Weekly. The market keeps moving up within the powerful multiyear uptrend, which is close to an end.
H4. Last week the pair ended correction [4]. After that, the prices resumed growth within another upward impulse [5]. The approximate trajectory of the upcoming move is at the picture.
Daily. The market keeps moving within the long downtrend. At the final part, there was an upward correction , after which the pair’s decline resumed.
H4. Last week the pair finished upside corrective wave (2). In the next few trading days we expect another decline within the new bearish impulse. In the situation like this we recommend selling.
Daily. The market is moving within powerful and long downtrend, which was interrupted by the upwards corrective wave (4) for several months. When it ended, the pair continued moving down in a complex shape.
H4. The development of corrective wave (2) was likely over last week, so this week we expect the pair’s decline in a new downward impulse. However, one should trade carefully as the market is forming very complex and sharp waves. It is better to switch to other currencies during this period.
US dollar recovered some of its Friday losses. American personal spending growth slowed down to 0.2% in June, while the previous reading was revised down from 0.9% to 0.7%. US ISM manufacturing PMI also came out below expectations. Weak statistics will curb the greenback versus its main counterparts.
EUR/USD spiked up towards 1.1115 on Friday, but then closed in the 1.0980 area. Support is at 1.0900, 1.0870 and 1.0820. Resistance is at 1.1020 (100-day MA) and 1.1095 (55-day MA).
GBP/USD remained below 1.5700, but is holding above support line since April in the 1.5550 zone. The pound should rise above 1.5700 to be able to get to 1.5815 (May high). Only below 1.5550 sterling will fall to 1.5400. UK manufacturing PMI came slightly above forecasts. On Tuesday there will be the next important piece of British data – construction PMI.
USD/JPY is supported by the daily Ichimoku Cloud. The greenback has to overcome resistance in the 124.50/60 area in order to open the way to 125.00 and 125.85 (June high). Support is at 123.35/00 (Cloud’s top). The decline below this level will make the pair vulnerable for a slide to 122.00 (Cloud’s bottom).
AUD/USD is swinging in the 1.7235/1.7035 area. Australian dollar was hurt on Monday by worse than expected China manufacturing PMI. On Tuesday Australia will release retail sales (positive forecast) and trade balance (negative forecast) at 01:30 GMT. The Reserve Bank of Australia’s meeting results will be announced at 04:30 GMT (forecast is positive). According to the consensus forecast, the RBA will keep its benchmark rate unchanged at 2%. Still, the central bank is likely to create some negative pressure on Aussie with its comments as it will probably refer to the sliding commodity prices, which create the need for weaker AUD. Resistance is at 0.7323 and 0.7363. Support is at 0.7230 and 0.7200.
Daily. The market is currently building the final part of a bearish impulse in a wave [D] of a triangle. When the wave [D] is fully complete, we'll see the market reversed in a new bullish wave [E].
H4. The bearish trend is not over as there was now normal wave [v] built. At the beginning of the new week a sideways flat [iv] will be finished. After that the market will decline to 1062,51.
Demand for the US Dollar remains limited after the last week’s downbeat figures. DXY index consolidated around 97.50 on Tuesday. However, we expect the bulls to return at the end of the week. On Wednesday the market will focus on the NFP from ADP ahead of the official figures on Friday. You should also watch the US trade balance and non-manufacturing PMI tomorrow.
Commodity markets slowed their depreciation amid the weaker dollar and a bounce on the Chinese market. As a result, risky currencies have also regained some ground. We review this rebound as temporary. NZD/USD tested the 0.6600 resistance today, but failed to overcome it. Don’t miss the NZ employment figures tonight. USD/CAD holds above the key support at 1.3100.
EUR/USD came under resumed pressure after the US factory orders release. Tomorrow we’ll be watching service PMIs in euro zone. Bearish risks remain very high. GBP/USD holds in a sideways range above 1.5500. The market clearly remains uncertain about the BOE and the Fed’s policy intentions. On Wednesday we’ll watch services PMI. Thursday is going to be a key day for the cable – BOE meeting, quarterly inflation report and policy minutes are on the schedule. Buy GBP against the EUR and JPY.
USD/JPY consolidates slightly below the 124.00 mark. Resistance lies at 124.40/50, but this level could be broken on strong US data on Wednesday. Trend support – 123.70.
USD/CHF continues to rise inside the C-wave of the intermediate ABC correction (2) from the start of May. This C-wave earlier broke the strong resistance level 0.9500 (which reversed the previous A-wave of this ABC correction) – intersecting with the 200-day simple moving average – which intensified the bullish pressure on this currency pair.
USD/CHF is likely to rise further inside the active C-wave toward the next buy target at the nearby resistance level 0.9850 (top of the minor correction 2) – the breakout of which can lead to further gains toward 1.0080 (top of wave ② from March.
-EUR/CAD reversed from resistance zone
-Next sell target - 1.4200
EUR/CAD continues to decline after the recent downward reversal from the resistance zone near the strong resistance level 1.4480 (which also previously reversed the pair with the daily Japanese candlesticks reversal pattern Bearish Engulfing at the end of July, as you can see below). The previous downward reversal from the resistance level 1.4480 completed the earlier primary ABC correction ② from April.
EUR/CAD is likely to fall further inside the active minor impulse wave 1 toward the next sell target at the support level 1.4200 (which reversed the price with the daily Morning Star last week).
The US Dollar index tested the July peak at 98.15 on Wednesday after the unexpectedly strong US non-manufacturing PMI index (10-year high of 60.3). ADP NFP disappointed, coming at 185K, but the market didn’t pay too much attention to this figures. Watch the unemployment claims on Thursday and the official NFP on Friday (your guesses are accepted here).
