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GOLD Short-term bearish in a bullish mediumterm trend.

Gold keeps on weakening since the yellow metal has faded near the hourly resistance at 1295 (18/04/2017 high). Support can be located at 1261 (intraday low). The road is wideopen for further decline.

In the long-term, the technical structure suggests that there is a growing upside momentum. A break of 1392 (17/03/2014) is necessary ton confirm it, A major support can be found at 1045 (05/02/2010 low).

SILVER Continued weakness.

Silver has broken strong support at 18.16 (rising trendline) indicating further downside risk. Strong support is given far away at 16.82 (15/03/2017 low). Strong resistance is given at a distance at 19.00 (09/11/2017 high). Expected to see continued bearish pressures.

In the long-term, the death cross indicates that further downsides are very likely. Resistance is located at 25.11 (28/08/2013 high). Strong support can be found at 11.75 (20/04/2009).

CRUDE OIL Consolidating below 50.

Crude oil has declined sharply, breaking the support at 50.71, yet now has paused. Support now lies at 48.87 (25/04/2017 low). Resistance for a short-term bounce can be found at 50.71 (old support) and 53.70 (12/04/2017 high).

In the long-term, crude oil has recovered after its sharp decline last year. However, we consider that further weakness are very likely. Strong support lies at 24.82 (13/11/2002) while resistance can now be found at 55.24 (03/01/2017 high).

AUD/USD – 0.7476

Recent wave: Wave 5 ended at 1.1081 and major correction has commenced for fall to 0.7000 and then towards 0.6500-10

Trend: Near term down

New strategy :

Stand aside

Position: -
Target:  -
Stop:-

As aussie has dropped again and broke below indicated previous support at 0.7473, adding credence to our bearish view that recent decline from 0.7750 has resumed and downside bias is seen for this move to extend weakness to 0.7450-55 (50% Fibonacci retracement of 0.7158-0.7750), then 0.7400-10 but reckon downside would be limited to 0.7380-85 (61.8% Fibonacci retracement) and 0.7350 should hold, risk from there is seen for a rebound later.

In view of this, would not chase this fall here and would be prudent to sell aussie on recovery as 0.7505-10 would limit upside. Only above resistance at 0.7556 would abort and suggest low is possibly formed, bring a stronger rebound to 0.7570-75 but break of resistance at 0.7592 is needed to provide confirmation. 

On the 4-hour chart, the move from 0.8066 is the wave 5 with i: 0.8860, ii: 0.8315, wave iii is an extended move ended at 1.0183, iv: 0.9706 and wave v has ended at 1.1081 (also the top of entire wave 5). The subsequent selloff is the major correction which is unfolding as ABC-X-ABC and 2nd A leg has ended at 0.8848, followed by a-b-c wave B which ended at 0.9758, hence, 2nd C wave is now in progress and indicated downside target at 0.7000 and 0.6950 had been met, so further fall to 0.6710-20 cannot be ruled out.

• ECB seen waiting for June meeting to announce any fresh changes to stimulus;
• Muted market response to Trump tax plans;
• Economic data and earnings eyed.

US equity markets are expected to open relatively unchanged on Thursday as investors eye the latest monetary policy decision from the ECB and respond to Donald Trump's tax reform plans, announced on Wednesday.

The ECB will announce its latest monetary policy decision shortly and is expected to leave everything unchanged, with the June meeting being seen as the most likely point at which the central bank will seriously consider a further removal of stimulus. While it's unlikely that another reduction in asset purchases or a rate hike will happen until the end of the year, the central bank may allude to such a move earlier but I think today's meeting is a little too soon.

Mario Draghi may have been keen to stress that the previous reduction is not tapering, but I think it's clear that the central bank has started a process of removing stimulus in much the same way that its US counterpart did. The only difference is that it's being less explicit with its plans and the process will be far more gradual. The problem that the ECB is facing is that core inflation is still well below its target of below but close to 2% and there still exists a two-tier eurozone with some countries in a far better position for monetary tightening and others still in need of substantial easing.

As far as today's meeting is concerned, very little is expected from the central bank. The meeting falls in between the first and second round of the French Presidential elections, with eurosceptic Marine Le Pen one of the two candidates set to battle it out for the Presidency on 7 May. While the central bank may want to avoid appearing to interfere in the election, it will be interesting to see whether the reference to downside risks is scaled back in order to avoid playing into Le Pen's hands, or whether they talk up the progress achieved this year and the improved prospects for the region.

There has been a relatively muted response to Trump's plans for tax reform that were announced on Wednesday, the prospect of which was one of the key drivers of the market rally that followed his election victory last November. With US equity markets near all-time highs and much of the details that were released already being known, it would appear everything was already priced in.

