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Daily Pivots: (S1) 1.4612; (P) 1.4688; (R1) 1.4730; More...

Intraday bias in EUR/AUD remains neutral as it's bounded in range of 1.4421/4777. At this point, we're still favoring the case that correction from 1.5226 could have completed with three waves down to 1.4421 already. Therefore, another rally is expected in the cross. Break of 1.4777 will turn bias to the upside for 1.5073 resistance first. Break there will indicate resumption of whole rise from 1.3624. However, break of 1.4221 will invalidate our view and extend the decline from 1.5226 to 61.8% retracement of 1.3624 to 1.5226 at 1.4236.

In the bigger picture, we're holding on to the view that corrective decline from 1.6587 medium term has completed at 1.3624. Rise from 1.3624 is expected to resume to retest 1.6587. The corrective structure of the fall from 1.5226 is affirming this view. Above 1.5226 will target a test on 1.6587 key resistance. However, further downside acceleration will dampen our view and would drag EUR/AUD lower to retest key support zone around 1.3624.

Daily Pivots: (S1) 1.1099; (P) 1.1136; (R1) 1.1194; More...

Intraday bias in EUR/CHF remains on the upside as current rally is in progress for 1.1198 key resistance level. Sustained break there will carry larger bullish implication. In such case, next near term target will be 161.8% projection of 1.0652 to 1.0986 from 1.0830 at 1.1370. On the downside, below 1.1106 minor support will turn intraday bias neutral first. But retreat should be contained by 1.1006 to bring rise resumption.

In the bigger picture, the price actions from 1.1198 are seen as a corrective move. Such correction could have completed after defending 38.2% retracement of 0.9771 to 1.1198 at 1.0653. Decisive break of 1.1198 will resume the long term rise from SNB spike low back in 2015. In such case, EUR/CHF could eventually head back to prior SNB imposed floor at 1.2000. We'll favor this bullish case as long as 1.0830 support holds. However, rejection from 1.1198 will extend the multi-year range trading with another fall.

Daily Pivots: (S1) 1.1649; (P) 1.1695 (R1) 1.1777; More...

EUR/USD's rise resumed after brief consolidation and intraday bias is back on the upside. Current rally is expected to target 1.2 handle next. On the downside, break of 1.1612 support is needed to indicate short term topping. Otherwise, outlook will remain bullish in case of retreat.

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.

Daily Pivots: (S1) 1.3037; (P) 1.3080; (R1) 1.3161; More...

GBP/USD's rise resumed by taking out 1.3125 and intraday bias is back on the upside. At this point, we'll stay cautious on strong resistance from 61.8% projection of 1.2108 to 1.3047 from 1.2588 at 1.3168 to limit upside. However, sustained break there could extend recent rebound towards 1.3444 key resistance. But still, price actions from 1.1946 is seen as a corrective pattern and GBP/USD should feel heavy approaching 1.3444. On the downside, 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.

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, overall outlook remains bearish as long as 1.3444 key resistance holds. Larger down trend from 1.7190 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) 0.9472; (P) 0.9533; (R1) 0.9569; More...

Intraday bias in USD/CHF remains neutral as it's staying in range of 0.9437/9699. At this point, we remain cautious on strong support from 0.9443 key support to bring reversal. Decisive break of 0.9699 will confirm and turn outlook bullish. Meanwhile, sustained trading below 0.9443 will extend the down trend from 1.0342 to 161.8% projection of 1.0342 to 0.9860 from 1.0099 at 0.9319.

In the bigger picture, focus is now back 0.9443 key support level. Sustained break there indicate underlying bearish momentum and would target 0.9 handle and possibly below. Meanwhile, strong rebound from current level and break 0.9699 resistance will extend long term range trading between 0.9443/1.0342.

Daily Pivots: (S1) 110.76; (P) 111.47; (R1) 111.89; More...

At this point, USD/JPY is staying in range of 110.61/112.41 and intraday bias remains neutral. With 112.41 intact, further decline is expected. Below 110.61 will target 108.81. Break there will resume whole correction from 118.65 and target 61.8% retracement of 98.97 to 118.65 at 106.48. Nonetheless, break of 112.41 will dampen this bearish view and turn focus back to 114.49 resistance 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, down side should be contained by 61.8% retracement of 98.97 to 118.65 at 106.48 and bring rebound.

Daily Pivots: (S1) 1.2391; (P) 1.2467; (R1) 1.2521; More....

