Sample Category Title

EURUSD (1.1646): The EURUSD posted a fresh two-year high yesterday as price rallied briefly to a session high of 1.1712 before giving up most of the gains. The strong price action and the subsequent failure to keep to the gainssuggests that the upside momentum is fading. The support level at 1.1635 continues to remain in focus as currently EURUSD is seen falling back to this level. Another leg to the upside, which if results in a lower high could suggest the head and shoulders pattern forming on the 4-hour chart. The breakdown below 1.1635 will signal a move towards the support level at 1.1475 which is yet to be tested currently.

Relatively positive earnings and economic data released on Tuesday brought a risk-on sentiment back, as data reinforced confidence in the strength of the global economy. The FOMC will be looking to weigh robust global growth against poor inflation and mixed US. economic data. The Markets expect the Fed to keep rates unchanged, with clues to the fate of its balance sheet being foremost. With a rate hike unlikely, the markets will focus on the Fed's statement, looking for signs of when the Fed will begin paring its massive bond holdings and next raise rates. The Markets will be closely watching US advance Q2 growth estimates on Friday to see if the economy really is recovering. Adding further to a heavy USD; President Trump's son Donald Jr. and former Trump campaign Chairman Paul Manafort will go before a Senate committee on Wednesday to answer questions in regards to Trump's Presidential campaign and possible collusion with Russia.

EURUSD climbed to a high on Tuesday of 1.17118 not seen in more than 2 years. Currently EURUSD has backed off its highs to currently trade around 1.1640.

USDJPY rose on Tuesday to trade as high as 111.684, the highest level it has reached in more than a week. JPY weakness has carried on overnight with USDJPY currently trading around 112.00.

GBPUSD saw its highest level in over a week, reaching a high on Tuesday of 1.30835, before retracing lower. Currently, GBPUSD is trading around 1.3020.

AUDUSD dropped 0.5% to trade as low as 0.78873, following the release of inflation figures and a speech by the country's central bank governor. Australia's Q2 headline inflation rose less than expected from a year earlier. Reserve Bank of Australia Governor Philip Lowe said “his global counterparts' moves to withdraw stimulus from their economies has no automatic implications for policy Down Under”. Currently, AUDUSD is trading near its Wednesday lows.

Gold dropped over 0.4% on Tuesday to trade as low as $1,248.96, before rebounding higher. Currently, Gold is trading around $1,246.

Oil also moved higher on Tuesday, posting the biggest intraday gain in more than a week, as Saudi Arabia pledged deep crude export cuts next month and US supplies are seen to be declining. WTI gained over 3% on the day to trade as high as $47.92pb, its largest gain in nearly a month. Crude inventories declined by 10.2 million barrels last week in the American Petroleum Institute report released Tuesday, resulting in Oil climbing overnight with WTI currently trading around its Wednesday high at $48.40pb.

At 11:30 BST the UK National Statistics Office will release UK Gross Domestic Product (QoQ) (Q2) & (YoY) (Q2). The market consensus is expecting the QoQ release to be 0.3% from the previous 0.2%, whereas the Year on Year release is forecasting 1.7%, a drop from the previous release of 2.0%. As a broad measure of UK economic activity, a falling GDP number will be seen as negative for the value of GBP.

At 21:00 BST, the 2 day FOMC meeting will finish, with the markets waiting for the press release that follows that will include the Fed Interest Rate Decision. The markets are not expecting any hike today and the CME Fedwatch tool is showing a less than 50% probability of a rate increase before the end of 2017.

The US dollar managed to post a pullback following a string of losses in the previous sessions. The modest two-day recovery in the greenback saw the currency stabilizing. Politics continues to dominate the sentiment as the US Senate passed a motion to repeal the Obamacare or the Affordable Care Act.

Oil prices also edged higher yesterday after Saudi Arabia reiterated its commitment to maintain the crude oil export limit. The weekly crude oil inventory report is due to be released today with expectations of a drawdown of 3.3 million.

