Sample Category Title

Daily Pivots: (S1) 1.1735; (P) 1.1750; (R1) 1.1773; More...

Intraday bias in EUR/USD remains neutral as range trading continues. With 1.1804 resistance intact, another fall cannot be ruled out yet. But we'd continue to look for strong support from 1.1602/1703 key support zone to bring rebound. On the upside, above 1.1804 resistance will turn bias back to the upside for 1.1907 resistance first. However, sustained break of 1.1602/1703 will carry larger bearish implication and pave the way to 1.1289 fibonacci support.

In the bigger picture, rise from 1.0635 is seen as the third leg of the pattern from 1.0339 (2017 low). Further rally remains in favors long as 1.1602 support holds, to cluster resistance at 1.2555 next, (38.2% retracement of 1.6039 to 1.0339 at 1.2516). However sustained break of 1.1602 will argue that the rise from 1.0635 is over, and turn medium term outlook bearish again. Deeper fall would be seen to 61.8% retracement of 1.0635 to 1.2348 at 1.1289 and below.

Daily Pivots: (S1) 1.3700; (P) 1.3724; (R1) 1.3754; More...

Intraday bias in GBP/USD stays neutral for the moment. Another fall is in favor with 1.3785 minor resistance intact. On the downside, firm break of 1.3570 will resume larger fall from 1.4248 to 1.3482 resistance turned support next. Break there will target 100% projection of 1.4248 to 1.3570 from 1.3982 at 1.3304. However, on the upside, break of 1.3785 will turn bias back to the upside for 1.3982 resistance intact.

In the bigger picture, current development argues that rise from 1.1409 (2020 low) has completed at 1.4248, after failing 1.4376 resistance. Fall from there could either be correcting the rise form 1.1409, or starting another falling leg inside long term sideway pattern. In either case, sustained break of 1.3482 resistance turned support will target 38.2% retracement of 1.1409 to 1.4248 at 1.3164 first. Break there will pave the way to 61.8% retracement at 1.2493.

Daily Pivots: (S1) 0.9114; (P) 0.9126; (R1) 0.9142; More....

Intraday bias in USD/CHF remains neutral for the moment. On the upside, break of 0.9241 resistance should resume the rise from 0.8925 through 0.9273. On the downside, break of 0.9098 will target 0.9017 support first. Further break there will likely resume the decline from 0.9471 through 0.8925 low.

In the bigger picture, the failure to sustain above 55 week EMA (now at 0.9180) retains medium term bearishness in USD/CHF. Break of 0.8925 support should resume the whole decline form 1.0342 (2016 high) through 0.8756 low. However, break of 0.9273 resistance and sustained trading above 55 week EMA will be an early sign of bullish trend reversal. Focus will then turn to 0.9471 resistance for confirmation.

Daily Pivots: (S1) 109.45; (P) 109.66; (R1) 109.91; More...

USD/JPY recovers mildly today but stays in range of 109.10/110.79. Intraday bias remains neutral at this point. On the upside, break of 110.79 will resume the rebound from 108.71 to retest 111.65 high. On the downside, break of 109.10 will target 108.71 support first. Firm break there will resume the decline from 111.65 and target 38.2% retracement of 102.58 to 111.65 at 108.18 next.

In the bigger picture, medium term outlook is staying neutral with 111.71 resistance intact. The pattern from 101.18 could still extend with another falling leg. Sustained trading below 55 day EMA will bring deeper fall to 107.47 support and below. Nevertheless, strong break of 111.71 resistance will confirm completion of the corrective decline from 118.65 (2016 high). Further rise should then be seen to 114.54 and then 118.65 resistance.

Dollar continues to pare back some of this week's losses in early US session, after slightly better than expected durable goods orders. But strength of recovery is so far relatively weak. Markets are also generally in mixed mode. Euro has litter reaction to worst than expected Germany business climate data, too. Overall, traders are turning cautious, awaiting Fed Chair Jerome Powell's inspiration from his Jackson Hole speech.

Technically, Gold's development is worth a note. Apparently, it lacks follow through buying to sustain above 1800 handle. Yet, retreat is held comfortably above 1774.14 support so far. We'd continue to monitor the next move. Sustained trading above 1800/32 resistance zone will suggest larger reversal, which could be accompanied by another round of selloff in Dollar. On the other hand, break of 1774.14 will indicate completion of rebound from 1682.60 and Dollar could rebound in tandem.

In Europe, at the time of writing, FTSE is up 0.34%. DAX is down -0.13%. CAC is up 0.24%. Germany 10-year yield is up 0.0337 at -0.440. Earlier in Asia, Nikkei closed down -0.03%. Hong Kong HSI dropped -0.13%. China Shanghai SSE rose 0.74%. Singapore Strait Times dropped -0.0%. Japan 10-year JGB yield rose 0.0007 to 0.021.

