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USD/JPY trades slightly higher since yesterday trading session. The USD/JPY bearish trend is however maintained, heading for the 106 range. Hourly support and resistance are given at 105.55 (16/02/2018) and 109.09 (31/01/2018 high). The technical structure suggests shortterm downside moves.

We favor a long-term bearish bias. Support at 105.55 (03/05/2016 low) is almost reached. A gradual rise toward the major resistance at 125.86 (05/06/2015 high) seems unlikely. Expected to decline further support at 101.20 (09/11/2016 low).

GBP/USD trades at the 1.40 range, the upward momentum is maintained. Edging higher along hourly resistance at 1.4151 (05/02/2018). Hourly support is given at 1.3742 (16/01/2018 low). The technical structure suggests further short-term upside moves.

The long-term technical pattern is reversing. The Brexit vote had paved the way for further decline but the pair is moving to 2016 highs. Long-term support and resistance are given at 1.1841 (07/10/2017 low) and 1.5018 (24/06/2016 high).

EUR/USD is turning positive, heading to hourly resistance at 1.2434 (06/02/2018 high). Hourly support remains at 1.2165 (17/01/2018 low). The technical structure suggests upside moves.

In the longer term, the momentum is turning largely positive. We favor a continued bullish bias. Key resistance is holding at 1.2886 (15/10/2014 high) while strong support lies at 1.1554 (08/11/2017 low).

China slips towards dictatorship

According to new flow the ruling Chinese Communist Party will move to allow President Xi Jinping to stay in power ad infinitum. A next month's annual session the counties parliaments the National People Congress projected to pass the proposed amendment. This act will shift the 1982 constitution, which limited the President's term to two five-year terms in office. The government of China holds no competitive elections for leadership positions and body responsible for decision on Presidential term and constitutional amendments generally rubberstamps the party's agenda. While limiting personal freedom and increasing the likelihood of authoritarian state cannot be a positive for humanity. However, safeguarding some degree of political stability provides comfort for investors.

President Xi Jinping extending his rule doesn't come without political risk. Centralizing power make Xi solely responsible for results. However, limited red tape means he can focus on ballooning public debt, nonexistent welfare system, rebalancing from export to consumer led growth, and geopolitical diplomacy.

Core to your investment story based partially on China's protectionist behavior around key domestic companies. Consolidation of power by President Xi Jinping support this theme. Elsewhere, US President Trump is expected to slap global tariffs on US steel and aluminum imports sometime this week. While affecting other nations China will be impacted. Some would say China is Trumps primary target. This shotgun trade policy is unlikely to be well received by an all-powerful Xi.

Draghi Speech gives comfort to investors

Draghi held a positive tone yesterday, reassuring investors that inflation is underway as growth continues to take effect. Draghi also mentioned that further increase in employment (published in March 14th 2018) and a pickup in wage growth will support consumer-price growth. February Consumer Price Index Estimate Y/Y published on Wednesday will most probably remain below the 2% target (estimated at 1.50%). An additional impediment for monetary policy authorities is the recent weakening correlation between growth and inflation that renders tackling inflation target much more challenging.

European markets remained solid after the announcement, the Euro Stoxx 50 rose at 3'463 points (+0.63%), supported by Consumer Staples (+1.59%), Information Technology (1.21%), Health Care (+0.92%) and Materials (+0.68%), all sectors remaining green. Major European markets also closed in positive figures (FTSE 100: +0.62%, DAX: +0.35%, CAC40: +0.51%, Ibex 35: +0.81%, FTSE MIB: +0.15% and SMI: +0.87%). Eurozone Government yields remained stable, currently valued at 0.658% (10-year) and -0.535% (2-year).

The USD/JPY has formed a W bullish pattern straight from the W L3 support. We can also spot an ascending trend line supporting the bullish outlook. The POC zone 106.85-107.00 could spike the price upwards towards 107.15 and 107.36. However, a 4h close above 107.36 is needed for a continuation towards 107.70-85. Only below 106.50, the price should turn bearish and possibly reach 106.17.

