Sample Category Title

Daily Pivots: (S1) 1.0934; (P) 1.0962 (R1) 1.1001; More....

EUR/USD's rally accelerates further today and reaches as high as 1.1073 so far. 100% projection of 1.0339 to 1.0828 from 1.0569 at 1.1058 is already met and there is no sign of topping. Intraday bias remains on the upside for 138.2% projection at 1.1245, which is close to 1.1298 key resistance. For now, rise from 1.0339 is still viewed as a corrective move. Hence we'd expect strong resistance below 1.1245/98 to limit upside and bring reversal. On the downside, below 1.0989 minor support will turn bias neutral and bring consolidation. But break of 1.0838 support is needed to indicate short term topping. Otherwise, further rise will remain in favor.

In the bigger picture, as long as 1.1298 key resistance holds, whole down trend from 1.6039 (2008 high) is still expected to continue. Break of 1.0339 low will send EUR/USD through parity to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115. However, considering bullish convergence condition in weekly MACD, break of 1.1298 will indicate long term reversal.

Euro surges broadly today as incoming economic data is in line with a brighter outlook. Some attributes that rally in Euro to the weakness of Dollar. The greenback is pressured as the markets are getting more doubtful on US President Donald Trump's implementation of economic policy. For the very least, he is constantly being distracted by other issues, like currently, his firing of former FBI director James Comey and subsequent sharing of sensitive information with Russia. But it should be noted that both DAX and FTSE 100 hits record highs today. The moves in the markets are clearly driven by optimism. Released in US, housing starts dropped to 1.17m annualized rate in April while building permits dropped to 1.23m.

German ZEW jumps to near two year high

German ZEW economic sentiment rose to 20.6 in May, up from 19.5 but missed expectation of 22.0. Current situation gauge rose to 83.9, up from 80.1 and beat expectation of 82.0. The reading is, nonetheless, highest since July 2015. Eurozone ZEW economic sentiment jumped sharply to 35.1, up from 26.3, beat expectation of 29.1. ZEW President Achim Wambach noted that "the latest figures on gross domestic product confirm that the German economy is in good shape." And, "the prospects for the euro zone as a whole are gradually improving, further strengthening the economic environment for German exports." Also from Eurozone, GDP rose 0.5% qoq in Q1, in line with preliminary reading, same as prior quarter's growth. Eurozone trade surplus widened to EUR 23.1b in March, up from EUR 18.8b. Italy GDP rose 0.2% qoq in Q1.

Pound unmoved by strong inflation reading

UK CPI accelerated to 2.7% yoy in April, up from March's 2.3% yoy and beat expectation of 2.6% yoy. Core CPI rose to 2.4% yoy, up from 1.8% yoy and beat expectation of 2.3% yoy. RPI accelerated to 3.5% yoy, up from 3.1%, beat expectation of 3.4%. PPI input slowed to 16.6% yoy, PPI output was unchanged at 3.6% yoy, PPI output core rose to 2.8% yoy. Sterling received little boost from the set of stronger than expected inflation data. It's argued that the pop in the CPI readings is expected and could instead drag down price growth in the coming months. On the other hand, FTSE surges to new record high today and stays firm around 7500 handle after the release.

BoJ Kuroda: Quite sure of enough tools for stimulus exit

BoJ Governor Haruhiko Kuroda said today that there "may be some challenging issues" regarding stimulus exit. But he is "quite sure" that the central bank has "enough tools" to manage it. Meanwhile, Kuroda also noted there will be lessons to be learned from Fed's normalization of policies. But he also emphasized that "the United States is the United States, Japan is Japan. At this stage, we're not exiting." There has been much concern over the size of BoJ's balance, in particular that it already took out 40% of JGBs in the markets. But Kuroda talked it down and said there are still 60% left and there won't be "any constraint" to the so called Yield Curve Control. Release from Japan, Tertiary industry index dropped -0.2% mom in March.