While it was interesting to see the plans being laid out, there are still a number of obstacles to overcome before the changes come into effect, which may explain the muted response. Investors may have also got a little carried away with the plans previously and the implementation of them could take longer than people were expecting which is taking a little bit of the shine off.

Still to come today we've got some US economic data being released as well as first quarter earnings reports from a number of companies including Amazon, Microsoft and Alphabet

The DAX posted considerable gains to start of the week, but the index has since been on pause. The trend continues in the Thursday session, as the DAX trades quietly at 12,437.50. Today’s highlight is the ECB policy meeting, with the markets expecting the benchmark rate to remain at 0.00%. On the release front, GfK German Consumer Climate climbed to 10.2, above the forecast of 9.9 points. Later in the day, Germany releases Preliminary CPI, with an estimate of -0.1%. Friday will be busy, with the release of German Retail Sales and Eurozone CPI Flash Estimate. Over in the US, we’ll get a look at Advance GDP.

ECB policymakers meet on Thursday for the monthly policy meeting. Although central bank meetings always attracts the attention of the markets, this could turn out to be a non-event, unless Mario Draghi makes some newsworthy comments in his press conference. The benchmark interest rate has been pegged at a flat 0.0% since March 2016, and no changes are expected. With the eurozone showing stronger inflation and growth numbers in the first quarter, there had been some pressure on the ECB to taper or shorten its asset-purchase program, which is scheduled to wind up in December. However, the ECB appears content to hold course, barring any significant change in growth or inflation numbers. There is also the political card to keep in mind, as the ECB does not want to be seen as intervening in the current French election, or when Germany holds elections in September.

It’s back to the ballot box for French voters on Sunday, in the second round of the presidential election. The markets have priced in a convincing victory by Emmanuel Macron over Marie Le Pen. Macron enjoys a comfortable margin of 60-40 in opinion polls, but round two of the campaign has not gone well for the front-runner. Macron was jeered by workers at a factory in his hometown of Amiens, only to have Le Pen show up unexpectedly, to the delight of the workers. A BFM TV poll showed that more voters feel that Le Pen’s campaign has been more successful in the second round than that of Macron. This may not change the expected outcome of a Macron win, but a strong showing by Le Pen on Sunday would show that her strident anti-EU stance has wide popularity, and this could sour investor sentiment and send the stock markets to lower ground.

President Trump announced his long-awaited tax plan on Wednesday. The proposal calls for sharp reductions for both individuals and corporations. The plans calls three tax brackets for individuals – 10%, 25% and 35%. The corporate sector would also see significant tax relief, with the corporate tax rate dropping from 35% to 15%, and the tax on multinationals’ overseas profits lowered from 35% to 10%. However, any tax reform proposals from the White House will require a stamp of approval from Congress, so Trump’s proposal should be viewed as a blueprint that is a long way off from becoming law. Trump’s proposal was short on details, although government officials are praising it as one of the largest tax cuts and broadest overhauls of the tax system in history. There hasn’t been much reaction from the euro, which has been subdued in Thursday trading.

The euro is unchanged in the Thursday session, as EUR/USD hugs the 1.09 level. The lack of movement could change during the day, as there is a host of indicators in the eurozone and the US. Germany will release Preliminary CPI, with an estimate of -0.1%. The ECB will announce its benchmark rate, which is expected to remain at a flat 0.0%. In the US, it's a busy day, with three key events – Core Durable Goods Orders, unemployment claims and Pending Home Sales. On Friday, we'll get a look at German Retail Sales and Eurozone CPI Flash Estimate. The US will release Advance GDP and Preliminary UoM Consumer Sentiment.

The ECB will meet for its monthly rate meeting on Thursday. Although central bank meetings always attracts the attention of the markets, this could turn out to be a non-event, unless Mario Draghi makes some waves in his press conference. The benchmark interest rate has been pegged at a flat 0.0% since March 2016, and no changes are expected. With the eurozone showing stronger inflation and growth numbers in the first quarter, there has been speculation that the ECB might taper its asset-purchase program, which runs until December, ahead of schedule. However, the ECB appears content to hold course, barring any significant change in growth or inflation numbers. There is also the political card to keep in mind, as the ECB does not want to be seen as intervening in the current French election, or when Germany holds elections in September.

The second round of the French election is only days away, and the markets have priced in a convincing victory by Emmanuel Macron over Marie Le Pen. Macron enjoys a comfortable margin of 60-40 in opinion polls, but round two of the campaign has not gone well for the front-runner. Macron was jeered by workers at a factory in his hometown of Amiens, only to have Le Pen show up unexpectedly, to the delight of the workers. A BFM TV poll showed that more voters feel that Le Pen's campaign has been more successful in the second round than that of Macron. This may not change the expected outcome, but a strong showing by Le Pen on Sunday would show that her strident anti-EU stance has wide popularity, and this could sour investor sentiment and hurt the euro.

