Sample Category Title

GBP/USD – 1.3027




Recent wave: Wave V of larger degree wave (III) has ended at 1.1986 and major correction has commenced from there for gain to 1.3000 and 1.3140-50




Trend: Near term up




Original strategy :

Sell at 1.3090, Target: 1.2890, Stop: 1.3150

Position: -



Target:  -



Stop: - 




New strategy :

Sell at 1.3100, Target: 1.2900, Stop: 1.3160

Position: -



Target:  -



Stop:- 



Although cable has retreated after meeting resistance at 1.3084 yesterday, reckon 1.2980-85 would limit downside and near term upside risk remains for another bounce to 1.3090-00, however, as long as indicated resistance at 1.3126 holds, prospect of a retreat remains, below 1.2980-85 would bring test of 1.2950-55, break there would signal the rebound from 1.2933 has ended, bring another test of this level, break there would add credence to our view and extend the fall from 1.3126 top to 1.2910-15, break there would provide confirmation, then further decline to 1.2870-80 would follow but reckon support at 1.2812 would remain intact. 


Our preferred count on the daily chart is that cable's rebound from 1.3500 (wave (A) trough) is unfolding as a wave (B) with A ended at 1.7043, followed by triangle wave B and wave C as well as wave (B) has ended at 1.7192, the subsequent selloff is the larger degree wave (C) which is still unfolding with minor wave (III) of larger degree wave 3 ended at 1.1986, hence wave (IV) correction is in progress which could either be a triangle wave (IV) of a complex formation but upside should be limited to 1.3500 and price should falter well below 1.4000, bring another decline in wave (V) of 3 for weakness to 1.1500, then 1.1200. 


On the upside, whilst marginal gain above 1.3084 cannot be ruled out, price should falter below 1.3100 and bring another retreat later. A break above last week’s high of 1.3126 would signal recent upmove is still in progress and may extend headway to 1.3150, then towards 1.3190-00 but loss of upward momentum should limit upside to 1.3250, bring another retreat later.



NZDUSD has been in an uptrend since the May 11 low of 0.6816 to the July 21 high of 0.7457. There was a slight corrective move lower from this peak as the market reached overbought levels, which was indicated by the RSI rising above 70.

The technical picture remains bullish as there was a bullish crossover of the 50-day moving average with the 200-day MA on July 5. The loss in upside momentum suggests some consolidation in the near term with immediate support expected at 0.7392 (July 21 low).

Failure to clear the 0.7457 high increases the risk of a short-term top being put in place, especially amidst overbought conditions in the market. However, only a break below the key psychological level of 0.7200 would start to shift the bullish bias. An important support level comes in at 0.7057. For now there are no clear signs of a shift in the May to July uptrend.

Looking at the bigger picture, NZDUSD needs to continue trading above 0.7375 in order to maintain the current bias. Falling back below this level would bring the bias to neutral. A sustained break of 0.7457 is needed in order to open the way to target the September 2016 high of 0.7484. The rising 50-day moving average supports a bullish bias.

GBP/JPY - 145.80

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 found support at 144.05 and has staged a strong rebound and marginal gain from here cannot be ruled out, as long as resistance at 146.30 holds, mild downside bias remains for another retreat, below 145.00 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 146.30-35 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 - 130.02

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 rose briefly to 130.59, lack of follow through buying on break of previous resistance at 130.51 has retained our view that further consolidation below recent high of 130.77 would be seen and near term downside risk is for 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.

On the upside, whilst recovery to 129.60-70 cannot be ruled out, reckon 130.00 would limit upside and resistance at 130.51 should hold, bring another decline later. Only a break of 130.51 would signal the retreat from 130.77 has ended, bring retest of this level, break there would confirm recent upmove has resumed for headway to 131.00-10, then towards 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.

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).

Asian shares were mostly mixed during early trading on Wednesday, while the Greenback held steady ahead of the Federal Reserve decision later today which is largely expected to conclude with monetary policy unchanged. With it already being considered a foregone conclusion that US interest rates will be left unchanged in July and no press conference scheduled by Janet Yellen, today’s FOMC meeting is likely to be a non-event. Although the absence of a press conference and no new summary of economic projections may take away a chunk of the excitement, investors most probably will use this opportunity to closely scrutinize the policy statement for clues on the Federal Reserve’s tightening plan.

Many questions still remain unanswered over both the timings and pace of rate hikes which may weigh on the minds of Fed watchers ahead of the rate decision. Markets will also be paying very close attention to see if the policy statement offers any fresh details on how and when the Federal Reserve plans to normalize its $4.5 trillion balance sheet. Any unexpected surprises from the policy statement may come in the form of inflation concerns as the central bank acknowledges the fall in inflation and the impact it has on reaching their 2% inflation target.

Sterling pressured ahead of GDP data

Sterling dipped towards 1.3000 during Wednesday’s trading session as investors became anxious ahead of the release of the UK Q2 GDP numbers. The story around the Sterling continues to revolve around Brexit-based uncertainty, political risk, and weakness in UK economic fundamentals that continue to weigh heavily on the currency. The preliminary UK GDP data will be in focus and is expected to show that the economy grew by 0.3% in the second quarter of 2017. A reading that prints below market consensus is likely to quell expectations of the BoE raising UK interest rates in the near term. From a technical standpoint, the GBPUSD remains at risk of depreciating lower once bears conquer the 1.3000 psychological level. A breakdown and daily close below 1.3000 should encourage a further deprecation lower towards 1.2850.

