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'The weak trajectory of consumer spending at the end of second quarter adds some challenges to the third-quarter consumption outlook, which reinforces our view that growth will step down modestly in the current quarter.' - Michael Feroli, JPMorgan

Consumer prices in the United States were flat, while retail sales dropped for the second consecutive month in June. The Labour Department reported on Friday that its CPI registered an unchanged reading in the observed month, missing market expectations for a 0.1% rise, as the cost of mobile services and gasoline declining. On a yearly basis, the index surged 1.6% in June, continuing to ease from February's 2.7%, when it showed the strongest gain in five years. Furthermore, the so-called core inflation rose by the same margin of 0.1% for the third straight month. Meanwhile, the country's retail sales registered a 0.2% drop in the reported month, affected by declines in receipts at supermarkets, clothing stores and service stations. Data showed the largest monthly fall of 1.3% in gas station sales. Overall, economists suggested that the weaker-than-expected reports are set to diminish expectations for the Fed to raise interest rates for the third time this year, with inflation being the main uncertainty factor to define the course of further monetary policy changes.

Daily Pivots: (S1) 146.43; (P) 147.00; (R1) 147.99; More

Intraday bias in GBP/JPY stays neutral with mixed near term outlook. On the upside break of 147.76 will resume rise from 138.65. And firm break of 148.42 key resistance will also resume the whole rally from 122.36 to long term fibonacci level at 150.43 and above. Meanwhile, on the downside, break of 145.25 will revive the case of rejection from 148.09/42 resistance zone. Intraday bias would then be turned back to the downside for 55 day EMA (now at 143.72) and below.

In the bigger picture, rise from medium term bottom at 122.36 is expected to continue to 38.2% retracement of 196.85 to 122.36 at 150.43. Decisive break there will carry long term bullish implications and pave the way to 61.8% retracement at 167.78. In case the sideway pattern from 148.42 extends, we'd be looking for strong support from 135.58 and 50% retracement of 122.36 to 148.42 at 135.39 to contain downside.

EUR/USD

Weaker than expected US data released on Friday sent the greenback down across the board, with the EUR/USD pair ending Friday at 1.1469, not far from a fresh yearly high of 1.1489 set last week. US inflation for June came in flat, disappointing for a fourth consecutive month, up by 1.6% from a year earlier. Core CPI YoY resulted at 1.7% the lowest in over two years. Retail Sales also came below market's expectations, falling 0.2% in June, down for a second consecutive month, while consumer confidence, according to the Michigan index, fell down to 93.1 for July against previous 95.1.

The Fed is still in the path of rising rates for a third time this year and shrinking its balance sheet, according to Yellen's semi-annual testimony before the Congress, but she also said that not much more hikes are required to reach "normal." The figures released on Friday may it tougher for the central bank to continue with its tightening policy, while for the ECB, expectations built for QE tapering, with the market expecting some sort of announcement in the September meeting, not the one that will take place this upcoming week. Divergences on economic policies between the two institutions are beginning to dwindle, but still present, preventing the pair for breaking higher.

From a technical point of view the pair retains a bullish bias, albeit still unable to clearly surpass the current 1.1460 region, from where the pair retreated multiple times since January 2015. In the daily chart, technical indicators resumed their advances within positive territory after correcting overbought conditions, whilst the 20 DMA heads below the current level and around a daily ascendant trend line coming from June 28th, all of which favors additional advances. In the 4 hours chart, the price settled above its 20 SMA, whilst technical indicators advanced above their mid-lines, also supporting additional gains on a break above 1.1490, the yearly low and immediate resistance.

Support levels: 1.1420 1.1380 1.1340

Resistance levels: 1.1490 1.1525 1.1560

USD/JPY

The USD/JPY pair closed the week at 112.53, down on broad dollar's weakness, as the DXY sunk to fresh YTD lows on softer-than-expected US inflation figures. The pair traded as low as 112.26, bouncing modestly ahead of the close as US Treasury yields recovered some ground ahead of the closing bell. The 10-year note benchmark fell to 2.29% after settling at 2.32%, still down from previous 2.35%, while the 2-year note yields, the most sensitive to rate moves, fell to its lowest in three weeks. Japan will start the week with a bank holiday, which may result in limited action at the beginning of the week, whilst the BOJ will have its monetary policy meeting on Thursday. Governor Kuroda is not expected to surprise markets, reaffirming the need to maintain easing to achieve a sustainable 2% inflation. Anyway, the pair is a brick of breaking lower, as in the daily chart the price broke below its 200 DMA, while standing barely above the 38.2% retracement of its latest weekly advance, at 112.30. Technical indicators in the same chart have turned strongly lower and are about to cross their mid-lines into negative territory, suggesting that a downward move through the mentioned Fibonacci support should lead to additional losses. In the 4 hours chart, the price settled below the 100 SMA for the first time since mid June, while technical indicators have lost their bearish strength, but remain within negative territory, in line with the longer term perspective.