EUR/USD broke below 1.0900 and opened the way to 1.0820. There are no important releases to watch in euro zone this week, so watch the US data releases.
As for GBP/USD, bulls are gaining strength: the pair jumped to 1.5650 on weak ADP NFP. Thursday is going to be the key day for the cable – BOE meeting, quarterly inflation report and policy minutes are on the schedule. We expect some hawkish surprises from the UK regulator. Watch the 1.5700 resistance.
As we expected, commodity block currencies came under pressure again. AUD/USD failed to close above 0.7400 yesterday. It means that the bullish move was speculative. Watch the employment data in Australia on Thursday. Aussie will likely hit the recent levels around 0.7200 soon.
USD/JPY soared to 125.00 on the USD optimism. Next target lies at 125.80.
FXBAZOOKA.com - Market prices tend to move towards the strike price at the time large vanilla options (ordinary put and call options) expire. It happens (all things equal) as each side of the deal seeks to hedge its risk exposure. This action is most noticeable ahead of 10 a.m. New York time when the majority of options expire (15:00 GMT).
GBP/JPY continues to rise after the pair earlier broke above the resistance level 194.00 (which stopped the previous sharp minor impulse wave 1 in the middle of July, as you can see below). The breakout of this resistance level accelerated the active minor impulse wave 3 – which belongs to the 3rd intermediate impulse wave (3) from the start of July.
GBP/JPY is likely to rise further in the active impulse waves 3 and (3) toward the next buy target at the resistance level 195.50 (which stopped previous impulse (1)) – the breakout of which can lead to further gains toward 198.00.
AUD/CAD recently reversed down after the price reached the resistance level 0.9750, which was set as the buy target in our previous forecast for this currency pair. The resistance zone near the resistance level 0.9750 was strengthened by the upper daily Bollinger Band and by the 50% Fibonacci Correction of the previous downward impulse from the middle of January (as you can see below). The downward reversal from 0.9750 completed the earlier minor correction 2.
AUD/CAD is likely to fall further in the active impulse wave 3 toward the next sell target at the support level 0.9600. Strong resistance remains at 0.9750.
US dollar remains strong vs. other major currencies. Traders are rather positive about the upcoming release of the American Non-Farm Payrolls (NFP) figures on Friday, at 12:30 GMT. Consensus forecast is that American economy has gained 220-225K jobs in July, while unemployment rate remained unchanged at 5.3%. If the reading comes between 200K and 220K, US dollar will be OK, though there may be a negative short-term reaction. A reading below 200K will provoke USD selloff, while NFP around 250K will make the greenback broadly strengthen.
EUR/USD remained above 1.0900. The pair is trading between 1.0950 and 1.0850. Good NFP will make the euro decline towards 1.0800/1.0750, but if US data disappoint we will see a spike towards 1.1050/1.1100. There will be some figures in the euro area, but America will remain in the center of market’s attention.
The super Thursday for British pound did not leave up to expectations. GBP/USD slid below 1.5550, but found support in the 1.5460 area (July 24 low). Only one MPC (Monetary Policy Committee) member voted for the rate hike vs. at least two expected. In addition, the Bank of England’s Governor Carney has mentioned low commodity prices and said that higher sterling affects inflation. However, fundamentally the central bank’s position did not change much. Rate hikes around the beginning of the next year is still on the table. Cable fell because the expectations of the market fueled by the previous Bank of England’s comments were too elevated. There are some positive technical signs like the 100-day MA turning up, so the battle is not lost for the pound in the longer-term. On Friday, however, it will all depend on the US NFP. A strong reading will send GBP/USD to 1.5300, while a weak one will allow it to test levels above 1.5700 with potential target at 1.5800. There is also support in the 1.5400 area (200-day MA).
USD/JPY remains just below the psychological level of 125.00. The Bank of Japan will meet early on Friday. The central bank will likely maintain its monetary stimulus program and upbeat assessment of national economy. Note that the central bank would not like to see the pair above 125.00. Still, in case of strong NFP USD/JPY will surge to 125.75/126.00. The disappointment, however, may provoke a decline down to 123.50 (top of the daily Cloud).
AUD/USD declined after data showed increase in unemployment level. Support is at 0.7315, but strong NFP will provoke a decline to 0.7260/0.7200. Strong resistance is located in the 0.7400 area.
EUR/CHF continues to rise after the pair earlier broke through the resistance level 1.0690 (which reversed the price in March and July, as you can see below). The breakout of this resistance level follows the earlier sharp upward reversal from the support zone lying between the pivotal support level 1.0550 and 38.2% Fibonacci Correction of the previous sharp upward impulse wave from the end of June.
EUR/CHF is expected to rise further inside the active minor impulse wave (iii) toward the next buy target at the strong resistance level 1.0800 (which stopped and reversed the strong A-wave at the end of April).
AUD/CHF continues to rise inside the minor ABC correction 4 – the (a) and the (c) waves of this ABC correction started earlier - when the pair reversed up from the strong support zone surrounding the support level 0.6950. This support zone was strengthened by the lower daily Bollinger Band. The latest two reversals from this support zone created the two daily Japanese candlesticks reversal patterns Morning Star and Hammer.
With the clear bullish divergence visible on the daily Stochastic - AUD/CHF is expected to break the nearby resistance level 0.7250 – after which the pair is likely to rise to the next buy target 0.7400.
Daily. The shape of the final wave area made it clear that the development of the corrective wave (4) is not over yet. This wave will likely take form of the protracted double Triple W-X-Y. The pair is currently forming the final part of the wave X.
H4. The wave X is a rather complex formation, which consists of double Zigzags. The most important thing is that this week we expect the final part of the upward correction , after which the price will resume downward movement in the impulse [c]. When the entire wave X is over, we will see an increase.
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