Sample Category Title

Weekly
    •    Last Candlesticks pattern: Shooting doji
    •    Time of formation: 20 Feb 2017
    •    Trend bias: Sideways

Daily
    •    Last Candlesticks pattern: Bearish engulfing pattern
    •    Time of formation: 21 Mar 2017
    •    Trend bias: Near term down



Aussie did meet renewed selling interest at 0.7611 (we recommended in our previous update to sell at 0.7570 and a short position was entered) earlier this week and has slipped, retaining our bearishness for the fall from 0.7750 top to bring at least a strong retracement of the rise from 0.7158, hence further decline to 0.7450-55 (50% Fibonacci retracement of 0.7158-0.7750), then towards 0.7380-85 (61.8% Fibonacci retracement) would be seen, however, reckon downside would be limited to 0.7300-10 and bring rebound later.

On the upside, whilst initial recovery to 0.7560-65 cannot be ruled out, reckon the Kijun-Sen (now at 0.7612) would cap upside and bring another decline later. Only a daily close above the Kijun-Sen would abort and signal first leg of decline from 0.7750 has ended, bring a stronger rebound to 0,7640-50 but resistance at 0.7680 should cap upside, price should falter below 0.7700-10, bring another decline later. 



Recommendation: Hold short entered at 0.7570 for 0.7390 with stop above 0.7620.



On the weekly chart, as aussie recovered after finding support at 0.7473 (just held above the Kijun-Sen at 0.7468) and consolidation above this level would be seen, however, if our view that top has been formed at 0.7750 is correct, upside should be limited to 0.7590-00 and bring another decline, below the Kijun-Sen (now at 0.7468) would add credence our view that the rebound from 0.7158 has ended at 0.7750, then further fall towards 0.7380-85 (61.8% Fibonacci retracement of 0.7158-0.7750) would be seen, however, reckon downside would be limited to 0.7290-00, bring recovery later.

On the upside, expect recovery to be limited to 0.7575-80 and the Tenkan-Sen (now at 0.7612) should hold, bring another decline later. Above resistance at 0.7641 would risk test of resistance at 0.7680 but only a sustained breach above this level would signal the retreat from 0.7750 has ended instead, bring another bounce towards this level. Looking ahead, only break of 0.7778 resistance would suggest a possible upside break of early established broad range, bring further rise to 2016 high at 0.7835, above there would confirm and encourage for headway to 0.7900 and later towards psychological level at 0.8000.

The Euro rallied in early European trading, probing above key near-term barrier at 1.0738 (daily Kijun-sen) which capped gains in past two days.

Wednesday's consolidation of Tuesday's strong rally was contained by former strong barrier, now support at 1.0700, keeping near-term bulls intact.

Also, US dollar is weaker on lowered expectations on rate hike in June, which gives additional support to Euro, few days ahead of French election.

Outcome of the first round of election will be the main driver for the single currency, which is expected to come under stronger pressure in case anti-EU candidates win on Sunday.

Until then, the pair is expected to remain bid and extend gains, driven by bullish technicals and weaker dollar.

Daily close above Kijun-sen would be seen as bullish signal for extension towards 1.0776 (Fibo 61.8% of 1.0905/1.0568 descend).

Conversely, repeated close below Kijun-sen line would signal prolonged consolidation with near-term risk expected to shift lower.

Res: 1.0759, 1.0776, 1.0800, 1.0825
Sup: 1.0720, 1.0700, 1.0685, 1.0657

USD/CHF - 0.9960

Most recent candlesticks pattern : N/A

Trend                                    : Near term down

Tenkan-Sen level                  : 0.9970

Kijun-Sen level                    : 0.9973

Ichimoku cloud top                 : 1.0004

Ichimoku cloud bottom              : 0.9985

Original strategy :

Sold at 1.0000, Target: 0.9900, Stop: 1.0030

Position : - Short at 1.0000

Target :  - 0.9900

Stop : - 1.0030

New strategy  :

Hold short entered at 1.0000, Target: 0.9900, Stop: 1.0010

Position : - Short at 1.0000

Target :  - 0.9900

Stop : - 1.0010

As the greenback has remained under pressure after recent selloff, adding credence to our bearish view that recent decline from 1.0108 top is still in progress and bearishness remains for further weakness to 0.9943-48 (1.236 times projection and previous support) and then 0.9926 (61.8% Fibonacci retracement of 0.9813-1.0108) but reckon 0.9900-05 (1.618 times projection) would hold on first testing, bring rebound later.

In view of this, we are holding on to our short position entered at 1.0000. Above previous support at 1.0008 would defer and risk rebound to 1.0020-30 but still reckon indicated resistance at 1.0067 would remain intact.