Looking ahead, economic data today includes the preliminary second quarter GDP data from the UK. Economists polled expect to see a 0.3% quarterly GDP growth rate in the period ending June. However, the GDP data could be weaker than expected.

Later in the day, the Federal Reserve will be releasing its monetary policy statement. No changes are expected but the Fed could signal that it will continue with its tightening policy. This includes further clarity that could be given on the balance sheet normalization.

Continues to move sideways on the short term, between the 23.6% and the 50% retracement levels, is trading at the half of this range. We’ll have a clear direction once we’ll have a valid breakout from the extended sideways movement. Remains to see if this is an accumulation or a distribution movement. Personally I’m waiting to see what will happen on the Nikkie, which is narrowing around 20058 static resistance.

Price found temporary resistance right below the 1.1700 level and could lose altitude as the USDX is trying to recover as much as can before the FOMC Statement. However the perspective is bullish as long as is located above the median line (ml) of the ascending pitchfork, only a valid breakdown will signal a reversal.

Technically, is somehow expected to decrease at least till the median line (ml) after the failure to reach the 1.1712 long term resistance and the upper median line (uml) of the ascending pitchfork, but unfortunately the fundamental factors will drive the price.

Daily Pivots: (S1) 0.8924; (P) 0.8942; (R1) 0.8957; More

Intraday bias in EUR/GBP remains neutral for consolidation below 0.8994 temporary top. Downside of retreat should be contained by 0.8828 minor support to bring another rally. Break of 0.8994 will extend the whole rise from 0.8312 towards 0.9304 high. here is no clear sign of up trend resumption yet. Hence, we'll be cautious on strong resistance from 0.9304 to limit upside and bring another fall.

In the bigger picture, price actions from 0.9304 are viewed as a medium term corrective pattern. It's uncertain whether it is finished yet. But in case of another fall, we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside and bring rebound. Whole up trend from 0.6935 is expected to resume after consolidation from 0.9304 completes.

Weekly 


   


•    Last Candlesticks pattern: Shooting star 
   
  


•    Time of formation: 13 Mar 2017 
   
   


•    Trend bias: Down


 


Daily



  


•    Last Candlesticks pattern: Bearish engulfing pattern 
   
  


•    Time of formation: 16 Feb 2017 
   
  


•    Trend bias: Near term down





 

The Australian dollar continued surging after breaking above previous resistance at 85.10 and the subsequent breach of another previous chart point at 88.15 adds credence to our view that the medium term upmove from 2016 low of 72.50 is still in progress and bullishness is seen for this move to extend further gain to 89.30-35, then towards psychological resistance at 90.00, however, near term overbought condition should prevent sharp move beyond previous chart resistance at 90.70, risk from there is seen for a retreat to take place next month. 



On the downside, whilst initial pullback to 87.60-65 is likely, reckon downside would be limited to 87.25-30 and the Kijun-Sen (now at 86.53) should hold, bring another rise later. A daily close below the Kijun-Sen would defer and suggest top is possibly formed, bring correction to 86.00 and then towards previous support at 85.70 but downside should be limited and price should stay well above 85.00-10, bring another upmove probably net week. 


Recommendation: Buy at 87.30 for 89.30 with stop below 86.30.



On the weekly chart, aussie has maintained a firm undertone after recent rally above previous resistance at 88.15, adding credence to our bullish view that medium term upmove from 72.50 low (formed back in 2016) is still in progress and upside bias remains for this move to extend headway to psychological resistance at 90.00, then test of previous resistance at 90.70, however, near term overbought condition should limit upside to 91.50-60 and price should falter below another previous chart resistance at 92.70, bring correction later.

On the downside, although pullback to 88.00, then 87,.50-60 cannot be ruled out, reckon 87.00 would limi downside and bring another rise later. Below 86.50-55 would defer and risk test of the Tenkan-Sen (now at 85.55) but a weekly close below the Kijun-Sen (now at 85.41) is needed to signal a temporary top is formed instead, bring retracement of recent rise to 85.00, then 84.60-65, however, still reckon the upper Kumo (now at 83.55) would remain intact. 


