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Daily Pivots: (S1) 0.8635; (P) 0.8655; (R1) 0.8673; More...

Intraday bias in EUR/GBP remains neutral for the moment. On the upside, firm break of 0.8670 resistance will retain near term bullishness and extend the rebound from 0.8595 to retest 0.8752 high. However, sustained trading below 38.2% retracement of 0.8354 to 0.8752 at 0.8600 will indicate near term bearish reversal and target 61.8% retracement at 0.8506.

In the bigger picture, the structure from 0.8221 medium term bottom are not impulsive enough to suggest that it's reversing the down trend from 0.9267 (2022 high). But even if it's a correction, further rise could still be seen to 61.8% retracement of 0.9267 to 0.8221 at 0.8867. Nevertheless, sustained trading below 55 W EMA (now at 0.8513) will argue that the pattern has completed and bring retest of 0.8221 low.

Daily Pivots: (S1) 1.7827; (P) 1.7864; (R1) 1.7904; More...

EUR/AUD recovers today but stays well below 1.7979 minor resistance. Intraday bias remains neutral first. On the downside, sustained break of 38.2% retracement of 1.7245 to 1.8155 at 1.7807 should confirm that whole rise from 1.7245 has completed. Corrective pattern from 1.8554 should then be in its third leg. Further decline should be seen to 61.8% retracement at 1.7593. On the upside, break of 1.7979 resistance will retain near term bullishness and bring retest of 1.8155 resistance instead.

In the bigger picture, price actions from 1.8554 medium term top are seen as a corrective pattern. Such pattern could extend further with another falling leg. But even in that case, downside should be contained by 38.2% retracement of 1.4281 (2022 low) to 1.8554 at 1.6922 to bring rebound. Uptrend from 1.4281 is expected to resume at a later stage.

Daily Pivots: (S1) 0.9340; (P) 0.9357; (R1) 0.9373; More....

Intraday bias in EUR/CHF remains neutral and some more consolidations could be seen above 0.9317. Current development suggests that corrective pattern from 0.9218 might have completed with three waves up to 0.9452 already. Further decline is in favor as long as 0.9403 resistance holds. On the downside, below 0.9317 will target 0.9265 support first. Firm break there should resume larger fall to retest 0.9204 low. Nevertheless, break of 0.9403 will dampen this view and bring stronger rise back to 0.9452 resistance instead.

In the bigger picture, the down trend from 0.9204 (2018 high) might still be in progress considering that EUR/CHF is staying well inside the long term falling channel. However, with bullish convergence condition in W MACD, downside potential should be limited in case of another fall. Instead, firm break of 0.9660 resistance will be an important sign of medium term bullish trend reversal.

Markets

Friday’s US July PCE inflation gauges printed bang in line with expectations. Lacking signs of tariff-related inflationary pressures, they basically vindicated Fed chair Powell paving the way for a first rate cut in a year at this month’s meeting. A softer Chicago PMI and a downward revision in the US Michigan consumer survey’s inflation expectation gauges added to the US yield curve steepening. Net daily changes varied between -1.3 bps (2-yr) to +5.2 bps (30-yr). European rates followed the same curve movement, adding up to 3.8 bps at the long end. The first national inflation readings (Germany, France, Spain) suggest little to no surprises to tomorrow’s EMU print expected at 2%. That allows the ECB to stick to the sidelines for some time to come with its 2% deposit rate. The euro tried to capitalize on some dollar weakness that prevailed in the early US trading hours with EUR/USD pushing for the 1.17 barrier. The move lacked strength and conviction, perhaps due to the long weekend ahead in the US (markets closed today for Labour Day), but the pair is giving it another shot this morning (1.1714). A federal appeals court late Friday found that US president Trump had gone too far in his use of emergency powers, mostly under the veil of national security, to install his signature import tariffs. It gave the US administration a mid-October deadline to appeal to the Supreme Court before the ruling takes effect. It’s considered the most consequential ruling so far but comes along with several other judges having concluded that the president is acting without legal support. It’s one of the legal themes to keep an eye at, the other one being Trump vs Cook. Friday’s emergency hearing on the firing of the Fed board governor came with no initial ruling though. Stock markets ended Friday on softer footing. The main European and US indices (especially tech) printed losses up to 1%.

