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Sunrise Market Commentary

• Rates: Risk sentiment remains key, positive for core bonds?
  Risk sentiment will be key for trading with markets watching the latest developments in the Trump affaire. The US stock market correction probably has further to go. Risk aversion could support core bonds short term. The US Note future broke above 125-26+ resistance, suggesting return action to the contract high (126-20). 2.16% is key support for the 10-yr yield.
• Currencies: USD Trump sell-off to slow?
  Yesterday, the dollar was hit hard as the sell-off of risky assets weighed. Today, sentiment on risk remains the key driver for USD trading. If the equity sell-off slows, the dollar might enter calmer waters, at least temporary. Sterling traders will keep a close eye at the UK retail sales. Euro strength propelled EUR/GBP to the 0.86 big figure.

The Sunrise Headlines

• US stocks suffered their worst day in 8 months (-2%) after political turmoil shook investors, with some fearing President Trump's ability to push through his pro-growth policies has been side-lined by the deepening political controversy. Losses in Asia are more contained overnight with Japan underperforming.
• Former FBI Director Robert Mueller III was appointed as special counsel to oversee the federal investigation into Russia's alleged interference in the 2016 US presidential election.
• Japan has recorded its longest run of sustained economic growth since 2006 in a sign of its robust progress under Abenomics. Growth for Q1 2017 came in at an annualised 2.2%, marking 5 quarters of continuous output growth.
• Growth in China's new home prices slowed further in April when compared to a year prior, particularly among top-tier cities, but data also show price rises ramped up in month-on-month terms to the fastest pace since October.
• A Harris Interactive poll found Macron's Republic on the Move party, together with allies, is set to win the largest share of the vote in the first round. 32% of 4,600 registered voters questioned planned to vote for Macron's party, it said.
• Australia's jobless rate fell to its lowest in four months in April, but the number of people with full-time work declined - a mixed report that augurs poorly for a much-needed revival in wage growth and inflation.
• Today's eco calendar contains UK retail sales, US jobless claims and Philly Fed Business Outlook. ECB Draghi, Weidmann, Mersch, Lautenschlager, Nowotny and Fed Mester are scheduled to speak. Spain and France tap the market.

Currencies: USD Trump Sell-Off To Slow?

Turmp-driven USD decline to slow?

On Wednesday, the dollar sold off after articles, based on internal FBI memo of former director Comey, accused Donald Trump to influence and possible obstruct an FBI investigation against his former security adviser. The dollar initially still held near Asian lows, but the sell-off accelerated during the US session with US equities falling off a cliff. USD/JPY lost more than two big figures to close the session at 110.83. The decline of the dollar against the euro was more modest as EUR/JPY selling weighed. Still EUR/USD set a new recovery top and closed session at 1.1159.

Overnight, Asian equity losses are more modest than in the US. Japanese indices are losing about 1.5% as yen strength bites. USD/JPY touched a correction low near 110.55 and trades currently in the 111.20 area. It looks that the acute sell-off phase is easing. Japanese Q1 growth was marginally strong than expected (2.2% Q/Qa), but had limited impact on yen trading. EUR/USD shows a similar picture. The pair touched a minor top around 1.1172 and trades in the 1.1150 area. The Australian April labour market report was better than expected. The Aussie dollar rebounds further off the recent lows. AUD/USD trades around 0.7460

Today, the eco calendar only contains the US initial jobless claims and the May Philly Fed business outlook. For the Philly Fed, a slight decline to 18.5 from 22 is expected. A negative surprise might have more impact than a positive one, as it might raise further doubts on the strength of the US economy. Various ECB members will speak including Draghi. However, it is not clear whether they will elaborate on market sensitive issues. The risk-off sentiment might make them reluctant to address the issue of policy normalization. So, global risk sentiment will dominate USD trading.

We think that US equities entered a short-term sell-on-upticks environment and that US (10-year) yields might revisit the recent lows. This scenario suggests that the dollar might remain in the defensive. That said, we consider yesterday's USD correction as aggressive. So, if the equity and core yields decline slows, the dollar decline might do so too. Yesterday's price action indicates that the outright riskoff is extremely negative for USD/JPY. The impact on EUR/USD is more modest. Even more, a protracted risk-off correction might raise questions on the ECB's intention to start policy normalization in the near future. So, the upside of EUR/USD might become more difficult, even if sentiment on risk remains negative due to US political uncertainty

Technical picture.

