Sample Category Title

The Kiwi strengthened against the US Dollar on New Zealand's retail sales data on Thursday. The NZD/USD currency pair initially rose 0.17%, or 12 base points, to 0.7343, but soon after that it came down to the 0.7320 area.

Statistics New Zealand stated that the country's retail sales growth stepped up the game by gaining 1.7% in the December quarter, following an upwardly-revised 0.3% growth recorded in the prior period. The report showed that retail sales volumes soared mostly on the back of an increase in spending on food and beverages, supermarket shopping and cars. Westpac's Senior Economist Satish Ranchhod said that growth in spending will continue its steady pace in the early 2018.

The AUD/USD has formed a bullish W pattern, and we could see rejections from POC and POC2. At this point, the price is struggling to break daily H5 but is still above W L3 pivot. Traders should pay attention to bounces from 0.7860-68 (POC1) or 0.7840-53 (POC2) if the price retraces further. Target is 0.7920. A 4h close above 0.7820 should target 0.7982. Bears should be in control only below the X-Cross of the green trend line and W L3 - 0.7800.

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 British pound has opened the new trading week strongly against the U.S dollar, following bullish comments from the Bank of England’s Dave Ramsden over the weekend. The GBPUSD pair is currently testing the key 1.4008 level, as hawkish comments on 2018 rate rises from Deputy BOE Governor Ramsden underpin early week pound strength. Moving into today’s European trading session, a sustained move above the key 1.4008 level is likely to encourage further sterling buying.

The GBPUSD pair is intraday bullish whilst trading above the 1.3968 level, key intraday resistance is currently located at the 1.4008 and 1.4080 levels.

Should GBPUSD price-action decline below the 1.3968 level, the pair may then move back toward the key 1.3938 and 1.3901 support level.

The euro continues to consolidate towards the lower end of its recent trading range against the greenback, ahead of a trading week defined by market moving risk events. The EURUSD pair currently trades just above the 1.2300 handle, with financial markets cautious ahead of new Federal Reserve Chair Jerome Powell's first testimony before U.S senate, and the upcoming Italian elections. In the short-term, EURUSD traders look towards New Home Sales data from the United States today and the key 90.00 level on the U.S dollar index.

The EURUSD pair remains bearish while trading below the 1.2321 level, further declines towards 1.2992 and 1.2259 seem likely.

Should the EURUSD pair start to trade below the 1.2321 level, buyers are likely to test resistance around the 1.2351 and 1.2390 levels.

Monday kicks off a highly active week in the financial markets. On the agenda is a steady stream of US economic data and an important speech from one of the Federal Reserve’s policymakers.

European data headline a light European release schedule on Monday. At 07:00 GMT, Nationwide will report on housing prices for February. A few hours later, the British Bankers Association (BBA) will report on mortgage approvals for the month of January. Approvals are expected to drop to 35,928 from 36,115 in December.

Switzerland will also release fourth quarter employment data at 08:15 GMT. Overall employment levels are expected to rise slightly to 4.963 million, compared with 4.956 million in Q3.

Ahead of the New York session, Federal Reserve Bank of St. Louis President James Bullard will deliver a speech. The remarks are scheduled for 13:00 GMT.

In terms of economic data, the Chicago Fed will release its National Activity Index at 13:30 GMT. The monthly report provides an overview of the nation’s overall economic health. For January, the National Activity Index is expected to read 0.15, down from 0.27 in December.

Later in the session, the Department of Commerce will report on new home sales for the month of January. The sale of new residential units is forecast to edge up 0.1% to a seasonally adjusted annual rate of 642,000. New sales dropped 9.3% the month before.

At 15:30 GMT, the Dallas Fed will report on manufacturing conditions in the Texas region. The Manufacturing Business Index for February is expected to read 28.4, down from 33.4 the previous month.

In currency news, the US dollar extended its recovery on Monday, with the DXY dollar index hitting a high of 90.00. The index bottomed at fresh three-year lows on 15 February but has since recovered 1.5%.

