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Sunrise Market Commentary

• Rates: Risk aversion dominates thin agenda at start trading week
  Overnight, risk sentiment deteriorated on most Asian stock markets. A stronger opening of the Bund will result in an immediate test of 0.2% support for the German 10-yr yield. We don't anticipate a sustained break lower even if risk aversion provides some short term safe haven flows.
• Currencies: Dollar cannot build on Friday's positive price action
  EUR/USD hovers listless close to 1.06, but USD/JPY is sliding back towards the key 110, helped by some risk-off sentiment in Asian session (lower equities and lower US yields). We nevertheless aren't convinced the Asian trend should infect European and US markets too much. That should keep USD/JPY north of 110

The Sunrise Headlines

• US equities flat lined in the first trading session of the week. Overnight Asian risk sentiment deteriorated with China underperforming (-1%).
• The Federal Reserve's plans to raise US interest rates gradually are aimed at sustaining full employment and near-2-% inflation without letting the economy overheat, Fed Chair Yellen said.
• ECB policy is "appropriate and a reassessment is not warranted at this stage," VP Constancio said. The risk of a regional (Portuguese) real estate bubble is limited, while advocating targeted measures to avoid potential problems.
• A Moody's report titled 'Credit Profiles Resilient to Rising Household Debt and Stretched Housing Affordability' focused on Australia, Canada, New Zealand and Sweden - all AAA rated countries where home prices and household debt have soared in the last three years.
• BoJ Governor Kuroda said the central bank aims for a moderate acceleration of inflation driven by increases in wages and corporate earnings. At this stage, they haven't increased as much as hoped for despite a tightening job market.
• South Africa's central bank said the scope for interest-rate cuts is limited as current policy should be enough to bring inflation to within target range. Price-growth expectations remain "uncomfortably close to 6%", SARB said.
• Today's eco calendar contains EMU industrial production, German ZEW, US NFIB small business optimism and UK inflation data. The Netherlands and the US tap the market ECB Visco and Fed Kashkari are scheduled to speak.

Currencies: Dollar Cannot Build On Friday's Positive Price Action

USD: Uneventful trading yesterday with poor close

The dollar traded fairly uneventful in a news-poor Monday session. Some follow through USD/JPY buying during the Asian session and some minor French election-related risk-off spiced the sideways trading session that ended with some marginal dollar weakening against euro and yen. EUR/USD hovered between about 1.0570 and 1.0608, closing at 1.0596. USD/JPY made a trip to 111.60 from 111.10 in Asian trading, but gradually eased to opening levels before a final down-move pushed it just below 111 with a 1.1094 close. Concluding, an uneventful session, but with a bit of a nasty taste as USD/JPY couldn't build on Friday's gains, despite US equities closing unchanged.

Overnight: Yen higher on risk off and Yellen

Overnight, Yellen said the Fed is shifting from its post-crisis exercise of healing the economy to one aimed at holding on to the progress made (see above). While her comments are quite neutral according to us, US yields are 2 to 3 bps lower overnight. Asian equities are mostly down with some close to flat. The yen is gaining ground together with other safe havens like US Treasuries and gold. USD/JPY slid from 110.95 to an intraday low at 110.60 and trades now slightly higher at 110.67. EUR/USD trades with a slight dollar positive bias, but at 1.0584 from 1.0595 at the opening that doesn't mean much. Calendar heats up, but most second tier data

EMU industrial production is expected to have risen 0.1% M/M and 1.9% Y/Y in February following a stronger 0.9% M/M (and 0.6% Y/Y in January. Risks remain on the downside of expectations. The German ZEW investors' sentiment (expectations) is expected to have risen slightly to 14.8 in April from 12.8 previously, while current conditions remain strong at 77.3. Given the advance of equities and the rise in the Sentix survey, we nevertheless dare to put the risks slightly on the upside of expectations. Finally the US NIFB small business sentiment is expected to have slid marginally in March to 104.7 from 105.3 in February. There may be some early disappointment on Trump's scorecard till now so, risks might be on the downside. The eco data are no strong market movers

No strong catalyst for today's trading

Friday's dollar price action was constructive, as was the rejection of key US yield supports (1.80% for the 5-yr and 2.30% for the 10-yr). This suggested that US yields and widening yield differentials may give the dollar again support. The proof of the pudding is in the eating though and yesterday's price action didn't really support the notion that the dollar is back on the winning side. EUR/USD stabilizes with election risk and geopolitical risk keeping the euro dollar balance intact. The dollar didn't get rate support. On the contrary, yields are down at the onset of European trading. We don't expect much of the eco data. So, sentiment and geopolitical issues will simmer at the background giving FX markets some intraday momentum. We don't see a catalyst for EUR/USD or USD/JPY to take out significant technical barrier, even if EUR/JPY remains dangerously close to the 110 level.

