Sample Category Title

Daily Pivots: (S1) 108.79; (P) 109.11; (R1) 109.34; More....

Intraday bias in USD/JPY remains on the upside for the moment. The break of 110.10 resistance indicates short term bottoming at 108.12, on bullish convergence condition in 4 hour MACD. Further rise would be seen to 111.58 support turned resistance. Sustained break there will argue that fall from 118.65 is merely a corrective move and has completed. Outlook will then be turned bullish for 115.49 resistance and above. Meanwhile, below 108.87 minor support will turn bias to the downside and extend the whole decline from 118.65 to 61.8% retracement of 98.97 to 118.65 at 106.48.

In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. Current development suggests that it's not completed yet and is extending. In case of deeper decline, downside should be contained by 61.8% retracement of 75.56 to 125.85 at 94.77 to bring rebound. Rise from 75.56 is still expected to resume later after the correction from 125.85 completes.

USD/JPY - 110.15

Original strategy  :

Buy at 109.50, Target: 110.50, Stop: 109.15

Position :  -

Target :  -

Stop : -

New strategy  :

Buy at 109.50, Target: 110.50, Stop: 109.15

Position :  -

Target :  -

Stop : -

The greenback opened higher today and rallied to as high as 110.60, adding credence to our view that a temporary low has been formed at 108.13 last week and bullishness remains for this move to extend further gain, above said resistance at 110.60 would bring test of 111.00, however, near term overbought condition should limit upside and price should falter well below resistance at 111.58, bring retreat later.

In view of this, would not chase this rise here and would be prudent to buy dollar again on dips as previous resistance at 109.50 should turn into support and limit dollar’s downside, bring another rise later. Below the upper Kumo (now at 109.20) would abort and suggest an intra-day top is formed, bring weakness to the lower Kumo (now at 108.98) first.

Daily Pivots: (S1) 1.2759; (P) 1.2797; (R1) 1.2838; More...

Intraday bias in GBP/USD remains neutral for consolidation below 1.2903 temporary top. With 1.2614 resistance turned support intact, further rally is expected. Firm break of 100% projection of 1.2108 to 1.2614 from 1.2365 at 1.2871 will target 161.8% retracement at 1.3184. Still, price actions from 1.1946 are seen as a correction. Hence we'd expect strong resistance below 1.3444 to bring larger down trend resumption. On the downside, break of 1.2614 resistance turned support will turn bias back to the downside for 1.2365 support first.

In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. There is no sign of medium term reversal yet. Sustained trading below 61.8% projection of 2.1161 to 1.3503 from 1.7190 at 1.2457 will target 100% projection at 0.9532. Overall, break of 1.3444 resistance is needed to confirm medium term bottoming. Otherwise, outlook will remain bearish.

Daily Pivots: (S1) 1.0692; (P) 1.0715 (R1) 1.0747; More....

Intraday bias in EUR/USD remains on the upside for the moment. Rise from 1.0339 is still in progress and would extend higher towards 1.1298 resistance. But still, such rally is seen as a corrective move. Hence, we'd pay attention to topping signal above 1.0905 and below 1.1298 key resistance. On the downside, below 1.0777 minor support will turn bias to the downside for 1.0569 support first.

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 term reversal. this would also be supported by sustained trading above 55 week EMA.

Euro pares back some French election triggered gains, but stays broadly higher against all other major currencies. Meanwhile, Japanese Yen is trading as the weakest as markets are on risk on mode. Markets generally welcome the results of the election and centrist Emmanuel Macron's win in the first round is seen as a boost to the Euro. Forward Eonia bank-to-bank rates also imply a roughly 60% chance of a 10bps hike by ECB by the end of March 2018, up from just 20% chance last week. European stocks are trading broadly higher with CAC up 4.5%, DAX up 3.1% and FTSE up 1.9% at the time of writing. In other markets, Gold drops sharply to as low as 1266.0, down more than -1.3% today. WTI recovers mildly but fails to find follow through buying above 50 handle.