The USD/JPY rebound ran into resistance last week. Till Tuesday, it was no more than a correction, but yesterday's sell-off and the re-break below the previous top at 112.20 aborted the uptrend and made the short-term picture negative. Return action lower in the 108.13/114.37 range is likely.

Last week, it looked that EUR/USD could revisit the 1.0821/1.0778 support (gap). However, Friday's US data and political uncertainty finally propelled EUR/USD north the 1.1023 range top, improving the technical picture. The correction top at 1.1366 is the next resistance. We think that USD sentiment will have to be extremely negative to clear this hurdle short-term. Further ST EUR/USD gains might become tougher.

EUR/USD: euro breaks topside of the ST range as US political uncertainty weighs on the dollar

EUR/GBP

EUR/GBP tests 0.86 big figure

The April UK labour market report was solid, but wage growth was again the missing link. Real wage growth even became negative due to rising inflation. Sterling's reaction was limited. Chance are low that the BoE will raise its policy rate any time soon as long as low wage growth is at risk to further slow UK spending/growth. EUR/GBP touched an intraday top of 0.8615 early in Europe and settled in the upper half of the 0.85 big figure for most of the day, supported by the ongoing bid in EUR/USD. The pair close the session at 0.8604. USD weakness kept cable near the recent top, but a real test of 1.30 didn't occur.

Today, the April UK retail sales will be published. Sales are expected to rebound (1.1% M/M and 2.1% Q/Q) after a sharp decline in March. Technical factors might have been in play. The odds are for a good report, but for sterling there is still an asymmetrical risk. After recent indications that higher prices are weighing on spending, a negative figure will probably have more impact than a positive surprise. The price action in the euro and the dollar will also remain important. Of late, the positive sterling sentiment eased and euro strength prevailed in EUR/GBP trading.. The pair developed a bottoming out pattern with 0.84/0.8330 as a solid bottom. The breach of 0.8509/31 (previous ST tops) improved the technical picture. For now, we don't row against the EUR/GBP uptrend even as the euro rebound might slow short-term. Longer term, Brexit remains potentially negative for sterling.

EUR/GBP: jumps north of ST range top

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EUR/JPY - 123.75

Recent wave: wave v of (C) ended at 94.12 and major correction in wave A has ended at 149.79

Trend: Near term up

New strategy :

Stand aside

Position: -
Target:  -
Stop:-

As the single currency finally retreated after rising to 125.82 earlier this week, retaining our view that consolidation below this level would be seen and initial downside risk remains for weakness to previous support at 123.32, break there would add credence to this view, bring retracement to 123.00, however, reckon downside would be limited to 122.60 support and bring another rise later.

In view of this, would not this rise here and would be prudent to stand aside in the meantime. Above previous minor support at 124.50 would bring recovery to 125.00, however, reckon upside would be limited to 125.50-55 and price should falter below said resistance at 125.82, bring retreat later. Only break of 125.82 would revive bullishness and extend recent upmove to 126.00-10, then 126.40-50.

Our latest preferred count is that wave (ii) is ABC-X-ABC which ended at 123.33 and wave (iii) is unfolding with wave iii ended at 100.77, followed by wave iv at 111.57 and wave v as well as the wave (iii) has ended at 97.04, followed by wave (iv) at 111.43 and wave (v) has ended at 94.12 which is also the end of the larger degree v, this also implied the major wave (C) has also ended there, hence major correction has commenced from there with (A) leg unfolding in its lower degree wave c which has possibly ended at 145.69. Under this count, A-B-C wave (B) has commenced with A leg ended at 136.23, wave B at 143.79 and wave C has possibly ended at 149.79.

Our larger degree count is that the decline from 139.26 is wave (C) and is sub-divided into a diagonal triangle i-ii-iii-iv-v with wave i - 105.44, wave ii- 123.33, wave iii - 97.03, wave iv - 111.43, followed by the final wave v as well as the end of wave (C) at 94.12, this also mark the bottom of larger degree wave B. Under this count, major rise in wave C has commenced as an impulsive wave with minor wave III ended at 145.69, wave V is still in progress for further gain to 150.00. Having said that, this so-called wave V could well be the first leg of larger degree 5-waver wave C and this wave C should bring at least a retest of wave A top at 169.97 (July 2008).

