Sample Category Title

EUR/USD - 1.1219

Most recent candlesticks pattern   : N/A

Trend                      : Up

Tenkan-Sen level              : 1.1224

Kijun-Sen level                  : 1.1230

Ichimoku cloud top             : 1.1201

Ichimoku cloud bottom      : 1.1176

Original strategy  :

Bought at 1.1205, Target: 1.1305, Stop: 1.1170

Position : - Long at 1.1205

Target :  - 1.1305

Stop : - 1.1170

New strategy  :

Hold long entered at 1.1205, Target: 1.1305, Stop: 1.1170

Position : - Long at 1.1205

Target :  - 1.1305

Stop : - 1.1170

As the single currency has retreated after marginal rise to 1.1257 earlier today, suggesting consolidation below this level would be seen, however, reckon the upper Kumo (now at 1.1184) would limit downside and bring another rise later, above said resistance at 1.1257 would extend gain to previous resistance at 1.1268, break there would confirm early upmove has resumed and test of another previous chart resistance at 1.1300 would follow, above there would encourage for headway to 1.1340-45, however, overbought condition should limit upside to chart point at 1.1366.

In view of this, we are holding on to our long position entered at 1.1205. Only below support at 1.1164 (yesterday’s low) would abort and suggest a temporary top is formed instead, risk weakness to 1.1140 but said support at 1.1109 should remain intact, bring rebound later. 

USD/JPY - 111.25

Most recent candlesticks pattern   : N/A

Trend                      : Near term down

Tenkan-Sen level              : 111.21

Kijun-Sen level                  : 110.98

Ichimoku cloud top             : 110.98

Ichimoku cloud bottom      : 110.87

New strategy  :

Buy at 110.85, Target: 111.85, Stop: 110.50

Position :  -

Target :  -

Stop : -

Current breach of indicated resistance at 111.23-24 signals low has indeed been formed at 110.48 and near term upside risk remains for a strong retracement of the fall from 112.13, hence gain to 111.50 (61.8% Fibonacci retracement of 112.13-110.48), then 111.70 is likely, however, as broad outlook remains consolidative, reckon upside would be limited to resistance at 111.95 and price should falter below another previous resistance at 112.13, bring retreat later. 

In view of this, we are looking to buy dollar on pullback as 110.80-85 should limit downside. Only below support at 110.48 would extend recent decline to another previous support at 110.24, break there would bring subsequent selloff to 110.00 which is likely to hold on first testing.

NZDUSD is making a potential reversal from the top, with blue wave a in the making. If everything goes as expected, then a three wave move to the downside will unfold in sessions ahead. That said, the later blue wave c can reach region at 0.6988 where previous swing low of wave four could offer some resistance and slow weakness down.

NZDUSD, 1H

EUR/GBP - 0.8700

 
Recent wave: Major double three (A)-(B)-(C)-(X)-(A)-(B)-(C) is unfolding and 2nd (A) has possibly ended at 0.6936.

Trend: Near term up

Original strategy  :

Buy at 0.8620, Target: 0.8750, Stop: 0.8580

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 0.8735, Target: 0.8610, Stop: 0.8775

O.C.O.

Buy at 0.8600, Target: 0.8750, Stop: 0.8565

Position : -

Target :  -

Stop : -

 
As the single currency has retreated after marginal rise to 0.8755, suggesting a temporary top is possibly formed and consolidation below this level is seen with mild downside bias for test of 0.8655 support, break there would add credence to this view, bring retracement of recent rise to 0.8620-25, then test of 0.8600-03 support where renewed buying interest should emerge, bring another rise later. Above said resistance at 0.8755 would extend recent rise from 0.8312 low to 0.8770, then test of resistance at 0.8788, however, reckon upside would be limited to 0.8800-10.

In view of this, whilst we are still looking to buy euro on dips, we would also sell euro on recovery as 0.8730-35 should limit upside. Below 0.8565-70 would abort and signal a temporary top is formed, bring correction to 0.8550 and possibly towards support at 0.8524 which is likely to hold from here.

Our preferred count is that, after forming a major top at 0.9805 (wave V), (A)-(B)-(C) correction is unfolding with (A) leg ended at 0.8400 (A: 0.8637, B: 0.9491 and 5-waver C ended at 0.8400. Wave (B) has ended at 0.9413 and impulsive wave (C) has either ended at 0.8067 or may extend one more fall to 0.8000 before prospect of another rally. Current breach of indicated resistance at 0.9043 confirms our view that the (C) leg has ended and bring stronger rebound towards 0.9150/54, then towards 0.9240/50.

USD/CAD - 1.3492

 
Recent wave: Only wave v of c has ended at 0.9407 and wave C of major A-B-C correction is underway for headway to 1.4700

Trend:  Near term up

 
Original strategy       :

Sell at 1.3540, Target: 1.3340, Stop: 1.3600

Position: -

Target:  -

Stop: -

 
New strategy             :

Sell at 1.3550, Target: 1.3350, Stop: 1.3610

Position: -

Target:  -

Stop:-

Although the rebound from 1.3387 (last week’s low) suggests consolidation above this level would be seen and corrective bounce to 1.3530-35 (38.2% Fibonacci retracement of 1.3770-1.3387) cannot be ruled out, however, reckon upside would be limited to resistance at 1.3540-50 and bring another decline, below said support at 1.3387 would extend the fall from 1.3794 top for further weakness to 1.3350, then towards 1.3300 but loss of near term downward momentum should prevent sharp fall below 1.3250-60, risk from there has increased for a rebound to take place later.

