Chinese depreciation is slowing its effect on global markets and it could mean that gradually its effect will diminish as a major driver of the markets for now. Instead, focus could return to US growth and its effect on the September FED rate decision. US retail sales yesterday showed a solid growth of 0.6% versus 0.4% expected which brought back speculation that the hike will indeed happen in September. Stock markets have stabilized however OIL has made a new 6.5 year old low going as low as $41.35. Notable mover is also the NZD after disappointing retail sales data. AUD has also followed mildly lower. Generally the picture is one of the strong USD but not against the EUR which has been by far the strongest currency of the week. Speaking of EUR, JP Morgan mentions that “for the bulls to really gain more traction, it would take additional breaks above 1.1288 and ultimately 1.1383 for the euro to reach 1.1699. Particularly under 1.1288 the market remains in the danger zone” JPM adds.
It’s a full calendar today with EZ GDP and inflation data out of EZ and US as well as Industrial Production and Consumer Confidence from the US as well.
Trading Quote of the Day: “Buy from the scared, sell to the greedy”
Currency Updates:
EURUSD
Pivot: 1.109
Our preference: Long positions above 1.109 with targets @ 1.117 & 1.1215 in extension.
Alternative scenario: Below 1.109 look for further downside with 1.103 & 1.098 as targets.
Comment: The RSI is mixed to bullish.
USDJPY
Pivot: 124.7
Our preference: Short positions below 124.7 with targets @ 124.05 & 123.8 in extension.
Alternative scenario: Above 124.7 look for further upside with 125 & 125.3 as targets.
Comment: As long as 124.7 is resistance, look for choppy price action with a bearish bias.
GBPUSD
Pivot: 1.564
Our preference: Short positions below 1.564 with targets @ 1.557 & 1.554 in extension.
Alternative scenario: Above 1.564 look for further upside with 1.5675 & 1.571 as targets.
Comment: As long as the resistance at 1.564 is not surpassed, the risk of the break below 1.557 remains high.
AUDUSD
Pivot: 0.739
Our preference: Short positions below 0.739 with targets @ 0.732 & 0.727 in extension.
Alternative scenario: Above 0.739 look for further upside with 0.743 & 0.749 as targets.
Comment: The RSI lacks upward momentum.
GOLD
Pivot: 1108.80
Our preference: Long positions above 1108.80 with targets @ 1127.00 & 1135.00 in extension.
Alternative scenario: Below 1108.80 look for further downside with 1101.30 & 1093.70 as targets.
Comment: A support base at 1108.80 has formed and has allowed for a temporary stabilisation.
USDCAD
Pivot: 1.3025
Our preference: Long positions above 1.3025 with targets @ 1.309 & 1.3145 in extension.
Alternative scenario: Below 1.3025 look for further downside with 1.2985 & 1.295 as targets.
Comment: The RSI is mixed to bullish.
USDCHF
Pivot: 0.98
Our preference: Short positions below 0.98 with targets @ 0.972 & 0.967 in extension.
Alternative scenario: Above 0.98 look for further upside with 0.986 & 0.9905 as targets.
Comment: As long as the resistance at 0.98 is not surpassed, the risk of the break below 0.972 remains high.
OIL
Pivot: 43.15
Our preference: Short positions below 43.15 with targets @ 41.33 & 40.9 in extension.
Alternative scenario: Above 43.15 look for further upside with 43.87 & 44.4 as targets.
Comment: As long as 43.15 is resistance, likely decline to 41.33.
DAX
Pivot: 10880
Our preference: Long positions above 10880 with targets @ 11205 & 11310 in extension.
Alternative scenario: Below 10880 look for further downside with 10800 & 10650 as targets.
Comment: Intraday technical indicators are mixed.
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