EUR/USD

Since hitting a high near 1.2600 ten days ago, the EUR/USD has given back nearly 300 pips. Although the pair remains in an uptrend, the bulls appear to be losing momentum as the dollar shows signs of rebounding. The pair is currently trading below 1.2300, with immediate resistance found at the 1.2340 region.

GBP/USD

Cable has also tapered off recent highs, as the US dollar continued to rebound from multi-year lows. The GBP/USD touched a session high of 1.3999 on Monday. The bulls are eyeing the 1.4025 level for signs of a bullish breakout.

USD/JPY

The USD/JPY was little changed on Monday, as the pair continued to hold below 107.00. A rebounding dollar drove the USD/JPY to a high of 107.81 last week. However, prices have been trending lower ever since. The pair has established a bottom of 105.70, which is the low from 16 February. A bearish reversal for the greenback could send USD/JPY below this key threshold.

The Australian dollar moved higher in early Monday's trading, backed by weaker US dollar, on repeated probe above rising daily cloud (cloud top lies at 0.7859) and hit levels near 0.79 barrier (round-figure resistance, reinforced by falling 20SMA).

Firm break above daily cloud will be bullish signal, however, mixed setup of daily MA's suggests no clear direction signal.

The pair gained momentum but needs close above 20SMA to generate firmer signal for extension of recovery leg from 0.7803, where bears stalled on approach to key support at 0.7776, provided by converged 100/200SMA's.

Broken cloud top now acts as support which should contain dips to keep fresh bulls in play, otherwise near-term outlook could turn bearish again if the pair fails to close above daily cloud.

Res: 0.7880, 0.7900, 0.7913, 0.7947
Sup: 0.7859, 0.7828, 0.7803, 0.7790

The pair holds in red at the beginning of European session and cracked pivotal support at 106.44 (Fibo 61.8% of 105.54/107.90 upleg), after short-lived probe above 107 barrier in early Asian trading.

Fresh weakness probes below the base of thick 4-hr cloud (106.54), weighed by thickening falling hourly cloud (spanned between 106.95 and 107.24) and falling 10SMA (106.90).

Bears need close below Fibo support at 106.44 to confirm continuation of bear-leg from 107.90 (last week’s strong upside rejection) towards key support at 105.54 (16 Feb low, reinforced by 20-d Bollinger band), as daily studies in full bearish setup support the notion.

Immediate bears could be delayed on bounce and close above falling 10SMA, but stronger bullish signal could be expected on sustained lift above 108 resistance zone (last week’s rejection, reinforced by falling 20SMA).

Res: 106.90, 107.00, 107.24, 107.66
Sup: 106.37, 106.10, 105.54, 105.00

Cable maintains bullish tone at the beginning of the week and rallied to new one-week high at 1.4046 after taking out psychological 1.40 barrier.

Strong bullish acceleration in early Monday’s trading improved technical picture as the pair broke above 1.4034 pivot (Fibo 61.8% of 1.4144/1.3856 bear-leg), while daily MA’s (10;20;30) turned in bullish setup and 14-d momentum broke into positive territory, supporting the advance.

Bulls pressure barrier at 1.4054 (daily Kijun-sen) and eye 1.4076 (Fibo 76.4%), break of which would open way towards key near-term resistance at 1.4144 (16 Feb high).

Broken 1.40 hurdle now offers initial support ahead of 1.3972/66 (broken daily Tenkan-sen/broken Fibo 38.2% of 1.4144/1.3856 bear-leg) which should keep the downside protected.

Fundamentals are also working in favor of sterling as BoE’s deputy governor Ramsden showed hawkish steer towards possible rate hike in May, in his newspaper interview on Sunday.

Hopes for softer Brexit also support pound, as opposition Labour Party backs custom union with EU.

