Sample Category Title

EUR/USD - 1.0650

Most recent candlesticks pattern   : N/A

Trend                      : Near term down

Tenkan-Sen level              : 1.0645

Kijun-Sen level                  : 1.0643

Ichimoku cloud top             : 1.0640

Ichimoku cloud bottom      : 1.0615

Original strategy  :

Sold at 1.0665, Target: 1.0565, Stop: 1.0680

Position : - Short at 1.0665

Target :  - 1.0565

Stop : - 1.0680

New strategy  :

Hold short entered at 1.0665, Target: 1.0565, Stop: 1.0675

Position : - Short at 1.0665

Target :  - 1.0565

Stop : - 1.0675

Although the single currency slipped to 1.0602 initially yesterday, euro found good support there and has staged a strong rebound to 1.0670, suggesting further choppy trading would be seen, however, as long as resistance at 1.0670-78 holds, prospect of another decline remains, below said support at 1.0602 would bring test of 1.0589 support but break there is needed to signal decline has resumed for retest of 1.0570, (last week’s low), below there would extend the decline from 1.0906 to 1.0550-55 (50% projection of 1.0906-1.0635 measuring from 1.0689), then 1.0525-30.

In view of this, we are holding on to our short position entered at 1.0665. A firm break above said resistance at 1.0670-78 would abort and suggest low has been formed at 1,0570, bring a stronger rebound to 1.0698-02 (50% Fibonacci retracement of 1.0827-1.0570 and previous resistance).

Daily Pivots: (S1) 136.36; (P) 136.84; (R1) 137.16; More...

A temporary low is formed at 135.58, ahead of medium term fibonacci level at 135.39. Intraday bias in GBP/JPY is turned neutral first. As noted before, we're viewing price actions from 148.42 as a corrective pattern. Break of 137.51 support turned resistance will turn intraday bias back to the upside. Break of 140.08 resistance will confirm near term reversal. However, sustained break of 135.39 will dampen our view and target next fibonacci level at 132.31.

In the bigger picture, price actions from 122.36 medium term bottom are still seen as a corrective pattern. As long as 50% retracement of 122.36 to 148.42 at 135.39 holds, another rising leg would be seen to 38.2% retracement of 195.86 to 122.36 at 150.42 and possibly above. However, firm break of 135.39 will bring retest of 122.36, with prospect of resuming the larger down trend from 195.86.

Daily Pivots: (S1) 115.16; (P) 115.59; (R1) 116.35; More...

EUR/JPY formed a temporary low at 114.84 after hitting 61.8% retracement of 109.20 to 124.08 at 114.88. Intraday bias is turned neutral for consolidations. Upside of recovery should be limited by 118.23 support turned resistance and bring another decline. Corrective rise from 109.20 has completed at 124.08. Below 114.84 will turn bias back to the downside for retesting 109.20 low.

In the bigger picture, medium term corrective rise from 109.20 should have completed at 124.08, ahead of 126.09 support turned resistance. Medium term down trend from 149.76 is likely resuming. Break of 109.20 will target 94.11 low. In any case, break of 126.09 is needed needed to confirm medium term reversal. Otherwise, outlook will remain bearish in case of another rebound.

USD/JPY - 109.09

Most recent candlesticks pattern   : N/A

Trend                      : Near term down

Tenkan-Sen level              : 109.06

Kijun-Sen level                  : 108.74

Ichimoku cloud top             : 108.77

Ichimoku cloud bottom      : 108.55

Original strategy  :

Sell at 109.90, Target: 108.90, Stop: 110.25

Position :  -

Target :  -

Stop : -

New strategy  :

Sell at 109.90, Target: 108.90, Stop: 110.25

O.C.O.

Buy at 108.60, Target: 109.60, Stop: 108.25

Position :  -

Target :  -

Stop : -

Although the greenback extended recent decline to as low as 108.13 yesterday, the subsequent strong rebound suggests a temporary low has been formed there and consolidation with mild upside bias is seen for retracement of recent decline, hence gain to 109.40-45 (previous resistance and 38.2% Fibonacci retracement of 111.58-108.13) is likely, however, 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 to 108.50-60 but price should stay above 108.30-35, bring another rebound.

