Sample Category Title

GBP/USD - 1.3036

Original strategy :

Sell at 1.3090, Target: 1.2990, Stop: 1.3125

Position : - 

Target :  -

Stop : -

New strategy  :

Sell at 1.3090, Target: 1.2990, Stop: 1.3125

Position : -

Target :  -

Stop : -

Although the British pound rose briefly to 1.3126, the subsequent retreat suggests temporary top is possibly formed and consolidation below this level would be seen with mild downside bias, below support at 1.3005 would add credence to this view, bring retracement of recent upmove to 1.2965-70 (50% Fibonacci retracement of 1.2812-1.3126), then test of previous resistance at 1.2955 but reckon 1.2930-35 (61.8% Fibonacci retracement) would limit downside and support at 1.2912 should remain intact.

In view of this, we are looking to sell cable on recovery as 1.3090-00 should limit upside. Only break of said yesterday’s high at 1.3126 would signal recent upmove has resumed and extend gain to 1.3150-60 but upside should be limited to 1.3190-00, bring retreat later.

EUR/USD - 1.1537

Original strategy  :

Buy at 1.1495, Target: 1.1595, Stop: 1.1460

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.1495, Target: 1.1595, Stop: 1.1460

Position : -

Target :  -

Stop : -

As the single currency has retreated after surging to 1.1583 yesterday, suggesting consolidation below this level would be seen and pullback to 1.1500-05 (38.2% Fibonacci retracement of 1.1370-1.1583) cannot be ruled out, however, reckon previous resistance at 1.1490 would contain downside and bring another upmove later, above said resistance at 1.1583 would extend recent upmove to 1.1600-10 and then 1.1630 but loss of upward momentum should prevent sharp move beyond 1.1650-60.

In view of this, we are looking to buy euro on further pullback as previous resistance at 1.1490 should turn into support and contain downside, bring another rise. Below 1.1475-76 (another previous resistance and 50% Fibonacci retracement of 1.1370-1.1583) would defer and signal top is formed, risk correction to 1.1450-55 (61.8% Fibonacci retracement) and then test of support at 1.1435 which is likely to hold from here. 

The Greenback received a thorough pummelling on Tuesday after reports of Republican legislators failing to pass a revised healthcare bill rekindled concerns over Trump's ability to implement tax cuts and infrastructure spending. Sentiment was already turning increasingly bearish towards the Dollar following last week's soft US inflation reading, with sellers swiftly exploiting the fresh setback to Trump's domestic agenda, in order to attack prices further. With the Greenback displaying signs of sensitivity to monetary policy speculations and the probability of a 25-basis-point rate increase in December dropping to 43% according to CME FedWatch Tool, further downside could be on the cards.

As the US economic calendar is fairly thin today, with only US building permits and housing starts in focus, price action is likely to dictate where the Dollar Index trades. Technical traders could be tempted to utilize the technical bounce on the daily time frame to drive the Index lower. A solid breakdown and daily close below 94.60 may encourage a further selloff towards 94.00.

Euro bulls wait for Draghi

Thursday's main risk event for the Euro will be the European Central Bank meeting, which is widely expected to conclude with monetary policy left unchanged in July. Investors will closely scrutinize the meeting and press conference for clues on whether the central bank may announce plans to reduce its bond-buying program in September. With ECB President Mario Draghi's optimistic speech in Sintra sparking speculations of QE tapering and also playing a role in the current Euro rally, he may choose his words carefully on Thursday. Although the economic conditions in Europe continue to stabilize, inflation is still far from the 2% target and it will be interesting to hear Draghi's thoughts on this. While the improving macro-fundamentals and absence of political risk in Europe have heavily supported the Euro, bulls may need further inspiration in the form of QE tapering expectations. It becomes a question of whether Draghi will offer the bulls what they crave or will end up clipping their wings.

From a technical standpoint, the EURUSD is heavily bullish on the daily charts. The breakout and daily close above 1.1500 could encourage a further incline higher towards 1.1615.

