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The Euro eases from session high at 1.1474, showing again hesitation under 1.1500 resistance zone, following multiple upside rejections last week.

The pair was so far unable to capitalize on Friday's strong rally, signaling extended trading within recent 1.1370/1.1489 range.

Bullish daily studies remain supportive for further upside, with extended dips expected to hold above strong support at 1.1400 (daily Tenkan-sen) and keep bulls intact for renewed attempts higher.

However, daily RSI / slow stochastic bearish divergence warn of deeper pullback, with increased downside risk seen on break below 1.1400 / 1.1370 (13 July low) pivots.

ECB's policy meeting, due later this week is in focus, as traders will be looking for more hints about ECB's next steps, as markets have understood recent comments from central bank's president Mario Draghi as hawkish and initial signals of beginning of tightening monetary policy.

Current structure favors dip-buying scenario for extension of broader uptrend towards key barriers at 1.1614 and 1.1712 (May 2016 and Aug 2015 highs).

Alternatively, loss of 1.1300 support (05 July trough) would sideline bulls for deeper correction.

Res: 1.1474, 1.1489, 1.1500, 1.1527
Sup: 1.1423, 1.1400, 1.1391, 1.1370

EUR/USD another rejection?

Price touched new highs in the morning, but the bulls failed to keep the rate above the 1.1471 Friday's high and now is trading in the red. EUR/USD continues to be trapped within a major resistance area, so maybe will be better to stay away till we'll have a valid breakout from this range.

Is moving somehow sideways on the Daily chart, technically is still showing some exhaustion signs, but we still need a confirmation that will turn to the downside again.

The Euro-zone Final CPI and the Final Core CPI will be released later, remains to see what impact will have. The Final CPI should increase by 1.3% in June, matching the 1.3% growth in the former reading period, while the Final Core CPI may increase by 1.1% in the previous month.

Price slipped below the 1.1450 level as the dollar index managed to rebound and to recover after the impressive sell-off. USDX remains under massive selling pressure on the short term, has found temporary support at the 95.05 level and now is fighting hard to recover.

Technically, we may still have a Falling Wedge pattern on the USDX if will stay above the 95.00 psychological level.

EUR/USD retested the median line (ML) of the ascending pitchfork and the 1.1466 long term static resistance and now is going down. Technically another leg lower is favored at this moment after the failure to jump above the mentioned resistance levels and after the failure to reach the 1.1488 previous high.
A bearish opportunity will appear if the Rising Wedge pattern will be confirmed, so we have to wait for a valid breakdown from the potential chart pattern to be sure that we'll have a large corrective phase.

EUR/GBP selling opportunity?

The EUR/GBP dropped significantly in the previous three days and looks determined to reach fresh new lows in the upcoming period. Has fallen in the seller's territory, so we may have a selling opportunity these days if will come back higher to retest the broken support level.

A sell-off is expected to come after the breakdown below the median line (ml) of the ascending pitchfork, has failed to stay above the 100% Fibonnacci level and above the second warning line (wl2) of the former descending pitchfork.
We'll have a perfect selling opportunity if the rate will come back to test and retest the major confluence area formed between the 100% level, ML and the warning line (wl2). The next downside target will be at the lower median line (LML) of the ascending pitchfork.

EUR/CHF breakout attempt

Price is trading in the green on the Daily chart, signalling that the bulls are still in the game, is still bullish after the minor retreat and looks motivated to climb much higher in the upcoming period. Is trading right above the 1.1050 psychological level and is pressuring the upper median line (UML) of the major ascending pitchfork, a valid breakout will confirm a further increase.

However, another false breakout will send the rate towards the lower median line (lml) of the minor ascending pitchfork.

Bullish sentiment remained high in Asia as a weaker U.S. Dollar gives helpful tailwinds to both oil and gold.

Oil

Crude oil opened in Asia in a positive mood, with both Brent and WTI rising slightly following on from last week's positive price action. The Baker Hughes Rig Count, released very late on Friday in New York, showed an unchanged headline number at 952 with only a two rig increase in active oil rigs. The slowing pace of increases combined with massive drawdowns last week on both official crude inventory numbers from the U.S. probably explains the positive sentiment in general at the moment.

