggest a temporary low has been formed at 0.9438 instead, bring a stronger rebound towards resistance area at 0.9622-35.