EURUSD

The EURUSD was indecisive last week. Price attempted to push lower bottomed at 1.0521 but closed higher at 1.0610. The bias is neutral in nearest term. Immediate support is seen around 1.0590. A clear break below that area could trigger further bearish pressure testing 1.0520/00 area. Immediate resistance is seen around 1.0680. A clear break and daily close above that area would expose 1.0750 – 1.0800 region. Overall I remain neutral.

GBPUSD

The GBPUSD didn’t make significant movement last week. The bias is neutral in nearest term. Immediate support is seen around 1.2385. A clear break below that area could trigger further bearish pressure testing 1.2350/25 area. Immediate resistance is seen around 1.2450. A clear break above that area could trigger further bullish pressure testing 1.2500 or higher. Overall I remain neutral.

USDJPY

The USDJPY attempted to push higher last week topped at 114.95 but whipsawed to the downside and closed lower at 112.87. The bias is bearish in nearest term testing 112.00 area. Immediate resistance is seen around 113.50. A clear break above that area could lead price to neutral zone in nearest term testing 114.00 area but overall I still prefer a bearish scenario at this phase and any upside pullback should be seen as a good opportunity to sell.

USDCHF

The USDCHF was indecisive last week. The bias is neutral in nearest term probably with a little bullish bias testing 1.0100 area. Immediate support is seen around 1.0000. A clear break below that area could trigger further bearish pressure testing 0.9950 area. As you can see on my H4 chart below, the double top scenario remains valid (1.0335) but price is still moving inside a bullish channel. We need a clear break below that bullish channel and 0.9950 support area to continue the bearish scenario. Overall I remain neutral.

Daily Pivots: (S1) 1.0584; (P) 1.0630 (R1) 1.0656; More.....

Intraday bias in EUR/USD remains neutral for the moment. With 1.0713 minor resistance intact, we're holding on to our bearish view. That is, corrective rise from 1.0339 has completed at 1.0828 already. Below 1.0520 will target 1.0339 first. Break will extend the larger down trend to parity. However, above 1.0713 will dampen our view and turn focus back to 1.0828 instead.

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.

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Daily Pivots: (S1) 1.2359; (P) 1.2434; (R1) 1.2482; More...

Intraday bias in GBP/USD remains neutral for the moment. Price actions from 1.1946 are viewed as a consolidation pattern, with rise from 1.1986 as the third leg. In case of another rise, we'd expect upside to be limited by 1.2774 to bring larger down trend resumption. On the downside, below 1.2346 will revive the case that such consolidation is completed at 1.2705 already. In that case, intraday bias will turn back to the downside for retesting 1.1946 low.

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.

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Daily Pivots: (S1) 0.9980; (P) 1.0007; (R1) 1.0047; More.....

Intraday bias in USD/CHF remains neutral for the moment. Near term outlook stays cautiously bullish as long as 0.9929 minor support holds. Fall from 1.0342 could have finished at 0.9860 already. Above 1.0118 will turn bias back to the upside for retesting 1.0342. However, break of 0.9929 will likely extend the decline from 1.0342 through 0.9860 low.

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.

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Currency pair USD/JPY

The USD/JPY seems to have completed a bullish 5 wave (brown) pattern as part of a wave 1 (blue). Price could now be retracing back to the Fibonacci levels of wave 2 vs 1. A break below the 100% level invalidates this wave structure. A breakout above resistance (red) could confirm and start the wave 3 (blue).

The USD/JPY is probably building a bearish ABC zigzag (brown) correction within wave 2 (blue). Price could bounce at the Fibonacci levels of wave B vs A (brown) price could move lower within wave 2 (blue). A break above the 100% level of wave B vs A invalidates wave B (brown) and below 100% of wave 2 vs 1 invalidates wave 2 (blue).

Currency pair EUR/USD

The EUR/USD retraced back to the Fibonacci levels of wave X (blue) as price builds a WXY correction within a larger wave 2 (puple). The Fibonacci levels of wave 2 (purple) could therefore act as resistance. A break above the 100% level of wave 2 vs 1 invalidates the wave 1-2 (purple).

The EUR/USD showed a bearish bounce and price fell back to the 50% Fibonacci support level. Price will either break above resistance trend line (red) or retrace to deeper Fib levels of wave X vs W.

Currency pair GBP/USD

The GBP/USD is in between multiple support and resistance trend lines. At this moment price is close the support trend line (blue) which could be used as a bouncing spot within wave 2-3 (orange) and a larger wave C (blue).

