Sample Category Title

Daily Pivots: (S1) 0.9705; (P) 0.9723; (R1) 0.9735; More.....

USD/CHF continues to gyrate in range above 0.9613 and intraday bias stays neutral first. With 0.9087 resistance intact, near term outlook stays bearish. Break of 0.9613 will extend the whole decline from 1.0342 to 0.9548 support and below. We'd start to look for bottoming signal again as it approaches 0.9443 key support level. However, considering bullish convergence condition in 4 hour MACD, break of 0.9807 will indicate near term reversal and turn outlook bullish for 1.0099 resistance next.

In the bigger picture, USD/CHF is still bounded in medium term range of 0.9443/1.0342 for the moment. Consolidative trading would likely continue and medium term outlook remains neutral. Break of 1.0342 key resistance is needed to confirm underlying bullish momentum in the pair. Meanwhile, downside attempts should be contained by 0.9443 key support level. However, sustained break of 0.9443 will carry larger bearish implication and target 0.9 handle.

EUR/USD - 1.1180

Original strategy  :

Sell at 1.1200, Target: 1.1100, Stop: 1.1235

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 1.1210, Target: 1.1110, Stop: 1.1245

Position : -

Target :  -

Stop : -

The single currency found support just below 1.1140 and has recovered, retaining our view that further consolidation above this week’s low at 1.1119 would be seen and near term upside risk remains for retracement to 1.1207-13 (50% Fibonacci retracement of 1.1296-1.1119 and previous resistance), however, upside should be limited and bring another decline later, below 1.1135-40 would suggest the rebound from 1.1119 has ended, bring retest of this level, below there would confirm recent decline has resumed for further weakness to previous support at 1.1109, then towards 1.1075-80.

In view of this, we are looking to sell euro on recovery as 1.1205-10 should limit upside. Only a firm break above 1.1213 resistance would defer and risk a stronger rebound to 1.1230-35 but upside should be limited to 1.1260-70, bring another decline later.

Daily Pivots: (S1) 1.2660; (P) 1.2675; (R1) 1.2697; More...

While GBP/USD rebounds today, it's staying below 1.2813 resistance. Intraday bias stays neutral first. At this point, we're still favoring the bearish case that consolidation pattern from 1.1946 has completed at 1.3047 already. Sustained break of 1.2614 resistance turned support should confirm our bearish view and target a test on 1.1946 low next. However, break of 1.2813 resistance will dampen our view and turn bias back to the upside for 1.3047 and above.

In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. Price actions from 1.1946 medium term low are seen as a consolidation pattern, which could have completed after hitting 55 week EMA. Break of 1.1946 low will target 61.8% projection of 1.5016 to 1.1946 from 1.3047 at 1.1150 next. In case the consolidation from 1.1946 extends, outlook will stay remain bearish as long as 1.3444 resistance holds.

USD/JPY - 111.30

Original strategy  :

Buy at 110.65, Target: 111.65, Stop: 110.30

Position :  -

Target :  -

Stop : -

New strategy  :

Buy at 110.65, Target: 111.65, Stop: 110.30

Position :  -

Target :  -

Stop : -

Although the greenback found support just below 111.00 level, near term downside risk remains for the erratic fall from this week’s high of 111.79 to bring retracement of recent rise and weakness to 110.90-95 cannot be ruled out, however, reckon previous support at 110.65 would limit downside and bring another rise later, above 111.45-50 would bring retest of 111.79 but break there is needed to confirm the rise from 108.82 low has resumed and extend headway to 111.90-95 (50% projection of 108.82-111.42-110.65), however, upside should be limited to resistance at 112.13 and 112.25 (61.8% Fibonacci retracement of 114.37-108.82 and 61.8% projection) should hold.

In view of this, would not chase this rise here and we are looking to buy dollar on pullback as 110.65 support should limit downside. Below 110.30-35 (50% Fibonacci retracement of 108.82-111.79 and previous resistance turned support) would abort and signal a temporary top has been formed instead, risk weakness towards 109.95-00 (61.8% Fibonacci retracement).

Daily Pivots: (S1) 1.1134; (P) 1.1156 (R1) 1.1172; More....

Intraday bias in EUR/USD remains neutral as it's staying in consolidation in range of 1.1109/1295. There is no confirmation of near term reversal yet. And focus remains on 1.1298 key resistance. Decisive break of 1.1298 key resistance will carry larger bullish implication and extend the whole rise from 1.0339 to 1.1615 resistance next. On the downside, firm break of 1.1109 support will indicate short term topping and rejection from 1.1298. In such case, intraday bias will be turned to the downside for 1.0838 support.