WTI Crude sprints towards $48.50

WTI Crude bulls were unleased during Tuesday’s trading session with prices lurching to eight-week highs above $48.50 after the American Petroleum Institute (API) reported that US Crude stocks fell sharply last week. The upside momentum was supported by optimism over Saudi Arabia pledging to make deeper cuts to its crude exports in August, which inspired oil bulls to attack further. While OPEC and Non-OPEC members may be commended once again by exploiting oil’s sensitivity to generate speculative boosts in prices, this could come at a heavy cost if oil markets fail to rebalance.

With the oversupply concerns still a major theme that continues to fuel the bearish sentiment towards oil and markets remaining anxious over higher production volumes from other oil producers, WTI Crude still remains exposed to downside risks.

AUD/USD – 0.7899

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 0.7840, Target: 0.7990, Stop: 0.7780

Position: -
Target:  -
Stop: -

New strategy :

Buy at 0.7800, Target: 0.7990, Stop: 0.7740

Position: -
Target:  -
Stop:-

As aussie has retreated after meeting resistance at 0.7971 yesterday, retaining our view that further consolidation below recent high at 0.7990 would be seen and pullback to 0.7840-50 cannot be ruled out, however, reckon downside would be limited to 0.7800 and support at 0.7786 should hold, bring another rise later, above 0.7971 would bring retest of 0.7990, break there would extend recent upmove to 0.8040-50 but loss of upward momentum should prevent sharp move beyond 0.8080 and reckon 0.8100 would hold from here. 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 target. 

In view of this, would not chase this rise here and we are looking to buy aussie on subsequent pullback as 0.7800 should limit downside, bring another upmove later. Below support at 0.7786 would defer and suggest wave iii top is formed, bring correction in wave iv to 0.7750 but wave i top at 0.7712 should remain intact.

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.

EUR/USD

Current level - 1.1637

Yesterday's peak below 1.1716 resistance signals a reversal and my outlook is already bearish, for a break through 1.1620, towards 1.1580, en route to 1.1480 support zone. 

USD/JPY

Current level - 111.86

The violation of 111.47 hurdle shows a reversal of the whole downtrend from 114.46 and the bias is positive, for a corrective pattern towards 112.80 resistance. Initial intraday support lies at 111.47.

GBP/USD

Current level - 1.3021

The recent peak at 1.3082 should be considered a finale of the consolidation rebound above 1.2930 and my outlook is bearish, for a break through 1.3000, towards 1.2860.

Inflation figures out of Australia were today's main data release during Asian session trading. The softer than expected data led to the aussie posting losses. Beyond that, the dollar index seems to be maintaining some positive momentum following yesterday's upbeat consumer confidence report.

The dollar's index against a basket of currencies was up 0.2% as Asian traders were about to complete their trading day. It stood above the 94 mark, but not far above 93.64, the 13-month low reached yesterday. Against the yen, the US currency was not much changed. Dollar/yen last eyed the 112 handle. Yesterday the pair finished the day 0.7% higher. The Federal Reserve will complete its two-day meeting later in the day. It is widely expected to maintain interest rates at their current levels and investors will mainly focus on rate guidance throughout the rest of the year, as well as on details regarding when it will start reducing the size of its balance sheet.

Political developments have in large part been driving the dollar to a significant extent recently and new deliberations by the US Senate to repeal and replace Obamacare will also be watched by forex market participants.

In other dollar pairs, euro/dollar and pound/dollar were last down 0.2% and 0.1% on the day. Yesterday, euro/dollar rose to its highest since late August 2015 when it hit 1.1712, while pound/dollar climbed to a more than one-week high of 1.3083.

Moving to today's major release during the Asian session, Australian consumer prices rose 1.9% year-on-year in the second quarter of the year. This fell short of expectations for a rise by 2.2% and was also below the two-and-a-half-year high of 2.1% during the first quarter of the year. On a quarterly basis, the inflation rate stood at 0.2% in the second quarter, below the 0.4% expected and the previous quarter's 0.5%. The Australian dollar fell on the data relative to its US counterpart. Aussie/dollar last traded at 0.7892, down 0.6% on the day.

New Zealand trade data for June showed the country posting a trade surplus of NZ$242 million during the month. The local dollar edged slightly higher relative to the US dollar upon release of the data. Kiwi/dollar last traded at 0.7423, up on the day though not by much.

Turning to commodities, gold was last down 0.3%, trading at $1245.04 an ounce. WTI and Brent crude were both up 0.8% and 1.0%, at $48.38 and $50.61 respectively. Both benchmarks finished the day higher in the two preceding days, recording considerable gains.

Beyond the FOMC statement upon completion of the Fed's meeting, UK preliminary GDP estimates for the second quarter of the year and the Energy Information Administration's (EIA) weekly report on US crude stockpiles will also be in focus.

XAUUSD (1247.57): Gold prices were seen slipping for a second consecutive day. This follows the doji candlestick that was formed on Monday. The bearish descent could signal a near-term decline in gold prices towards 1241.36 support level. In the near term, any upside gains could be seen capped near the 1252.71 which could act as resistance. Below 1241.36, gold prices could be seen slipping towards the 1224.47 level. This marks a major support level that could be tested in the near term.

GBPUSD (1.3023): The British pound attempted to rally above 1.3025,but the gains were capped. GBPUSD posted a session high to 1.3083 before giving up the gains to settle rather flat. Price action could be seen pushing lower as a result, off the current resistance level. The rising wedge pattern signals a move to the downside with 1.2656 staying in focus. On the 4-hour chart, yesterday's rally has led to a lower high being formed. This suggests that the downside momentum could gather pace. Watch for a daily close below 1.3025 following which, GBPUSD could be ready for a move to the downside.