Commodity Spotlight - WTI Crude

WTI Crude Oil edged slightly lower on Tuesday after API reported US inventories increased by 1.63 million barrels last week. Although prices ventured towards $46.55 during Wednesday's trading session this had nothing to do with a change of bias, but rather profit taking, as sentiment remained bearish. Recent reports of Ecuador publicly admitting that it will not meet OPEC's cut commitments, presents a threat to the production cut deal, with fears of a domino effect exposing oil prices to further downside risks. The bias towards oil remains bearish and further downside may be expected as the supply overhang erodes investor attraction towards the commodity. Much attention will be directed towards the pending report from the US Energy Information Administration (EIA) this afternoon, which could compound to oils woes if there is a build in crude inventories.

USD/JPY - 111.90

Original strategy  :

Sell at 112.70, Target: 111.70, Stop: 113.05

Position :  -

Target :  -

Stop : -

New strategy  :

Sell at 112.70, Target: 111.70, Stop: 113.05

Position :  -

Target :  -

Stop : -

Although the greenback recovered after falling to 111.68 yesterday and minor consolidation above this level would be seen, as the selloff from 114.50 signals top has been formed there, reckon upside would be limited to the upper Kumo (now at 112.73) and bring another decline, below said support at 111.68 would extend the fall from 114.50 top to 111.50, then 111.20-25 but reckon 111.00 would hold from here due to loss of downward momentum.

In view of this, would not chase this fall here and would be prudent to sell dollar on recovery as 112.70-75 should limit upside. A firm break above resistance at 112.87 would defer and risk a stronger rebound to 113.10-20 but price should falter below resistance at 113.58, bring another selloff later.

USD/CAD undecided ahead the US and Canadian data

The currency pair changed little in the last hours, but will move aggressively in the upcoming hours as the fundamental factors will take the lead again. The US and Canada data could bring life on the pair, which maintains a bearish perspective, will drop much deeper if the US data will disappoint again.

Is trading much above the 1.2580 yesterday's low, but is under pressure because is located deep in the seller's territory, only an USDX's impressive rally will will force the USD/CAD to increase again in the upcoming period. Another leg higher is uncertain right now because the pair is trapped below some important resistance levels.

The Loonie could receive more support from the Canadian Manufacturing Sales, which is expected to increase by 0.9% in May, but less versus the 1.1% growth in the former reading period. On the other hand, the greenback needs a bullish spark from the US economy, the Building Permits could increase from 1.17M to 1.20M in the previous month, moreover the Housing Starts are expected to climb from 1.09M to 1.16M in June. The USD will increase only if the US data will come in line with expectations or better.

Price is trading in the red and maintains a bearish perspective on the short term as long as is trading within the minor descending pitchfork's body. Is located also much below the 1.2678 broken static support and below the third warning line (wl3) of the former minor ascending pitchfork.

The next downside targets are at the lower median line (lml) of the minor descending pitchfork and at the 1.2460 swing low, a further USDX's drop will send the rate towards these objectives.

Brent Oil another breakout attempt

The Brent Oil is trading in the green and is located much above the 48.58 yesterday's closing price, technically is somehow expected to increase further.

Is still trying to break above the 48.89 static resistance, a valid breakout will attract more buyers on the short term, which will drive the rate towards the outside sliding line (SL) of the descending pitchfork. Is expected to increase after the failure to reach and retest the 38.2% retracement level and the 50% Fibonacci line (ascending dotted line).

Only a breakout above the outside sliding line (SL) will confirm a broader upside movement in the upcoming weeks.

NZD/USD reached another upside target

Price rallied and climbed much above the 0.7372 yesterday's high and above the 0.7375 major static resistance, remains to see if will have a valid breakout above the long term resistance because has found resistance at the up sloping red line.

A false breakout above the 0.7375 level will signal an exhaustion and a potential corrective phase, however the perspective remains bullish as long as stays above the fourth warning line (WL4), only breakdown below this level will open the door for more declines.

The DAX index is unchanged in the Wednesday session. With no major events on the schedule, we can expect investors to concentrate on earnings news, so it could continue to be a quiet day for the DAX. Currently, the DAX is trading at 12,430.00, unchanged on the day. On Thursday, the ECB will release its monthly rate statement.

