Sample Category Title

Daily Pivots: (S1) 0.8763; (P) 0.8799; (R1) 0.8832; More...

Intraday bias in EUR/GBP remains neutral for consolidation below 0.8865 temporary top. Downside of retreat should be contained above 0.8639 support and bring another rally. Firm break of 0.8851 will pave the way to retest 0.8304 high. . At this point, there is no clear sign of larger up trend resumption yet. Hence, we'll be cautious on topping around 0.9304. However, break of 0.8639 support will now indicate near term topping and bring deeper pull back to 55 day EMA (now at 0.8615) and below.

In the bigger picture, price actions from 0.9304 are viewed as a medium term corrective pattern. The leg from 0.9304 should have completed after testing 0.8332 structural support. But it's too early to say that larger rise from 0.6935 is resuming. Rejection from 0.9304 will extend the consolidation with another falling leg. Meanwhile, firm break of 0.9304 will target 0.9799 (2008 high). In case of another decline, 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.

Weekly

    •    Last Candlesticks pattern: Doji
    •    Time of formation: 20 Feb 2017
    •    Trend bias: Up

Daily

    •    Last Candlesticks pattern: Doji
    •    Time of formation: 1 Sep 2016
    •    Trend bias: Near term down

EUR/CHF – 1.0877

As the single currency has rebounded after holding above support at 1.0838, retaining our bullishness and consolidation above this level would be seen with upside bias for gain to 1.0920 but break of resistance at 1.0949 is needed to signal the pullback from 1.0988 has ended, bring test of 1.0960, break there would suggest upmove has resumed for retest of 1.0988, then towards previous resistance at 1.1001. Looking ahead, only a break there would retain bullishness and encourage for headway to 1.1050-60, then 1.1100, having said that, price should falter below another previous resistance at 1.1201.

On the downside, expect pullback to be limited to 1.0855 and said support at 1.0838 should hold, bring another rise later to aforesaid upside targets. Below 1.0838 support would risk test of previous support at 1.0792 but only a daily close below there would signal top is formed at 1.0988 instead, bring subsequent fall to 1.0750 and then towards 1.0700-10 but support at 1.0671 should remain intact, the single currency shall stage another rebound from there.

Recommendation: Hold long entered at  at 1.0865 for 1.1065 with stop below 1.0835.

 
On the weekly chart, as indicated support at 1.0838 has continued to hold, retaining our bullishness and consolidation with upside bias remains for gain to 1.0949 resistance but break there is needed to signal the pullback from 1.0988 has ended, bring retest of this level, break there would extend recent upmove from 1.0631 to previous resistance at 1.1001, a sustained breach above this level would signal the fall from 1.1201 has ended, bring further gain to 1.1100 and possibly test of resistance at 1.1129 but price should falter below said recent high at 1.1201, bring retreat later. 

On the downside, as long as said support at 1.0838 holds, prospect of such a rebound remains. Below this level would risk test of the Kijun-Sen (now at 1.0810) but only break of previous support at 1.0780 would abort and signal top has been formed at 1.0988 instead, bring further weakness to 1.0720, however, still reckon support at 1.0656 would remain intact, bring another rally later.

Wednesday's probe above daily cloud / 55SMA (1.2793) was short-lived and subsequent pullback left Doji candle with long upper shadow, signaling strong hesitation at important 1.2800 resistance zone (reinforced by daily Tenkan-sen at 1.2806).

Fresh easing on Thursday threatens of further downside but bears were so far contained by hourly cloud top / Wednesday's low at 1.2722.

Markets are awaiting BoE's policy decision today for fresh signals. The central bank is expected to keep rates unchanged, but traders will be closely watching BoE's stance in regards to rising inflation, mixed numbers from labor sector and political turmoil following last week election.

Hawkish BoE may offer temporary support to the pound, however, overall bearish short-term structure continues to weigh.

Key supports lay at 1.2640 zone (near-term base) and 1.2623 (100SMA), loss of which would further weaken the structure and expose next significant support at 1.2565 (200SMA).

At the upside, renewed attempts above 1.2800 resistance zone will face resistance at 1.2841 (daily Kijun-sen) and are expected to stay capped by falling 20SMA (1.2870).