As we look to the week ahead, attention will remain focused on the U.S. API, and EIA Crude Inventory counts with next Monday the 24th also being an OPEC/Non-OPEC technical management meeting in St Petersburg. Nigeria and Libya have been “invited” to attend, but we feel the chances of either joining the overall cuts is remote as are the chances of any other surprises on that front. Last week's price action has taken the heat of the grouping, for now.

Brent spot trades 48.95 this morning with resistance at 49.70 and then 50.00. Support is at 48.00 and then 47.00.

WTI spot trades at 46.65 with resistance initially at 47.20 before the more formidable 48.20 region. Home to the 100-day moving average. Support comes in at 45.70 and then 45.00.

Gold

Gold picked itself up off the floor Friday, propelled by weaker U.S. CPI and Retail Sales numbers, to rise a stunning 18 dollars to trade as high as 1233.00 before closing at 1228.00. Gold should continue to benefit as yet another set of weak U.S. data forces the world and possibly the Federal Reserve, to reassess the trajectory of U.S. interest rates.

The key resistance level at 1230.50, the 200-day moving average, remained intact as of Friday's close. This morning though, Asia has seized on Friday's move with gold trading through this level to 1232.00 in early trading. Precious metals, in general, should find support on any dip in the early part of the week as Friday's fallout continues.

Gold's next major resistance lies around 1240.00 and then 1247.70, the 100-day moving average. The 1230.50 should be an intra-day pivot with nearby support at 1226.50 and then 1218.50

Early indications from Asia this morning are pointing towards a strong day for global equities, continuing the momentum from last week. Data released shows China GDP at 6.9% (markets had expected 6.8%), indicating the Chinese economy has stabilized. In addition, Chinese President Jinping said that 'the central bank will play a stronger role in defending against risks' and he called for more work on safeguarding the financial system and modernizing its regulatory framework. The buoyant Global equity markets were also helped as Chicago Federal Reserve President Evans expressed concerns on Friday about the Fed's inflation target running below 2% and that such economic conditions required a very gradual rise in interest rates. The most recent CME Fedwatch tool has seen the chances of a December hike in US rates fall to 43.1% from 55%. As global economic conditions improve, and with a degree of caution on raising interest rates too quickly, one can foresee global equities remaining strong and reaching new highs.

Japanese markets are closed today for Marine Day.

In relatively quiet early trading EURUSD is trading around 1.1460, staying close its yearly high.

GBPUSD has been a major recipient of recent USD weakness and is currently trading around the psychological 1.3100 level.

With the Japanese holiday today USDJPY trading has been lackluster and is currently trading around 112.60.

Gold has risen 0.2% so far on the day, to currently trade around $1,231.

After last week's indication of lower US inventories and stronger demand, Oil has continued to move higher and currently trades 0.2% higher at today's high of $46.90.

The major focus today will be the release of the Eurozone Consumer Price Index (YoY) (Jun) at 10:00 BST. With the markets expecting an unchanged number at 1.2%, traders will be interested to see how the Eurozone is fairing compared to other Global Economies and if the current increase in sentiment in Europe's economies is holding true.

EURUSD

The EURUSD continued its bullish momentum last week topped at 1.1489. The bias is bullish in nearest term testing 1.1500 – 1.1530 before targeting 1.1615 area (weekly EMA 200 and 2016 high). Immediate support is seen around 1.1435. A clear break below that area could lead price to neutral zone in nearest term testing 1.1390 region but overall I remain bullish and any downside pullback should be seen as a good opportunity to buy and only a clear break back below 1.1285 would interrupt the bullish outlook. On the upside, a clear break above 1.1615 would expose 1.1712 region (2015 high).

GBPUSD

The GBPUSD had a significant bullish momentum last week, broke above 1.3050 key resistance, topped at 1.3113. This fact activates my bullish mode. The bias is bullish in nearest term testing 1.3200 area. Immediate support is seen around 1.3070/50 region. A clear break below that area could lead price to neutral zone in nearest term testing 1.3000 region. On the upside, a clear break and daily close above 1.3200 would expose 1.3350 area.

USDJPY

The USDJPY was corrected lower last week, fell below 112.75 key support. This fact activates my neutral mode with a bearish short-term bias testing 111.45 (daily EMA 200). Immediate resistance is seen around 113.00. A clear break above that area could lead price to neutral zone in nearest term testing 113.50 area which need to be clearly broken to the upside to give the bullish scenario another chance. On the downside, a clear break and daily close below 111.45 would expose 111.30/00 region.

