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GOLD Bullish momentum continues.

Gold's is trading higher after the precious metal reached the support given at 1204 10/07/2017 high). Hourly resistance lies at 1258 (23/06/2017 high). Expected to show further strengthening.

In the long-term, the technical structure suggests that there is a growing upside momentum. A break of 1392 (17/03/2014) is necessary ton confirm it, A major support can be found at 1045 (05/02/2010 low)

SILVER Bullish.

Silver is pushing higher after the bounce still bouncing from hourly support given at 15.18 (10/07/2017 low). Key resistance is given at a distance at 17.75 (06/06/2017 high). The commodity has broken the 16-mark. Expected to inch higher.

In the long-term, the death cross indicates that further downsides are very likely. Resistance is located at 25.11 (28/08/2013 high). Strong support can be found at 11.75 (20/04/2009).

CRUDE OIL Strong upside pressures.

Crude Oil is trading higher. Hourly support is given at 43.65 (10/07/2017 low). Expected to monitor resistance given at 48.42 (05/06/2017).

In the long-term, crude oil has recovered after its sharp decline last year. However, we consider that further weakness are very likely. Strong support lies at 35.24 (05/04/2016) while resistance can now be found at 55.24 (03/01/2017 high).

The DAX index has posted small gains in the Friday session. Currently, the DAX is trading at 12,454.20, up 0.22% on the day. It's a quiet end to the week, with no German or eurozone releases. On Thursday, the ECB made no changes to interest rates or its quantitative easing (QE) program.

It's been smooth sailing for the German economy in 2017, and the locomotive of Europe has led the way for a stronger eurozone economy, as growth has improved and unemployment has dropped. The German export sector has been boosted by stronger global demand, and domestic spending remains solid. Fears of an economic slowdown due to Britain's departure from the EU and US President Trump's protectionist stance have not materialized. The German Finance Ministry was positively upbeat on Thursday, saying that “the current picture of economic indicators suggests that the economic upswing continued vigorously in the second quarter”. GDP expanded at a strong clip of 0.6% in the first quarter, and Q2 is expected to post another gain of 0.6%. The economy received a thumbs-up from the IMF, which has raised its growth projections to 1.8% in 2017 and 1.6% in 2018. If the ECB tapers its asset purchase program in September, as many analysts expect, German economic growth could be even higher in the second half of the year. The fly in the ointment has been inflation, as both Germany and the eurozone continue to struggle with inflation levels well below the ECB's inflation target of 2%. German policymakers have long argued that the German economy needs higher interest rates. However, the ECB has to look after eurozone members who are not doing as well as Germany, and has insisted that it will not withdraw stimulus until inflation in the eurozone moves closer to the bank's inflation target.

The ECB didn't make any moves at its policy meeting, but that didn't stop the euro from posting strong gains on Thursday. EUR/USD has gained 1.6% this week, and earlier on Friday, the pair hit its highest level since August 2015. As expected, the ECB opted to hold steady with its monetary policy, keeping interest rates at 0.00% and the QE scheme at EUR 60 billion/month. The QE program is scheduled to end in December, and any change to that date could have a significant impact on the euro. At his press conference, ECB President Mario Draghi sounded upbeat about the eurozone economy, noting there were signs of “unquestionable improvement” in the eurozone economy. As for monetary policy, Draghi said the bank had not set an exact time for revisiting any changes to the current accommodative policy, but added that policymakers would review policy in September. These comments did not seem to break any new ground, but were perceived as hawkish by the markets and triggered a euro rally.

With Mario Draghi saying that the ECB will revisit its ultra-loose monetary policy in September (and the euro jumping higher as a result), what moves can we expect from the bank in September? As OANDA Senior Currency Analyst Craig Erlam explains, the markets should be prepared for some significant moves at the September policy meeting:

The most likely decision, despite the central bank still falling well short of its inflation target, will be to cut its purchases by another €20 billion as it did in April and extend by another six months. There has been a lot of speculation about a more explicit phasing out but I think the ECB want to be more careful given the fragile nature of the recovery. The result will likely be the same though with the central bank ending its quantitative easing program either at the end of 2018 or early 2019.

EUR/GBP Surging.

EUR/GBP is very volatile. The pair has surged toward 0.9000. Hourly resistance is given at a distance at 0.8742 (16/07/2017 low). Downside risks are important.

