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Daily Pivots: (S1) 0.9414; (P) 0.9454; (R1) 0.9478; More...

Intraday bias in USD/CHF remains neutral for the moment. At this point, further rise is still expected with 0.9356 support intact. Above 0.9533 will target 0.9626 fibonacci level. However, break of 0.9356 will indicate that the rebound has completed. In such case, intraday bias will be turned back to the downside for retesting 0.9186 low.

In the bigger picture, fall from 1.0342 is seen as a medium term down trend. Current development is raising the chance that it is completed. But there is no confirmation yet. Focus will now be back on 38.2% retracement of 1.0342 (2016 high) to 0.9186 (2018 low) at 0.9626. Sustained break there will add much credence to the case of trend reversal and target 61.8% retracement at 0.9900 and above). However, rejection from 0.9626 will maintain medium term bearishness for another low below 0.9186.

For the 24 hours to 23:00 GMT, the AUD declined 0.29% against the USD and closed at 0.7855.

LME Copper prices rose 0.4% or $26.0/MT to $6883.0/MT. Aluminium prices declined 0.8% or $17.0/MT to $2080.0/MT.

In the Asian session, at GMT0400, the pair is trading at 0.7873, with the AUD trading 0.23% higher against the USD from yesterday's close.

Overnight data revealed that Australia's Westpac consumer confidence index rose 0.2% MoM to a level of 103.0 in March, compared to a reading of 102.7 in the prior month.

The pair is expected to find support at 0.7847, and a fall through could take it to the next support level of 0.7820. The pair is expected to find its first resistance at 0.7899, and a rise through could take it to the next resistance level of 0.7924.

Looking ahead, Australia's consumer inflation expectation data for March, set to release overnight, will be eyed by traders.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the EUR rose 0.48% against the USD and closed at 1.2393, as the Organisation for Economic Co-operation and Development (OECD) raised its growth forecast for Euro-zone to 2.3% in 2018 and 2.1% in 2019.

The US Dollar declined against its key counterparts, amid fresh political tensions in the US after the US President, Donald Trump, unexpectedly ousted the Secretary of State, Rex Tillerson following a series of public rifts.

The greenback extended its losses, after the latest inflation report suggested that the Federal Reserve (Fed) would hike interest rates only gradually this year.

Data indicated that the US consumer price index (CPI) advanced 0.2% on a monthly basis in February, meeting market expectations and compared to a rise of 0.5% in the previous month.

Other data showed that the nation's NFIB small business optimism index climbed more-than-estimated to a level of 107.6 in February, compared to a reading of 106.9 in the prior month, while markets were expecting for an increase to a level of 107.1.

Separately, the OECD boosted its global growth forecast to 3.9% for both 2018 and 2019, up from a previous estimate of 3.6% for both years, citing a rebound in global trade and investments. Moreover, the organisation expects the US economy to grow 2.9% this year and 2.8% in 2019, due to recent enacted tax cuts, up from 2.5% and 2.1% estimated previously.

In the Asian session, at GMT0400, the pair is trading at 1.2405, with the EUR trading 0.10% higher against the USD from yesterday's close.

The pair is expected to find support at 1.2343, and a fall through could take it to the next support level of 1.2280. The pair is expected to find its first resistance at 1.2440, and a rise through could take it to the next resistance level of 1.2474.

Moving ahead, traders would eye a speech by the European Central Bank's (ECB) Chief, Mario Draghi, due in a few hours. Additionally, the Euro-zone's industrial production data for January as well as Germany's final inflation figures for February, would be on investors' radar. Later today, the US advance retail sales for February and business inventories data for January, will keep investors on their toes.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

Daily Pivots: (S1) 1.3892; (P) 1.3942; (R1) 1.4011; More....

Intraday bias in GBP/USD remains on the upside for 1.4144 resistance. Current development suggests that corrective pull back from 1.4345 has completed at 1.3711 already. Break of 1.4144 should confirm this bullish case and target 1.4345 high and above. On the downside, below 1.3840 minor support will turn bias to the downside to extend the corrective fall from 1.4345 instead.

In the bigger picture, as long as 1.3038 support holds, medium term outlook in GBP/USD will remains bullish. Rise from 1.1946 is at least correcting the long term down from 2007 high at 2.1161. Further rally would be seen back to 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466. However, GBP/USD fails to sustain above 55 month EMA (now at 1.4259) so far. Break of 1.3038 support, will suggest that rise from 1.1946 has completed and will turn outlook bearish for retesting this low.

For the 24 hours to 23:00 GMT, the GBP rose 0.50% against the USD and closed at 1.3969, after the Spring Budget statement indicated an upgrade to UK’s economic growth forecast for this year.