AUD/USD – 0.7449

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 :

Buy at 0.7370, Target: 0.7520, Stop: 0.7320

Position: -
Target:  -
Stop: -

New strategy :

Buy at 0.7370, Target: 0.7520, Stop: 0.7320

Position: -
Target:  -
Stop:-

As aussie has risen again after brief pullback, adding credence to our view that a temporary low is possibly formed at 0.9329 and consolidation with mild upside bias is seen for further gain to 0.7470-75, then 0.7500-10 but break of latter level is needed to add credence to this view, bring subsequent rise towards resistance at 0.7556 which is likely to hold from here due to near term overbought condition.

In view of this, we are looking to buy aussie on dips as 0.7360-70 should limit downside. A break of said support at 0.7329 would abort and signal recent decline is still in progress for weakness to 0.7295-00 (76.4% retracement of 0.7158-0.7750), however, loss of downward momentum should prevent sharp fall below 0.7300 and reckon 0.7245-50 would remain intact, bring another rebound later. 

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.

US Session Highlights

(US) MBA MORTGAGE APPLICATIONS W/E MAY 12TH: -4.1% V +2.4% PRIOR

(US) Rep Al Green (D-TX) says he will call on Congress to start impeachment proceedings against Pres Trump

(US) House GOP caucus meeting today said to not focus on Pres Trump's issues; no indication of breaking point with Pres Trump - AP

(US) House Speaker Ryan (R-WI): want facts before rushing to judgment on Trump-Comey reports; there are clearly a lot of politics being played

Stocks lost their foothold as investors began to doubt the capability of the Trump administration to enact its economic agenda. Last night's news that memos indicate President Trump asked the FBI to drop the Flynn investigation created an overall lack of confidence in the markets. Blue chips and the broader S&P dropped close to 2%, for the largest one-day drop since Mar 21st. Volume at 3:30pm for the S&P was 17% above 3-month average, with decliners leading advancers 3 to 1. The worst hit sectors in the S&P were Financials and Techs, down 3.1% and 2.6% respectively. The VIX was up 34%, hitting its highest intraday level since April 21st.

US markets on close: Dow -1.8%, S&P500 -1.8%, Nasdaq -2.6%

Best Sector in S&P500: Financials

Worst Sector in S&P500: Real Estate

Biggest gainers: CL +5.7%; EXR +4.9%; BF.B +3.6%

Biggest losers: MU -7.0%; CFG -6.8%; NVDA -6.6%

At the close: VIX 15.6 (+4.9pts); Treasuries: 2-yr 1.26% (-2bps), 10-yr 2.22% (-11bps), 30-yr 2.90% (-9bps)

US movers afterhours

LYC: GMI-1271 receives FDA Breakthrough Therapy Designation for Adult Relapsed/Refractory Acute Myeloid Leukemia; +37.1% afterhours

LB: Reports Q1 $0.33 v $0.29e, R$2.44B v $2.46Be; Guides Q2 $0.40-0.45 v $0.45e; Raises FY17 $3.10-3.40 v $3.19e; +6.8% afterhours

CSCO: Reports Q3 $0.60 v $0.58e, R$11.9B v $11.9Be- Guides Q4 $0.60-0.62 v $0.63e, Rev -6% to -4% y/y v -1%e, gross margin 63-64% ; -7.7% afterhours

GMED: Receives FDA letter saying company had not sufficiently addressed the FDA’s questions regarding the 510(k) submission for the Excelsius GPS robotic guidance and navigation system - filing; -10.5% afterhours

ASNA: Guides Q3 EPS $0.04-0.06 v $0.11e, SSS -8% y/y; -33.0% afterhours

Key economic data

(CN) CHINA APR PROPERTY PRICES M/M: RISE IN 58 OUT OF 70 CITIES VS 62 PRIOR; Y/Y: RISE IN 69 OUT OF 70 CITIES V 68 PRIOR; avg all-70 new home prices m/m: 0.7% v 0.6% prior; y/y: 10.7% v 11.3% prior

(JP) JAPAN Q1 PRELIMINARY GDP Q/Q: 0.5% V 0.5%E; ANNUALIZED GDP: 2.2% V 1.7%E; 5th consecutive quarter of growth for the first time in 11 years

(JP) JAPAN Q1 HOUSING LOANS Y/Y: 3.3% V 3.1% PRIOR

(AU) AUSTRALIA APR EMPLOYMENT CHANGE: +37.4K (2nd straight increase; best 2-month rise since late 2015) V +5.0KE; UNEMPLOYMENT RATE: 5.7% (3-month low) V 5.9%E

