Sample Category Title

GBP/USD - 1.2512

Original strategy :

Buy at 1.2400, Target: 1.2520, Stop: 1.2365

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.2425, Target: 1.2540, Stop: 1.2390

Position : -

Target :  -

Stop : -

As cable has continued trading with a firm undertone, adding credence to our bullish view that recent upmove from 1.2109 is still in progress and may extend further gain to 1.2540-50 but loss of upward momentum would limit upside to previous chart resistance at 1.2570 and price should falter below 1.2600-10, risk from there has increased for a retreat to take place later.

In view of this, would not chase this move here and we are looking to buy cable on subsequent pullback as 1.2400 should limit downside. Below 1.2380-85 would defer and risk correction to 1.2350-55 but still reckon support at 1.2335 would remain intact, bring another rise later. 

EUR/USD - 1.0784

Original strategy  :

Buy at 1.0725, Target: 1.0840, Stop: 1.0690

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.0725, Target: 1.0840, Stop: 1.0690

Position : -

Target :  -

Stop : -

As the single currency retreated after rising to 1.0825 yesterday, suggesting minor consolidation below this level would be seen and pullback to 1.0750-60 cannot be ruled out, however, reckon support at 1.0719 would limit downside and bring another rise later, above indicated resistance at 1.0825-29 would extend further rise to 1.0850-60 but loss of near term upward momentum should prevent sharp move beyond 1.0880 and price should falter below 1.0900, risk from there has increased for a retreat to take place later.

In view of this, would not chase this rise here and we are looking to buy euro on subsequent pullback as 1.0719 support should limit downside and bring another rise later. Below 1.0690-00 would defer and suggest top is possibly formed, risk weakness to 1.0640 (previous resistance now support) but still reckon indicated support at 1.0600 would remain intact.

EUR/USD - 1.0784

Original strategy  :

Buy at 1.0725, Target: 1.0840, Stop: 1.0690

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.0725, Target: 1.0840, Stop: 1.0690

Position : -

Target :  -

Stop : -

As the single currency retreated after rising to 1.0825 yesterday, suggesting minor consolidation below this level would be seen and pullback to 1.0750-60 cannot be ruled out, however, reckon support at 1.0719 would limit downside and bring another rise later, above indicated resistance at 1.0825-29 would extend further rise to 1.0850-60 but loss of near term upward momentum should prevent sharp move beyond 1.0880 and price should falter below 1.0900, risk from there has increased for a retreat to take place later.

In view of this, would not chase this rise here and we are looking to buy euro on subsequent pullback as 1.0719 support should limit downside and bring another rise later. Below 1.0690-00 would defer and suggest top is possibly formed, risk weakness to 1.0640 (previous resistance now support) but still reckon indicated support at 1.0600 would remain intact.

USD/JPY - 111.00

Original strategy  :

Sell at 112.00, Target: 110.80, Stop: 112.35

Position :  -

Target :  -

Stop : -

New strategy  :

Sell at 112.00, Target: 110.80, Stop: 112.35

Position :  -

Target :  -

Stop : -

As the greenback recovered after falling to 110.63, suggesting consolidation above this level would be seen and corrective bounce to 111.55-60 is likely, however, still reckon upside would be limited to 112.00-10 and bring another decline later, a break of said support at 110.73 would signal recent decline is still in progress and may extend further fall to 110.50 but near term oversold condition should prevent sharp fall below 110.20-25 and reckon 110.00 would hold from here. 

In view of this, would not chase this fall here and would be prudent to sell cable on recovery as 112.00 should limit upside. Only above indicated previous support at 112.26 would abort and signal low is formed instead, bring a stronger rebound to 112,59 but resistance at 112,87-90 should cap upside.

A growing sense of caution has gripped the financial markets this week with investors on standby ahead of Thursday's key healthcare vote in Congress which may thoroughly test the Trump bump. Uncertainty over Donald Trump's proposed economic agenda has already triggered risk aversion and any complications in the healthcare reform could spell trouble for this phenomenal stock market rally. Global stocks may be exposed to downside shocks with the threat of a potential setback in the healthcare bill raising doubts over Trump's ability to move forward with the proposed tax cuts and infrastructure spending. Today will be the first major test for Trump's legislative ability and the outcome may either create a Trump slump or technical bounce for bulls to exploit.

Sterling hovering around 1.2500

Sterling has staged a remarkable rebound this week with bulls almost rebelling against the Brexit woes by propelling the GBPUSD above 1.2500 during Thursday's trading session. The Dollar's persistent weakness combined with February's blockbuster retail sales figure of 1.4% may have created an illusion of a bullish bias returning to Sterling. Although the retail sales figure for February was unquestionably impressive and illustrated strong growth, the underlying three-month view from December and January still displayed a slowdown.

With the Article 50 set to be triggered next week and the focus redirected towards Brexit, Sterling could be instore for a messy rollercoaster ride. The lingering concerns over complications arising in the negotiation process may compound to the jitters consequently exposing Sterling to downside risks.

While bulls may be commended on their ability to exploit Dollar's weakness and elevate Sterling repeatedly despite the Brexit anxieties, questions may be asked over how much steam the over-extended technical bounce has left. With uncertainty still the name of the game when dealing with Sterling, there remains a likelihood of the Brexit developments dictating where the currency trades with macro fundamentals becoming secondary.

From a technical standpoint, Sterling bulls may win the battle this week if 1.2500 is conquered. A decisive breakout and daily close above 1.2500 could open a path towards 1.2600. On the other hand, if 1.2500 remains defensive then bears have a chance to test Wednesday's daily low at 1.2420.

