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EURUSD

The EURUSD had a bearish momentum yesterday bottomed at 1.0599. Price closed a little bit below the H4 EMA 200 suggests a potential bearish outlook especially if price able to make a clear break below 1.0600 testing 1.0500 – 1.0450 area which is a good place to buy with a tight stop loss. Immediate resistance is seen around 1.0650. A clear break above that area could lead price to neutral zone in nearest term testing 1.0700 – 1.0750 region. Overall I remain neutral.

GBPUSD

The GBPUSD had a bearish momentum yesterday slipped below 1.2135 but still unable to closed below that support area so far. The bias is bearish in nearest term especially if price able to make a clear break below 1.2135/00 support area but note that any movement near 1.2000 psychological level should be seen as a good opportunity to buy with a tight stop loss below 1.2000. Immediate resistance is seen around 1.2175. A clear break above that area could lead price to neutral zone in nearest term testing 1.2215 or higher. Overall I remain neutral.

USDJPY

The USDJPY had another indecisive movement yesterday. The bias remains neutral in nearest term probably with a little bearish bias testing 114.35/00 area. Immediate resistance is seen around 115.20 followed by 115.60 which remains a good place to sell with a tight stop loss as a clear break and daily close above 115.60 would expose 117.00 – 118.60 region.

USDCHF

The USDCHF failed to continue its bearish momentum yesterday topped at 1.0107 after unable to break below the H4 EMA 200. I have made some adjustments to the bullish channel on my H4 chart below. The bias is neutral in nearest term probably with a little bullish bias testing 1.0150 – 1.0200 area. Immediate support is seen around 1.0070. A clear break and daily close below that area would expose 1.0000 region. Overall I remain neutral.

After a day off from the blog yesterday, we're back onto the forex currency crosses today with a nice level of confluence in EUR/JPY.

EUR/JPY Daily:

Here you can see the higher time frame confluence of resistance that I'm talking about on the daily chart. Price has not only hit the pretty obvious trend line resistance, but also the horizontal resistance zone.

Both are pretty obvious levels, with the trend line resistance speaking for itself and the horizontal zone formed by a retest of previous swing lows.

EUR/JPY 15 Minute:

Once we zoom into the 15 minute chart, we can look for levels to possibly get short.

I try to usually wait for the higher time frame resistance zone to clear, just to make sure that the level has in fact held, and it is shorts that we should be looking to trade.

As you can see marked in green on the intraday chart above, the level has cleared and we were presented with this little short term retest to manage our risk around and possibly get short off of.

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The NZD has been on a torrid run against its US counterpart so far this month, falling more than 4% in a little over a week before finding some stability around December's lows.

Since then the pair has run into resistance around 0.6950, an area than had been key support between June and November last year before retesting the lows again.

Once again, the pair found support just below 0.69, potentially suggesting that the strongly bearish sentiment has subsided, allowing for a possible correction in the near term.

With the pair having found a clear floor for now, the test becomes whether it will break above 0.6950 - the double bottom neckline - or through what has become a pretty sturdy support first, just below 0.69.

A break above 0.6950 would suggest we're heading for a correction in the near term rather than a resumption of the aggressive downtrend. While it doesn't tell us how big the correction will be, it would suggest we may at least see a move back towards 0.70. One of the benefits of double bottom setups is that they give us possible price projection levels, based on the size of the double bottom (0.69-0.6950) projected above the neckline.

A break through 0.70 could signal a broader correction, at which point the Fibonacci retracement levels - 7 February highs to 9 March lows - stand out for me, with 38.2% falling around 0.7075, 50% falling around 0.7132 and 61.8% around 0.7190.

A break through the lows of the last week would suggest the sellers are back on board, although one important test remains around 0.6862 - 23 December low - with the next major support below here arguably coming around 0.6675.

Economic projections to give insight on Fed's next steps

The USD is higher across the board awaiting the release of the Federal Open Market Committee (FOMC) rate statement on Wednesday, March 15, at 2:00 pm EDT (6pm GMT). Fed speakers went out of their way in making sure they telegraphed the central banks' decision as the market expected a more patient Fed given the Trump administration has not launched its tax stimulus and infrastructure spending policies.