US durable goods orders dropped -0.1% in Jul, ex-transport orders rose 0.7% mom

US durable goods orders dropped -0.1% mom to USD 257.2B in July, better than expectation of -0.2% mom. Ex-transport orders rose 0.7% mom, above expectation of 0.5% mom. Ex-defense orders dropped -1.2% mom. Transportation equipment, dropped -2.2% to USD 75.3B.

ECB Lane: There could be counterbalances in H2

ECB Chief Economist Philip lane said in an interview, Q2 GDP came in "well ahead of out June projections", reflecting an "earlier opening up", "strength of the world economy" and "progress in vaccinations". It's "still early days" regarding H2, and there could be "counterbalance" like bottlenecks, moderation in world economy, and the Delta variant. Overall, he said, "we're broadly not too far away from what we expected in June for the full year."

The Delta variant is now "part of the mix in the US and global economies", while Europe "may not be among the regions hardest-hit thanks to high vaccination rates and prior lockdown measures. Also, the infrastructure and system for vaccination has "eliminated uncertainty about Europe's ability to carry out vaccinations."

On PEPP, Lane said "we'll have to assess at the September meeting the appropriate calibration for the final quarter of the year". He emphasized that "single philosophy" of maintaining favorable financing conditions regarding PEPP. "If favourable financing conditions require more purchases, we'll conduct more purchases," he said.

Germany Ifo business climate dropped to 99.4 in Aug, supply bottlenecks and rising inflections

Germany Ifo Business Climates dropped from 100.8 to 99.4 in August, below expectation of 100.4. Current Assessment index rose from 100.4 to 101.4, above expectation of 100.8. However, Expectations index dropped from 101.2 to 97.5, below expectation of 100.0.

Looking at some more details, manufacturing dropped from 27.4 to 24.1. Services dropped from 19.8 to 17.7. Trade dropped from 15.8 to 9.0. Construction rose from 6.0 to 7.8.

Ifo said: "This decline was due mainly to significantly less optimism in companies' expectations. Concerns are growing in the hospitality and tourism sectors in particular. By contrast, companies assessed their current situation as somewhat better than in the previous month. Supply bottlenecks for intermediate products in manufacturing and worries about rising infection numbers are putting a strain on the economy."

BoJ Nakamura warned of delayed spending, Japan expands state of emergency

BoJ board member Toyoaki Nakamura warned in a speech today that the economy is still in a "severe state" and outlook was "highly uncertain" with risks skewed to the downside. He added, "the resurgence in infections may have somewhat delayed the timing for when pent-up demand materializes."

But he's hopeful that economic activity would strengthen strongly as pandemic impact subsides. Inflation is likely to gradually accelerate as the economy recovers. Also, he expects exports to increase steadily on robust global demand and recovery in capital expenditure.

Separately, Japan is set p expand a state of emergency to 8 more prefectures. That takes the total to 21 out of 47 total prefectures. Economy Minister Yasutoshi Nishimura emphasized, "the most important task is to beef up the medical system."

New Zealand goods exports rose 15% yoy in Jul, imports rose 35% yoy

New Zealand goods exports rose 15% yoy to NZD 5.8B in July. Goods imports rose sharply by 35% yoy to NZD 6.2B. Monthly trade balance was a deficit of NZD -402m, versus expectation of NZD 100m surplus.

Exports to all trading partners were up (China +25% yoy, Australia 22% yoy, EU + 7.4% yoy, Japan +26% yoy), except the US (down -2.9% yoy. Imports from all top trading partners were up (China +22% yoy, EU + 38% yoy, Australia + 12% yoy, US + 14% yoy, Japan +71% yoy).

From Australia, construction work done rose 0.8% in Q2, below expectation of 2.8%.

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 109.45; (P) 109.66; (R1) 109.91; More...

USD/JPY recovers mildly today but stays in range of 109.10/110.79. Intraday bias remains neutral at this point. On the upside, break of 110.79 will resume the rebound from 108.71 to retest 111.65 high. On the downside, break of 109.10 will target 108.71 support first. Firm break there will resume the decline from 111.65 and target 38.2% retracement of 102.58 to 111.65 at 108.18 next.

In the bigger picture, medium term outlook is staying neutral with 111.71 resistance intact. The pattern from 101.18 could still extend with another falling leg. Sustained trading below 55 day EMA will bring deeper fall to 107.47 support and below. Nevertheless, strong break of 111.71 resistance will confirm completion of the corrective decline from 118.65 (2016 high). Further rise should then be seen to 114.54 and then 118.65 resistance

Economic Indicators Update

The euro rally has taken a pause in the Wednesday session., Currently, EUR/USD is trading at 1.1736, up 0.03% on the day.