RBA Minutes: Reiterated concerns on housing and labor

The RBA minutes for the May meeting contained little news but reiterated policymakers' the importance of the property market and the labor market conditions in its policy decision. The stance to leave the monetary policy unchanged was obviously due to the perceived uncertain outlook in these two areas. As noted in the concluding statement in the minutes, 'the board continued to judge that developments in the labour and housing markets warranted careful monitoring'. More in RBA Reaffirmed Importance Of Housing And Labor Markets On Decision-Making, Defends The Trend Of Rising Part-Time Workers.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.0934; (P) 1.0962 (R1) 1.1001; More....

EUR/USD's rally accelerates further today and reaches as high as 1.1073 so far. 100% projection of 1.0339 to 1.0828 from 1.0569 at 1.1058 is already met and there is no sign of topping. Intraday bias remains on the upside for 138.2% projection at 1.1245, which is close to 1.1298 key resistance. For now, rise from 1.0339 is still viewed as a corrective move. Hence we'd expect strong resistance below 1.1245/98 to limit upside and bring reversal. On the downside, below 1.0989 minor support will turn bias neutral and bring consolidation. But break of 1.0838 support is needed to indicate short term topping. Otherwise, further rise will remain in favor.

In the bigger picture, as long as 1.1298 key resistance holds, whole down trend from 1.6039 (2008 high) is still expected to continue. Break of 1.0339 low will send EUR/USD through parity to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115. However, considering bullish convergence condition in weekly MACD, break of 1.1298 will indicate long term reversal.

Economic Indicators Update

EUR/USD - 1.1065

Original strategy  :

Sold at 1.1000, stopped at 1.1035

Position : - Short at 1.1000

Target :  -

Stop : - 1.1035

New strategy  :

Buy at 1.1020, Target: 1.1120, Stop: 1.0985

Position : -

Target :  -

Stop : -

Euro has rallied and broke above previous resistance at 1.1025, confirming recent upmove has resumed and further gain to 1.1080 and possibly 1.1100 would be seen, however, near term overbought condition should limit upside to 1.1125-30 and reckon 1.1150 would hold from here, bring retreat later.

In view of this, we are looking to buy euro on pullback as previous resistance at 1.1025 should turn into support and contain euro’s downside, bring another upmove later. Below another previous resistance at 1.0990 would abort and suggest top is possibly formed, bring correction to 1.0965 support first. 

USD/JPY - 113.66

Original strategy  :

Buy at 112.70, Target: 113.80, Stop: 112.35

Position :  -

Target :  -

Stop : -

New strategy  :

Buy at 112.70, Target: 113.80, Stop: 112.35

Position :  -

Target :  -

Stop : -

As the greenback met resistance at 113.85 yesterday and retreated, retaining our view that further consolidation below last week’s high at 114.37 would be seen and pullback to 113.00-05 (38.2% Fibonacci retracement of 110.87-114.37 and previous resistance) cannot be ruled out, however, reckon 112.60-65 (50% Fibonacci retracement of 110.87-114.37) would limit downside and bring rebound later, above 113.85 would bring test of 114.00-05 but break of latter level is needed to signal the pullback from 114.37 has ended, bring retest of this level later.

In view of this, we are inclined to buy dollar on next decline but one should exit on such rebound as 114.37 resistance should cap upside. Below support at 112.39 would risk further weakness to 112.20-25 (61.8% Fibonacci retracement of 110.87-114.37) but still reckon previous support at 112.09 would hold from here.

EURUSD: With the pair retaining its short term uptrend by rallying further on Tuesday, more strength is envisaged in the days ahead. Resistance comes in at 1.1100 level with a cut through here opening the door for more upside towards the 1.1150 level. Further up, resistance lies at the 1.1200 level where a break will expose the 1.1250 level. Its daily RSI is bullish and pointing higher suggesting more strength. Conversely, support lies at the 1.1000 level where a violation will aim at the 1.0950 level. A break of here will aim at the 1.0900 level. All in all, EURUSD faces further bull pressure.