USDCHF

The USDCHF was indecisive last week. Price attempted to push higher topped at 0.9700 but closed lower at 0.9632. The bias is bearish in nearest term testing 0.9600 but key support remains at 0.9550 – 0.9450 region which remains a good place to buy with a tight stop loss below 0.9450. Immediate resistance is seen around 0.9675. A clear break above that area could lead price to neutral zone in nearest term retesting 0.9700 area but key resistance is seen at 0.9765 region which is a good place to sell with a tight stop loss.

Asia Summary

Markets opened mixed in the wake of US data on Friday that showed weaker than expected retail sales and inflation; supporting the view that the next rate hike could be gradual. Markets remained thin with Japan closed for a holiday; Japan did report four Chinese ships near the disputed islands. Markets in China opened slightly lower before falling nearly 5% on the promise of greater coordination of financial regulation and the strengthening of weak links in supervision. The loses were later reversed when Q2 GDP, June industrial production and retail sales came in strong.

Over the weekend China held the National Financial Work Conference (held once every 5-yrs) where President Xi pledged that the PBOC would play a stronger role in defending against risks, calling for more work on safeguarding the financial system and modernizing its regulatory framework. Xi also said prudent monetary policy should be firmly implemented and the PBOC should take a stronger macro-prudential policy role (prudent policy was announced in Dec 2016). China kept with its open market operations adding back in the 14-day to Friday’s use of the 7-day. In Australia The APRA is expected to announce new stricter rules for banks this week, that are expected to cause the banks to raise capital.

Key economic data

(CN) CHINA Q2 GDP Q/Q: 1.7% V 1.7%E; Y/Y: 6.9% V 6.8%E; YTD Y/Y: 6.9% V 6.8%E

(CN) CHINA JUN INDUSTRIAL PRODUCTION Y/Y: 7.6% V 6.5%E; YTD Y/Y: 6.9% V 6.7%E

(CN) CHINA JUN RETAIL SALES Y/Y: 11.0% V 10.6%E; YTD Y/Y: 10.4% V 10.3%E

(CN) CHINA MAY FIXED ASSETS EX RURAL YTD Y/Y: 8.6% V 8.5%E

(SG) SINGAPORE JUN NON-OIL DOMESTIC EXPORTS M/M: -2.7% V -4.0%E; Y/Y: 8.2% V 5.2%E; ELECTRONIC EXPORTS Y/Y: 5.4% v 8.3%E

(NZ) New Zealand Jun Services Performance of Services Index: 58.6 v 58.8 prior

(UK) UK JULY RIGHTMOVE HOUSING PRICES M/M: 0.1% V -0.4% PRIOR; Y/Y: 2.8% V 1.8% PRIOR

Speakers and Press

China

(CN) China Premier Li: Need to have moderate credit growth and keep liquidity basically stable - National Financial Work Conference

(CN) China National Bureau of Statistics (NBS) revises methodology by including contributions from healthcare, tourism, and new economy sectors

(CN) China top graft-buster Wang Qishan attacks ruling Communist Party's members: Party political culture remains "unhealthy" and governance weak even after five years of renewed effort to fight the problem

(CN) China’s National Development and Reform Commission (NDRC) to hold a meeting with major coal producers today and may urge them to boost production for summer peak consumption season - Chinese press

(CN) China Stats Bureau (NBS): Prudent and neutral monetary policy will provide necessary liquidity in the economy, but also prevent rise in debt levels

Australia/New Zealand

(NZ) RBNZ Deputy Gov Bascand: Lower external debt is encouraging; lower NZD would help rebalance growth and reduce debt further

Korea

(KR) South Korea Defense Min proposes military talks with North Korea

Asian Equity Indices/Futures (00:30ET)

Nikkei closed, Hang Seng 0.6%, Shanghai Composite -0.1%, ASX200 flat, Kospi +0.4%

Equity Futures: S&P500 flat; Nasdaq +0.1%, Dax flat, FTSE100 flat

FX ranges/Commodities/Fixed Income (00:30ET)

EUR 1.1475-1.1457; JPY 112.69-112.40; AUD 0.7835-0.7808; NZD 0.7360-0.7316

Aug Gold +0.2% at 1,230/oz; Aug Crude Oil +0.3% at $46.69/brl; Sept Copper +0.3% at $2.70/lb

