Sample Category Title

GBP/USD - 1.2743

Original strategy :

Sold at 1.2790, Target: 1.2690, Stop: 1.2825

Position : -  Short at 1.2790

Target :  - 1.2690

Stop : - 1.2825

New strategy  :

Hold short entered at 1.2790, Target: 1.2690, Stop: 1.2825

Position : - Short at 1.2790

Target :  - 1.2690

Stop : - 1.2800

As the British pound ran into resistance at 1.2818 yesterday and has retreated on dollar’s broad-based strength after Fed rate hike, suggesting the rebound d from 1.2635 has ended there and consolidation with mild downside bias remains for weakness to 1.2680-90, however, break there is needed to retain bearishness and bring further fall to 1.2650, then towards said support at 1.2635.

In view of this, we are holding on to our short position entered at 1.2790. Only above said resistance at 1.2818 would defer and risk a strong rebound to 1.2845-50 (61.8% Fibonacci retracement of 1.2978-1.2635) but upside should be limited to 1.2870-80. 

EUR/USD - 1.150

Original strategy  :

Sell at 1.1240, Target: 1.1140, Stop: 1.1275

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 1.1190, Target: 1.1090, Stop: 1.1225

Position : -

Target :  -

Stop : -

Although the single currency surged to as high as 1.1296, lack of follow through buying on break of previous resistance at 1.1285 and the subsequent reversal signal top has been formed there, current breach of indicated support at 1.1166 adds credence to this view and bearishness remains for further fall to 1.1125-30, however, near term oversold condition should limit downside to previous support at 1.1109.

In view of this, we are looking to sell euro on recovery as 1.1185-90 should limit upside and bring another decline. Above 1.1225-30 would defer and risk a stronger rebound to 1.1250 but price should falter well below said resistance at 1.1296, bring another decline later.

USD/JPY - 110.41

Original strategy  :

Sold at 109.60, stopped at 109.90

Position :  - Short at 109.60

Target :  -

Stop : - 109.90

New strategy  :

Buy at 109.90, Target: 110.90, Stop: 109.55

Position :  -

Target :  -

Stop : -

The greenback has rallied again after staging a strong rebound yesterday and resistance at 110.35 was penetrated, suggesting recent decline has indeed ended at 108.82 and upside bias is seen for further gain towards resistance at 110.81, however, break there is needed to retain bullishness and extend the rise from 108.82 low for retracement of recent downtrend to 111.00 and possibly towards 111.25-30.

In view of this, we are looking to buy dollar on pullback as 109.85-90 should limit downside. Only below 109.45-50 would suggest an intra-day top is formed instead, risk weakness to 109.20-25 but price should stay well above said yesterday’s low at 108.82, bring another rebound later.

Highlights:

• Nominal manufacturing sales jumped 1.1% in the month helped by strong gains in petroleum and coal (8.9%) and primary metal (3.8%) that more than offset the motor vehicle component dropping 3.7%.
• Sale volumes increased 0.5% reflecting non-durables rising 1.9% that more than offset a 0.8% drop in the durables component.
• Nominal inventories rose an equally strong 0.9% which contributed to the inventory-to-sales ratio remaining unchanged at 1.35.
• The data is indicative of the manufacturing component of GDP being flat in the month as much of the strength in petroleum and coal manufacturing sales gets discounted on a value added basis. The data remains consistent with our expectation that overall April GDP will remain unchanged in the month following the 0.5% jump in March.

Our Take:

The volume of April manufacturing sales increased at a stronger-than-expected pace both in the month (0.5%) and over the year (1.9%). The annual increase has been helped by the volume of machinery orders surging 13.5% over the past year. It follows indications of a rebound in imports of machinery and equipment in April and solid momentum in engineering employment through March. The burst in overall GDP growth of 3.7% in the first quarter was helped by business investment surging 10.3%. Today's manufacturing report, along with the import and employment data, bodes well for second quarter business investment to build further onto the Q1 surge. We are currently forecasting a 3 1/2% increase though with the risks on the upside. This continued strength reinforces the Bank of Canada's recent comments about economic growth becoming more broadly based. Our expectation is that this broad-based strength will continue through the remainder of this year and that will eventually return the Bank of Canada to tightening mode. In fact, if upcoming data continues to surprise on the upside, there is the clear risk that this tightening could be advanced relative to our current forecast of rate hikes commencing in the first half of 2018.

