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Recent Chinese economic indicators have been positive. The country surprisingly recorded trade deficit, of RMB 60B, in February. The market had anticipated a decline of surplus to RMB 173B from RMB 355B in January. Imports soared +44.7% y/y while exports gained +4.2% y/y, compared with growths of +15.9% and +25.2%, respectively, in January. The sharp rise uin imports might indicate improvement in domestic demand. China's FX reserve added +US$ 6.9B to US$ 3.01 trillion in February, marking the first increase in 8 months. The market had anticipated further decline for the month. After adjusting for currency valuation effects, the reserves probably increased US$ 19-25B in the month. While this might be the first sign of the effect of China's capital control measures, we expect the government remain cautious as outflow should remain a problem for the rest of year. Note that a reason for the uptick in February was the improved performance of renminbi at the beginning of the year. Further information, including PBOC's FX position and SAFE flow data, is needed to grasp a clearer outlook of the capital flow situation. We remains bearish over renminbi as the Fed's monetary policy normalization program should continue to support USDCNY.

Separately, China's Premier Li Keqiang in his working report to the National People's Congress outlined a more benign economic growth outlook for the year. The GDP growth target for this year is "around 6.5%, or higher if possible", down from 2016's 6.5-7.0%. Inflation target stays at around 3% and a fiscal deficit at around 3% of GDP. The growth target of money supply M2 has been lowered, by -1 percentage point, to 12%. Also suggested in the Work Report, the RMB exchange rate will "be further liberalized, and the currency's stable position in the global monetary system will be maintained". It is apparent that the policy focus has shifted from a pro-growth one to one that aims at stable social and economic developments and prevention of macro risks. Meanwhile, we believe a stable monetary policy stance, as suggested by the government, refers to one with tightening bias. Yet, the tightening is targeted more at the asset market but not at cooling the real economy.

This year's growth target, at 'around +6.5%', allows the government more flexibility. The tolerance of lower growth was probably a lesson learnt from the past two years as the government had to revise lower the targets after actual growth turned out weaker than expected. This also reflects that the policy focus has shifted from pursuing growth to reining in financial risks and leverage. Growth targets for total social financing (TSF) and M2 were trimmed one percentage point to +12% in 2017. The fact that TSF growth target is lower than the 2016's growth of +12.8% might signal the government's credit tightening policy in certain areas, such as real estate. The M2 growth target is higher than last year's growth of +11.3%. That said, the more conservative forecast for this year, when compared with last year, still reflects a tightening bias in monetary policy stance.

Daily Pivots: (S1) 1.0548; (P) 1.0575 (R1) 1.0592; More.....

EUR/USD is still consolidating in range of 1.0493/1.0630. Intraday bias remains neutral at this point. On the upside, firm break of 1.0630 resistance will argue that pull back from 1.0828 is completed. Also, rise from 1.0339 could possibly be resuming. In that case, intraday bias will be turned back to the upside for 1.0828 resistance and above. On the downside, below 1.0493 support will affirm the case that fall from 1.0828 is resuming the larger down trend. In that case, intraday bias will be back to the downside for resting 1.0339 low.

In the bigger picture, whole down trend from 1.6039 (2008 high) is in progress. Such down trend is expected to extend to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115. On the upside, break of 1.1298 resistance is needed to confirm medium term bottoming. Otherwise, outlook will stay bearish in case of rebound.

Daily Pivots: (S1) 113.75; (P) 113.95; (R1) 114.18; More...

Intraday bias in USD/JPY remains neutral as it's staying in range of 111.58/114.94. Corrective fall from 118.65 might not be completed yet. But still, in case of another fall, we'd still expect strong support from 38.2% retracement of 98.97 to 118.65 at 111.13 to contain downside and bring rebound. On the upside, decisive break of 114.94 will indicate that it's completed with a double bottom pattern (111.58, 111.68). In such case, intraday bias will be turned to the upside for retesting 118.65.

In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. The impulsive structure of the rise from 98.97 suggests that the correction is completed and larger up trend is resuming. Decisive break of 125.85 will confirm and target 61.8% projection of 75.56 to 125.85 from 98.97 at 130.04 and then 135.20 long term resistance. Rejection from 125.85 and below will extend the consolidation with another falling leg before up trend resumption.

Daily Pivots: (S1) 1.2163; (P) 1.2207; (R1) 1.2246; More...

Intraday bias in GBP/USD remains on the downside as decline from 1.2705 continues. Current fall should target a test on 1.1946/86 support zone. As noted before, consolidation pattern from 1.1946 should have completed with three waves to 1.2705 already. Break of 1.1946 will confirm our bearish view and resume the larger down trend. On the upside, break of 1.2346 support turned resistance is needed to invalidate this view. Otherwise, outlook will remain cautiously bearish in case of recovery.

In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. There is no sign of medium term bottoming yet. Sustained trading below 61.8% projection of 2.1161 to 1.3503 from 1.7190 at 1.2457 will target 100% projection at 0.9532. Overall, break of 1.3444 resistance is needed to confirm medium term bottoming. Otherwise, outlook will remain bearish.

Daily Pivots: (S1) 1.0101; (P) 1.0136; (R1) 1.0165; More.....

