Daily Pivots: (S1) 0.8423; (P) 0.8457; (R1) 0.8512; More...

EUR/GBP recovered after hitting 0.8402 and intraday bias is turned neutral again. But near term outlook stays cautiously bearish with 0.8590 resistance holds. Fall from 0.8851 is seen as the third leg of the corrective pattern from 0.9304. Below 0.8402 will target 0.8303 support first. Break will confirm our view and target 0.8116 key cluster support level.

In the bigger picture, price actions from 0.9304 are viewed as a medium term corrective pattern. Deeper fall cannot be ruled out yet. But we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside. Overall, the corrective pattern would take some time to complete before long term up trend resumes at a later stage. Break of 0.9304 will pave the way to 0.9799 (2008 high).

Daily Pivots: (S1) 1.3637; (P) 1.3693; (R1) 1.3761; More...

EUR/AUD breached 1.3671 key support level but recovered quickly. Intraday bias is turned neutral first. We'd still viewing fall from 1.6587 as a corrective move. And strong support is expected from 1.3671 to contain downside and break rebound. Break of 1.3900 resistance will indicate near term reversal and turn bias back to the upside for 1.4025 resistance and above. However, sustained break of 1.3671 will invalidate our view.

In the bigger picture, price actions from 1.6587 medium term top are viewed as a corrective pattern. We'd expect strong support from 1.3671 key level to contain downside and bring rebound. Up trend from 1.1602 should not be finished and will resume later. Break of 1.4721 resistance will indicate completion of such correction and turn outlook bullish for retesting 1.6587 high. However, sustained break of 1.3671 will invalidate our bullish view and would turn focus back to 1.1602 long term bottom.

Daily Pivots: (S1) 1.0641; (P) 1.0659; (R1) 1.0684; More...

EUR/CHF recovered but stays in range below 1.0706. Intraday bias remains neutral first. With 1.0706 resistance intact,deeper decline is expected. Firm break of 1.0620 key support level will extend the larger decline from 1.1198 to 1.0485 fibonacci level. However, break of 1.0706 resistance will indicate short term bottoming and turn bias back to the upside. Further break of 1.0749 resistance will raise the chance of medium reversal.

In the bigger picture, the decline from 1.1198 is seen as a corrective move. Such correction is still in progress. Sustained trading below 38.2% retracement of 0.9771 to 1.1198 at 1.0653 will target 50% retracement at 1.0485. On the upside, break of 1.0897 resistance is needed to confirm completion of such fall. Otherwise, outlook will stay bearish.

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Currency pair EUR/USD

The EUR/USD indeed made a bullish bounce yesterday at the support Fibonacci levels of wave X (blue). Price could now be building a complex WXY correction within a larger wave 2 (purple) unless price breaks below the 138.2% Fib level (invalidation). The Fibonacci levels of wave 2 (purple) could also act as reversal spot and remains valid unless price breaks above the 100% level of wave 2 vs 1 (purple).

The EUR/USD could be building a bullish ABC (green) within wave Y (blue) but a break below the 100% Fibonacci level of wave B vs A invalidates the structure.

Currency pair GBP/USD

The GBP/USD retraced back the support level (blue line) of the contracting triangle chart pattern after breaking above it (orange dotted). A bullish bounce could see price potentially retest the larger resistance trend line (brown) as part of wave C (blue).

The GBP/USD indeed made a bearish retracement yesterday which bounced at the 78.6% Fibonacci level of wave 2 (purple). A bullish continuation above resistance (red) could see price pick up more momentum towards the Fibonacci targets of wave C (orange). A break below the 100% level of wave 2 vs 1 invalidates the wave structure.

Currency pair USD/JPY

The USD/JPY is probably in a wave 1-2 (blue) unless there is a break below the 100% level of wave 2 vs 1. A larger ABC (brown) seems to be taking place within wave 2 (blue). A wave 2 (blue) correction typically last between 100% and 161.8% of wave 1 (see bottom scale).

