USDJPY in bearish trend after exiting long-term triangle pattern

Trading 05 août 2019 Commentaire »

USDJPY is trading at 106. In previous posts we noted the importance of 108 as the break below it has given us a bearish signal when price exited the long-term triangle pattern.


Red lines - triangle pattern

USDJPY has broken below the triangle pattern and back tested the break out area and the lower triangle boundary at 109. The rejection was a bearish signal. Price not only got rejected at the lower triangle boundary from below but also got rejected at the weekly Ichimoku cloud. This double rejection is another bearish sign. Trend is bearish and we expect price to continue lower towards 104 and lower. As long as price is below 108 trend will remain bearish.

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EURUSD challenges short-term channel resistance

Trading 05 août 2019 Commentaire »

EURUSD is challenging the upper boundary of the short-term bearish channel. Recapturing 1.12-1.1210 could lead to a bigger bounce towards 1.13.


Black line - upper wedge boundary

Red line - lower wedge boundary

Blue lines -bearish channel

EURUSD is in bearish trend as price is still inside the blue bearish channel. The longer-term trend remains bearish as price is still inside the long-term downward sloping wedge pattern. Price is now challenging resistance at 1.12. A break above this resistance could push price towards the upper wedge boundary near 1.13. As we said in previous posts the bullish RSI divergence is an important warning for bears. Each time we reach the lower wedge boundary the chances of a bounce increase as long as the bullish divergence remains.

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Technical analysis of Gold for August 5th, 2019

Trading 05 août 2019 Commentaire »

Gold price is making new higher highs above $1,450. It is important for bulls to hold above the $1,425-$1,440 area in order for the up trend to continue towards $1,500-$1,525.


Red lines - bearish divergence

Red rectangle - major support area

Gold price remains in an up trend making new higher highs. The RSI is still lower on daily basis relative the last peak. The bearish divergence is just a warning and not a reversal signal. If Gold bulls manage to hold above $1,425-$1,440 we could then see a new RSI higher high that will maintain this upward momentum towards $1,500. Key support remain at $1,400 area. However breaking below $1,440-$1,425 area will increase the chances of breaking below $1,400. Bulls should be very cautious at current levels. A pull back is highly probable. Bears should be patient as we have no reversal signal yet.

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August 5, 2019 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 05 août 2019 Commentaire »


Back in June 24, the EURUSD looked overbought around 1.1400 facing a confluence of supply levels.

Thus, a bearish movement was initiated towards 1.1275 followed by a deeper bearish decline towards 1.1235 (the lower limit of the previous bullish channel) which failed to provide enough bullish support for the EUR/USD pair.

In the period between 8 - 22 July, sideway consolidation range was established between 1.1200 - 1.1275 until a triple-top reversal pattern was demonstrated around the upper limit.

Shortly after, evident bearish momentum (bearish engulfing H4 candlestick) could bring the EURUSD back below 1.1235.

Early bearish breakdown below 1.1175 facilitated further bearish decline towards 1.1115 (Previous Weekly Low) where temporary bullish rejection was recently demonstrated on July 25.

That's why, Intraday bullish pullback was demonstrated towards 1.1175-1.1200 where a valid SELL entry was suggested in a previous article.

Earlier last week, bearish persistence below 1.1115 allowed further bearish decline towards 1.1025 where significant signs of bullish recovery were demonstrated.

Risky traders were advised to watch for bullish persistence above 1.1050 as a bullish signal for Intraday BUY entry with initial bullish targets projected towards 1.1115 then 1.1175.

It's already running in profits. S/L should be advanced to 1.1140 to secure more profits and let the remaining portion open.

On the other hand, the current price zone of 1.1175-1.1200 (a cluster of previous bottoms) stands as a prominent SUPPLY zone where signs of bearish rejection and a possible SELL entry should be considered.

Trade recommendations :

Intraday traders can have a short-term SELL entry anywhere around the current price levels (1.1200).

S/L should be tight (above 1.1240). T/P level to be located around 1.1125-1.1115.

Conservative traders should wait for a bearish movement towards 1.1125-1.1115 for a valid BUY entry. S/L should be placed just below 1.1080 while initial T/P levels should be located around 1.1160 and 1.1200.