W H3 -Weekly Camarilla Pivot (Weekly Interim Resistance)

W L3 - Weekly Camarilla Pivot (Weekly Interim Support)

W H3 - Weekly Camarilla Pivot (Weekly Interim Resistance)

W H4 - Weekly Camarilla Pivot (Strong Weekly Resistance)

D H4 - Daily Camarilla Pivot (Very Strong Daily Resistance)

D L3 – Daily Camarilla Pivot (Daily Support)

D L4 – Daily H4 Camarilla (Very Strong Daily Support)

POC - Point Of Confluence (The zone where we expect price to react aka entry zone)

The pair remains within daily cloud on Tuesday, after upside attempts in Asian session stalled under cloud top (0.7878), maintaining downside risk. Yesterday's strong upside rejection at 0.7893 and close within daily cloud was also negative signal, but clear near-term direction could be expected while the price holds in cloud. Mixed daily studies (MA's in bearish setup, but momentum studies improving) add to current outlook. On the other side, near-term techs are weak and keep the downside at risk. Break below Monday's low (0.7825) will be bearish signal for possible extension towards key supports at 0.7790 (22 Feb low) and 0.7770 (daily cloud top). To neutralize bearish threats, close above daily cloud is required. Speech of Fed's Chair Powell would provide stronger direction signal.

Res: 0.7868, 0.7878, 0.7913, 0.7947
Sup: 0.7825, 0.7803, 0.7790, 0.7770

The US Dollar has been bound in several long and short-term patterns which have guided the price lower since October 2017.

The currency pair is likely to continue falling within the following trading sessions in line with the medium-term pattern. The pair is currently trading near the border of the junior channel and could breach the upper boundary in the short term.

If and when this situation happens, the rate would encounter a resistance cluster set by the combination of the 200-hour simple moving average and the weekly R1 near 0.9428. Traders should look for opportunities to trade either direction if the aforementioned scenario occurs.

The exchange rate has been trading in a large-scale triangle after it hit the upper boundary on November 30, 2017. Also, the currency pair has formed a new junior pattern during this period.

A support cluster set by the combination of the 55-, and 200—hour SMAs and the weekly pivot point at 1.6839 was providing enough support to push the price north. However, the surge could be stopped by the weekly R1 at 1.6945 near the border of the junior pattern.

The common European currency continued to appreciate against the New Zealand Dollar after the pair touched the lower bottom of an ascending trend-line.

The exchange rate has been trading in a large-scale triangle after it hit the upper boundary on November 30, 2017. Also, the currency pair has formed a new junior pattern during this period.

A support cluster set by the combination of the 55-, and 200—hour SMAs and the weekly pivot point at 1.6839 was providing enough support to push the price north. However, the surge could be stopped by the weekly R1 at 1.6945 near the border of the junior pattern.

Following a period of strong appreciation on Monday morning, Gold was halted by the combined resistance of the 200-hour SMA and the monthly PP near the 1,340.00 mark. Most gains were erased during the following hours, thus leaving the rate circa 1,332.00 by Tuesday morning.

The 55-hour moving average has guided the pair's movement since mid-yesterday. This situation might continue during the first part of the day, thus narrowing its trading range within the bounds of this line and the 200-hour SMA.

The current positioning of the short-term channel up demonstrates that the yellow metal might still reach the senior channel circa 1,340.00 in this session. However, US fundamentals released later in the day could likewise introduce some bearish pressure towards the 1,320.00 mark.

The common European currency was fluctuating around the 55– and 100-hour SMAs during the previous session. However, the general price movement has not changed since Monday morning.

As apparent on the chart, the price is still tended slightly upwards, as it is moving along the bottom line of a four-month channel up for the third consecutive session. Technical indicators flash mixed signals for today, suggesting that the current steady movement might prevail within the following hours, as well.

It is likely that volatility is introduced in the second part of the day is due to three sets of significant fundamentals published by the US during this time. A strong support could be provided by the 55– and 100-hour SMAs circa 1.23, while gains should be capped near the weekly R1 at 1.2402.