The USD/JPY could be completing a bearish ABC (brown) zigzag within wave 2 (blue). There could be another ABC zigzag (orange) within wave that wave B (brown) but the wave B could also have already been completed and a break above the red line invalidates wave B (brown). A break below support (green) could price test but probably not break the next support (blue) which would probably complete the ABC (brown) within wave 2 (blue).

EURUSD

The EURUSD attempted to push lower yesterday bottomed at 1.0493 but closed higher at 1.0557. The bias is neutral in nearest term probably with a little bullish bias testing 1.0600/20 area. Immediate support is seen around 1.0520/00 which remains a good place to buy with a tight stop loss as a clear break and daily close below that area would expose 1.0400 – 1.0350 region. On the upside, a clear break and daily close above 1.0600 would expose 1.0680 – 1.0700 area. Overall I remain neutral.

GBPUSD

The GBPUSD had another indecisive movement yesterday. The bias remains neutral in nearest term. As you can see on my H1 chart below price has been moving sideways without clear direction suggests a consolidation phase. Immediate support is seen around 1.2400. A clear break below that area could trigger further bearish pressure testing 1.2340 area. Immediate resistance is seen around 1.2500. A clear break and daily close above that area could trigger further bullish pressure testing 1.2580 area. Overall I remain neutral.

USDJPY

The USDJPY was indecisive yesterday. The bias is neutral in nearest term but overall as long as stay below 115.60 I still prefer a bearish scenario. Immediate resistance is seen around 113.50. A clear break above that area could trigger further bullish pressure testing 114.00 or higher. Immediate support is seen around 112.90. A clear break below that area could trigger further bearish pressure testing 112.50 or lower.

USDCHF

The USDCHF attempted to push higher yesterday topped at 1.0140 but closed lower at 1.0104. The bias is neutral in nearest term probably with a little bearish bias testing 1.0050 area. Immediate resistance is seen around 1.0140 (yesterday’s high). A clear break and daily close above that area could trigger further bullish pressure testing 1.0200 region. Overall I remain neutral.

Daily Pivots: (S1) 1.3111; (P) 1.3160; (R1) 1.3211; More...

USD/CAD is still staying in range below 1.3211 resistance. Intraday bias remains neutral first. 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.

Daily Pivots: (S1) 0.7673; (P) 0.7694; (R1) 0.7721; More...

Intraday bias in AUD/USD remains neutral for the moment. Another rise cannot be ruled out with 0.7605 minor support intact. 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 0.7550) 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.

Daily Pivots: (S1) 1.0508; (P) 1.0541 (R1) 1.0589; More.....

Intraday bias in EUR/USD remains mildly on the downside for the moment. Fall from 1.0828 has just resumed. Such decline is seen as resuming the larger down trend. Further fall should be seen to retest 1.0339 low first. Break will confirm our bearish view and target parity. On the downside, break of 1.0678 is needed to confirm completion of fall from 1.0828. Otherwise, outlook will remain mildly bearish in case of recovery.

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) 1.2406; (P) 1.2457; (R1) 1.2499; More...

Intraday bias in GBP/USD remains neutral for the moment as it's staying in range of 1.2346/2705. 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.

Fed minutes lift likelihood of a May hike

Asia Mid-Session Market Update: Austalia CapEx falls more than expected; BOK on hold; Fed minutes lift likelihood of a May hike

US Session Highlights

(US) JAN EXISTING HOME SALES: 5.69M V 5.55ME (highest since Feb 2007)

OPEC Committee reports sees Jan OPEC cuts compliance at above 90%, sees non-OPEC cuts compliance near 60% - press

(US) Pres Trump: to submit a healthcare reform plan by mid-March

(US) Minutes from the previous FOMC meeting showed the committee said it would be appropriate to raise rates “fairly soon” should jobs and inflation come inline with expectations

