Sample Category Title

USD/CHF - 0.9961

Original strategy :

Sell at 1.0020, Target: 0.9920, Stop: 1.0055

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 1.0020, Target: 0.9920, Stop: 1.0055

Position : -

Target :  -

Stop : -

As the greenback has remained under pressure, suggesting recent decline from 1.0171 is still in progress and may extend further weakness to 0.9920-25, however, loss of near term downward momentum should prevent sharp fall below 0.9900 and reckon 0.9870-75 would hold from here, risk from there has increased for a strong rebound later.

In view of this, would not chase this fall here and would be prudent to sell dollar on recovery as the lower Kumo (now at 1.0019) should limit upside and bring another decline. Only above previous support at 1.0060 (now resistance) would abort and signal low is formed instead, risk rebound to 1.0090-95 first.

GBP/USD - 1.2352

Original strategy :

Buy at 1.2310, Target: 1.2410, Stop: 1.2275

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.2290, Target: 1.2400, Stop: 1.2255

Position : -

Target :  -

Stop : -

As cable has eased after rising to 1.2399, suggesting consolidation below this level would be seen and pullback to 1.2320-25 cannot be ruled out, however, reckon downside would be limited o 1.2290-00 and bring another rise later, above said resistance at 1.2399 would extend recent rise from 1.2109 low to 1.2410-15 but reckon 1.2440-50 would hold, price should falter well below resistance at 1.2471, bring retreat later.

In view of this, would not chase this move from here and we are looking to buy cable on pullback as 1.2290-00 should limit downside and bring another rise. Below 1.2265-70 would suggest top is possibly formed, risk test of said support at 1.2241 which is likely to hold on first testing.

EUR/USD - 1.0735

Original strategy  :

Buy at 1.0675, Target: 1.0775, Stop: 1.0640

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.0675, Target: 1.0775, Stop: 1.0640

Position : -

Target :  -

Stop : -

As the single currency has eased after rising to 1.0782, suggesting consolidation below this level would be seen and pullback to 1.0725-30 cannot be ruled out, however, reckon downside would be limited to support at 1.0706 and the lower Kumo (now at 1.0674) should hold, bring another rise later to resistance at 1.0799 but loss of near term upward momentum should prevent sharp move beyond another previous resistance at 1.0829, bring retreat later.

In view of this, would not chase this rise here and we are looking to buy euro on pullback as 1.0670-75 should limit downside. Below 1.0640-50 would signal top is formed, bring weakness to 1.0620-25 but said support at 1.0600 should remain intact.

Daily Pivots: (S1) 112.94; (P) 113.24; (R1) 113.58; More...

Intraday bias in USD/JPY remains on the downside for 111.58 low. Current development argues that consolidation from 111.58 has completed with three waves to 115.49. And larger decline from 118.65 is resuming. Break of 111.58 will target 61.8% projection of 118.65 to 111.58 from 115.49 at 111.12. That coincides with 38.2% retracement of 98.97 to 118.65 at 111.13. We'd tentatively expect strong support from there to bring rebound. But firm break there will target 100% projection at 108.42. On the upside, outlook will stays bearish as long as 115.49 holds, in case of recovery.

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.

USD/JPY - 113.13

Original strategy  :

Sell at 114.00, Target: 113.00, Stop: 114.35

Position :  -

Target :  -

Stop : -

New strategy  :

Sell at 114.00, Target: 113.00, Stop: 114.35

Position :  -

Target :  -

Stop : -

Although the greenback recovered after falling to 112.90 yesterday and consolidation above this level would be seen for corrective bounce to 113.65-70, reckon 114.00 would limit upside and bring another decline later, below said support at 112.90 would extend recent decline from 115.51 to 112.76-77, then towards 112.50 but reckon downside would be limited to 112.00-10, bring rebound later.

In view of this, we are looking to sell dollar on subsequent recovery as 114.00 should limit upside. Only above previous support at 114.48-52 would abort and signal low is formed instead, risk a stronger rebound to 114.89 resistance first, break there would signal the retreat from 115.51 has ended, then gain to 115.20 resistance would follow.

Daily Pivots: (S1) 0.9940; (P) 0.9975; (R1) 1.0000; More.....

Intraday bias in USD/CHF remains on the downside for 0.9860 support. Corrective rise from 0.9860 should have completed at 1.0169 and fall from 1.0342 is likely resuming. Break of 0.9860 will target 100% projection of 1.0342 to 0.9860 from 1.0169 at 0.9687. On the upside, above 1.0018 minor resistance will turn bias neutral. But outlook will now stay bearish as long as 1.0169 resistance holds.

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.

Daily Pivots: (S1) 1.2272; (P) 1.2324; (R1) 1.2408; More...

Intraday bias in GBP/USD remains on the upside as rebound from 1.2108 continues. Whole consolidation pattern from 1.1946 is still in progress. Stronger rise could be seen to 1.2705/2774 resistance zone next. On the downside, below 1.2240 minor support will turn bias back to the downside for 1.2108 instead.

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) 1.0722; (P) 1.0746 (R1) 1.0787; More.....

