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Daily Pivots: (S1) 0.8861; (P) 0.8893; (R1) 0.8912; More...

EUR/GBP's decline from 0.8967 is still in progress an reaches as low as 0.8840 so far. Intraday bias remains on the downside for 0.8771 support. Break there will confirm completion of rebound from 0.8686 and target a retest of this low. On the upside, above 0.8896 minor resistance will turn bias neutral first. Further break of 0.8967 will resume the rebound from 0.8686 to 61.8% retracement of 0.9305 to 0.8686 at 0.9069.

In the bigger picture, there are various ways to interpret price actions from 0.9304 high. But after all, firm break of 0.9304/5 is needed to confirm up trend resumption. Otherwise, range trading will continue with risk of deeper fall. And in that case, EUR/GBP could have a retest on 0.8303. But we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside.

Daily Pivots: (S1) 106.29; (P) 106.66; (R1) 107.18; More...

Intraday bias in USD/JPY remains neutral as the consolidation from 105.24 is still in progress. Note again that bullish convergence condition is seen in 4 hour MACD. On the upside, decisive break 107.67 resistance will indicate near term reversal. In such case, outlook will be turned bullish for 110.47 resistance next. But before that, another decline is still mildly in favor. Break of 105.24 will resume larger decline from 118.65 and target 100% projection of 118.65 to 108.12 from 114.73 at 104.20 next.

In the bigger picture, current development argues that the corrective pattern from 118.65 is extending. The solid break of 61.8% retracement of 98.97 to 118.65 at 106.48 now suggests that the pattern from 125.85 high is possibly extending. Deeper fall could be seen through 98.97 key support (2016 low). This bearish case will now be favored as long as 110.47 resistance holds.

Daily Pivots: (S1) 0.9486; (P) 0.9509; (R1) 0.9532; More...

Intraday bias in USD/CHF is turned neutral first with 4 hour MACD crossed below signal line. But further rise is expected as long as 0.9337 support holds. As noted before, the head and shoulder bottom formation (ls: 0.9254, h: 0.9186, rs: 0.9337) suggests near term reversal. Rise from 0.9186 should target 100% projection of 0.9186 to 0.9490 from 0.9337 at 0.9641 first. On the downside, break of 0.9337 minor support is needed to indicate completion of the rebound. Otherwise, near term outlook will be cautiously bullish even in case of retreat.

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.

Daily Pivots: (S1) 1.2273; (P) 1.2303 (R1) 1.2334; More....

EUR/USD continues to gyrate in very tight range above 1.2268 minor support. Intraday bias stays neutral. On the downside, 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. On the upside, above 1.2445will turn bias to the upside for retesting 1.2555 key resistance.

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.

Daily Pivots: (S1) 1.3792; (P) 1.3841; (R1) 1.3894; More....

GBP/USD rebounds strongly today. But it's still staying below 1.3929 resistance. Intraday bias remains neutral first. On the upside, firm break of 1.3929 will be the first sign of reversal. That is, the choppy pull back from 1.4345 could have completed at 1.3711 already. In this case, intraday bias will be turned back to the upside for 1.4144 resistance for confirming this bullish view. On the downside, break of 1.3711 will resume the decline from 1.4345 through 1.3651 resistance turned support. At this point, we'll look for strong support from 38.2% retracement of 1.1946 to 1.4345 at 1.3429 to contain downside and bring rebound.

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.

Sterling jumps broadly after Reuters reported that UK Junior Brexit Minister Robin Walker said it's very close to transition deal with the EU. But so far, no detail is reported yet. Meanwhile, Australian Dollar remains one of the strongest one today, together with the Japanese yen. Canadian Dollar is trading the the weakest one so far as last week's rebound lost steam. Euro is followed as the second one while Dollar is the third weakest. Officials from both sides continue to exchange words regarding trade relationship.

An update on Trump and EU

US president Donald Trump tweeted this morning (US time) that "Secretary of Commerce Wilbur Ross will be speaking with representatives of the European Union about eliminating the large Tariffs and Barriers they use against the U.S.A. Not fair to our farmers and manufacturers." That's seen as a follow up to his tweet over the weekend that "the European Union, wonderful countries who treat the U.S. very badly on trade, are complaining about the tariffs on Steel & Aluminum." And he warned, "if they drop their horrific barriers and tariffs on U.S. products going in, we will likewise drop ours. Big Deficit. If not, we Tax Cars etc. FAIR!"

ECB Smets and Coeure sound cautious

ECB Governing Council member Jan Smets said that "inflation pressures could take more time to build." He pointed out that "the level of potential output may have become higher due to structural reforms and… slack may be bigger." Meanwhile, he also emphasized it's "absolutely crucial" to meet the inflation target and "not accept a level below that:. Regarding growth, Smets said it's "too early to conclude that growth is plateauing." He added that "come soft indicators have been a bit weaker but the recovery is on solid footing and we are in a clear, expansionary period."