Support levels: 112.30 111.90 111.60

Resistance levels: 112.80 113.15 113.50

GBP/USD

The GBP/USD pair broke higher and settled around 1.3100, its highest since September last year, as hopes for a softer Brexit kept the Pound bid during the second half of the week, with the rally later fueled by USD weakness. PM Theresa May have asked opposition Labour for support with the Brexit, and news last week showed that she is considering setting up a cross-party Brexit commission, which somehow backed the case for a more EU friendly Brexit. The pair tripped stops above previous 2017 high on US weak data, topping on Friday at 1.3113. Next Tuesday, the UK will release its June employment figures, expected to remain close to 3%, but hopes of a rate hike cooled down on poor local data, putting the BOE on a tough position ahead of their next monetary policy meeting. In the meantime, the daily chart shows that the Momentum remains above its 100 level with limited upward strength, but also that the RSI indicator heads sharply higher at 67 as the 20 SMA advanced below the current level, in line with additional gains for this Monday. In the 4 hours chart, technical indicators have eased partially, but remain within extreme overbought levels, while the price stands far above its moving averages. 1.3047, the previous yearly high is the immediate support, and as long as it holds, the risk will remain towards the upside.

Support levels: 1.3050 1.3010 1.2965

Resistance levels: 1.3120 1.3160 1.3200

GOLD

Gold prices recovered strongly on Friday, ending the week up on poor US data that cooled down expectations of firm tightening in local monetary policy. Spot gold settled at $1,228.23 a troy ounce, recovering from a 4-month low of 1,204.75 set at the beginning of the past week. The recovery took off some of the downward pressure over the bright metal, but it´s still not enough to confirm an interim bottom ahead of further recoveries, as in the daily chart, selling interest rejected the advance around a bearish 20 DMA, at 1,232.80, while technical indicators barely managed to recover some ground, still well below their mid-lines. Shorter term, and according to the 4 hours chart, the upward potential also seems limited, as spot was unable to surpass a strongly bearish 100 SMA, whilst technical indicators turned lower within positive territory. In this last time frame, the 20 SMA provides a dynamic support at 1,220.70, with a break below it favoring a bearish extension for this Monday.

Support levels: 1,216.60 1,208.30 1,199.20

Resistance levels: 1,225.60 1,236.50 1,242.50

WTI CRUDE OIL

Crude oil prices recovered ground this past week, and West Texas Intermediate futures settled at $46.67 a barrel, up 5.2%. A broadly weaker dollar helped the commodity advance, as fears over an oversupply market persist, as the Baker Hughes report released on Friday showed that the number of active US rigs drilling for oil increased by 2 to 765. Backing the commodity were news indicating supply issues in Nigeria, with a pipeline shutdown. Daily basis, WTI presents a modest positive tone, with the price above its 20 SMA, the Momentum indicator lacking directional strength, but within positive territory, and the RSI indicator heading north around 57. In the same chart, however, the 100 DMA heads lower around the 61.8% retracement of the latest daily fall around 48.20, while the commodity topped around the 50% retracement of the same slide in the precious week around 47.20, prize zones where selling interest will likely appear. In the 4 hours chart, the upside is favored, with technical indicators heading higher within positive territory and the 20 SMA having surpassed its 100 and 200 SMAs below the current level.

Support levels: 45.90 45.20 44.60

Resistance levels: 47.20 47.70 48.20

DJIA

Wall Street surged to record highs on Friday, boosted by poor US data on speculation that it will force the Fed to ease its tightening bias. The Dow Jones Industrial Average and the S&P settled at record highs, with the first up 84 points to 21,637.74 and the second adding 0.47% to 2,459.27. The Nasdaq Composite added 11 points, to close the day at 2,459.27. Financial equities were the worst performers in the country, on earning reports. JPMorgan reported much better-than-expected second quarter earnings, but the bank lowered its net interest income forecast for the year, while Wells Fargo also beat on earnings, but revenues were below expectations. Finally, Citigroup also reported good results for Q2, but the bank reported a slowdown in its trading results. Within the DJIA JP Morgan was the worst performer, down 0.91%, while Wal-Mart led advancers, up 1.72%. Technically, the Dow daily chart shows that the index settled far above all of its moving averages, with the RSI indicator heading north around 67, and the Momentum lacking directional strength within positive territory. In the 4 hours chart, technical indicators eased modestly within overbought territory, whilst the 20 SMA surged above the largest, acting as dynamic support some 100 points below the current level. The index traded as high as 21,682 intraday, the immediate resistance and the level to break to open doors for an extension towards 22,000 this upcoming week.