In view of this, whilst we are looking to turn long on dips for such a rebound, we are inclined to sell dollar on subsequent bounce as 109.90-00 should limit upside, bring another decline. Below 108.30-35 would risk retest of 108.13 support (yesterday’s low) but break there is needed to signal recent decline has resumed and extend weakness to 107.75-80 later.

'Although forward-looking indicators of labor demand continued to suggest an increase in employment growth over the period ahead, this has been true for some time without leading to an improvement in labor market conditions.' - Reserve Bank of Australia

Minutes of the Reserve Bank of Australia's meeting released on Tuesday showed that policymakers would mainly focus their attention on the country's labour and housing markets going forward. The Central bank pointed to a significant weakness in the labour market and rising underemployment, with the unemployment rate at a record high of 5.9%. Therefore, the RBA highlighted the need for consistent monitoring of the labour markets. At the end of its latest meeting, the Bank voted to keep cash rate unchanged at a record low pf 1.50%, stating that it would continue to seek ways to ensure stronger investment and hiring in the non-energy-related sectors. The Central bank expressed also concerns over surging housing prices in Sydney and Melbourne. As to inflation, the headline inflation rate is set to rise 2% in 2017 amid higher oil prices, while the return of core inflation to the RBA's 2% inflationary target would probably take much longer. A report released last week showed that growth in the property market offset household income growth, pointing to overheating in the market. However, the Bank said that higher oil prices provided a significant boost to Australia's national income during the first quarter of 2017.

Daily Pivots: (S1) 1.3992; (P) 1.4011; (R1) 1.4041; More...

Intraday bias in EUR/AUD remains neutral as sideway trading continues in range of 1.3872/4309. We continue to favor the case that larger fall from 1.6587 is completed at 1.3624, after defending 1.3671 key support. And the trend is reversing. On the upside, break of 1.4215 minor resistance will turn bias to the upside for 1.4309. Break there will finally resume whole rise from 1.3624 and target 1.4721 key resistance next. On the downside, however, sustained break of 1.3872 will dampen our view of trend reversal. In that case, intraday bias will be turned back to the downside for retesting 1.3624 low, with prospect of extending the larger down trend.

In the bigger picture, price actions from 1.6587 medium term top are viewed as a corrective pattern. Such correction could be completed after testing 1.3671 key support. Break of 1.4721 cluster resistance (38.2% retracement of 1.6587 to 1.3624 at 1.4756) should confirm this case and target 61.8% retracement at 1.5455 and above. Overall, we'd expect the up trend from 1.1602 to resume later. However, sustained break of 1.3671 will invalidate our bullish view and would turn extend the fall from 1.6587 towards 1.1602 long term bottom.

'As this index is very noisy, it is hard to understand what these massive moves up or down mean - however, this regional manufacturing survey is normally one of the more pessimistic.' - Steven Hansen, Econintersect

Manufacturing activity in the New York State fell markedly in April, raising concerns over economic growth in the Q2 of 2017, a survey revealed on Monday. The New York Federal Reserve reported that its Empire State Manufacturing Index came in at 5.2 for April, following the preceding month's reading of 16.4. Meanwhile, market analysts anticipated a slight drop to 15.2 points during the reported month. Data showed that 35% of the survey respondents said that business conditions had improved, while 30% claimed that they has worsened over the reported month. The New Orders Index plunged 14 points to 7.0, while the Unfilled Orders Index rose slightly to 12.4. On the positive side, the Employment Index jumped to its two-year high of 13.9 points in April, confirming the view that the US labour market is at or near full employment. The survey respondents also pointed to modestly rising input prices and increasing working hours. The respondents also expressed optimism of the long-term prospects of the US economy, with the Future Situation Index rising three points to 39.9 and the Future New Orders and Shipments Indexes decreasing slightly. Moreover, both Future Capital Expenditures and Future Technology Spending Indexes surged to 27.7 and 15.3 points, respectively.