In the bigger picture, the case for medium term reversal continues to build up with EUR/USD staying far above 55 week EMA (now at 1.0932). Also, bullish convergence condition is seen in weekly MACD. Focus will now be on 1.1298 key resistance. Rejection from there will maintain medium term bearishness and would extend the whole down trend from 1.6039 (2008 high). However, firm break of 1.1298 will indicate reversal. In such case, further rally would be seen back to 1.2042 support turned resistance next.

Canadian Dollar weakens notably in early US session after inflation data missed expectation. Headline CPI slowed to 1.3% yoy in May, down from 1.6% yoy, below consensus of 1.5% yoy. CPI core - common was unchanged at 1.4% yoy, CPI core - median slowed to 1.5% yoy from 1.6% yoy. CPI core - trim slowed to 1.2% yoy from 1.3% yoy. The Loonie has been lifted recently by the hawkish turn of BoC Governor Stephen Poloz. And it tried to resume the rally yesterday after solid retail sales data. Today's tamer than expected inflation reading could now keep USD/CAD in range in near term. The real test will come when BoC announce rate decision again on July 12, when quarterly forecasts will also be released.

Euro recovers mildly against Dollar today but there is no follow through buying seen so far. Eurozone PMI manufacturing rose to 57.3 in June, up from 57.0 and beat expectation of 56.8. But Eurozone PMI services dropped to 54.7, down from 56.3 and missed expectation of 56.1. Germany PMI manufacturing dropped slightly to 59.3, down from 59.3, but beat expectation of 59.0. Germany PMI services dropped to 53.7, down from 55.4, below expectation of 55.4. France PMI manufacturing rose to 55.0, up from 53.8 and beat expectation of 54.0. But France PMI services dropped to 55.3, down from 57.2 and missed expectation of 57.0.

While the set of data is overall disappointing, Markit chief business economist Chris Williamson noted that "at the moment I'm not too worried about it." And "we may be reaching the stage where growth has been strong for quite a few months and we are hitting a few ceilings in terms of degrees to which firms can expand capacity." Also, he noted that there it's not clear what the drop in PMI services is about and he "inclined to treat it just as some payback for the sheer strength of growth in recent months,"

In Japan, PMI manufacturing dropped to 52.0 in June, down from 53.1 and missed expectation of 53.4. Looking at some details, new orders dropped to 51.3, down from 53.4, and hit the lowest level since November. New export orders also dropped to 52.5, down from 53.0. Markit noted that "slower growth was signaled in June, with both orders and output rising at the weakest rates since late last year amid reports of a slight softening in market conditions." Nonetheless, "demand is holding up well, and the sector continues to operate within a solid growth range."

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1134; (P) 1.1156 (R1) 1.1172; More....

Intraday bias in EUR/USD remains neutral as it's staying in consolidation in range of 1.1109/1295. There is no confirmation of near term reversal yet. And focus remains on 1.1298 key resistance. Decisive break of 1.1298 key resistance will carry larger bullish implication and extend the whole rise from 1.0339 to 1.1615 resistance next. On the downside, firm break of 1.1109 support will indicate short term topping and rejection from 1.1298. In such case, intraday bias will be turned to the downside for 1.0838 support.

In the bigger picture, the case for medium term reversal continues to build up with EUR/USD staying far above 55 week EMA (now at 1.0932). Also, bullish convergence condition is seen in weekly MACD. Focus will now be on 1.1298 key resistance. Rejection from there will maintain medium term bearishness and would extend the whole down trend from 1.6039 (2008 high). However, firm break of 1.1298 will indicate reversal. In such case, further rally would be seen back to 1.2042 support turned resistance next.

Economic Indicators Update

GBPUSD - The pair continues to face upside pressure but within its established range. Support lies at the 1.2700 level where a break will turn attention to the 1.2650 level. Further down, support lies at the 1.2600 level. Below here will set the stage for more weakness towards the 1.2550 level. Conversely, resistance stands at the 1.2800 levels with a turn above here allowing more strength to build up towards the 1.2850 level. Further out, resistance resides at the 1.2900 level followed by the 1.2950 level. On the whole, GBPUSD continues to face upside threats.