Centrist Emmanuel topped in the first round of election in France getting 23.75% vote. Far-right Marine Le Pen got 21.53%. Both are through to the head-to-head run-off on May 7. Higher support for Macron is seen as a sign of solid support for staying with Euro. Meanwhile, after accepting defeat conservative Francois Fillon and leftist Benoit Hamon called their supports to choose Macron over Le Pen. According to recent polls by Ifop, Ipsos and Elabe, Macron would easily beat Le Pen in a head-to-head run-off, by a wide margin. A new Harris survey also saw Macron winning the run-off by 64% to 36%. More in French Election: Macron And Le Pen Enter Final, Euro Soars Across The Board.

German Ifo beat expectaions

German Ifo business climate rose to 112.9 in April, up fro 112.4 and beat expectation of 112.5. That's also the highest level since July 2011. Current assessment gauge rose to 121.1, up from 119.5 and beat expectation of 119.2. However, expectations gauge dropped to 105.2, down from 105.7 and missed expectation of 105.9. Ifo chief Clemens Fuest noted in the statement that "the German economy is growing strongly." He also noted separately that Macron's first round win in the presidential election "cannot be over-estimated" and from the European perspective, "this is a very good result".

ECB meeting the next focus

Euro will now look into ECB meeting later in the week for further strength. But ECB president Mario Draghi will likely stay cautious with his messages. Draghi warned last week that risks remain tilted to the downside. And "very substantial" accommodation is still needed. Nonetheless, he sounded a bit more relieved that there are "signs" of broadening recovery "across countries and sectors", with a "somewhat brighter global recovery and increasing global trade". Chief economist Peter Praet also noted that time for stimulus exit is yet to come. Separately, governing council member Ewald Nowotny said that the policy path for 2017 is "decided". And ECB will "continuing bond purchases at a reduced level and leaving the interest-rate structures as they are." Another member Francois Villeroy de Galhau said that current policies were "fully appropriate" and recovery is "still fragile.

Trump busy with Xi, Abe, Kim and Tax

Elsewhere, it's reported that China President Xi Jinping urged US President Donald Trump to exercise restraint over North Korea. Xi also expressed his opposition to any action that violate UN Security Council resolutions. Xi urged all parties to avoid further ratcheting up tensions. Meanwhile, Trump has talked to Japan Prime Minster Shinzo Abe. Abe then said that Trump "has indicated by his words and actions that all possible options are on the table." Meanwhile, markets will be eagerly looking forward to Trump's announcement on tax response this Wednesday. The White House said last week that Trump will release "broad principles and priorities" of the tax overhaul.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.0692; (P) 1.0715 (R1) 1.0747; More....

Intraday bias in EUR/USD remains on the upside for the moment. Rise from 1.0339 is still in progress and would extend higher towards 1.1298 resistance. But still, such rally is seen as a corrective move. Hence, we'd pay attention to topping signal above 1.0905 and below 1.1298 key resistance. On the downside, below 1.0777 minor support will turn bias to the downside for 1.0569 support first.

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 term reversal. this would also be supported by sustained trading above 55 week EMA.

Economic Indicators Update

CRUDE OIL: The commodity looks to weaken further after selling off the past week. On the downside, support resides at the 49.00 level where a break will expose the 48.00 level. A cut through here will set the stage for a run at the 47.50 level. Further down, support resides at the 47.00 level. On the upside, resistance resides at the 50.00 level. Further out, resistance comes in at the 50.50 level. A break above here will aim at the 51.00 level and then the 51.50 level followed by the 52.00 level. All in all, CRUDE OIL remains biased to the downside.