Price looks undecided and uninspired on the Daily chart and could decrease again if the USDX will have enough energy to climb much higher on the short term. GBP/USD is trading much above the 1.3000 psychological level, maintaining a bullish perspective as long as this support remains intact.

The buyers seem exhausted on the Daly chart, price failed to reach the 1.3111 previous high, signalling that he could slip lower to test and retest a support level.

The United Kingdom data could bring life on the GBP/USD, the Prelim GDP could increase by 0.3% in the second quarter and could beat the 0.2% growth in the former reading period, while the BBA Mortgage Approvals could decrease from 40.3K to 39.9K. Moreover the Index of Services is expected to increase by 0.4% in May.

You should be careful today because we may have a high volatility after the FOMC Statement and after the Federal Funds Rate will be released. As you already know, the interest rate is expected to remain steady at 1.25% in the upcoming period.

Price decreased a little after the yesterday’s indecision, could come down to retest the upper median line (UML) if the dollar index will resume the minor rebound. Right now is premature to say that we’ll have a broader rebound on the USDX because is trapped below a strong dynamic resistance.

GBP/USD looks too overbought on the short term, so technically should drop towards the warning line (wl1) of the ascending pitchfork, could be attracted by the confluence formed between the upper median line (UML) of the major descending pitchfork with the warning line (wl1). The outlook is bullish as long as is trading above the mentioned support levels, but a valid breakdown below the wl1 and below the UML will open the door for a major drop.

Daily Pivots: (S1) 1.4645; (P) 1.4685; (R1) 1.4714; More...

Intraday bias in EUR/AUD remains neutral for consolidation below 1.4777 temporary top. We'd holding on to the view 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.

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.

Weekly
    •    Last Candlesticks pattern: Long white candlestick
    •    Time of formation: 10 Jul 2017
    •    Trend bias: Sideways

Daily
    •    Last Candlesticks pattern: Long white candlestick
    •    Time of formation: 18 Jul 2017
    •    Trend bias: Up



As aussie found decent demand at 0.7571 earlier this month and has rallied since, price broke above indicated previous resistance at 0.7835, reinforcing our bullish view that medium term erratic rise from 0.6827 has resumed and upside bias remains for this move to extend headway to psychological resistance at 0.8000, break there would encourage for subsequent rise to 0.8090-00 but near term overbought condition should prevent sharp move beyond 0.8150 and price should falter below 0.8200.

On the downside, whilst initial pullback to 0.7875-80 cannot be ruled out, reckon the Tenkan-Sen (now at 0.7833) would limit downside and the Kijun-Sen (now at 0.7763) should hold, bring another upmove later. A daily close below the Kijun-Sen would dampen this bullish view and suggest a temporary top is possibly formed, risk test of previous resistance at 0.7712 but break there is needed to add credence to this view.



Recommendation: Buy at 0.7840 for 0.8040 with stop below 0.7740.



On the weekly chart, aussie has surged after brief retreat to 0.7571 and the subsequent rally above previous resistance at 0.7835 formed a long white candlestick, signaling the erratic rise from 0.6827 low is still in progress, hence bullishness remains for this move to extend headway to psychological resistance at 0.8000, then 0.8090-00, however, near term overbought condition would limit upside to previous resistance at 0.8163 and price should falter well below resistance at 0.8295, bring retreat later.

On the downside, although pullback to 0.7875 is likely, reckon downside would be limited to previous resistance at 0.7835 (now support) and bring another rise later. Below 0.7785-90 would bring pullback towards previous resistance at 0.7712, break there would suggest top is possibly formed, bring test of the Tenkan-Sen (now at 0.7681) but break of the Kijun-Sen (now at 0.7660) is needed to provide confirmation, bring further fall towards said support at 0.7571 which should remain intact.