Technicals: Danger USD/JPY not away yet

From a technical point of view, USD/JPY failed to regain the 111.36/60 previous range bottom and approached three times the key 110 support area, but rebounded each time. A decline below 110 would signal more trouble ahead. Friday's price action is a slight positive for the dollar, but we remain cautious on USD/JPY as long as the pair doesn't trade sustainably above 112.20 (neckline ST double bottom). EUR/USD extensively tested the topside of the MT range (1.0874/1.0906 area) two weeks ago, but the test was rejected. EUR/USD returned lower in the 1.0875/1.05 trading range with the odds now for a test of the downside of the range.

EUR/USD: Nice dollar move on payrolls suggesting the pair may slide towards 1.05 support area or even the cycle lows at 1.0340, but yields should go up

EUR/GBP

Sterling doing somewhat better

Today, the UK eco calendar is busy and interesting from a market point of view. Overnight, the BRC like for like sales disappointed as they dropped 1% Y/Y while a 0.3% M/M drop was expected. A further sign that consumer spending is losing momentum. However, it didn't impact sterling that remained fairly stable against euro and dollar. More important will be the CPI and PPI data for March. The market expects CPI at 0.3% M/M and 2.3% Y/Y unchanged from February, while the core CPI is expected to have eased slightly to 1.9% Y/Y from 2% previously. The weaker sterling is behind the trend increase in inflation, but that trend may pause in March due to some special factors like the late Easter and lower fuel prices. We side with consensus, but any stronger outcome may stimulate expectations on the timing of a rate hike and supports sterling. Similarly both input and output PPI are expected to have slowed in March, even as input prices remain at very high levels. Output price risks are on the upside. Sterling gradually gained ground versus the euro. If inflation surprises on the upside, some more gains are possible. However, EUR/GBP intermediate support looms at 0.8484, a level which won't be easily broken. Mid-March, sterling found a better bid after higher than expected UK inflation and a more hawkish tone from the BoE. We changed our short-term bias on EUR/GBP from positive to neutral. The EUR/GBP 0.88/0.84 range should guide trading for now. Last week, sterling rally/shortsqueeze ran into resistance, but we see no trigger for a real change in sentiment.

EUR/GBP sterling short-squeeze is easing, but no sustained sterling correction yet

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US Session Highlights

(CA) CANADA MAR ANNUALIZED HOUSING STARTS: 253.7K V 215.5KE

(MX) Mexico Mar Nominal Wages Y/Y: 4.7% v 4.6% prior

(US) Mar Labor Market Conditions Index Change: 0.4 v 1.0e

Equities started the week with the same sentiment as they finished the last, with stocks trending mostly sideways and major indices closing flat to slightly higher. Markets are still treading cautious ground. Higher crude prices helped the S&P, with energy the best performing sector, gaining 0.9% on the day.

US markets on close: Dow flat, S&P500 +0.1%, Nasdaq +0.1%

Best Sector in S&P500: Energy

Worst Sector in S&P500: Telecom

Biggest gainers: WFM +10.0%; FSLR +4.3%; HES +4.0%

Biggest losers: MU -3.1%; NVDA -2.6%; INCY -2.3%

At the close: VIX 14.1 (+1.2pts); Treasuries: 2-yr 1.26% (-1bps), 10-yr 2.36% (-1bps), 30-yr 2.99% (-1bps)

US movers afterhours

SALE: Acquired for $11.60/shr in cash by Harland Clarke Holdings; +49.0% afterhours

SVU: To acquire Unified Grocers for $384M in cash and stock deal; +9.8% afterhours