Yellen conference in focus

King Dollar was on the back foot this week with the Dollar Index struggling to break back above 100.00 as sellers exploited the renewed Trump jitters to attack prices incessantly. Dollar bulls remain on the hunt for inspiration to pump life into the Greenback with Yellen's speech today at a Community Development Conference seen as an opportunity. If Yellen dishes a hawkish surprise or any fresh insights on rate hike timings, then bulls could be encouraged to elevate the Dollar Index back towards the psychological 100.00 level. On the other hand, if bulls are left empty handed then the Greenback could be instore for further punishment in the short term.

Commodity spotlight - Gold

The risk-off trading environment has boosted appetite for safe-haven assets with Gold becoming an investor's popular choice this week. Prices have climbed to a three-week high above $1250 with Dollar weakness fueling the upside momentum. Although Gold may find itself under pressure in the longer term when the Dollar stabilizes, risk aversion could uplift the yellow metal higher in the short term. From a technical standpoint, the fact that bulls have conquered $1240 on the daily charts suggests that the upside still has some steam. A decisive breakout above $1250 may open a path towards $1260.

Daily Pivots: (S1) 1.0774; (P) 1.0799 (R1) 1.0823; More.....

With 1.0178 minor support intact, further rise is still expected in EUR/USD. Break of 1.0828 resistance will target 100% projection of 1.0339 to 1.0828 from 1.0494 at 1.0983. However, as rise from 1.0339 is seen as a corrective move. We'd expect upside to be limited by 1.0983 to complete the correction. On the downside, break of 1.0718 minor support will turn bias to the downside for 1.0494 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 resume later. 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.

Daily Pivots: (S1) 1.2434; (P) 1.2470; (R1) 1.2517; More...

Intraday bias in GBP/USD remains on the upside for 1.2569 resistance. Break there will target 1.2705/74 resistance zone. But still, price actions from 1.1946 are seen as a consolidation pattern. Hence, we'd expect strong resistance from 1.2705/2774 to limit upside and bring down trend resumption. On the downside, break of 1.2340 support will turn bias back to the downside for 1.2108 support. Though, sustained break of 1.2774 will extend the rise towards 1.3444 key resistance level.

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 bottoming 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) 0.9881; (P) 0.9913; (R1) 0.9946; More.....

With 1.0002 minor resistance intact, deeper decline is still expected in USD/CHF for 0.9860 support. Break there will resume whole decline from 1.0342 and target 100% projection of 1.0342 to 0.9860 from 1.0169 at 0.9687. Nonetheless, on the upside, break of 1.0002 minor resistance will turn bias back to the upside for 1.0169 resistance instead.

In the bigger picture, USD/CHF is staying in medium term sideway pattern between 0.9443/1.0342. In any case, decisive break of 1.0342 resistance is needed to confirm underlying strength. Otherwise, we'll stay neutral in the pair first. In case of another fall, we'd expect strong support from 0.9443/9548 support zone.

USD/CAD has edged lower in the Thursday session. Early in the North American session, the pair is trading at 1.3320. On the release front, there are no Canadian economic indicators. In the US, unemployment claims jumped to a 7-week high, rising to 258 thousand. This was well above the forecast of 258 thousand. Later in the day, New Home Sales is expected to improve to 566 thousand. Federal Reserve Chair Janet Yellen will speak at an event in Washington, and FOMC members Neel Kashkari and Robert Kaplan will also deliver speeches on Thursday. On Friday, Canada publishes CPI, one of the most important economic indicators. CPI was unexpectedly high in January, at 0.9%. The February report is expected to slip to 0.2%.

Canada's retail sales were stellar in January, indicative of a strong increase in consumer spending. Core Retail Sales jumped 1.7%, beating the forecast of 1.3%. This marked the strongest gain since February 2015. Retail Sales sparkled with a gain of 2.2%, compared to an estimate of 1.3%. The strong figures point to a strong first quarter for the economy, and weak retail sales data in December appear to be a seasonal distortion. However, the Canadian dollar was unable to take advantage and couldn't gain ground against the greenback.

With a dearth of economic releases this week, the markets have been focusing on speeches from FOMC members. Earlier this week, Chicago Fed President Charles Evans said he expected the Fed to raise rates two more times this year. This projection was in line with the Fed's dot plot (which remain unchanged) as well as last week's rate statement. Although one could make a strong case that three rate hikes in 2017 would be impressive, the markets appear disappointed, and would like four hikes, given the strong performance of the US economy. The Fed's cautious approach has soured sentiment towards the greenback, resulting in the dollar heading lower against its major rivals.

Daily Pivots: (S1) 110.67; (P) 111.22; (R1) 111.72; More...

USD/JPY's decline from 115.49 is still in progress for the moment. Sustained trading below 111.12/13 cluster support (61.8% projection of 118.65 to 111.58 from 115.49 at 111.12 and 38.2% retracement of 98.97 to 118.65 at 111.13) will pave the way to 100% projection at 108.42. Nonetheless, rebound from there current level, and break of 112.86 resistance will indicates completion of the correction from 118.65. In such case, intraday bias will be turned back to the upside for 115.49 resistance and above.

In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. The impulsive structure of the rise from 98.97 suggests that the correction is completed and larger up trend is resuming. Decisive break of 125.85 will confirm and target 61.8% projection of 75.56 to 125.85 from 98.97 at 130.04 and then 135.20 long term resistance. Nonetheless, sustained trading below 55 week EMA (now at 111.12) will extend the consolidation from 125.85 with another fall through 98.97 before completion.