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U.S. Service Sector Growth Continues To Slow In July

Trading 05 août 2019 Commentaire »

Growth in U.S. service sector activity unexpectedly slowed in the month of July, according to a report released by the Institute for Supply Management on Monday.

The ISM said its non-manufacturing index fell to 53.7 in July after dropping to 55.1 in June. A reading above 50 still indicates service sector growth, although economists had expected the index to inch up to 55.5.

With the unexpected decrease, the non-manufacturing index slid to its lowest level since hitting 51.8 in August of 2016.

"The non-manufacturing sector's rate of growth continued to cool off," said Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee.

"Respondents indicated ongoing concerns related to tariffs and employment resources," he added. "Comments remained mixed about business conditions and the overall economy."

The unexpected decrease by the headline index was partly due to a steep drop by the business activity index, which tumbled to 53.1 in July from 58.2 in June.

The new orders index also slumped to 54.1 in July from 55.8 in June, indicating a continued slowdown in the pace of growth in new orders.

On the other hand, the report said the employment index rose to 56.2 in July from 55.0 in June, pointing to a rebound in the pace of job growth in the service sector.

The ISM said the prices index dropped to 58.9 in July from 56.5 in June, indicating that prices increased for the 26th consecutive month.

Last Thursday, the ISM released a separate report showing growth in U.S. manufacturing activity also unexpectedly saw a continued slowdown in the month of July.

The ISM said its purchasing managers index dipped to 51.2 in July after edging down to 51.7 in June. Economists had expected the index to inch up to 52.0.

With the continued decrease, the purchasing managers index dropped to its lowest level since hitting 49.6 in August of 2016.

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Dollar Little Changed Following ISM Non-manufacturing Survey

Trading 05 août 2019 Commentaire »

At 10:00 am ET Monday, U.S. ISM non-manufacturing composite index for July have been released. After the data, the greenback changed little against its major rivals.

The greenback was trading at 106.03 against the yen, 0.9751 against the franc, 1.1183 against the euro and 1.2166 against the pound around 10:05 am ET.

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Eurozone Investor Confidence Lowest Since October 2014

Trading 05 août 2019 Commentaire »

Euro area investor confidence deteriorated sharply in August to its lowest level in nearly five years, amid a steep drop in the current situation assessment and expectations, survey data from the behavioral research institute Sentix showed on Monday.

The investor confidence index of the survey tumbled to -13.7 from -5.8 in July, marking its lowest level since October 2014. Economists had forecast a score of -7.

The current situation index dropped to -7.3 from 1.8 in the previous month. The latest reading was the lowest since January 2015.

The expectations measure slid to -20 from -13, reaching its lowest level since August 2012.

"The measures announced by the central banks have not led to a change in economic expectations," Sentix Managing Director Patrick Hussy said.

The latest survey was carried out between August 1 and 3 among 930 investors, including 249 institutions.

The sentiment index for Germany dropped to its lowest level since October 2009, suggesting that a recession in the biggest euro area economy is inevitable. The sentiment index plunged to -13.7 from -4.8 in July.

The other regions of the world are also struggling with large discounts, Sentix said. In the U.S., President Donald Trump's threat of imposing tariffs on more Chinese imports has fueled the trade war further, the institute added.

Given that the Sentix indicator is the earliest early indicator means more strong weakening in the economic signals is to be expected in August.

The global aggregate of the Sentix survey fell to -2.3 in August from 3.9 in July, marking the lowest level since February 2016.

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August 5, 2019 : GBP/USD demonstrates a bullish reversal pattern to be considered around 1.2100.

Trading 05 août 2019 Commentaire »

Since May 17, the previous downside movement within the depicted bearish channel came to a pause allowing the recent sideway consolidation range to be established between 1.2750 - 1.2550.

On July 5, a bearish range breakout was demonstrated below 1.2550 (the lower limit of the depicted consolidation range). Hence, quick bearish decline was demonstrated towards the price zone of 1.2430-1.2385 (where the lower limit of the movement channel came to meet the GBPUSD pair).