Daily Pivots: (S1) 0.8456; (P) 0.8473; (R1) 0.8486; More...

Intraday bias in EUR/GBP remains on the downside for 0.8402 support. As noted before, consolidation from 0.8303 could be completed at 0.8786. Fall from 0.8786 is developing as the third leg of the correction from 0.9304. Decisive break of 0.8402 support will confirm our bearish view and target 0.8303 and below. At this point, we'd expect front support from 0.8116/20 cluster support to contain downside and complete the correction from 0.9304. On the upside, break of 0.8589 resistance is needed to indicate short term bottoming. Otherwise, outlook will stay cautiously bearish in case of recovery.

In the bigger picture, price actions from 0.9304 are viewed as a medium term corrective pattern. Such decline is likely ready to resume and should make a new low below 0.8303. At this point, we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside. Rise from 0.6935 (2015 low) will resume at a later stage to 0.9799 (2008 high). However, sustained break of 0.8116 could bring deeper decline to next key support level at 0.7564 before the correction completes.

Sunrise Market Commentary

• Rates: Consolidation as core bonds entered overbought conditions?
  Sunday's first round of the French presidential elections and geopolitical concerns are set to dominate trading this week. It should underpin core bonds via safe haven slows though the rally could lose some steam with the Bund and US Note future in overbought conditions.
• Currencies: USD decline to slow?
  Yesterday, the dollar (USD/JPY and DXY) rebounded after comments from US Treasury Secretary Mnuchin who said that a strong currency was positive longer term. Today, the eco calendar is thin. A sustained bottoming out process of the dollar probably needs support from higher US yields. The topside of EUR/USD looks well protected ahead of the French elections

The Sunrise Headlines

• US equities ended yesterday on a strong foot, recording gains of nearly 1%. Overnight, most Asian stock markets gain ground as well though risk sentiment is less ebullient.
• US Treasury secretary Mnuchin has conceded that the timetable for ambitious tax reforms is set to slip following setbacks in negotiations with Congress over healthcare. He also downplayed Trump's weak dollar comments.
• International observers said a closely contested vote on Turkey's presidential powers contravened Turkish law by changing rules on ballot-counting at the last minute, one of several alleged voting irregularities prompting criticism.
• Vice Fed chair Fischer said he doesn't see a replay of the so-called taper tantrum of 2013 as the central bank rolls out its plan for reducing its big balance sheet.
• North Korea's UN envoy warned that the US has pushed the Korean peninsula to the "brink of war", as President Trump and his administration kept up their rhetoric against Kim Jong Un's regime.
• Marine Le Pen and Emmanuel Macron's support rose half a point to 23% and 24%, respectively, Elabe's latest poll showed. Francois Fillon and Jean-Luc Mélenchon each slipped half a point to 19.5% and 18%.
• Today's eco calendar contains US housing starts, building permits and industrial production. Kansas city Fed George is scheduled to speak and Bank of America, Goldman Sachs and Yahoo are among the companies who publish Q1 earnings

Currencies: USD Decline To Slow?

Dollar decline to slow?

On Monday, USD equities and by comments from US Treasury Secretary Mnuchin supported the dollar. The FinMin said he agreed with president Trump that the strength of the dollar was negative for exports, but added that the currency's strength was a positive longer term. USD/JPY returned to the 109 area after touching a correction low in the 108.13 area in thin trading early in the session. The picture of the dollar against the euro remained a bit different. The euro rebounded against the dollar even as the decline in US bond yields halted. A short-squeeze in EUR/JPY (due to a better US equities) probably was the driver behind the move. EUR/USD closed the session at 1.0643 (from 1.0618 on Friday evening).