The Trump administration continues to flounder, as a key plank in Trump's agenda appears dead in the water. Trump's proposed health care bill, which replaces much of Obamacare, has stalled in the Senate before lawmakers even voted on the bill. With some conservative Republicans against the bill, it's questionable if the Republicans can craft a new proposal which could be passed before Congress takes a recess in August. Trump had promised to pass a health care before the summer break, so his credibility will take another hit if he's unable to do so. With this latest defeat, there is growing skepticism as to whether Trump will be able to convince Congress to pass other key parts of his agenda – tax reform and fiscal spending. The Republicans also have egg on their faces, as they have been unable to pass any significant legislation since Trump took over, despite having control of both houses of Congress and the White House. This paralysis on Capitol Hill has deepened investor pessimism about the Trump administration and has hurt the US dollar.

Investors are keeping a close on the ECB, which holds its policy meeting on Thursday. What can we expect from Mario Draghi & Co.? The bank is unlikely to make any changes to its asset-purchase program (QE). With the eurozone showing improvement in 2017, there has been speculation that the bank might taper QE or change the expected end of the scheme, which is December of this year. The ECB makes every attempt to avoid shaking up the markets, but this policy doesn't always work. Case in point – at the ECB forum in June, upbeat comments by ECB President Mario Draghi about tweaking QE led to a sharp rally by the euro. If the eurozone economy continues to show strong numbers, we could see the ECB make some adjustments in its September meeting. In December 2016, the bank tapered QE while extending the scheme until December, and this type of scenario could be adopted once again. Analysts will be combing through the July statement, as well as Draghi's press conference, looking for any nuances to tweaks which could hint at substantive changes to come in September.

Borrowing costs in the euro area dipped on Wednesday, with investor sentiment underpinned by a view that the ECB is unlikely to signal significant policy tweaks when it meets this week, given subdued inflation and a stronger euro.

Reduced expectations of another rise in U.S. interest rates this year and the expansionary fiscal policies flagged by U.S. President Donald Trump that could boost inflation helped push down bond yields.

European Central Bank chief Mario Draghi is expected to use Thursday's meeting to calm market expectations of a scaling back of stimulus in coming months.

Comments he made three weeks ago in Sintra, Portugal were seen opening the door to tapering of asset purchases and sparked a sharp selloff in bonds.

Data this week confirmed that euro zone inflation remains tame at 1.3 percent – well below the ECB's near 2 percent target – while further strength in the single currency could dampen inflation by keeping down import costs.

The euro hit its highest level in more than a year against a broadly weaker dollar on Tuesday and is up roughly 3 percent since just before Draghi's Sintra speech.

“A strong euro has also raised expectations that they will not sound overly hawkish,” said Benjamin Schroeder, a rates strategist at ING.

Most euro zone government bond yields were 1-2 basis points lower. Germany's benchmark 10-year Bund yield dipped 1 bps to 0.55 percent, off recent 18-month highs.

Germany on Wednesday sold 805 million euros of 30-year government paper.

Concerns that central banks globally are gearing up for a tighter monetary policy stance have been eased in the past week by weak U.S. economic data. On Tuesday, weaker-than-expected inflation numbers in Britain also dampened talk of a rate hike in the months ahead, lifting broader bond market sentiment.

“On the issue of tapering, which has been obsessing the market, we're unlikely to get anything tomorrow and that is reassuring the market,” said Antoine Bouvet, rates strategist at Mizuho. “But that doesn't mean the ECB will be dovish or pessimistic about growth – there's no reason for that either.”

A slew of upbeat updates from European firms helped the region's benchmark index rise on Wednesday and recoup some of the previous session's sharp losses, though weakness among construction firms and cyclical sectors weighed.

The pan-European STOXX 600 index rose up 0.2 percent while the blue chips were flat in percentage terms.

Dutch semiconductor equipment maker ASML, up 3.7 percent, boosted the tech sector. The firm beat quarterly earnings estimates thanks to strong demand from manufacturers of memory chips.

Europe's tech sector has gained more than 14 percent so far this year, but worries over stretched valuations, especially among U.S. peers, have put the brakes on this rally.

Strong first-half profit growth boosted shares in Georg Fischer 6 percent to the top of the STOXX, while French video games maker Ubisoft jumped more than 5 percent on the back of a strong sales update.

Overall earnings in the second quarter are expected to grow by 7.9 percent from the same period last year, which would be an increase of 5.6 percent excluding the energy sector, according to Thomson Reuters I/B/E/S estimates.

“We would like to see those stronger earnings coming through and Europe really turning a corner,” said Dafydd Davies, partner at Charles Hanover Investments.

