Sample Category Title
Crude OIL Looking Lower
Crude oil is making a new drop lower, which could be an indication that red wave 4) correction is completed and that red wave 5) is in motion. If that is the case, then we expect a five wave development to take place within the final wave, and ideally look for support and limited downside around the 40 mark.
Crude oil, 1h
Crude Oil: Sells Off On Trend Resumption
CRUDE OIL: The commodity continues to retain its downside pressure as it sold off on Tuesday. On the downside, support resides at the 43.00 level where a break will expose the 42.50 level. A cut through here will set the stage for a run at the 42.00 level. Further down, support resides at the 41.50 level. Its daily RSI is bearish and pointing lower suggesting further weakness. On the upside, resistance resides at the 44.00 level. Further out, resistance comes in at the 44.50 level. A break above here will aim at the 45.00 level and then the 45.50 level followed by the 46.00 level. All in all, CRUDE OIL remains biased to the downside.
EURCAD Downside Risk after Break Below 50-day Moving Average; Medium-term Bullish Picture Intact
EURCAD has been in a downtrend since falling from the June 2 high of 1.5257. There is risk to the downside since the momentum indicators are bearish. RSI is below 50 but not yet oversold, so there is a possibility of a move lower. The MACD is falling and approaching close to zero. Other bearish signals were given when prices broke below the 50-day moving average in mid-June. Meanwhile, the tenkan-sen has crossed below the kijun-sen line, giving a bearish signal, while prices have pierced the daily Ichimoku cloud.
EURCAD has been holding above the cloud until last week. The cloud top stands at 1.4794 and was acting as support until it failed and prices have dropped to threaten 1.4691, which is the 38.2 Fibonacci retracement level of the upleg from 1.3782 to 1.5257. The mid-point of this February to June uptrend is a critical support level. Falling below this level would start to change the medium-term bullish market structure.
Major resistance is expected at the 23.6% Fibonacci at 1.4907. A sustained beak above this could weaken the recent downside bias and see prices target the June high of 1.5257 for a resumption of the uptrend.
Looking at the bigger picture, EURCAD still maintains a bullish outlook as long as the market remains above the cloud. The rising 50-day moving average and its positive alignment with the 200-day moving average also supports a bullish view for the medium-term.
EUR/USD Potential Up Swing Within 1.1115-1.1100 Zone
The EUR/USD is has been trading within a range that has been established in May and it's close to the POC zone 1.1115-1.1100 (W L4, 88.6, historical buyers, ATR pivot). The POC zone might spike the price towards 1.1185, 1.1230 and 1.1295. If the price breaks above W H4 1.1295 the door towards 1.1400 should be open. Major support lies at 1.1040 that is W L5 level. Failure of this level should put this pair in a bearish territory again. This POC zone might be the chance for bulls to regain positive momentum on this pair.
Trade Idea Update: USD/CHF – Hold long entered at 0.9705
USD/CHF - 0.9743
Original strategy :
Bought at 0.9705, Target: 0.9805, Stop: 0.9690
Position : - Long at 0.9705
Target : - 0.9805
Stop : - 0.9690
New strategy :
Hold long entered at 0.9705, Target: 0.9805, Stop: 0.9690
Position : - Long at 0.9705
Target : - 0.9805
Stop : - 0.9690
As the greenback found renewed buying interest at 0.9695 and staged a strong rebound, retaining our bullishness and suggesting the pullback from 0.9771 has ended there, hence upside bias remains for a retest of said resistance, break there would extend recent rise from 0.9613 low to resistance at 0.9808 but reckon previous resistance at 0.9825 would hold from here due to near term overbought condition, bring retreat later.
In view of this, we are holding on to our long position entered at 0.9705. Below said support at 0.9695 would defer and risk weakness towards said support at 0.9641 but only break there would abort and revive bearishness, this would also suggest the rebound from 0.9613 has ended instead, bring retest of this level later.
Trade Idea Update: GBP/USD – Sell at 1.2715
GBP/USD - 1.2650
Original strategy :
Sell at 1.2780, Target: 1.2680, Stop: 1.2815
Position : -
Target : -
Stop : -
New strategy :
Sell at 1.2715, Target: 1.2615, Stop: 1.2750
Position : -
Target : -
Stop : -
As cable has fallen again and broke below indicated support at 1.2690, adding credence to our view that the rebound from last week’s low at 1.2635 has ended at 1.2818 earlier and below this level would extend recent decline to 1.2600-05, however, near term oversold condition would limit downside to 1.2575-80 and reckon 1.2550 would hold from here, risk from there is seen for a rebound later.
In view of this, we are looking to sell cable on recovery but at a lower level as 1.2715-20 should limit upside. Only above 1.2755-60 would abort and suggest an intra-day low is formed instead, bring a stronger rebound to 1.2780 but price should falter below said resistance at 1.2818.
Trade Idea Update: EUR/USD – Sell at 1.1185
EUR/USD - 1.1151
Original strategy :
Sell at 1.1185, Target: 1.1085, Stop: 1.1220
Position : -
Target : -
Stop : -
New strategy :
Sell at 1.1185, Target: 1.1085, Stop: 1.1220
Position : -
Target : -
Stop : -
The single currency met resistance at 1.1213 and retreated quite sharply from there, suggesting the rebound from 1.1132 has ended there and retest of said support would be seen, however, break there is needed to confirm recent decline has resumed and extend weakness to previous support at 1.1109, a drop below this level would encourage for subsequent fall to 1.1075-80 which is likely to hold on first testing.
