Sample Category Title
Trade Idea : GBP/USD – Stand aside
GBP/USD - 1.3111
Most recent candlesticks pattern : N/A
Trend : Near term up
Tenkan-Sen level : 1.3128
Kijun-Sen level : 1.3111
Ichimoku cloud top : 1.3091
Ichimoku cloud bottom : 1.3079
New strategy :
Stand aside
Position : -
Target : -
Stop : -
Despite rising to 1.3152 on Friday, as cable has retreated after faltering below indicated resistance at 1.3159 (last week’s high), retaining our view that further consolidation below this level would be seen and pullback to the lower Kumo (now at 1.3079) cannot be ruled out, however, reckon support at 1.3052 would hold, bring further sideways trading. Only a drop below tis support would signal a temporary top has been formed, bring retracement of recent upmove to 1.3030, then towards support at 1.2999 which is expected to hold from here.
On the upside, above said resistance at 1.3152-59 would revive bullishness and signal recent upmove has resumed and extend further gain to 1.3185-90 and then 1.3210-20, however, loss of upward momentum should prevent sharp move beyond 1.3240-50, bring another retreat later.
USDJPY Intraday Analysis
USDJPY (110.55): USDJPY extended the declines on Friday, closing at fresh 2-month low. Price action was seen posting a fresh two month decline earlier today before pulling back. A close above 110.80 will signal a move to the upside on a daily basis. Resistance is seen at 111.77. Currently, the price action on the 4-hour chart suggests a potential falling wedge pattern in the making. A lower high is to be expected. However, if USDJPY can establish support at 110.81, then we could see a near-term push towards 111.77.
GBPUSD Intraday Analysis
GBPUSD (1.3121): The British pound continued to consolidate above 1.3025. Friday's price action has result in an inside bar formation as well. Support at 1.3025 will be critical as a breakdown below this level could signal sharp declines to 1.2818. On the 4-hour chart, GBPUSD has formed an inside bar. An intraday close below 1.1312 could send GBPUSD lower on the day. The initial support is seen at 1.3025 followed by a decline to 1.2818.
EURUSD Intraday Analysis
EURUSD (1.1732): The EURUSD rallied on Friday, but the range established was within Thursday's high and low. The inside bar that was formed as a result could potentially signal a breakout in the near term. The direction of the breakout will signal the near-term trend in prices. To the downside, the main support is established near 1.1635 which could be tested if price action breaks out from last Thursday's low of 1.1649. If the support at 1.1635 fails to hold the declines, then expect further declines in EURUSD towards the next main support at 1.1475.
Q2 GDP Data Fails To Impress As US Dollar Extends Declines
On Friday, the second quarter gross domestic product data was released which showed that the US economy expanded at a pace of 2.6% in the three months ending June. This was slightly below consensus estimates of 2.7%. The greenback extended the declines falling to a fresh 14-month low as a result. The US dollar index was down 0.7% closing at 93.25 which marked the lowest close since May last year.
Looking ahead, the economic data today will focus on the flash inflation estimates for the eurozone. Economists are expecting inflation to remain steady, rising 1.3% on the headline and 1.1% on the core, same as the month before.
Later in the day, the US Chicago PMI and pending home sales report will be released. With today being the last trading day of the month, expect to see some profit booking and some volatility in the US dollar.
Geo-Political Tensions Rise
The past few days have seen geo-political tensions rise between North Korea, the US, Russia & China. North Korea's recent ICBM test further fueled the United States condemnation of the regime, with the US asking China to impose sanctions on North Korea. North Korea claims the recent successful missile test now brings the mid-west of the US and possibly New York within range. In a 'show of force' the US flew 2 jets close to North Korea over the weekend and have made it clear that they will take the 'necessary' force to ensure US security is not undermined.
On Friday, the US imposed sanctions against Russia as a result of Russian interference in last year's Presidential election, Russia has now demanded that the US remove 755 diplomatic staff by September. The markets will be keenly awaiting news of more sanctions and further deterioration of diplomatic relations between the US, Russia, North Korea and China. Recent Chinese manufacturing purchasing managers index data showed a positive sentiment towards the Chinese economy which will help many economies globally, specifically those in the Pacific rim. The markets will be awaiting Central Bank statements this week from the RBA and BoE, and the release of, the always impactful, US NFP on Friday.
EURUSD remains buoyed by USD weakness, holding well above 1.1700 to currently trade around 1.1735.
USDJPY has weakened over the weekend by 0.1% to currently trade around 110.60.
