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EUR/GBP is maintained close of hourly resistance at 0.8929 (12/01/2018 high). Hourly support at 0.8687 (25/01/2018) remains distant. The technical structure suggests further shortterm sideways move.

In the long-term, the pair has largely recovered from 2015 lows. The technical structure suggests further upside pressure. The pair is trading below its 200 DMA. Strong resistance can be found at 0.9500 (psychological level) while support remains at 0.8304 (05/12/2016 low).

AUD/USD is trading sideways at 0.79 after its short-term bullish momentum, close to hourly resistance at 0.7999 (17/01/2018 high). Hourly support remains at 0.7638 (15/12/2017 low). The technical structure suggests further short-term sideways moves.

In the long-term, the upward trend resumes after failing to reach key resistance at 0.8164 (14/05/2015 low). Key support stands at 0.6009 (31/10/2008 low). A break of the key resistance at 0.8164 (14/05/2015 high) is needed to invalidate our long-term bearish view.

USD/CAD keeps increasing, recovering from December downward trend. The pair is approaching the 1.26 range. Hourly resistance is maintained at 1.2748 (24/11/2017 high) and support is given at 1.2251 (31/01/2018 low). The technical structure indicates that further shortterm rise is expected.

In the longer term, the pair is trading between resistance point at 1.3805 (05/05/2017 high) and support at 1.2128 (18/06/2015 low). Strong resistance is given at 1.4690 (22/01/2016 high). The pair is likely to head lower. The pairs is trading below its 200 DMA.

USD/CHF ended its short-term downward trend, heading for further rise along 0.94. Hourly resistance stands at 0.9559 (24/01/2018 high) while stronger resistance remains at 0.9668 (17/01/2018 high).

In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support lies at 0.9072 (07/05/2015 low) while resistance at 1.0344 (15/12/2016 high) is distanced. The technical structure favours a long term bullish bias since the unpeg in January 2015.

USD/JPY is rising, outreaching the 107 range and approaching hourly resistance at 109.40 (06/09/2018 high). Strong hourly resistance remains at 113.75 (12/12/2017). The technical structure suggests short-term upside 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 is trading below 1.40, heading for hourly resistance at 1.3742 (16/01/2018 low). The technical structure suggests further upside move.

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 slowing down its decrease after its break of resistance at 1.2537 (25/01/2018 high). Heading toward 1.23 range. Hourly support at 1.2165 (17/01/2018 low) is approaching. The technical structure suggests further downside 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).

Bitcoin keeps grinding higher

Cryptocurrencies got off to rocky start in February amid a broad sell-off that wiped out $550 billion from the crypto market. However, the market got through this bad patch and started to recover as the mood of investors improved progressively. On Tuesday, the price of Bitcoin rose around 5% and hit $11,646, the highest level since January 29th. The price is approaching a key resistance area at around $12,000 (previous highs), while the 50-day moving average currently lies at $12,260.

Investors have shown a lot of patience recently as they did not jumped back into Bitcoin after the sharp sell-off. However, they are slowly coming back into crypto and are carefully avoiding to giving way to panic buying.

Elsewhere, the entire alt-coins complex has seen significant inflow, although uneven. Indeed, the first quarter of 2018 looks very promising as many crypto-companies have of will release mainnet version of beta product. Kyber Network is finally done with testnet as they launched their platform on the Ethereum mainnet a few days ago – the pilot launch will run until April this year. OmiseGo is also expected to deliver in the first quarter (or second quarter at the latest).

Overall, we remain very positive on cryptocurrencies, 2018 will be a key year. However, investors have to keep in mind that many coins will not make it this year and that they should focus on the good projects that will deliver a working product.

Stealth USD in play

The greenback continues to gain, yet reasons are still vague. Is it shorts unwinding, reaction to renewed bond sell-off's, risk aversion or catchup to wide yields spreads? There is no shortage of optimism around the US economic health (accelerated by massive fiscal spending) but balanced out by bearish commentary over equities and twin deficits. US 10yrs yields are now edging back up after US Presidents day but still below Valentine’s day high. Failure of EURUSD to break new highs at 1.2555 put the pair in corrective mode. Should German ZEW and EU PMI coming in weaker than expected plus ECB sounding less hawkish we should get continuation of pair bearish trend.

