FOREX PRO WEEKLY, July 04 - 08, 2016

Sive Morten

Special Consultant to the FPA
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Fundamentals


(Reuters) The U.S. dollar tumbled against the safe-haven yen on Friday as a plunge in benchmark U.S. Treasury yields reduced the attractiveness of U.S. debt and traders expected dovish Federal Reserve policy through this year, while sterling dipped.

The dollar was last down 0.8 percent at 102.47 yen, near a session low of 102.44 hit in early trading. The dollar index, which measures the greenback against a basket of six major rivals, was last down 0.5 percent at 95.700.

U.S. 30-year Treasury yields hit their lowest since the 1950s, at 2.189 percent, in a worldwide scramble for bonds on expectations of weak global growth and more policy stimulus from major central banks. Benchmark U.S. 10-year Treasury yields nearly matched their record low of 1.381 percent.

"Dollar/yen is a highly sensitive yield play, so the plunge in U.S. Treasury yields is boosting the yen," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

Analysts also said significantly reduced expectations that the Fed would raise rates this year in the wake of Britain's surprise vote last week to exit the European Union hurt the dollar. The euro was last up 0.3 percent against the dollar at $1.1132 after hitting a one-week high of $1.1168 in morning U.S. trading.

"The Brexit situation has completely removed the prospect of further monetary tightening by the Fed for this year at least," said Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York.

Thin liquidity ahead of the Fourth of July holiday weekend in the United Status exaggerated currency moves, analysts said.

Sterling was last down 0.3 percent at $1.3280 after hitting a session low of $1.3244. While sterling hovered above Monday's 31-year low of $1.3122 right after the Brexit vote, analysts said the currency was still hobbling on comments that Bank of England Governor Mark Carney made on Thursday.

Carney said the central bank would probably need to enact more stimulus over the summer, a signal of further action to offset the Brexit shock. His remarks pushed sterling down as much as 1.6 percent on Thursday.

For the week, sterling was set to fall about 3.1 percent against the dollar after posting its worst week against the greenback since January 2009 last week. Despite Friday's losses, the dollar was on track to gain modestly against the yen for the first week in three.


Brexit and the Fed: are all bets really off?
by Fathom Consulting

Here, guys, very interesting research of Labour market in US that shed some light on perspective of inflation (as wage growth) and rate hike. This analysis shows that in reality overall situation is not as pessimistic as it seems by many investors right now and rate still could be increased in December.

In response to last week’s UK referendum result, investors have slashed the already low probabilities previously assigned to the prospect of US interest rate increases. Currently, the chances of a hike even by the end of next year are seen as just 26%. In our view, investors would be wise to consider the possibility that the US labour market is close to full employment.

Brexit-US-rate.jpg

After last week’s UK referendum, a tightening of US interest rates next month is all but impossible, even if the next nonfarm payrolls report confirms our belief that US job creation rebounded in June. Nevertheless, we think that markets are significantly underestimating the possibility of US rate increases both this year and next.

Last week’s result poses a number of uncertainties, which are unlikely to be resolved any time soon. Financial markets are likely to remain volatile over the summer and global economic growth will probably slow as long as these uncertainties remain. November’s US presidential election will add a further element of unpredictability into the mix.

But federal funds futures prices seem to be implying that the US economy is heading into a recession. We disagree. In fact, we still believe that the domestic economy is relatively strong and that the labour market is close to full employment. Indeed, although US labour market participation has fallen, we estimate that around two thirds of the decline since 2008 is due to demographics and the ageing of the US workforce.

Two thirds of the fall in the US participation rate since 2008 is explained by the ageing of the US population; cyclical and other structural factors explain the rest. Consequently, we think that the US labour market is tight, even though the equilibrium unemployment rate has fallen since 2008. On the basis of this analysis we expect the little remaining labour market slack to be absorbed before long and for wage growth to accelerate this year.

AAlpha-Now-30.06.2016-06-US-participation-rate-with-trend.jpg


To critics, the persistent fall in the labour market participation rate highlights the fragility of the economy. We take a different view and believe that most of the decline in the participation rate since 2008 is due to structural, not cyclical, factors.