Res: 1.4054, 1.4076, 1.4100, 1.4144
Sup: 1.4034, 1.4000, 1.3966, 1.3904

The Euro ticked higher in early Monday's trading, testing levels above 1.23 handle, but without clear near-term direction, as the pair holds within 1.2260/1.2360 congestion and extends range-trading into fourth consecutive day.

Some recovery was seen in Asia on Monday as dollar slipped, but the action remains within the limits on cautious trading ahead of key events, speech of ECB President Mario Draghi today and the first congressional testimony on new Fed Chairman Jerome Powell, due on Tuesday.

Mario Draghi is widely expected to maintain neutral tone in order not to push the Euro too high, as the central bank is moving towards stabilizing monetary policy on cautious steps, suggesting that Draghi's speech today wouldn't make stronger impact on markets.

On the other side, markets are awaiting to hear an ideas about new Fed chief's view about the monetary policy, whether Powell will stay in line with his predecessor or would take more radical steps.

Markets expect Powell not to make too much noise at his first testimony and likely stay in neutral mode, looking for more evidence from economic data to signal further steps regarding monetary policy.

From the technical point of view, bearishly aligned studies maintain negative near-term outlook.

The action remains capped by 30SMA (1.2344) for the fourth day and keeps negative bias, with 14-d momentum in negative zone supporting the notion.

The downside is expected to remain vulnerable while 30SMA caps, with range floor at 1.2260 marking initial support and guarding key points at 1.2205 (09 Feb low) and 1.2173 (Fibo 38.2% of 1.1553/1.2555 ascend), loss of which would generate stronger bearish signal.

At the upside, 30SMA barrier guards upper pivots at 1.2370 zone (converged 10/20 SMA's / Fibo 38.2% of 1.2555/1.2260 downleg), close above which will be strong bullish signal for stronger recovery towards the mid-zone of larger 1.2205/1.2555 range.

Res: 1.2344, 1.2370, 1.2407, 1.2442
Sup: 1.2279, 1.2260, 1.2235, 1.2205

Here are the latest developments in global markets:

FOREX: The dollar index which tracks the strength of the dollar against a basket of six major currencies opened lower in Asia, touching a session-low of 81.67 (-0.25%). Dollar/yen slipped to a one-week low of 106.43, while aussie/dollar and kiwi/dollar were the best performers, with the former peaking at 0.7880 and the latter surging to 0.7336. Pound/dollar bounced back up to 1.4015 and euro/dollar managed to pare Friday's losses, returning to 1.2327.

STOCKS: Asian stock markets advanced on Monday following Friday's Wall Street rally and news that the Chinese President Xi Jinping was planning to remove a constitutional clause limiting presidential service to two terms. This would allow him to stay in office indefinitely. Japan's Topix and Nikkei 225 closed 0.80% and 70% higher respectively, while Hong Kong's Hang Seng rose by 0.74%. Shanghai's SE composite index was up by 1.25%. In Europe, equities were also in the green.

COMMODITIES: Oil prices headed towards three-week highs after the Saudi Arabian Energy Minister said on Saturday that Saudi Arabia will manage to hold its crude oil production well below its output caps in the first quarter of the year, while he also mentioned that OPEC members would be able to relax their production curbs next year when the deal expires, under a permanent framework that would stabilize oil markets. Meanwhile in Libya, the El feel oil field was shut after guards of the field protested to demand higher payments, giving further support to oil prices. WTI crude and Brent were last seen at $63.65/ounce (+0.14%) and $67.35/ounce (+0.07%) respectively. In precious metals, gold posted significant gains, jumping to $1340.90/ounce (+0.79%) on the back of a weaker dollar.

Major Movers: Dollar weakens but all eyes on Powell

The dollar started the week on the backfoot as the US Treasury yields extended their losses from a 4-year high of 2.975 percent reached on Wednesday, falling to 2.866 percent on Monday. Investors, however, held a cautious on the currency as all eyes are now on the new Federal Reserve chief, Jerome Powell, who is expected to make his first major appearance before the House Financial Services Committee on Tuesday.