SEAC: Reports Q4 -$0.06 v -$0.05e, R$23.8M v $23.1Me; -3.3% afterhours

Politics

(US) Alabama Gov Bentley (R) resigns after pleading guilty to campaign finance violations - press

(US) Full Virginia Court to hear Pres Trump's appeal of his overturned travel ban executive order - press

(FR) France IFOP daily presidential poll: Second round poll: Macron 58% (-1.0pts), Le Pen 42% (+1pts)

Key economic data

(AU) AUSTRALIA MAR NAB BUSINESS CONFIDENCE: :6 V 7 PRIOR; CONDITIONS: 14 V 9 PRIOR

(NZ) NEW ZEALAND MAR CARD SPENDING M/M: -0.3% V +0.5%E (2nd consecutive decline); TOTAL M/M: +0.5% V -0.7% PRIOR

Asia Session Notable Observations, Speakers and Press

Asian equity markets are largely lower, led by near 1% drop in Hong Kong where sentiment soured on energy, tech, and gaming sectors. Australia is resilient with a modest gain, as most mining and financials names turned higher. US and European futures are also lower, while FX majors appear to be succumbing to renewed risk-off flows - USD/JPY is down over 30pips from the highs below 110.60, while AUD and NZD were slightly lower against the greenback late in the day.

In the absence of regional catalysts, renewed profit-taking has been attributed to ongoing geopolitical uncertainty on the Korean peninsula and in the Middle East. In North Korea, Kim Jong Un said to have vowed the "toughest" counteraction against the United States in response to US dispatching USS Carl Vinson aircraft carrier over the weekend. In Syria, there is chatter that Russia may have known about Assad's intentions to carry out a chemical attack against the rebels. Note that US State Sec Tillerson is set to travel to Moscow this week, but will only meet with his counterpart since Putin did not extend his audience to US official.

Traders tuned in to Fed Chair Yellen's discussion at University of Michigan mostly to hear familiar rhetoric. Yellen said the Fed's estimate of neutral fed funds rate is not very high, reiterating intentions to continue to gradually raise interest rates. Fed chair added that unemployment of 4.5% is now below where most of her colleagues would consider to be full employment. On inflation she said she would prefer that it does not linger above or below the 2% target, adding that it is close to objective.

Ahead of Australia's critical employment report later this week, NAB Business Conditions data hit post-GFC highs, briefly sending AUD/USD about 0.75. NAB economist said "Conditions have improved almost across the board to levels that suggest a strong economy in the near term."

China

(CN) China Premier Li: China hopes for progress in investment treaty negotiations with US - Xinhua

(CN) China Q1 railway cargo volume +15.3% y/y

(CN) US may punish China companies that are involved with North Korea weapons

Japan

(JP) Bank of Japan (BOJ) Gov Kuroda: Japan is out of the deflationary situation of falling prices

(JP) Japan Fin Min Aso: Need to create economic conditions to allow sales tax hike

Australia/New Zealand

(NZ) New Zealand opposition Labour party's finance spokesman Robertson: Expanding RBNZ focus to inflation and employment would bring New Zealand in line with Australia and US - NZ Press

Korea

(KR) North Korea vows to take the "toughest" counteraction against the United States; We will hold the US wholly accountable for the catastrophic consequences to be entailed by its outrageous actions

(KR) South Korea acting President Hwang: Have asked military to expand monitoring over North Korea

(KR) US, South Korean and Japanese envoys to hold six-party talks - Japanese press

Asian Equity Indices/Futures (00:00ET)

Nikkei -0.6%, Hang Seng -0.8%, Shanghai Composite -0.5%, ASX200 +0.4%, Kospi -0.6%

Equity Futures: S&P500 -0.1%; Nasdaq -0.1%, Dax -0.2%, FTSE100 -0.1%

FX ranges/Commodities/Fixed Income (00:00ET)

EUR 1.0580-1.0605; JPY 110.60-110.90; AUD 0.7495-0.7515; NZD 0.6940-0.6970

June Gold +0.3% at 1,257/oz; May Crude Oil flat at $53.09/brl; May Copper +0.2% at $2.61/lb

SPDR Gold Trust ETF daily holdings rise 1.8 tonnes to 838.3 tonnes; highest since Mar 15th

(CN) PBoC skips open market operations for 12th straight session; drains net CNY20B