Support levels: 21,628 21,576 21,531

Resistance levels: 21,682 21,735 21,780

FTSE100

The FTSE 100 closed at 7,378.39, down 0.47% or 34 points last Friday, despite the strong performance of mining-related equities, as a resurgent Pound weighed on its export-oriented components. Anglo American was the best performer, adding 2.10%, while Fresnillo and Randgold Resources added over 1%each, also making it to the top ten list. Barratt Developments led decliners with a 2.50% loss, followed by Royal Mail that shed 2.43%, after presenting a new pension proposal, while the company with a "sell" rating. Technical readings in the daily chart favor the downside, as the index settled a few points below a bearish 20 DMA, whilst technical indicators resumed their declines after failing to surpass their mid-lines. In the 4 hours chart, the index is below its 100 and 200 SMAs and around a bullish 20 SMA, whilst technical indicators hover within positive territory, without clear directional strength, failing to provide directional clues.

Support levels: 7,362 7,333 7,304

Resistance levels: 7,413 7,439 7,482

DAX

The German DAX closed 9 points or 0.08% lower on Friday at 12,631.72, as European equities were weighed down by the poor performance of the banking sector, hit my earning reports from their overseas counterparts. In Germany, Commerzbank led decliners with a 1.10% lost, followed by Bayerische Motoren that shed 1.06%. Volkswagen led advancers, up 1.08%, followed by BASF that added 0.92%. The pharmaceutical sector advanced, which helped limiting losses. Despite Friday's slide, the index closed sharply up for the week, but presents a neutral stance according to technical readings, given that in the daily chart, the index stands a few points above a modestly bearish 20 DMA, while technical indicators hold flat around their mid-lines. In the 4 hours chart, the 20 SMA heads sharply higher below the current level, but the index continues hovering around directionless 100 and 200 SMAs, whilst technical indicators lack directional strength, but hold well above their mid-lines. The index topped last week at 12,677, now the immediate resistance and the level to break to see further gains during the upcoming sessions.

Support levels: 12,617 12,565 12,521

Resistance levels: 12,689 12,732 12,774

Daily Pivots: (S1) 128.57; (P) 129.04; (R1) 129.49; More...

Intraday bias in EUR/JPY remains neutral for consolidation below 130.76 short term top. Deeper fall might be seen. But downside should be contained by 127.43 cluster support (38.2% retracement of 122.39 to 130.76 at 127.56) and bring rebound. Above 130.76 will extend the larger rally to next key fibonacci level at 134.20.

In the bigger picture, the down trend from 149.76 (2014 high) is completed at 109.03 (2016 low). Current rally from 109.03 should be at the same degree as the fall from 149.76 to 109.03. Further rise is expected to 61.8% retracement of 149.76 to 109.03 at 134.20. Sustained break there will pave the way to key long term resistance zone at 141.04/149.76. Medium term outlook will remain bullish as long as 124.08 resistance turned support holds.

Daily Pivots: (S1) 0.8723; (P) 0.8770; (R1) 0.8796; More

Intraday bias in EUR/GBP remains on the downside for the moment. Rebound from 0.8312 should have completed at 0.8948, on bearish divergence condition in 4 hour MACD. Deeper fall would be seen to 38.2% retracement of 0.8312 to 0.8948 at 0.8705 first. Break will target 61.8% retracement at 0.8555 next. On the upside, above 0.8816 minor resistance will turn intraday bias neutral and bring recovery. But deeper decline is now in favor as long as 0.8948 resistance holds.

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.

In stark contrast to the US, China printed a positive data set today, with growth, investment, production and retail sales all beating expectations.

GDP expanded at an annual rate of 6.9% in Q2, beating expectations of a reduction to 6.8% and maintaining the solid pace of Q1. This is the 2nd positive surprise from GDP this year, where many feared growth would soften. The government has switched from growth revival to growth preservation, although it would appear growth is doing just fine.

