Sample Category Title

EUR/USD

Current level - 1.2247

The recent break through 1.2090 led to an acceleration of the upmove and the bias remains positive, for a rise towards 1.2400 hurdle. Crucial on the downside is 1.2188 low.

Resistance		Support
intraday	intraweek	intraday	intraweek
1.2300	1.2500	1.2188	1.2090
1.2400	1.2500	1.2090	1.1910

USD/JPY

Current level - 110.52

The downtrend is still underway and I favor a slide towards 109.50. Initial intraday resistance lies at 111.00 and crucial on the upside is 111.70 peak.

Resistance		Support
intraday	intraweek	intraday	intraweek
111.00	111.70	110.00	109.50
111.70	113.75	109.50	109.50

GBP/USD

Current level - 1.3764

The uptrend is heading for a tight test of 1.3800 area and a violation of the latter will challenge 1.4000 sentiment area. Initial support lies at 1.3720 and only a break there will signal a reversal of the bullish outlook.

Resistance		Support
intraday	intraweek	intraday	intraweek
1.3800	1.3800	1.3720	1.3611
1.3800	1.4000	1.3611	1.3460

USDJPY touched a 4-month low during today's European session, challenging the 110.51 price level. The bearish picture is supported by the momentum indicators, while prices are in process to end the day below the 110.80 barrier. In addition, the pair recorded the fifth consecutive red day.

In the daily timeframe, the MACD oscillator is strengthening its downtrend as it is holding below the trigger and zero lines. Moreover, the RSI indicator had a pullback from the positive territory and is approaching the oversold zone.

As it stands, if the bears are strong enough to push the price lower, dollar/yen could extend its losses towards the lower boundary of the symmetrical triangle near 109.60. In case of a break below 109.60, this could open the door for the next immediate support level at 108.10 confirming the bearish tendency.

On the upside, if the bulls take control, the pair may move towards the 113.75 significant resistance level but, it needs to go through the 20 and 40 simple moving average on the short to medium-term timeframe. This is the less expected scenario as the price has a strong negative momentum.

It is worth mentioning that USDJPY has been trading within a symmetrical triangle on a long-term basis since May 2015. Also, the pair has been establishing and trading within a sideways range between the upper boundary of 108.10 and the lower boundary of 114.70, roughly around the 112.00 key level, over the past ten months.

Notes/Observations

US markets are closed Monday for a holiday

Euro currency at its highest level since before the ECB began its QE bond buying program back in 2015

Asia:

China PBOC Vice Gov Yin Yong: China will remove policy barriers for cross-border payments and enhance financial infrastructural construction in foreign countries as part of efforts to further promote internationalization of the yuan

China Banking Regulatory Commission (CBRC) will step up oversight in the banking sector this year to reduce financial risks, stressing that long-term efforts would be needed to control banking sector chaos

PBOC lent CNY398B in its Medium-Term Lending Facility (MLF) but maintained the interest rate in 1-year operation at 3.25%. It noted that there had been a relatively big drop in total liquidity in banking system

Bank of Japan (BOJ) January Regional Economic Report: raised economic assessment in 3 of 9 regions and kept its economic assessment in 6 of 9 regions

Bank of Japan (BOJ) Gov Kuroda: Economy was expanding moderately and expected to continue expanding moderately. Reiterated to maintain QQE with YCC for as long as needed to reach 2% inflation in stable manner

Europe:

Germany SPD Party's general secretary Nahles: Achieved good result in coalition talks, optimistic of convincing majority of coalition. To try to achieve more successes in the coalition negotiations but added it was a different ball game compared to exploratory talks

Senior SPD Official Schaefer-Guembel: Exploratory talks laid a foundation, not more, not less. Must be more substance in the coalition agreement so that the distinction was more evident that we are co-governing

Germany Social Democrats in Saxony-Anhalt state said to reject proposed German coalition with Merkel's party. voted 52-51 to oppose joining a coalition (**Insight: Saxony-Anhalt state only sends 7 out of 600 delegates to SPD congress)