GBP/USD – 1.2816

Recent wave: Wave V of larger degree wave (III) has ended at 1.1986 and major correction has commenced from there for gain to 1.3000 and 1.3140-50

Trend: Near term up

Original strategy :

Buy at 1.2710, Target: 1.2910, Stop: 1.2650

Position: -
Target:  -
Stop: -

New strategy :

Buy at 1.2710, Target: 1.2910, Stop: 1.2650

Position: -
Target:  -
Stop:-

Although cable staged a brief bounce to 1.2858, as price has retreated after failing to penetrate minor resistance at 1.2859, retaining our view that further consolidation below last week’s high at 1.2906 would be seen and risk of another corrective fall to 1.2757 (38.2% Fibonacci retracement of 1.2515-1.2906) is seen, however, reckon 1.2710 (50% Fibonacci retracement as well as 100% projection of a leg from1.2906) would limit downside and bring another rise later, above said resistance at 1.2858-59 would suggest the pullback from 1.2906 has ended instead, bring further gain to 1.2870, then retest of 1.2906. We are keeping our view that the wave c as well as larger degree wave B has ended at 1.2109, hence impulsive wave C has commenced from there with wave i of C ended at 1.2616, follow by a correction to 1.2365 (end of wave ii) and wave iii rally is unfolding, hence further gain to 1.2940-50 and possibly psychological resistance at 1.3000 would be seen, however, near term overbought condition should limit upside to 1.3050-60. 

Our preferred count on the daily chart is that cable's rebound from 1.3500 (wave (A) trough) is unfolding as a wave (B) with A ended at 1.7043, followed by triangle wave B and wave C as well as wave (B) has ended at 1.7192, the subsequent selloff is the larger degree wave (C) which is still unfolding with minor wave (III) of larger degree wave 3 ended at 1.1986, hence wave (IV) correction is in progress which could either be a triangle wave (IV) of a complex formation but upside should be limited to 1.3500 and price should falter well below 1.4000, bring another decline in wave (V) of 3 for weakness to 1.1500, then 1.1200.

On the downside, whilst initial pullback to 1.2750-55 is likely, reckon downside would be limited and 1.2700-10 (50% Fibonacci retracement of 1.2515-1.2906) should contain weakness and bring another rally later. Below 1.2690-00 would defer and risk correction to 1.2660-65 but another previous resistance at 1.2616 (wave i top) should remain intact.

GBP/JPY - 141.20

Recent wave: Medium term low formed at 120.50 and (A)-(B)-(C) major correction has commenced with (A) leg ended at 148.45, hence wave (B) is unfolding for retreat to 131.00-10.

Trend: Near term up

Original strategy:

Exit long entered at 139.10,

Position: - Long at 139.10
Target: -
Stop: -

New strategy :

Stand aside

Position: -
Target:  -
Stop:-

Although sterling did surge in line with our previous bullishness and price rose to as high as 142.10 earlier today, the subsequent retreat suggests consolidation below this level would be seen and pullback to 140.60-65 cannot be ruled out, however, reckon downside would be limited to 140.00 and price should stay well above support at 139.20 (Friday’s low), bring another rise later.

In view of this, would not chase this rise here and would be prudent to buy sterling on subsequent pullback. Above 141.70-80 would bring retest said intra-day resistance at 142.10 but break there is needed to revive bullishness and extend the rise from 135.60 low to 142.50, then towards 142.90-00 later.

Our preferred count is that larger degree wave V with circle is unfolding from 251.12 with wave (I) 219.34, (II): 241.38 and wave (III) is subdivided into 1: 192.60, 2: 215.89 (23 Jul 2008) and wave 3 ended at 118.87 earlier in 2009. The correction from there to 162.60 is wave 4 which itself is a double three and is labeled as first a-b-c ended at 151.53, followed by wave x at 139.03, 2nd a ended at 162.60, 2nd b at 146.75 and 2nd c leg of wave 4 ended at 163.00. Therefore, the decline from 163.00 to 116.85 is now treated as wave 5 which also marked the end of larger degree wave (III), hence wave (IV) major correction has commenced for retracement of the wave (III) from 241.38 and upside target at 183.95-00 (50% Fibonacci retracement of the wave (II) from 241.38) had been met, a drop below 160.00 would suggest wave (IV) has ended at 195.85, bring decline in wave (V) for initial weakness to 130 (already met) and 120.




Cable is holding around 1.2800 handle after being dragged higher by strength of Euro and hit session high at 1.2838.