The share of the adult population aged 55 years and over has almost doubled over the last twenty years and the Bureau of Labor Statistics (BLS) expects the ratio to rise further. Since the participation rate of this age group is a lot lower than that of younger groups, it is unsurprising that the participation rate of the overall population continues to fall.
table.jpg

To quantify the effect of the ageing population on the labour market participation rate, we have projected a ‘trend’ participation rate using actual demographic changes and holding within age-band participation rates constant at 2000 levels. This projection is reflected by the yellow line in the first chart, while the blue line is the actual participation rate.

By comparing the two lines, we estimate that around two thirds of the decline in the actual participation rate since September 2008 can be explained by demographics. For the actual participation rate to return to trend, another 1.4 million people would need to enter the labour force. But our trend participation rate may overestimate the degree of slack within the labour market if the participation rates within age groups has fallen for other structural, as opposed to cyclical, reasons since 2000.

The participation rates of the 55 years+ and 16 to 24 year age groups have been moving in opposite directions since the turn of the century. The net result of these movements on the participation rate of the adult population is probably neutral. Moreover, we think that these movements are explained by structural, not cyclical, factors. For example, higher rates of university enrolment probably explain the decline in the participation rate of 16 to 24 year olds.
AAlpha-Now-30.06.2016-US-participation-rate-older-and-younger.jpg

AAlpha-Now-30.06.2016-US-participation-rate-16-24-college-enrolment.jpg


he participation rate of prime-age workers has fallen too, but we do not think that this is evidence of spare capacity and a fragile economic recovery. Indeed, many of the explanations that are cited for the decline in the participation rate of prime-age men, such as technology, inequality, globalisation, high incarceration rates and a lack of adequate childcare support for working parents, are largely structural, not cyclical, factors. The participation rate of prime-age workers started to decline well before the 2008 financial crisis.
AAlpha-Now-30.06.2016-US-participation-rate-prime-age-bands-25-54-3-bands.jpg

Another means of analysing the degree of slack within the labour market is to consider the number of people that are ‘not in the labour force, but want a job’. A stronger economy would probably cause some of these workers to re-enter the labour force, although many of them will be unable to, for reasons such as family commitments.

The proportion of those ‘not in the labour force, but want a job’ as a share of the population is not especially high by historical standards. For the ratio to fall to 2.0%, its pre-crisis low, less than one million workers would need to enter the labour force. If 200,000 new payrolls continue to be added every month, we estimate that this would take less than eight months to be achieved (after factoring in population growth).

AAlpha-Now-30.06.2016-01-US-not-in-the-labour-force-want-a-job.jpg

An alternative, and possibly more appropriate, measure of slack might be the number of discouraged workers, which is a subset of the ‘not in the labour force, but want a job’ group. Discouraged workers are people that are not in the labour force and have not looked for work in the last four weeks. The current level of discouraged workers (at 538,000, or 0.21% of the adult population) is not very high by past standards. Assuming this proportion fell to its pre-crisis low of 0.15%, that would be equivalent to 158,000 additional workers entering the work force, which would take only a few months to be absorbed by the labour market.
AAlpha-Now-30.06.2016-08-US-discouraged-workers.jpg

There are several reasons to believe that the NAIRU may have fallen in the post crisis period. For example, the emergence of online job matching websites such as LinkedIn and the rise of the ‘gig’ economy may enable quicker matches between employers and employees. All else equal, this would imply lower frictional unemployment (one of the two main components of the natural rate of unemployment described by Milton Friedman when he came up with the concept in the 1960s). In addition, rising university enrolment should result in a more educated workforce, which theoretically lowers the natural rate of unemployment too.

Another explanation for the fall in the NAIRU is the ageing of the population. As the following chart shows, the unemployment rate of older workers is a lot lower than that of younger workers. It is therefore plausible that as the US labour force ages, the average unemployment rate should fall. Given the compositional changes to the population since 2008, we estimate that this factor has pushed the NAIRU down by 0.1 percentage points since 2008.
AAlpha-Now-30.06.2016-US-unemployment-rate-by-age.jpg

Given the combination of factors discussed, we are comfortable with an estimate of 4.7%, which happens to be the same as the current unemployment rate. Federal Open Market Committee members have cut their estimate of the longer-term unemployment rate (considered by many as their estimate of the NAIRU) from a central range of 5.2% to 6.0% in 2013, to 4.7% to 5.0% today.