EUR/USD

Current level - 1.2351

The bias is still negative, with a risk of a slide towards 1.2290 support area. A rebound above 1.2410 will signal a reversal for another rise towards 1.2550.

Resistance		Support
intraday	intraweek	intraday	intraweek
1.2410	1.2650	1.2290	1.2290
1.2460	1.2870	1.2290	1.2210

USD/JPY

Current level - 107.18

The outlook is positive above 107.80, for a rise towards 108.00 resistance area. Crucial on the downside is 106.40.

Resistance		Support
intraday	intraweek	intraday	intraweek
107.50	108.30	106.80	105.40
108.30	110.40	106.40	102.40

GBP/USD

Current level - 1.3949

The slide has reached 1.3920 support and my outlook is already bullish, for a rise towards 1.4280 are. Trigger on the upside is 1.4060.

Resistance		Support
intraday	intraweek	intraday	intraweek
1.4060	1.4280	1.3920	1.3760
1.4185	1.4340	1.3800	1.3620

Notes/Observations

Eurogroup nomination of Spain’s de Guindos as the next ECB Vice-Chair allows the potential successor to Draghi to come from a core northern European country

EU said to be more willing to call for more flexibility in future relationship talks with Britain

Asia:

RBA Feb Minutes reiterates that low interest rates was helping reduce unemployment and help raise inflation further. Further progress on inflation likely to be only gradual and saw underlying inflation rising to 2.25% by mid-2020. Reiterated view that rising AUD currency would impede pickup in economic growth and inflation

Japan Fin Min Aso: Expect BOJ to keep working with govt to beat deflation; reaching 2% inflation is a way to prove Japan has beat deflation

Europe:

Eurogroup formally nominated Spain's Luis de Guindos for ECB vice president role (as expected)

Spain Econ Min de Guindos stated that he would resign as Econ Min within days after being chosen as ECB VP. Reiterated view that steps need to be taken to deepen economic and monetary union and vowed to defend ECB independence

Eurogroup chief Centeno: Greece has only 2 prior actions outstanding before disbursement of new loans; technical work on debt relief measures for Greece has already start (in-line with recent press reports)

PM May said to have a contingency plan to withhold payments of the £40B Brexit bill if EU leaders backtrack on their post-Brexit free trade deal. Fall-back option that could be triggered if negotiations go wrong

UK Brexit Min Davis upcoming speech to reassure the European Union that the U.K. won’t try to undercut the bloc by tearing up regulations after the split, making the case for mutual trust between regulators on each side

ECB has purchased €1.924T worth of bonds in public sector purchase program (PSPP, QE) as of w/e Feb 16th v €1.919T prior week

Energy:

OPEC Sec Gen Barkindo: Jan compliance seen at 133% for OPEC/Non-Opec members on production cut agreement. Rebalancing of market gaining massive momentum

Economic Data:

(JP) Japan Jan Final Machine Tool Orders Y/Y: 48.8% v 48.8% prelim

(DE) Germany Jan PPI M/M: 0.5% v 0.3%e; Y/Y: 2.1% v 1.8%e

(CH) Swiss Jan Trade Balance (CHF): 1.3B v 3.4B prior, Exports Real M/M: -5.1 v +3.3% prior; Imports Real M/M: 3.8% v 1.0% prior

(FI) Finland Jan Unemployment Rate: 8.8 v 8.4% prior

(ZA) South Africa Dec Leading Indicator: 104.6 v 105.2 prior

(DK) Denmark Feb Consumer Confidence Indicator: 8.5 v 8.0e

(TR) Turkey Feb Consumer Confidence: 72.3 v 72.3 prior

(JP) Japan Jan Convenience Store Sales Y/Y: +0.1 v -0.3% prior

(HU) Hungary Dec Average Gross Wages Y/Y: 13.5% v 14.2%e

(SE) Sweden Jan CPI M/M: -0.8% v -0.7%e; Y/Y: 1.6% v 1.8%e

(SE) Sweden Jan CPIF M/M: -0.9% v -0.7%e; Y/Y: 1.7% v 1.9%e, CPI Level: 322.51 v 322.92e

