Sample Category Title

Daily Pivots: (S1) 0.8507; (P) 0.8572; (R1) 0.8605; More…..

Intraday bias in USD/CHF remains on the downside at this point. Rebound from 0.8431 should have completed at 0.8747, after rejection by 38.2% retracement of 0.9223 to 0.8431 at 0.8734. Deeper fall would be seen to retest 0.8431 low first. Firm break there will resume whole decline from 0.9223 towards 0.8332. On the upside, above 0.8616 minor resistance will turn intraday bias neutral first. But risk will stay on the downside as long as 0.8747 resistance holds, in case of recovery.

In the bigger picture, price actions from 0.8332 (2023 low) are currently seen as a medium term corrective pattern, with fall from 0.9223 as the second leg. Strong support could be seen from 0.8332 to bring rebound. Yet, overall outlook will continue to stay bearish as long as 0.9243 resistance holds. Firm break of 0.8332, however, will resume larger down trend from 1.0146 (2022 high).

Daily Pivots: (S1) 1.3603; (P) 1.3622; (R1) 1.3639; More...

Intraday bias in USD/CAD stays on the downside for 1.3588 structural support. Strong support could be seen from there to bring reversal. On the upside, above 1.3686 minor resistance will turn intraday bias back to the upside for stronger rebound. However, decisive break of 1.3588 will argue that rise from 1.3176 has completed at 1.3946 and target 1.3477 support next.

In the bigger picture, price actions from 1.3976 (2022 high) are viewed as a corrective pattern, that might have completed at 1.3176 (2023 low) already. Firm break of 1.3976 will confirm resumption of whole up trend from 1.2005 (2021 low). Next target is 61.8% projection of 1.2401 to 1.3976 from 1.3176 at 1.4149. This will be the favored case as long as 1.3588 support holds, in case of pullback. However, firm break of 1.3588 will argue that consolidation from 1.3976 is already extending with another falling leg back towards 1.3091/3176 support zone.

Daily Pivots: (S1) 0.6723; (P) 0.6737; (R1) 0.6761; More...

Intraday bias in AUD/USD remains on the upside as rise from 0.6348 is in progress for 0.6798 resistance. Firm break there will argue that larger rise from 0.6269 is ready to resume through 0.6870 resistance. On the downside, below 0.6712 minor support will turn intraday bias neutral and bring consolidations first. But further rally will remain in favor as long as 55 4H EMA (now at 0.6642) holds, in case of retreat.

In the bigger picture, overall, price actions from 0.6169 (2022 low) are seen as a medium term corrective pattern. Rise from 0.6340 is likely developing into another rising leg. Firm break of 0.6798/6870 resistance zone will target 0.7156 resistance. In case of another fall, strong support should be seen from 0.6169/6361 to bring rebound.

Dollar remains under broad-based selling pressure, with markets likely to keep this trend until Fed Chair Jerome Powell delivers his speech at the Jackson Hole Symposium on Friday. While today's events, including the non-farm payroll revision and the release of FOMC minutes, warrant some attention, they are unlikely to cause significant market shifts.

The US Bureau of Labor Statistics is set to release 2024 Preliminary Benchmark Revision to Establishment Survey Data, which includes adjustments to non-farm payroll numbers for the period between April 2023 and March 2024. Analysts at Goldman Sachs have suggested that the revision could result in a downward adjustment to labor growth by 600k to 1m jobs, equating to a monthly reduction of 50k to 85k jobs.

The implications of the downward revision to NFP data are complex. On one hand, it could indicate that the US job market has not been as robust as previously thought, which might be perceived negatively. However, as Fed Governor Michelle Bowman pointed out, this could also imply that the job market isn't cooling as much as the recent rise in unemployment suggests.

Regarding FOMC minutes, it's unlikely that they will provide clear guidance on the future path of monetary policy easing, given the current uncertainties. One key takeaway will likely be that Fed is increasingly balancing its dual mandate of price stability and full employment, with potential of tilting slightly more towards the latter. While the minutes may offer subtle hints that the committee is prepared for a rate cut in September, the market's focus will be on what Fed plans to do after the initial reduction.

So far this week, Dollar has been the weakest performer among major currencies, followed by Canadian Dollar and British Pound. New Zealand Dollar is leading gains, followed by Yen and Swiss Franc, while Euro and Australian Dollar are positioned in the middle.