Overnight, Asian equities trade with modest gains. USD/JPY is holding off the recent lows and is changing hands in the 109 area. Markets are keeping an eye at meetings between US Vice President Pence and the Japanese PM Abe and FinMin Aso. There might be some frictions between the two countries on trade issues, but the focus will be on a joined strategy against North Korea. EUR/USD shows no clear trend, holding tight in the mid 1.0650 area.

Today, the US the March housing data are expected mixed. Starts are expected to have dropped 3% M/M to 1250K (annual rate while permits are expected to have risen modestly by 2.8% to 1250K.That would keep starts and permits near the cycle highs. The upward trend isn't broken, but signs of some moderation become gradually visible. Industrial production is expected to have rebounded in March, rising by 0.4% M/M. The more cyclical manufacturing output is expected flat in March after a strong 0.5% M/M in February. All in all, the data won't have too much impact on USD trading.

Yesterday, there were first tentative signs that the recent downward correction of the dollar is losing momentum. USD/JPY and the trade-weighted dollar rebounded off the recent low. For now, we don't draw any firm conclusions yet. A sustained outperformance of the dollar probably needs support from a bottoming/rise of US bond yields. We're not that far yet. So, we look for confirmation that the decline/correction of USD/JPY (and of DXY) has run its course. Of late, EUR/USD was an exception to the overall trend of USD weakness. The pair hovers in a tight range in the 1.06 area

Political uncertainty in Europe (mainly due to the French elections) counterbalances the overall USD decline even as interest rate differentials between the dollar and the euro and narrowed. In a day-to-day perspective, we don't see much upside for EUR/USD as long as uncertainty on the French elections reigns.

Technicals: USD/JPY decline slows EUR/USD neutral

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 does not regain and sustains above 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 trading range with the odds for a test of the downside of the range. However, real downside break is difficult as the dollar trade rather weakish of late.

EUR/USD: stabilizes in the 1.06 big figure. Political uncertainty weighs, but no strong dollar momentum

EUR/GBP

Sterling holding near the recent highs

Of late, EUR/GBP drifted cautiously lower and this trends remained in place yesterday. Technical considerations in a very thin market dominated trading. EUR/GBP touched a minor correction low in the 0.8461 area and closed the session at 0.8470 (from 0.8478 on Friday). Sterling also held strong against the dollar even as the US currency showed tentative signs of bottoming. Cable closed the session at 1.2565.

There are no important eco data in the UK today. So, sterling trading will be driven by technical considerations. With both the dollar and the euro trading soft of late, sterling recorded some by default gains of late. However, both in EUR/GBP and cable there was no really strong sterling momentum. EUR/GBP drifted cautiously lower, but the magnitude of the decline remained modest, awaiting a clear move in the euro (French elections) or some high profile news from Brexit. For now, we don't see a change of this sterling scenario.

We have a neutral short-term bias on EUR/GBP. The EUR/GBP 0.88/0.84 range should guide trading for now. Early April, the sterling rally/short-squeeze ran slowed, but sterling held near the recent highs. We see no trigger for a real change in sentiment yet. Longer term, Brexit-complications remain a potential negative for sterling. The BoE won't raise rates anytime soon

EUR/GBP: gradual downtrend continues

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Daily Pivots: (S1) 1.0666; (P) 1.0679; (R1) 1.0700; More...

Intraday bias in EUR/CHF is neutral for the moment for consolidation above 1.0652 temporary low. With 1.0699 minor resistance intact, deeper decline is still expected. below 1.0652 will target 1.0620/0629 support zone. Decisive break there will confirm resumption of whole fall from 1.1198. In that case, EUR/CHF should target next long term fibonacci level at 1.0485. On the upside, break of 1.0699 minor resistance will argue that choppy fall from 1.0823 has completed and turn bias back to the upside.

In the bigger picture, the decline from 1.1198 is seen as a corrective move. Current development suggests that it's not completed yet. Sustained trading below 38.2% retracement of 0.9771 to 1.1198 at 1.0653 will target 50% retracement at 1.0485. In any case, break of 1.0823 resistance is needed to be the first indication of reversal. Otherwise, deeper fall is still expected even in case of recovery.