ECB Executive Board member Benoit Coeure reiterated that interest rates will stay at "very low levels", "far beyond the end of QE. Like many others, he pointed out "inflation is not quite where we would like it to be." Meanwhile, he also noted that was discussion on a first rate hike in mid-2019

North Korea quiet on meeting with US

North Korea leader Kim Jong-un is set to meet with Trump by the end on May on the topic of denuclearization. It's reported that Kim would want to have a peace treaty with the US. But other than that, the country is so far very quiet on the topic. South Korea's Ministry of Unification spokesman Baik Tae-hyun said today that "we have not seen nor received an official response from the North Korean regime regarding the North Korea-U.S. summit." And, "I feel they're approaching this matter with caution and they need time to organize their stance."

Japan BSI sentiments dropped broadly

Japan business sentiments weakened generally in Q1. Large all industry index dropped to 3.3, down from 6.2. Large manufacturing index dropped to 2.9, down from 9.7. Large non-manufacturing index dropped to 3.4, down from 4.5. Outlook for Q2 showed further deterioration. But large companies are expectation a rebound in Q3. Deteriorations are also seen in sentiments of small and mid sized companies for Q1. Also from Japan machine tool orders rose 39.5% yoy in February.

GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.3792; (P) 1.3841; (R1) 1.3894; More....

GBP/USD rebounds strongly today. But it's still staying below 1.3929 resistance. Intraday bias remains neutral first. On the upside, firm break of 1.3929 will be the first sign of reversal. That is, the choppy pull back from 1.4345 could have completed at 1.3711 already. In this case, intraday bias will be turned back to the upside for 1.4144 resistance for confirming this bullish view. On the downside, break of 1.3711 will resume the decline from 1.4345 through 1.3651 resistance turned support. At this point, we'll look for strong support from 38.2% retracement of 1.1946 to 1.4345 at 1.3429 to contain downside and bring rebound.

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.

Economic Indicators Update

The DAX index has posted gains in the Monday session. Currently, the DAX is trading at 12,400.00, up 0.44% since the Friday close. It’s a quiet start to the week, with no eurozone indicators.

It was an excellent week for European stock markets, and the DAX surged with a 4.4% gain. There was concern on the part of investors after US President Trump made good on his threat and imposed stiff tariffs on steel imports, drawing harsh criticism from the EU. However, Trump has exempted Canada and Mexico from the tariffs, and has said that Washington could ease the duties on other countries as well. Importantly, is strong domestic opposition to Trump’s move, including senior Republican lawmakers who have said they will work to overturn the tariffs, which could spark an all-out trade war. So far, the markets are confident that a solution to the tariff tussle will be found.

The ECB didn’t change the benchmark interest rate on Thursday, which remained pegged at 0.00%. Still, the ECB meeting had plenty of drama, as policymakers removed a long-standing clause known as ‘easing bias’, which stated that monthly asset purchases could be increased if economic conditions were to worsen. The removal of easing bias can be seen as a small step towards winding up the asset program, which is scheduled to end in September. However, Mario Draghi dampened the party, saying that that eurozone inflation could remain subdued, so the Bank’s monetary policy would remain ‘reactive’. Investors took the comments as a sign that the ECB is no rush to tighten monetary policy, which boosted the German stock markets, while sending the euro sharply downwards.

Entering into US session, NZD/CAD is the biggest mover for today. However, it seems to be losing momentum. On the other hand, GBP/CAD is clearly picking up strength.

In particular that's help by selloff and EUR/GBP which could now be finally heading heading to 0.88 handle.

Always look deeper!

Trump just tweeted regarding tariffs and trade with E: -

"Secretary of Commerce Wilbur Ross will be speaking with representatives of the European Union about eliminating the large Tariffs and Barriers they use against the U.S.A. Not fair to our farmers and manufacturers."

The U.S dollar continues to retrace lower against the Japanese yen, after the pair moved to overextended levels on Friday, following a stronger than expected Non-farm payrolls jobs report. The USDJPY pair currently trades around the 106.55 level, with key near-term upside technical resistance now found at the 106.72 level. Moving into the U.S trading session, the intraday directional bias of the U.S dollar index and U.S stock markets are likely to guide the USDJPY pair.

The USDJPY pair is likely to see further gains whilst trading above the 106.45 level, key upside resistance is found at the 106.72 and 107.04 level.

Should USDJPY price-action move convincingly below the 106.45 level, intraday sellers are likely to test towards the 106.00 support level.