Sample Category Title

Daily Pivots: (S1) 0.9644; (P) 0.9702; (R1) 0.9735; More.....

Break of 0.9691 indicates resumption of recent decline in USD/CHF. Intraday bias is turned back to the downside. Current fall from 1.0342 will target 100% projection of 1.0342 to 0.9860 from 1.0099 at 0.9617. We'll start to look for reversal signal below there. But in any case, break of 0.9807 resistance is needed to indicate short term bottoming. Otherwise, near term outlook will remain bearish in case of recovery.

In the bigger picture, USD/CHF is 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.

Daily Pivots: (S1) 110.41; (P) 110.82; (R1) 111.16; More...

With 111.46 minor resistance intact, intraday bias in USD/JPY remains mildly on the downside for 110.23 support. Break will resume the fall from 114.36 to 108.12 and below. Note again that decline from 118.65 is seen as a correction. In that bearish case, we'll look for bottoming signal again at 61.8% retracement of 98.97 to 118.65 at 106.48. On the upside, above 111.46 minor resistance will turn intraday bias neutral again first.

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) 141.86; (P) 142.38; (R1) 143.30; More....

With 143.36 minor resistance intact, deeper decline could still be seen in GBP/JPY, for 61.8% retracement of 135.58 to 148.09 at 140.35. At this point, we'd still expect rebound from 122.36 to resume later. Hence, we'd look for strong support below 140.35 to contain downside and bring rebound. On the upside, above 143.36 minor resistance will turn bias back to the upside. However, sustained trading below 140.35 will dampen our bullish view and turn focus back to 135.58 key near term support instead.

In the bigger picture, rise from 122.36 medium term bottom is still expected to extend to of 195.86 to 122.36 at 150.42. And decisive break there could pave the way to 61.8% retracement at 167.78. However, as the cross is starting to lose upside momentum, rejection below 150.42 and break of 135.58 support will indicate reversal and bring deeper fall back to retest 122.36 instead.

AUD/USD – 0.7406

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 down

Original strategy :

Bought at 0.7405, Target: 0.7570, Stop: 0.7345

Position: - Long at 0.7405
Target:  - 0.7570
Stop: - 0.7345

New strategy :

Exit long entered at 0.7405

Position: - Long at 0.7405
Target:  -
Stop:-

Aussie ran into selling interest at 0.7455 earlier today and has dropped in European morning, dampening our bullishness and near term downside risk is seen for weakness to 0.7380-85, break there would suggest the rebound from 0.7329 has ended at 0.7518 last month, bring further fall to 0.7350, then retest of this level later. Only a drop below this support at 0.7329 would confirm recent decline has resumed and extend weakness to 0.7295-00 (76.4% retracement of 0.7158-0.7750).

In view of this, would be prudent to exit our long position entered at 0.7405 and stand aside for now. above said intra-day resistance at 0.7455 would bring test of 0.7476 but break there is needed to revive bullishness and signal the retreat from 0.7518 has ended, bring another test of this level first, break there would extend the rise from 0.7329 low to resistance at 0.7556.

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.

Daily Pivots: (S1) 123.99; (P) 124.25; (R1) 124.79; More...

Intraday bias in EUR/JPY remains neutral as the consolidation from 125.80 continues. Deeper fall cannot be ruled out down we'd expect downside to be contained by by 38.2% retracement of 114.84 to 125.80 at 121.61 to bring rise resumption. We're staying mildly bullish in the cross. And, break of 126.09 key resistance will extend the whole rebound from 109.03 to 100% projection of 109.03 to 124.08 from 114.84 at 129.89. Nonetheless, firm break of 121.61 will dampen our bullish view and bring deeper fall to 61.8% retracement at 119.02.

In the bigger picture, focus is back on 126.09 support turned resistance. Decisive break there will confirm completion of the down trend from 149.76. And in such case, rise from 109.20 is at the same degree and should target 141.04 resistance and above. Meanwhile, rejection from 126.09 and break of 114.84 will extend the fall from 149.76 through 109.20 low.

Daily Pivots: (S1) 1.0862; (P) 1.0886; (R1) 1.0903; More...

No change in EUR/CHF's outlook as consolidation from 1.0986 continues. Intraday bias stays neutral for the moment. Deeper fall cannot be ruled out. But downside should be contained by 1.0791/0872 support zone to bring rise resumption. As noted before, the consolidative pattern from 1.1198 should be completed. Firm break of 1.0999 resistance will pave the way for a retest on 1.1198 high.

In the bigger picture, the price actions from 1.1198 are seen as a corrective move. Current strong rebound is raising the chance that it's 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.

Daily Pivots: (S1) 0.8694; (P) 0.8721; (R1) 0.8747; More...