All eyes on Powell speech at Jackson Hole

With markets in a holding pattern ahead of the Jackson Hole meeting, which starts on Thursday, the euro could continue to drift. The lack of activity is likely to change on Friday, when Fed Chair Jerome Powell delivers a highly-anticipated speech. The question on the minds of investors is whether Powell will provide any details or hints as to the timing of a Fed taper. Risk sentiment has improved with the Biden Administration making progress on its budget and infrastructure proposals, but the mood could quickly shift, depending on what Powell says or doesn’t say. If he hints that a taper is imminent, that would likely give the dollar a boost. If, however, Powell chooses to lay low and doesn’t provide any news about a taper, risk sentiment could improve and send the dollar downwards.

German business sentiment remains high, but there are concerns as the Ifo Business Climate index worsened for a second straight month. In August, the index fell to 99.4, down from 100.7 (exp. 100.3). The well-respected survey found that businesses expressed worries about supply bottlenecks and the resurgence of Covid-19 Delta variant. Supply problems were also reflected in Germany’s PMI Manufacturing report for July, which was the lowest in six months. The unleashing of pent-up demand has led to a shortage in materials, which has had a negative effect on factory production. The severe shortage of auto chips has had a detrimental effect on German car production, with auto production expected to be “significantly below expectations”, according to the German auto industry association.

EUR/USD Technical

• Support and resistance levels have remained unchanged this week
• There are resistance lines at 1.1779 and 1.1859
• On the downside, we find support lines at 1.1642 and 1.1585

ECB Chief Economist Philip lane said in an interview, Q2 GDP came in "well ahead of out June projections", reflecting an "earlier opening up", "strength of the world economy" and "progress in vaccinations". It's "still early days" regarding H2, and there could be "counterbalance" like bottlenecks, moderation in world economy, and the Delta variant. Overall, he said, "we're broadly not too far away from what we expected in June for the full year."

The Delta variant is now "part of the mix in the US and global economies", while Europe "may not be among the regions hardest-hit thanks to high vaccination rates and prior lockdown measures. Also, the infrastructure and system for vaccination has "eliminated uncertainty about Europe's ability to carry out vaccinations."

On PEPP, Lane said "we'll have to assess at the September meeting the appropriate calibration for the final quarter of the year". He emphasized that "single philosophy" of maintaining favorable financing conditions regarding PEPP. "If favourable financing conditions require more purchases, we'll conduct more purchases," he said.

Full interview here.

US durable goods orders dropped -0.1% mom to USD 257.2B in July, better than expectation of -0.2% mom. Ex-transport orders rose 0.7% mom, above expectation of 0.5% mom. Ex-defense orders dropped -1.2% mom. Transportation equipment, dropped -2.2% to USD 75.3B.

Full release here.

Strong two-day rally on Monday and Tuesday (the contract was up 9.6%), which erased the most of Aug 12-20 steep fall, was capped by daily cloud base and bulls are taking a breather on Wednesday.

Fresh bulls started to lose traction on news that Mexico is going to resume production, disrupted by a fire on oil platform that resulted and smaller than expected fall in US crude stocks (API report), but expected to remain in play as global oil market is heavily in deficit.

Two massive bullish candles (Mon/Tue) underpin the action, along with improving daily studies.

Shallow consolidation was contained by 20DMA’s, keeping bulls intact for renewed probe through cloud base ($71.18) and attack at 12 Aug lower top ($71.87) which guards next pivot at $72.35n (cloud top).

Res: 71.52, 71.87, 72.41, 72.70.
Sup: 70.48, 70.00, 68.99, 68.49.

The USDJPY edged higher in European trading on Wednesday, just to return to the middle of the range that extends into six straight day.

Long shadows of daily candle of past few days signal strong indecision, as market awaits fresh signals from Jackson Hole symposium and a speech from Fed Chairman Powell later this week.

Near-term action continues to move between 100 and 55 DMA’s, with neutral daily studies lacking direction signals and keeping the pair in sideways mode.

Lift above psychological 110 barrier and 55DMA (110.12) would revive bulls for potential acceleration towards targets at 110.53 (Fibo 61.8% 111.65/108.72 descend) and 110.80 (Aug 11 peak).

Alternatively, firm break of 100DMA (109.63) and extension below Tuesday’s spike low (109.41) would bring bears in play.

Res: 109.88, 110.00, 110.12, 110.22.
Sup: 109.63, 109.41, 109.11, 108.87.