Sample Category Title

EUR/JPY - 128.44

Recent wave: wave v of (C) ended at 94.12 and major correction in wave A has ended at 149.79

Trend: Near term up

Original strategy:

Buy at 127.00, Target: 129.00, Stop: 126.40

Position: -
Target: -
Stop: -

New strategy :

Buy at 127.00, Target: 129.00, Stop: 126.40

Position: -
Target:  -
Stop:-

The single currency ran into resistance at 128.83 last week and retreated, retaining our view that consolidation below this level would be seen and pullback to 127.50 is likely, however, reckon 127.00 would limit downside and bring another rise later, above said resistance at 128.83 would extend recent upmove to 129.00-10 but near term overbought condition should prevent sharp move beyond 129.50-60 and reckon psychological level 130.00 would hold from here, risk from there has increased for a retreat later. 

In view of this, we are looking to reinstate long on pullback as 127.00 should limit downside. Below support at 126.49 would defer and suggest top is possibly formed, risk correction to 126.00 and later towards 125.40-50.

Our latest preferred count is that wave (ii) is ABC-X-ABC which ended at 123.33 and wave (iii) is unfolding with wave iii ended at 100.77, followed by wave iv at 111.57 and wave v as well as the wave (iii) has ended at 97.04, followed by wave (iv) at 111.43 and wave (v) has ended at 94.12 which is also the end of the larger degree v, this also implied the major wave (C) has also ended there, hence major correction has commenced from there with (A) leg unfolding in its lower degree wave c which has possibly ended at 145.69. Under this count, A-B-C wave (B) has commenced with A leg ended at 136.23, wave B at 143.79 and wave C has possibly ended at 149.79.

Our larger degree count is that the decline from 139.26 is wave (C) and is sub-divided into a diagonal triangle i-ii-iii-iv-v with wave i - 105.44, wave ii- 123.33, wave iii - 97.03, wave iv - 111.43, followed by the final wave v as well as the end of wave (C) at 94.12, this also mark the bottom of larger degree wave B. Under this count, major rise in wave C has commenced as an impulsive wave with minor wave III ended at 145.69, wave V is still in progress for further gain to 150.00. Having said that, this so-called wave V could well be the first leg of larger degree 5-waver wave C and this wave C should bring at least a retest of wave A top at 169.97 (July 2008).

AUD/USD – 0.7659

Recent wave: Wave 5 ended at 1.1081 and major correction has commenced for fall to 0.7000 and then towards 0.6500-10

Trend: Near term up

Original strategy :

Exit long entered at 0.7595

Position: - Long at 0.7595
Target:  -
Stop: -

New strategy :

Stand aside

Position: -
Target:  -
Stop:-

Despite rising to 0.7712 late last week, the subsequent retreat has retained our view that minor consolidation below this level would be seen and pullback to 0.7635-40 is likely, however, a break below previous resistance at 0.7625 would suggest a temporary top is possibly formed, further all to 0.7575-80 but break there is needed to add credence to this view, bring correction of recent rise to 0.7535 support which is likely to hold from here. 

In view of this, would be prudent to stand aside for now and look to reinstate long on pullback. Above said resistance at 0.7712 would extend recent upmove to chart resistance at 0.7750 but overbought condition should limit upside and price should falter below 0.7785-90.

On the 4-hour chart, the move from 0.8066 is the wave 5 with i: 0.8860, ii: 0.8315, wave iii is an extended move ended at 1.0183, iv: 0.9706 and wave v has ended at 1.1081 (also the top of entire wave 5). The subsequent selloff is the major correction which is unfolding as ABC-X-ABC and 2nd A leg has ended at 0.8848, followed by a-b-c wave B which ended at 0.9758, hence, 2nd C wave is now in progress and indicated downside target at 0.7000 and 0.6950 had been met, so further fall to 0.6710-20 cannot be ruled out.

USDCHF looks to have completed a bigger triangle correction in wave 4, from where a new drop followed recently. We now expect a new five wave movement to develop within black wave 5, before bears slowdown and make a new pullback higher. Ideally we will see Fibonacci ratio of 161.8 reached, before a new recovery starts to unfold. That said, at the moment we see minor wave iv unfolding.

USDCHF, 4H

Weekly

    •    Last Candlesticks pattern: Shooting star 
    •    Time of formation: 03 May 2016
    •    Trend bias: Down

Daily

    •    Last Candlesticks pattern: Shooting star
    •    Time of formation: 3 May 2016
    •    Trend bias: Sideways

EUR/USD – 1.1384

The single currency has surged again after brief pullback to 1.1172, suggesting recent upmove is still in progress and may extend further gain to 1.1450, then 1.1480-85 (50% projection of 1.0570-1.1296 measuring from 1.1119, however, loss of upward momentum should prevent sharp move beyond 1.1565-70 (61.8% projection) and reckon previous chart resistance at 1.1616 would hold from here, risk from there has increased for a retreat to take place later this month.

On the downside, whilst initial pullback to 1.1325-30 and possibly 1.1292 support cannot be ruled out, reckon the Kijun-Sen (now at 1.1278) would limit downside and bring another upmove later to our aforesaid upside targets. Below said support at 1.1172 would defer and suggest a temporary top is possibly formed, bring correction towards support at 1.1109-19 but only a daily close below there would provide confirmation, bring further fall to 1.1050 and then test of previous resistance at 1.1025. 

Recommendation: Buy at 1.1270 for 1.1470 with stop below 1.1170.

On the weekly chart, last week’s rally above previous resistance at 1.1296 confirms recent upmove from 1.0340 low is still in progress and a long white candlestick was formed, hence bullishness remains for this move to extend further gain to 1.1500-10, then 1.1565-70 (61.8% projection of 1.0570-1.1296 measuring from 1.1119), however, near term overbought condition would prevent sharp move beyond previous chart resistance at 1.1616 and price should falter below 1.1700-10, risk from there is seen for a retreat later.