Dollar extends post FOMC rebound in early US session after positive economic data. Initial jobless claims dropped 8k to 237k in the week ended June 10, below expectation of 241k. Four-week moving average rose 1k to 243k. That's the 119 straight weeks initial claims stayed below 300k handle, last seen in early 1970s. Continuing claims rose 6k to 1.935m in the week ended June 3 staying below 2m handle for the 9 straight week, last seen back in 1973. Empire State manufacturing index rebound to 19.8, up from -1. Philly Fed survey though, retreated to 27.6 but beat expectation of 25.0. Industrial production, rose 0.0% in May while capacity utilization dropped to 76.6%.

EUR/USD's fall accelerates today and breaks through 1.1165 minor support. Main focus is now back to 1.1109. As long as this support holds, further rally is still in favor and firm break of 1.1298 key resistance will carry larger bullish implication. However, break of 1.1109 will confirm rejection from 1.1298 and bring deeper pull back. USD/JPY, at this point, is also staying below 110.80 near term resistance and outlook stays bearish until a break of this level. USD/CAD, despite today's rebound, is held well below 1.3387 resistance and maintains bearish outlook.

Dollar's rebound started after yesterday's FOMC rate decision. The overall announcement, including new economic projections, was not as bad as some anticipated. Fed maintained the projection of a total of three rate hike this year. Downward revision in 2017 inflation forecast was somewhat offset by the upward revision in GDP forecast and downward revision in unemployment rate forecast. On other hand, both growth and inflation forecasts for 2018 and 2019 were held unchanged.

Three voted for rate hike in BoE decision

BoE kept bank rate unchanged at 0.25% and asset purchase target at GBP 435b as widely expected. To the markets' surprise two officials joined Kristin Forbes to vote for rate hike this year. That include Michael Saunders and Ian McCafferty. Overall, the statement suggests that MPC policy makers are getting more impatient with surging inflation. The statement noted that "the continued growth of employment could suggest that spare capacity is being eroded, lessening the trade-off that the MPC is required to balance and, all else equal, reducing the MPC's tolerance of above-target inflation." Nonetheless, the central bank also emphasized that any rate hike will be at a "gradual pace and to limited extent".

Also from UK, retail sales dropped more than expected by -1.2% mom in May.

Technically, GBP/USD is staying in tight range above 1.2633 temporary low and lacks clear momentum to extend the recovery from there. EUR/GBP dips sharply to as low as 0.8722 but stays well above 0.8639 near term support. GBP/JPY also recovers today but stays well below 142.75 resistance. There is no change in the near term bearish trend in the Pound yet.

SNB stands pat, Jordan open to further stimulus

SNB held sight deposit rate unchanged at -0.75% as widely expected. Three month LIBOR rate was held at -1.25% to -0.25%. The central bank kept 2017 inflation forecast unchanged at 0.3%. However, for 2018 and 2019, inflation projected was downgraded to 0.3% (from 0.4%) and 1.0% (from 1.1%) respectively. Growth is projected to be at 1.5% this year. SNB President Thomas Jordan said that "available economic indicators suggest that the Swiss economy is on the road to recovery." But he also warned that "certain indicators suggest that the recovery has not yet taken hold in all areas of the economy." Also, "the strong Swiss franc continues to weigh on some industries" and it's still "significantly overvalued".

Jordan seems not concerned with its balance street and said that "our monetary policy remains expansionary for the reasons we've given, namely low inflation, underutilisation of production capacities and a significantly overvalued franc." He also left the door open for further rate cut and said that "all options are still open, we could also cut rates further if needed.

Also from Swiss, PPI dropped -0.3% mom, rose 0.1% yoy in May. Also from Europe, Eurozone trade surplus narrowed to EUR 19.6b in April.