Notes/Observations

• European Q1 GDP data falls in-line with ECB view that recovery is being more broad-based
• UK Apr CPI beats expectations (Y/Y: 2.7% v 2.6%) and remains above BOE target for the 3rd straight month

Overnight:

Asia:

• Reserve Bank of Australia (RBA) May 2nd Meeting Minutes:Maintaining the current accommodative stance of monetary policy would be consistent with achieving sustainable growth and the inflation target over time. Q1 inflation data had generally increased confidence that underlying inflation would pick up to around 2% by early 2018.
• Bank of Japan (BOJ) Gov Kuroda reiterates its view that was not exiting at this stage but quite sure exiting from its easy monetary policy could be managed quite well; BoJ had tools to manage exit from stimulus. Reiterated view that Japan inflation rate was still quite low and that current YCC policy was appropriate. Reiterated view that would take more stimulus steps if needed
• China Banking Regulator (CBRC) to tighten disclosure rules on lenders' wealth management products to track risky lending practices in shadow banking sector and launch approx. 4 dozen new rules

Europe:

• France President Macron 1st full day in office noted that he planned to carry out reforms in the next few months. France-German relationship needed to be more pragmatic and wanted to set up roadmap with Germany to reform the Euro zone. Treaty changes would not longer be taboo as France was ready for EU treaty change if necessary
• Germany's Merkel met the French President. Noted that France and Germany want to develop roadmap to deepen EU integration and make the region more resilient to crises. Was possible to change EU treaties but first needed to decide on what reforms were needed
• UK Labour party said to plans to introduce taxes on companies that pay staff more than £330K/ year if it wins general election

Americas:

• President Trump reportedly revealed highly classified intelligence information to Russian Foreign Min Lavrov last week that intelligence agency partners had not given permission to share
• White House official Powell denied President Trump gave classified information to Russian diplomats, as reported in Washington Post. National Security Advisor McMaster added that at no
• time were any intelligence sources or methods discussed and no military operation were disclosed that were not already known publically
  - Mar Total Net Tic Flows -$0.7B v $13.2B prior; Long-term TIC Flows $59.8B v $53.1B prior; both Japan and China increased their Treasury holdings

Energy:

• EIA forecasted June total shale regions oil production at 5.40M bpd, +122K bbd m/m (vs +109K bpd rise in May)