Discussing the Fed's Semi-Annual Monetary Policy Report and making comments on the state of the economy, Powell is anticipated to have similar views with his predecessor Janet Yellen, signaling that further monetary tightening is on the way this year, but any rate hikes would come on a gradual pace. Besides, on Friday the Fed's Washington-based Board of Governors stated in its semiannual report to Congress on monetary policy that despite the recent stock sell-off and the subdued inflationary pressures, it sees “steady growth continuing and no serious risks on the horizon that might pause its planned pace of rate rises”. Note that Fed policymakers project three rate rises this year. Powell will also testify in front of the Senate committee on Thursday.

Meanwhile, the Bank of Japan's Governor, Haruhiko Kuroda, speaking in Parliament on Monday, dismissed any plans to review monetary policy amid elusive inflationary pressures, saying that the central bank will maintain its current ultra-easy monetary policy as “Japan's economy is no longer in a state that can be described as deflation”.

In other news, the Bank of England's Deputy Governor, David Ramsden, argued that interest rates might have to rise faster than previously thought if wage growth rises sooner this year according to the Sunday Times newspaper. This comes in contrast to his stance in November, when he held a dovish stance, opposing the BOE's decision to raise rates for the first time in a decade.

Day Ahead: Numerous speeches could dominate attention in absence of data

Monday's calendar is a light one, with the focus possibly remaining in several speeches during the day, while the US dollar started the week with steep losses. Investors are waiting the New Fed chair Jerome Powell's testimony that will take place tomorrow.

In other data releases, in the UK, gross mortgage approvals will be available at 0930 GMT. Analysts anticipate the figure to stand at 37.2K in January compared to 36.1K in the preceding month. Also, later in the day, January's new home sales will be released out of the US.

At 1000 GMT the ECB Executive Board member Benoit Coeure will deliver a welcome address at the first meeting of the Working Group on Euro Risk-Free Rates. Later, at 1300 GMT St. Louis Fed President James Bullard will give a presentation on the US economy and monetary policy before the National Association for Business Economics conference titled “Promoting Sustained Growth: Policy Tensions and Risks”. At the same event, Fed Vice Chair for Supervision Randal Quarles will give a speech on “A View From the Federal Reserve Board”. ECB President Mario Draghi is scheduled to give a speech to the European Parliament's ECON committee at 1400 GMT. In the afternoon, at 1800 GMT BOE Deputy Governor Jon Cunliffe is expected to speak at Warwick University.

In politics, the leader of Britain's opposition Labour Party, Jeremy Corbyn, will clarify the party's position on Brexit today, in a move that could lead to a major parliamentary defeat for Prime Minister Theresa May.

One of the major events this week is the Fed Chair Jerome Powell's speech in his first outing to testify on the economic outlook before the House Financial Services Committee in Washington. The market is not expecting to say anything new, with inflation forecasted to hold around 2% for the rest of the year, although several rate hikes are on the agenda.

Technical Analysis: USDJPY remains under pressure; maintains bearish short-term bias

USDJPY retreated during today's European session, holding below the 23.6% Fibonacci retracement level of 107.45 of the downleg from 113.70 to 105.50.

From the technical point of view, in the daily chart, the stochastic oscillator seems to have halted its advance as well, lending support to a mostly bearish short-term picture. Also, the MACD oscillator is moving slightly lower in the negative territory after it posted a bearish crossover with its trigger line in the previous sessions, suggesting a downside tendency in the near-term.

In the absence of economic data, the pair is expected to remain negative and continues its previous tendency. The next level to have in mind is the 105.50 support barrier, taken from the inside swing high on October 2016.

On the flip side, in case of an upside retracement, the price could hit the 23.6% Fibonacci mark at 107.45. A jump above the aforementioned obstacle could open the door for the 107.90 – 108.00 resistance area.