With US investors lacking and an uninspiring economic calendar elsewhere, including the euro area, trading is likely to be technically inspired. That’ll change starting tomorrow though. The US offers an important economic update, kicking off with the manufacturing ISM for August. The JOLTS job report is due Wednesday, the services ISM and ADP job report on Thursday and the official payrolls on Friday. After Powell’s pivot at Jackson Hole, markets are probably especially vulnerable for downside surprises in anything related to the labour market. That would trigger additional dovish repositioning (eg. from two to three rate cuts this year) in US markets, weighing on front-end yields and the dollar. The European focus is mainly directed towards France, where the vote of no confidence is drawing near (September 8). The OAT/swapspread is on our radar.

News & Views

South Korean August trade data showed export growth of 1.3% Y/Y in August, showing no harm so far from the higher reciprocal tariff rate installed by the US in July (15%). Semiconductor exports jumped by 27% with vehicle shipments rising by 9%. It will be interesting to see if export momentum holds going into year-end. The US Commerce Department complicated things on Friday by saying that it will revoke a waiver (in 120 days) for South Korean companies Samsung and SK Hynix to use US technologies in their Chinese operations. These regulations allowed them to import chipmaking equipment without applying for a new license each time (“validated end user”). South Korean imports fell by 4% Y/Y with the trade surplus slightly narrowing from $6.6bn to $6.5bn.

EC president von der Leyen said that the EU’s $150bn SAFE programme reached full subscription. Under the programme, cash will be borrowed against the EU budget to member states to jointly spend on military purchases. Those are mainly EU manufactured products with the EU imposing clauses that limit the amount of third-country components. The EC will now review the bids and optimize the distribution of the funds. Initial disbursements could already begin this year.

GBP/USD started a fresh increase above 1.3500. USD/CAD declined and is now consolidating losses below 1.3800.

Important Takeaways for GBP/USD and USD/CAD Analysis Today

• The British Pound is eyeing more gains above 1.3500.
• There is a key bearish trend line forming with resistance at 1.3530 on the hourly chart of GBP/USD at FXOpen.
• USD/CAD started a fresh decline after it failed to stay above 1.3900.
• There is a connecting bearish trend line with resistance at 1.3755 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair formed a base above the 1.3390 level. The British Pound started a steady increase above 1.3440 against the US Dollar, as discussed in the previous analysis.

The pair gained strength above 1.3465 and the 50-hour simple moving average. It even cleared the 1.3500 handle and tested 1.3530. It is now consolidating gains below 1.3530.

The pair is stable above the 23.6% Fib retracement level of the upward move from the 1.3446 swing low to the 1.3529 high. It seems like the bulls might aim for more gains. The RSI moved above the 50 level on the GBP/USD chart and the pair could soon aim for an upside break above a key bearish trend line at 1.3530.

An upside break above 1.3530 could send the pair toward 1.3545. Any more gains might open the doors for a test of 1.3620. If there is a downside correction, immediate support is near the 1.3500 level and the 50-hour simple moving average.

The first major support could be near the 50% Fib retracement at 1.3485. The next pivot level sits near 1.3445. If there is a break below 1.3445, the pair could extend the decline. In the stated case, it could drop and test 1.3420. Any more losses might call for a move toward 1.3390.

USD/CAD Technical Analysis

On the hourly chart of USD/CAD at FXOpen, the pair climbed toward 1.3900 before the bears appeared. It formed a swing high near 1.3867 and recently declined below 1.3800.

There was also a close below the 50-hour simple moving average and 1.3785. The bulls are now active near 1.3720. If there is an upside correction, the pair could face resistance near 1.3755 and a connecting bearish trend line.

The trend line is near the 23.6% Fib retracement level of the downward move from the 1.3867 swing high to the 1.3718 low. If there is an upside break above the trend line, the pair could rise toward the 1.3785 pivot level.

The next key hurdle on the USD/CAD chart is near the 61.8% Fib retracement at 1.3810. If there is an upside break above 1.3810, the pair could rise toward 1.3865. The next major sell zone is 1.3930, above which it could rise steadily toward the 1.4000 handle.