Res: 1.2760, 1.2793, 1.2817, 1.2841
Sup: 1.2722, 1.2704, 1.2673, 1.2635

Daily Pivots: (S1) 1.0855; (P) 1.0881; (R1) 1.0918; More...

Breach of 1.0902 minor resistance argues that the correction from 1.0986 could have completed at 1.0836 already. Intraday bias is turned back to the upside for retesting 1.0986/0999 resistance zone. Below 1.0836 will extend the correction. Still, we'd expect strong support from 1.0791/0872 support zone to bring rebound.

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 1.0791 support holds.

EUR/USD

Current level - 1.1222

Yesterday's failure at 1.1300 resistance signals a bearish bias, for a break through 1.1185, towards 1.1108 low.

Profit-taking affects gold curbing silver and platinum

USD/JPY

Current level - 109.56

The recent slide to 108.80 should be considered a finale of the whole slide since 114.37 and my outlook is bullish, for a break through 110.35, towards 112.10.

GBP/USD

Current level - 1.2746

The bias here is negative after the recent failure below 1.2830, for a break through 1.2720, towards 1.2610.

The US dollar mostly held onto gains made after the Federal Reserve was not as dovish as some had expected and the aussie was one of the best performing major currencies after strong jobs data. The kiwi slid after soft GDP data.

The Fed announced on Wednesday it raised interest rates for the second time this year, taking the target range for the Fed funds rate to between 1.00-1.25%, as was widely expected. The US central bank cited continued US economic growth and job market strength, and announced it would begin cutting its holdings of bonds and other securities this year. Fed Chair Janet Yellen indicated the Fed was still looking through soft inflation and blamed recent low inflation numbers on one-off effects.

The greenback rose post-FOMC to 109.85 yen but could not make up for Wednesday's losses made after weak US CPI and retail sales data when it fell to 108.92 from 110.3 yen. The dollar's gains will likely be limited as US political uncertainty weighs on the currency after the Washington Post reported that US President Donald Trump was under investigation by Special Counsel Robert Mueller for possible obstruction of justice.

The aussie surged after strong Australian employment data and jumped up to $0.7630 from $0.7582. Australian jobs beat forecasts in May with the economy adding 42,000 positions versus 10,000 expected. The unemployment rate hit 5.5%, its lowest since 2013. It was expected to remain at 5.7%.

The kiwi fell following weak New Zealand growth data to reach a session low of $0.7207. First quarter GDP missed forecasts and rose 0.5% versus 0.7% forecast, following an increase of 0.4% in the December 2016 quarter.

Sterling was little changed against the dollar after falling yesterday on weak UK average earnings numbers. Focus shifts to the Bank of England policy meeting later today, although rates are expected to remain on hold. Cable traded around $1.2750 during the Asian session.

The euro reversed all of its gains made versus the dollar yesterday, when it came close to the key $1.1300 level, only to fall back down to below $1.1200.

Aside from the forex markets, looking at commodities, US WTI oil prices consolidated losses after dropping below $45 a barrel to a five-week low on Wednesday following a disappointing report on US crude and gasoline stockpiles. Gold slid to its lowest in three weeks at $1257.07 an ounce. The precious metal is usually sensitive to US interest rates, and thus weakened after Wednesday's Fed rate hike.

The Swiss National Bank (SNB) is maintaining its expansionary monetary policy, with the aim of stabilising price developments and supporting economic activity. Interest on sight deposits at the SNB is to remain at -0.75% and the target range for the three-month Libor is unchanged at between -1.25% and -0.25%. The SNB will remain active in the foreign exchange market as necessary, while taking the overall currency situation into consideration. The negative interest rate and the SNB's willingness to intervene in the foreign exchange market are intended to make Swiss franc investments less attractive, thereby easing pressure on the currency. The Swiss franc is still significantly overvalued.

The new conditional inflation forecast differs little from that of March. The SNB continues to anticipate an inflation rate of 0.3% for the current year. For 2018, the forecast has fallen slightly to 0.3%, from 0.4% in the previous quarter. For 2019, it now expects inflation of 1.0%, compared to 1.1% last quarter. The conditional inflation forecast is based on the assumption that the three-month Libor remains at -0.75% over the entire forecast horizon.

In line with the SNB's expectations, the global economy has strengthened further. Owing to the economic growth, the labour market situation in advanced economies has improved in recent quarters. Despite positive developments in the real economy, inflation remains modest in most advanced economies. Against this background, monetary policy in Japan and the euro area, in particular, is likely to remain very expansionary. In the US, monetary conditions are expected to gradually normalise.