Economic Data

• (NO) Norway Q2 Consumer Confidence: 11.1 v 7.3 prior
• (EU) Apr EU27 New Car Registrations: -6.6% v +11.2% prior (1st negative reading in 41 months)
• (NO) Norway Q1 GDP Q/Q: 0.2% v 0.2%e; GDP Mainland Q/Q: 0.6% v 0.5%e
• (RO) Romania Q1 Advance GDP Q/Q: 1.7% v 1.0%e; Y/Y: 5.7% v 4.4%e
• (FR) France Apr Final CPI M/M: 0.1% v 0.1%e; Y/Y: 1.2% v 1.2%e
• (FR) France Apr Final CPI EU Harmonized M/M: 0.1% v 0.1%e; Y/Y: 1.2% v 1.2%e, CPI (Ex-Tobacco) Index: 101.23e
• (CZ) Czech Q1 Advance GDP Q/Q: 1.3% v 0.7%e; Y/Y: 2.9% v 2.3%e
• (HU) Hungary Q1 Preliminary GDP Q/Q: 1.3% v 1.2%e; Y/Y: 4.1% v 3.2%e
• (NL) Netherlands Q1 Preliminary GDP Q/Q: 0.4% v 0.5%e; Y/Y: 3.4% v 2.8%e
• (IT) Italy Q1 Preliminary GDP Q/Q: 0.2% v 0.2%e; Y/Y: 0.8% v 0.8%e
• (PL) Poland Q1 Preliminary GDP Q/Q: 1.0% v 0.8%e; Y/Y: 4.0% v 3.9%e
• (UK) Apr CPI M/M: 0.5% v 0.4%e; Y/Y: 2.7% v 2.6%e; CPI Core Y/Y: 2.4% v 2.3%e
• (UK) Apr RPI M/M: 0.5% v 0.4%e; Y/Y: 3.5% v 3.4%e; RPI Ex Mortgage Interest Payments (RPIX) Y/Y: 3.8% v 3.7%e
• (UK) Apr PPI Input M/M: 0.1% v 0.0%e; Y/Y: 16.6% v 17.0%e
• (UK) Apr PPI Output M/M: 0.4% v 0.2%e; Y/Y: 3.6% v 3.4%e
• (UK) Apr PPI Output Core M/M: 0.5% v 0.2%e; Y/Y: 2.8% v 2.5%e
• (DE) Germany May ZEW Current Situation Survey: 83.9 v 82.0e; Expectation Survey: 20.6 v 22.0e
• (EU) Euro Zone May ZEW Expectations Survey: 35.1 v 26.3 prior
• (EU) Euro Zone Mar Trade Balance (Seasonally Adj): €23.1B v €18.7Be; Trade Balance NSA (unadj): €30.9B v €25.8Be
• (EU) Euro Zone Q1 Preliminary GDP (2nd reading) Q/Q: 0.5% v 0.5%e; Y/Y: 1.7% v 1.7%e

Fixed Income Issuance:

• (FR) France Debt Agency (AFT) opened its book to sell new May 2048 Oat; Guidance seen mid-teens bps to French Treasuries
• (SI) Slovenia Debt Agency opened its book to sell EUR-denominated 2027 and 2040 bonds
• (ID) Indonesia sold total IDR6.02T in 2-year,4-year,7-year and 15-year Project-based Sukuk (PBS)
• (ES) Spain Debt Agency (Tesoro) sold total €1.605B vs. €1.0-2.0B indicated range in 3-month and 9-month Bills (Apr 18th 2017)
• (UK) DMO opened its books to sell 1.75% July 2057 Gilt; guidance seen +2.5-2.75bps to UK Treasuries
• (ZA) South Africa sold total ZAR2.35B vs. ZAR2.35B indicated in 2026, 2036 and 2048 bonds

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx50 -0.1% at 3268, FTSE +0.4% at 7486, DAX -0.1% at 12799, CAC-40 -0.4% at 5394, IBEX-35 +0.1% at 10972, FTSE MIB +0.1% at 21714, SMI -0.2% at 9094, S&P 500 Futures -0.1%]

Market Focal Points/Key Themes

European Indices trade mixed this morning, with out performance in the FTSE100 led by Vodafone up ~4% following their Full year results, EasyJet on the other hand one of the leading decliners after missing estimates. Earlier the DAX hit a new record high before pulling back, after record highs for US indices yesterday. Telecoms are outperforming with Car makers and Healthcare stocks declining.
Looking ahead to the US morning notable earnings on the calendar include Home Depot, Staples, Dick's Sporting Goods and TJX.

Equities

• Consumer discretionary: [EasyJet [EZJ.UK] -6.6% (Earnings), DCC [DCC.IL] -3.1% (Earnings), SpeedyHire [SDY.UK] +3% (Earnings)]
• Consumer Staples: [ITE Grp [ITE.UK] -4.3% (Earnings)]
• Financials: [Crest Nicholson [CRST.UK] -1.9% (Earnings)]
• Technology: [Sonova [SOON.CH} +0.8% (Earnings)]
• Telecom: [Vodafone [VOD.UK] +4.0% (Earnings)]
• Healthcare: [AB Science [AB.FR] -29% (Announces that ANSM requested the temporary suspension of clinical studies conducted in France following deviations from Good Clinical Practice (GCP) standards), BTG [BTG.UK] -9.0% (Earnings)]