In the long-term, the pair has largely recovered from recent lows in 2015. The technical structure suggests a growing upside momentum. The pair is trading above from its 200 DMA. Strong resistance can be found at 0.9500 psychological level.

EUR/CHF Pushing higher.

EUR/CHF is still trading above psychological level at 1.1000 and the pair is approaching 1.1100. Selling pressures are growing at the moment. Hourly support is located at a distance at 1.0922 (30/06/2017 low). Expected to inch higher.

In the longer term, the technical structure is mixed. Resistance can be found at 1.1200 (04/02/2015 high). Yet,the ECB's QE programme is likely to cause persistent selling pressures on the euro, which should weigh on EUR/CHF. Supports can be found at 1.0184 (28/01/2015 low) and 1.0082 (27/01/2015 low).

BITCOIN Surging.

Bitcoin has well recovered after the sell-off this weekend. Hourly resistance can be found at 2417 (13/07/2017 high) has been exploded and hourly support looks very far at 1852 (14/07/2017 low). Expected to show some further retracement. Still good to enter buying orders below 2000.

In the long-term, the digital currency has had an exponential growth. There are decent likelihood that the asset will consolidate above $1500. Long-term support is given at $1464 (04/05/2017 low).

Notes/Observations

EUR/USD near 2-year highs aided by broad USD weakness

Overnight

Asia:

RBA Dep Gov Debelle: Discussion of neutral rates had no implications for policy. Reiterated RBA view that a rising A$ was not welcomed and complicated the economy's adjustment

New Zealand Fin Min Joyce: 'Unperturbed' by NZD strength, kiwi dollar strength reflects strong economy

Europe:

ECB tapering decision reportedly may not be made until Oct

UK govt reportedly to offer EU citizens free movement for up to 2 years under plans devised by Chancellor Hammond

IMF confirmed approval of $1.8B conditional loan for Greece (as expected) but would not disburse any bailout until Europe details their debt relief plan

Americas:

Special counsel Mueller reportedly expanding Russia probe into Trump business transactions, as well as financial dealings of Trump associates

President Trump said to have made changes to legal team

Economic Data

(JP) Japan Jun Nationwide Dept Sales Y/Y: 1.4% v 0.0% prior; Tokyo Dept Store Sales Y/Y: +1.1% v -1.1% prior

(NL) Netherlands Jun House Price Index M/M: 0.7 v 0.8% prior; Y/Y: 8.0 v 7.8% prior

(UK) Jun Public Finances (PSNCR): £18.3B v £13.4B prior; Public Sector Net Borrowing: £6.3B v £4.2Be , Central Government NCR: 17.8B v £9.8B prior, PSNB ex Banking Groups: £6.9B v £4.9Be

Fixed Income Issuance:

(IN) India sold total INR150B in 2022, 2029, 2033 and 2051 bonds

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx600 +0.1% at 384, FTSE 0.3% at 7511, DAX +0.1% at 12457, CAC-40 +0.2% at 5208, IBEX-35 -0.1% at 10556, FTSE MIB flat at 21441, SMI +0.2% at 9046, S&P 500 Futures +0.1%]

Market Focal Points/Key Themes: European Equities trade slightly higher across the board in a releatively lackluster session. The FTSE 100 outperforms with help from Vodafone which trades higher after Q1 results. Elsewhere Philips lighting, Accel Holdings and Sartorius Stedim trade sharply lower following results. In the M&A space Paysafe trade higher after confirming a bid

Equities

Consumer discretionary [Accel [ACCEL.NL] -7.5% (Earnings)]

Industrials: [Valeo [FR.FR] -4.0% (Earnings), Philips Lighting [LIGHT.NL] -7.5% (Earnings)]

Financials: [Paysafe [PAYS.UK] +7.5% (Receives take over approach)]

Technology: [Landis & Gyr [LAND.CH] +1.0% (IPO), Fingerprint Cards [FINGB.SE] +10% (Earnings)]

Telecom: [Vodafone [VOD.UK] +1.6% (Q1 Earnings)]

Healthcare: [Sartorius Stedim [DIM.FR] -7.6% (Earnings), Ypsomed [YPSN.CH] -23% (Ends distribution agreement with Insulet Corp)]

Speakers

ECB Survey of Professional Forecasters (SPF) cut its inflation outlook for the 2017-19 period and bumped up its growth forecasts (**Note: moves in-line with the most recent Staff Projections).