(CN) PBOC SETS YUAN MID POINT AT 6.8957 V 6.9042 PRIOR; first stronger setting in 4 sessions

(JP) Japan MoF sells 10-yr 0.1% inflation linked bonds; bid-to-cover 3.64x v 2.61x prior

(AU) Australia MoF (AOFM) sells A$150M in 3.0% 2025 Bonds; avg yield: 0.5408%; bid-to-cover: 3.00x

Asia equities / Notables / movers

Australia

AHY.AU Asaleo Care -8.0% (Credit Suisse downgrades)

SAR.AU Saracen Mineral Holdings -4.5% (Q3 result)

AAD.AUArdent Leisure Group -1.7% (UBS downgrades)

VLA.AU Viralytics +2.3% (Q3 result)

CDV.AU Cardinal Resources +1.7% (Namdini Gold Project)

Japan

6502.JP Toshiba -2.5% (may release earnings this week w/out auditor approval)

3769.JP GMO Payment Gateway -5.5% (Goldman Sachs downgrades)

6758.JP Sony -1.0% (To split off battery operations to Murata)

4631.JP DIC Corp -2.4% (Q1 results speculation)

Hong Kong

489.HK Dongfeng Motor -0.7% (Mar result)

1238.HK Powerlong Real Estate Holding -1.3% (Mar result)

568.HK Shandong Molong Petroleum Machinery +6.3% (to cut costs)

2611.HK Guotai Junan Securities Co -1.2% (H share debut)

China

300104.CN Leshi Technology -2.4% (to cut US jobs)

000725.CN BOE Technology Group Co -2.4% (annual result)

For the 24 hours to 23:00 GMT, the AUD rose 0.27% against the USD and closed at 0.7511.

LME Copper prices declined 0.7% or $39.0/MT to $5731.0/MT. Aluminium prices declined 0.03% or $0.5/MT to $1929.0/MT.

In the Asian session, at GMT0300, the pair is trading at 0.7497, with the AUD trading 0.19% lower against the USD from yesterday's close.

Earlier in the session, Australia's NAB business conditions index jumped to a level of 14 in March, surging to its highest level since February 2008 and hinting that the economy could be strengthening. The index registered a level of 9 in the prior month. In contrast, the nation's NAB business confidence index eased to a level of 6.0 in March, compared to a level of 7.0 in the preceding month.

The pair is expected to find support at 0.7475, and a fall through could take it to the next support level of 0.7453. The pair is expected to find its first resistance at 0.7516, and a rise through could take it to the next resistance level of 0.7535.

Moving ahead, traders would keep a close watch on Australia's Westpac consumer confidence index for April, scheduled to release in the early hours' tomorrow.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the EUR rose 0.2% against the USD and closed at 1.0598, after the Euro-zone's Sentix investor confidence index advanced to a level of 23.9 in April, strengthening to its highest level in almost a decade as investors emancipated themselves from uncertainty surrounding the French Presidential election. Markets were expecting the index to rise to a level of 21.0, after recording a level of 20.7 in the prior month.

The greenback traded higher lower against a basket of major currencies, after the Federal Reserve (Fed) Chairwoman, Janet Yellen, struck a cautious tone, stating that it would be appropriate to raise interest rates gradually if the economy continues to perform well. Nevertheless, she also added that the US economy is healthy and the Fed is close to reaching its policy objectives.

On the data front, the US labour market conditions index dropped more-than-anticipated to a level of 0.4 in March, compared to a revised level of 1.5 in the preceding month, while investors had envisaged the index to drop to a level of 0.8.

In the Asian session, at GMT0300, the pair is trading at 1.0583, with the EUR trading 0.14% lower against the USD from yesterday's close.

The pair is expected to find support at 1.0565, and a fall through could take it to the next support level of 1.0548. The pair is expected to find its first resistance at 1.0603, and a rise through could take it to the next resistance level of 1.0624.

Trading trend in the Euro today is expected to be determined by the release of ZEW expectations index for April across the Euro-zone accompanied with the region's industrial production data for February, slated in a few hours. Moreover, the US NFIB small business optimism index for March, due to release later in the day, will be closely watched by traders.

The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the GBP rose 0.33% against the USD and closed at 1.242.