EUR/GBP is still bounded in range below 0.8750 and intraday bias stays neutral first. Consolidation from 0.8750 could extend but near term outlook will remain mildly bullish as long as 0.8602 support holds and further rally is expected. Above 0.8750 will target 0.8786 resistance first. Break of 0.8786 would pave the wave for retesting 0.9304 high. Break of 0.8602, however, will argue that the rebound from 0.9312 has completed and turn bias back to the downside for 0.8529 first.

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 taking 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.

USD/CHF - 0.9684

Most recent candlesticks pattern : N/A

Trend                                    : Near term down

Tenkan-Sen level                  : 0.9684

Kijun-Sen level                    : 0.9714

Ichimoku cloud top                 : 0.9770

Ichimoku cloud bottom              : 0.9761

Original strategy :

Bought at 0.9700, met target at 0.9800

Position : - Long at 0.9700

Target :  - 0.9800

Stop : -

New strategy  :

Sell at 0.9720, Target: 0.9620, Stop: 0.9755

Position : -

Target :  -

Stop : -

Although the greenback did stage the anticipated rebound to 0.9808 (our long position entered at 0.9700 met target at 0.9800), dollar ran into heavy selling pressure at 0.9808 earlier this week and has dropped sharply since, the subsequent breach of previous support at 0.9692 confirms recent decline has resumed and may extend further weakness to 0.9655-60, then 0.9630, however, near term oversold condition should prevent sharp fall below 0.9600-05 (50% projection of 1.0100-0.9692 measuring from 0.9808), bring rebound later.

As we already took profit on our long position entered at 0.9700, we are looking to turn short on recovery as 0.9725-30 should limit upside and bring another decline. Only break of resistance at 0.9761 would abort and suggest a temporary low is possibly formed, risk test of said resistance at 0.9808 but only break there would provide confirmation.

GBP/USD - 1.2854

Most recent candlesticks pattern   : N/A

Trend                                 : Near term down

Tenkan-Sen level                 : 1.2865

Kijun-Sen level                    : 1.2845

Ichimoku cloud top              : 1.2839

Ichimoku cloud bottom        : 1.2833

Original strategy :

Sold at 1.2910, Target: 1.2810, Stop: 1.2945

Position : - Short at 1.2910

Target :  - 1.2810

Stop : - 1.2945

New strategy  :

Hold short entered at 1.2910, Target: 1.2810, Stop: 1.2900

Position : - Short at 1.2910

Target :  - 1.2810

Stop : - 1.2900

Although sterling rebounded after falling marginally to 1.2769 yesterday, as price has retreated after meeting resistance at 1.2921, retaining our bearishness and as long as this level holds, consolidation with mild downside bias is seen for weakness to 1.2800-10, however, said support at 1.2769 should hold from here and bring another rebound later today or tomorrow.

In view of this, we are holding on to our short position entered at 1.2910. Above 12921-26 (said resistance and previous support) would defer and suggest low is formed instead, bring a stronger rebound to 1.2950 but upside should be limited to 1.2990-00.

China's manufacturing activities contracted for the first time in 11 months, as Caixin/Markit's PMI index suggested. The report shows that the manufacturing PMI dropped -0.7 points to 49.6 in May (a reading below 50 signals contraction), compared with consensus of a milder drop to 50.1. While the sub-indices of output and new business remained in the expansionary territory, but both fell to their lowest levels since June last year. Meanwhile, the sub- indices of input costs and output prices drifted to the contractionary territory for the first time since June 2016 and February 2016, respectively. Meanwhile, the sub-index of stocks of purchases showed renewed decline. The rebound in the sub-index of stocks of finished goods suggested that companies stopped restocking as inventory levels increased.

Caixin Manufacturing PMI in Conflict with Official Data

Focusing on small- and medium-sized firms, the Caixin/Markit PMI report indicates quite rapid slowdown in activities in these companies. By contrast, the official PMI data by the National Bureau of Statistics saw a rebound in activities in small- and medium-sized firms. The official manufacturing index for small-sized firms rose for the third consecutive month to 51 in May while that for medium-sized firms rebounded to 51.3 in May, after moderating over the past 3 months.

The official manufacturing PMI stayed unchanged at 51.2 for May, compared with consensus of 51. Besides the above-mentioned indices for small- and medium-sized firms, the official report also covers large corporations of which the index declined further to 51.2, from 52 in April. Despite the general belief that smaller companies should perform worse than larger companies due to the government tightening measures, the formers indeed benefited from the improved external demand, evidenced in the pickup in the export orders sub-index. The report also unveiled the widening gap between exports and imports, signaling stabilization in China's trade balance.

The input price index fell to 49.5 in May, marking the first sub-50 reading in 16 months, due to the decline in global commodity prices. We expect China's PPI would continue to moderate, probably falling to around 5%, in coming months.

The Non-manufacturing Sector

The official non-manufacturing PMI improved to 54.5 in May from 54 a month ago. the biggest growth driver for the month was the services PMI which gained +0.9 point to 53.5. The construction PMI slipped -1.2 points to 60.4 in May