WTI Crude was exposed to sharp losses on Wednesday, with prices tumbling towards $50 after an unexpected weekly climb in U.S gasoline supplies compounded with existing oversupply fears. Although some losses were clawed back during early trading on Thursday as investors attempted to look beyond the oversupply dilemma and focus on the slight drop in U.S Crude inventories, the bias remains tilted to the downside. With anticipation likely to heighten ahead of the scheduled 25 May conference when OPEC and Non-OPEC oil producers will meet, oil price sensitivity could become a dominant theme moving forward. Although OPEC remains optimistic that production cuts with non-members may uplift oil prices, the resurgence of U.S shale continues to sabotage the cartel's efforts to stabilize the saturated markets.

While some investors remain optimistic over OPEC extending its production cut by another six months to battle oversupply woes, questions may be raised if such measures could reduce the global supply glut and revive oil bulls. The sentiment towards oil remains bearish and when factoring in how Donald Trump's pro-drilling rhetoric and deregulations may continue to negatively impact oil markets, further losses could be expected. From a technical standpoint, bears have conquered the $52 support level with prices almost clipping $50. Previous support at $52 could transform into a dynamic resistance that opens a path towards $50 and potentially lower.

Global stocks on the defense

The combination of depressed oil prices and a sense of anxiety ahead of the French presidential elections this weekend has left investors edgy and stock markets on the defense. Although Asian shares have displayed a touch of resilience during early trading on Thursday, the upside could be limited if participants start to depart from riskier assets amid the uncertainty. European markets are expected to open slightly pressured as investors observe from a safe distance; this sense of caution could potentially limit gains on Wall Street. With the Trump rally losing momentum and geopolitical tensions weighing on global sentiment, stock markets are in desperate need of inspiration to fuel the bull rally.

Sterling hovering around 1.2800

Sterling has staged an awe-inspiring rebound this week off the back of U.K Prime Minister Theresa May shocking markets by announcing early elections. However, questions should be raised whether the rally is sustainable. With political risks and uncertainty revolving around Brexit remaining a dominant theme when dealing with Sterling, the bullish rally could face some headwinds down the road. Investors may direct their attention towards BoE governor Mark Carney who is scheduled to deliver a speech today. With the Brexit saga gaining traction and UK economic data displaying some signs of weakness over the past months, it will be interesting to hear Carney's thoughts on these developments. From a technical standpoint, the GBPUSD has broken above the 1.2775 resistance level, with the next level of interest at 1.3000.

In an alternative scenario, repeated weakness below 1.2775 could open a path lower towards 1.2600.

GBP/USD - 1.2788

Most recent candlesticks pattern   : N/A

Trend                                 : Near term up

Tenkan-Sen level                 : 1.2805

Kijun-Sen level                    : 1.2815

Ichimoku cloud top              : 1.2775

Ichimoku cloud bottom        : 1.2711

Original strategy :

Buy at 1.2710, Target: 1.2850, Stop: 1.2675

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.2755, Target: 1.2855, Stop: 1.2720

Position : -

Target :  -

Stop : -

Although cable has rebounded after finding support at 1.2770 and gain to 1.2855-60 cannot be ruled out, break there is needed to signal the pullback from 1.2906 has ended, bring retest of this level, break there would extend recent upmove to 1.2920-30 (2 times extension of 1.2365-1.2575 measuring from 1.2500), then 1.2950 but loss of near term upward momentum should prevent sharp move beyond 1.2990-00 (1.236 times projection of 1.2109-1.2616 measuring from 1.2365 and psychological resistance). If said resistance continues to hold, then further consolidation would take place and another retreat to 1.2755-60 (38.2% Fibonacci retracement of 1.2515-1.2906) cannot be ruled out before prospect of a rally.

In view of this, would not chase this rise here and would be prudent to buy cable on subsequent pullback as downside should be limited to 1.2740-50. Below 1.2710 (50% Fibonacci retracement) would defer and signal top has been formed, risk correction to 1.2660-65 (61.8% Fibonacci retracement of 1.2515-1.2906) but price should stay well above 1.2608-16 (previous resistance now support).

EUR/USD - 1.0738

Most recent candlesticks pattern   : N/A

Trend                      : Near term down

Tenkan-Sen level              : 1.0729

Kijun-Sen level                  : 1.0724

Ichimoku cloud top             : 1.0707

Ichimoku cloud bottom      : 1.0676

Original strategy  :

Buy at 1.0675, Target: 1.0775, Stop: 1.0640

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.0685, Target: 1.0785, Stop: 1.0650

Position : -

Target :  -

Stop : -

As the single currency has risen again after brief pullback, suggesting recent upmove from 1.0570 is still in progress and upside bias remains for further gain to 1.0775-80 (61.8% Fibonacci retracement of 1.0906-1.0570) and possibly towards 1.0800, however, 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 1.0675-85 should limit downside. Only below support at 1.0635 would abort and signal top is formed instead, risk weakness towards 1.0602 support.

