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Euro and GBP are unchanged, and most asset classes in Asia are almost so, as markets await France's 1st round presidential runoff this weekend.

If the price action on most G-10 currency pairs and precious metals were an electrocardiogram printout today, the Doctor would be screaming 'code blue' and reaching for the electric paddles; such has been the quietness of the price action. Asia has any positioning it wants (or not) into this weekend's French election, or they are content to let early Europe lead the way. With currencies and metals becalmed, only equity indices have shown signs of life, moderately up following Wall Street's performance overnight.

On the data front, it is strictly 2nd tier with PMI's from the eurozone, Germany, France and the U.S. Canada releases its March CPI which might spark some activity for traders of the loonie persuasion. Otherwise, we expect markets to move on headlines and final rejigging of positions into this weekend's 'Le Crunch.'

FX

EUR/USD

Monday morning's price action may well be 'exciting' to say the least in the twilight zone of early New Zealand and Australia when the results come out. It's worth, therefore, taking a look at some of the bigger picture levels.

EUR has resistance at yesterday's high of 1.0780 followed by the 200-day moving average (DMA) at 1.0845 and then March's high of 1.0905.

Support sits at the 100-DMA at 1.0633 ahead of the rising trendline back to December at 1.0610. After this, we have 1.0490 and then 1.0390.

A Melenchon vs. Le Pen run-off may well render these levels academic I will add.

USD/JPY

Has been gratefully out of the limelight this week as Europe takes the limelight. Easing tensions in the region have also helped USD/JPY paint a fairly constructive short-term technical picture this week, with a series of higher daily lows. Depending on Sunday's result, USD/JPY may not be it's own on Monday, pushed around by EUR/JPY flows.

Nevertheless, in the bigger picture USD, the technical outlook still looks bearish with the descending trendline coming in at around 110.00, the breakout from last week and resistance anyway. From a technical perspective, USD/JPY would need a couple of daily closes above this area to imply the worst may be over for now.

Support is at yesterday's low and also the 200-DMA, at 108.78. Below here next support is at 108.08.

INDICES

ASX 200

The ASX enjoyed a positive day following on from a frothy Wall Street. The exchange down under got another boost in Asia as resource stocks rallied with copper and iron ore. The Dalian iron ore futures rallying a whopping 7% on the day.

Zooming out to the longer term chart, the ASX continues to trade constructively from a technical perspective. The ascending wedge formation is clear to see on the daily chart.

The ASX enjoys trendline support at 5740 with the 100-DMA at 5711 just behind.

Above, the April highs at 5950 form the top of the wedge and the next longer term resistance.

NIKKEI 225

A constructive week as a weaker Yen has boosted Japan exporter stocks. The Nikkei is closing in on its pivot level, just above, at 18,790 with the 100-DMA above at 19153. Above there we see resistance at 19,355 and then 19,720, which has been a multiple daily high since December.

Support appears at 18,265 followed by the 200-DMA at 18,160.

The Nikkei should be a high-beta to the results in France on early Monday, given its sensitivity to the movements of the Yen.

PRECIOUS METALS AND OIL

No change from this morning's missive which can be found here. Wolves Circle Oil and Gold Ahead of Le Crunch. The chart perspectives are not constructive for precious metals or oil, but we may have to wait until Monday for our answer.

SUMMARY

Asia has remained in a holding pattern as the markets settle down to see if French voters storm The Bastille, or stay 'on message.' Early Monday trading, with its usual much-reduced liquidity at the best of times, should see some volatility. The question will be how orderly or disorderly it will be, and only the French can tell us that. Merci beaucoup et bon weekend..

EUR/JPY Short-term bullish momentum continues.

EUR/JPY has broken the resistance at 117.43 (23/11/2016 low). Other resistance stands at 122.88 (13/03/0217 high). Major support is given at 114.90 (18/04/2017low).

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 Moving sideways.

EUR/GBP is now pausing after unsuccessfully challenged its key support at 0.8304. Resistances for a temporary rebound are given by 0.8400 (intraday high) and 0.8512 (18/04/2017 reaction high). The short-term 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 Moving sideways.

EUR/CHF is in an uptrend as long as the support at 1.0693 (19/04/2017 low and declining trendline) holds. The medium-term pattern suggests us to see continued bearish pressures towards key support that can be found at 1.0623 (24/06/2016 low). Key resistance is given by 1.0720.Expected to see further decline.

