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For the 24 hours to 23:00 GMT, the GBP rose 0.61% against the USD and closed at 1.4093.

In the Asian session, at GMT0400, the pair is trading at 1.4117, with the GBP trading 0.17% higher against the USD from yesterday's close.

The pair is expected to find support at 1.404, and a fall through could take it to the next support level of 1.3963. The pair is expected to find its first resistance at 1.4159, and a rise through could take it to the next resistance level of 1.4201.

Going ahead, traders would focus on UK's retail sales data scheduled for release in a few hours, which is expected to show a rebound on a monthly basis in January.

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

For the 24 hours to 23:00 GMT, the USD declined 0.6% against the CHF and closed at 0.9225.

In the Asian session, at GMT0400, the pair is trading at 0.9209, with the USD trading 0.17% lower against the CHF from yesterday’s close.

The pair is expected to find support at 0.9180, and a fall through could take it to the next support level of 0.9151. The pair is expected to find its first resistance at 0.9262, and a rise through could take it to the next resistance level of 0.9315.

Amid no macroeconomic releases in Switzerland today, investor sentiment would be governed by global macroeconomic factors.

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

For the 24 hours to 23:00 GMT, the USD declined 0.03% against the CAD and closed at 1.2485. Gains in the loonie were limited following dovish talks by the Bank of Canada Deputy Governor, Lawrence Schembri. Also, Canada's existing home sales plunged 14.5% on a monthly basis in January, compared to a rise of 4.5% in the previous month.

In the Asian session, at GMT0400, the pair is trading at 1.2474, with the USD trading 0.09% lower against the CAD from yesterday's close.

The pair is expected to find support at 1.2448, and a fall through could take it to the next support level of 1.2421. The pair is expected to find its first resistance at 1.2519, and a rise through could take it to the next resistance level of 1.2563.

Ahead in the day, investors would await the release of Canada's manufacturing sales data for December.

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

For the 24 hours to 23:00 GMT, the USD declined 0.29% against the JPY and closed at 106.19, after the US industrial production unexpectedly declined in January, dragged down by a sharp decline in mining output and a flat manufacturing output reading for January.

In the Asian session, at GMT0400, the pair is trading at 106.10, with the USD trading 0.08% lower against the JPY from yesterday’s close.

The pair is expected to find support at 105.79, and a fall through could take it to the next support level of 105.48. The pair is expected to find its first resistance at 106.63, and a rise through could take it to the next resistance level of 107.16.

Moving ahead, investors would look forward to Japan’s trade balance figures, Nikkei manufacturing PMI and consumer price inflation due to release next week.

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

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$DXY US dollar Index Short-term Elliott Wave view suggests that the rally to February 09.2018 peak at 90.57 ended Primary wave ((4)) in a Flat correction. Down from 90.57 high the decline is unfolding as Elliott Wave Impulse Sequence, where each leg has an internal distribution of 5-3-5 structure thus favored being an Impulse sequence. The DXY has managed to see a break below January 25 low (88.43) thus confirming more downside extension in Primary wave ((5)) lower.

From 2/09 high (90.57) cycle the DXY is close to ending that cycle in Intermediate wave (1) lower in 5 waves impulse, where internals for wave (1) lower ended Minor wave 1 at 89.38 and Minor wave 2 ended at 90.12 high. Minor wave 3 ended at 88.58 low, Minor wave 4 bounce ended at 88.96 high and below from there Minor wave 5 of (1) remains in progress. Which is expected to end in between 88.21-87.95 area lower but in case of further extension in Minor wave 5 could see as low as 87.78-87.50 5=1 target area. Afterwards, the index should do a bounce in Intermediate wave (2) for the correction of 2/09 peak (90.57) in 3, 7 or 11 swings before further downside extension is seen. We don’t like buying the index into a proposed bounce and as far as a pivot from 2/09 high (90.57) remains intact index should find sellers in 3, 7 or 11 swings for further downside.

DXY 1 Hour Elliott Wave Chart

STOCKS

Overall major stock indices seem to be on the recovery mode after the initial weakness in the early sessions this month. We need to see if the recovery really wipes out further chances of a sharp decline or is the current recovery just a pause leading to more declines in the coming weeks.

Dow (25200.37, +1.23%) is moving up gradually. A break above 25500 can take it to previous highs of 26500+ levels again. Need to see if the index pauses or continues to move up.

Dax (12346.17, +0.06%) has important support near 12000 as seen on the 3-day charts. While that holds, trade within 12000-12650 is possible in the coming sessions. The index has risen a bit to current levels and may move higher to target 12600-12650 levels in the near term.

Nikkei (21694.96, +1.07%) is up about 200 points in line with our expectations of a rise towards 22200. Keeping our near term target intact, the index could find immediate resistance in the 22200-22400 region in the coming sessions. Near term looks bullish for Nikkei with some possibility of a fall thereafter.

Shanghai (3199.16, +0.45%) is on a week long holiday celebrating the New Year and the Spring Festival. It would open again next Thursday on the 22nd Feb. Till then we would be omitting our views on Shanghai. We would have to keep an eye at important near term resistance at 3260 which is likely to hold in the last few sessions of this month.

