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Daily Pivots: (S1) 0.8761; (P) 0.8776; (R1) 0.8795; More...

EUR/GBP continues to stay in consolidation below 0.8879 and intraday bias remains neutral for the moment. On the downside, break of 0.8718 support will argue that rise from 0.8312 has completed. In that case, intraday bias with be turned back to the downside for lower side of the range at 0.8312. Meanwhile, break of 0.8879 and sustained trading above 0.8851 will pave the way to retest 0.9304 high.

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.

Daily Pivots: (S1) 1.4811; (P) 1.4846; (R1) 1.4867; More...

Despite breaching 1.4813 support, EUR/AUD quickly recovered. Intraday bias is neutral first and we're holding on to the bullish view. That is, pull back from 1.5226 has completed at 1.4625, ahead of 38.2% retracement of 1.3624 to 1.5226 at 1.4614. Above 1.4997 will turn bias back to the upside for 1.5226 first. However, firm break of 1.4813 will dampen this view and turn bias back to the downside for 1.4625 support.

In the bigger picture, price actions from 1.6587 medium term top are viewed as a corrective pattern. Such correction should be completed at 1.3624 after defending 1.3671 key support. Rise from 1.3642 would extend to 61.8% retracement of 1.6587 to 1.3624 at 1.5455. Sustained break there will pave the way to retest 1.6587. However, sustained break of 1.4669 support will dampen this bullish view. We'll assess the outlook later after looking at the structure and depth of the pull back.

Daily Pivots: (S1) 1.0928; (P) 1.0940; (R1) 1.0961; More...

Intraday bias in EUR/CHF remains neutral as it's staying in range below 1.0957 temporary top. Some more consolidations could be seen. But downside of retreat should be contained above 1.0884 support to bring rise resumption. As noted before, the rally from 1.0629 should be resuming. Above 1.0957 will send EUR/CHF through 1.0986/0999 resistance zone to 61.8% projection of 1.0652 to 1.0986 from 1.0830 at 1.1036.

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 1.0999 resistance will target a test on 1.1198 high. For now, this will be the preferred case as long as 1.0830 support holds.

The DAX index has ticked lower in the Tuesday session, as the index is down 0.21%. Currently, the DAX is at 12,449.50. On the release front, it's a very quiet day. There are no US events, as the markets are closed for Independence Day. The sole eurozone indicator was Eurozone PPI, which declined 0.4%, weaker than the forecast of -0.2%. On Wednesday, the Federal Reserve will publish the minutes of its June policy meeting.

The German consumer is spending more, which is good news for the German and eurozone economies. German retail sales posted a solid gain of 0.5%, in May, the strongest since February. Preliminary CPI posted a gain of 0.2% in June, beating the estimate of 0.0%. This reading was an improvement from May, which showed a decline of 0.2%. The German manufacturing sector is in good shape, boosted by a stronger demand for German exports. On Monday, German Manufacturing PMI came in at 59.6, pointing to expansion. We'll get a look at additional manufacturing data later in the week, with the release of Factory Orders and Industrial Production.

The annual European forum of central bankers is generally a non-event for the markets, but last week's gathering was a significant market-mover. Both the euro and the pound recorded sharp gains, following hawkish remarks from ECB President Mario Draghi and BoE Governor Mark Carney. The euro jumped 2.0% last week, catching ECB policymakers by surprise. The bank tried to dampen market speculation about any imminent moves to withdraw stimulus, but the euro remains at high levels. Last week's stampede to snap up euros has forced ECB policymakers to reassess whether what moves, if any to announce at the July 20 policy meeting. In June, the ECB removed an easing bias regarding interest rates, effectively closing the door to further rate cuts. However, after the Draghi rally last week, policymakers may be wary about removing a second easing bias regarding the asset-purchase program, to avoid another run on the euro. The ECB has repeated loud and clear that it will not remove QE until inflation levels are closer to the bank's target of 2.0%, but Draghi may have learned the hard way at the ECB forum that the market is picking up a different message than what the ECB thinks it is sending. This could result in the ECB playing it safe and avoiding any meaningful discussion about QE at the July meeting, especially if the euro remains at high levels.

The Federal Reserve has given broad hints that it plans to raise interest rates three times in 2017, but the markets are becoming more skeptical. The odds of a rate hike in December have fallen to 47%, down from 53% last week, according to the CME Group. With the US economy giving a mediocre performance in the first quarter, and inflation levels remains low, there are Fed policymakers who are currently lukewarm to the idea of raising rates again this year. Key economic indicators have not looked particularly sharp in the second quarter, notably housing and consumer spending numbers. If inflation numbers do not improve and GDP reports for Q2 remain soft, the odds of a December hike will drop even further, which could translate into broad losses for the US dollar.

