BOC: September CPI Not Major Obstacle To October Cut (1/2)

• RES 4: 151.62 61.8% retracement of the Jan 10 - Apr 22 bear leg
• RES 3: 150.92 High Aug 1 and a key resistance 
• RES 2: 149.64 76.4% retracement of the Aug 1 - Sep 17 bear leg 
• RES 1: 148.28/149.14 High Sep19 / High Sep 3  
• PRICE: 147.95 @ 20:15 BST Sep 19
• SUP 1: 145.49 Low Sep 17 and a pivot support 
• SUP 2: 145.40 50% retracement of the Apr - Aug upleg
• SUP 3: 144.10 61.8% retracement of the Apr - Aug upleg
• SUP 4: 143.45 Low Jul 3 

USDJPY recovered sharply from last Wednesday’s low. A bullish candle pattern on Tuesday - a hammer formation - provided an early reversal signal. On Wednesday, the pair breached a number of important short-term support levels, however, this has not confirmed a bearish threat. A continuation higher would open 149.14, the Sep 3 high. Pivot support is 145.49, the Sep 17 low.

• RES 4: 0.8800 Round number resistance   
• RES 3: 0.8769 High Jul 28 and the bull trigger
• RES 2: 0.8744 High Aug 7
• RES 1: 0.8729 High Sep 19   
• PRICE: 0.8722 @ 20:01 BST Sep 19
• SUP 1: 0.8643/8597 50-day EMA / Low Aug 14 and the bear trigger
• SUP 2: 0.8562 50.0% retracement May 29 - Jul 28 upleg 
• SUP 3: 0.8540 Low Jun 30 
• SUP 4: 0.8514 61.8% retracement May 29 - Jul 28 upleg

Recent weakness in EURGBP has been corrective and last week’s recovery confirmed the end of the corrective phase. Support to watch lies at 0.8597, the Aug 14 low. Clearance of this level would cancel a bull theme and reinstate a recent bearish threat. For bulls, the resumption of gains opens 0.8744, the Aug 7 high. Key resistance and the bull trigger is at 0.8769, the Jul 28 high. First support is 0.8643, the 50-day EMA.

• RES 4: 1.3893 1.236 proj of the Aug 1 - 14 - Sep 3 price swing     
• RES 3: 1.3789 High Jul 1 and key resistance
• RES 2: 1.3753 High Jul 2
• RES 1: 1.3661/3726 High Sep 18 / 17 
• PRICE: 1.3468 @ 19:58 BST Sep 19
• SUP 1: 1.3463 Low Sep 19
• SUP 2: 1.3433 Trendline support drawn from the Aug 1 low
• SUP 3: 1.3333 Low Sep 3 
• SUP 4: 1.3142 Low Aug 1 and a key support      

A bullish theme in GBPUSD remains intact and the move down from last Wednesday’s high is considered corrective - for now. However, the pair has traded through the 50-day EMA and this signals scope for a deeper retracement. The next support to watch lies at 1.3449, a trendline support drawn from the Aug 1 low. For bulls, a resumption of gains would refocus attention on key short-term resistance at 1.3726, the Sep 17 high.