The UK’s Chancellor of the Exchequer, Philip Hammond, in his first Spring Statement, raised Britain’s growth projections and predicted a fall in government borrowing as well as national debt over the coming years. Hammond indicated that the Office for Budget Responsibility (OBR) has upgraded UK’s economic growth forecast to 1.5% for 2018, from an earlier prediction of 1.4%. However, growth outlook for 2021 and 2022 were revised lower to 1.4% and 1.5%, respectively. Further, the Chancellor stated that British inflation should fall back to the central bank’s 2.0% target over the next 12 months, while forecasting that public spending could increase in 2018’s Autumn Budget.

Separately, the OECD predicted that Britain’s economic growth would expand to 1.3% in 2018, up from 1.2% estimated earlier, amid a strengthening global recovery.

In the Asian session, at GMT0400, the pair is trading at 1.3984, with the GBP trading 0.11% higher against the USD from yesterday’s close.

The pair is expected to find support at 1.3907, and a fall through could take it to the next support level of 1.3831. The pair is expected to find its first resistance at 1.4028, and a rise through could take it to the next resistance level of 1.4073.

With no macroeconomic releases in the UK today, investor sentiment would be determined by global macroeconomic events.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD rose 0.1% against the JPY and closed at 106.49.

In the Asian session, at GMT0400, the pair is trading at 106.44, with the USD trading 0.1% lower against the JPY from yesterday's close.

Minutes of the Bank of Japan's (BoJ) January meeting showed that some policymakers called for monitoring the impact of the current accommodative policy. Further, it revealed that most of the officials shared the view that the central bank should continue to pursue its powerful monetary easing until inflation hits its 2.0% target.

On the macro front, Japan's machinery orders rebounded 8.2% in January, topping market expectations for a rise of 5.2%. Machinery orders had registered a drop of 11.9% in the previous month.

Meanwhile, the OECD stated that Japan's economy will likely grow 1.5% this year before slowing to 1.1% in 2019. The organisation had expected the world's third largest economy to grow 1.2% in 2018 and 1.0% in 2019.

The pair is expected to find support at 106.13, and a fall through could take it to the next support level of 105.82. The pair is expected to find its first resistance at 107.02, and a rise through could take it to the next resistance level of 107.60.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.36% against the CHF and closed at 0.9437.

In the Asian session, at GMT0400, the pair is trading at 0.9430, with the USD trading 0.07% lower against the CHF from yesterday’s close.

The pair is expected to find support at 0.9405, and a fall through could take it to the next support level of 0.9381. The pair is expected to find its first resistance at 0.9474, and a rise through could take it to the next resistance level of 0.9519.

In absence of any macroeconomic releases in Switzerland today, investor sentiment would be determined by global macroeconomic factors.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD rose 0.91% against the CAD and closed at 1.2957.

Yesterday, the Paris-based think tank, OECD nudged up its growth forecast for Canada to 2.2% in 2018, up from 2.1% it had forecasted earlier in November.

In the Asian session, at GMT0400, the pair is trading at 1.2945, with the USD trading 0.09% lower against the CAD from yesterday's close.

The pair is expected to find support at 1.2856, and a fall through could take it to the next support level of 1.2767. The pair is expected to find its first resistance at 1.3009, and a rise through could take it to the next resistance level of 1.3073.

Ahead in the day, market participants would look forward to Canada's Teranet/National Bank house price index for February.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

Daily Pivots: (S1) 1.2334; (P) 1.2370 (R1) 1.2427; More....

EUR/USD's rebound continues today. While intraday bias remains neutral, focus is back on 1.2445. Break there will turn bias back to the upside for 1.2555 high. Decisive break there will carry larger bullish implication. But again, break of 1.2268 will argue that fall from 1.2555 is likely resuming. And intraday bias will be turned back to the downside for 1.2154 support and below.

In the bigger picture, key fibonacci level at 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516 remains intact despite attempts to break. Hence, rise from 1.0339 medium term bottom is still seen as a corrective move for the moment. Rejection from 1.2516 will maintain long term bearish outlook and keep the case for retesting 1.0039 alive. Firm break of 1.1553 support will add more medium term bearishness. However, sustained break of 1.2516 will carry larger bullish implication and target 61.8% retracement of 1.6039 to 1.0339 at 1.3862.

Global markets tumbled on concern that US President Donald Trump is finally starting the steps towards a full blown trade war with China. DOW ended down -0.68%, or -171.58 pts at 25007.03. S&P 500 also lost -0.64%, or -17.71 pts to 2765.31. NASDAQ, which reached a new record high at 7637.27, reversed and closed down -1.02%, or -77.31 pts at 7511.01. Asian markets follow with Nikkei trading down -0.7%, HK HSI down -1.3% and China SSE down -0.5% at the time of writing.