(AU) AUSTRALIA MAY CONSUMER INFLATION EXPECTATION: 4.0% V 4.1% PRIOR; matches 5-month low

(NZ) NEW ZEALAND MAY ANZ CONSUMER CONFIDENCE INDEX: 123.9 V 121.7 PRIOR; M/M: +1.8% V -2.8% PRIOR; First increase in 4 months

Asia Session Notable Observations, Speakers and Press

Asian equity indices are down across the board, tracking the biggest US market decline of the year. White House political risk has risen from a simmer to an open flame over the past 24 in the wake of alleged interference by Pres Trump into the FBI investigation of former NSA Flynn. The presidential crisis has sunk so deep that the appointment of a special counsel Mueller to head the Russia probe on Wednesday evening is treated as a positive development, helping US equity futures regain some ground.

In FX, USD index has now erased all of its post-election gains, while the 10-2 Treasury spread was below 1% for the first time since Trump was elected last year. Predictably, Financials sector was the worst performer on THE S&P500 as long-end Treasuries rose on safe-haven demand. Nikkei225 is among the biggest decliners in Asia as USD/JPY fell as low as 110.50. USD selling is also sufficiently pronounced to boost commodity currencies despite the risk-off mode - AUD/USD was supported into the US market close and then rallied some 30pips on strong Australia employment data. MXN fell for the 2nd straight day however, with USD/MXN rising above 19 level.

In economic data, Aussie employment change was much higher than expected and unemployment rate fell back to 5.7% for a 3-month low despite participation rate remaining unchanged. Japan Q1 GDP was also constructive with a beat on q/q annalized. Sequentially, Japan grew for the 5th straight quarter - the longest such streak since 2006. Capex was the standout component, rising 0.2% against expected 0.4% decline. Also of note, China house price growth continued to retreat in the wake of property curb measures by regulators - Y/Y growth across top 70 cities slowed to 10.7% from 11.3%.

China

(CN) Templeton's Mobius: No doubt there's risk in China, but govt will insulate SOEs - press

(CN) China said to be considering excluding some industries from carbon permit trade

(CN) China Banking Regulator (CBRC) to increase protections after recently global cyber attack - local press

(CN) Fitch: Rapid growth in China investment companies is building risks - press

Japan

(JP) BOJ Dep Gov Iwata: No details of policy exit have been decided - press

(JP) Credit Suisse: Pace of Japan GDP growth may slow - press

Asian Equity Indices/Futures (00:30ET)

Nikkei -1.6%, Hang Seng -0.2%, Shanghai Composite -0.2%, ASX200 -1.2%, Kospi -0.5%

Equity Futures: S&P500 +0.2%; Nasdaq +0.3%, Dax +0.3%, FTSE100 +0.3%

FX ranges/Commodities/Fixed Income (00:30ET)

EUR 1.1145-1.1175; JPY 110.50-111.20; AUD 0.7410-0.7465; NZD 0.6925-0.6950

June Gold +0.1% at 1,260/oz; June Crude Oil -0.3% at $48.92/brl; July Copper -0.8% at $2.52/lb

(CN) PBOC to inject combined CNY80B v CNY140B prior in 7-day and 14-day reverse repos

(CN) PBOC SETS YUAN MID POINT AT 6.8612 V 6.8635 PRIOR; Strongest Yuan setting since Feb 7th; 6th consecutive firmer fix

(JP) Japan's MoF sells ¥0.9T in 0.7% (0.7% prior) 20-year JGBs; Avg yield: 0.560% v 0.562% prior; bid-to-cover: 3.84x v 4.06x prior

Asia equities notable movers

Australia

Sirtex (SRX) -28.6%; Announces combined Foxfire analysis; primary endpoint of overall survival superiority not met in mCRC

Virgin Australia (VAH) -2.8%; Reports Q3

Fairfax (FXJ) +6.6%; Receives takeover offer from Hellman&Friedman consortium at $1.225-1.250/shr cash

James Hardie (JHX) -5.6%; Reports FY16/17

Japan

Sumitomo Mitsui (8316) -3.0%; Guides FY20

Nintendo (7974) -0.4%; Switch sales

Senko Group (9069) -1.3%; Cut at Nomura

Hong Kong

Tencent (700_ +3.9%; Q1 result

Parkson Retail Group (3368) +1.0%; Q1 result

TPV Technology Ltd (903) -7.7%; Q1 result

Johnson Electric Holdings (179) +8.1%; Q1 result

Weekly
    •    Last Candlesticks pattern: N/A
    •    ime of formation: N/A
    •    Trend bias: Near term up