Immediate support is near the 1.3720 level. The first major support could be 1.3700. A close below the 1.3700 level might trigger a strong decline. In the stated case, USD/CAD might test 1.3600. Any more losses may possibly open the doors for a drop toward 1.3500.

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Daily Pivots: (S1) 1.3720; (P) 1.3750; (R1) 1.3772; More...

USD/CAD is still holding above 1.3720 support and intraday bias stays neutral. On the downside, decisive break of 1.3720 will argue that the corrective pattern from 1.3538 has already completed at 1.3923. Intraday bias will be back on the downside for 1.3574 support first. Break there will bring retest of 1.3538 low. On the upside, though, break of 1.3813 resistance will retail near term bullishness, and bring retest of 1.3923 high instead.

In the bigger picture, price actions from 1.4791 medium term top could either be a correction to rise from 1.2005 (2021 low), or trend reversal. In either case, further decline is expected as long as 1.4014 cluster resistance (38.2% retracement of 1.4791 to 1.3538 at 1.4017) holds. Next target is 61.8% retracement of 1.2005 (2021 low) to 1.4791 at 1.3069.

Daily Pivots: (S1) 0.6526; (P) 0.6537; (R1) 0.6552; More...

AUD/USD is staying below 0.6567 resistance and intraday bias remains neutral first. On the upside, firm break of 0.6567 should confirm that corrective pattern from 0.6624 has completed at 0.6413, and larger rally is ready to resume. Retest of 0.6624 high should be seen next. On the downside, though, break of 0.6461 will extend the corrective pattern with another fall, and target 0.6413 support, and possibly below.

In the bigger picture, there is no clear sign that down trend from 0.8006 (2021 high) has completed. Rebound from 0.5913 is seen as a corrective move. While stronger rally cannot be ruled out, outlook will remain bearish as long as 38.2% retracement of 0.8006 to 0.5913 at 0.6713 holds. Nevertheless, considering bullish convergence condition in W MACD, even in case of another fall through 0.5913, downside should be contained above 0.5506 (2020 low).

Daily Pivots: (S1) 146.74; (P) 147.08; (R1) 147.38; More...

Intraday bias in USD/JPY remains neutral for the moment. On the downside, firm break of 146.20 will resume the decline from 150.90. More importantly, that would also argue that rebound from 139.87 has completed as a corrective move to 150.90. Deeper fall should be seen to 142.66 support for confirmation. On the upside, above 148.76 will bring another rise to retest 150.90 instead.

In the bigger picture, price actions from 161.94 (2024 high) are seen as a corrective pattern to rise from 102.58 (2021 low). Decisive break of 61.8% retracement of 158.86 to 139.87 at 151.22 will argue that it has already completed with three waves at 139.87. Larger up trend might then be ready to resume through 161.94 high. In case the corrective pattern extends with another fall, strong support is expected from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound.

Daily Pivots: (S1) 0.7983; (P) 0.8010; (R1) 0.8034; More….

Intraday bias in USD/CHF remains mildly on the downside at this point. The current favored case is that corrective rebound from 0.7871 has completed at 0.8170. Deeper fall would be seen to 0.7910 support, and then retest 0.7871. Nevertheless, break of 0.8033 minor resistance will dampen this bearish view and turn intraday bias neutral again first.

In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8475 resistance holds.

Daily Pivots: (S1) 1.3459; (P) 1.3490; (R1) 1.3534; More...

Intraday bias in GBP/USD stays neutral for the moment. With 1.3389 support intact, further rally is in favor. On the upside, above 1.3594 will resume the rebound from 1.3140 to retest 1.3787 high. On the downside, however, break of 1.3389 support will extend the corrective pattern from 1.3787 with another fall, and target 1.3140 support.

In the bigger picture, up trend from 1.3051 (2022 low) is in progress. Next medium term target is 61.8% projection of 1.0351 to 1.3433 from 1.2099 at 1.4004. Outlook will now stay bullish as long as 55 W EMA (now at 1.3104) holds, even in case of deep pullback.