USD/CAD's decline is still in progress and took out 1.2460 key support level. We'd stay cautious on rebound on bullish convergence condition in 4 hour MACD, as well as deep oversold condition in daily RSI. But for the moment, further fall is expected as long as 1.2543 minor resistance holds. Sustained trading below 1.2460 will target next key fibonacci level at 1.2048. On the upside, break of 1.2543 will indicate short term bottoming and bring rebound.

In the bigger picture, price actions from 1.4689 medium term top are seen as a correction pattern. Fall from 1.3793 is seen as the third leg and should target 50% retracement of 0.9406 to 1.4869 at 1.2048. At this point, we'd look for strong support from there to contain downside and bring rebound. However, firm break there will target 100% projection of 1.4689 to 1.2460 from 1.3793 at 1.1564.

Daily Pivots: (S1) 0.7917; (P) 0.7965; (R1) 0.8053; More...

AUD/USD's rally resumed by taking out 0.7988 and reaches as high as 0.8065 so far. Intraday bias is back on the upside. Current rise from 0.7328 is now targeting next key projection level at 100% projection of 0.6826 to 0.7833 from 0.7328 at 0.8335. On the downside, break of 0.7877 support is needed to indicate short term topping. Otherwise, outlook will remain bullish in case of retreat.

In the bigger picture, current development suggests that rebound from 0.6826 is developing into a medium term rise. There is no confirmation of trend reversal yet and we'll continue to treat such rebound as a corrective pattern. But in any case, further rise is now expected to 55 month EMA (now at 0.8100) or even further to 38.2% retracement of 1.1079 to 0.6826 at 0.8451. Break of 0.7328 support is needed to confirm completion of the rebound. Otherwise, further rise is now expected.

Dollar's broad based selloff resumed overnight after Fed kept monetary policies unchanged. The move was seen as reaction to Fed's slight tweak in description of inflation. Also, Fed's indication that balance sheet normalization would start very soon suggest that it will push another rate hike, if any to December. While the greenback is weak, it's still slightly better than the Swiss Franc. The Franc dived yesterday in catch up to recent developments in the financial markets and there is no sign of halting yet. Commodity currencies are the best performer this week as markets are on full risk-on mode.

Fed to start balance sheet normalization "relatively soon"

Fed left its monetary policy unchanged, maintaining the federal funds rate target at 1-1.25%. The Fed made two tweak in the statement, though. First, it noted that balance sheet reduction would begin 'relatively soon', signaling that the official announcement would come in September. Second, policymakers revised lower the outlook on core inflation. US dollar plunged, with the weighted index falling to a 13-month low as the market interpreted the inflation assessment as dovish.

More on FOMC:

• FOMC Signaled To Begin Balance Sheet Normalization 'Relatively Soon', Downgraded Core Inflation Assessment
• Dollar Resumes The Unwind As Fed Fail To Impress
• FOMC Review: Smidgen Dovish But It Does Not Alter The Overall Picture
• FOMC: Steady As She Goes
• Little-Changed FOMC Statement Maintains Dovish Uncertainty, Weighs Further On Dollar
• Fed Stands Pat as Expected, Signals Coming Balance Sheet Normalization
• Fed Acknowledges the Inflation Miss, But Sticks to Balance Sheet Plans

DOW at record thanks to Boeing, not Fed

DOW surged 97.58 pts, or 0.45% to close at record high at 97.58 overnight. But it should be noted that the index has gapped up at 21690.38 at open already and barely moved after FOMC announcement. The surge was mainly driven by Boeing upgrading its forecast for the year after posting strong earnings. The 9.9% gain in Boeing has indeed added 144 pts to DOW. Overall, in spite of weak momentum, the index is still on course for 61.8% projection of 17883.56 to 21169.11 from 20379.55 at 22410.01.

RBA Lowe warned of prolonged weak wage growth

In Australia, RBA governor Philip Lowe warned that prolonged weakness in wage growth could hurt the economy. He said that "if workers are getting no real wage increase year after year after year that's insidious." And, he emphasized that high wage growth "would help get inflation back to target and I think people would feel a bit better as well, and the fact that many of us have lowered our expectations of future income growth means we're less inclined to spend."

Regarding monetary policy, Lowe noted that "the main effect of lower interest rates is that more people have jobs". And "that's why I'm very comfortable with the current setting of monetary policy, it's helped people get jobs." Regarding the exchange rate, Lowe said that "it would be better if the exchange rate were a bit lower than it currently is. It would help generate more jobs, push inflation a bit closer to our target -- so that's the solution to a competitiveness problem."