Daily
    •    Last Candlesticks pattern: Hammer
    •    Time of formation: 3 Feb 2016
    •    Trend bias: Up

EURGBP – 0.8583

The single currency found decent demand at 0.8384 last week and has rallied, reinforcing our bullish view that another leg of corrective rise from 0.8312 low is underway, our long position entered at 0.8400 met indicated upside target at 0.8600 with 200 points profit, this anticipated rise suggests the rebound from 0.8312 is still in progress, hence bullishness remains for this move to bring retracement of recent decline towards 0.8660-65, however, near term overbought condition should prevent sharp move beyond 0.8700 and price should falter below previous resistance at 0.8735, bring retreat later.

On the downside, whilst initial pullback to 0.8540-50 cannot be ruled out, reckon the Tenkan-Sen (now at 0.8500) would limit downside and bring another rise later to aforesaid upside targets. Below the Tenkan-Sen would risk test of the Kijun-Sen (now at 0.8464) and but only a daily close below support at 0.8457 would abort and signal top is formed instead, bring further fall to 0.8400-10 and then test of said support at 0.8384. Looking ahead, only a drop below 0.8384 would shift risk back to downside and suggest the rise from 0.8312 has ended, bring eventual retest of this level later. 

Recommendation: Long entered at 0.8400 met target at 0.8600 with 200 points profit and would buy again at 0.8520 for 0.8700 with stop below 0.8420.

On the weekly chart, as the single currency found good support at 0.8384 and has rebounded, a hammer candlestick bullish pattern was formed, retaining our bullish view for the rebound from 0.8312 to bring retracement of recent decline, hence further gain to 0.8675-80 and then 0.8700-10, however, as broad outlook remains consolidative, reckon upside would be limited to 0.8750 and 0.8788 resistance should remain intact, bring retreat later.

On the downside, although initial pullback to 0.8560-70 cannot be ruled out, reckon the Tenkan-Sen (now at 0.8524) would limit downside and bring another rise later. A drop below this week’s low at 0.8457 would abort and suggest top is possibly formed, risk weakness to 0.8400-10 but only break of said support at 0.8384 would suggest the rebound from 0.8312 has ended instead, bring further fall to 0.8350-55 and eventually retest of 0.8312.

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 – 1.0973

As the single currency has retreated after rising to 1.0988 late last week, suggesting consolidation below this level would be seen and pullback to 1.0860-65 cannot be ruled out, however, reckon the Kijun-Sen (now at 1.0822) would contain weakness and bring another rise later, above said resistance would extend the erratic rise from 1.0631 for at least a stronger correction of early decline to 1.1001 resistance but break there is needed to encourage for headway to 1.1050-60, then 1.1100, having said that, overbought condition should prevent sharp rise beyond 1.1150 and price should falter below previous chart resistance at 1.1201, risk from there has increased for a retreat to take place later.

On the downside, whilst initial pullback to 1.0860–65 is likely, reckon the Kijun-Sen (now at 1.0886) would limit downside and bring another rise later. Below 1.0845-50 would defer and suggest top is possibly formed, bring test of support at 1.0792 which is likely to limit downside, bring rebound later. A daily close below this support at 1.0792 would abort and signal top is formed, bring subsequent fall to the upper Kumo (now at 1.0726) but support at 1.0671 should remain intact, the single currency shall stage another rebound from there.

Recommendation: Buy at 1.0865 for 1.1065 with stop below 1.0765.

On the weekly chart, although the single currency surged to 1.0988 last week, the subsequent retreat suggests consolidation below this level is in store and pullback to 1.0860-65 cannot be ruled out, however, the Tenkan-Sen (now at 1.0822) would contain downside and bring another rise later, above said resistance at 1.0988 would extend the rise from 1.0631 low to 1.1001 resistance, 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, expect pullback to be limited to the lower Kumo (now at 1.0852) and bring another rise later.  Below the Tenkan-Sen (now at 1.0822) would risk test of the Kijun-Sen (now at 1.0810), break there would defer and suggest top is possibly formed, risk test of 1.0792 support, once this level is penetrated, this would add credence to this view, bring further fall towards 1.0725-30 but support at 1.0656 should remain intact, bring another rally later this month.