The GBP/USD seems to have built a bearish ABC zigzag (grey) towards the Fibonacci levels of wave 2 (purple). A break below the 100% Fib level of wave 2 vs 1 (purple) invalidates the wave structure. A bullish breakout above resistance (red) could see price move towards the Fibonacci targets of wave 3 vs 1 (orange).

Daily Pivots: (S1) 112.43; (P) 112.97; (R1) 113.32; More...

Intraday bias in USD/JPY remains neutral for the moment. Corrective fall from 118.65 could extend lower through 111.58. But 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, above 114.94 resistance should confirm completion of pull back from 118.65. In such case, intraday bias will be turned back 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.

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Daily Pivots: (S1) 1.3056; (P) 1.3091; (R1) 1.3123; More...

Intraday bias in USD/CAD remains neutral for the moment. On the upside, break of 1.3211 resistance will argue that fall from 1.3598 has completed at 1.2968. And more importantly, rise from 1.2460 is still in progress. In that case, intraday bias will be turned back to the upside for 1.3598 and above. On the downside, below 1.2968 will revive the case that rise from 1.2460 is completed and turn outlook bearish for this low. Overall, choppy rise from 1.2460 is still seen as a corrective move.

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 could be completed at 1.3598 and fall from there is tentatively seen as the third leg. Break of 1.2460 will target 50% retracement of 0.9460 to 1.4689 at 1.2075 before completing the correction. In case of another rise, we'd look for reversal signal above 61.8% retracement of 1.4689 to 1.2460 at 1.3838.

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Daily Pivots: (S1) 0.7643; (P) 0.7677; (R1) 0.7699; More...

Intraday bias in AUD/USD remains neutral for the moment. With 0.7605 minor support intact, further rise cannot be ruled out yet. However, considering bearish divergence condition in 4 hour MACD, we'd expect strong resistance from 0.7777/7833 resistance zone to limit upside and bring near term reversal. On the downside, break of 0.7605 support will indicate that rise from 0.7158 has completed already and turn bias back to the downside for 55 day EMA (now at 0.7534) first.

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 0.8186) and above.

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The forex markets are generally staying in range as another week starts. FOMC minutes will be the main focus of the week. Recent comments from Fed officials were generally hawkish, maintaining the general view of three rate hikes this year. And there are some comments that raised the probability of a March hike mildly. The markets will look into the minutes of January 31 - February 1 meeting to confirm that it's a consensus among FOMC minutes. Meanwhile, it's generally expressed that fiscal policies were not taken into account in Fed's last projections, due to lack of details available. US president Donald Trump has promised to deliver "phenomenal" tax reforms within two or three weeks. And it's about time for Trump to deliver. And the announcement of Trump's tax overhaul could overwhelm the markets.

Yen Lower as Trade Surplus Shrank

Yen trades mildly lower today as trade deficit narrowed to JPY 0.16T in January, below expectation of 0.28T. Exports rose 1.3% yoy, much weaker than expectation of 4.7% yoy. That's, nonetheless, the second month of import growth, following 14 straight months of contraction. Some economists noted that's in line with strengthening global demand. However, the outlook ahead is unclear thanks US's trade policies. In particular, Donald Trump's protectionist policies could be a blow to Japanese exporters, in particular auto manufacturers.

Also released today so far, New Zealand PPI inputs rose 1.0% qoq in Q4 while PPI outputs rose 1.5% qoq. UK Rightmove house price rose 2.0% mom in February. Germany will release PPI today. UK CBI trends total orders, Eurozone consumer confidence and Canada wholesale sales will be featured. US in on bank holiday today.

FOMC Minutes, RBA Minutes and Eurozone PMIs and German Ifo to highlight the week

For the week ahead, FOMC and RBA minutes are the main feature. Meanwhile, Eurozone PMIs and German Ifo will be closely watched too. Euro is so far the second weakest major currency this month, next to Kiwi. The common currency is weighed down by political uncertainties in Europe. The closer ones include French election and Brexit negotiations. The PMIs and Ifo could be a gauge to see how sentiments in business are being affected by those uncertainties. Here are some highlights for the week:

• Monday: New Zealand PPI, Japan trade balance; German PPI; Eurozone consumer confidence; Canada wholesale sales
• Tuesday: RBA minutes; Japan PMI manufacturing, all industry index' Swiss trade balance; Eurozone PMIs; US PMIs
• Wednesday: Australia wage cost; German Ifo, Eurozone CPI final; UK GDP revision: Canada retail sales; US existing home sales, FOMC minutes
• Thursday: Australia private capital expenditure; German GDP final, Gfk consumer sentiment; US jobless claims
• Friday: UK BBA mortgage approvals; Canada CPI; US new home sales

AUD/USD Daily Outlook

Daily Pivots: (S1) 0.7643; (P) 0.7677; (R1) 0.7699; More...