The CME FedWatch tool based on Fed fund rate futures shows the market has listened to Fed member comments and the probability of a rate hike in March is 93 percent. The Fed will also update its economic projections with investors eager to see what path of tighter monetary policy the Fed is anticipating. Chair Yellen's press conference before the financial press will be closely followed given the willingness to offer more transparent communication from the central bank. Yellen's press conference is scheduled to start at 2:20 pm EDT (6:30 pm GMT).

The Fed is expected to raise the benchmark interest rate in March, making it the third time since the economic crisis. The American central bank would be proactive in 2017 after exercising a patient stance in the past two years which brought about one rate hike a year. The Fed appears optimistic about the growth of the U.S. economy and Yellen will be asked to address Trump pro-growth policies still to be enacted.

The EUR/USD lost 0.258 percent in the last 24 hours. The single currency is trading at 1.0634 ahead of the Fed's FOMC statement where a rate hike by the U.S. central bank is highly anticipated. The USD rally lost steam at the beginning of the year as the Trump administration has not shown the same commitment to pro-growth policies as it did right after the elections.

The EUR got a boost from the comments from European Central Bank (ECB) President Mario Draghi that saw the worst outcome for the currency was still highly unlikely. As voters prepare to cast their ballot in the Dutch elections investor anxiety is on the rise. A win by the PVV Party could trigger the Netherland leaving the Union. Lack of cooperation from other parties make the PVV win less probable, but given the loss of confidence in pollsters after the Brexit and Trump wins the market won't get ahead of the result.

French elections in April and May could prove to be end of the EUR if Marine LePen wins in the second round. The Far-right candidate has campaigned under a flag of nationalism with calls of reintroducing the franc. A Frexit would not be up to LePen alone unless in the improbable scenario where she wins a majority in the house.

The price of oil fell 1.844 percent today. West Texas is trading at $47.32 ahead of the release of the U.S. weekly inventories on Wednesday. Crude has hit three month lows as the momentum gained from the Organization of the Petroleum Exporting Countries (OPEC) production cut agreement has been offset by other factors. Shale producers in the U.S. used the higher prices to increase their output as evidenced by American inventories that have shown consistent buildups in the last nine weeks. The OPEC has not confirmed if it intends to extend the production cut agreement beyond the current six month period.

The GBP/USD lost 0.544 percent in the trading session. The currency is trading at 1.2164 as the road clears for the legal proceedings to trigger Brexit. Invoking article 50 will begin a two year negotiation process that will result in the United Kingdom leaving the European Union. There have not been many fruitful meetings between the two sides on what the future trade relationship will look like. The U.K. has the most to lose, and this has been reflected in the pound. The USD has risen given the expectations of a rate hike in March putting further downward pressure on the GBP.

Scotland added to the political uncertainty in the U.K. after its First Minister Nicola Sturgeon said the is seeking a second Scottish Independence referendum within the next two years. The FX market so far has been the best gauge of investors losing confidence in Theresa May reaching an acceptable agreement despite the limited effect Brexit proceedings have had on the economy. The true impact of leaving the E.U. has not been felt as article 50 has not triggered Brexit.

The eyes of the market will be focused on the words out of Washington as the Fed finished its two day meeting with the publication of the U.S. benchmark interest rate, economic projections and press conference by Fed Chair Janet Yellen.

Market events to watch this week:

Wednesday, March 15

• 8:30am USD CPI m/m
• 8:30am USD Core CPI m/m
• 8:30am USD Core Retail Sales m/m
• 8:30am USD Retail Sales m/m
• 10:30am USD Crude Oil Inventories
• 2:00pm USD FOMC Economic Projections
• 2:00pm USD FOMC Statement
• 2:00pm USD Federal Funds Rate
• 2:30pm USD FOMC Press Conference
• 5:45pm NZD GDP q/q
• 8:30pm AUD Employment Change
• 8:30pm AUD Unemployment Rate
• Tentative JPY BOJ Policy Rate
• Tentative JPY Monetary Policy Statement

Thursday, March 16

• 2:30am JPY BOJ Press Conference
• 4:30am CHF Libor Rate
• 4:30am CHF SNB Monetary Policy Assessment
• 8:00am GBP MPC Official Bank Rate Votes
• 8:00am GBP Monetary Policy Summary
• 8:00am GBP Official Bank Rate
• 8:30am USD Building Permits
• 8:30am USD Philly Fed Manufacturing Index
• 8:30am USD Unemployment Claims

