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Daily Pivots: (S1) 1.1626; (P) 1.1654 (R1) 1.1691; More...

EUR/USD is losing some upside momentum as seen in 4 hour MACD. But with 1.1582 minor support intact, intraday bias remains on the upside. Current rally would now target 1.2 handle next. On the downside, below 1.1582 minor support will turn intraday bias neutral and bring consolidations. But downside should be contained by 1.1444 resistance turned support and bring rise resumption.

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 fro 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.

GBP/USD – 1.3043






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 1.3050, Target: 1.2850, Stop: 1.3110

Position: - 

Target:  -

Stop: -







New strategy :



Sell at 1.3090, Target: 1.2890, Stop: 1.3150


Position: -

Target:  -

Stop:-





As cable has rebounded again after brief pullback, suggesting near term upside risk remains for the recovery from 1.2933 (last week’s low) to bring further gain to 1.3062, however, if our view that top has been formed at 1.3126 is correct, upside should be limited to 1.3090-00 and bring another decline later, below 1.2950-55 would signal the rebound from 1.2933 has ended, bring 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 fall to 1.2870-80 would follow but reckon support at 1.2812 would remain intact, bring rebound later. 




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 further recovery to 1.3062 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.



US indexes closed in the red on Friday, with the Dow Jones Industrial Average down 31 points, to 21,580.07, the Nasdaq Composite retreating 0.04%, to 6,387.75, and the S&P ending the day 0.04% lower at 2,472.54. Despite Friday's declines, Wall Street ended near fresh all-time highs set earlier in the week, amid solid earnings reports for the second quarter of the year. The Dow, however, ended the week in the red, down roughly 0.30% with most members down on Friday, led by General Electric that lost 2.92% and Chevron that closed 1.32%. The best performer was Visa, up 1.52%, followed by Nike that added 1.44%. The daily chart for the index shows that it has been consolidating, with buying interest surging on approaches to its 20 DMA, currently at 21,500 and technical indicators easing within positive territory, these lasts limiting chances of a bullish move for this Monday. In the 4 hours chart, the scale leans towards the downside, as the Momentum indicator heads south within negative territory, while the RSI consolidates around 45. In this last time frame, the index is below its 20 SMA, but still above a bullish 100 SMA, also in the 12,500 region, with the level being now a critical support.

Support levels: 21,551 21,500 21,464

Resistance levels: 21,599 21,643 21,682

Crude oil prices sunk on Friday, trimming its early week gains and with West Texas Intermediate crude oil futures settling at $45.57 a barrel, on reports indicating that OPEC's output is set to raise this July by 145,000 bpd. The report, issued by Petro-Logistics, came ahead the OPEC and non-OPEC oil ministers' meeting this Monday, when those producers that agreed an output cut last year are set to review the latest developments. In the US, the Baker Hughes report showed that in the week, the number of active rigs drilling for oil fell by 1, to 764. From a technical point of view, the daily chart shows that commodity settled below is 20 SMA, while the Momentum indicator remains flat around its 100 level, but the RSI indicator turned sharply lower, now around 47 anticipating additional declines ahead. Furthermore, WTI settled below the 50% retracement of the latest bullish run, now the immediate resistance at 45.65. In the 4 hours chart, the commodity is also biased lower, as technical indicators maintain their strong downward momentum within negative territory, whilst the 20 SMA gains downward strength above the current level. The immediate support is 45.20, the 61.8% retracement of the mentioned rally.

Support levels: 45.20 44.50 43.80

Resistance levels: 45.90 46.65 47.20

Dollar's weakness kept gold on the run, with spot ending the week at $1,254.17 a troy ounce, a few cents below a three-week high of 1,255.64. Political jitters in the US alongside with soft local macroeconomic figures dented the case for a tighter monetary policy in the world's largest economy, while rising speculation that the ECB will take a first step towards tapering next autumn further pressure the greenback. From a technical point of view, the daily chart shows that spot settled above a horizontal 100 DMA, for the first time in July, while technical indicators resumed their advances within positive territory, nearing now overbought readings with a strong upward momentum. In the 4 hours chart, the 20 SMA has extended its advance above the 200 SMA below the current level, while technical indicators have pared gains and turned modestly lower within overbought readings, maintaining the risk towards the upside. June 23rd daily high at 1258.79 is the immediate resistance and the level to break to confirm additional gains ahead, as the pair also has multiple daily lows from mid-May around the level.

