Sample Category Title

EUR/USD – 1.0754

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 decent demand at 1.0600 last week and has rallied again, dampening our bearishness and suggesting the erratic rise from 1.0493 is still in progress, hence upside risk remains for gain towards resistance at 1.0829, however, break there is needed to signal another leg of corrective rise from 1.0340 low is still in progress for further gain to resistance at 1.0873 but still reckon upside would be limited to 1.0930-35 (61.8% Fibonacci retracement of 1.1300-1.0340) and 1.1000 should hold from here, bring another decline in Q2.

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 1.0700-10 cannot be ruled out, reckon downside would be limited to 1.0650-60 and said support at 1.0600 should hold, bring another rise later. Only a daily close below this level would signal the rebound from 1.0493 low has ended, bring further fall to 1.0550 but break of 1.0525 support is needed to revive bearishness for retest of 1.0493. A drop below 1.0493 support would add credence to previous view that the rebound from 1.0340 has ended and bring further fall to indicated key support at 1.0454. A sustained break below this level would suggest the rebound from 1.0340 has ended, bring subsequent decline to 1.0390-00, then towards said recent low at 1.0340.
 
Recommendation: Exit short entered at 1.0740 and stand aside for this week. 

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.

EUR/USD

Current level - 10772

The pair is currently testing the previous peak at 1.0780 and a failure here will result in an intraday slide towards 1.0710 support zone. The overall bias on the senior frames remains positive above 1.0600, for a rise towards 1.0870.

Profit-taking affects gold curbing silver and platinum

USD/JPY

Current level - 112.52

The bias is negative below 112.90, for a slide towards 111.60. Crucial on the upside is 113.50 hurdle

GBP/USD

Current level - 1.2430

Despite the positive bias, my outlook here is rather negative, for a break through 1.2376 crucial low, towards 1.2300 and even 1.2250 support zone. 

USD/JPY - 112.81

USD/JPY – Wave V of larger degree circle V has possibly ended at 75.31 and major correction has commenced and already met indicated target at 125.00.

As the greenback ran into strong resistance at 115.51 earlier this month and has retreated sharply, suggesting top is formed there and consolidation with downside bias is seen for further fall to 112.00 but break there is needed to signal the rebound from 111.59 has ended, bring further fall towards this level. Looking ahead, dollar needs to penetrate indicated support at 111.36 to retain bearishness and extend the fall from 118.66 (2016 high) for retracement of recent upmove to 110.90-00, then 109.90-95 (50% Fibonacci retracement of 101.19-118.66) but downside should be limited to 109.50 and price should stay above 109.00, bring rebound later.

Our preferred count is that, triangle wave IV (with circle) ended at 101.45 and the circle wave V brought dollar down to the record low of 75.31 in 2011 and the subsequent rebound signal major correction has commenced with A leg ended at 84.19, followed by wave B at 77.14 and impulsive wave C is now unfolding (indicated upside target at 125.00 had been met) for gain towards 127.00 level. In the event dollar drops below support at 99.01, this would confirm medium term decline from 125.86 top (2015 high) has resumed for subsequent weakness to 98.00 and possibly 97.00.

Under this count, this wave C is unfolding as impulsive waves with (1) (2), 1 2 ended at 80.67, 79.07, 82.84 and 81.69 respectively, hence the extended wave 3 has ended at 103.74 and wave 4 correction of recent upmove should bring weakness to 92.57, then towards 90.88 but psychological support at 90.00 should limit downside and bring another rally later in wave 5, indicated target at 125.00 had been met and gain to 127.00 cannot be ruled out but reckon price would falter below 130.00.

On the upside, whilst initial recovery to 113.40-50 cannot be ruled out, price should falter below 114.00 and bring another decline later. Above 114.45-50 would abort and prolong choppy trading, risk rebound to 115.00 but only;y break of indicated resistance at 115.51-62 would signal the erratic rise from 111.59 low is still in progress and may extend further gain to 116.00-10, break there would suggest the pullback from 118.66 has ended, then headway to resistance at 116.87 would follow. Looking ahead, a sustained break above there would signal early upmove has resumed for further gain to another previous resistance at 117.53 next.