President Trump announced his tax plan on Wednesday. The proposal calls for sharp reductions for both individuals and corporations. There would be three rates for individuals – 10%, 25% and 35%. The corporate sector would also see significant tax relief, with the corporate tax rate dropping from 35% to 15%, and the tax on multinationals' overseas profits lowered from 35% to 10%. However, any tax reform proposals from the White House will require a stamp of approval from Congress, so Trump's proposal should be viewed as a blueprint that is a long way off from becoming law. Trump's proposal was short on details, although government officials are praising it as one of the largest tax cuts and broadest overhauls of the tax system in history. There hasn't been much reaction from the euro, which has been subdued in Thursday trading.

US consumer confidence levels remain high, but there was some disappointment as CB Consumer Confidence dropped to 120.3 in April, missing the estimate of 123.7. The softer than expected reading boosted the euro in the Tuesday session. What is troubling analysts is that strong consumer confidence numbers have not translated into increased consumer spending, a key component of economic growth. This trend has been labeled the “hard/soft discrepancy” (confidence being ‘soft', while actual spending being ‘hard'). This was underscored in March retail sales numbers, which came in at a flat 0.0%, shy of the forecast. Next up is Advance GDP on Friday, which is expected at 1.3 percent. An unexpected GDP reading could have a sharp impact on EUR/USD.

EUR/JPY Stalling below 122.00.

EUR/JPY's buying pressures are there. Key resistance stands at 123.31 (27/01/0217 high). Major support is given at 114.90 (18/04/2017low). Expected to see short-term consolidation.

In the longer term, the technical structure validates a medium-term succession of lower highs and lower lows. As a result, the resistance at 149.78 (08/12/2014 high) has likely marked the end of the rise that started in July 2012. Strong support at 94.12 (24/07/2012 low) looks nonetheless far away.

EUR/GBP Short-term bearish pressures.

EUR/GBP is going lower. The pair has exited the short-term bullish pattern. The technical structure is negative as long as the resistance at 0.8596 holds. Expected to show continued weakness.

In the long-term, the pair has largely recovered from recent lows in 2015. The technical structure suggests a growing upside momentum. The pair is trading above from its 200 DMA. Strong resistance can be found at 0.9500 psychological level.

EUR/CHF Strengthening.

EUR/CHF continues to push higher, yet very slightly. However, despite the sharp increase and the recent bullish breakout which is very likely psychological, we believe that the medium-term pattern suggests us to see at some point renewed bearish pressures towards key support that can be found at 1.0623 (24/06/2016 low).

In the longer term, the technical structure is mixed. Resistance can be found at 1.1200 (04/02/2015 high). Yet,the ECB's QE programme is likely to cause persistent selling pressures on the euro, which should weigh on EUR/CHF. Supports can be found at 1.0184 (28/01/2015 low) and 1.0082 (27/01/2015 low).

Canadian dollar was sharply higher in Asia on Thursday, supported by comments from US President Trump who said that termination of NAFTA treaty is not at the agenda at this stage of negotiations between the members of the treaty. The news boosted Loonie which was under increased pressure from lumber news earlier this week. USDCAD fell from fresh over one-year high at 1.3645 and spiked to session low at 1.3527. Fresh weakness may extend, as today's fall could be seen as rejection on probe above weekly cloud top (1.3573) and bearish signals building on reversal of daily RSI and slow stochastic from the overbought territory. Focus will be on today's close, which would give another negative signal if in red, with confirmation of reversal seen on extension below 1.3483/70 (Fibo 38.2% of 1.3221/1.3645/rising daily 10SMA). Conversely, return and close above weekly cloud would be seen as bullish signal.

Res: 1.3573, 1.3596, 1.3645, 1.3700
Sup: 1.3527, 1.3483, 1.3470, 1.3412

USD/CHF Trading sideways.

USD/CHF keeps on declining despite strong volatility. The short-term technical structure is negative as long as prices remain below the hourly resistance at 1.0171 (07/03/2017). Monitor strong support given at 0.9814 (27/03/2017 low).

In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours nonetheless a long term bullish bias since the unpeg in January 2015.

USD/CAD Renewed buying pressures.

USD/CAD has broken key resistance given at 1.3599 (28/12/206 high). Yet, the pair has failed to go any higher. There is still a strong upside momentum. Hourly support can be found at 1.3411 (24/04/2017 high) then 1.3353 (20/01/2017 high). Expected to show renewed bullish pressures as long as the pair remains above 1.3411.

