Sample Category Title

Near-term sentiment remains negative, as steep post-Fed fall extended on Thursday and cracked pivotal support at 113.13 (Fibo 61.8% of 111.67/115.49 rally / rising 100SMA), but failed to close below.

Recent strong upside rejection that formed Bull-trap pattern and subsequent strong acceleration lower, confirmed reversal and signal further downside.

Eventual close below 113.13 is needed to confirm bearish continuation and expose next target at 112.57 (Fibo 76.4% retracement.

Thickening daily cloud continues to heavily weigh on near-term action, which is so far holding below initial barrier at 113.58 (daily Kijun-sen), guarding daily cloud base (113.90), where extended upticks should be ideally capped.

Res: 113.47, 113.58, 113.90, 114.19
Sup: 113.13, 112.89, 112.57, 112.00

Cable maintains strong bullish sentiment that came in play after Fed and accelerated further after BoE on Thursday. Two-day rally peaked at 1.2375, being so far capped by falling 30SMA and just ticks ahead of base of daily Ichimoku cloud (spanned between 1.2379 and 1.2435). Break above the cloud would generate another strong bullish signal for further retracement of 1.2568/1.2107 downleg. Meantime, consolidative/corrective phase could be expected ahead of fresh attempts higher. Broken 20SMA marks immediate support at 1.2315, with extended dips to hold above 1.2240 zone (yesterday's low/daily Tenkan-sen line).

Res: 1.2379, 1.2392, 1.2435, 1.2459
Sup: 1.2315, 1.2272, 1.2239, 1.2200

The Euro closed above Fibo 76.4% barrier at 1.0748 on Thursday, confirming strong bullish stance after Fed.

This signals further upside and full retracement of 1.0827/1.0492 downleg as likely near-term scenario.

The pair is on track for the third consecutive bullish weekly close that confirms the notion.

Overbought near-term studies suggest that final push towards 1.0827 target might be preceded by corrective dip.

Yesterday's low at 1.0704 marks initial support, ahead of daily cloud top at 1.0681, which is expected to keep downside protected.

However, stronger pullback on end-of-week profit taking cannot be ruled out. Below cloud top, daily Tenkan-sen and Kijun-sen lines offer next supports at 1.0652 and 1.0637 respectively.

Any extension below the latter would weaken near-term structure and risk test of lower breakpoint at 1.0605 (daily Ichimoku cloud base).

Res: 1.0781, 1.0800, 1.0827, 1.0872
Sup: 1.0738, 1.0704, 1.0681, 1.0652

On the hourly chart of DAX, we are looking at a possible reversal from the highs being made, with price now trading lower around the 12044 level. Well, we expect a sharp fall to follow from current levels, as we have been following an ending diagonal of a higher degree within the red wave 5). We know that ending diagonals are powerful reversal patterns, that tend to make sharp reversal, when they are completed. So we see a potential top at the 12178 level, and a breach beneath the 11946 level would indicate more weakness to follow.

German DAX, 1H

EUR/USD

Current level - 10776

The pair failed to break below 1.0712 support and the uptrend has been renewed, reaching new local high at 1.0780. The overall bias remains bullish above 1.0745, for a test of 1.0828 peak. Crucial on the downside is 1.0704 low.

Profit-taking affects gold curbing silver and platinum

USD/JPY

Current level - 113.28

The bias is neutral within the tight range between 113.50 and 112.90, but a violation of the lower boundary will signal a bearish outlook for 111.60 static support.

GBP/USD

Current level - 1.2367

Yesterday's unsuccessful attempt at 1.2250 led to a renewal of the upmove and current bias remains positive, for a test at 1.2400 resistance, towards 1.2570 area. Initial intraday support lies at 1.2300 and crucial on the downside is 1.2250.