Support levels: 1,251.90 1,242.50 1,236.30

Resistance levels: 1,258.80 1,266.60 1,274.10

The GBP/USD pair closed the week in the red at 1.2996, as speculation that the BOE won't need to raise rates and Brexit jitters weighed on the Pound. According to the official release, inflation in the UK rose by less-than-expected in June, taking off the pressure over Carney, who pledged to be tolerant with inflation above 2% within the ongoing political uncertainty. Negotiations between the UK and the EU didn´t succeed as parts can´t agree on how to deal with the divorce bill, with the EU want it to be monitored by the European Commission, something that the UK rejects. The Pound managed to recover some ground on Friday, but failed to sustain gains beyond the 1.3000 threshold, bouncing from the 61.8% retracement of it latest daily advance at 1.2930, a strong static support for the pair reached last Thursday. In the daily chart, the price settled above a horizontal 20 DMA, while technical indicators hover around their mid-lines, with no clear directional strength. In the 4 hours chart, the pair presents a neutral-to-bearish stance, as the upside is being contained by a bearish 20 SMA and the 38.2% retracement of the mentioned rally at 1.3005, while technical indicators turned marginally lower right below their mid-lines.

Support levels: 1.2965 1.2930 1.2880

Resistance levels: 1.3005 1.3030 1.3075

Daily Pivots: (S1) 1.2958; (P) 1.2989; (R1) 1.3024; More...

Intraday bias in GBP/USD remains neutral as it's bounded in range of 1.2811/3125. With 1.2811 support intact, another rise is mildly in favor. Break of 1.3125 will target 61.8% projection of 1.2108 to 1.3047 from 1.2588 at 1.3168. Overall, choppy rebound from 1.1946 is seen as a corrective pattern, hence, we'd be cautious on strong resistance from 1.3168 to limit upside. But firm break of 1.3168 will bring further rise towards 1.3444 key resistance. Meanwhile, break of 1.2811 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.

The USD/JPY pair edged lower for a second consecutive week, plunging on Friday to its lowest in over a month at 111.00, as soft US data and falling US Treasury yields added to US political jitters to send the yen higher this last week. The USD/JPY pair advanced on Thursday, after the Bank of Japan maintained its ongoing monetary policy unchanged, but delayed the timing on when the 2% inflation target is expected to be reached, but the yen quickly resumed its advance on dollar's weakness. As for yields, the 10-year note benchmark in the US traded as low as 2.22% to finally settle at 2.23%, whilst the 30-year note interest posted its largest weekly decline in over three months, down to 2.80%. The week will start with Japan releasing its June leading indexes and July preliminary Manufacturing PMI, this last expected at 52.3 from a previously revised 52.4. The daily chart shows that the pair stands a few cents above the 61.8% retracement of its latest weekly advance at 110.90 the immediate support, having broken below its 100 DMA, this last at 111.45, while technical indicators head sharply lower within bearish territory, all of which support a bearish extension. In the 4 hours chart, technical indicators have bounced modestly from oversold readings, but are far from supporting an upward correction, with the price also developing below its moving averages.

Support levels: 110.90 110.55 110.20

Resistance levels: 111.45 111.90 112.35

The EUR/USD pair settled at its highest since August 2015 at 1.1638, up for  a second consecutive week. The bullish breakout came on Thursday, following the ECB monetary policy meeting. President Draghi did his best to talk down the Euro, but the market did not believe him, grappled to the line in where he said that changes to the ongoing policies will be discussed next fall. Quantitative easing is set to remain in place until next December, but the market rushed to price in tapering. In the meantime, data released in the US these last days were soft, further backing the ongoing rally in the pair.

Next Wednesday, the US Federal Reserve will have its own monetary policy meeting, a "non-live" one, meaning that it won't include fresh economic reviews or a press conference, which means that there are little chances the event could revert the negative sentiment towards the greenback, unless Yellen & Co. come with a huge, unexpected surprise. In the US, there's just one more rate hike pending for this year, and latest data and political turmoil suggest that the Central Bank will have to pause afterwards. The imbalance between both central banks is shrinking.

From a technical point of view, the pair is clearly overbought and the risk of a downward corrective movement is high for this upcoming days. In the daily chart, however, there is no sign that that could happen, as technical indicators keep heading north, with the RSI at 74, whilst a bullish 20 DMA keeps leading the way higher, currently around 1.1450. In the 4 hours chart, technical indicators have lost upward strength, but are currently consolidating within overbought levels, whilst the price is also well above all of its moving averages. A downward correction towards 1.1460, will hardly the ongoing trend, although below that level, bulls will likely rush to take profits out of the table, fueling the decline.

Support levels: 1.1615 1.1560 1.1520

Resistance levels 1.16600 1.1710 1.1745

Daily Pivots: (S1) 0.9422; (P) 0.9472; (R1) 0.9506; More...

Intraday bias in USD/CHF remains on the downside for the moment. Sustained trading below 0.9443 key support will extend the down trend from 1.0342 to 161.8% projection of 1.0342 to 0.9860 from 1.0099 at 0.9319. On the upside, above 0.9521 minor resistance will turn bias neutral. But outlook will remain bearish as long as 0.9699 resistance holds.

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.