Recommendation: Sell at 113.50 for 111.50 with stop above 114.50.

On the monthly chart, we have changed our preferred count that an impulsive wave is unfolding with major wave III with circle ended at 79.75, then followed by wave IV with circle and is labeled as a triangle with A: 147.64 (11 August, 1998), B: 101.25, C: 135.20, D: 101.67 and E leg ended at 124.14 to end the wave IV with circle. Hence, wave V with circle commenced from there and hit a record low of 75.31, however, the subsequent strong rebound signals this circle wave V has possibly ended there, hence gain to (indicated upside target at 122.00 and 125.00 had been met), the retreat from 125.86 suggests wave A of major correction has ended there and wave B correction back to 99.00, then 95.00 would be seen, however, reckon downside would be limited to 90.00, bring another rebound in wave C next year.

'This was another good news report for the Canadian manufacturing sector, suggesting that the momentum in the sector that heated up in late-2016 carried over into the beginning of 2017.' - Michael Dolega, TD Bank senior economist

Manufacturing sales soared 0.6% in January, Statistics Canada reported on Friday. Growth remained positive for the third consecutive month. It was mainly driven by a 2.3% increase in non-durable goods sales, among which the main drivers were the petroleum, coal and chemical industries. The petroleum and coal industry nudged 7%, mainly because of higher volumes and higher prices. The chemical industry, in turn, advanced 2.5%, due to higher demand for pesticides and other agricultural products. Inventories climbed 1.1% in January. The largest inventories gains were registered in the petroleum and coal, machinery, primary metal and food industries, where inventories spiked 5.2%, 2.5%, 1.9% and 1.6%, accordingly. As a result, the inventory-to-sales ratio increased slightly from 1.30 to 1.31. Unfilled orders rose 0.3% after two months of declines. The increase was mostly attributable to the machinery industry, where unfilled orders hit a record high since March 2015 of C$7.3B. Furthermore, new orders rallied 4.6%, also following two consecutive months of declines. New orders mainly came from the aerospace and motor vehicle industries. In general, manufacturing sales rose in 14 of 21 industries, which represent 75.4% of the Canadian manufacturing sector.

'Factories are benefiting from greater consumer and business optimism since last fall's presidential election. Companies are spending more on big-ticket items such as industrial machinery, and Americans are buying cars at near-record levels. Overseas growth has spurred more exports.' - Forbes

US industrial production was unchanged last month, while market analysts anticipated an increase, official figures revealed on Friday. The Federal Reserve reported factory production came in at 0.0% in February, falling behind analysts' expectations for a gain of 0.3%. Meanwhile, January's initially reported drop of 0.3% was revised to a 0.1% fall. However, manufacturing production, which accounts for 75% of overall industrial output, posted a 0.5% increase in February that matched the preceding month's rise. A global economic recovery, stronger business investment in equipment and appropriate inventory levels allowed manufacturers to gain momentum over the last several months. The advance in manufacturing output was in line with analysts' forecasts. Data also showed utility output decreased 5.7%, following a 5.8% decline in January. The fall was mainly driven by unusually warm temperatures. Mining production rose 2.7% last month, boosted by oil and gas drilling. Business equipment output advanced 0.7% in February, compared to a 0.1% decline registered in the prior month, whereas production of construction supplies increased 1.3% after climbing 1.4% in January. Other data released on Friday showed mood of American shoppers jumped to 97.6 in March, according to the preliminary reading released by the University of Michigan.

The pair eventually cracked key barrier at 0.7739 (23 Feb high) on fresh acceleration higher today, after bulls paused on Thu/Fri, following strong post-Fed bullish acceleration.

Full retracement of 0.7739/0.7489 pullback signals that bulls from 0.7489 trough could extend towards next strong barrier at 0.7758/76 (highs of Aug / Nov 2016), where strong upside rejection occurred.