In view of this, we are looking to sell euro on recovery as 1.1185-90 should limit upside. Only above 1.1213-14 (said resistance and 50% Fibonacci retracement of 1.1296-1.1132) would defer and risk a stronger rebound to 1.1230-35 (61.8% Fibonacci retracement) but upside should be limited to 1.1260-70, bring another decline later.
Trade Idea Update: USD/JPY – Buy at 111.10
USD/JPY - 111.45
Original strategy :
Buy at 111.25, Target: 112.25, Stop: 110.90
Position : -
Target : -
Stop : -
New strategy :
Buy at 111.10, Target: 112.10, Stop: 110.75
Position : -
Target : -
Stop : -
As the greenback has maintained a firm undertone after breaking above previous resistance at 111.42, adding credence to our bullish view that the rise from 108.82 low is still in progress for retracement of recent decline from 114.37, hence further gain to 111.90-95 (50% projection of 108.82-111.42-110.65) would be seen, however, overbought condition should prevent sharp move beyond resistance at 112.13 and 112.25 (61.8% Fibonacci retracement of 114.37-108.82 and 61.8% projection) should hold on first testing, price should falter below 112.50.
In view of this, we are looking to buy dollar on pullback as 111.00-05 should limit downside. Below 110.85-90 would defer and suggest a temporary top is formed instead, risk retreat towards previous support at 110.65 but reckon previous resistance at 110.35 would turn into support and contain downside.
CAC Posts Gains as Fed Continues Hawkish Message
The CAC index has posted gains in the Tuesday session. The index has gained 0.37% and is currently trading at 5330.57 points. On the release front, the Eurozone's current account surplus dropped sharply to EUR 22.2 billion, well below the estimate of EUR 31.3 billion. This was the lowest surplus since July 2016.
The Federal Reserve issued a hawkish rate statement at last week's meeting, and the Federal Reserve of New York President Charles Dudley continued the upbeat message on Tuesday. Dudley cautioned the Fed against halting its current tightening cycle. Dudley said that he was not concerned with inflation levels, which are at 1.5 percent. Dudley's upbeat remarks have sent global stock markets higher. If other FOMC members also wax positive about the economy, the odds of a December (or even September) rate hike could increase.
France's long election season is finally over, after the second round of parliamentary elections on Sunday. President Emmanuel Macron's En Marche easily won a majority of seats in the National Assembly, garnering about 61% of the vote. This was somewhat lower than recent polls, which had predicted that Macron would win as much as 80% of the seats in parliament. Still, it's an impressive victory for the young and charismatic Macron, whose party is barely a year old. Macron ran on a pro-business agenda, promising to relax regulations and reform labor laws in order to make the French economy more competitive, but France's powerful trade unions are sure to push back against any legislation that will take away rights or benefits from workers. The unions have not shied away from going on strike or organizing mass protests in past conflicts with the government, so Macron will be hard-pressed to implement reforms while keeping peace on the labor front.
One year after the Brexit referendum, which stunned Britain and the European Union, the two sides formally commenced negotiations on Monday in Brussels. The first day was primarily a photo-shoot opportunity, and the sides were on their best behavior. The parties published a concise Terms of Reference for the negotiations, which provided an outline of the talks as set by the Europeans. The paper pointedly did not mention trade talks, but rather listed the initial issues that will be discussed: 1) legal status of EU citizens in the UK; (2) Northern Ireland/Ireland border; and (3) financial obligations of the UK to the EU. With Prime Minister May trying to cobble together a minority government, her position is much weaker than before the disastrous election, and the British position has become more flexible. Philip Hammond, the British finance minister, has said that he wants a business-friendly and pragmatic Brexit and that no deal would be bad for the UK. Hammond did, however, warn the Europeans not to craft an agreement that punished the UK for leaving the club. The negotiations are expected to resume on July 10, when the parties will delve into substantial issues.
GBPJPY Fell Back Below Daily Cloud
The cross fell back below daily cloud on Tuesday after dovish comments from BoE's Carney. Penetration into daily cloud (spanned between 141.85 and 144.07) and probe above 142.27 (Fibo 38.2% of 148.28/138.66 downleg) was short-lived and generated initial signal of stall.
Thick daily cloud weighs on the pair, along with bearishly aligned technical studies (20/55 SMA bear cross was formed at 142.18 yesterday) and uncertainty at the beginning of Brexit talks.
Fresh bearish acceleration through 100SMA (141.23) and 10SMA/Fibo 38.2% of 138.66/142.54 upleg (141.06) further weakens near-term structure, with daily Tenkan-sen (140.71) coming under increased pressure.
Daily close below 141.06 will be seen as strong bearish signal, while firm break below Tenkan-sen would generate initial signal of an end of corrective phase from 138.66.
Res: 141.23; 141.48; 141.85; 142.27
Sup: 140.71; 140.34; 140.14; 139.58