Intraday bias in AUD/USD remains neutral for the moment. With 0.7605 minor support intact, further rise cannot be ruled out yet. However, considering bearish divergence condition in 4 hour MACD, we'd expect strong resistance from 0.7777/7833 resistance zone to limit upside and bring near term reversal. On the downside, break of 0.7605 support will indicate that rise from 0.7158 has completed already and turn bias back to the downside for 55 day EMA (now at 0.7534) first.

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 0.8186) and above.

Economic Indicators Update

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STOCKS

Overall the equities are mixed. Dow and Shanghai looks bullish while Dax and Nikkei are sideways. Nifty could be on the verge of seeing a sharp fall in the near term.

The US markets are closed today on the eve of Washington’s birthday. Dow (20624.05, +0.02%) has moved up slightly and a small dip from 20800 can be expected in the near term. A break above 20800 could turn very bullish towards 21000 or higher. Near term looks strong.

Dax (11757.02, -0.22) is finding some difficulty in breaking above the previous high of 11893.08 and at the same time is holding well above the 11500-11400 support region. Unless we see a break on either side, the index may continue to trade sideways in the near term.

Nikkei (19207.30, -0.14%) is also stuck in the 19000-19620 region and may remain so for some more sessions. We could see a rise to 1950 over today and tomorrow.

Shanghai (3214.20, +0.38%) may bounce back from support at 3200 to rise again towards 3225-3250 levels. Near term looks bullish.

Immediate support near 8800 seen on the Nifty (8821.70, +0.50%) which could take it towards crucial resistance at 9000. A sharp corrective fall is expected in the coming sessions either from current levels or after testing crucial resistance near 9000.

COMMODITIES

Gold (1234) may test the support of 1215 due to fresh strength in Dollar (100.95). It may keep it stable in the range of 1215-40.

Long term (since April 2011) trend line resistance for Silver (17.94) poised at 18.35 region. Unless the same has been penetrated on an closing basis, silver may be range bound between 18.35-17.60.

Nothing changed for Brent (55.78) and WTI (53.43) in the last session. Repeat – both are trading exactly at the midpoint of their respective ranges of 53-58 and 50-55 with no directional bias and this horizontal movement may continue for a few more days. Brent-WTI ratio (1.63) is also moving downwards, may find support at 1.00.

Copper (2.71) is trading within the range of 2.60-83 with no directional bias.

FOREX

With the US market closed today, the forex market is expected to remain quiet for the day. This week, the volatility may come down.

Dollar Index (100.95) has bounced back from 100.40, a bit short of our target/support of 100.20 and a break above 101.25-40 may confirm a near term bottom at 100.40. The next 2-5 sessions may find Dollar trading in the range of 100.40-101.70.

Euro (1.0609) failed to retrace more than 50% of the decline from 1.0829 to 1.0519 and came down once again. Now a break below 1.0580 may extend the fall to 1.0500-1.0450 levels.

Dollar-Yen (113.08) has been only mildly affected by the January Trade Balance (-¥1086.9b versus -¥625.9b expected)missing expectations and bounced back from 112.60, slightly below our support of 112.85. But to hold above the low of 112.60, it must rise above 113.50 in the next couple of sessions.

Pound (1.2412) is trying to expand the near term range of 1.2400-1.2600 to the lower side in line with our expectations. The medium term upside chances remain open till the support at 1.2350-40 is protected.

Aussie (0.7670) is testing the near term support at 0.7650. It remains to be seen if it manages to bounce from the support or not as a break below 0.7650 may weaken the uptrend considerably. The major resistance remains unchanged at 0.7750-0.7800..

The GST council was successful in passing only a single draft law on Saturday but three other crucial laws were stuck. Dollar Rupee (67.01) may open slightly higher today with the trend up above the near term support at 66.90

INTEREST RATES

The US yields may possibly remain stable near current levels before coming off below immediate supports. The 5Yr (1.90%), 10YR (2.2%) and the 30Yr (3.02%) are almost stable and may remain so for another 2-3 sessions.

The Japanese 5YR (-0.10%) and the 10Yr (0.089%) have fallen disappointing trade figures came out this morning. However, the 30YR (0.917%) has risen from levels near 0.88% and looks bullish for the near term.

The UK yields are all trading lower. The 5YR (0.393%), 10Yr (1.3020%) and the 20YR (1.80%) are down by 1bps and could fall some more before bouncing back in the next few sessions.

The Indian 10YR GOI (7.00%) closed higher last week and we may expect it to trade in the 6.88-7.04% region for the coming sessions.