Energy stocks fell 0.1 percent, putting pressure on Britain's FTSE 100, while banks were 0.2 percent lower, extending yesterday's slide as Goldman Sachs put pressure on U.S. lenders.

Heavy losses for builder NCC and lock maker Assa Abloy weighed on the construction sector, which fell 0.6 percent.

NCC slumped more than 9 percent after its second quarter pretax profit came in below expectations, while Assa Abloy dropped 8.5 percent after saying that demand in China had turned sour again in the second quarter.

Cross-border deal-making rolled on with Reckitt Benckiser up 1.3 percent after saying it would sell its food business to U.S. spice and herbs co McCormick & Co Inc for $4.2 bln. Reckitt shares were the biggest boosts on the FTSE 100.

Shares in Spanish firms Aena and Abertis were suspended following a report that the Spanish airport operator had studied a possible takeover offer for the highway concessions company.

EURUSD

The EURUSD had a bullish momentum yesterday topped at 1.1583. The bias remains bullish in nearest term testing 1.1615 (weekly EMA 200 and 2016 high). A clear break above that area could trigger further bullish pressure testing 1.1712 area (2015 high). Immediate support is seen around 1.1510. A clear break below that area could lead price to neutral zone in nearest term testing 1.1470 area but as long as stay above 1.1285 key support I remain bullish and any downside pullback should be seen as a good opportunity to buy.

GBPUSD

The GBPUSD attempted to push higher yesterday topped at 1.3125 but whipsawed to the downside and closed lower at 1.3039, formed a bearish pin bar as you can see on my daily chart below. I still prefer a bullish scenario at this phase, but a bearish pin bar formed at a key resistance level (1.3100) is always a serious threat to a bullish run. The bias is bearish in nearest term testing 1.2950 region. On the upside, we need a clear break and consistent movement above 1.3100 to continue the bullish scenario targeting 1.3350 or higher. On the other hand, a clear break and daily close below 1.2950 would expose 1.2850/00 support area.

USDJPY

The USDJPY had a bearish momentum yesterday bottomed at 111.68. The bias remains bearish in nearest term testing 111.45 as a part of the bearish phase after formed a double top formation (114.50) and bearish pin bar as you can see on my daily chart below. A clear break and daily close below 111.45 would expose 110.25 support area and the trend line support. Immediate resistance is seen around 112.35. A clear break above that area could lead price to neutral zone in nearest term testing 112.75 region. Overall I remain neutral.

USDCHF

The USDCHF had a bearish momentum yesterday bottomed at 0.9523. The bias remains bearish in nearest term testing 0.9450 but note that 0.9550 – 0.9450 remains a key support and good place to buy with a tight stop loss below 0.9450. Immediate resistance is seen around 0.9580. A clear break above that area could lead price to neutral zone in nearest term testing 0.9630 area but key resistance remains at 0.9700 – 0.9756 region. On the downside, a clear break and daily close below 0.9450 would expose 0.9250 region.

WTI Oil was threading water during the past few sessions and holding within 100-pips range, with upside attempts being capped by 55SMA and 10 SMA holding the downside.

The oil price moved higher on Wednesday after previous day's release of API report showed strong draw in gasoline inventories (5.5 million barrels) which offset unexpected build in crude inventories (1.6 million barrels vs forecasted draw of 3.5 million barrels).

However, rising output from OPEC producers continues to weigh and keep the upside limited.

Technical studies remain bullishly aligned and supportive for final push towards key near-term barrier at $47.30 (04 July high / base of widening daily cloud), break of which would generate strong bullish signal.

Meanwhile, oil price may remain in prolonged consolidation as daily slow stochastic reversed from overbought territory.

Dips should be ideally contained by 10SMA ($45.68) and rising 20SMA ($45.28) in extension, to keep bullish stance intact.

Focus in on today's EIA weekly crude stocks report which shows forecast for a draw of 3.2 million barrels (well below previous week's 7.5 million barrels draw) but release at / above forecasted level should keep oil prices supported.

Disappointing numbers in oil crude stocks today (release below forecasted level or build of inventories) may put oil prices under fresh pressure.

Res: 46.61, 46.90, 47.30, 48.23
Sup: 46.13, 45.80, 45.68, 45.28