Speakers

• Italy PM Gentiloni commented from Beijing that China President Xi had expressed confidence in the future of EU -
• German ZEW Economists noted that the latest figure suggested on GDP confirm German economy is in good shape with prospects gradually improving; exports continue to strengthen. Euro Zone prospects were also better
• Sweden Central Bank (Riksbank) publishes Opinion on Inflation Target Variable; Proposes CPIF from CPI. changes are expected to be able to be implemented at the monetary policy meeting in September 2017. Proposal will would not entail any change to policy being conducted
• European Court of Justice (ECJ): Free trade agreement with Singapore needed the approval of national parliaments before it can become legal (**Insight: case widely seen as setting a precedent for the UK and pave the way for the trade negotiations as he country prepares to leave the bloc)
• IEA Monthly Report noted that if saw a sharp stockpile draw if production cuts were extended. Trimmed 2017 global oil demand growth from 1.32M bpd to 1.30M bpd. Raised 2017 Non-Opec oil supply growth forecast from 485K bpd to 600K bpd. Opec production was higher from 31.68M to 31.78M, +65K bpd; compliance of 96% v 99% m/m
• Russia Energy Min Novak: Looking to extend timeframe for production cuts; keep continues in place

Currencies

• USD still hampered by a spat if weaker-than-expected economic data that any upward expectations that Fed 2017
• EUR/USD hit fresh 7-month highs in the session at 1.1050. Dealers cited continued optimism following the election of Macron. German Chancellor Merkel noted that she was open to changing the EU's treaties to strengthen the bloc, voicing a desire to work closely with France. Both leaders agreed to "develop and renew" their bilateral relationship and that their cabinet ministers would meet shortly after the French parliamentary election in June
• GBP/USD was firmer as UK inflation data remain hot. Apr CPI YoY reading topped estimates and remained above the BOE target for the 3rd straight month. GBP/USD tested above 1.2950 area afterwards but still unable to fiund the momentum to tackle the 1.30 handle. The pair failed at several attempts last week to bust above the key resistance. GBP saw its gains erode just ahead of the NY morning with GBP/USD back below the 1.29 level.

Fixed Income

• Bund futures trade at 160.36 down 18 ticks, continuing to come off Friday's high of 160.99. Initial resistance comes from the 161.01 level, while medium –term resistance lies near the April 27th high of 162.01 level followed by 163.68.
  A break of 160.01 support level could see lows target 159.01 followed by 157.50.
• Gilt futures trade at 127.55 lower by 6 ticks, but off the lows of 127.45 after UK inflation came in hotter than expected. Last week's rally saw a pause from the continuation of the pullback from the 129.14 April 18th high. Price still finds key support at the 126.41 support level. An acceleration lower could test the 125.80 region. Resistance remains the 128.51 level then 129.14 followed by 132.80.
• Tuesday's liquidity report showed Monday's excess liquidity rose to €1.6536T a rise of €9.6B from €1.6440T prior. Use of the marginal lending facility climbed to €227M from €248M prior.
• Corporate issuance saw over $13.5B come to market via 11 issues headlines by Intl Flavors & Fragrances $2.0B in a 2-part senior unsecured notes & bond offering and Wells Fargo $3.0B in a 2-part senior notes and non-call 10-year offering