Turkey Econ Min Zeybekci reiterated govt view that interest rates were higher than they should be

South Korea govt said to discuss issues on possible tax hike in 2018

Currencies

EUR/USD probed near 2-year highs early in the session. EUR/USD tested 1.1677 for its highest level since August 2015. Dealers noted that the spike up in the Euro during the press conference was likely related to Draghi ducking the question about the recent EUR currency strength. Draghi failed to communicate any unwanted deflationary implications of EUR strength. Also providing a catalyst was expectations that the ECB announcement on plan to taper its stimulus will occur in September.

AUD currency was weaker after RBA Dep Gov Debelle noted that the central bank far from tightening its policy (differs from recent minutes)

Fixed Income

Bund futures trade at 162.38 up 41 ticks after dovish ECB survey. Resistance lies near the 162.10 level followed by 162.75. A break of the 160.00 support level could see lows target 159.25 followed by 157.50.

Gilt futures trade at 126.29 higher by 1 tick after being capped by key resistance from the 126.51 level. Price finds key support at the 125.42 support level. An acceleration lower could test the 122.88 region. Resistance remains the noted 126.51 region, followed by 127.50.

Friday's liquidity report showed Thursday's excess liquidity fell to €1.640T a drop of €7B from €1.647T prior. Use of the marginal lending facility rose to €280M from €272M prior.

Corporate issuance saw $3.2B come to market via 2 issuers headlined by Canadian Imperial Bank $1.75B covered bond offering and Church & Dwight $1.425B 4-part senior unsecured note offering. This week's issuance is at $46.9B. For the week ending July 19th Lipper US fund flows reported IG funds net inflows $3.8B bringing YTD inflows to $75.2B, High yield funds reported outflows of $2.2B bringing YTD outflows to $6.6B.

Looking Ahead

(UR) Ukraine Jun Industrial Production M/M: No est v 3.4% prior; Y/Y: No est v 1.2% prior

06:00 (IE) Ireland Jun PPI M/M: No est v -0.8% prior; Y/Y: No est v 1.1% prior

06:00 (UK) DMO to sell combined £3.5B in 1-month, 3-month and 6-month bills (£0.5B, £1.0B and £2.0B respectively)

06:45 (US) Daily Libor Fixing

07:30 (IN) India Weekly Forex Reserves

08:00 (PL) Poland Jun M3 Money Supply M/M: 0.6%e v 0.5% prior; Y/Y: 5.9%e v 6.2% prior

08:15 (UK) Baltic Dry Bulk Index

08:30 (CA) Canada Jun CPI M/M: -0.1%e v +0.1% prior; Y/Y: 1.1%e v 1.3% prior

08:30 (CA) Canada Jun CPI Core- Common Y/Y: 1.3%e v 1.3% prior, CPI Core- Trim Y/Y: No est v 1.2% prior, CPI Core- Median Y/Y: No est v 1.5% prior, Consumer Price Index: No est v 130.5 prior

08:30 (CA) Canada May Retail Sales M/M: 0.3%e v 0.8% prior; Retail Sales Ex Auto M/M: 0.0%e v 1.5% prior

09:00 (MX) Mexico Jun Unemployment Rate (Seasonally Adj): 3.5%e v 3.5% prior; Unemployment Rate (Unadj): 3.5%e v 3.6% prior

09:30 (BR) Brazil Jun Current Account: $1.4Be v $2.9B prior; Foreign Direct Investment (FDI): $2.5Be v $2.9B prior

11:00 (EU) Potential sovereign ratings after European close

13:00 (US) Weekly Baker Hughes Rig Count Data

15:00 (CO) Colombia May Economic Activity Index (Monthly GDP) Y/Y: 1.4%e v 1.4% prior

USD/CHF Weakening again.

USD/CHF is pushing lower. Hourly resistance can be found at 0.9696 (09/06/2017 high). Strong resistance is given at 1.0107 (10/04/2017 high). Expected to to show further weakness.

In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours nonetheless a long term bullish bias since the unpeg in January 2015.