Nifty (10545.50, +0.42%) and Sensex (34297.47%) seem to be stuck in the 10680-10380 and 34750-33750 regions respectively. Note that the sideways consolidation is likely to continue with some possibility of seeing another small dip in the near term. Note that 10600-10680 levels on the Nifty and 34750 on the Sensex are important levels which if breaks on the upside could lead to further rise for the medium term. Unless a break of the mentioned levels on the upside is seen, we expect sideways range for the near term.

COMMODITIES

WTI (61.53) is likely to move up towards 63 in the coming sessions from where another dip towards 61 is possible. On the other hand, Brent (64.71) is likely to move up towards 65-66 in the next few sessions. Immediate view is for a slight upmove followed by a dip next week.

Gold (1359.30) is almost at 1360 and could test immediate resistance near 1365/70 as seen on the daily charts. If the price manages to break above 1365/70 just now, we could see the metal trading near 1380 in the next few sessions with greater possibility of rising further. Watch important resistance just above current levels.

Copper (3.2475) may pause near immediate resistance near 3.25. A break above 3.25, if seen could be bullish for the metal taking it higher towards 3.30 in the coming sessions.

FOREX

Dollar Index (88.405) is testing support on 3 day and weekly candles near 88.5 (also seen as support on daily line chart). There are some chances of a slight bounce from here towards 89-90; however we should keep in mind that the recent downmove of the Dollar Index has broken crucial long term support on weekly line chart near 89, which might indicate onset of prolonged bearishness and consequently, a probable break of above mentioned support near 88.5.

Strong rise in Euro (1.2533) seen yesterday is continuing today and as projected yesterday, it is now very near to the previous high of 1.2537 (25-Jan) which could be the next Resistance level to look at. We repeat: if this also breaks, then we would look at 1.2600 and 1.2670. However there are some chances of a dip from 1.2537.

The Dollar-Yen (106.11) is testing immediate Support near 106.00 on the daily candles and if Euro goes beyond 1.2537, Dollar-Yen could simultaneously try testing lower support at 105.50 on the weekly candles.

The Euro-Yen (132.94) is again seen to be bouncing from crucial support near 132 on the 3 day candles. This is an important support level and we could see a break of it if the Yen goes below 105.5 while the Euro respects its resistance near 1.2537.

Pound (1.4121) has resistance on 3 day candles and 3 day line chart near 1.42-1.43 which should lead to a dip in the coming week. If it breaches that level, there is higher resistance 1.44 on the weekly candles.

Dollar-Rupee (63.915) Need to see if Dollar-Rupee rises past 64.00 or not. Else we might see dip to 63.65. Be careful about Nifty while below 10600-10650.

INTEREST RATES

US 10 Year Yield (2.90), US 30 year Yield (3.15), US 5 year yield (2.65), US 2 year yield (2.19) : After the yield upmove seen yesterday on back of higher inflation data release in the US, the far end yields have again consolidated around their respective long term resistances. The 10 Year however did see highs near 2.94. The fact that it has again come down towards 2.9 suggests that there might be a bigger shock required to push it towards 3%.
We repeat that the long term resistance levels for the 4 yields are as follows: 2.85-2.90, 3.20, 2.7 and 2.2 respectively) which we have been expecting to hold in this month.

Japan 10 year yield (0.062) had broken support on short term chart 3 days back and hasn’t moved up yet, reflecting that it might now stay below 0.07 and test 0.05 in the coming weeks.

Headlines/Economic Data

General Trend:

China, Hong Kong, Indonesia, Malaysia, Philippines,Singapore, South Korea, Taiwan and Vietnam are all closed for holidays; There is a US holiday on Monday, Feb 19th

China equity futures gain in Singapore

Japan's government confirms Kuroda to be nominated for another term as BoJ Governor; BoJ Exec Dir Amamiya ('Mr BoJ') and noted academic/reflationist Wakatabe nominated as Deputy Govs

Japanese sold net of ¥973.2B in foreign bonds in week ended Feb 16th

RBA Gov Lowe reiterates recent interest rate guidance; said Australia sovereign credit downgrade would be 'political event'

US dollar trades generally weaker: EUR/USD hits highest level since Dec 2014, while the US Dollar Index hits the lowest level since that date.

