2. Week Ahead
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Jackson Hole
Upcoming Events
US & South Korea
War Games
Durable Goods Orders
ZEW German
Economic Sentiment
Wholesale &
Retail Sales
Ifo report on German
business climateNew Homes Sales
Draghi at Germany
event / Jackson Hole
Manufacturing &
Service Sector Activity
Revised Q2 GDP
Drama in Washington
Last Week
• ECB Rhetoric EUR/USD ended the week ~1.174 after a 3-week low of 1.1661.
• FOMC Minutes
• Barcelona Attack
This Week– Jackson Hole
• Yellen likelyto prepare markets for startof balance sheet normalization in September, anythingrelatingto
future Fed trajectory may be in the greenback’s favor.
• Draghi unlikely to make material announcements (i.e. stimulus tapering/ touch on reduction of asset
purchases, albeititbeing 2 weeks to the September ECB meeting) outside of his home turf, but I expectmarkets
to position for a dovish stance from Draghi after lastThursday’s rhetoric.
Tactical Bearish Short-Term Bullish LT Bearish
3. EUR/USD
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Anticipate Choppy
Trading within Bull Flag
Clear Uptrend since Apr ‘17
Daily Chart
• 1.1714, swing low to signal near-term market top
and near-term support, 3-week low of 1.166 as
next support, could see price pulling back to 1.146
if break 1.16 (around 2016 highs/ intersection
between flag and uptrend)
• 1.1847 swing high, then 1.191 (August high), 1.2
psychological level.
2016 High: 1.1616
LT Support: 1.146
Support: 1.088
Aug 11 Swing High: 1.1847
Swing Low: 1.1714
3-week low: 1.1661
Tactical Bearish Short-Term Bullish LT Bearish
4. EUR/USD
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Weekly Chart
• Recent gains through 1.17 look constructivefor
further upside in the medium term, but ultimately
2011 downtrend remains formidable resistance.
• Eventually, ECB concerns over EUR should weigh on
it, DXY slide looks stretched – view markets as
underpricing a 3rd
hike in 2017.
LT Downtrend
Trend intersection with
Resistance: 1.2609
Tactical Bearish Short-Term Bullish LT Bearish
5. EUR/USD
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Outlook & Expectations
Tactical (<1w) Short-Term (1w-3m) Strategic (Q42017-2018)
View
Expect choppy trading within
confines of bull flag.
Anticipateresumption along
April uptrend.
Limitedupside in the long-term.
Rationale
(Fundamental)
Expect markets to position
for a dovish stancefrom
Draghi, DXY easy upside on
Fedspeak and risk aversion.
DXY expected to remain weak
in the near-term as
expectations for US tax
reform and a further hike
remain low.
Eventually, ECB concerns over EUR
should weigh on it, DXY slide looks
stretched – view markets as
underpricing a 3rd
hike in 2017.
Rationale
(Technical)
Indicators look bearish on
the daily chart, expect
trading within flag before
resuming upward.
Recent gains through the
1.17 area are supportive for
additional upside. April trend
looks robust, indicators are
supportive. Bull flag.
Long-term downtrend from 2011
has been a robust resistance, a
sustained break above 1.26,
intersection between resistance
and trend line, is unlikely.
Action
Play both sides, bearish bias
for the week. Watchout for
1.166/1.61 which may signal
move lower toward 1.146 LT
support.
Look for pair to break 1.191
(August high) then 1.2
psychological level tosignal
resumption of larger bull
trend.
Expect bull market to run out of
steam by the 1.26 level.
Tactical Bearish Short-Term Bullish LT Bearish
7. Week Ahead
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Jackson Hole
Upcoming Events
US & South Korea
War Games
Durable Goods Orders
ZEW German
Economic Sentiment
Wholesale &
Retail Sales
Ifo report on German
business climateNew Homes Sales
Draghi at Germany
event / Jackson Hole
Manufacturing &
Service Sector Activity
Revised Q2 GDP
Drama in Washington
Tactical Bullish ST Bearish LT Bullish
Last 2 Weeks
• VIX finally spiked higher, gold flirted with 1307 lastweek but ultimately got rejected.