GBPUSD has also benefited from USD weakness and currently trades around 1.3130.
AUDUSD was helped by healthy Chinese data pushing AUD higher to currently trade around 0.7980.
Gold is little changed at $1,268.50 and is set for a 6th month of gains in 7 months.
WTI traded above $50pb, the first time it has done so since May, in early Monday trading. WTI currently trades around $49.95pb.
At 10:00 BST Eurostat will release Eurozone CPI & Core CPI (YoY) (Jul). Market consensus is for no change in the reading from the previous reading of 1.3%. With the ECB inflation target of 2% it appears highly unlikely such a level will be reached anytime soon – prolonging any possibility of an interest hike in the Eurozone. At the same time, Eurostat will release Eurozone Unemployment, with the consensus being 9.2% a slight improvement from the previous 9.3%. The ECB will want to see this rate fall substantially to show a strong labour market and therefore a strong economy.
Later in the day, at 14:45 BST, ISM-Chicago will release the Chicago Purchasing Managers Index (Jul). Confidence in the strength of the US economy has come into question of late and the consensus of 61.3 (prev. 65.7) will do little to calm markets perception of this.
EUR/CHF Upside Stopped By Confluence Area
EUR/CHF has found strong resistance at the confluence area formed between the second warning line (WL2) with the warning line (wl1) of the minor ascending pitchfork. A retreat was favored after the impressive rally, so he could come back towards the upper median line (uml) of the minor ascending pitchfork.
GBP/USD Losing Direction
Is still trapped within an ascending channel, but has failed once again to reach the 150% Fibonacci line (ascending dotted line) and the upside line of this chart pattern. GBP/USD is bullish on the short term and should climb much higher after the breakout above the upper median line (UML), has retested this level.
Maybe the rate needs to recapture more directional energy before will jump much higher on the short term, so we may see a minor consolidation in the upcoming days. We may have a buying opportunity if will come to retest the warning line (wl1) of the minor ascending pitchfork.
EUR/USD Poised For Further Gains?
Price decreased a little in the morning as the USDX has managed to increase a little in the morning, the index is struggling to stay above the 93.17 previous low. USDX is under massive selling pressure on the Daily chart and could drop further because we don’t have any reversal sign right now.
The greenback will lose more ground versus its rivals if the USDX will slip towards the 92.49 major static support, a drop towards this level is favored because I don’t believe that the US data will impress in the upcoming period.
The Euro may resume the upside movement if the Euro-zone data will come in better than expected, the German Retail Sales have increased by 1.1%, more versus the 0.1% estimate and compared to the 0.5% growth in the former reading period. We’ll see how the EUR/USD will react when the Euro-zone CPI Flash Estimate will be released, the indicator should increase by 1.3% in July, while the Core CPI Flash Estimate may increase by 1.1%, like in the former reading period. The Unemployment Rate will be released as well and could decrease from 9.3% to 9.2%.
Price is testing the broken dynamic resistance (wl7) and should retest also the 1.1711 static support (resistance has turned into support) as well. We may have a buying opportunity if the rate will consolidate above these levels, but I want to remind you that a failure to reach the upper median line (uml) of the ascending pitchfork will send the rate towards the median line (ml).
EUR/USD maintains a bullish perspective on the short term, so only a false breakout above the warning line (wl7) and above the 1.1711 level will signal another leg lower.
Trade Idea : EUR/USD – Stand aside
EUR/USD - 1.1732
Most recent candlesticks pattern : N/A
Trend : Near term up
Tenkan-Sen level : 1.1743
Kijun-Sen level : 1.1726
Ichimoku cloud top : 1.1695
Ichimoku cloud bottom : 1.1695
New strategy :
Stand aside
Position : -
Target : -
Stop : -
Although the single currency staged a strong rebound after finding support at 1.1650, a break of last week’s high at 1.1777 is needed to signal recent upmove has resumed and extend gain to 1.1784-85 (50% projection of 1.1370-1.1712 measuring from 1.1613). then 1.1800 but loss of near term upward momentum should prevent sharp move beyond 1.1820-25 (61.8% projection), risk from there has increased for a retreat later.
In view of this, would not chase this rise here and would be prudent to stand aside for now. Below 1.1690-95 would bring test of said support at 1.1650 but break there is needed to signal a temporary top is possibly formed, bring further weakness towards support at 1.1613, having said that, price should stay well above previous resistance at 1.1583 (now support), bring another rise later.
