Sample Category Title

GBP/USD - 1.2354

Most recent candlesticks pattern   : N/A

Trend                                 : Near term up

Tenkan-Sen level                 : 1.2278

Kijun-Sen level                    : 1.2244

Ichimoku cloud top              : 1.2193

Ichimoku cloud bottom        : 1.2183

Original strategy :

Buy at 1.2300, Target: 1.2400, Stop: 1.2265

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.2300, Target: 1.2400, Stop: 1.2265

Position : -

Target :  -

Stop : -

As cable rallied again after finding renewed buying interest at 1.2241, adding credence to our view that the rise from 1.2109 low is still in progress for retracement of recent decline, hence further gain to previous support at 1.2384 would be seen, however, near term overbought condition should prevent sharp move beyond 1.2410-15 and price should falter well below resistance at 1.2471, bring retreat later.

In view of this, we are looking to buy cable on pullback but at a higher level as 1.2300-10 should limit downside and bring another rise. Below 1.2265-70 would suggest top is possibly formed, risk test of said support at 1.2241 which is likely to hold on first testing.

EUR/USD - 1.0735

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 1.0725

Kijun-Sen level                  : 1.0680

Ichimoku cloud top             : 1.0640

Ichimoku cloud bottom      : 1.0624

Original strategy  :

Buy at 1.0675, Target: 1.0775, Stop: 1.0640

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.0675, Target: 1.0775, Stop: 1.0640

Position : -

Target :  -

Stop : -

As the single currency found renewed buying interest at 1.0600 yesterday and has rallied, reviving our bullishness for recent erratic upmove from 1.0493 low to extend further gain to 1.0755, break there would encourage for headway to 1.0775-90 but reckon resistance at 1.0799 would limit upside and price should falter well below resistance at 1.0829, bring retreat later.

In view of this, would not chase this rise here and we are looking to buy euro on pullback as the Kijun-Sen (now at 1.0677) should limit downside. Below the upper Kumo (now at 1.0657) would signal top is formed, bring weakness to 1.0620-25 but said support at 1.0600 should remain intact.

USD/JPY - 113.15

Most recent candlesticks pattern   : N/A

Trend                      : Near term down

Tenkan-Sen level              : 113.22

Kijun-Sen level                  : 113.86

Ichimoku cloud top             : 114.85

Ichimoku cloud bottom      : 114.74

Original strategy  :

Sell at 114.00, Target: 113.00, Stop: 114.35

Position :  -

Target :  -

Stop : -

New strategy  :

Sell at 114.00, Target: 113.00, Stop: 114.35

Position :  -

Target :  -

Stop : -

Although the greenback tumbled today and dropped below 113.00 level, lack of follow through selling and current rebound suggest consolidation above support at 112.90 would be seen and recovery to 113.55-60 cannot be ruled out, however, reckon 114.00-05 would limit upside and bring another decline later. A break of said support at 112.90 would extend the fall from 115.51 to 112.76-77, then towards 112.50 but reckon downside would be limited to 112.00-10, bring rebound later.

In view of this, we are looking to sell dollar on recovery as 114.00 should limit upside. Only above previous support at 114.48-52 would abort and signal low is formed instead, risk a stronger rebound to 114.89 resistance first, break there would signal the retreat from 115.51 has ended, then gain to 115.20 resistance would follow.

S&P500 is showing us first signs of a completed higher degree three wave correction, that was recognized in wave B or 2. Well, current fall suggest that more weakness may in store for the S&P and ideally in a five wave sequence. That said, a break beneath the 2359 region would indicate a completed correction and more weakness to follow.

S&P500, 1H

Oil price extended bounce from Tuesday's spike low at $47.08, boosted by weaker dollar and fall in US crude inventories. Recovery extended for the third consecutive day and peaked at $49.61, threatening key barrier at $50.00 (daily cloud base/psychological resistance), after closing above another important point, 200 SMA at $48.70 on Wednesday. However, risk of recovery stall persists, as daily studies are still bearish and concerns of global oversupply keep oil price under pressure. Stall of recovery rally (also fourth wave of five-wave cycle from $55.01) under $50.00 barrier would generate bearish signal and commence the fifth wave, which could travel back to $47.08 low. Today's close below 200SMA would be seen as negative signal that may trigger fresh acceleration lower.

Res: 49.00; 49.61; 50.00; 50.43
Sup: 48.55; 48.05; 47.68; 47.08

Global stocks were catapulted to record highs on Thursday following the Federal Reserve's "dovish hike" which rekindled investor's appetite for riskier assets. Asian shares have traded mostly higher today as participants digest the Fed's caution to future rate increases with the bullish domino uplifting European equities. With risk-on being the new name of the game in the short term, Wall Street may stroll into further gains moving forward.