USD/JPY - 108.90

Most recent candlesticks pattern   : N/A

Trend                      : Near term down

Tenkan-Sen level              : 108.90

Kijun-Sen level                  : 108.92

Ichimoku cloud top             : 108.68

Ichimoku cloud bottom      : 108.65

Original strategy  :

Bought at 108.45, Target: 109.45, Stop: 108.30

Position :  - Long at 108.45

Target :  - 109.45

Stop : - 108.30

New strategy  :

Hold long entered at 108.45, Target: 109.45, Stop: 108.30

Position :  - Long at 108.45

Target :  - 109.45

Stop : - 108.30

As dollar has eased after faltering below indicated resistance at 109.22, suggesting further consolidation would take place, however, reckon downside would be limited to 108.45-50 and bring another bounce to said resistance, break there would add credence to our view that a temporary low has been formed at 108.13, bring retracement of recent decline to 109.40-45 (previous resistance and 38.2% Fibonacci retracement of 111.58-108.13) but reckon upside would be limited to 109.86-87 (50% Fibonacci retracement and previous resistance) and price should falter below 110.25-30 (61.8% Fibonacci retracement), bring retreat later.

In view of this, we are holding on to our long position entered at 108.45. Below 108.30-32 would risk retest of 108.13 support (this week’s low) but break there is needed to signal recent decline has resumed and extend weakness to 107.75-80 later.

EUR/USD

Current level - 10725

The corrective pattern below 1.0736 is expected to dip lower, to 1.0670, before bouncing towards new high, around 1.0750.

Profit-taking affects gold curbing silver and platinum

USD/JPY

Current level - 108.88

My intraday outlook here is positive, for another test of 109.40 resistance, en route to 110.10 zone. Key support lies at 108.30.

GBP/USD

Current level - 1.2808

The pullback after 1.2904 is still underway and I favor a break through 1.2770 to provoke a test of 1.2705 support zone.

Sunrise Market Commentary

• Rates: Working off overbought conditions
  Today's eco calendar contains US weekly jobless claims, Philly Fed business outlook and EMU consumer confidence. Data aren't expected to inspire trading, but a weaker Philly Fed outlook could further question the reflation trade. However, both the Bund and US Note future entered overbought conditions, suggesting that the core bond rally could lose more steam.
• Currencies: dollar still going nowhere
  Yesterday, the dollar stabilized against the euro and the yen. A bottoming in core yields helps to put a floor for the dollar, but there is no obvious trigger for a sustained rebound. Sterling maintains most of the impressive gains recorded after UK PM May announced early elections.

The Sunrise Headlines

• US equities started the day on a strong footing, but returned gains throughout dealings. The Dow (‐0.58%) and S&P (‐0.17%) even closed with losses. Overnight, Asian risk sentiment is better with gains of up to 0.5%.
• Oil prices slid after data showed US gasoline stockpiles increased for the first time in nine weeks and as weekly US crude production hit its highest level since August 2015. Brent crude declined from $55/barrel to $52.5/barrel.
• Brussels is starting systematically to shut out British groups from multibillioneuro contracts and urging companies to decamp to one of the 27 remaining EU members as it prepares for Brexit.
• New Zealand inflation jumped in Q1 to 2.2% Y/Y, the fastest since 2011, putting CPI in the upper half of the RBNZ's 1‐3% target range. The central bank said last month it was anticipating higher inflation. NZD/USD jumped from 0.7 to 0.704.
• Japan's export and import growth revved up in March, with the former marking a fourth straight month of expansion and a stronger yen helping the latter notch its fastest rise in more than three years.
• UK PM May won formal approval from the House of Commons to hold an early election in June, supported by an opposition Labour Party that could be facing one of its worst national defeats in decades.
• Today's eco calendar contains US initial jobless claims, Philly Fed business outlook and EMU consumer confidence. Spain and France tap the market. Fed governor Powell is scheduled to speak.

Currencies: Dollar Still Going Nowhere

Dollar in wait-and-see modus. No rebound yet

On Wednesday, there were only second tier eco data releases. Core bond yields rebounded after the recent decline and put a floor under EUR/JPY and USD/JPY. The broader picture for the dollar remained indecisive. The trade‐weighted dollar held within reach of the recent correction low, while EUR/USD hovered in the 1.0725 area, near this week's high. So, there was no consistent indication across markets that the US reflation trade would resume and that a sustained dollar rebound is around the corner.