Australia unemployment rate dropped to lowest since 2013

Australia unemployment rate unexpectedly dropped to 5.5% in May, down from 5.7% and below expectation of 5.7%. That's also the lowest number since February 2013. Headline job number showed 42k growth, well above expectation of 10k. Full-time jobs grew 52.1k while part-time jobs fell -10.1k. Participation rate also rose 0.1% to 64.9%. Speculations of a rate cut by RBA receded after the release. On the other hand, New Zealand GDP grew only 0.5% qoq in Q1, below expectation of 0.7% qoq.

USD/CHF Mid-Day Outlook

Daily Pivots: (S1) 0.9654; (P) 0.9694; (R1) 0.9749; More.....

USD/CHF's rebound from 0.9613 extends to as high as 0.9755 so far. However, it's kept well below 0.9807 resistance. Thus, there is no clear indication of reversal yet. As long as 0.9807 stays intact, deeper fall is still in favor. 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.

Economic Indicators Update

Daily Pivots: (S1) 1.1189; (P) 1.1206 (R1) 1.1228; More....

EUR/USD's fall from 1.1295 extends lower today and breaks 1.1165 minor support. Still, it's holding above 1.1109 support and outlook is unchanged. Intraday bias remains neutral with focus on 1.1298 key resistance. Decisive break there will carry larger bullish implication and target 1.1615 resistance next. On the downside, 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 1.0922). 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.

Daily Pivots: (S1) 1.2710; (P) 1.2764; (R1) 1.2804; More...

Intraday bias in GBP/USD remains neutral for the moment and consolidation from 1.2633 might extend. Near term outlook remains bearish with 1.2977 resistance intact. We continue to favor the case that consolidation pattern from 1.1946 has completed at 1.3047 already. Decisive break of 1.2614 resistance turned support would confirm our bearish view and target a test on 1.1946 low next. However, break of 1.2977 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.

Daily Pivots: (S1) 108.79; (P) 109.56; (R1) 110.34; More...

With 4 hours MACD crossed above signal line, intraday bias in USD/JPY is turned neutral first. With 110.80 resistance intact, further decline is still expected to 108.12 low first. Break will extend the whole corrective fall from 118.65 to 61.8% retracement of 98.97 to 118.65 at 106.48. We will look for bottoming sign there. However, break of 110.80 should indicate completion of fall from 114.36. In that case, intraday bias will turned back to the upside for 111.70. Break will target 114.36 key resistance.

In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. It's uncertain whether it's completed yet. But in case of another fall, downside should be contained by 61.8% retracement of 75.56 to 125.85 at 94.77 to bring rebound. Overall, rise from 75.56 is still expected to resume later after the correction from 125.85 completes.

Daily Pivots: (S1) 0.9654; (P) 0.9694; (R1) 0.9749; More.....

USD/CHF's rebound from 0.9613 extends to as high as 0.9755 so far. However, it's kept well below 0.9807 resistance. Thus, there is no clear indication of reversal yet. As long as 0.9807 stays intact, deeper fall is still in favor. 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.

GBPUSD pair fails to break the resistance at 1.2815, investors slams the pair back into consolidating zone

GBPUSD is currently closing to the 1st support at 1.2707, the June 13 mid open/close price, if it breaks through, the further support will be on 1.2636, the June 9 low and the last support is on 1.2625-15, the 100 direct moving average and also the March 27 high. The first resistance is on 1.2815-18, the 200 hour moving average and June 14 high, whereas the second is on 1.2846-53, the 2nd and 3rd June lows are also 61.8% Fibonacci. If the price breaks through the 2nd resistance, it might form a bullish trend since it will be trading above 2 moving averages and challenge the 3rd resistance, 1.2876, the 21-DMA

AUDUSD bullish on the heels of economic data, eyes on first resistance 0.7636, June 14 high

AUDUSD is currently trading at 0.76032, a short fall after today's high. If the price successfully breaks out of the first resistance 0.7636, the June high, the bullish trend might persist to the second resistance 0.7651, which is 76% Fibonacci of the March-May slump, and the last resistance lies at 0.7680, the March 30 high. The chart's first support is on 0.7566, the June high, whereas the 2nd support is on 0.7527-20, the DMA June 9 low. However, if the price falls below the 3rd support, 0.75, which is the June 7 low, it might signify a huge selling pressure as the price will be trading under 2 moving averages. (Yellow = 50 day moving average, Green = 100 day moving average)