• North Korea tensions, coolingthereof early lastweek
• Barcelona Terror Attacks
This week – is risk aversion still a theme?
• War Games: Unresolved/residual concerns surrounding North Korea tensions. Although this has retreated, it
leaves things in a fragile balance, especially with the US-South Korea jointmilitary exercise on Monday.
• US Political Scene: In the US, the domestic political dramais also another source of uncertainty.
• Gold may benefit from safe haven flows this week; last week’s rally may also nothave been exhausted.
8. Gold
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Safe Haven Substitutes
• In the short tomedium -term, gold pales in
comparison to US Treasuries as a flight to
quality asset due to tame inflation.
Tactical Bullish ST Bearish LT Bullish
9. Gold
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Comex GC1! Daily Chart
RSI
Key Resistance: 1300
MACD
Bearish Pin Bar?
• Gold has been range-trading for
sinceearly this year with 1300 as
an elusive level.
• Semblance of bearish pin bar
Tactical Bullish ST Bearish LT Bullish
10. Gold
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H4 Chart
RSI
MACD
Key Resistance: 1300
RSI
MACD
2011 Trend Line
38% Fibo 1267
Key Resistance: 1300
Near-Term Support: 1288
• 4hr chart shows a weakening uptrend with
immediate support at 1288.
• Good to have some skin in the game either
way with a small position at this level.
• Fundamental picture bullish.
• Have some skin in the game for the week
with small long at 1288.
Tactical Bullish ST Bearish LT Bullish
11. Gold
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Comex GC1! Daily Chart
Tactical Bullish ST Bearish
• In the ST, expect pullback - if
1307 was the market top last
week, first potential spot for
daily cycleto bottom will be
around support + 38%
retracement level of 1267.
• If sustained break below
1267, expect back torange
trading.
• If there is indecision around
this rea, top up on longs here
in anticipation of resumption
of bull trend.
• Broke its long-term downtrend
earlier this month.
LT Bullish
12. Gold
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COMEXGC1! Weekly Chart
Strategic View
2016 High: 1377
Next Level: 1315
Key Resistance: 1300
Next Level: 1340
• Also broke its long-term (2011) trend
lineearlier and 100SMA proceeded to
cross above it.
• If it manages to surmount 1300, next
levels will be 1315 (old support turned
resistance) and next resistanceat 1340
before contesting 1377. (2016 high)
13. Gold
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Suppressed Volatility
• VIX has been strangely
suppressed this year
compared to previous years.
Tactical Bullish ST Bearish LT Bearish
14. Gold
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Outlook & Expectations
Tactical (<1w) Short-Term (1w-1m) Strategic (Q42017-2018)
View
Current rally not yet
exhausted, after which
pullback expected.
Expect a drop back to~1270. Expect breakout of range.
Rationale
(Fundamental)
DXY quite prone togetting a
boost this week, pressuring
gold. Nonetheless, still
expect some residual risk-off.
Inflation remains tepid, other
safe haven assets (USTs)
attractiveness vs gold, etc.
Expect market volatility to pick up
with continued domestic and
geopolitical concerns,
Rationale
(Technical)
Uptrend on 4hr chart looking
shaky, with near-term
support at 1288.
Semblance of a bearish pin
bar after gold was rejected at
the level, bearish RSI & MACD
on daily chart.
Gold broke its long-term (2011)
trend lineearlier and 100SMA
proceeded to cross above it.
Action
Have some skin in the game
for now with a small long
position @ 1288.
If 1307 was the market top
last week, first potential spot
for daily cycleto bottom will
be around 38% retracement
level of 1267. Add larger long
position @ 1267.
Once1300 level is crossed, look to
realise some profit first at 1315
resistance. Other levels: 1340,
1377 (2016 high)