Overnight, Asian equities opened soft after a disappointing performance in the US, but found a better bid as the session proceeded. Japanese March foreign trade data were stronger than expected and suggest a decent global economic context supports regional sentiment. However, the equity rebound has hardly any impact on the dollar. USD/JPY hovers little changed near the 109 level. EUR/USD also maintains its tight range in the low 1.07 area. Commodity currencies remain in the defensive after yesterday's sharp decline of the oil price. AUD/USD is trading in the 0.75 area. USD/CAD jumped to the high 1.34 area.

Today, market attention will go to the EMU consumer sentiment, the Philly Fed business outlook and the US initial claims. The latest NFIB small business confidence and the Michigan consumer sentiment held close to record highs, but the NY business sentiment plunged in April, suggesting that firms might have second thoughts about Trump's ability to deliver on tax cuts and infrastructure spending. The Philly Fed business sentiment fell already in March, but is still at very high level. For April a slowing to 25.5 is expected. A sharper decline wouldn't go unnoticed. EMU consumer confidence is expected marginally stronger at ‐4.8 (from ‐5), a high level for this indicator.

Of late, by default dollar softness dominated FX trading. The move was reinforced by a sustained decline in US yields. Initially, USD softness was mainly visible in USD/JPY, but of late EUR/USD also rebounded north of 1.07. part of this move, however, might have been a euro rebound/short squeeze rather than USD weakness. We look out whether this week's tentative US bottoming out 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 on the US bond markets has gone far enough. However for now there is no trigger for Uturn. So, it is still too early to position for a rebound of the dollar. In a day‐to‐day perspective, there is maybe even room for some further unwinding of euro shorts ahead of the French election.

From a technical point of view, USD/JPY broke through the 110 key support, after having failed to regain the 111.36/60 previous range bottom. 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, as the dollar traded weakish of late. The picture is turning more neutral as the pair returns to 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: off the recent lows. USD softness or euro rebound

EUR/GBP

Sterling holding strong, but no further gains

Yesterday, sterling maintained most of Tuesday's impressive gains after UK PM May called for an early election on June 8. It is another reason for LT sterling shorts to reduce positions. However, there was only a very modest correction on Tuesday's GBP rally. EUR/GBP closed the session at 0.8383 (from 0.8356). Cable finished the day at 1.2777 (from 1.2841)

Today, there are again no UK eco data. BoE governor Carney speaks in Washington, but we don't expect him to make bold statements on high profile policy issues (or regarding the eco outlook). We assume that the BOE will keep a low profile as the election campaign has started. We don't row against the sterling positive tide. In a longer term perspective, the sterling rally is probably overdone.

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

Download entire Sunrise Market Commentary

Market movers today

A relatively quiet day once again on the data front, with the main release in the euro area being consumer confidence. The latest euro-area unemployment figures showed a decline in February to 9.5%, and such decent employment growth cont inues to support increasing consumer confidence, which we expect to see increased to -4.1 in April. Like financial and business sentiment , consumer confidence has also proved fairly resistant to political uncertainty, so we expect it to continue on an upward trend despite the uncertain political climate.

No major Scandi events are scheduled for today.

Selected market news

Markets calmed somewhat overnight following the upheaval in political risks over the past 10 days. The Fed's beige Book last night painted a still relatively upbeat picture of the US economy, which was echoed by the Fed's Fischer, suggest ing that the global economy is now more robust to tighter monetary policy. Moreover, strong Japanese export data out this morning is adding to global-growth sent iment . We stress, however, that our cyclical lead models paint an increasingly negat ive picture of the growth prospects across the US, Europe and Japan, and we would not be surprised to see a cyclical peak in especially the US in the near future. Oil prices dropped significantly on US data showing surging oil production and inventories. Equity markets have been mixed but energy stocks in particular are suffering as oil prices dropped on surging US production and inventories with Brent oil just above the USD53/bbl mark. Finally, a strong CPI print out of New Zealand, which saw inflation reach the 2% target for the first time in five years, has sent NZD/USD higher.

UK PM Theresa May received House of Commons' backing for her 8 June election call yesterday, and GBP/USD is trading just off the 1.28 mark, levels not seen since October last year, with UK stocks suffering as a result . The election campaign is now on with the Tories maintaining a decent lead.

Yesterday in an interview with the FT, US Treasury Secretary Steven Mnuchin commented on a range of the initiatives proposed by the Trump administration. Notably, Mnuchin said that while the tax plan remains a key priority for this year, August seems an unrealistic deadline. Plans to boost growth via infrastructure investment also remain on the table for 2017 but seem unlikely to provide a growth boost before next year , in our view. The Treasury also appears keen on incentivising repatriat ion of foreign profit (i.e. with a so-called Homeland Investment Act 2) but Mnuchin was more reluctant to provide out right support for border-tax adjustments, stressing that there are both pros and consto this instrument. The latter essentially works as an import tariff/export subsidy and could thus, depending on the actual implementat ion, spur USD appreciat ion, which would not be welcomed by the Trump administ ration.