To conclude, our analysis suggests that much of this decline can be explained by structural, not cyclical, factors. If true, there is likely to be very little slack left in the labour market, even though the equilibrium unemployment rate has fallen since 2008. Put simply, we think that the labour market is already at, or very near, full employment.

With this in mind, we estimate that average hourly earnings growth will accelerate from 2.5% in the twelve months to May, to over 3.0% by the end of 2016. This will push both core and headline inflation higher this year and next. On this basis, we still believe that there is a realistic prospect of a US rate rise this year, probably in December, with several more to come next year.

The participation rate of prime age workers (those aged 25 to 54 years) has also declined. We suspect that this is also due to structural factors — such as globalisation, technology and inequality — and not cyclical factors, as widely believed. Looking ahead, we anticipate a pick-up in wage growth, pushing both core and headline inflation higher this year and next. On that basis, we still believe that there is a realistic prospect of one US rate rise this year, probably in December, with several more to come next year.

COT Report

Today guys, we will take a look at GBP. Our EUR analysis doesn't need any update by far, as it just has completed 50% upside bounce that we've discussed. Our view on GBP also will not bring any sensation, but mostly will be for short-term perspective.
COT Report shows that market has got some relief after voting has been completed. Speculative short position as well as open interest has decreased slightly. This is logical, because short-term speculators have taken profit, while others still keep short positions. It means that after some minor retracement GBP has solid chances to continue move down.
upload_2016-7-2_13-46-56.png


Currently some analysts already start discussion of possible drop of cable in long term and many of them, including our lovely Fanthom consulting think that pound sterling could even reach 1.1 area within few years and parity with EUR.
Right now we see the crack of global politic system and starting of creation new center of power with Germany-France-Italy-Russia core. First careful statements already have taken place as UK is leaving EU.
With this center of power - EU will get unprecedented economical push since it will get access to huge Russian and Asian market, because Russia is doing the same work with China. So, in perspective of 3-5 years this will be tremendous territory with outstanding economical potential and recourses. This is our long-term view.

Technicals
Monthly

So guys, our long-term forecast, that we've created in 2011 in our Military Forex Course, based on Elliot Waves has been completed:

Long Term Forecast on GBP rate

Right now monthly trend is bearish, but market is not at oversold on monthly chart. We've said that lows will not survive because market has all-time 0.618 AB=CD target below them, so that has happened. Market has dropped and right now stands there, no W&R.
Overall picture looks bearish by some signs. First is - acceleration down to AB-CD target. Usually fast drop on this point tells that market has chances to continue to AB=CD target, which stands at 1.06 area, and we think that it will be reached within some years. The point is if you will take a look at all-time GBP chart, you'll see that market already has broken major 5/8 Fib support and on a way down, drop is really fast since first leg was on 2008 crisis:
imggraph.php


That's why technically there is nothing impossible with 1.06 area. - that will be AB=CD on a way down.
Second stands for shorter-term perspective. GBP has dropped below YPS1 and this indicates starting of new bearish trend, not just a retracement down, but trend.

Swings right now are so large, that monthly chart let's us talk on very long-term perspective and does not bring any clarity on shorter-term perspective.

Still we can say one thing - take a look that our 1.3080 target has not been reached for 100 pips though. This is what we will watch for in nearest week.
gbp_m_04_07_16.png


Weekly

Weekly chart shows very interesting information, and explains why our monthly AB-CD works. Actually guys, here we have rare pattern that calls Volatility Breakout (VOB). Those of you who follows our gold analysis knows that we've traded VOB on gold within 2 years and it has reached it's target around 1000$. Now GBP stands near its target as well:
gbp_w_04_07_16.png


Weekly chart is strongly oversold right now and major question is - do we have another VOB on Brexit? Usually VOB is absolute breakout as it was in 2008. Current breakout is smaller. But I think that we could treat it as VOB because more than 250 bars (weeks) has passed since first breakout. Although current VOB could be a bit weaker, but stil it could have a downward continuation. It means that market could drop even lower than our monthly 1.3080 target. To understand how much lower - we need to get upside retracement first after VOB, to get AB-CD and calculate 0.618 extension target. So, we will know it within few weeks probably. In fact, upside action from 2008 till 2016 precisely was this "retracement" after VOB... As soon as we've got it - we've estimated 1.3080 target that currently mostly is completed...