Although the impressive stock market rally has displayed repeated signs of resilience against political risk and uncertainty this quarter, participants must remain diligent as some fragments of a bear market still linger. A situation in the future where investors start to lose faith over Trump's pending fiscal stimulus plans could be the start of a steep market selloff.

Dollar punished by Doves

The Greenback was exposed to sharp losses on Wednesday after the Federal Reserve signaled a more moderate pace of monetary tightening in 2017 than most investors anticipated. Although US interest rates were increased as widely expected, the cautious tone Yellen struck at the press conference coupled with the static projections on the dot plot has extinguished expectations of four US interest rates increases this year. Regardless of the sharp Dollar selloff, the bullish bias remains intact in the longer term and with "the economy doing well" as Yellen stated buyers may reappear once a support has been established. Technical traders may observe how the Dollar Index reacts to the physiological 100.00 support which could provide protection for the bulls or simply assist the bears if prices are breached.

Sterling bounces back to life, but for how long?

Sterling bulls were back in action on Thursday with the GBPUSD lurching towards 1.2370 following the Bank of England's unexpectedly hawkish signals on future interest rate increases. Although the monetary policy was left unchanged, the emergence of a lone BoE hawk coupled with concerns of rising inflation simply offered Sterling a solid boost. With speculations potentially heightening over other policy makers moving to the hawkish camp following the dissenting vote by Kristin Forbes, the Pound could be supported in the short term. Although the Central Bank has raised expectations for economic growth in the first quarter to hit 0.6%, this may be overshadowed by the Brexit developments in the medium to longer term.

While the current gains on the GBPUSD are impressive, it must be kept in mind that this has little to do with a change of sentiment towards Sterling but extreme Dollar weakness. Technical traders may pay very close attention to how prices react around the 1.2400 regions with weakness below opening a path back down towards 1.2200.

Housing starts rose 3.0 percent in February. Single-family starts rose an even more impressive 6.5 percent. The momentum is swinging away from apartment building and back to traditional single-family homes.

Homebuilding Is Off to a Strong Start in 2017

Housing starts posted a stronger-than-expected 3.0 percent rise in February, with all of the increase coming in single-family starts. Milder weather across much of the country likely allowed for more work to begin this February relative to past winters, which likely bolstered the seasonally adjusted figures. That said, single-family starts have remained above the 800,000-unit threshold (annualized) for the past five months, and the latest figure marks the fastest pace for single-family starts since prior to the Great Recession.

The strength in single-family starts comes on the heels of yesterday's blowout NAHB/Wells Fargo Housing Market Index report, which jumped 6 points in March to 71, hitting its highest level since June 2005. The rise in builder confidence was driven by sizeable gains in sales and perspective buyer traffic, which is an encouraging sign for homebuilders.

Single-family construction posted its largest monthly gains in the Midwest and Northeast, rising 20 percent and 16.7 percent, respectively. Singlefamily homebuilding usually goes dormant throughout much of these regions during the winter months but has held up better this year due to, up until recently, much milder winter weather. Single-family starts also jumped 16.8 percent in the West but fell 2.6 percent in the South, where winter weather plays less of a role.

While single-family construction now appears to be ramping up, apartment construction seems to be cooling a bit. Vacancy rates have edged up across the country as a slew of projects have been completed over the past few months. With rent increases slowing and capital becoming dearer, starts of projects with 5 units or more, which are mostly apartments, are expected to fall modestly this year. Multifamily starts fell 3.7 percent in February, following a 7.3 percent drop in January. Those declines, however, come on the heels of a massive 44.3 percent jump in starts in December.

Permits Remain Solid But Spring Should See Some Payback

While the year has gotten off to a strong start, the large assist from milder winter weather will make it more difficult for housing starts to climb significantly higher this spring. Single-family permits have averaged an 823,000-unit pace over the past three months, which is slightly below the 832,000-unit pace for starts. Permits tend to be less impacted by the weather, which suggest that housing should hold onto much of its recent gains. The monthly data, however, may see a few head fakes as starts are unlikely to post as large of a gain as they usually do this spring because they did not fall off as much as they normally do each winter. We raised our estimate for housing starts in our monthly forecast to 1.25 million units for 2017 and look for 1.33 million starts in 2018.

The pace of homebuilding continued to climb in February, reaching a four-month high, with housing starts rising by 37k units to 1,288k (annualized). The headline number came in stronger than market expectations for 1,264k units. The expected rebound more than erases the prior month's decline, which was revised up to 1,251k units.