Hesitation at 0.7739 barrier could be anticipated on overbought slow stochastic, with dips to ideally hold above 0.7650/40 zone (base of thick hourly cloud, spanned between 0.7647 and 0.7678).

Res: 0.7745, 0.7758, 0.7776, 0.7800
Sup: 0.7695, 0.7661, 0.7647, 0.7629

EUR/JPY - 121.32

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

Original strategy:

Bought at 121.30, Target: 123.30, Stop: 120.70

Position: - Long at 121.30
Target: - 123.30
Stop: - 120.70

New strategy :

Hold long entered at 121.30, Target: 123.30, Stop: 120.80

Position: - Long at 121.30
Target:  - 123.30
Stop:- 120.80

Although the single currency slipped after meeting resistance at 122.26, as euro found support at 120.81 and has recovered, retaining our bullishness and consolidation with mild upside bias is seen for another bounce to said resistance at 122.26 but break there is needed to signal the retreat from 122.89 has ended, bring further gain to 122.60-65, then retest of 122.89. Looking ahead, above there would confirm recent rise from 118.24 has resumed and extend headway to 123.30-35, a sustained breach above this level would indicate signal early erratic fall from 124.10 top has ended at 118.24, bring further rise to 123.85-90 first.

In view of this, we are holding on to our long position entered at 121.30. A break of said support at 120.81 would abort and risk correction of recent upmove to 120.45-50 but downside should be limited and price should stay well above support at 120.02 and bring another rise later. 

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).

Fresh extension of last week's fall from 115.18 (14 Mar high) cracked target at 112.57 (Fibo 76.4% of 111.67/115.49 rally), maintaining firm bearish tone.

The pair was down nearly 2% last week, on strong bearish acceleration that commenced after upside rejection above daily cloud.

Daily studies are turning into full bearish setup, with close above 112.57 to generate bearish signal for full retracement of 111.67/115.49 upleg.

Oversold slow stochastic signals consolidation before bears resume, with base of thickening daily cloud at 113.65 (reinforced by daily Kijun-sen), expected to cap upticks.

Res: 113.25, 113.48, 113.65, 113.91
Sup: 112.44, 112.00, 111.67, 111.57

AUD/USD – 0.7723

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 up

Original strategy :

Buy at 0.7635, Target: 0.7775, Stop: 0.7575

Position: -
Target:  -
Stop: -

New strategy :

Buy at 0.7645, Target: 0.7800, Stop: 0.7585

Position: -
Target:  -
Stop:-

As aussie has risen again after brief pullback and broke above indicated previous resistance at 0.7741, suggesting recent upmove has resumed and bullishness remains for further gain to 0.7778 (last year’s high), however, break there is needed to retain upside bias and extend headway to 0.7840-50 but price should falter below 0.7900, risk from there has increased for a retreat to take place later.

In view of this, we are looking to buy aussie on subsequent pullback as 0.7633-36 should limit downside and bring another rise later. Only below previous resistance at 0.7592 would abort and signal top is formed instead, then further choppy trading would take place and risk is seen for pullback to 0.7530-40 but said support at 0.7491 should remain intact.

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.

The Euro is consolidating under fresh recovery high at 1.0781, the highest since 06 Feb, with early Monday’s action holding bullish tone for renewed attempt at 1.0781 high and possible extension higher.

Psychological 1.0800 barrier marks initial target ahead of key point at 1.0827 (02 Feb high).

Strong bullish setup of daily MA’s that also formed multiple bull-crosses and the price holding well above broken daily cloud, support bullish scenario.

However, overbought slow stochastic suggests bulls might be delayed.

Thickening hourly cloud (spanned between 1.0693 and 1.0757) underpins near-term action and marks strong support, ahead of daily cloud top (currently at 1.0674), above which extended dips are expected to find support and keep bullish bias intact.

Res: 1.0781, 1.0800, 1.0827, 1.0872
Sup: 1.0757, 1.0726, 1.0693, 1.0676