Friday, March 17

• 8:30am CAD Manufacturing Sales m/m
• 10:00am USD Prelim UoM Consumer Sentiment

*All times EST

While my colleagues in New York managed much better than expected, as the city sidestepped the worst of the winter storm Stella, but there was little inspiration during Tuesday's North American session. Currency markets were constrained due to little more than position square dancing, ahead of a potentially wicked Wednesday (in NY). Traders eyes are peeled on the Fed Dot Plots while remaining attuned for any political noise, which there certainly is no shortage of these days.

The collapse in oil prices was the big story overnight when the WTI dropped from $48.80 level towards $47 zone. The catalyst was the release of the OPEC monthly report, as Traders focused on headlines that Saudi Arabia increased their production in February by 263.3k barrels a day, to 10.011mn per day, as reported. However, given it's still below 10.06mn agreed to in the production deal, the move looks to be little more than a momentum fast money reaction. After cooler heads had prevailed, the market had all but filled the headline gap, aided by the Weekly API inventories, which reported its first draw in 3 weeks coming in at -.5M vs. +11.6 M prior. Oil patch traders should take no solace as we are far from an endgame in this shale vs. production cut debate.

The slide in oil prices yanked down shares across the energy sector, but broader commodity weakness has also weighed on stocks. While other areas of the markets saw moderate losses as investors taper positions while in wait and hear mode ahead of the Federal Reserve, which has begun its two-day policy meeting on interest rates.

Australian Dollar

The AUD fell under moderate pressure after the NAB business conditions indicated signs of weakness, which seems to confirm the recent underwhelming string of economic data all the while the RBA continues to paint a rosy picture.

Commodity prices continued to sag, despite stronger-than-expected activity data in China which offered little support to the currency.

Headlines have materialised that the RBA assistant governor Bullock has announced there will be further macro-prudential measures to compensate for the rising housing market – while these tightening measures could imply the RBA has wiggle room to cut rates, I suspect Governor Low will opt for a lower for longer stance than a more drastic cut.

While the Aussie dollar has hardly budged from yesterday's APAC levels, with concerns, the commodity complex outlook remains fragile. One could expect the AUD at some point to play catch up with the other commodity high betas that have been experiencing a broader correction lower. The longer we float in this mid-7500 no man's land, the more likely USD support from US$ yields will kick in, and if commodity prices are to roll over, it could make a compelling argument for a full correction lower on the AUD.

On the domestic data front, the Australia March Westpac consumer confidence index printed 99.7%, a four-month high vs. 99.6% prior, on a month to month basis 0.1% and the third consecutive increase. While AUD is off the interday lows, it will struggle to gain traction ahead of the deluge of central bank cacophony ahead.

Japanese Yen

There has been see-sawing between the US yield play and the minor risk reversal in equity markets due to falling oil prices.But I suspect the USDJPY remains the favourite trade if we get any glimmering hope from the Fed of a more hefty path of US interest rates through 2017, but the 115.60-75 level will be the first tricky area for the dollar bulls to challenge if Dr Yellen signals a robust interest rate trajectory

Euro

The Euro is pulling back, as EUR traders adopt a bit of risk aversion temperament, which is justifiable with the Dutch election looming. Some near term stops reported below 1.06 will likely come in play as the dealers play position chess with one another ahead of the FOMC.

EM Asia

USDAsia retraced in a big way yesterday with the market trading US dollar offered throughout the session, as dealers eagerly awaited the USDINR fix (open) which then turned into an INR feeding frenzy after stops were triggers below 66. While the market remains very bullish INR, dealers will sit tight and await better clarity on the Fed trajectory before doubling down on the post-election euphoria. While much of the move was driven onshore, offshore investors will take note of the record NSE index highs so there could be another wave

As for the rest of Asia, we could be witnessing little more than the calm before the storm as USD selling across the region yesterday was supported on the back of adamant equity inflows.