EUR/USD dips notably after hitting 1.0781. But intraday bias stays on the upside for the moment first. Further rally is in favor to 1.0828 resistance and above. Overall, rise from 1.0339 is seen as a corrective move. Hence, we'd upside to be limited by 100% projection of 1.0339 to 1.0828 from 1.0494 at 1.0983 to bring larger down trend resumption. On the downside, break of 1.0599 will turn bias back to the downside for 1.0494 support.

In the bigger picture, as long as 1.1298 key resistance holds, whole down trend from 1.6039 (2008 high) is still expected to continue. Break of 1.0339 low will send EUR/USD through parity to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115.

The forex markets are relatively quiet today as the week is heading to a close. There have been talks about Euro strength around. While the common currency did jump against Dollar, it's indeed the second weakest major currency for the week. There are speculations that ECB could lift interest rate before ending the quantitative easing program. There are also talks that results of the Dutch elections showed a defeat for populism and anti-Euro sentiments. However, the lifts from those factors to Euro were rather brief. Cross price actions could be a factor as the currency markets are always a tug war of relative strengthens. But in such situations, we'll always look at EUR/CHF for more guidance on the performance of Euro.

EUR/CHF suggests underlying weakness in Euro

The strong rebound in EUR/CHF last week triggered our bullish view that the medium trend in the cross is reversing. However, the sharp decline since hitting 1.0823 earlier this week is quickly dampening this view. In particular, the rebound from 1.0689 support looks rather short lived. The pair is heading back to this near term support level as and could have a break on it before weekly close. From another angle, EUR/CHF breached 55 week EMA (now at 1.0809) for just a very brief period of time. The rejection from this falling EMA indicates that underlying bearishness is persisting. We'll pay close attention to the overall developments in related Euro pairs. But for now, it's getting likely that EUR/CHF will revisit 1.0620 key support level again next week. And that could be accompanied by weakness in EUR/GBP and EUR/AUD.

FTSE 100 to extend record run

The strength in Sterling would have been seen as a surprise before BoE announcement. But policymaker Kristin Forbes' vote rate hike now suggests that there is realistic, even still remote, chance of a hike around early 2018. The announcement was also well received by other investors. FTSE 100 closed at record high yesterday and is pushing for another one today. It's still very earlier to talk about a reversal in the pound's trend. But the developments suggest that things are not as bad as it seem in UK in spite of Brexit and the talks about another Scottish referendum.

G20 meeting watched over the weekend

G20 meeting in Baden-Baden, Germany will be a focus for the weekend. German Finance Minister Wolfgang Schaeuble said the group is yet to have consensus of global trade and open markets. He said that "I don't know the exact wording but nobody has raised the issue of protectionism yet and I don't believe that we have to deal with this a lot." And, "it's about finding the right wording, it's about how we phrase the openness of the world trade system in the final communique."

On the data front...

US industrial production rose 0.0% in February. Capacity utilization dropped to 75.4%. Canada manufacturing shipments rose 0.6% mom in January. Eurozone trade surplus narrowed to EUR 15.7b in January. New Zealand business NZ manufacturing index rose to 55.2 in February.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.0722; (P) 1.0746 (R1) 1.0787; More.....

EUR/USD dips notably after hitting 1.0781. But intraday bias stays on the upside for the moment first. Further rally is in favor to 1.0828 resistance and above. Overall, rise from 1.0339 is seen as a corrective move. Hence, we'd upside to be limited by 100% projection of 1.0339 to 1.0828 from 1.0494 at 1.0983 to bring larger down trend resumption. On the downside, break of 1.0599 will turn bias back to the downside for 1.0494 support.

In the bigger picture, as long as 1.1298 key resistance holds, whole down trend from 1.6039 (2008 high) is still expected to continue. Break of 1.0339 low will send EUR/USD through parity to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115.

Economic Indicators Update

The DAX Index has edged higher in the Friday session. Currently, the DAX is at 12,091.00. On the release front, it's a quiet end to the week. Eurozone Trade Balance slipped to EUR 15.7 billion, well short of the estimate of EUR 22.3 billion.

As widely expected, the Federal Reserve raised rates by a quarter-point on Wednesday. The rate hike, the second in just three months, raised the benchmark lending rate to a 0.75%-1% range. The dollar reacted negatively, declining broadly against its major rivals, including the euro. This was largely due to disappointment with the Fed, which sent a more dovish message than the markets wanted to hear. Leading up the rate announcement, there had been speculation that a red-hot US economy would propel the Fed to accelerate its pace of monetary tightening, with possibly four rate hikes this year. Instead, Fed Chair Janet Yellen reiterated that further rate hikes would be "gradual" and left its "dot plot" unchanged, with a projection for three rate hikes in 2017. As well, the US dollar may have lost ground due to traders and investors acting on "buy on rumor, sell on fact". This large-scale selling of US dollars after the Fed hike has sent the US dollar broadly lower, and gold has taken advantage with impressive gains of 2.5 percent since the Fed announcement.

European governments can breathe a sigh of relief following the results of the election in the Netherlands. The centre-right coalition of Prime Minister Mark Rutte won the most votes, handily defeating the anti-EU Freedom Party, headed by Geert Wilders. The election was closely watched across Europe, as it was viewed as a bellwether of populist sentiment on the continent. Leaders in France and Germany, who are also facing tight races due to rising anti-EU sentiment, are hopeful that they can copy Rutte's recipe for electoral success. The election results have helped push the euro to its highest level February 5.