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).

Gold Drifting towards support.

Gold has faded near the hourly resistance at 1295 (18/04/2017 high), suggesting a pickup in selling pressures. Support can be located 1272 (08/04/2017 low). Another hourly support lies at 1270 (rising trendline). An hourly resistance can now be found at 1295 (range high).

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 Breaks rising trendline.

Silver has broken strong support at 18.16 (rising trendline) indicating further downside risk. Key support is given at 17.78 (10/04/2017 low) then 16.82 (15/03/2017 low). Strong resistance is given at a distance at 19.00 (09/11/2017 high).

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 Weak bounce.

Crude oil has declined sharply, breaking the support at 50.71, yet now has paused. Support now lies at 49.63 (08/12/2017 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).

EUR/USD - 1.0725

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 1.0724

Kijun-Sen level                  : 1.0742

Ichimoku cloud top             : 1.0726

Ichimoku cloud bottom      : 1.0695

Original strategy  :

Buy at 1.0690, Target: 1.0790, Stop: 1.0655

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.0690, Target: 1.0790, Stop: 1.0655

Position : -

Target :  -

Stop : -

Euro’s retreat after rising to 1.0778 yesterday suggests a temporary top has been made there and consolidation with mild downside bias is seen for correction to 1.0690-00 (50% Fibonacci retracement of 1.0602-1.0778 and previous support), however, renewed buying interest should emerge there and bring another rise later to 1.0783-85 (61.8% projection of 1.0602-1.0737 measuring from 1.0700), then 1.0800-10 but loss of near term upward momentum should prevent sharp move beyond 1.0825-30, risk from there is seen for a retreat to take place later.

In view of this, would not chase this rise here and would be prudent to buy euro on pullback as 1.0690-00 should limit downside. Only below previous resistance at 1.0670 (now support) would abort and signal top is formed instead, bring correction towards previous support at 1.0635 which is likely to hold from here. 

USD/CHF Bouncing off support.

USD/CHF has declined toward the hourly support at 0.9955 (30/03/2017 base low) before bouncing. The short-term technical structure is negative as long as prices remain below the hourly resistance at 1.0171 (07/03/2017). Monitor hourly support is given at 0.9955 (30/03/2017 base low) then 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 Consolidating

USD/CAD has increased sharply this week. The pair is now consolidating. There is still a strong upside momentum. Resistances can now be found 1.3535 (09/03/2017 high). Hourly support can be located at 1.3456 (04/04/2017 high) then 1.3353 (20/01/2017 high).

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 Failing to find demand.

AUD/USD is still trying to bounce off strong support at 0.7494. However, 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).

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.

EUR/USD Choppy trading.

EUR/USD has reversed course. Hourly support can be found at 1.0703 (20/04/2017 base) then 1.0576 (11.04.2017 low). Stronger support can be found at 1.0494 (22/02/2017 low). Key resistance stands at 1.0776 (20/04/2017 high) then 1.0906 (27/03/2017 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 Consolidation.

GBP/USD has pause after sharp bullish rally. Resistance stands at 1.2953. Monitor the hourly support at 1.2775 (intraday base) as a break would confirm a weakening short-term bullish momentum. Hourly resistance is located at 1.2905 (18/04/2017 reaction high).

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 Grinding higher.

USD/JPY has drifted higher. Hourly resistance stands at 109.10 (18/04/2017 high). Other resistance can be found at 110.11, while a key resistance stands at 112.20 (31/03/2017 high). Next support can be located at 108.22 (17/04/2017 low). Other key supports lie at a distant 106.04 (11/11/2016 low).

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).

USD/JPY - 109.17

Most recent candlesticks pattern   : N/A

Trend                      : Near term down

Tenkan-Sen level              : 109.27

Kijun-Sen level                  : 109.11

Ichimoku cloud top             : 108.90

Ichimoku cloud bottom      : 108.75

New strategy  :

Stand aside

Position :  -

Target :  -

Stop : -

Although yesterday’s anticipated rebound to 109.49 adds credence to our near term bullish view for the erratic rise from 108.13 to bring retracement of recent decline, reckon upside would be limited to 109.86-87 (50% Fibonacci retracement of 111.58-108.13 and previous resistance), however, price should falter below 110.25-30 (61.8% Fibonacci retracement) and bring retreat later.