Encouragingly, the entire gain was concentrated in the single-family segment (+53k) while the pace of multi-family construction continued to moderate (-16k).

Building permits disappointed, coming in well below expectations, declining by 80k to 1213k, albeit from an upwardly revised 1293k print in the prior month. Nonetheless, good news was found in single-family permitting activity, which rose by 25k to 832k – the highest level since September 2007. Permitting across the volatile multifamily segment, on the other hand, continued to soften, falling by 105k units, and erasing more than all of the prior month's gain.

The monthly housing starts gain came entirely from the West (85k). Meanwhile, all other regions saw modest declines, with the South (-26k) leading the way followed by the Northeast (-13k) and Midwest (-9k) regions.

Key Implications

This morning's report was quite upbeat, with housing starts rising to a four-month high in February. Furthermore, the pace of homebuilding is well above its 6-month average and reaffirms our view that home-building in America is on a modestly positive upward trajectory.

The report however was not without flaws with headline permitting activity recording a large decline, dragged down entirely by the volatile multifamily segment. Nonetheless a rebound should be in store, with single-family segment posting strong gains to the highest level on record since September 2007. Moreover, the NAHB's Housing Market Index rose to 71, or an 11-year high in March, suggesting that interest in new homes continues to improve despite rising interest rates.

Rising long-term interest rates will likely place some downward pressure on housing demand, with the Fed likely to raise rates twice more this year after yesterday's hike. Still, rising income and job gains should provide an offset. Today's report, which suggests that records are being broken across a number of measures, only confirms the outlook for homebuilding in America is one that appears quite positive.

Cable surged over 0.5% after BoE left rates unchanged at 0.25%, as expected, but significant point was vote of one of policymakers for rate hike.

Markets anticipated that such step could be followed by other MPC members next time that lent strong support to the pound.

With inflation in UK being on strong footing and other economic parameters showing solid numbers, the only dissonant tone came from wage growth, which fell below expectations in Feb.

However, positive sentiment is building, as BoE expects Britain's economy to grow by relatively strong 2.0% this year that may push BoE towards more aggressive approach in next meeting.

From technical point of view, fresh bullish acceleration that extended in the second day, broke above the upper pivot at 1.2343 (daily Kijun-sen) and sidelined selling-upticks scenario that was in play on prevailing bearish tone.

After our upper trigger was taken out, near-term focus turned higher. Fresh rally is approaching next pivot, daily Ichimoku cloud (spanned between 1.2379 and 1.2435). Sustained break above the cloud would be another strong bullish signal.

Former barrier and pivot at 1.2300 now acts as strong support (broken top of thick 4-hr cloud) which is expected to hold extended corrective downticks.

Res: 1.2379; 1.2392; 1.2435; 1.2459
Sup: 1.2326; 1.2300; 1.2239; 1.2200

EUR/GBP - 0.8691

 
Recent wave: Major double three (A)-(B)-(C)-(X)-(A)-(B)-(C) is unfolding and 2nd (A) has possibly ended at 0.6936.

Trend: Near term down

Original strategy  :

Buy at 0.8645, Target: 0.8760, Stop: 0.8605

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 0.8620, Target: 0.8750, Stop: 0.8580

Position : -

Target :  -

Stop : -
 

Although the single currency rebound to as high as 0.8760, as renewed selling interest emerged and euro has slipped again, retaining our view that further consolidation below indicated resistance at 0.8788 would be seen and pullback to 0.8645-48 (38.2% Fibonacci retracement of 0.8422-0.8788) is likely, however, reckon downside would be limited to 0.8615-20 and bring another rise later, break of 0.8760 would bring retest of said resistance at 0.8788, above there would extend the rise from 0.8403 low to 0.8800 but loss of near term upward momentum should prevent sharp move beyond 0.8825-30 and price should falter well below 0.8850.

In view of this, we are looking to buy euro on subsequent pullback as 0.8615-20 should limit downside. Below 0.8605 (50% Fibonacci retracement of 0.8422-0.8788) would defer and suggest top is possibly formed, risk test of 0.8560-65 (61.8% Fibonacci retracement) but support at 0.8547 should remain intact. 

Our preferred count is that, after forming a major top at 0.9805 (wave V), (A)-(B)-(C) correction is unfolding with (A) leg ended at 0.8400 (A: 0.8637, B: 0.9491 and 5-waver C ended at 0.8400. Wave (B) has ended at 0.9413 and impulsive wave (C) has either ended at 0.8067 or may extend one more fall to 0.8000 before prospect of another rally. Current breach of indicated resistance at 0.9043 confirms our view that the (C) leg has ended and bring stronger rebound towards 0.9150/54, then towards 0.9240/50.