On July 18, a recent bullish movement was initiated towards the backside of the broken consolidation range (1.2550) where another valid SELL entry was offered few weeks ago.

Moreover, Bearish breakdown below 1.2350 facilitated further bearish decline towards 1.2320, 1.2270 and 1.2125 which correspond to significant key-levels on the Weekly chart.

The current price levels are quite risky/low for having new SELL entries. That's why, Previous SELLERS were advised to have their profits gathered.

Recently, weak signs of bullish recovery are being demonstrated around 1.2100.

This may push the GBPUSD to retrace towards 1.2260 then 1.2320 if sufficient bullish momentum is maintained.

On the other hand, The price zone of 1.2320 - 1.2350 (backside of the broken channel) stands as a prominent SUPPLY zone to be watched for new SELL positions if the current bullish pullback pursues towards it.

Trade Recommendations:

Intraday traders are advised to look for early bullish breakout above 1.2230 for a counter-trend BUY entry.

Conservative traders should wait for the current bullish pullback to pursue towards 1.2320 - 1.2350 for new SELL entries.

S/L should be placed above 1.2430. Initial T/P level to be placed around 1.2279 and 1.2130.

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*ISM U.S. Non-Manufacturing Index Drops To 53.7 In July

Trading 05 août 2019 Commentaire »

ISM U.S. Non-Manufacturing Index Drops To 53.7 In July

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U.S. Dollar Falls On Trade, Growth Concerns

Trading 05 août 2019 Commentaire »

The U.S. dollar declined against its major counterparts in the European session on Monday, as concerns over a global economic slowdown intensified following an escalation in US-China trade war.

Today, China's central bank allowed its yuan to fall below the politically sensitive level of seven to the U.S. dollar, fueling speculation that Beijing was allowing currency depreciation to counter U.S. President Donald Trump's latest tariff threat.

The U.S. ramped up the trade war last week, imposing a 10 percent tariff on $300 billion of Chinese goods from next month.

China has pledged to take countermeasures to the U.S. decision, thereby widening the rift.

The ISM Non-manufacturing index for July is the sole release today. The index is expected to inch up to 55.5 in July after dropping to 55.1 in June.

The greenback declined to 0.9738 against the franc, its lowest since June 28. The greenback is seen finding support around the 0.96 level.

Data from the Federal Statistical Office showed that Switzerland's retail sales grew in June.

Retail sales rose a working day adjusted real 0.7 percent year-on-year in June, after a 1.1 percent decline in May.

The greenback fell to an 11-day low of 1.1184 versus the euro from last week's closing value of 1.1106. If the greenback weakens further, it may find support around the 1.14 level.

Final data from IHS Markit showed that the euro area private sector growth softened largely due to deepening downturn in manufacturing activity in July.

The final composite output index fell to 51.5 in July from 52.2 in June. The reading came in line with the preliminary estimate.

The greenback dropped back to 1.2174 against the pound, not far from a 5-day low of 1.2188 seen at 8:45 pm ET. On the downside, 1.27 is possibly seen as the next support level for the greenback.

Data from IHS Markit showed that the UK service sector growth improved in July on renewed increase in new work.

The IHS Markit/Chartered Institute of Procurement & Supply services Purchasing Managers' Index rose to 51.4 in July from 50.2 in June. The reading was forecast to rise marginally to 50.5.

The U.S. currency depreciated to more than a 7-month low of 105.79 against the yen and held steady thereafter. The pair had ended last week's trading at 106.57.

Survey results from IHS Markit showed that Japan's service sector began the third quarter with a moderate growth pace in July.

The Jibun Bank services Purchasing Managers' Index fell slightly to 51.8 in July from 51.9 in June.

The greenback retreated to 1.3212 against the loonie, on track to pierce a 4-day low of 1.3191 seen in the Asian session. The greenback is likely to face support around the 1.30 level.

The greenback eased off to 0.6771 against the aussie and 0.6535 against the kiwi, from an early more than 7-month high of 0.6748 and multi-week high of 0.6488, respectively. The next possible support for the greenback is seen around 0.715 against the aussie and 0.66 against the kiwi.

At 10:00 am ET, U.S. ISM non-manufacturing composite index for July is scheduled for release.

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