Looking Ahead

• (IT) Italy PM Gentiloni meets Russia President Putin
• (CO) Colombia Apr Consumer Confidence Index: No est v -21.1 prior
• 05.30 (UK) Weekly John Lewis LFL sales data
• 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender
• 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-month Bills
• 06:00 (IE) Ireland Mar Trade Balance: No est v €4.7Be
• 06:00 (IL) Israel Q1 Advance GDP Annualized: 3.7%e v 6.3% prior
• 06:00 (TR) Turkey to sell 2019 and 2022 bonds
• 06:30 (SE) Sweden Central Bank (Riksbank) Gov Ingves speech
• 07:00 (BR) Brazil May FGV Inflation IGP-10 M/M: -1.0%e v -0.8% prior
• 07:45 (US) Weekly Goldman Economist Chain Store Sales
• 08:00 (IS) Iceland Apr Unemployment Rate: No est v 2.4% prior
• 08:15 (UK) Baltic Dry Bulk Index
• 08:30 (US) Apr Housing Starts: 1.26Me v 1.22M prior; Building Permits: 1.27Me v 1.267M prior (revised from 1.260M)
• 08:55 (US) Weekly Redbook Sales
• 09:00 (EU) Weekly ECB Forex Reserves:
• 09:00 (NZ) Fonterra Global Dairy Trade Auction
• 09:00 (RU) Russia announces weekly OFZ bond auction
• 09:15 (US) Apr Industrial Production M/M: 0.4%e v 0.5% prior; Capacity Utilization: 76.3%e v 76.1% prior, Manufacturing Production: +0.4%e v -0.4% prior
• 10:00 (US) Q1 MBA Mortgage Foreclosures: No est v 1.53% prior; Mortgage Delinquencies: No est v 4.8% prior
• 10:30 (CA) Canada to sell 3-month, 6-month and 12-month Bills
• 11:00 (BR) Brazil to sell 2022, 2026 2035 and 2055 I/L Bonds - 08/15/2022
• 11:30 (US) Treasury to sell 4-Week Bills
• 11:30 (AT) ECB's Nowotny (Austria) speaks in Vienna
• 16:30 (US) Weekly API Oil Inventories

• GBP spikes after inflation data before quickly spiralling lower;
• Good reason to look beyond today's inflation numbers;
• EURUSD hits six month high and further gains could lie ahead.

Equity markets in Europe are trading a little mixed on Tuesday, offering little direction for US futures ahead of the open on Wall Street, while commodities are broadly in the green as oil looks to extend its winning run to five straight session. There's been some interesting moves in currency markets this morning, with sterling being particularly volatile on the back of some interesting inflation data.

This morning's UK CPI data caused quite a stir for the pound, with the spike in headline and core inflation in April initially sending the currency higher before almost immediately spiralling lower. As always, there's a number of things to consider here, which would explain such a strong reaction. The above expectation spike in inflation is typically bullish for the currency, especially when the rate is already above the central bank's target. Add to this the sheer size of the jump and the BoEs acknowledgement last week that "some MPC members would need relatively little upside news on growth or inflation to consider voting for tighter policy" and the initial spike will perhaps seem justified.

That said, there are other things to consider here, not least the fact that Easter this year fell in April rather than March, therefore the year on year comparison is naturally skewed to the upside. The 18.6% increase in air fares which largely contributed to the rise in transport prices is a clear indication of this. The other thing to consider here is that the BoE will likely have been aware of the spike in April when it released its new forecasts and made its decision last week, so from a monetary policy perspective, little has probably changed. Finally, with the pound already struggling around 1.30 against the dollar, the sell-off that followed to levels well below where it was prior to the release is an indication of an exhausted rally that's possibly crying out for a correction. Given the size of the moves we've seen over the last month, this could easily be what we're seeing, having failed repeatedly at the recent highs.

The euro on the other hand has had a much more positive start to the day, breaking and holding above 1.10 against the dollar to trade at its highest level in six months. The ZEW economic sentiment figures were broadly supportive for the euro – despite the pause that initially followed it – with economic sentiment in Germany rising, albeit less than expected, while the eurozone as a whole rose to a near two year high. This morning's break could be significant for the pair, with 1.1125-1.1150 being the next big test for the pair.

