EUR/USD

A return to US Dollar strength now favoured.

  • Initial objective met, stop moved to entry.

  • EUR/USD has relapsed lower after breaking under minor hourly support from 1.2288.

  • A push under 1.2520 is now sought to strengthen the bearish picture. 1.2522 has been met thus far.

  • The support that we had been anticipating in the US Dollar index near 81.50 materialised yesterday, potentially marking a near term base for an attempt at breaking over 83.542 over coming days.

  • Failure to hold under 1.2748 will likely target the 1.2900 region at which point our bearish bias will be neutralised.

STRATEGY: Short 2 at 1.2740, Objs: 1.2000/1.1650, Stop: 1.2740.


GBP/USD

Further short-term strength possible.

  • GBP/USD may be in the final phase of a correction from 1.5269. This has potential to target the 1.5900 region where a lower high would be favoured to form.

  • As noted in the past, the large devaluation versus the US Dollar has already taken place in 2008, so strength in the USD Index is not expected to be as aggressively exhibited in cable, hence our bearish view in EURGBP

  • With this in mind, although mildly bearish, due to our stance on the US Dollar Index, we look for higher levels before deciding to sell.

STRATEGY: Sell limit 3 at 1.5950, Objs: 1.5800/1.5400/1.5250, Stop: 1.6100.


USD/JPY

Longer-term remains negative.

  • Short stopped. Await fresh signal.

  • USD/JPY met the stop in our prior strategy, however the longer-term structure is still deemed negative, with the recent rise simply viewed as a correction higher.

  • In the meantime, we will look for short-term signs of a return to weakness, ahead of a fresh strategy.

  • Failure to form a lower high will suggest the formation of an inverted head and shoulders formation in the daily timeframe and a return to strength.

STRATEGY: Awaiting renewed buy trade setup.


USD/CHF

Strong support seen near the 0.9500 region.

  • USD/CHF has continued to find support under the 0.9500 region, close to our strategy entry level.

  • The bigger picture remains supported by a strongly bullish structure present since 0.9002 / 0.8931. This may now mark 0.9423 as the higher low that we had been seeking.

  • Yesterday’s break above 0.9563 is now strengthens the potential for a continuation of the current recovery.

  • Longer-term the break over both the 200 day and 50 week moving averages favours a stronger recovery higher towards 1.1000/1.1731, over coming months.

STRATEGY: Long 3 at 0.9500, Objs:0.9650/1.0000/1.0500, Stop: 0.9350.


USD/CAD

Falling wedge complete.

  • Buy strategy adjusted higher. Targets and stop amended too.

  • USD/CAD has now completed a falling wedge formation in the hourly timeframe, suggesting an end to the corrective phase off 1.0447

  • This view is also bolstered by movements in the US Dollar index overnight.

  • Meanwhile, only a decisive break back beneath 0.9800 would resume the multi-month downtrend into next support at 0.9726.

STRATEGY: Buy limit 3 at 1.0260, Objs: 1.0370/1.0700/1.1000, Stop: 1.0150.


AUD/USD

Daily structure favours a return to the 0.9582 low.

  • Initial target met. Stop moved to entry.

  • AUD/USD has met initial resistance/supply close to the 1.0200 region as anticipated.

  • The short-term diamond top that we noted yesterday yielded the expected sharp swing lower yesterday afternoon.

  • This downtrend is expected to continue, targeting lower levels, beneath 0.9582. This is favoured by the daily structure, however, it is noted that a push back over 1.0300 will weaken our view in favour of a neutral/bullish stance.

STRATEGY: Short 2 at 1.0200, Objs: 0.9700/0.9300, Stop: 1.0200.


GBP/JPY

Initial signs of exhaustion suggest limited upside potential.

  • GBP/JPY has initiated a further leg higher in its corrective phase from 118.81, after breaking over 124.35.

  • There remains scope for a further swing higher to complete the corrective phase, before a resumption of weakness is anticipated. An earlier break under 122.14 will suggest a resumption of weakness.

  • An hourly rising wedge is now forming warning of a degree of exhaustion. However, a final push to the 127.00 region remains viable.

STRATEGY: Sell limit 3 at 127.00, Objs: 125.00/120.00/117.00, Stop: 129.00.


EUR/JPY

Correction pushes higher.

  • EUR/JPY appears to be in the midst of a recovery from the recent 95.60 low made at the beginning of June. If a break under 98.54 can be realised this will increase the probability that 100.95 marks a lower high.

  • We would need to see the re-capture of 102.13 to suggest that a major low has formed, setting the stage for a return to 104.62 initially as the 111.43 decline is retraced.

  • In the meantime the bias remains negative, due to our individual views on USD/JPY and EUR/USD.

STRATEGY: Looking to re-sell higher.


EUR/GBP

Approaches the low at 0.8012.

  • EUR/GBP met strong resistance in recent trade at 0.8169. However, the follow through has been limited with potential now for a higher low at 0.8012 (12/06/2012 low).

  • This price action warns that the fall from 0.8506 is now exhausted warning of a short-term corrective phase higher, back towards 0.8200.

  • However, the larger trend is still deemed to be negative so we will look to re-sell close to 0.8200.

  • If a sustained break under 0.8012 can be achieved then this will warn that a lower high is already in place at 0.8169. Meantime, a recovey towards 0.8200 remains viable.

STRATEGY: Sell limit 3 at 0.8200, Objs: 0.8100/0.7900/0.7700, Stop: 0.8300.


EUR/CHF

Remains in a tight range above 1.2000.

  • EUR/CHF continues to trade sideways being supported by the SNB.

  • While we could see further corrective activity over the short-term the overall tone remains negative after breach of the February swing low at 1.2031 and while 1.2076 caps we see risk of an attack on retracement support at 1.1905 initially as the major downtrend extends.

  • Settlement above 1.2076 from here would suggest basing potential, while re-capture of 1.2147 would confirm a base pattern calling for a return to broken support at 1.2226 initially.

STRATEGY: Stand aside.


GOLD

Opportunistic trading strategy based on Longer-term structure.

  • Gold remains locked in a tight range oscillating around the 1600.00 level. However the recent hourly structure is suggestive of a corrective phase nearing completion.

  • We also note the formation of a large daily triangular consolidation pattern, with the 1525.00 level acting as a base. This increases the importance of this level, if broken to the downside.

  • With this in mind, we will look for a return to strength while above the 1526.97 low. Back under this level will turn the outlook decidedly bearish.

STRATEGY: Buy limit 3 at 1560, Objs: 1620/1700/1790, Stop: 1525.


SILVER

Short-term exhaustion suggests a recovery.

  • Silver is once again approaching the 26.07 level from where a recovery is anticipated. A break under this level would not be anticipated to be long lasting in nature, targeting the 20.00 level.

  • The 26.07 level remains key to future gains.

  • The hourly structure suggests a degree of near-term exhaustion, with scope for a recovery back towards 28.00 initially.

STRATEGY: Long 3 at 27.50, Objs: 28.50/30.00/31.50, Stop: 26.50.