In view of this, would not chase this rise here and would be prudent to stand aside for now. Below 108.65-70 would suggest top is formed, bring weakness to 108.30-32, break there would signal the rebound from 108.13 has ended, bring retest of this level first. 

The Euro holds in extended consolidation above 1.0700 support (broken Fibo 38.2% of 1.0905/1.0568 downleg) reinforced by 5/30 SMA's bull-cross) in early Friday's trading.

The pair spiked to 1.0776 on Thursday and hit target at 1.0776 (Fibo 61.8%), but probe above 1.0738 pivot (sideways-moving daily Kijun-sen line which capped Tue/Wed upside attempts), proved to be short-lived.

Strong upside rejection that left daily candle with long upper shadow on Thursday weighs, however, immediate downside risk will be sidelined while the price is holding above supports at 1.0700 and 1.0680 (rising daily Tenkan-sen / 20SMA).

Release of EU PMI data is in focus today, as the Euro is eyeing an outcome of the first round of French presidential election.

Res: 1.0738, 1.0776, 1.0800, 1.0837
Sup: 1.0700, 1.0680, 1.0661, 1.0627

EUR/USD

Current level - 10716

Yesterday's 'double top' formation at 1.0777 signals a reversal and the intraday outlook is bearish, for a break through 1.0700 static support, towards 1.0570 low. Crucial resistance lies at 1.0740.

Profit-taking affects gold curbing silver and platinum

USD/JPY

Current level - 109.26

My intraday outlook is positive above 109.09, for a rise towards 110.10. Crucial on the downside is 108.70.

GBP/USD

Current level - 1.2808

Still in the consolidation pattern below 1.2904 peak and the intraday outlook is rather bearish, for a break through 1.2770, towards 1.2705 area. 

Sunrise Market Commentary

• Rates: Side-lined ahead of French elections?
  EMU and US PMI's colour today's trading, but risk ending up being irrelevant ahead of Sunday's first French presidential election round which probably keep most investors sidelined. The outcome will determine the start of next week's trading. If the tail risk (Mélenchon vs Le Pen or Fillon) manifests, markets will start discounting the “Frexit” possibility.
• Currencies: EUR/USD fails to extend gains going into the French election
  Yesterday, the euro gained temporary ground on hopes for a market-friendly outcome of the French election. However, the momentum couldn't be maintained. The dollar was in better shape later in the session. Today, trading in the major USD cross rates might shift in wait-and-see modus. We don't expect yesterday's pro-euro repositioning to continue.

The Sunrise Headlines

• US equities ended strong, gaining between 0.75% and 1% as US Treasury secretary Mnuchin promised details of tax reforms very soon. Overnight, Asian stock markets record similar gains with China underperforming (flat).
• The Trump administration will unveil a tax reform plan very soon and expects it will be approved by Congress this year whether a healthcare overhaul happens or not, Treasury Secretary Steven Mnuchin said.
• The US has set the stage for a global showdown over steel, launching a national security investigation that could lead to sweeping tariffs on steel imports in what would be the first significant act of economic protectionism by Trump.
• The Japanese manufacturing PMI rose to 52.8 from 52.4 in March. Sub-indices measuring output, new export orders, employment, input and output prices all increased at a faster rate than the previous month.
• It would not be a bad idea for the ECB and other central banks to follow the US Federal Reserve's example and change course away from an ultra-accommodative monetary policy, German Finance Minister Schaeuble said.
• France's presidential candidates embark on their last day of campaigning on Friday before this weekend's tight first-round election, marked by the collapse of the mainstream political parties and rise of the far left and far right.
• Today's eco calendar contains EMU manufacturing and services PMI's, UK retail sales, US PMI's and US existing home sales. Fed Kashkari is scheduled to speak

Currencies: EUR/USD Fails To Extend Gains Going Into The French Election

EUR/USD rebound slows ahead of French election

On Thursday, the euro initially rebounded as euro area yields recovered from recent lows and interest rate differentials narrowed in favour of the euro. However, the rally petered out later in the session. A good equity performance and US Treasury secretary Mnuchin confirming that the government will propose tax reform plans soon, helped the return the dollar. The headlines on the terrorist attack in Paris had little impact. At that time, EUR/USD had already reversed the intraday gains. The pair closed the session at 1.0717. USD/JPY finished the day at 109.32 (from 108.86 on Wednesday ). Even so, the gain remained modest given the rise in core yields and the positive equity sentiment.