In the longer term, there is a golden cross with the 50 dma crossing the 200 dma indicating further upside pressures. Strong resistance is given at 1.4690 (22/01/2016 high). Long-term support can be found at 1.2461 (16/03/2015 low).

AUD/USD Continued decline.

AUD/USD has broken support at 0.7473 (12/04/2017 low). As long as prices remain below the resistance at 0.7608 (17/04/2017 high), the short-term technical structure is negative. Key resistance stands at 0.7681 (30/03/2017 high). Expected to show further weakness.

In the long-term, we are waiting for further signs that the current downtrend is ending. Key supports stand at 0.6009 (31/10/2008 low) . A break of the key resistance at 0.8295 (15/01/2015 high) is needed to invalidate our long-term bearish view.

Weekly
    •    Last Candlesticks pattern: N/A
    •    ime of formation: N/A
    •    Trend bias: Near term up

Daily
    •    Last Candlesticks pattern: Hammer
    •    Time of formation: 3 Feb 2016
    •    Trend bias: Up

EURGBP – 0.8445

Although the single currency fell briefly to 0.8312 earlier this month, as euro has staged a strong rebound after holding above previous chart support at 0.8304, suggesting low has possibly been formed there and consolidation with mild upside bias is for another bounce, above 0.8530-35 would extend gain to 0.8592 resistance but a daily close above there is needed to signal recent decline has ended instead, bring further gain to the lower Kumo (now at 0.8630), then test of the upper Kumo (now at 0.8656), however, price should falter well below previous resistance at 0.8735, bring retreat later.

On the downside, whilst initial pullback to 0.8400-10 cannot be ruled out, if our view that low has been formed at 0.8312 is correct, downside would be limited to support at 0.8351 and bring another rebound later. A daily close below 0.8351 would abort and signal the rebound from 0.8312 has ended, bring retest of this level first. Looking ahead, only a drop below 0.8304 support would revive bearishness and signal early downtrend has resumed for weakness to 0.8270-75, then 0.8250 but price should stay well above 0.8200-10.

Recommendation: Buy at 0.8400 for 0.8600 with stop below 0.8300.

On the weekly chart, as the single currency found good support at 0.8312 last week and staged a strong rebound, suggesting consolidation above this level would be seen and initial upside risk remains, above this week’s high at 0.8531 would bring recovery to the Tenkan-Sen (now at 0.8550) but break of resistance at 0.8592 is needed to signal the fall from 0.8857 has ended, then test of the Kijun-Sen (now at 0.8677) would follow, however, as broad outlook remains consolidative, reckon upside would be limited to 0.8788 resistance, bring retreat later.

On the downside, although initial pullback to 0.8400 cannot be ruled out, as long as minor support at 0.8351 holds, prospect of another rebound remains. A drop below 0.8351 would bring test of indicated support at 0.8304-12, once this level is penetrated, this would signal decline from 0.9576 top has resumed for retest of 0.8304 but only break there would extend the fall from 0.9576 top for retracement of medium term upmove to previous support at 0.8251, then 0.8200.

EUR/USD Consolidating above 1.0900.

EUR/USD is pushing higher. Hourly support is given at 1.0856 (26/04/2017 low) then 1.0682 (21/04/2017 base). Stronger support can be found at 1.0494 (22/02/2017 low). Hourly resistance is given at 1.0951 (26/04/2017 high).

In the longer term, the death cross late October indicated a further bearish bias. The pair has broken key support given at 1.0458 (16/03/2015 low). Key resistance holds at 1.1714 (24/08/2015 high). Expected to head towards parity

GBP/USD Strong demand.

GBP/USD is consolidating lower after sharp bullish rally. Resistance at 1.2905 (18/04/2017 low) has been broken. The pair has exited the short-term bearish momentum. Hourly support can be found at 1.2757 (21/04/2017 low). A break of this support would indicate further weakness.

The long-term technical pattern is even more negative since the Brexit vote has paved the way for further decline. Long-term support given at 1.0520 (01/03/85) represents a decent target. Long-term resistance is given at 1.5018 (24/06/2015) and would indicate a long-term reversal in the negative trend. Yet, it is very unlikely at the moment.

USD/JPY Heading towards resistance at 112.20.

USD/JPY is drifting higher. Hourly resistance given at 110.64 (23/04/2017 high) has been broken. Stronger resistance can be found at 112.20 (31/03/2017 high). Closest support can be located at 108.13 (17/04/2017 low). Other key supports lie at a distant 106.04 (11/11/2016 low). Expected to show continued bullish pressures.

We favor a long-term bearish bias. Support is now given at 96.57 (10/08/2013 low). A gradual rise towards the major resistance at 135.15 (01/02/2002 high) seems absolutely unlikely. Expected to decline further support at 93.79 (13/06/2013 low).