On the downside, expect pullback to be limited to 1.1260-70 and support at 1.1172 should hold, bring another upmove later. A drop below 1.1172 would risk test of 1.1109-19 support but a weekly close below there is needed to signal a temporary top is formed, bring retracement of recent upmove to 1.10000, then test of the Kijun-Sen (now at 1.0950) but downside should be limited to 1.0900 and previous support at 1.0839 should remain intact.

'Fresh official data reveal how the economy slowed sharply at the start of the year as higher prices squeezed households.' — Chris Williamson, IHS Markit

The UK economy showed a slow growth pace in the first quarter of the year, the weakest performance among European and G7 countries. The ONS reported that the country's GDP growth matched previous estimates of 0.2% in the Q1 of 2017, compared to a 0.7% increase in the Q4 of 2016. Both business services and construction sectors contributed to the Q1 UK economic expansion. The British economy, which successfully withstood in the Brexit vote aftermath, started to lag behind other developed countries. Economic growth in the Q1 weakened amid a slowdown in the consumer-focused industries, such as accommodation and retail sales, as well as diminished household spending power. Consumers' real income faced the most prolonged squeeze as price growth beat wage growth. Overall, trends in the main areas of the country's economy are set to be crucial for the Bank of England to decide whether to raise its key interest rates in the second half of the year or not. However, higher demand for UK exports and stronger manufacturing activity can potentially offset weak consumer spending.

'Canadian growth is slowing from a blistering end to last year and start of 2017, but is still in healthy enough territory to chew up what's left of economic slack.' —Nick Exarhos, CIBC

Canada's economic output posted the sixth straight month of expansion in April, contributed by improvements in most sectors. Statistics Canada reported on Friday that the country's GDP rose 0.2% in the fourth month of the year, following March's 0.5% gain and matching analysts' forecasts. The increase was mainly driven by services activity, with a 0.5% advance in both retail sales and wholesale trade. The report showed that 14 of 20 sectors expanded in April. On a yearly basis, the Canadian economy expanded 3.3% in the reported month, its strongest growth pace in almost three years. The largest annual increase of 5.6% was registered in the warehousing and transporting sector, supported by a rise in rail transport. Strong data suggested the Bank of Canada would be more optimistic amid the country's strong economic performance. Moreover, the economy is expected to reach full employment by the end of the year, which is one more reason to lead to a rate hike. Stephen Poloz, the BoC Governor, pointed out that two previous rate cuts did their job and the economy was now on a firmer ground despite lower oil prices.

The EUR/USD has made 3 consecutive bullish candles on daily(see the mini chart on the main chart) and the first candle from those 3 is a bullish marubozu that usually suggests a continuation. We see that the continuation has already happened but the W H3 hasn't been reached so we might see a pullback before the next leg up. We have 2 POC zones where the price could possibly reject. POC 1.3370-84 (D L4, 38.2, EMA89, ATR pivot) marks the important L4 camarilla support zone while POC2 1.1350-65 ( 61.8, ATR Low, D L5 historical buyers) marks the final support zone before we see a deeper retracement towards W L4 camarilla that might slow the uptrend continuation. If the price rejects from any POC watch for 1.1445 and 1.1500.

Cable is consolidating under fresh high at 1.3029, where last week's steep ascend peaked. Today's action is still holding within narrow range, so far contained by psychological 1.3000 support (top of thick hourly cloud), but stronger correction of 1.2588/1.3029 could be anticipated. Strongly overbought slow stochastic on daily chart suggests further easing, with notion being supported by Hanging Man candle formed on Friday. Loss of 1.3000 handle would open at 1.2944 (Friday's low) and strong support at 1.2910 (daily cloud top). Dips should ideally find support here, however, deeper pullback towards 1.2860 (Fibo 38.2% of 1.2588/1.3029) and 1.2836 (30SMA) cannot be ruled out. Bull-cross of 10/20SMA's underpins the action at 1.2808.

Res: 1.3029, 1.3047, 1.3081, 1.3120
Sup: 1.2990, 1.2977, 1.2944, 1.2910

EUR/USD

Current level - 1.1411

The intraday outlook is bearish below 1.1445 peak, for a break through 1.1385, towards 1.1290 major support. The latter is expected to provide a reliable base for another leg upwards, to 1.1550 area.

USD/JPY

Current level - 112.53

My outlook here is bearish below 113.00 resistance, for another corrective leg to 111.30 before advancing towards 114.35.

GBP/USD

Current level - 1.2994

The pair is in a consolidation pattern between 1.3050 and 1.2950 and a break through the lower bounday will target 1.2860 static support.

The Euro is holding in extended consolidation under fresh one-year high at 1.1445wher renewed upside attempts on Friday were rejected. Consolidation is so far holding within narrow range, but deeper correction of last week's strong rally is likely. Slow stochastic is turning south in deep overbought territory on daily chart and RSI is also reversing after brief probe into overbought zone. Firm break below 1.1400 handle is needed to signal pullback and expose supports at 1.1368 (Fibo 23.6% of 1.1188/1.1445/hourly cloud base) and more significant 1.1320 (Fibo 38.2%) and 1.1300 (former tops). Dip-buying scenario remains in play, as broader uptrend from 1.0340 (2017 low) is looking for further extension higher. Deeper pullback would face next supports at 1.1280 zone (converged daily Tenkan-sen/Kijun-sen) and needs to find ground above 1.1243 (20SMA/Fibo 61.8%) to keep bulls in play.

Res: 1.1426, 1.1445, 1.1500, 1.1550
Sup: 1.1368, 1.1320, 1.1300, 1.1280