Overnight, Asian equities are also trading with modest to moderate gains. Japanese equities are supported by comments from BOJ's Kuroda that the bank intends to keep monetary policy very accommodative. The BOJ governor acknowledged that the Japanese economy is doing better but inflation remains low. Kuroda also mentioned that a rise in the yen could delay Japan reaching the 2% inflation target. USD/JPY hovers in in the 109.20 area this morning, maintaining most of yesterday's gain. EUR/USD stabilizes in the low 1.07 area as investors ponder the impact of the terrorist attack in France yesterday evening, just days before the first round of the presidential election.

Today the April business sentiment in the US and the EMU will be released . In March, EMU composite PMI climbed to 56.4 from 56. The omens are good for yet another (slight) increase of the headline index in April, which would bring the index to a 6-yr high. The consensus expect a stabilization, but we see risks on the upside.US Markit PMI is expected to have risen slightly for both manufacturing and services. Regional surveys (Philly Fed and NY) fell sharply in April, suggesting that risks for the US PMI might be on the downside of consensus. So, the data might be slightly supportive for EUR/USD. The French election will remain an important factor for FX trading. Yesterday, markets adapted positions for a market friendly outcome of the first round on Sunday. This temporary supported the euro. Today, we assume a more neutral market bias after yesterday's attack in Paris. The euro probably won't get additional interest rate support. We expect the euro to return to wait-and-see modus. However, the downside of EUR/USD might be well protected as a market friendly outcome of the election is still a likely.

Of late, by default dollar softness dominated FX trading. This week, the dollar (trade-weighted) showed cautious signs of bottoming out. We look out whether this process is confirmed. For the overall USD performance we continue to keep a close eye on the US bond markets. We maintain the view that the correction higher on the US bond markets has gone far enough. However, for now there is no trigger for a U-turn and the French election remains a factor of uncertainty. A constructive outcome of the French election might be supportive for both EUR/USD and USD/JPY.

From a technical point of view, USD/JPY broke through the 110 key support. We downgraded our USD/JPY assessment to bearish, as long as the pair doesn't regain 112.20 (neckline ST double bottom). Next key support (62% retracement) comes in at 107.18. EUR/USD extensively tested the topside of the MT range (1.0874/1.0906 area) late March, but the test was rejected. EUR/USD returned lower in the 1.0875/1.05. The move met support in the 1.06 area. The picture turned more neutral as the pair returnsedto the middle of the ST range. We slightly prefer to sell EUR/USD on upticks in case of a return higher in the range as we see room for a broader USD comeback.

EUR/USD: pre-French election has nog strong legs

EUR/GBP

Sterling holds near the recent highs

Sterling trading was mostly driven by global moves and technical considerations yesterday. EUR/GBP was supported by the overall euro rebound. EUR/GBP temporary moved to the 0.84 area, but the gains were reversed as the euro returned intraday gains later in the session. EUR/GBP closed the session at 0.8364 (from 0.8383). EUR/GBP 0.83 support holds for now. Cable basically drifted sideways in the 1.28 area

The UK retail sales data might bring some animus for sterling trading today. March sales are expected to decline 0.5% M/M after a strong performance in February. We don't have strong reasons to take a different view from the consensus. A substantial negative surprise is probably needed to trigger a meaningful sterling correction given current momentum. If the EUR/USD rally slows, it will probably be difficult for EUR/GBP to break north of the 0.83/0.84 corridor. In a longer term perspective, the sterling rally is probably overdone. However, short-term we still see no obvious trigger for a sustained sterling correction.

We had a neutral short-term bias on EUR/GBP. On Tuesday, sterling dropped below the bottom of the EUR/GBP 0.84 support, improving the picture for sterling. The pair came with reach of the key 0.8305 support (Dec low). We look whether this level holds. A break below would be highly significant from a technical point of view. Longer term, Brexit-complications remain a potential negative for sterling. However, this is not the focus of sterling trading at this stage.

EUR/GBP: key 0.83 support still within reach, but no real test occurred

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