The DAX index has posted losses in the Friday session. Currently, the index is at 12,730.25 points, down 0.50%. There was positive news on the manufacturing front, as German and Eurozone Manufacturing PMIs beat their estimates. However, data from the services sector failed to keep pace, as German and Eurozone Services PMIs both missed expectations.

Global stock markets continued to contend with low oil prices, which are weighing on investor confidence. Brent crude has plunged 10.8% in June, as crude trades around $45 a barrel. As crude prices continue to fall, there are rising concerns of disinflation. The US, Japan and much of Europe are struggling with low inflation, and lower levels could hamper growth. OPEC members continue to discuss lowering production, but the markets do not seem impressed. OPEC is already bound by a production agreement and compliance is over 100%, yet this has failed to prevent the collapse in oil prices. Another headache for major producers is the increase in production from the US, Libya and Nigeria.

A stronger global economy has spurred demand for exports from the euro-area, and this has boosted the manufacturing sectors in Germany and the eurozone. German Manufacturing PMI ticked lower to 59.3 in May, above the forecast of 59.1 points. Germany's manufacturing sector continues to show strong growth, and the April reading of 59.4 was the highest since March 2011. The news was also positive in the eurozone, as Manufacturing PMI improved for a tenth straight month, climbing to 57.3 points. This beat the estimate of 56.9 points. On Thursday, the ECB's economic bulletin projected solid growth in the euro-area in the second quarter, buoyed by low inflation rates and stronger domestic demand.

The German economy remains robust, with a strong labor market and stronger consumer and state spending. As well, the manufacturing and export sectors are booming due to increased global demand for German products. There were cries of despair in political and business circles in Europe when Donald Trump was elected, as Trump campaigned on a protectionist, 'America first' agenda. However, these concerns have largely died down, as the eurozone economy has improved and Trump has been in damage control mode, as he focuses on domestic scandals. Earlier this week, the well-respected German BDI Federation of Industry added its voice to the chorus of accolades for the German economy. The BDI said that Germany's economic output would increase by 1.5% this year. At the same time, the BDI counseled caution, noting that the economy had been buoyed by a weaker euro, lower oil prices and the ECB's accommodative monetary policy. All three are ‘external factors', in the sense that Germany has limited influence on them, and a significant change in any one factor could weigh on economic growth.

The US 30 index is on its fourth day of declines after reaching an all-time high of 21,539.10 on Monday. Today's decline has led the index to record a one-week low of 21,340.70.

Technical indicators such as the RSI and stochastics are pointing to a change in short-term momentum for the index. The RSI is theoretically in bullish territory at 60, but it has steeply fallen from overbought territory to reach its current level. In addition, the indicator remains downward sloping. Meanwhile, the stochastics are projecting a similar picture with the %K line in bearish territory (after recording a steep fall) and below the slow %D line.

On the upside, Monday's all-time high of 21,539.10 is likely to act as a point of resistance. Further up, the 21,600.00 level might act as psychological barrier to upside movements as well.

On the downside, today's decline violated the Tenkan-sen line (red), which was providing intra-day support at 21,378.00. The 21,300.00 handle, a potential psychological level, could provide some support. Another likely important support area is the one formed by the Kijun-sen line (blue) at 21,089.10 and the 21,000.00 psychological mark. Notice that the 50-day moving average (MA) at 21,020.00 is also in between these two points.

As regards the medium-term outlook, it remains bullish given the significant advancing by the index since the start of the year. Further supporting this is the fact that the index level is comfortably above the 50- and 200-day MAs as well as the Ichimoku cloud top, while both MAs are currently upward sloping. A note of caution though as the considerable divergence from the 200-day MA might be indicative of an overextended rally.

Overall, the near-term momentum is currently looking negative and the medium-term is bullish.

Spot Gold extends recovery from week’s low at $1240 and took out initial barrier at $1254 (Fibo 23.6% of $1296/$1240 descend / 10SMA).

Correction may extend through $1259 (55SMA / daily Tenkan-sen) towards strong resistance at $1262/64 (Fibo 38.2% / 20SMA) as slow stochastic on daily chart is heading north after reversal from O/B territory and showing more room at the upside.

Close above $1264 is needed to generate strong signal for extended recovery.

Broken 10SMA now acts as initial support at $1255, followed by more significant broken 100SMA at $1248, loss of which would signal an end of corrective phase and shift focus towards $1240 and 200SMA at $1236.

Res: 1259, 1262, 1264, 1268
Sup: 1255, 1248, 1245, 1240