(ES) Spain Dec Trade Balance: -€2.1B v -€1.6B prior

(PL) Poland Jan Sold Industrial Output M/M: 4.1% v 3.7%e; Y/Y: 8.6% v 8.5%e, Construction Output Y/Y: 34.7% v 20.4%e

(PL) Poland Jan PPI M/M: 0.1% v 0.1%e ; Y/Y: 0.2% v 0.1%e

(PL) Poland Jan Retail Sales M/M: -20.5% v -21.2%e; Y/Y: 8.2% v 6.9%e, Real Retail Sales Y/Y: 7.7% v 6.5%e

(GR) Greece Dec Current Account Balance: -€1.2B v -€1.0B prior

(DE) German Feb ZEW Current Situation Survey: 92.3 v 93.9e; Expectations Survey: 17.8 v 16.0e

(EU) Euro Zone Feb ZEW Expectations Surveys: 29.3 v 29.0 prior

Fixed Income Issuance:

(ES) Spain Debt Agency (Tesoro) opens book to sell Oct 2048 bonds; guidance seen +107bps to mid-swaps with order book over €22.5B

(ID) Indonesia sold total IDR8.475 in 6-month Islamic Bills; 2-year, 4-year, 7-year and 15-year Project-based Sukuk (PBS)

(ZA) South Africa sold total ZAR3.3B vs. ZAR3.3B indicated in 2030, 2037, 2041 and 2048 bonds

(ES) Spain Debt Agency (Tesoro) sold total €1.31B vs. €1.0-2.0B indicated range in 3-month and 9-month Bills

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx600 flat at 378.3, FTSE -0.5% at 7213, DAX -0.1% at 12373, CAC-40 flat at 5257 , IBEX-35 +0.2% at 9829, FTSE MIB +0.1% at 22582 , SMI flat at 8907, S&P 500 Futures -0.8%]

Market Focal Points/Key Themes: European Indices trade mostly higher across the board following the weakness seen yesterday, with the FTSE under performing being weighed on by HSBC and BHP Billiton following results. Also weighing on the FTSE is shares of IHG trading over 4% lower after announces results and a cost cutting plans. Elsewhere, HeidelbergCement, Covestro trade higher in Germnay following results, with Edenred also rising. In the M&A space Fidessa trades sharply higher after confirming an approach by Temenos. Looking ahead notable earners include Home Depot, Duke Energy, Genuine Parts and MGM Resorts.

Movers

Consumer Discretionary [ Edenred [EDEN.FR] +7.4% (Earnings), Sports Direct [SPD.UK] +3% (Share buyback), IHG [IHG.UK] -4.6% (Earning), Dunelm [DNLM.UK] -10% (Earnings)]

Materials [ BHP [BLT.UK] -3.3% (Earnings) ]

Industrials [HeidelbergCement [HEI.DE] +1.8% (Earnings)]

Healthcare [ Covestro [1COV.DE] +1.8% (Earnings)]

Financial [ HSBC [HSBA.UK] -4.2% (Earnings), Fidessa [FDSA.UK] +23% (Confirms takeover approach)]

Speakers

European Parliament said to be preparing a "detailed," 60-paragraph resolution which will call for more flexibility in future relationship talks with Britain. European Parliament said to call for Britain to have 'privileged' single market access after Brexit

ECB's Rimsevics (Latvia): All allegations against me wee false; never asked for or receive a bribe

EU's Moscovici: stated that had questions on US policy and WTO rules. Tax dumping was not the right answer to US tax reform

Germany Fin Min Altmaier: EU to keep a close watch on US tax reform

Sweden Fin Min Andersson stated that Sweden to vote no to EU budget discharge; hoped for further improvements. Positions on bank union risk sharing was locked; discussion on how to measure risks included govt bonds

Luxembourg Fin Min Gramegna: stated that EU should be united on tax reform. UK would be a reliable partner after Brexit

German CDU Parliamentary Whip Grosse-Broemer: Markel could be voted in 2nd week of March with SPD vote