That's being said, right now on GBP we have two tasks. First one - finish with our 1.3080 destination. Second - watch for upside bounce and estimate next target on AB-CD that we should get.

Daily

Here we do not have any patterns and could watch only for levels that could become a potential target of upside bounce. Most probable looks 1.3850 area - MPP, former lows and overbought area. Trend is bearish here:
gbp_d_04_07_16.png


Hourly

At the same time hourly chart shows that upside retracement will not start immediately. Recall that we have uncompleted monthly target. Now hourly chart shows pattern that should lead to its completion. This is butterfly "buy" that makes possible reaching of 1.3080 area:
gbp_1h_04_07_16.png


Conclusion:
That's being said, we confirm our bearish view on GBP that even has become worse as procedure of EU leaving has started. Based on patterns that we have right now we could make a conclusion that this is really possible that cable will reach 1-1.05 area within 3-5 years. Our first 1.3080 target that we've estimated in 2011 has been completed.

In short-term perspective we wait for two major moments. First - hourly butterfly completing and reaching of our 1.3080 target. Second - upside bounce that should give us AB-CD and next downside target.


The technical portion of Sive's analysis owes a great deal to Joe DiNapoli's methods, and uses a number of Joe's proprietary indicators. Please note that Sive's analysis is his own view of the market and is not endorsed by Joe DiNapoli or any related companies.
 
Good morning,

(Reuters) The Australian dollar slipped on Tuesday as the central bank held steady and analysts speculated that easing could lie ahead, while the perceived safe-haven yen got a lift from worrying signs in China's service sector.

Trading was subdued with no directional clues from U.S. markets, which were shut on Monday for the Independence Day holiday.

A private survey showed that activity in China's services sector rose to an 11-month high in June, but a composite measure of activity fell to a four-month low. That raised fears the services sector may not be able to make up for a prolonged decline in the industrial economy that has pushed China's growth to 25-year lows.

"There are no domestic factors that could explain the yen's strength, so it appears to be the 'risk-off' effect from China that's bringing the dollar/yen to test the 102 level," said Ayako Sera, market economist at Sumitomo Mitsui Trust Bank in Tokyo.

The dollar was down 0.5 percent at 102.03 yen after briefly dipping as low as 101.985, while the euro fell 0.8 percent to 113.51 yen.

The Aussie initially pulled away from session lows when the Reserve Bank of Australia kept policy steady, but then it slipped 0.3 percent to $0.7507, moving away from Monday's more than one-week high of $0.7545.

Australia's central bank kept its cash rate steady at 1.75 percent, a widely expected decision given political uncertainty at home and abroad and a lack of up to date information on domestic inflation.

"The next natural signpost is the inflation data at the end of this month, so markets are anchored around a rate cut in August, and we think that won't be the last one either," said Ben Jarman, economist at JP Morgan.

Possible policy paralysis after no clear winner emerged from a weekend election continued to threaten the Aussie's outlook, in addition to the potential Brexit fallout.

"Brexit is not a direct threat to Australia, but over time the hit to investment and risk-taking sentiment may weigh on commodity prices, adding to the pressure on the RBA," Marshall Gittler, head of investment research at FXPrimus, said in a note.

Brexit has ramped up the urgency for some Asian central banks to ease monetary policy, as a prolonged period of uncertainty threatens a wider downshift in trade and investment.

The timing of Britain's actual exit from the EU remains unclear, and against this backdrop, investors have begun to hope for additional stimulus and UK corporate tax cuts to blunt the impact of the move.

Sterling shed 0.3 percent to $1.3247, but remained above last week's 31-year trough of $1.3122 plumbed in the wake of the Brexit vote.

The U.S. dollar index, which tracks the greenback against a basket of six rival currencies, was steady at 95.653.