In view of this, would be prudent to sell on further recovery as 1.3540 resistance should limit upside, bring another decline. Above 1.3571-79 (previous support and 50% Fibonacci retracement of 1.3770-1.3387) would defer and suggest a temporary low is formed instead, risk a stronger rebound to 1.3600 but still reckon resistance at 1.3670 would remain intact.

To recap, wave B from 1.3066 is unfolding as an a-b-c and is sub-divided as a: 1.2192, b: 1.2716 and wave c is a 5-waver with i: 1.1983, ii: 1.2506, extended wave iii with minor iii at 1.0206, wave iv ended at 1.0781 and wave v as well as wave iii has ended at 0.9931, hence the subsequent choppy trading is the wave iv which is unfolding as (a)-(b)-(c) with (a) leg of iv ended at 1.0854, followed by (b) leg at 1.0108 and (c) leg as well as the wave iv ended at 1.0674. The wave v is sub-divided by minor wave (i): 0.9980, (ii): 1.0374, (iii): 0.9446, (iv): 0.9913 and (v) as well as v has possibly ended at 0.9407, therefore, consolidation with upside bias is seen for major correction, indicated target at 1.3700 and 1.4000 had been met and further gain to 1.4700 would be seen later.

US oil price remains at the back foot on Thursday but holding above Wednesday's spike low at $47.72, where two day fall was contained by daily Kijun-sen line. Long tail of yesterday's candle signaled strong downside rejection that may trigger extended consolidation. Upside attempts stalled at $49.05, after false break above initial 20SMA barrier at $48.85, keeping daily MA's in bearish setup. Oil is awaiting release of US weekly Crude Stocks data for fresh signals. Forecast for 2.5 million barrels draw is well below previous week's 4.4 million barrels draw and may put oil price under increased pressure on release at/below consensus. Daily Kijun-sen marks pivotal support and close below it may trigger fresh bearish acceleration towards $46.89 (Fibo 61.8% of $43.74/$51.98 rally. Conversely, close above 20SMA would ease persisting downside pressure and expose a cluster of strong barriers between $49.50 and $50.00.

Res: 48.85; 49.05; 49.50; 50.00
Sup: 48.19; 47.86; 47.35; 46.89

• European equity markets gain up to 0.5% today amid a nearly completely empty EMU eco calendar. US stock markets opened marginally stronger as well after an upbeat ADP report.
• ADP employment growth beat expectations in May, rising by 253k (vs 180k expected). Weekly jobless claims unexpectedly ticked up from 235k to 248k, but remain near historically low levels. The US manufacturing ISM nearly stabilised as expected at 54.9, but the "prices paid" component unexpectedly declined from68.5 to 60.
• Inflation in the US is likely to rise further following its recent pause given strong spending numbers and the tightening labour market, Washington-based Fed Governor Powell said as he advocated continued monetary policy tightening. He said the risks to the Fed's outlook were as balanced as they have been in some time.
• UK manufacturing activity maintained its momentum in May and confidence rose as strong domestic demand buoyed orders. The PMI printed at 56.7 (vs. 56.5 consensus) in May after reaching 57.3 in April, which was the highest in 3 years. The final May EMU manufacturing PMI was confirmed at 57.0.
• Brussels and Italy have agreed on a rescue of the troubled Monte dei Paschi di Siena bank, outlining a draft plan that involves significant cost cuts, some investors taking a hit on bonds and top management accepting a cap on pay. The agreement is conditional on approval from the ECB.

Rates

US Treasuries lose ground after strong ADP report

Global core bond lost some ground today with US Treasuries underperforming following a strong ADP-report. Ahead of the release, bond trading was subdued and confined to tight ranges. Positive risk sentiment on European stock markets and lower oil price didn't impact trading. At the time of writing, US yields shift 2.4 bps to 3.2 bps higher, the belly of the curve underperforming the wings. Changes on the German yield curve range between +1 bp and +1.8 bps. On intra-EMU bond markets, 10-yr yield spread changes versus Germany are nearly unchanged with Italy/Greece underperforming (+4 bps) and Portugal outperforming (-5 bps).

ADP reported net job growth of 253k in May from 174k in April and against 180k consensus. It bodes well for tomorrow's payrolls. Weekly jobless claims unexpectedly ticked up, but remain below 250k en near historically low levels. The US manufacturing stabilised as expected at 54.9, but the prices paid component of the report disappointed. Washington-based Fed governor Powell, usually sparse with comments, sounded upbeat on the economy. He predicts a further rise in inflation after the current pause given strong spending and a tightening labour market. According to Powell, the Fed is as close to its assigned goals as it has been for many years. That warrants a continuation of the tightening cycle (in June?!) and the start of the balance sheet run-off later this year.