In the currency markets, Dollar is under broad based pressure today, it's trading as the second weakest for the week, just next to Canadian Dollar. Sterling is the strongest one for the week, followed by Swiss Franc.

Trump clearing the way on measures to push back China threats

Trump fired Secretary of State Rex Tillerson after some clashes, and replaced him by Mike Pompeo, Director of the CIA. That's less than a week after departure of White House economic advisor Gary Cohn. Both Tillerson and Cohn are seen as the globalists in Trump's team. And their departure, is another step in the protectionist direction. Also, Pompeo is known for endorsing "pushing back against the Chinese threat".

Separately, it's reported that Trump is preparing a new package targeted at China, on trade and investments. There could be as much as USD 60b tariffs on Chinese goods. The tariffs, associated with a "Section 301" intellectual property investigation, under the 1974 US Trade Act begun in August last year, could come in the very near future.

And, White House blocked semi-conductor manufacturer Broadcom's bid for the semiconductor maker. Trump declared earlier in the week that the proposed US$117B deal was prohibited on national security grounds. He noted that "there is credible evidence" that Broadcom through control of Qualcomm "might take action that threatens to impair the national security of the United States". Indeed, it is believe that the key reason behind is the US concern over Broadcom's business practice of cost reduction. It is concerned that the company would reduce investment and weaken Qualcom's 5G development roadmap, thus weakening US position in the technology and giving way to China to take the lead.

BoJ Kuroda repeated his message: Long way from meeting inflation target

BoJ Governor Haruhiko Kuroda repeated his rhetorics that Japan is still long way from meeting the 2% inflation target. Therefore, it's too early to talk about stimulus exit. But he assured the parliament that the central bank has the tools to smoothly exit from the ultra-loose monetary policy when needed. Kuroda added that "by combining various tools, it's possible to shrink the BoJ's balance sheet at an appropriate pace while keeping markets stable." Meanwhile, he also hailed that while keeping long term yield low with the policy, BoJ also managed to maintain markets' trust in JGBs. He noted "If market trust over Japan's debt is eroded, it will be difficult for us to keep interest rates low with our yield curve control policy."

Release earlier, minutes of BoJ January meeting showed that some board members were concerned with the impact of the loose monetary policy, especially on banks. The minutes showed "some members said it was important to continue to monitor and assess the positive impacts and side-effects of the current monetary easing policy, including its effects on Japan's banking system." Some member suggested to raised the yield target as economy improves. But another member (obviously Goushi Kataoka), called for ramping up the stimulus.

Canadian Dollar tumbles as markets interpreted Poloz as dovish

BoC Governor Stephen Polo sounded quite balanced on the labor market in his speech overnight. But markets looked at the dovish side of it. Poloz said there are untapped potential in the economy, including workforce by youth, women, indigenous peoples, Canadians with disabilities and recent immigrants to Canada. And, he added "it is not much of a stretch to imagine that Canada's labour force could expand by another half a million workers." On the other hand, he noted that participation rate usually declines during recessions and rebounds on recovery. But "that has yet to occur for young Canadians". He over tone suggested there could be larger slack in the labor market and the economy could handle more growth without inflation. The markets interpreted that as a warning that tightening may not happen as fast as they expected. But after all, to us, NAFTA renegotiation is the most critical factor for BoC ahead.

On the data front

New Zealand current account deficit narrowed to NZD -2.77b in Q4. Australia Westpac consumer confidence rose 0.2% in March. Japan machine orders rose 8.2% mom in January. China retail sales rose 9.7% yoy in February, industrial production rose 7.2%, fixed assets investment rose 7.9% yoy.

Looking ahead, German CPI, Eurozone industrial production and employment will be featured in European session. US retail sales, PPI and business inventories will be featured later in the day.

EUR/USD Daily Outlook

Daily Pivots: (S1) 1.2334; (P) 1.2370 (R1) 1.2427; More....

EUR/USD's rebound continues today. While intraday bias remains neutral, focus is back on 1.2445. Break there will turn bias back to the upside for 1.2555 high. Decisive break there will carry larger bullish implication. But again, break of 1.2268 will argue that fall from 1.2555 is likely resuming. And intraday bias will be turned back to the downside for 1.2154 support and below.

In the bigger picture, key fibonacci level at 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516 remains intact despite attempts to break. Hence, rise from 1.0339 medium term bottom is still seen as a corrective move for the moment. Rejection from 1.2516 will maintain long term bearish outlook and keep the case for retesting 1.0039 alive. Firm break of 1.1553 support will add more medium term bearishness. However, sustained break of 1.2516 will carry larger bullish implication and target 61.8% retracement of 1.6039 to 1.0339 at 1.3862.

Economic Indicators Update