Overnight the NY NDF market, USDKRW traded 1148.5-1150.5 and closed at 1149.0-1150.0. USDKRW has opened a touch 1148.0, but I suspect we will continue to drift in range. The technical edges of support and resistance will not come into play until further clarity on the Feds offered later tonight

Gold continues to have a quiet week. In the North American session, the spot price for one ounce is $1204.65. On the release front, US PPI dipped to 0.3%, above the estimate of 0.1%. We could see some movement from gold on Wednesday, as the US publishes CPI and retail sales reports. As well, the Federal Reserve is widely expected to raise the benchmark rate to 0.75 percent.

With the markets expecting a quarter-point rate hike on Wednesday, will gold react negatively to a Fed move? Although a rate hike has been priced in by the markets at 93%, there have been disappointments in the past, so a rate move could boost the dollar at the expense of gold. Strong US employment numbers in February have reinforced market speculation that the Fed will raise rates for the first time this year. Nonfarm payrolls sparkled in February, as the indicator jumped to 235 thousand, easily beating the estimate of 196 thousand. Wage growth climbed 2.6% compared to February 2016, while the participation rate edged up to 63.0%, up from 62.9%. These solid job numbers have also provided President Trump with a much-needed boost. Trump is under pressure to present an economic agenda, but the markets won't mind giving him some additional breathing room, with the economy performing so well.

West Texas crude has dropped below $48 on Tuesday, as the slide against the dollar continues. In North American trade, WTI crude futures are trading at $47.33. Brent Crude has dropped to $50.51, as the Brent premium has widened to $3.18. On the release front, US PPI dipped to 0.3%, above the estimate of 0.1%. Wednesday will be busy, as the US publishes CPI and retail sales reports. As well, the Federal Reserve is widely expected to raise the benchmark rate to 0.75 percent.

Oil prices continue to head downwards, as West Texas crude plunged 8.7 percent last week and dipped below the $47 level earlier on Tuesday. This was in response to reports that Saudi Arabia has increased oil production above 10 million barrels a day, raising concerns about a global oil glut. WTI crude is also under strong pressure as US crude stockpile reports continue to point to surpluses. Last week, Crude Inventories soared to 8.2 million barrels, well above the forecast of 1.1 million. US crude has posted surpluses in 11 of the past 12 weeks, reflective of increasing US shale production. Most of the surpluses have been much higher than the forecasts, as the markets continue to underestimate the level of crude stockpiles. The ongoing surplus has dampened OPEC's hopes of raising prices, as the cartel cut production levels at the beginning of January. Compliance with the agreement stands at an impressive 94% and OPEC had high hopes of pushing crude to $60 or more, but oil prices continue to lose ground in 2017.

Strong US employment numbers in February have cemented a rate hike by the Federal Reserve on Wednesday. Nonfarm payrolls sparkled in February, as the indicator jumped to 235 thousand, easily beating the estimate of 196 thousand. Wage growth climbed 2.6% compared to February 2016, while the participation rate edged up to 63.0%, up from 62.9%. These numbers make it a virtual certainty that the Fed will raise rates by a quarter-point on Wednesday. Although a rate hike has been priced in by the markets at 93%, there have been disappointments in the past, so a rate move will likely give the dollar a boost against its major rivals. The solid job numbers also give President Trump a much-needed boost. Trump is under pressure to present an economic agenda, but the markets won't mind giving him some additional breathing room, with the economy performing so well.

The pair fell back to 114.50 (rising daily Tenkan-sen support) after another failure above daily Ichimoku cloud top.

Today's rally stalled at 115.18, well below last Friday's spike to 115.49, signaling repeated rejection above 114.99/115.08 pivots (daily cloud top / 50% of 118.59/111.57 downleg).

Daily Tenkan-sen that tracks the rally since Feb 28, offers solid support, also guarding cloud base at 114.29.

Loss of these supports would generate stronger bearish signal.

Meantime, the pair is expected to remain in neutral mode while holding within the cloud, ahead of tomorrow's FOMC meeting.

As market participants are convinced that Fed will hike rates tomorrow, focus is turning on Yellen's comments and grade of hawkishness regarding next increase of interest rates.

Bullish scenario requires final close above 115.00 resistance zone to generate positive signal for fresh acceleration higher that may extend towards 115.91 barrier ( Fibo 61.8% of 118.59/111.57 descend).