Currency pair EUR/USD

The EUR/USD bullish momentum continued strongly yesterday breaking above 1.11 and heading towards the next round level of 1.12. The bullish push can be explained by the wave 3 pattern (purple) which is known for its strong momentum. The bullish momentum could now however reach a moment where it will be retracing for a corrective wave 4 (purple). The Fibonacci levels of wave 4 could act as support.

On one time frame higher the EUR/USD could be building an ABC (blue) zigzag which could face resistance at the 88.6% Fibonacci level.

Currency pair USD/JPY

The USD/JPY continued with the ABC (brown) zigzag correction yesterday, which has reached the 61.8% Fibonacci level (of the 5 waves (brown)). This could cause a retracement.

The USD/JPY bearish third wave 3 (orange) seems to have reached a support level which could cause a wave 4 (orange) correction. The Fibonacci levels of wave 4 (orange) are therefore potential resistance levels.

Currency pair GBP/USD

The GBP/USD remains in an uptrend channel (red/green) and price is challenging the top (red). Price poked through the previous top and hence a bullish wave 5 (orange) seems more likely at this moment.

The GBP/USD break above resistance (red) could see a wave 3 (purple) develop whereas a break below support (blue) could see price continue within the correction.

USD/CHF - 0.9818

Most recent candlesticks pattern : N/A

Trend                                    : Near term down

Tenkan-Sen level                  : 0.9800

Kijun-Sen level                    : 0.9813

Ichimoku cloud top                 : 0.9921

Ichimoku cloud bottom              : 0.9867

Original strategy :

Sell at 0.9870, Target: 0.9770, Stop: 0.9905

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 0.9870, Target: 0.9770, Stop: 0.9905

Position : -

Target :  -

Stop : -

As dollar has recovered after dropping to 0.9774 yesterday, suggesting minor consolidation above this level would be seen and recovery to 0.9850 cannot be ruled out, however, reckon 0.9870 (38.2% Fibonacci retracement of 1.0025-0.9774) would limit upside and bring another decline later, below said support at 0.9774 would extend early selloff from 1.0344 top towards 0.9735-40 (76.4% retracement of 0.9550-1.0344), however, near term oversold condition should prevent sharp fall below 0.9700, risk from there is seen for a rebound to take place later. 

In view of this, would not chase this fall here and would be prudent to sell dollar on recovery as 0.9870 should limit upside. Above 0.9900 (50% Fibonacci retracement) would defer and risk rebound to 0.9925-30 (61.8% Fibonacci retracement) but upside should be limited to 0.9950 and price should falter well below previous support at 0.9987, bring another decline.

GBP/USD - 1.2940

Most recent candlesticks pattern   : N/A

Trend                                 : Near term up

Tenkan-Sen level                 : 1.2949

Kijun-Sen level                    : 1.2943

Ichimoku cloud top              : 1.2912

Ichimoku cloud bottom        : 1.2901

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Although cable’s rally after finding renewed buying interest at 1.2866 earlier this week confirms the correction from 1.2991 has ended at 1.2844 earlier and retest of this level would be seen, however, above indicated level of 1.2999-00 (1.236 times projection of 1.2109-1.2616 measuring from 1.2365 and psychological resistance) is needed to retain bullishness and signal early upmove has resumed for headway to 1.3040-50, then 1.3075-80.

In view of this, would not chase this rise here and would be prudent to stand aside for now. Below 1.2900-10 would prolong consolidation and risk weakness towards support at 1.2866, however, price should stay above said support at 1.2844. 

EUR/USD - 1.1129

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 1.1147

Kijun-Sen level                  : 1.1127

Ichimoku cloud top             : 1.1075

Ichimoku cloud bottom      : 1.1020

Original strategy  :

Buy at 1.1065, Target: 1.1185, Stop: 1.1030

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.1065, Target: 1.1185, Stop: 1.1030

Position : -

Target :  -

Stop : -

As the single currency has eased after rising to 1.1172, suggesting minor consolidation would be seen and pullback to 1.1100 and possibly support at 1.1081 cannot be ruled out, however, reckon 1.1060-65 would limit downside and bring another rise later, above said resistance at 1.1172 would extend recent rise towards 1.1205-10 (1.618 times projection) but reckon 1.1250 would hold from here, bring retreat later.

In view of this, would not chase this rise here and we are looking to buy euro on pullback as 1.1065-70 should limit downside. Below previous resistance at 1.1025 (now support) would defer and suggest top is possibly formed instead, risk test of another previous resistance at 1.0990 first.