Forex Charts

FX Daily

In the euro area the main event today will be the release of money supply M3and credit data for August.

The ideal correction for Sterling is unfolding accordingly.

The 4-hour chart shows a pivotal zone for support today as prices are testing the sharp up channel that contained wave-(iii).

The right divergences are in place for a bottom to form in Euro but

The up channel, still intact, contains wave-(1) of what we expect to be a much larger uptrend towards 1.15.

Focus will be on flash estimates for PMIs. In the euro area we expect bothmanufacturing PMI and service PMI to

With little natural resistance above, the next upside level of interest is the measured move target at 109.96;

The first signal that wave-3 (1.37-1.2826) is complete is a rally through 1.2925 followed by 1.2995.

In the euro area, ECB president Mario Draghi will testify before the EuropeanParliament’s Economic and Monetary Committee at 15:00 CET.

Sterling halted at a major confluence of resistance and can now resume lower to 1.60 (at a minimum).

Our wave-v’ down to mid 1.27s call stands; any move below 1.2835 can satisfy this final leg in a cycle that began from 1.34.

Main focus will be the digestion of the Scottish referendum. The ‘No’ vote means wewill see some relief in the markets.