ZEW Economists: Inflation expectations for both Germany and the Euro Zone had increased; Domestic economy expected to improve in coming months -

Japan PM Abe: Must consider steps on demand swings from sales-tax hike (**Note: The 1st phase was in Apr 2014 and the 2nd phase is planned for Oct 2019

OPEC Committee said to see pace of oil rebalancing quickening

UAE Energy Min Mazrouei: Oil market monitoring beyond 2018 was minimum we could do. OPEC had draft charter for future cooperation with allies (OPEC and non-OPEC members). Hoped OPEC and allies framework cooperation to be presented to all members in June

Currencies

The USD recovered from recent 3-year lows by having its best run in two months over the past few sessions as participants scaled back dollar shorts. One analyst believed that the USD correction should remain limited and was mainly driven by technical factors

EUR/USD was off 0.4% to test the 1.2350 area. The pair seemed to ignore the outcome of the ECB VP position to Spain’s de Guindos which now placed Bundesbank President Weidmann as one of the leading contenders to succeed Draghi in 2019

The GBP/USD pair recovered from initial losses as reports circulated that EU Parliament was preparing a "detailed," 60-paragraph resolution which would call for more flexibility in future relationship talks with Britain. Pair back testing the 1.40 area after testing 1.3930 earlier

Higher US yields helped the USD/JPY pair to move back above the 107 level.

Fixed Income

Bund Futures trades down 17 ticks at 158.12 after the German ZEW survey declines. Upside targets 158.85, while a continued move lower targets the157.25 level.

Gilt futures trade at 120.89 down 17 ticks as the Gilt spread over Bunds near a 2-month high sets to narrow. Support continues to stand at 120.75 then 120.15, with upside resistance at 121.75 then 122.25.

Tuesday's liquidity report showed Monday's excess liquidity fell to €1.854T from €1.863T prior. Use of the marginal lending facility rose to €47M from €98M prior.

Corporate issuance saw the primary market finish last week with ~$9B sold.

Looking Ahead

(DE) German SPD party begins membership ballot on coalition pact with CDU/CSU

(UK) House of Commons reconvenes after February Recess

(IL) Israel Feb CPI 12-Month Forecast: No est v 0.7% prior

05.30 (UK) Weekly John Lewis LFL sales data

05:30 (HU) Hungary Debt Agency (AKK) to sell in 3-month Bills

05:30 (EU) ECB allotment in 7-day Main Financing Tender

05:30 (DE) Germany to sell €5.0B in new Mar 2020 Schatz

06:00 (UK) Feb CBI Industrial Trends Total Orders: 11e v 14 prior, Selling Prices: No est v 40 prior

06:00 (IL) Israel Dec Manufacturing Production M/M: No est v % prior

06:00 (TR) Turkey to sell 2024 Floating Bonds; Yield: % v 6.18% prior

06:30 (EU) ESM to sell €2.0B in 6-month bills

06:30 (CL) Chile Central Bank Traders Survey

06:30 (SE) Sweden Central Bank ( Riksbank) Gov Ingves/Floden speech in New York

06:45 (US)Daily Libor Fixing

07:00 (RU) Russia announces weekly OFZ bond auction

08:15 (UK) Baltic Dry Bulk Index

08:30 (CA) Canada Dec Wholesale Trade Sales M/M: 0.4%e v 0.7% prior

09:00 (NZ) Fonterra Global Dairy Trade Auction

09:00 (EU) Weekly ECB Forex Reserves

10:00 (EU) Euro Zone Feb Advance Consumer Confidence: 1.0e v 1.3 prior

10:30 (CA) Canada to sell 3-month, 6-month and 12-month BTF Bills

11:30 (US) Treasury to sell 4-Week Bills

11:30 (US) Treasury to sell 3-Month and 6-Month Bills

13:00 (US) Treasury to sell 2-Year Notes

(IT) Italy Debt Agency (Tesoro) announcement for BTPei and CTZ auctions for Feb 23rd

15:00 (MX) Mexico Citibanamex Survey of Economists

16:00 (KR) South Korea Jan PPI Y/Y: No est v 2.3% prior