USD/CAD Strong weakness.

USD/CAD is going lower and the pair remains in a strong bearish momentum. Hourly support is given at 1.2541 (20/07/2017 low). Hourly resistance is given at 1.2701 (17/07/2017). Expected to show continued bearish pressures.

In the longer term, the pair lies in a bullish channel since a year. Strong resistance is given at 1.4690 (22/01/2016 high). Long-term support can be found at 1.2461 (16/03/2015 low)

AUD/USD Profit-taking.

AUD/USD's technical structure is bullish since early May despite some profit-taking. Hourly resistance is given at 0.7989 (19/07/2017 high). Hourly support is given at 0.7875 (21/07/2017 low).

In the long-term, we are waiting for further signs that the current downtrend is ending. Key supports stand at 0.6009 (31/10/2008 low) . A break of the key resistance at 0.8295 (15/01/2015 high) is needed to invalidate our long-term bearish view.

The yellow metal continues to surprise the bulls. The commodity price was reaching for the 1,250 mark on Friday morning. It was initially expected on Thursday that the metal will decline down to the lower trend line of a medium ascending channel pattern. However, as the metal fluctuated between the 100 and 55-hour SMAs, a fundamental event took place, which influenced the price of gold. As the ECB press conference took place, the massive buying of the Euro and simultaneous selling of the US Dollar caused a spill over. That resulted into the metal breaking the resistance of the 55-hour SMA. Due to that it can be observed on Friday morning that the bullion is most likely going to reach above the 1,250 levels on Friday, as there are no notable strong resistance levels, which might stop it.

Contrary to expectations, an impulse given by an exit from a rising wedge pattern was not strong enough to push the currency pair to a closest combined resistance level formed by the 200-hour SMA and the weekly PP at 113.09. Namely, the currency pair soared to the 100-hour SMA near 112.30 but then rapidly fell back to the weekly S1 at 111.70. The new attempt to recover the lost ground failed as well, as the pair encountered a combination of the 20- and 55-hour SMA near 111.97. An early Friday morning shows that the above weekly S1 still does not let the rate to fall further and pushes it to make another attempt to climb upstairs. But in case of a third failure, the freefall of the rate should be stopped by the monthly PP 111.38.

Despite the fact that a released information on the UK Retail Sales beat experts expectations, the Pound lost 0.6% in value against the American Dollar and fell below the weekly PP at 1.3008 as well as the 200-hour SMA near the 1.2968 level. For this reason, the pair is expected to spend this Friday in attempts to recover the lost ground. Nevertheless, the road upstairs most probably will be blocked by a new combined resistance level formed by a combination of the 55-hour SMA and the above weekly PP. In addition, a rebound at this point would return the pair into a short-term inner descending channel and, thus, move it closer to the bottom channel-line of the dominant ascending pattern.

Yesterday, as Mario Draghi spoke, the common European currency skyrocketed against the rest of the markets. After the ECB press conference the EUR/USD currency exchange rate stopped at the upper trend line of the long term descending channel patter near the 1.1560 mark. Immediately afterwards the markets were watching, will or will not the pair break out of the pattern. The result is that the pattern was broken. The breakout resulted in a 100 base point surge. Moreover, it indicates that the Euro is set to continue to score gains against other currencies in the long term. Meanwhile, it has to be noted that the next target for the pair is the combined resistance of a large scale ascending pattern and the 2015 high level near the 1.1710 mark.

Spot Gold extended gains on Friday and dented barriers at $1246/47 (converged 55/10SMA's) en-route towards targets at $1250 (50% retracement of $1296/$1296 descend) and $1255 ( daily cloud base) in extension.

The yellow metal regained traction on Thursday after fresh weakness of dollar boosted gold price and left higher base at $1235 (Wed/Thu consolidation lows).

Strong bullish structure was reinforced by 10/200SMA golden cross, formed on daily chart, with gold price being on track for the second strong weekly bullish close, signaling firm bullish stance.

Strongly overbought slow stochastic on daily chart warns of rally's stall and corrective action in the near-term.

Session low at $1243 offers initial support, followed by broken Fibo 38.2% barrier at $1239, which is expected to hold and guard $1235 higher base.

Res: 1250, 1255, 1258, 1261
Sup: 1243, 1239, 1235, 1230