In the Asian session, at GMT0300, the pair is trading at 1.2419, with the GBP trading slightly lower against the USD from yesterday's close.

Overnight data indicated that UK's BRC like-for-like retail sales declined more-than-anticipated by 1.0% YoY in March, recording its sharpest decline since August 2015. Markets expected BRC retail sales to fall 0.3%, following a drop of 0.4% in the preceding month.

The pair is expected to find support at 1.2384, and a fall through could take it to the next support level of 1.2349. The pair is expected to find its first resistance at 1.2442, and a rise through could take it to the next resistance level of 1.2465.

Going ahead, investors will look forward to UK's consumer price inflation data for March, slated to release in a few hours.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.65% against the JPY and closed at 110.73.

In economic news, Japan's Eco-watchers survey for current situation index surprisingly dropped to a level of 47.4 in March, defying market consensus for a rise to a level of 49.8, highlighting that investors are getting more pessimistic over the health of the nation's economy. The index registered a level of 48.6 in the previous month. Moreover, the nation's Eco-watchers survey for future outlook index unexpectedly declined to a level of 48.1 in March, compared to a level of 50.6 in the preceding month and compared to market expectations for a rise to a level of 50.7.

In the Asian session, at GMT0300, the pair is trading at 110.68, with the USD trading slightly lower against the JPY from yesterday's close.

The pair is expected to find support at 110.34, and a fall through could take it to the next support level of 110. The pair is expected to find its first resistance at 111.28, and a rise through could take it to the next resistance level of 111.88.

Looking ahead, market participants focus on Japan's flash machine tool orders for March, slated to release in some time.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.17% against the CHF and closed at 1.0081.

On the data front, Switzerland’s total sight deposits advanced to a level of CHF564.1 billion in the week ended 07 April, from CHF561.7 billion reported in the previous week.

In the Asian session, at GMT0300, the pair is trading at 1.0088, with the USD trading 0.07% higher against the CHF from yesterday’s close.

The pair is expected to find support at 1.0072, and a fall through could take it to the next support level of 1.0055. The pair is expected to find its first resistance at 1.0106, and a rise through could take it to the next resistance level of 1.0123.

Amid no economic releases in Switzerland today, trading trend in the CHF is expected to be determined by global macroeconomic news.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the USD declined 0.71% against the CAD and closed at 1.3322.

The Canadian Dollar gained ground, after Canada's housing starts climbed more-than-anticipated to a level of 253.7K March, notching its highest level in nearly a decade, suggesting that housing market will remain one of the bright spots in the nation's economy. Housing starts had recorded a revised level of

214.3K in the preceding month, while market participants anticipated for a rise to a level of 214.5K.

In the Asian session, at GMT0300, the pair is trading at 1.3327, with the USD trading marginally higher against the CAD from yesterday's close.

The pair is expected to find support at 1.3283, and a fall through could take it to the next support level of 1.3238. The pair is expected to find its first resistance at 1.3399, and a rise through could take it to the next resistance level of 1.3470.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

Key Points:

• Long-term wedge ready to slap the USDCHF lower.
• Fundamental bias suggestive of losses moving forward.
• The pair should retreat back to parity.

The Swissy should be gearing up for another reversal in fairly short order as the technical and fundamental biases turn against the pair. Specifically, we continue to see the long-term chart pattern exert its influence and when this is coupled with a number of fundamental developments, downside risks seem to be increasing at a notable rate. As a result, let's take a closer look at the pair to ascertain exactly what may be on offer this week.

As is shown on the daily chart, it is rather plain to see that the USDCHF has been rallying strongly over the past week or so. Additionally, if the EMA bias is anything to go by, this momentum looks to be fairly entrenched which could mean we see even further gains over the impending sessions. However, what is also becoming clear, is that a rather convincing wedge pattern is forming up which would typically indicate precisely the opposite is on the agenda for the Swissy

Indeed, the pair is challenging the upper constraint of this long-term wedge so the question is now, will we see a breakout or will the structure hold firm? From a technical point of view, there is some uncertainty about which of these two outcomes is more likely. On the one hand, the EMA bias and parabolic SAR readings are leaning towards bullish which could mean that a breakout isn't totally impossible. Whilst, on the other hand, stochastics are overbought and the pair has drifted close to the upper Bollinger band which could be indicative of a reversal.