Technically, GBP/CHF's rebound lost much momentum after hitting 1.1235 earlier in the week. For now, further rally will remain in favor as long as 1.1069 minor support holds. However, firm break of 1.1069 will indicate that the rebound from 1.0741 could have completed, after rejection by 1.1216 support turned resistance, and capped below 55 D EMA. That would keep the whole fall from 1.1675 alive, and set up for deeper decline back to 1.0741 low.

In Asia, at the time of writing, Nikkei is down -0.31%. Hong Kong HSI is down -0.91%. China Shanghai SSE is down -0.39%. Singapore Strait Times is down -0.35%. Japan 10-year JGB yield is down -0.0091 at 0.883. Overnight, DOW fell -0.15%. S&P 500 fell -0.20%. NASDAQ fell -0.33%. 10-year yield fell -0.0490 to 3.818.

Japan's July exports value reaches record amid yen weakness

Japan's exports surged 10.3% yoy in July, reaching JPY 9,619B—a record high for the month. The growth of export value was was largely driven by the weaker yen, which marked a -12.3% depreciation from a year ago. On volume basis, exports actually declined by -5.2% yoy.

Regionally, Japan's exports to the US grew by 7.3%, a slight deceleration from the previous month. Exports to China remained steady with a 7.2% increase, while shipments to the EU saw a decline of -5.3%.

On the import side, Japan recorded a 16.6% yoy increase, bringing the total to JPY 10,241B—the largest ever for July. As a result, the trade balance showed a deficit of JPY -622 B.

In seasonally adjusted terms, exports rose 1.7% mom to JPY 9,137B, while imports increased by 0.9% mom to JPY 9,893B, leading to a seasonally adjusted trade deficit of JPY -755B.

Australia's Westpac leading index points to modest growth, but sustainability in doubt

Australia's six-month annualized growth rate in the Westpac–Melbourne Institute Leading Index inched up to +0.06%, signaling a slight improvement in economic momentum.

However, Westpac cautioned that this positive signal may not be sustained due to "sharp falls in commodity prices." The detailed report highlights that the economy is facing "significant cross-currents," with economic activity improving but expected to remain "below trend into early 2025."

As RBA gears up for its next meeting on September 23–24, Westpac emphasized the importance of the upcoming June quarter national accounts, set to be released on September 4. These figures are expected to shed light on the strength of domestic demand and could ease some of the RBA's concerns regarding productivity growth.

However, Westpac noted that there is little chance of a policy shift at the September meeting, as the next quarterly CPI update isn't due until October 30.

Fed's Bowman: Gradual rate cuts on the table if inflation continues to ease

Fed Governor Michelle Bowman, in a speech overnight, stated that her baseline outlook anticipates further declines in inflation under the current monetary policy. Should incoming data continue to confirm that inflation is moving steadily toward the 2% target, it may become appropriate to "gradually lower" the federal funds rate. This adjustment would prevent monetary policy from becoming "overly restrictive" on economic activity and employment.

However, Bowman urged to be "patient" and "avoid undermining" the continued progress on disinflation by "overreacting to any single data point". She emphasized that monetary policy is "not on a preset course," and decisions will depend on upcoming economic data. By the September meeting, Fed will review additional employment and inflation reports, as well as broader financial conditions, to assess their impact on the economic outlook.

Bowman also warned of "some upside risks to inflation," citing concerns that supply conditions, now largely normalized, may not sufficiently counteract price pressures from geopolitical tensions, fiscal stimulus, and increased housing demand driven by immigration.

She also noted that the labor market might not be as strong as payroll data suggests, and the recent rise in unemployment could be "exaggerating the degree of cooling in labor markets."

Looking ahead

UK will release public sector net borrowing in European session. Canada will release IPPI and RMPI later in the day. But main focus will be on FOMC minutes.

AUD/USD Daily Report

Daily Pivots: (S1) 0.6723; (P) 0.6737; (R1) 0.6761; More...

Intraday bias in AUD/USD remains on the upside as rise from 0.6348 is in progress for 0.6798 resistance. Firm break there will argue that larger rise from 0.6269 is ready to resume through 0.6870 resistance. On the downside, below 0.6712 minor support will turn intraday bias neutral and bring consolidations first. But further rally will remain in favor as long as 55 4H EMA (now at 0.6642) holds, in case of retreat.

In the bigger picture, overall, price actions from 0.6169 (2022 low) are seen as a medium term corrective pattern. Rise from 0.6340 is likely developing into another rising leg. Firm break of 0.6798/6870 resistance zone will target 0.7156 resistance. In case of another fall, strong support should be seen from 0.6169/6361 to bring rebound.