USD/CHF Continued bullish consolidation.

USD/CHF is pushing higher but the technical structure suggests further weakness. Hourly resistance can be found at 0.9771 (09/06/2017 high). Strong resistance is given at 1.0107 (10/04/2017 high). Hourly support is given at 0.9553 (30/06/2017 low). Expected to show continued bearish pressures.

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 Consolidating around 1.3000.

USD/CAD is way into bearish mode. Support is given at 1.2965 (30/06/2017 low). Resistance is located at 1.3014 (02/15/2017). Expected to show continued downside 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 Strong decline.

AUD/USD's technical structure is bullish since early May. Recovery bounce near former resistance at 0.7636 is gaining momentum. The pair has lost around 80 pips yesterday. Expected to see further consolidation after such a move. A break of support at 0.7520 (09/06/2017 low) would indicate a trend reversal.

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.

EUR/USD Continued bearish consolidation.

EUR/USD is now consolidating after its recent rally above 1.1400. Hourly support can be found at 1.1076 (18/05/2017 low). Stronger support lies at 1.0842 (11/05/2017 low).

In the longer term, the momentum is clearly negative. We favour a continued bearish bias towards parity. Key resistance holds at 1.1714 (24/08/2015 high) while strong support lies at 1.0341 (03/01/2017 low).

GBP/USD Weakening after failing to monitor resistance given at 1.3046.

GBP/USD is consolidating lower. The pair failed to monitor resistance given at 1.3046 (18/05/2017 high). Hourly support is given at 1.2923 (intraday low). Expected to show renewed short-term bullish pressures.

The long-term technical pattern is even more negative since the Brexit vote has paved the way for further decline. Long-term support given at 1.0520 (01/03/85) represents a decent target. Long-term resistance is given at 1.5018 (24/06/2015) and would indicate a long-term reversal in the negative trend. Yet, it is very unlikely at the moment.

USD/JPY Riding within symmetrical triangle.

USD/JPY is riding higher within symmetrical triangle. Hourly support can be found at 111.73 (30/06/2017 low). Strong support is located at 108.13 (17/04/2017 low). Expected to show continued pressures within symmetrical pressures.

We favor a long-term bearish bias. Support is now given at 96.57 (10/08/2013 low). A gradual rise towards the major resistance at 135.15 (01/02/2002 high) seems absolutely unlikely. Expected to decline further support at 93.79 (13/06/2013 low).

RBA backs away from reflation trend

As expected, the Reserve Bank of Australia kept its cash rate unchanged at 1.50%. Despite the widely-held view for no change, there was still a level of disappointment that the RBA refrained from discussing “normalisation” or offering a hawkish lean. We see this meeting as a warning to other central banks normalisation bull, such as those in CAD not to get too far ahead of economic data.

Governor Lowe acknowledged pick-up in external growth dynamics and improvement in domestic economy. The central bank removed the reference to GDP expanding slightly above 3% suggesting that growth forecast could be revised lower. The RBA noted that the inflation rate has fallen in response to weaker crude prices and stagnating wage growth. We see the RBA maintaining a neutral tone for the near-term as increasing household debt without catchup from wage growth could threaten financial stability should the RBA start tightening.

We remain bearish on AUD as believe the market is overpricing the central bank's rush to reflation story and rising funding cost will remove the AUD shine.

Sweden's bellwether of reflation story

Following the RBA failure to change bias, the Riksbanks monetary policy meeting will be closely watched for an expected shift in policy tone. We view this thinking because of recent ECB and BoE language rather than purely the result of improving economic data. While incoming data has been broadly positive, we doubt the time has come to revive the reflation story.

The Riksbanks will play a critical role in rejecting or confirming the monetary policy divergence theme. Recently, a Governing Council member stated that QE was less effective, increasing the likelihood that the central bank removes hints of additional QE measures. While this is a mildly hawkish adjustment, we doubt it will have severe consequences for SEK strength.

Switzerland retail sales declined less than expected

The Swiss franc is still trading below 1.10 against the single currency despite short-term bullish pressures on the pair. We believe that there is at the moment two major reasons that are pushing the euro against the Helvetic currency.

The French Presidential election and the start of the “Brexit” negotiations have removed – at least reducing the political and geopolitical uncertainties - so markets are clearly shifting towards risk-on and this is why we see the EURCHF pair moving up. In addition, Mario Draghi's comments pushed the euro higher by stating the Eurozone recovery is progressing and the ECB monetary policy stance must accompany this recovery. Markets interpreted those declarations from the ECB as hawkish.