Taking a look at the broader fundamental environment, we have a slightly clearer image of what is likely to be the pair’s next move. Specifically, it appears that the rally was already petering out as it contended with the 100 day moving average and the last two major spikes in buying pressure are simply near-term bursts coming in response to some solid US employment data. As a result, the USDCHF may have much less underlying support than it might at first appear.

Furthermore, there is a strong case suggesting that the Franc should be taking ground back from the greenback based on its safe haven status. In particular, the US’s involvement in Syria and heightened tensions between North Korea and the entire planet dominated headlines last week and this will be bolstering interest in the CHF. Moreover, fears that the stock market is amid a bubble and in danger of correcting will see traders taking a slightly more risk-off approach, likely adding to the Franc’s buoyancy. In fact, we are already seeing the effects of these expectations creeping back into the market as the VIX is at its highest point for 2017 at around the 14.05 mark.

Overall, the forecast for the pair is skewed towards bearish which could result in some decent downside action within the next few sessions. Specifically, if a reversal is seen, the USDCHF should retreat back to parity before the 100 day EMA and the 38.2% Fibonacci level cap losses. As for where the pair moves to from there, it is currently unclear but the aforementioned support zone is by no means unbreakable. As a result, monitor the Swissy closely as these near-term downsides may only be the beginning of a sizable decline.

Key Points:

• Euro likely to continue sliding towards the 1.05 handle.
• RSI Still trending lower within neutral territory.
• Watch for a gradual slide to oversold status before we are likely to see a retracement.

The Euro continued to retreat throughout most of last week, as price action was rejected from levels around the 55EMA, despite a stronger than expected EU Retail Sales Result of 0.7% m/m. Much of the move was due to the stronger greenback sentiment in the wake of a sharp fall in the U.S. Unemployment Rate to 4.5%. However, the pair is nearing some key support around the 1.05 handle which could prove to be decisive in the coming week. Subsequently, let’s take a look at last week’s machinations as we attempt to provide some forward guidance.

Last week continued the ongoing depreciation of the Euro as the pair saw the impact of a relatively sharp sentiment swing towards the U.S. Dollar. Subsequently, the market largely ignored the robust EU Retail Sales result of 0.7% m/m and instead focused on the tightening U.S. labour market figures. In particular, a surprise fall in the unemployment rate to 4.5% is indicative of the ongoing tightening within the market as the economy effectively abuts the natural rate of unemployment. Subsequently, this is fuelling rising speculation of near term rate hikes as we view the forward outlook for the Fed. This sentiment swing continued to push the Euro lower and the pair subsequently ended the week around the 1.0589 mark.

Looking ahead, the pair is likely to focus sharply on Fed Chair Yellen’s pending speech as well as the U.S. Core CPI numbers. As the U.S. Labour market continues to firm, so too does the focus upon further rate hikes from the central bank. In particular, the market will be reviewing the CPI figures with a view to second guessing the Fed’s direction in the coming months. In contrast, the EU has little in the way of fundamental data to contribute to the week ahead with the primary event likely to be the ZEW Economic Sentiment result. However, there will be little in the way of volatility from the Eurocentric data and the market’s focus will remains firmly on the greenback side of the pair.

From a technical perspective, the Euro’s ongoing fall has taken it towards a key support level at 1.0494 which breaching would send it sharply lower. This development argues that the corrective phase is not yet over, however, the RSI Oscillator is now nearing oversold levels which suggests that a period of moderation is the likely move in the week ahead. Subsequently, our initial bias for the coming week is neutral but with the caveat to watch for a gradual slide back towards the key 1.05 handle. Support is currently in place for the pair at 1.0572, 1.0495, and 1.0364. Resistance exists on the upside at 1.0677, 1.0783, and 1.0828.

Ultimately, there is little upside momentum to suggest that the Euro is likely to turn around any time soon. The medium term view still suggests a pullback towards the 1.05 handle, before the daily RSI becomes oversold, and we see any chance of a sharp retracement away from further declines. Subsequently, the pair is likely to provide little in the way of respite for the bulls in the short term but keep a close watch on it as markets open on the other side of the Easter holidays.