Economic Indicators Update

Australia's six-month annualized growth rate in the Westpac–Melbourne Institute Leading Index inched up to +0.06%, signaling a slight improvement in economic momentum.

However, Westpac cautioned that this positive signal may not be sustained due to "sharp falls in commodity prices." The detailed report highlights that the economy is facing "significant cross-currents," with economic activity improving but expected to remain "below trend into early 2025."

As RBA gears up for its next meeting on September 23–24, Westpac emphasized the importance of the upcoming June quarter national accounts, set to be released on September 4. These figures are expected to shed light on the strength of domestic demand and could ease some of the RBA's concerns regarding productivity growth.

However, Westpac noted that there is little chance of a policy shift at the September meeting, as the next quarterly CPI update isn't due until October 30.

Full Australia Westpac leading index release here.

Japan's exports surged 10.3% yoy in July, reaching JPY 9,619B—a record high for the month. The growth of export value was was largely driven by the weaker yen, which marked a -12.3% depreciation from a year ago. On volume basis, exports actually declined by -5.2% yoy.

Regionally, Japan's exports to the US grew by 7.3%, a slight deceleration from the previous month. Exports to China remained steady with a 7.2% increase, while shipments to the EU saw a decline of -5.3%.

On the import side, Japan recorded a 16.6% yoy increase, bringing the total to JPY 10,241B—the largest ever for July. As a result, the trade balance showed a deficit of JPY -622 B.

In seasonally adjusted terms, exports rose 1.7% mom to JPY 9,137B, while imports increased by 0.9% mom to JPY 9,893B, leading to a seasonally adjusted trade deficit of JPY -755B.

Fed Governor Michelle Bowman, in a speech overnight, stated that her baseline outlook anticipates further declines in inflation under the current monetary policy. Should incoming data continue to confirm that inflation is moving steadily toward the 2% target, it may become appropriate to "gradually lower" the federal funds rate. This adjustment would prevent monetary policy from becoming "overly restrictive" on economic activity and employment.

However, Bowman urged to be "patient" and "avoid undermining" the continued progress on disinflation by "overreacting to any single data point". She emphasized that monetary policy is "not on a preset course," and decisions will depend on upcoming economic data. By the September meeting, Fed will review additional employment and inflation reports, as well as broader financial conditions, to assess their impact on the economic outlook.

Bowman also warned of "some upside risks to inflation," citing concerns that supply conditions, now largely normalized, may not sufficiently counteract price pressures from geopolitical tensions, fiscal stimulus, and increased housing demand driven by immigration.

She also noted that the labor market might not be as strong as payroll data suggests, and the recent rise in unemployment could be "exaggerating the degree of cooling in labor markets."

Full speech of Fed's Bowman here.

• The Jackson Hole Symposium will be held on August 22-24
• Fed Chairman Powell speaks on Friday at 14.00 GMT
• Markets expect a dovish tone in support of a September rate cut
• Fed minutes and PMI surveys to set the scene

Markets are gearing up for the Jackson Hole Symposium

The much talked-about Jackson Hole Symposium is just a few days away with the markets anxiously waiting for Fed Chairman Powell’s speech. The overall Fedspeak during this 3-day gathering could determine the Fed’s rate strategy for the rest of 2024, but also set the basis for its monetary policy stance in 2025.

Following the recent stocks’ rout, which was fueled by US recession fears, the market is currently pricing in 95bps of easing in 2024 and another 105bps in 2025. According to the latest Reuters poll, most investment houses expect three rate cuts in 2024, but some diehards continue to talk about a 50bps rate cut in September.

Fed minutes and PMIs to serve as the appetizer

Ahead of the Jackson Hole gathering, and specifically on Wednesday the minutes of the July 31 Fed meeting will be published with the preliminary PMI surveys for August following a day later. Usually, the Fed minutes do not hold surprises. However, they could prove market-moving this time around if a greater appetite for rate cuts is revealed on Wednesday than the one portrayed by Chairman Powell on July 31.

In the meantime, Thursday’s PMI survey prints are expected to show a small improvement for both the services and manufacturing sectors, despite the latter still hovering below the 50 threshold. Such an outcome could serve as another confirmation of Powell’s comment at the last Fed press conference that “the picture is not one of a slowing or really bad economy”.

Powell will speak on Friday at 14.00 GMT

On Friday, Chairman Powell is expected to present his view on the current US economic outlook. He will most likely talk about the ongoing easing in labour market tightness, the growing level of confidence regarding the disinflation process and the Fed’s willingness to cut rates.