The Swiss fundamentals remain correct, even though inflation is clearly not picking up. We nonetheless remain concerned by the FX reserves which continue their massive increase. For the time being, the SNB holds tight to defend the Swiss franc. By the way, the Swiss central bank is now the world's eighth most important investor with $80 billion dollars invested in the US market.

The CHF valuation does not depend on Swiss Economy data. Markets barely reacted on the release of retail sales growth which came in negative for the 2nd month in a row. Swiss political stability is still what attracts investors and we see the EURCHF pair showing a short-term continued bullish move towards 1.1000.

WTI oil futures (August 2017 contract) rose to 47.09 today, its highest level since June 7. Near-term upside momentum has weakened as the market reached overbought conditions on the 4-hour chart, which is highlighted by the RSI indicator being above 70.

The rebound from the June 21 low of 42.02 does not look like it is reversing anytime soon and the short-term bullish bias will remain intact as long as the market remains above the 200-period moving average, currently at 46.75. This is now providing immediate support. A break below this would target the next support level at the June 30 low of 45.81 before heading towards further support levels at 44.63 and 43.54. A deeper decline would open the way to target the June 21 low at 42.02, consequently erasing the gains made after rising from this low. Such a move would see a resumption of the longer-term downtrend that started in April.

Due to overbought conditions on the 4-hour chart, the market is expected to consolidate at current levels. Should upside momentum resume, there is scope to target 48.37, the June 6 high, before other resistance levels come into view at 50.25 and 51.97.

While the recent rally is overbought, only a move below 44.50 would indicate a reversal in the recent uptrend.

The euro has ticked lower in the Tuesday session. Currently, the pair is trading at 1.1350. On the release front, there are no US events, as markets are off for Independence Day. There are no major events in the eurozone, so traders can expect a quiet day. On the schedule, Spanish Unemployment Change dropped sharply to -98.3 thousand, well below the estimate of -120.3 thousand. Later in the day, we'll get a look at Eurozone PPI. On Wednesday, the Federal Reserve will publish the minutes of its June policy meeting.

Analysts would be hard pressed to recall a European forum of note, but this year's gathering of central bankers won't be forgotten anytime soon. Last week's meeting in Portugal triggered sharp rises from the euro and British pound, following hawkish remarks from Mario Draghi and Mark Carney. The euro jumped 2.0% last week, surprising the ECB. The bank tried to dampen market speculation about any imminent moves to withdraw stimulus, but the euro remains at high levels. Last week's stampede to snap up euros has forced ECB policymakers to reassess whether what moves, if any to announce at the July 20 policy meeting. In June, the ECB removed an easing bias regarding interest rates, effectively closing the door to further rate cuts. However, after the Draghi rally last week, policymakers may be wary about removing a second easing bias regarding the asset-purchase program, to avoid another run on the euro. The ECB has repeated loud and clear that it will not remove QE until inflation levels are closer to the bank's target of 2.0%, but Draghi may have learned the hard way at the ECB forum that the market is picking up a different message than what the ECB thinks it is sending. This could result in the ECB playing it safe and avoiding any meaningful discussion about QE at the July meeting, especially if the euro remains at high levels.

The Federal Reserve has all but signed in writing that it would raise interest rates three times in 2017, but the markets are becoming more skeptical. The odds of a rate hike in December have fallen to 47%, down from 53% last week, according to the CME Group. With the US economy giving a mediocre performance in the first quarter, and inflation levels remains low, there are Fed policymakers who are currently lukewarm to the idea of raising rates again this year. Key economic indicators have not looked particularly sharp in the second quarter, notably housing and consumer spending numbers. If inflation numbers do not improve and GDP reports for Q2 remain soft, the odds of a December hike will drop even further, which could translate into broad losses for the US dollar.

Cable extends pullback from 1.3029 and pressures strong support at 1.2910 (daily cloud top). Strong close in red on Monday confirmed reversal on completion of Hanging Man reversal pattern. Deeper correction could be expected on penetration into daily cloud as slow stochastic is reversing from overbought zone and generating bearish signal. Dips could extend towards 1.2861 (Fibo 38.2% of 1.2588/1.3029 upleg, reinforced by 55SMA) and 1.2833 (10/30 SMA bull-cross). Psychological 1.3000 barrier is expected to ideally cap upside attempts for now.

Res: 1.2958, 1.3000, 1.3029, 1.3047
Sup: 1.2910, 1.2861, 1.2841, 1.2833