Netherlands Finance Ministry Official: No new agreement between Netherlands and Spain about how Britain should leave EU. Confirmed that Finance Ministers held meeting (on Friday) but no deal was reached, exchanged well known positions

UK Foreign Minister Boris Johnson said to have warned allies that Brexit is far from certain; privately shares ex-UKIP boss Nigel Farage's worries that the referendum result could yet be reversed

Euro Working Group chief Wieser: Any agreement to lighten Greek debt load after bailout program ends in August would mean it having to make additional commitments

Energy:

Russia Energy Minister Novak: oil market balancing was continuing and will monitor further

Iraq Oil Min: Near oil production capacity of 5M bpd; Remained committed to OPEC output target

UAE Energy Min: Expected high compliance with supply cuts in Dec from OPEC/non-OPEC. Did not see prices going down to $50 due to oversupply from shale

Economic Data:

(NL) Netherlands Nov Retail Sales Y/Y: 6.1%e v 0.2% prior

(JP) Japan Dec Preliminary Machine Tool Orders Y/Y: 48.3% v 46.9% prior

(IN) India Dec Wholesale Prices (WPI) Y/Y: 3.6% v 4.0%e

(FI) Finland Dec CPI M/M: 0.0% v 0.2% prior; Y/Y: 0.5% v 0.8% prior

(NO) Norway Q4 House Price Index Q/Q: +0.9% v -1.0% prior

(NO) Norway Dec Trade Balance (NOK): +24.7B v -4.2B prior

(EU) Euro Zone Nov Trade Balance (Seasonally Adj): €22.5B v €22.3Be; Trade Balance NSA (unadj): €26.3B v €18.9B prior

Fixed Income Issuance:

(NO) Norway sold NOK4.0B vs. NOK4.0B indicated in 6-month Bills; Avg Yield: 0.43% v 0.32% prior; Bid-to-cover: 1.93x v 2.55x prior

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx600 -0.2% at 397.80 , FTSE flat at 7776 , DAX -0.3% at 13208, CAC-40 -0.2% at 5504 , IBEX-35 flat at 10466, FTSE MIB -0.2% at 23397 , SMI -0.1 at 9542, S&P 500 Futures +0.2%]

Market Focal Points/Key Themes: European Indices trade mostly lower in quieter trade as US cash markets are closed in observance of MLK day. News flow has been relatively quiet ahead of a busier corporate schedule for the week ahead. Shares of GKN trade higher once again after press reports of further interest from Carlyle; Bell Ag announced the majority acquisition in Huegli; on the earnings front Metro trades lower after prelim Q1 results, while Metro is a steep decliner after profitability in its minerals sector came in weaker than expected. AkerBp trades higher on Q4 production and outlook and Gem Diamonds is an outperformer after the recovery of a 910ct stone.

Movers

Consumer Discretionary [ Metro Ag [B4B.DE] -3.3% (Q1 results), Premier Foods [PFD.UK] +3.8% (In exploratory stages of sale of Batchelor to Nissin Foods], Bell Ag [BELL.CH] +4.4% (Acquisition, capital raise), Class Ohlson [CLASB.SE] +3.8% (Dec sales)]

Industrials [ GKN [GKN.UK] +3.4% (Carlyle looking to make counterbid), Metso [METSO.FI] -9.1% (Prelim Q4)]

Energy [Akerbp [AKERBP.NO] +3.7% (Production)]

Speakers

Moody's: euro area economic recovery supports stable outlook in 2018 with GDP growth forecasted to be 2.0% with 2019 GDP seen at 1.7%. European sovereigns to continue to benefit from low interest rate environment

Currencies

USD Index hot fresh 3-year lows in the session as dealers note that its weakness was increasingly being driven by events outside of the US

EUR/USD has been aided by more-hawkish-than-expected ECB Minutes as well as exceptionally strong Euro Zone economic data. With the pair firmly above the 1.21 level, dealers now target the 1.24-1/25 neighborhood before any fresh concerns over the level of the Euro and its inflationary implications. Euro currency was at its highest level since before the ECB began its QE bond buying program back in 2015 with the pair approaching the 1.2250 area just ahead of the mid-session.