It is a crucial test of Powell’s ability to appease Fed members in order to secure strong support going into the September meeting, and to avoid attracting the ire from both US Presidential candidates and especially Donald Trump.

Putting together this week’s events, there are four likely scenarios:

Scenario 1: Dovish minutes, Powell pre-announces a September rate cut at Jackson Hole - 10% probability

This could be the perfect scenario for the market as not only Powell will reveal the worst kept secret that the Fed will cut rates in September, but he could also keep the market hoping for a 50bps rate cut. Barring any comments about an imminent US recession from Powell, equities could enjoy another strong day with the dollar most likely suffering across the board.

Scenario 2:  Dovish minutes, Powell is dovish but does not pre-announce a rate cut - 50% probability

Powell confirms expectations by talking about Fed’s willingness to cut rates if the current momentum in the economy is maintained and assuming that no negative surprises come from both the Middle East and Russia-Ukraine conflicts. Stock markets could feel a degree of disappointment, but the recent positive sentiment should linger. The dollar will probably remain under pressure across the board in this scenario.

Scenario 3:  Balanced minutes, Powell talks about data dependency – 30% probability

A more balanced speech by Powell, highlighting data dependency, but keeping the door firmly open to rate cuts, if needed, might upset the market and potentially result in a small correction in equities. The recent rally in stocks has been very gradual, potentially reflecting low confidence from investors. The dollar might have the chance for a small rebound, especially against the euro.

Scenario 4: Balanced minutes, Powell appears hawkish - 10% probability

A strong set of PMI surveys on Thursday and Powell appearing more hawkish than anticipated could really result in a sizeable risk-off reaction. Powell could acknowledge the progress made regarding the Fed’s dual mandate but state that the Fed has not reached the point of seriously discussing rate cuts. Equities could be under severe pressure with the dollar potentially recouping most of its losses during August.

In this technical blog, we will look at the past performance of the 1-hour Elliott Wave Charts of GBPCAD. In which, the rally from 28 September 2023 low is unfolding as a leading diagonal sequence and called for an extension higher to take place. Therefore, we knew that the structure in GBPCAD should remain supported & extend higher. So, we advised members not to sell the pair & buy the dips in 3, 7, or 11 swings at the blue box areas. We will explain the structure & forecast below:

GBPCAD 1-Hour Elliott Wave Chart From 8.07.2024

Here’s the 1-hour Elliott wave Chart from the 8.07.2024 NY update. In which, the rally to 1.7852 high-ended wave A & made a pullback in wave B. The internals of that pullback unfolded as Elliott wave double correction where wave ((w)) ended in 3 swings at 1.7610 low. Then a bounce to 1.7773 high-ended wave ((x)) & started the next leg lower in wave ((y)) towards 1.7530- 1.7378 blue box area. From there, buyers were expected to appear looking for new highs ideally or for a 3-wave bounce minimum.

GBPCAD Latest 1-Hour Elliott Wave Chart From 8.20.2024

This is the latest 1-hour Elliott wave Chart from the 8.20.2024 NY update. In which the pair is showing a strong reaction higher taking place, right after ending the double correction within the blue box area. Allowed members to create a risk-free position shortly after taking the long position at the blue box area. However, a break above 1.7852 high is still needed to confirm the next extension higher & avoid deeper pullback.

Short Term Elliott Wave View in EURUSD suggests that pair is close to form a bullish sequence. A break above the previous high on 12.28.2023 at 1.1139 suggests the next leg higher has started. Near term, rally from 6.26.2024 low is unfolding as a 5 waves impulsive structure. Up from 6.26.2024 low, wave 1 ended at 1.0948 and pullback in wave 2 ended at 1.0777. Pair has since turned higher in wave 3 which subdivides into another impulsive structure. Up from wave 2, wave ((i)) ended at 1.1 and pullback in wave ((ii)) ended at 1.088.

Pair has resumed higher in wave ((iii)). Up from wave ((ii)), wave i ended at 1.1047 and pullback in wave ii ended at 1.0948. Expect wave iii to end soon, and pair should then pullback in wave iv to correct cycle from 8.15.2024 low in 3, 7, 11 swing before it resumes higher again in wave v of (i). Near term, as far as pivot at 1.088 low stays intact, expect dips to find buyers in 3, 7, or 11 swing for further upside. Break above 12.28.2023 high at 1.1139, and more importantly above 7.17.2023 high at 1.1275 would confirm the bullish sequence and bullish trend.

EURUSD 60 Minutes Elliott Wave Chart

EURUSD Elliott Wave Video

https://www.youtube.com/watch?v=V48UScd1Q14