(CN) China PBoC OMO: injects CNY170B in 7 and 14 day reverse repos v CNY100B in 7-day reverse repos prior

(CN) PBOC SETS YUAN REFERENCE RATE AT 6.7562 V 6.7774 PRIOR

(KR) Bank of Korea (BOK) sells KRW0.6T in 6-month monetary stabilization bonds; avg yield 1.32% v 1.33% prior

(KR) South Korea sells 10-yr Govt bonds; avg yield 2.265%

Asia equities notable movers

Australia

Redflow Ltd,RFX.AU Announces strategic review; To raise up to A$10.5M in equity; +13.3%

Prima BioMed,PRR.AU To receive additional milestone payment from Novartis; +7.7%

Blackham Resources,BLK.AU Reports Q2 gold production 15.7K oz v 14.9K oz q/q; -13.5%

Hong Kong/China

Best Pacific International ,2111.HK Guides H1 Net profit to decline up to 30% y/y, cites lower than expected revenue from elastics business and higher costs; -24.8%

Friday US Session Highlights

Friday’s trade largely pivoted off soft readings for US consumption and consumer prices. June retail sales fell into negative territory across all categories, with the control group missing expectations by 0.4%. The core CPI (0.1%) fell short of expectations for a fourth consecutive month. New car prices (-0.3%) fell for the fifth straight month, and used car prices (-0.7%) fell for the sixth month in a row. The news put a bid into Treasury markets and a modest pressure on yields. The Greenback fell across the board. The lower rates pushed up gold prices along with REITs and Utilities. Banks and financials fell in light of decent earnings reports and conservative management commentary on the outlook. Technology stocks have continued to gain traction, keeping the NASDAQ on pace for its best week in over two months.

Daily Pivots: (S1) 0.7755; (P) 0.7794; (R1) 0.7864; More...

Intraday bias in AUD/USD remains on the upside for the moment. Firm break of 0.7833 resistance will confirm resumption of whole rebound from 0.6826 bottom. In such case, AUD/USD would target 61.8% projection of 0.6826 to 0.7833 from 0.7328 at 0.7950 next. On the downside, below 0.7739 minor support will turn intraday bias neutral first. But near term outlook will stay cautiously bullish as long as 0.7570 support holds.

In the bigger picture, current development suggests that rebound from 0.6826 is developing into a medium term rise. There is no confirmation of trend reversal yet and we'll continue to treat such rebound as a corrective pattern. But in any case, further rise is now expected to 55 month EMA (now at 0.8100) or even further to 38.2% retracement of 1.1079 to 0.6826 at 0.8451. Break of 0.7328 support is needed to confirm completion of the rebound. Otherwise, further rise is now in favor.

Daily Pivots: (S1) 1.2612; (P) 1.2679; (R1) 1.2715; More....

Intraday bias in USD/CAD remains on the downside for the moment. Current decline is expected to target a test on 1.2460 low. On the upside, above 1.2770 minor resistance will turn bias neutral and bring consolidation before staging another decline.

In the bigger picture, price actions from 1.4689 medium term top are seen as a correction pattern. Fall from 1.3793 is seen as the third leg and should target 50% retracement of 0.9406 to 1.4869 at 1.2048. At this point, we'd look for strong support from there to contain downside and bring rebound. However, firm break there will target 100% projection of 1.4689 to 1.2460 from 1.3793 at 1.1564.

Daily Pivots: (S1) 1.1415; (P) 1.1443 (R1) 1.1495; More.....

Intraday bias in EUR/USD remains neutral for the moment as consolidation from 1.1489 might extend. Below 1.1312 will bring deeper fall to 55 day EMA (now at 1.1201). In that case, downside should be contained by 1.1118 support to bring rise resumption. On the upside, break of 1.1489 will extend recent rally from 1.0339 to 1.1615 key resistance next.

In the bigger picture, the firm break of 1.1298 resistance further affirm medium term reversal. That is, an important bottom was formed at 1.0339 on bullish convergence condition in weekly MACD. Further rise would be seen to 55 month EMA (now at 1.1763). Sustained break there will pave the way to 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516 next. This will now remain the favored case as long as 1.1118 support holds.

Daily Pivots: (S1) 1.2986; (P) 1.3049; (R1) 1.3165; More...

Intraday bias in GBP/USD remains on the upside for 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. On the downside, below 1.2999 minor support will turn intraday bias neutral first.

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.