USD/CHF - 0.9959

Most recent candlesticks pattern : N/A

Trend                                    : Near term down

Tenkan-Sen level                  : 0.9967

Kijun-Sen level                    : 0.9979

Ichimoku cloud top                 : 1.0046

Ichimoku cloud bottom              : 1.0019

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 - 1.2357

Most recent candlesticks pattern   : N/A

Trend                                 : Near term up

Tenkan-Sen level                 : 1.2349

Kijun-Sen level                    : 1.2309

Ichimoku cloud top              : 1.2258

Ichimoku cloud bottom        : 1.2210

Original strategy :

Buy at 1.2300, Target: 1.2400, Stop: 1.2265

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.2300, Target: 1.2400, Stop: 1.2265

Position : -

Target :  -

Stop : -

As cable has maintained a firm undertone after this week’s rally, adding credence to our view that the rise from 1.2109 low is still in progress for retracement of recent decline, hence further gain to previous support at 1.2384 would be seen, however, near term overbought condition should prevent sharp move beyond 1.2410-15 and reckon 1.2440-50 would hold, price should falter well below resistance at 1.2471, bring retreat later.

In view of this, we are looking to buy cable on pullback as 1.2300-10 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 - 1.0767

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 1.0768

Kijun-Sen level                  : 1.0744

Ichimoku cloud top             : 1.0705

Ichimoku cloud bottom      : 1.0674

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.

USD/JPY - 113.36

Most recent candlesticks pattern   : N/A

Trend                      : Near term down

Tenkan-Sen level              : 113.38

Kijun-Sen level                  : 113.22

Ichimoku cloud top             : 114.18

Ichimoku cloud bottom      : 113.68

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.

Market movers today

In the US, we are due to get preliminary University of Michigan consumer confidence data (one of the soft economic indicators) for March today.

The Donald Trump and Angela Merkel meeting, initially scheduled for this Monday but postponed due to the blizzard in the north eastern part of the US, is set to take place at the White House today. This will be the first meeting between the German Chancellor and the new American President. Likely topics on the agenda are the future of the transatlantic alliance but also funding for NATO and relations with Russia.

In the euro area, S&P is scheduled to update its rating and outlook on Portugal, Finland, Austria and Cypress, while Moody's will be reviewing Estonia.

In Denmark, the Association of Danish Mortgage Banks is due to release its housing market statistics for Q4 16.

Selected market news

Different camps of the Governing Council within the ECB seem to be forming, both when it comes to how the 'normalisation' of monetary policy should start and regarding when it is time to embark on a clearer adjustment to the forward guidance. Overnight Ewald Nowotny (Hawk) was quoted in a Handelsblaat interview as saying that the 'deposit rate could rise before [the] main rate', while Peter Praet said during a speech in Brussels that 'inflation dynamics haven't yet become self-sustained'. It will be interesting to see how this 'gorge' continues to develop.

Donald Trump's first budget outline was presented yesterday. As expected, it had heavy emphasis on infrastructure spending without further detail and an increased defence budget, which he plans to fund with deep cuts to diplomatic and foreign aid programmes. Also, the Environmental Protection Agency is set to see its budget cut by 31%. The full 2018 budget is due to be released later this spring and it will include 'our specific mandatory and tax proposals, as well as a full fiscal path'.

Yesterday's Norges Bank meeting did not bring any surprises, as the sight deposit rate was left unchanged at 0.50% and the Board maintained the 'neutral bias' introduced in September. The rate path was revised 'postponing' the expectation of when the first rate hike will occur and stating 'the key policy rate will most likely remain at today's level in the period ahead'.

The Bank of England meeting did not surprise much either, as it made no policy changes and reiterated its neutral stance by repeating it could move 'in either direction'. However, the meeting was not completely uneventful, as Kristin Forbes (a known hawk) voted for a March hike and the statement disclosed that 'some members noted that it would take relatively little further upside news...for them to consider that a more immediate reduction in policy support might be warranted'. See more in Bank of England Review: Maintains neutral stance with hawkish twist,

The overnight session was very quiet, with the Asian equity indices seeing marginal gains and losses, no big FX moves and slightly higher yields of Japanese government bonds.