A stronger Euro currency could finally help push the EUR/CHF cross to retest the former floor of 1.2000 in coming weeks. The level was last tested on Jan 15th 2015 just before the SNB abandoned its floor.

GBP/USD tested the 1.38 level as cable's correction continued in the weak dollar environment

USD/JPY approaching 110.50

Fixed Income

Bund Futures trades up 6 ticks at 160.61 following the move higher with the euro. Continued upside targets 162.00, while a move lower targets the159.56 low.

Gilt futures trade at 123.82 up 13 ticks trading in sympathy with Bunds and US treasuries. Support continues to stand at 123.55 then 122.83, with upside resistance at 124.25 then 124.96.

Monday's liquidity report showed Friday's excess liquidity rose to €1.871T from €1.869T prior. Use of the marginal lending facility fell to €98M from €154M prior.

Corporate issuance saw high grade issuers raise $32B last week.

Looking Ahead

05:25 (BR) Brazil Central Bank Weekly Economists Survey

05:30 (NL) Netherlands Debt Agency (DSTA) to sell €2.0-4.0B in 3-month and 6-month bills

05:30 (BR) Brazil Nov Economic Activity Index (Monthly GDP) M/M: 0.4%e v 0.3% prior; Y/Y: 2.6%e v 2.9% prior

06:00 (IE) Ireland Nov Trade Balance: No est v €3.9B prior

06:45 (US) Daily Libor Fixing

08:00 (PL) Poland Nov Current Account Balance: €0.7Be v €0.6B prior; Trade Balance: €0.6Be v €0.6B prior

08:00 (PL) Poland Dec Final CPI M/M: No est v 0.2% prelim; Y/Y: No est v 2.0% prelim

08:00 (RO) Romania Central Bank (NBR) Dec Minutes

08:00 (RU) Russia Dec Official Reserve Assets: No est v $431.6B prior

08:00 (ES) Spain Debt Agency (Tesoro) announces size of upcoming actions in week

08:00 (IN) India announces details of upcoming bond sale (held on Fridays)

08:05 (UK) Baltic Dry Bulk Index

08:55 (FR) France Debt Agency (AFT) to sell combined €4.5-5.7B in 3-month, 6-month BTF Bills

09:00 (CA) Canada Dec Existing Home Sales M/M: No est v 3.9% prior

09:00 (BE) Belgium Nov Trade Balance: No est v -€3.8B prior

09:30 (EU) ECB announces Covered-Bond Purchases

09:35 (EU) ECB calls for bids in 7-Day Main Refinancing Tender

11:30 (IL) Israel Dec CPI M/M: 0.0%e v -0.3% prior; Y/Y: 0.3%e v 0.3% prior

13:15 (UK) BOE's Tenreyro at event in London

16:00 (NZ) New Zealand Q4 NZIER Business Confidence: No est v 5 prior

16:45 (NZ) New Zealand Dec Retail Card Spending M/M: 0.5%e v 1.2% prior; Total Card Spending M/M: No est v 1.4% prior

18:50 (JP) Japan Dec PPI M/M: 0.4%e v 0.4% prior; Y/Y: 3.2%e v 3.5% prior

19:30 (AU) Australia Dec New Motor Vehicle Sales M/M: No est v 0.1% prior; Y/Y: No est v 2.1% prior

21:00 (NZ) New Zealand Dec Non Resident Bond Holdings: No est v 60.4% prior

22:45 (JP) Japan to sell 5-Year JGB Bonds

23:30 (JP) Japan Dec Bankruptcies Y/Y: No est v -2.3% prior

23:30 (JP) Japan Nov Tertiary Industry Index M/M: 0.3%e v 0.3% prior

The Aussie dollar advanced further on Monday, supported by broadly weaker US dollar and extended steep ascend from 0.7807 trough into fourth straight day.

Weekly chart shows the pair running in uninterrupted rally from 0.7500 higher base, which completed five straight weeks in green.

Fresh bullish acceleration pressures immediate target at 0.7977 (Fibo 76.4% of 0.8124/0.7500 descend), signaling attack at psychological 0.8000 barrier.