• Reserve Bank of Australia (RBA) minutes hold no surprises
• German ZEW report is key for Euro today
• UK Inflation and Retail data awaited for GBP

Overnight, the Reserve Bank of Australia published the minutes from their last board meeting and there were few surprises. It was in line with their statement. The housing and labour markets are in focus, economic activity is expected to pick up and inflation is slowly rising. No news there, then, and the Aussie Dollar was largely unruffled.

This morning brings UK Inflation data and we are expecting a small uptick. This would be in line with the Bank of England's (BoE) thinking, as shown in the minutes from their last meeting. However, their central target is 2.0% and we are expecting something between 2.5 and 2.7%. No need to panic, in other words, but it may turn up the volume on calls for the BoE to bring forward their next interest rate hike.

From the Eurozone, we will get confirmation of the final Q1 economic growth rate. A quarterly rise of 0.5% is almost inked into the books, so any variation on that would be influential. For now, the Euro is strengthening. We have seen it gain ground against the Pound and USD amongst others. If this morning's German ZEW Index is as positive as many predict, further EUR strength is a given.

This afternoon brings US construction data in the form of the building permits count. That is considered a bellwether for the US construction sector confidence and the forecasts are positive. We also get US industrial production. That is likely to show a small decline on last month's very positive 0.5% growth. So, on balance, if all this data is as expected, the effect on the USD likely to be muted.

And many 'news' reporters are covering a story about a new trend amongst clubbers. Young women are apparently going out for the night wearing nothing but strategically placed duct tape. My mother always warned me about women like that and I probably don't go to the same sorts of clubs as them. I doubt they are into plane spotting and fly fishing but I was left wondering about the pain of getting ready for bed at the end of the night. Removing an Elastoplast is bad enough but a whole covering of duct tape…..ouch.

Winner

Interviewer: "Congratulations on winning the £120 million Euromillions lottery."

Farmer: "Thank you."

Interviewer: "Do you have any special plans for spending all of that money?"

Farmer: "Not really. I'm just gonna keep farming until the money runs out."

Spot Gold is holding positive tone and probing again above cracked $1233 barrier (Fibo 23.6% of $1295/$1214 downleg), following Monday’s recovery stall at $1237 and subsequent pullback.

The price may extend recovery on sustained break above $1233 pivot towards key near-term barriers at $1245 (daily cloud top / Fibo 38.2% retracement, reinforced by 55SMA), $1247 (200SMA) and $1248 (20SMA).

Bounce from $1214 low is seen as correction and should be ideally capped under these barriers, before broader bears retake control.

Alternative scenario sees break above $1245/48 pivots as strong bullish signal for fresh recovery that may extend towards $1250/54 targets.

Res: 1237, 1245, 1247, 1248
Sup: 1230, 1226, 1216, 1214

In this technical blog we’re going to take a quick look at the past Elliott Wave charts of NZD JPY published in members area of www.elliottwave-forecast.com. We’re going to take a look at the structures, count the swings and explain the trading setup.

The chart below is NZD JPY 4 hour update from 05.04.2017. As our members know, we were pointing out that NZDJPY is having incomplete bullish swings sequnces from the 75.62 low. Structure has been calling for more strength in 7th swing toward 78.40-78.94 ( taking profit area). Once the pair reaches proposed area in 7 swings, we expect to see 3 wave pull back to correct the cycle from the lows.

NZD JPY 1 Hour Chart 05.04.2017

The pair is bullish against the 76.112 low. Wave (x) pull back is expected to make another short term low ideally to reach 77.22-76.90 ( buying area). As we got incomplete bullish sequences in 4 hour chart, we advised our members to avoid selling the pair and keep buying dips in 3,7,11 swings. Invalidation level for the trade comes at 76.90 and we’re targeting 78.40-78.94 area.

NZD JPY 1 Hour Chart 05.09.2017

Eventually the pair has reached proposed target, giving us nice profits. As of right now, the pair has scope to extend little bit higher still toward 79.03-79.32 area before find sellers for for a 3 wave pull back at least.