In its new baseline scenario for the global economy, the SNB anticipates that economic developments will remain favourable. The cautiously optimistic baseline scenario continues to be subject to considerable downside risks; this is due to political uncertainty and structural problems in a number of advanced economies.

According to initial quarterly estimates of the national accounts, positive stimuli from abroad were again only partially transmitted to the Swiss economy in the first quarter of 2017. Although GDP growth firmed somewhat, it still remained subdued at an annualised 1.1%, having already been weak in the second half of 2016. However, available economic indicators point to slightly more robust economic momentum. For 2017, the SNB continues to expect growth of roughly 1.5%.

In the first quarter, growth in mortgage lending remained constant at a relatively low level, and momentum in residential real estate prices continued at a measured pace. At the same time, owing to developments in fundamentals and the generally subdued activity on the mortgage and residential real estate markets, imbalances have fallen slightly in recent quarters. Nevertheless, they are still just as pronounced as they were in 2014, when the sectoral countercyclical capital buffer was set at 2%. The SNB will continue to monitor developments on these markets closely, and will regularly reassess the need for an adjustment of the countercyclical capital buffer.

Daily Pivots: (S1) 0.7536; (P) 0.7585; (R1) 0.7639; More....

AUD/USD's rise from 0.7328 resumed by taking out 0.7566 and reaches as high as 0.7635 so far. Intraday bias is back on the upside for 0.7748 resistance and above. There is no clear sign of range breakout yet. So, we'll be cautious on topping again as it approaches medium term fibonacci level at 0.7849. For now, near term outlook will stay mildly bullish as long as 0.7523 support holds.

In the bigger picture, we're still treating price actions from 0.6826 low as a corrective pattern. And, as long as 38.2% retracement of 0.9504 to 0.6826 at 0.7849 holds, long term down trend from 1.1079 is expected to resume sooner or later. Break of 0.6826 low will target 0.6008 key support level. However, firm break of 0.7849 will indicate that rise from 0.6826 is developing into a medium term rebound, rather than a sideway pattern. In such case, stronger rise should be seen to 55 month EMA (now at 0.8091) and above.

The Euro returned to familiar levels around 1.1200 after Wednesday's attempt at 1.1300 zone target, driven by strong fall of dollar on disappointing US inflation data and subsequent pullback on FOMC rate hike that strengthened the greenback.

Underlying bull trend is still in play but repeated failures to close above 10SMA / daily Tenkan-sen (1.1231) could be seen as negative signal, as Wednesday's daily candle with long upper shadow on strong upside rejection weighs.

Firm break below 20SMA (1.1217) which tracks the action in past couple of days and extension below last Friday's low at 1.1166 is needed to generate stronger bearish signal and expose next pivotal support at 1.1109 (30 May trough/near Fibo 38.2% of 1.0820/1.1295 upleg).

Conversely, eventual close above 10 SMA/daily Tenkan-sen resistances would shift focus higher, however, sustained break above 1.1300 barrier is needed to signal bullish continuation.

Res: 1.1231, 1.1295, 1.1300, 1.1366
Sup: 1.1192, 1.1166, 1.1109, 1.1058

Daily Pivots: (S1) 1.3184; (P) 1.3227; (R1) 1.3291; More....

USD/CAD recovered after dipping to 1.3164 and intraday bias is turned neutral first. Some consolidation would be seen but recovery is expected to be limited by 1.3387 support turned resistance to bring fall resumption. Current development affirms our view that corrective rise from 1.2460 has completed at 1.3793. Below 1.3164 will target next key level at 1.2968 (38.2% retracement of 1.2460 to 1.3793 at 1.2969) for confirmation.

In the bigger picture, price actions from 1.4689 medium term top are seen as a correction pattern. The first leg has completed at 1.2460. Rise from 1.2460 is seen as the second leg and has completed at 1.3793, ahead of 61.8% retracement of 1.4689 to 1.2460 at 1.3838. Break of 1.3222 should now indicate the start of the third leg while further break of 1.2968 should confirm. In that case, USD/CAD should decline through 1.2460 support to 50% retracement of 0.9406 to 1.4869 at 1.2048.