Bullish studies support further upside, however, bulls might be interrupted as daily indicators are strongly overbought.

Hesitation at pivotal 0.8000 barrier could be likely scenario, with corrective dips expected to find support above rising 10SMA which tracks the rally since mid-Dec and currently lies at 0.7865.

Res: 0.7977, 0.8000, 0.8035, 0.8102
Sup: 0.7940, 0.7900, 0.7865, 0.7847

GBP/USD is likewise taking advantage of the weaker US Dollar, thus managing to surge 1.49% in a matter of one session. The biggest gains were apparent during the second half of Friday, while this session started with the Pound trading sideways with low volatility. From theoretical point of view, the pair breached a six-week channel during the previosu session, thus pointing to a possible price decline down to the 1.3850 area. Converging technical indicators likewise support this scenario. Given that there is a bank holiday in the US, it is likely that no massive changes to the pair’s movement are to happen today. The Sterling might remain fluctuating between the weekly R1 and the monthly R2 at 1.3832 and 1.3707, respectively, during the whole session.

The common European currency has reached a dominant support line against the New Zealand Dollar. The encounter has resulted in a rebound.

The rebound, in accordance with the most dominant pattern should result in a surge of more than a couple of months. The reason for that is the fact that this rebound marks the end of a long term descent, which was expected and described in previous reviews of the currency exchange rate.

Regarding the short them traders should watch, as the pair should soon review a new medium term pattern, which is likely going to be an ascending one.

At the end of the last year the Pound reached a zone near a 50.00% Fibonacci retracement level against the Swiss Franc. Namely, the currency exchange rate traded above the 1.3140 mark.

As a result of the encounter, the currency pair eventually rebounded against the support level and began a surge, which has resulted in the recognition of a pattern. Namely, the currency rate is surging in a wide range ascending channel pattern.

In regards to the short term, the pair is set to fluctuate between the weekly R1 and the monthly PP, which are respectively at 1.3303 and 1.3270 levels.

The Euro continues to take advantage of the weakened US Dollar, driven by hopes on the new German coalition. The pair started its surge mid-Thursday and has since appreciated 2.37%. As a result, the it breached the upper boundary of an ascending channel valid since late October, as well as the rate had reached its highest point since 2015 by early today. As apparent on the chart, the strong upside momentum has allayed in this session due to the pair testing the monthly R2 at 1.2225. Technical indicators are located near their historic highs, thus pointing to a soon period of decline. This scenario, however, might not occur today, as the Euro could still push towards the weekly R1 at 1.2310. In case the bearish sentiment takes over, the weekly PP and the monthly R1 circa 1.2115 are likely to limit the pair.

Driven by its broad-based weakness against a basket of currencies, including the Yen, the US Dollar continues to approach a four-month descending channel with its lower boundary located near the 110.00 mark. The pair’s attempt to edge higher on Friday was disrupted by the combined resistance of the monthly S1 and the 55-hour SMA circa 111.50. As a result, the Greenback fell even lower and thus had reached 110.60 by early today. It is likely that the bearish pressure continues to affect negatively the US Dollar. A possible fall, however, should not be massive due to a notable support cluster being located nearby circa 110.20. Meanwhile, it is unlikely that the 55-hour SMA is breached in this session, thus leaving the rate somewhere in the 110.50/111.00 area by Tuesday.

The yellow metal continues to gain momentum against the US Dollar for the fourth consecutive session. The pair remained stable during the first part of Friday, but eventually was pushed towards the 1,332.00 mark. Meanwhile, Gold opened higher during the Asian session, while banks in the US are closed due to Martin Luther King Day. Traders are still awaiting new information about inflationary pressures in the US, thus being reluctant to buy the Greenback. It is likely that the rate pushes even higher within this session towards the weekly R1 or the monthly R2 at 1,348.83 and 1,353.57, accordingly. The upper boundary of a five-week channel is also located in this area. High volatility is not expected in this session; however, in case of a fall, the pair should be supported by the 55-hour SMA circa 1,327.10.