The euro inched down 0.2 percent to $1.1126.

Today guys, we will talk on EUR. On NZD our H&S has not been formed, as market has moved right back to to of the head. Thus, athough weekly setup is still valid - we probably will have to wait for another pattern that will become a foundation for short position. Thus, let's keep watching.

On EUR, guys, we stand at important moment when market really could re-establish downward action. Right now on daily chart EUR has completed 50% retracement, it's favorite one and could form bearish grabber. This pattern will become the major part or our scenario. Grabber is important not just because of its own target @ 1.09 lows, but because it could trigger bearish continuation with daily AB-CD right to next 1.06 target. We discussed this setup in our weekly reserach 2 weeks ago.
eur_d_05_07_16.png


On 4-hour chart we definitely see retracement action - very choppy with long tales, no thrust action:
eur_4h_05_07_16.png


On 30-min chart right at the top of grabber stands butterfly "sell" pattern.
eur_1h_05_07_16.png


The attractiveness of the grabber stands with its clarity. Since we definitely know where to place stop and where the target is. So, if you will go short, take care about grabber confirmation, market should not close above MACDP line. If this will happen, grabber will not be confirmed and short position should be closed.

Anyway, this setup is very attractive and has nice parameters of risk and reward, as well as clarity.
 
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Good morning,

(Reuters) Sterling carved out a fresh 31-year trough on Wednesday while the safe-haven yen soared on heightening fears of the broader impact of Britain's vote last month to exit the European Union.

The pound slid as far as $1.2798, breaking through the previous low of $1.3000 set overnight. It was last down 1.2 percent at $1.2867.

The euro jumped as high as 86.26 pence, its highest since August 2013, and was last up 0.9 percent at 85.76 pence.

Against the resurgent Japanese currency, sterling fell as low as 128.81 yen GBPJPY=R, its lowest since November 2012. It was last down 2.2 percent at 129.61.

The dollar dropped as low as 100.58 yen , pulling back from Friday's post-Brexit high of 103.40. It was last down 1 pct at 100.72 yen, holding above the June 24 trough of 99.000 touched in the wake of the UK vote when nerves were still raw.

"It's back to double digits for dollar/yen? I think this is a pretty precarious level, and if we break through 100, we should start to hear some rumblings from officials," said Bart Wakabayashi, head of Hong Kong FX sales at State Street Global Markets.

"I'm sure there are a lot of safe-haven flows into the yen, obviously against sterling, but other crosses like euro-yen, so it's not just a straight yen valuation against any one currency," Wakabayashi said. "It's a difficult market for traders, and I'm sure it's a difficult market for central bankers and policymakers as well."

The euro retreated below 112.00 yen EURJPY=R for the first time in over a week, to a session low of 111.03, though it, too, held above its post-Brexit June 24 low of 109.30. It was last down 1.3 percent at 111.26 yen.

Fears of financial contagion spooked investors and sent them scurrying into the safety of government bonds, which helped push the benchmark 10-year Treasury yield to a fresh record low of 1.345 percent US10YT=RR in Asian trading on Wednesday. The benchmark 10-year Japanese government bond also plumbed a fresh record low of minus 0.275 percent JP10YTN=JBTC.

Rattling markets, three British commercial property funds worth about 10 billion pounds suspended trading this week after the Brexit vote sent asset prices into a tailspin.

Also adding to a growing sense of market instability, shares in Italy's banks, which are suffocating under a pile of non-performing loans, plunged on Tuesday.

"The market will focus on risks building in Europe. Expect headlines surrounding Brexit and Italian banks to drive volatility," analysts at ANZ wrote in a note to clients.

The Australian dollar dropped, though it fared relatively better than some counterparts despite the renewed risk aversion, thanks in part to still attractive Australian bond yields. The Aussie fell 0.6 percent to $0.7412 , having been as high as $0.7545 in the previous session.

The Reserve Bank of Australia on Tuesday left interest rates unchanged as expected and again disappointed some doves by not providing a clear easing bias.


So, guys, today we again will take a look at EUR. But first - our target on GBP that we've specified in weekly research has been completed. Thus, all background has been formed for possible retracement. How strong it will be - now it is difficult to say.