The French debt agency sold three OAT's for a combined €8.27B, near the upper end of the targeted €7.5-8.5B: €5.08B 1% May2027, €1.72B 5.75% Oct2032 and €1.47B 1.75% Jun2039. The auction bid cover was 1.8, which is rather low for French norms. Apparently some investors take a cautious approach ahead of the parliamentary elections. The Spanish Tesoro launched a new 3-yr Bono (€2.7B 0.05% Jan2021) and tapped the 50-yr Obligacion (€1.44B 3.45% Jul2066). The total amount sold (€4.14B) was in the upper bound of the eyed €3.5-4.5B. The auction bid cover was 1.72 with main interest to the Jan2021 Bono.

Currencies

USD decline halts ahead of key US eco data

The dollar started the session close to the recent lows against the euro and the dollar. The EMU data were OK, but not strong enough to push EUR/USD to a new short-term correction top. Interest rate differentials between the dollar and the euro didn't narrow anymore and the dollar profited slightly from strong ADP private job growth. EUR/USD dropped to the low 1.12 area. USD/JPY tries to make further headway north of 111, awaiting tomorrow's payrolls.

Overnight, country specific issues dominated trading in Asia. Positive capital spending data and corporate profits supported Japanese equities. The yen stayed strong despite positive risk sentiment. USD/JPY hovered in the 111 area. The moves in euro were limited, but EUR/USD maintained yesterday's gains and hovered within reach of the 1.1268 resistance.

European markets opened with a cautious risk-on bias as equities copied the late session rebound in the US yesterday. The May EMU manufacturing PMI was confirmed at 57.00. Italian growth was also revised higher from 0.2% Q/Q to 0.4% Q/Q. However, it wasn't enough to inspire further EUR/USD gains beyond the 1.1268 resistance. Moves on the bond markets were limited. If anything, interest rate differentials didn't narrow further in favour of the euro. EUR/USD gradually lost a few ticks during the morning session and settled in the mid 1.12 area. The dollar regained a few ticks against the yen and tried to recapture the 111 big figure.

Early in US dealings, the ADP labour market report printed at 253 000 additional jobs in the US private sector while 180 000 was expected. The dollar gained some further ground, but investors remain cautious to position for a protracted USD uptrend just hours before the US manufacturing ISM and ahead of tomorrow's key Payrolls report. The latter will probably decide whether there is room for a sustained USD rebound. EUR/USD is changings hands in the low 1.12 area going in the publication of the US ISM. USD/JPY rebounded to the 111.35/40 area. The US manufacturing ISM was very close to expectations. A soft prices paid sub-index might be marginally USD negative.

Sterling continues trading nervously on political jitters

The UK elections remain the key driver for sterling trading. The UK manufacturing PMI declined less than expected from 57.00 to 56.7, indicating ongoing good growth in the sector. However the impact on sterling trading was negligible. In technical trade, EUR/GBP even touched a minor short-term top in the 0.8755 area, but no clear break occurred. Most election polls still indicated a lead for PM May's conservative party, but the lead is declining. After the recent substantial sterling losses, some consolidation seems to kick in. EUR/GBP hovers in the lower half of the 0.87 big figure. Cable is changing hands in the mid 1.28 area as the countdown to June 08 continues.

EURJPY: With the pair continuing to hold on to its recovery pressure, more strength is now expected in the days ahead. On the downside, support comes in at the 124.00 level where a break if seen will aim at the 123.50 level. A cut through here will turn focus to the 123.00 level and possibly lower towards the 122.50 level. On the upside, resistance resides at the 125.00 level. Further out, we envisage a possible move towards the 125.50 level. Further out, resistance resides at the 126.00 level with a turn above here aiming at the 126.50 level. On the whole, EURJPY faces further recovery threats.

Daily Pivots: (S1) 1.1187; (P) 1.1219 (R1) 1.1275; More....

EUR/USD is staying in range of 1.1109/1267 and intraday bias remains neutral first. On the upside, break of 1.1267 will resume recent rise. Decisive break of 1.1245/98 (138.2% projection of 1.0339 to 1.0828 from 1.0569 at 1.1245) resistance zone will carry larger bullish implication and target 1.1615 resistance next. In case consolidation from 1.1267 extends with another fall, further rise will remain in favor as long as 1.1020 support holds. But, break of 1.1020 will indicate rejection from 1.1245/98 and turn bias 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 1.0888). 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) 1.2799; (P) 1.2859; (R1) 1.2951; More...

Intraday bias in GBP/USD remains neutral first. With 1.2926 minor resistance intact, deeper fall is still in favor. We're holding on to view that rise from 1.2108 is completed. Below 1.2768 will target 1.2614 resistance turned support next. Break there should also indicate completion of whole consolidation pattern from 1.1946 and target a retest on this low. Meanwhile, above 1.2926 minor resistance will turn focus back to 1.3047 high instead.

In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. The rejection from 55 week EMA is maintaining bearishness in the pair. Also, at this point, as long as 1.3444 resistance holds, fall from 1.7190 is still expected to continue. Break of above mentioned 1.2614 support will affirm this bearish case.