Near-term action remains within consolidation range established between 1.2755 and 1.2845, after the pair soared to fresh six-month high at 1.2904 last week.

Neutral near-term studies suggest extended sideways mode, however, risk of deeper correction exists, as daily RSI and slow stochastic are hovering around overbought borders and may generate bearish signal on reversal.

Consolidation range low at 1.2755 marks Fibo 38.2% of 1.2513/1.2904 rally, firm break of which is needed to trigger stronger pullback and open supports at 1.2700 (round-figure) and 1.2663 (Fibo 61.8% retracement).

At the upside, the upper 20d Bollinger band is capping near-term action (currently at 1.2862) and break above it would signal fresh attack at 1.2905 high. Violation of the latter would expose psychological 1.3000 barrier for retest.

Res: 1.2838, 1.2862, 1.2904, 1.2950
Sup: 1.2800, 1.2772, 1.2755, 1.2709

EUR/USD – 1.0854

EUR/USD:   Wave (c) of 2 ended at 1.3993 and wave 3 of III has commenced for weakness to 1.0411 (1.236 of wave 1), then 1.0000.

The single currency found renewed buying interest at 1.0682 and has rallied, price opened sharply higher today and broke above indicated previous resistance at 1.0906, suggesting the erratic rise from 1.0340 (tentatively wave v of larger defer wave 3) is stallion progress, hence further gain to 1.1000 would be seen, above there would encourage for further rise to 1.1050, however, reckon upside would be limited to 1.1125-30 (61.8% Fibonacci retracement of 1.1616-1.0340) and price should falter well below strong resistance at 1.1300, bring retreat later. 

Our preferred count on the daily chart remains that a wave (II) from 1.2329 ended at 1.5145 with A-leg ended at 1.4720, followed by wave B at 1.2457, the wave C from there was also a 3 legged move and is labeled as (a): 1.3739, (b): 1.2885, the wave iii of the 5-waver (c) from 1.2885 has ended at 1.4339 and wave iv is a triangle ended at 1.3878 and wave v formed a top at 1.5145. The decline from there is a 5-waver (C) with minor wave (i) of I of (C) ended at 1.4218 with wave (ii) ended at 1.4580, wave (iii) ended at 1.3267 and wave (iv) ended at 1.3692 and wave (v) ended at 1.1876, this is also the low of wave I of (C) and wave II ended at 1.4940, hence wave III is now in progress with a diagonal wave 1 ended at 1.2042, the breach of previous support at 1.1876 (wave I trough) adds credence to our view that the wave 2 has ended at 1.3993, wave 3 has commenced for further weakness to 1.0411, then towards 1.0000.

On the downside, whilst pullback to 1.0800 cannot be ruled out, reckon previous resistance at 1.0778 would turn into support and contain euro’s downside, bring another rise later. Below 1.0735-40 would defer and risk test of support at 1.0678-82 but only a drop below there would suggest top is formed instead, bring weakness to 1.0635-40, then 1.0602 support. Looking ahead, only a daily close below 1.002 would provide confirmation and revive bearishness for test of 1.0570 support first. 
 
Recommendation: Buy at 1.0780 for 1.0980 with stop below 1.0680. 

Euro's long-term uptrend started from 0.8228 (26 Oct 2000) with an impulsive structure. The rise from 0.8228 to 0.9593 (5 Jan 2001) is labeled as wave I, the retreat to 0.8352 (6 Jul 2001) is wave II and the rally to 1.3670 (31 Dec 2004) is wave III. Wave IV from there ended at 1.1640 (15 Nov 2005), the subsequent upmove to 1.6040 (July 15, 2008) is treated as wave V, the major selloff from the record high of 1.6040 to 1.2329 (October 27, 2008) signals a reversal has taken place with (I) leg ended at 1.2329 and once (II) ended at 1.5145, wave (III) itself is an extended move with I: 1.1876 and complex wave II ended at 1.4902, wave III has commenced with wave 1 and 2 ended at 1.2042 and 1.3993 respectively, wave 3 of III is now unfolding for weakness towards parity.