On EUR - market has confirmed our yesterday analysis. Grabber has been completed, price has dropped. As we've said grabber could be treated as isolated pattern as in larger context. Former way assumes 1.09 target while latter suggests to treat it as trigger for next leg of daily AB-CD pattern on a way to 1.05-1.06 level.
eur_d_06_07_16.png


On 4-hour chart price has broken upside channel action:
eur_4h_06_07_16.png


So, if you've taken a short on butterfly that we've discussed yesterday - now you could think on moving stop to breakeven. Those of you, who thinks about short position - watch for current upside retracement. It seems that 1.1085-1.11 level could be not bad one for chance to take short:
eur_30m_06_07_16.png
 
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Good morning,

(Reuters) The Australian dollar withered after Standard and Poor's cut the outlook for that country's credit rating to negative on Thursday, while the safe-haven yen firmed in the fallout from Britain's vote last month to exit the European Union.

The Aussie fell as low as $0.7467, from an earlier session high of $0.7539, after S&P downgraded the outlook on Australia's AAA credit rating to negative from stable. But the currency pared losses to last buy $0.7507, down 0.1 percent on the day.

The ratings agency had warned that deadlock on government policy after Saturday's inconclusive elections could endanger Australia's rating over the long run.

A Reuters poll taken ahead of S&P's move showed that analysts had raised their outlooks for the Australian and New Zealand dollars due to those countries' relatively high bond rates and the British pound's recent plunge.

The euro slipped 0.5 percent to 111.92 yen EURJPY=R, but managed to hold above its Wednesday low of 110.84 and a 3 1/2-year low of 109.30 logged soon after the results of the Brexit referendum were apparent.

The dollar shed 0.4 percent to 100.95 yen, though it also remained above the previous session's low of 100.20 as well as its June 24 nadir of 99.000 hit after the UK's vote.

"There's a lot of nervousness. Post-Brexit issues are starting to sink in," said Jeff Kravetz, senior investment strategist at the Private Client Reserve at U.S. Bank in Scottsdale, Arizona.

"The yen has been a big story. It keeps strengthening as a safe-haven currency," he said, adding that the dollar might break under 100 yen again against the backdrop of uncertainty.

Sharp yen gains are usually followed by verbal warnings from Japanese financial officials, one of whom said on Wednesday that the finance ministry was closely watching the currency market to see if any speculative factors were behind market moves.

According to Japan Macro Advisors' probability model of the risk of direct foreign exchange intervention, the dollar's fall to 95 yen could be a trigger point in the next 2 months, while from September onward, the threshold would shift to 90 yen.

"The Japanese yen is appreciating from an extremely weak level and the yen has to appreciate much further before Japan could gain an implicit approval from other G7 countries," said Takuji Okubo, chief economist at Japan Macro Advisors.

"Past episodes of intervention suggest a unilateral intervention without implicit approval from other G7 tends to be ineffective," Okubo said in a note.

Bank of Japan Governor Haruhiko Kuroda said on Thursday that the central bank is ready to expand monetary stimulus further if needed to achieve its 2 percent inflation target, but he made no mention of the Brexit vote that has spread turmoil in financial markets.

Beleaguered sterling fell as low as 128.81 yen GBPJPY=R on Wednesday, its lowest since November 2012. It was last down 0.2 percent at 130.70.

The pound had skidded to $1.2798 in the previous session to log a fresh 31-year low, but was last up 0.1 percent at $1.2939.

Sterling remains under pressure despite the efforts of Bank of England Governor Mark Carney, who has attempted to calm investors roiled by Brexit with an unusually explicit signal that the Bank was poised to pump more stimulus into the economy in the coming months.

"People are still selling into sterling rallies, whenever it rises on any of the crosses," said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo.

"The BOE might come up with some supportive measures," he said.

The BOE's next interest rate decision will come on July 14, though economists polled by Reuters mostly predicted that the central bank would wait to cut interest rates until its meeting on Aug. 4, when it will likely have a clearer idea about Brexit's impact.