USD/CHF's rise from 0.9860 is still in progress. Intraday bias remains on the upside for a test on 1.0342 key resistance level next. As noted before, based on neutral medium term outlook, we'd be cautious on topping at around 1.0342. On the downside, break of 1.0008, however, will indicate completion of the rebound from 0.9860. And intraday bias will be turned back to the downside for 0.9860.

In the bigger picture, prior rejection from 1.0327 resistance argues that USD/CHF is staying in a medium term sideway pattern. In any case, decisive break of 1.0342 resistance is needed to confirm underlying strength. Otherwise, we'll stay neutral in the pair first. In case of another fall, we'd expect strong support from 0.9443/9548 support zone. Meanwhile firm break of 1.0342 will target 38.2% retracement of 1.8305 to 0.7065 at 1.1359.

Daily Pivots: (S1) 0.7563; (P) 0.7598; (R1) 0.7620; More...

Intraday bias in AUD/USD remains neutral for the moment. With 0.7635 minor resistance intact, outlook is unchanged. That is, rebound from 0.7158 is finished at 0.7740. Below 0.7542 and sustained trading below 55 day EMA will pave the way back to 0.7144/7158 support zone. However, firm break of 0.7635 will dampen our bearish view and turn focus back to 0.7740 instead.

In the bigger picture, we're still treating price actions from 0.6826 low as a correction. And, as long as 38.2% retracement of 0.9504 to 0.6826 at 0.7849 holds, long term down trend from 1.1079 is expected to resume sooner or later. Break of 0.6826 low will target 0.6008 key support level. However, firm break of 0.7849 will indicate that rise from 0.6826 is developing into a medium term rebound, rather than a sideway pattern. In such case, stronger rise should be seek to 55 month EMA (now at 0.8164) and above.

Daily Pivots: (S1) 1.3350; (P) 1.3393; (R1) 1.3416; More...

Intraday bias in USD/CAD remains neutral for the moment as consolidation continues below 1.3436 temporary top. Deeper retreat cannot be ruled out. But we'd expect downside to be contained well above 1.3209 resistance turned support and bring rally resumption. Above 1.3436 will extend the whole rise from 1.2968 and target 1.3598 high. Break there will resume the medium term rally from 1.2460 to next fibonacci level at 1.3838.

In the bigger picture, price actions from 1.4689 medium term top are seen as a correction pattern. The first leg has completed at 1.2460. The second leg is likely still in progress and could target 61.8% retracement of 1.4689 to 1.2460 at 1.3838. We'd look for reversal signal there to start the third leg. Break of 1.2968 wold at least bring at retest of 1.2460 low. However, sustained trading above 1.3838 would pave the way to retest 1.4689 high.

Daily Pivots: (S1) 138.64; (P) 139.14; (R1) 139.55; More...

GBP/JPY remains bounded in range of 138.53/142.79. Intraday bias remains neutral at this point. We're treating price actions from 148.42 as a corrective pattern. Break of 138.53 support will bring deeper decline to 136.44 support and possibly below. However, we'd expect strong support at 50% retracement of 122.36 to 148.42 at 135.39 to bring rebound. On the upside, above 142.79 will turn bias back to the upside for 144.77 and above.

In the bigger picture, price actions from 122.36 medium term bottom are still seen as a corrective pattern. Main focus is on 38.2% retracement of 195.86 to 122.36 at 150.42. Rejection from there will turn the cross into medium term sideway pattern with a test on 122.36 low next. Though, sustained break of 150.42 will extend the rebound towards 61.8% retracement at 167.78.

Daily Pivots: (S1) 120.30; (P) 120.50; (R1) 120.63; More...

Intraday bias in EUR/JPY stays neutral for consolidation below 121.18 temporary top. We're holding on to the view that corrective fall from 124.08 has completed at 118.23 already, after defending 118.45 cluster support (38.2% retracement of 109.20 to 124.08 at 118.39). Decisive break of 121.32 resistance should confirm this case and target 124.08 high next. However, break of 119.45 support should invalidate this bullish view and would likely extend the fall from 124.08 through 118.23.

In the bigger picture, price actions from 109.20 medium term bottom are seen as part of a medium term corrective pattern from 149.76. Strong rebound from 118.45 resistance turned support suggests that it's still in progress. Break of 124.08 will target 126.09 key resistance level. We'd be cautious on strong resistance there to limit upside. However, sustained break there will be a strong sign of medium term momentum and could target 141.04 resistance next.

Daily Pivots: (S1) 1.0690; (P) 1.0718; (R1) 1.0733; More...

With 1.0683 minor support intact, further rise is expected in EUR/CHF. As noted before, a short term bottom is likely in place at 1.0629 on bullish convergence condition in 4 hour MACD. Current development raised the chance of larger trend reversal after defending 1.0620 key support level. Decisive break of 1.0749 should affirm this bullish case and target 1.0897. On the downside, though, below 1.0683 minor support will turn bias back to the downside for 1.0629 instead.

In the bigger picture, the decline from 1.1198 is seen as a corrective move. There is no confirmation of completion yet. Sustained trading below 38.2% retracement of 0.9771 to 1.1198 at 1.0653 will target 50% retracement at 1.0485. However, strong rebound from 1.0620 and break of 1.0897 resistance will indicate trend reversal and turn outlook bullish.