On the data front

Australia import price index dropped -0.1% qoq in Q2. German Gfk consumer sentiment and Eurozone M3 will be featured in European session. UK will also release CBI realized sales. US will release durable goods orders, trade balance and jobless claims.

AUD/USD Daily Outlook

Daily Pivots: (S1) 0.7917; (P) 0.7965; (R1) 0.8053; More...

AUD/USD's rally resumed by taking out 0.7988 and reaches as high as 0.8065 so far. Intraday bias is back on the upside. Current rise from 0.7328 is now targeting next key projection level at 100% projection of 0.6826 to 0.7833 from 0.7328 at 0.8335. On the downside, break of 0.7877 support is needed to indicate short term topping. Otherwise, outlook will remain bullish in case of retreat.

In the bigger picture, current development suggests that rebound from 0.6826 is developing into a medium term rise. There is no confirmation of trend reversal yet and we'll continue to treat such rebound as a corrective pattern. But in any case, further rise is now expected to 55 month EMA (now at 0.8100) or even further to 38.2% retracement of 1.1079 to 0.6826 at 0.8451. Break of 0.7328 support is needed to confirm completion of the rebound. Otherwise, further rise is now expected.

Economic Indicators Update

STOCKS

Dow (21711.01, +0.45%) rose above 21700 yesterday indicating resumption of the long term uptrend and has enough room on the upside towards 21800 for the coming sessions. Near term is likely to remain bullish.

Dax (1235.11, +0.33%) could test 12400-12450 in the coming sessions before seeing another down leg.

Shanghai (3221.92, -0.79%) came off sharply as expected and could fall further towards 3200 before again rising towards 3240-3260 levels.

Nikkei (20093.41, +0.22%) has been stable in the past 6-7 weeks and could continue to trade within 19705-20000 region for the next couple of weeks.

Nifty (10020.65, +0.56%) moved up yesterday to close above 10000. Immediate resistance is visible near 10050-10100 from where a sharp correction is possible in the medium term.

COMMODITIES

The support of 1245 held for Gold (1260) due to fresh weakness in Dollar index (93.22). Immediate trading range for Gold is 1258-1270. Gold is overbought in near term time frame and we are not confident about the sustainability beyond 1270 regions. Similarly Silver (16.69) is also trading within 16.69-17, well supported by the bullish momentum in Copper. Both Gold and Silver are out of their short term bearish channel but the supports of 1245 and 16.20 should hold to keep the bullish momentum intact.

Copper (2.86) looks on a firm footing while it is trading above 2.78 levels. Midterm resistance comes at 3.12 regions from where we may see some correction due to profit taking.

Both Brent (50.88) and WTI (48.66) moved upward as U.S weekly crude inventory data (actual -7.2M B) was highly supportive for the entire energy pack. This is the 5th consecutive week of shortage in weekly U.S crude inventory. We will remain bullish while Brent and WTI are trading above 47.70 and 45.50 on a weekly closing basis. Immediate trading range for Brent and WTI could be 48-51.50 and 46-49.70 respectively and a weekly close above51.50 and 49.70 levels might confirm the end of the midterm bearish trend too.

FOREX

Further strength in Euro to 1.1744, breaking above the earlier crucial resistance at 1.1712. This surge opens up targets of 1.18-20.

Dollar-Yen has come down again all the way to 110.98, giving back almost all the gains up to 112. Supports seen at 110.50 and deeper at 110.00.

The Euro-Yen (130.26) looks poised to climb further towards 132, possibly led by Euro. Dips likely to be bought.

Strong surge in Pound (1.3144) and Aussie (0.8044). f the Pound sustains above 1.31 today, look for a test of 1.32, beyond which 1.34 will come into the picture. Medium term Support at 1.29-28. The Aussie has no near term Resistance till 0.81 at least and might be able to rise beyond that as well given the surge in Copper.

Dollar-Rupee quotes 64.31/36 on NDF.

INTEREST RATES

The US yields have dipped slightly from long term resistance levels and could remain stable in the coming sessions before moving down sharply later on. Overall long term trend is likely to remain down.

The UK-US 10YR (-1.05%) can rise towards resistance near-0.98% in the near term. the surge in Pound could continue for a few more sessions. Near term looks bullish.

The German-US 10Yr (-1.72%) and the German-Us 2Yr (-2.03%) both have bounced slightly from immediate supports and could move up in the near term again boosted by the strength in Euro. The rise in Euro and the yield spreads may continue for the next few sessions.