Fanning fears of financial contagion in the wake of the Brexit vote, the number of British property funds suspended in recent weeks doubled to six on Wednesday, leaving 15 billion pounds ($19.37 billion) frozen in the biggest seizing up of investment funds since the 2008 financial crisis.

Minutes of the U.S. Federal Reserve's June policy meeting released on Wednesday showed that policymakers decided to keep interest rate hikes on hold as they assessed the Brexit impact.

The dollar was lifted overnight when Institute for Supply Management data revealed that growth in the U.S. economy's service sector increased in June at its fastest pace in seven months.

Investors awaited the key U.S. non-farm payrolls numbers due on Friday, which are expected to show employers added 180,000 jobs last month, according to a preliminary Reuters poll. That would follow May's surprisingly weak reading of just 38,000, which some economists expect to be revised upward.


So, I've checked across the board guys, and EUR probably shows best short-term setup right now. That's why we do not see much sense to shift somewhere else. Market is preparing to NFP report, but today will get ADP either and it could be good approx. of NFP one. If it really will show good numbers - EUR could accelerate dropping...

On daily chart we do not see any surprises, everything as we've suggested. Here we're watching for 2 targets. First one is 1.09 lows, that might be achieved even tomorrow if NFP will be 180+ and second one is medium-term - 1.06 as 1.618 target of our AB-CD pattern:
eur_d_07_07_16.png


Sentiment stands bearish. On daily chart price is below MPP, while here, on 4-hour chart it has failed to break above WPP:
eur_4h_07_07_16.png


Yesterday we've got another chance to go short around 1.11 and market mostly has completed our analysis well. Still if you again has missed this chance - it's not a problem. The buity of DiNapoli trading style is that he has good tools to entry on market that stands in motion. Thus, today, as downward action out from 1.11 resistance has started - you could try to take position on minor Fib level, based on this small most recent action down. Others, who have taken short yesterday - move stops to breakeven and watch the movie...
eur_1h_07_07_16.png


So let's keep watching, what we will get on ADP data release...
 
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Good morning,

(Reuters) The dollar edged down against most major currencies in Asian trade on Friday but remained on track for a weekly gain, as investors awaited U.S. jobs data later in the session to see if the labor market is stronger than previous surveys indicated.

Investors' risk sentiment also slipped with the safe-haven yen firmer after news that four police officers were fatally shot and seven wounded by snipers who targeted them during rallies in Dallas to protest against the fatal shootings of two black men by police this week.

The consensus forecast is for the U.S. economy to have added 175,000 jobs in June, according to a Reuters poll, but investors remain wary given the negative surprise in the May payrolls report, which some expect to be upwardly revised.

A report overnight showed U.S. private payrolls rose more than expected in June and jobless claims were lower than forecast.

The dollar index, which tracks the greenback against six major rivals, was down 0.2 percent at 96.091 .DXY. But it was still poised for a 0.5 percent gain in a week marked by volatile trade in the wake of Britain's surprise vote to exit the European Union last month.

The perceived safe-haven yen firmed, indicating that investors remained wary ahead of the payrolls report.

"I think many investors want to continue to focus on the Brexit risks, so even if we get some good U.S. employment data, it might not be so helpful to over come weak sentiment," said Masashi Murata, currency strategist for Brown Brothers Harriman in Tokyo.

"My basic scenario is that dollar/yen will trade between 100 and 105 through the end of September," he said.

The dollar was 0.3 percent lower against the yen at 100.45 yen, though still holding above its post-Brexit low of 99 yen hit on June 24. It was down 2 percent for the week.

Investors also pondered whether the Bank of Japan will decide to take further stimulus action at the conclusion of its two-day policy meeting on July 29, and what form such steps might take.

"Cutting rates is one of the key options the BOJ may look to when it eases policy next," strategists at Nomura wrote in a note.

"After its adoption on 29 January, its negative rate policy has not succeeded in improving investor sentiment, as concerns over the negative impact on bank earnings were highlighted more than its benefits," they said.

The euro inched 0.1 percent lower to 111.34 yen , moving back toward a 3 1/2-year low of 109.30 logged after the Brexit vote. It was poised to shed 2.6 percent for the week.

The euro edged up 0.2 percent to $1.1083, but was down 0.5 percent for the week.