Res: 114.99; 115.18; 115.49; 115.91
Sup: 114.51; 114.29; 114.00; 113.53

Hello fellow traders. In this technical blog we're going to take a quick look at the past Elliott Wave charts of NZDUSD. We're going to explain the structure and see how we guided our members through this instrument.

The chart below is $NZDUSD 4 hour chart from 02.28.2017. Our analysis suggests the price is correcting the cycle from the 0.6854 low. First leg W red has ended on 02/14 as expanded flat. On 02/21 date we got lower low: wave ((b)), and we got bearish sequences from the peak. In a mean time short term structure got little bit tricky. X red connector turned into irregular Flat correction. Our Elliott Wave analysis suggests X red is done at 0.7246 high. Consequently, the pair is ideally within Y red leg, looking for more downside, targeting 0.70044-0.69469 area.

NZDUSD 4 Hour Chart: 28 February

Now let's take a look at the short term structures:

NZDUSD 1 Hour Chart: 24 February

X red is done at 0.7246 high and as far as the price holds below that level further weakness should ideally follow. Current 0.71925-0.71783 area can provide 3 wave bounce before decline resumes.

NZDUSD 1 Hour Chart: 28 February

Short term price x red correction has turned into irregular flat against the 0.72466 peak. So far, the mentioned peak has held nicely and we're forecasting further decline within Y red leg toward 4 Hour target at 0.70044-0.69469

NZDUSD 1 Hour Chart: 1 March

We got nice decline and separation from the peak. As the pair has made new short term low we got more clue in proposed bearish view and we're recommending selling the rallies in 3,7,11 swings to our members. Currently price is showing clear 3 swings from the low suggesting that potential sell area comes at 0.7154-0.7184 .

NZDUSD 1 Hour Chart: 4 March

The pair found sellers at 0.7154-0.7184 and short term correction ended at 0.71692. We got nice decline as expected. Although the price reached 4 hour target at 0.7004 , due to a market correalation and incomplete pull backs in the rest of commoditiy instruments we switch short term count little bit and calling for 5 wave structure in the cycle from the 0.7247 peak, where ((ii)) ended at 0.71692. Currently about to complete short term ((iv)) bounce , looking for further extension lower. Next technical area comes roughly at 1.236 fib extension :0.6946. (According to 4 hour chart we presented above)

GBP/USD has posted losses in the Tuesday session. In North American trade, the pair is trading at 1.2130. On the release front, US PPI dipped to 0.3%, above the estimate of 0.1%. Later in the day, UK releases the CB Leading Index. Traders should be prepared for volatility, with a host of key indicators on both sides of the pond. The UK will release three employment indicators - Average Earnings Index, Claimant Count Change and the unemployment rate. The US will publish CPI and retail sales reports. As well, the Federal Reserve is widely expected to raise the benchmark rate to 0.75 percent.

The political machinations over Brexit have continued this week. On Monday, the House of Lords backed down and voted through the Brexit bill without making any changes. This move means the bill will be passed into law, allowing Theresa May's government to trigger Article 50 and formally declare Britain's intent to leave the European Union. There had been speculation that May might invoke Article 50 on Tuesday, but the government said it will not do so until later in March. Under Article 50, the negotiations are slated to take up to two years. Relations between Britain and the EU have nosedived since the stunning Brexit vote in June. The timing of invoking Article 50 comes at a particularly delicate time for Europe, as the Netherlands holds elections on Wednesday and France goes to the polls in April.

Strong US employment numbers in February have cemented a rate hike by the Federal Reserve on Wednesday. Nonfarm payrolls sparkled in February, as the indicator jumped to 235 thousand, easily beating the estimate of 196 thousand. Wage growth climbed 2.6% compared to February 2016, while the participation rate edged up to 63.0%, up from 62.9%. These numbers make it a virtual certainty that the Fed will raise rates by a quarter-point on Wednesday. Although a rate hike has been priced in by the markets at 93%, there have been disappointments in the past, so a rate move will likely give the dollar a boost against its major rivals. The solid job numbers also give President Trump a much-needed boost. Trump is under pressure to present an economic agenda, but the markets won't mind giving him some additional breathing room, with the economy performing so well.