Australia/New Zealand

ASX opened+0.3%: closed -0.1%

ASX 200 Consumer Discretionary Index -0.7%, Resources -0.6%, Financials -0.2%

(AU) RBA Gov Lowe: Labor market is noticeably stronger than RBA expected; reiterates more likely that next interest rate move will be rate hike

(AU) RBA Assistant Gov Ellis: Large degree of uncertainty around full employment est

(AU) Australia sells A$400M v A$400M indicated in Dec 2021 Bonds, avg yield 2.2960% v 2.0730% prior, bid to cover: 5.03x v 8.54x prior

(NZ) New Zealand Jan Non Resident Bond Holdings: 60.0% v 61.1%prior

China/Hong Kong

Shanghai Composite and Hang Seng are closed for holiday

China conglomerate HNA Group said to sell office building located in midtown Manhattan (1180 Sixth Ave) for more than $300M - US press

US SEC blocks the sale of the Chicago Stock Exchange (CHX) to a group led by China investors (Chongqing Casin Enterprise Group)

Japan

Nikkei 225 opened +0.4%: closed +1.2%

TOPIX Iron & Steel Index +1.5%, Electric Appliances +1.4%

Automakers trade generally higher: Toyota and Honda gain

Bridgestone [5108.JP] rises over 1% ahead of FY earnings

(JP) BoJ Gov Kuroda: Reiterates domestic economy expanding moderately, but price growth remains low; reiterates must maintain powerful easing for time being; Japan economy is 'already NOT in a state of deflation'

(JP) Japan Fin Min Aso: Reiterates sudden FX moves have big effects on economy, watching foreign exchange moves 'carefully'

Korea

Kospi closed for holiday

(KR) South Korea Pres Moon reportedly could visit North Korea if North Korean stance changes - Russian press

North America

US equity markets ended higher: Dow +1.2%, S&P500 +1.2%, Nasdaq +1.6%, Russell 2000+1%

S&P 500 Utilities +2.2%, Technology +1.9%

(US) DEC TOTAL NET TIC FLOWS: -$119.3B V +$33.5B PRIOR; NET LONG-TERM TIC FLOWS: $27.3B V $57.5B PRIOR

(US) Senate bipartisan amendment on immigration fails to pass procedural vote

GE [GE]: Said to have reached agreement to sell part of overseas lighting business to former executive for undisclosed figure -US financial press

Europe

(UK) UK Govt said to be prepared to set out its vision for financial services in the post Brexit environment - financial press

(DE) Germany EU budget contribution may rise €3.0-3.5B –German Press

Roche [ROG.CH]: To acquire health IT and services company Flatiron Health for $1.9B

Vivendi Universal [VIV.FR]: Reports FY adj net €1.31B v €755M, EBITA €987M v €724M, rev €12.4B v €10.8B y/y;Proposed dividend with respect to 2017: €0.45 per share, up 12.5%

Deutsche Bank [DBK.DE]: Largest shareholder China HNA Group said to cut stake to 8.8% vs 9.2% prior - FT

Looking Ahead: UK Jan Retail Sales due for release

Levels as of01:00ET

Equity Futures:S&P500 +0.2%; Nasdaq100 +0.3%, Dax +0.1%; FTSE100 +0.2%

EUR 1.2495-1.2556 ;JPY 105.54-106.37; AUD 0.7932-0.7972 ;NZD 0.7389-0.7428

Feb Gold +0.5% at $1,361.80/oz;Feb Crude Oil +0.5% at $61.66/brl; Mar Copper +0.3% at $3.256/lb

Daily Pivots: (S1) 1.2451; (P) 1.2494; (R1) 1.2523; More....

Rebound from 1.2246 should have completed at 1.2687 already. Intraday bias stays on the downside for retesting 1.2246 low first. Break will resume the fall from 1.2919 and target key support level at 1.2061. On the upside, break of 1.2687 is needed to confirm resumption of rise from 1.2246. Otherwise, near term outlook will now stays cautiously bearish in case of recovery.

In the bigger picture, the rebound from 1.2246 is mixing up the medium term outlook. Nonetheless, USD/CAD is staying below falling 55 week EMA, hence, the bearish case is in favor. That is, fall from 1.4689 is not completed yet. Sustained break of 1.2061 key support will carry larger bearish implication and target 61.8% retracement of 0.9406 to 1.4689 at 1.1424. However, firm break of 1.2919 will revive the case of medium term reversal and turn outlook bullish.

Daily Pivots: (S1) 0.7902; (P) 0.7934; (R1) 0.7977; More...

As noted before, the pull back from 0.8135 has completed at 0.7758 already. Intraday bias remains on the upside for retesting 0.8135 first. Decisive break there will resume medium term up trend for 0.8451 fibonacci level. On the downside, below 0.7758 will resume the fall towards 0.7500 key support. We'd look for strong support from 0.7500 to contain downside and bring rebound.

In the bigger picture, medium term rebound from 0.6826 is seen as a corrective move. It might still extend higher but we'd expect strong resistance from 38.2% retracement of 1.1079 to 0.6826 at 0.8451 to limit upside to bring long term down trend resumption. On the downside, break of 0.7500 support will now be an important signal that such corrective rebound is completed.

Daily Pivots: (S1) 105.78; (P) 106.39; (R1) 106.74; More...

USD/JPY's decline is still in progress and intraday bias remains on the downside. There is no sign of bottoming yet. Current fall is part of the pattern from 118.65 and should target 118.65 to 100% projection of 118.65 to 108.12 from 114.73 at 104.20 next. On the upside, break of 107.89 minor resistance is needed to be the first sign of short term bottoming. Otherwise, outlook will stay bearish.

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.