Recently battered sterling was up 0.3 percent at $1.2948 , holding above 31-year lows logged earlier this week though still down about 2.5 percent for the week.

But some analysts expect it to drop to as low as $1.20 in coming months as the Bank of England prepares to ease monetary policy to blunt the impact of the Brexit move.

So, guys, today actually we have no rival to EUR again in terms of setup. All other major currencies do not show something really valuable. May be on AUD only we could get something that looks like H&S pattern on 4-hour chart, but I do not like price action on right shoulder - price has stopped on half way down to neckline and turned up again. This is not good for H&S... thus, we need more information to understand what we have on AUD...

On EUR - daily picture stands mostly the same. Our bearish setup here will ba valid until grabber will hold. ADP numbers was not bad. NFP is expected around 175K. But ADP itself is 172 K. Thus, it means that in government sector employment should drop or stay flat to get 175 K. Thus, it gives really good promises to get solid upside surprise on NFP data within few hours.
eur_d_08_07_16.png


On hourly chart all three retracements that we've discuss are done. So, if downward action will start we could get, something like Butterfly pattern. But as grabber has target lower, butterfly will be probably just intermediate pattern. It just indicates nearest targets. So, if you do not want to hold positions through weekend but market will not reach grabber's target today - you could look for butterfly targets...
eur_1h_08_07_16.png
 
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Thanks for the Eur USD trade .. its fantastic !!!

No Updates yet from you sir .. I like to take some advices .. on my tradeplan . its kind of out of topic actually .. hoping you don't mind


Two charts currently i have with my mind , So my today's trade plan is

NZDUSD Buy for Intraday

1st Chart : 06/23/2016 to 07/04/2016 if we drag a fibo on NZD Pair we can see the gains Break's the trend line and falling .. and consolidating ( near daily Support 2) also we can see 50% support of this move Breaks by a 4 Hour candle ( which is close below it ) so not taking this support , taking the Next fibonacci support for entry which is on 0.7072 area ..

2nd Chart

This chart shows previous resistance turned support zone currently and giving a Double buttom type chart pattern

So i have a Duo over here

1st 06/23/2016 to 07/04/2016 Trend is Bullish , ( So i can take it as a retracement )

2nd a Double buttom type chart pattern Over there

Plan Conclusion : Pending Buy Limit NZDUSD 0.7273 Stoploss 15 Points target Open
 

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Thanks for the Eur USD trade .. its fantastic !!!

No Updates yet from you sir .. I like to take some advices .. on my tradeplan . its kind of out of topic actually .. hoping you don't mind...

Hi, buddy,
well my 2 cent is a bit late right now - market already has answered on your question :)
As you can see, your analysis was very good, and result as well. ;)
 
Thanks sir ... its Encourage a lot when your mentor give confidence .. any views on Audusd sir ? this is my plan

AudUSD ( Buy )

Greetings and Good Evening

Idea is Buying Aud/usd currently on Mind , 4 Hour chart i have an inside bar which clearly breaks on downside , so idea kinda Bluuuurrr and risky ...

Points Noted : 1) 0.618 Fibo level is Good support for current sharp move UP

Point 2 We got a Good Thurst of Pin bar , which shows Intraday Bullishness and hinting its just retracement

Entry Idea : Daily Piviot on 7484 Area , which is not yet touched by market , Learned from mentors , Market usually touch Piviot in same candle durations. Like Daily piviot have chances to touch piviot in same day , Weekly piviot monthly piviot follow same

So , point 3 is Daily Piviot is now a nice support

Conclusion : Pending Buy on Aussie on 0.7485 Area stoploss as usual 15 points ... Hoping for the best ... Finger crossed

Caution To be Noted : Inside bar break on 4 Hour ( So trading small lot )
 

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any views on Audusd sir ? this is my plan
Well some bounce up has happened. Hope you was able to move stop to b/e.
Personally I do not have yet clear view on AUD. It stands with solid relation to gold. So, as gold could show downward retracement, that's why on AUD also something could happen, say H&S pattern...
But today NFP, anything could happen. Besides, your setup is mostly scalp trade, it could work before data release... I mostly take a look at a bit longer setups.
 
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