Since moving below 7% in Q3 2015, growth has ranged between 6.7 – 6.9%. The lack of volatility from the quarterly reads has also aroused suspicion over the accurate if the data as some question whether real growth is being dressed up. Still, global market can take a sign of relief for now that a hard landing is not on the horizon and may begin to consider the low has been seen at 6.7%.

Retail sales beat expectations to rise 11% YoY, up from 10.7% previous and above 10.6% forecast. At 11% YoY, retail sales has expanded at its fastest rate since Jan 2016 to show consumer confidence is on the rise.

PMI data suggests continued support for growth in the quarters ahead, although this also depends on which read you use. The government related NBS PMI's tend to paint a healthier look for the economy, with both manufacturing and services continuing to expand.

Industrial production also beat expectations by expanding by 7.6%, its fastest pace since march and 2nd fastest since an 2015. If the NBS PIMs are correct then we could see industrial production pick up pace from here in the coming months and provide further support for growth.

USDCNH printed a bearish outside week to warn of pending weakness. As this follows on from a volatile, bearish engulfing candle two weeks ago and failed to recover 50% of its range, we can consider this to be a key swing high. Whilst prices have stabilised above support we are seeking to fade into the rally and move towards the 6.72 low. We have outlined a bearish channel yet the bearish engulfing candle from two weeks ago failed to test the upper trendline. Therefor we are also on guard to revise this channel, as current price action suggests its trajectory may become more bearish. When we assess US data and USD sentiment, we do see potential for this to roll over at some point.

The two swing highs which form the bearish channel are taken from the bearish engulfing highs. As we trade below the monthly pivot yet have stabilised above support, we can consider fading into a retracement towards the monthly pivot. A break above the pivot or upper trendline invalids the bearish setup, yet whilst we remain beneath these levels then a run down to WS1 and WS2 are our targets. We can either use a break of last week's low to assume a bearish continuation, or pre-empt
a bearish run and use a sell-limit order below the pivot to catch a mini rally.

Daily Pivots: (S1) 1.4599; (P) 1.4675; (R1) 1.4723; More...

Intraday bias in EUR/AUD remains on the downside for the moment. Break of 1.4625 support will extend the correction from 1.5226 to 100% projection of 1.5226 to 1.4625 from 1.4472 next. We'll look for bottoming signal below 1.4472. On the upside, above 1.4705 minor resistance will turn bias neutral and bring consolidations. But deeper fall is still expected as long as 1.5073 resistance holds.

In the bigger picture, we're holding on to the view that corrective decline from 1.6587 medium term has completed at 1.3624. But we will monitor the structure of the decline from 1.5226 to adjust our 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.

Daily Pivots: (S1) 1.1016; (P) 1.1044; (R1) 1.1076; More...

With 1.0983 support intact, further rally is still expected in EUR/CHF. Current rise from 1.0629 should target 1.1127/98 resistance zone. However, break of 1.0983 will indicate short term topping and turn bias back to the downside for 55 day EMA (now at 1.0899).

In the bigger picture, the price actions from 1.1198 are seen as a corrective move. Such correction could have completed after defending 38.2% retracement of 0.9771 to 1.1198 at 1.0653. Decisive break of 1.1198 will resume the long term rise from SNB spike low back in 2015. In such case, EUR/CHF could eventually head back to prior SNB imposed floor at 1.2000. However, rejection from 1.1198 will extend the multi-year range trading with another fall.

EUR/USD

Current level - 1.1459

The bias is positive, for a break through 1.1490, towards 1.1550 and 1.1610. Intraday allow a dip to 1.1430 support area and an eventual violation of that area will challenge 1.1380 again.

USD/JPY

Current level - 112.64

My outlook here remains negative, for a break through 111.75 area, towards 110.30 zone. Initial intraday resistance lies at 112.80 and crucial on the upside is 113.50. 

GBP/USD

Current level - 1.3090

The impulsive rise broke through 1.3050 resistance and the bias remains positive, for a violation of 1.3130 area, towards 1.3260 zone. Key support is projected at 1.3030.

The EUR/USD has bounced above Weekly L3 camarilla, that suggest a possible upmove continuation. We can see two POC zones. The POC1 (W L3, ATR Pivot, D L4, order block, 50.0, EMA89) 1.1420-35 could spike the price towards 1.1475 and 1.1505, while in the case of deeper retracement , he pair might hit the POC2 (88.6,trend line, ATR low, D L5) 1.1400-1.1385 and then spike again towards 1.1440, 1.1475 and 1.1505. In that case it will form inverted head and shoulders pattern (bullish shs) which will be another sign of uptrend continuation.