US markets on close: Dow +0.2%, S&P500 -0.1%, Nasdaq -0.1%

Best Sector in S&P500: Utilities

Worst Sector in S&P500: Energy

Biggest gainers: GRMN +7.3%, DOW +4.0%, DD +3.4%, VFC +2.1%, AET +1.9%

Biggest losers: FSLR -8.3%, NFX -8.1%, CXO -6.8%, NEM -3.9%, MRO -3.8%

At the close: VIX 11.7 (+0.2pts); Treasuries: 2-yr 1.22% (-2bps), 10-yr 2.42% (-1bp), 30-yr 3.04% (flat)

US movers afterhours

UCTT: Reports Q4 $0.36 v $0.27e, R$174.5M v $173Me; Guides Q1 adj $0.40-0.45 v $0.26e, R$190-197M v $165Me; +13.8% afterhours

SQ: Reports Q4 $0.05 v -$0.09e, R$452M v $453Me; Guides Q1 adj 0.00-0.02 v -$0.10e; EBITDA $14-18M, adj Rev $440-452M v $450Me; +8.6% afterhours

CTRP: Reports Q4 $0.17 v -$0.01e, Total Rev $746M v $734Me; +5.0% afterhours

HPQ: Reports Q1 $0.38 v $0.37e, R$12.7B v $11.8Be; +2.4% afterhours

TSLA: Reports Q4 -$0.69 v -$0.13e, R$2.28B v $2.20Be; Model S and Model X K deliveries 22.3K units, -10% q/q, +27% y/y; +1.5% afterhours

FIT: Reports Q4 -$0.56 v -$0.48e, R$573.8M v $576Me; +1.2% afterhours

CAKE: Reports Q4 $0.67 v $0.67e, R$603.1M v $594Me; announces $100M share repurchase plan (3.6% of market cap); -0.5% afterhours

NVDA: Nomura Cuts NVDA to Reduce from Buy, price target: $90; -2.4% afterhours

SAM: Reports Q4 $1.75 v $1.19e, R$219.4M v $226Me; Guides initial FY17 $4.20-6.20 v $6.35e; -7.7% afterhours

JACK: Reports Q1 $1.18 v $1.24e, R$487.9M v $498Me; -9.7% afterhours

ARRS: Reports Q4 $0.79 v $0.70e, R$1.76B v $1.69Be; Guides Q1 $0.36-0.40 v $0.67e, R$1.44-1.49B v $1.66Be; -10.4% afterhours

LB: Reports Q4 $2.03 v $1.90e, R$4.49B v $4.50Be; Guides Q1 $0.20-0.25 v $0.50e; Guides initial FY17 $3.05-3.35 v $3.70e; -13.1% afterhours

TSRA: Reports Q4 $0.45 v $0.61e, R$70.1M v $72.0Me; changes name and stock symbol; -13.6% afterhours

Asia Key economic data:

(BR) BRAZIL CENTRAL BANK (BCB) CUTS SELIC TARGET RATE BY 75BPS TO 12.25%; AS EXPECTED

(KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 1.25%; AS EXPECTED

(AU) AUSTRALIA Q4 PRIVATE CAPITAL EXPENDITURE (CAPEX) Q/Q: -2.1% V -0.5%E

(JP) JAPAN JAN PPI SERVICES Y/Y: 0.5% V 0.5%E

Asia Session Notable Observations, Speakers and Press

Asia equity markets are modestly lower as investors digest the implications of the latest Fed policy minutes. Fed noted it may be appropriate to raise rates "fairly soon", while some members urged going at the upcoming meeting to give FOMC more flexibility. However, traders looked for a more concrete signal as March Fed funds futures probability remained below 20%, even as the odds for May has risen above 50%. The caveat is that May does not have an accompanying press conference while March does, and the Fed has never raised rates in a meeting when the Fed chair did not take the podium.

USD weakened in US hours on release of the Fed minutes and remains under pressure in Asian session. USD/JPY is down over 30pips from the highs below 113.10, EUR/USD up 30pips above 1.0570, while NZD/USD is up 40pips at 0.7215. AUD/USD is the only exception among the majors, trading unchanged on the day around $0.77 after falling some 30pips on soft headline Q4 Australia Capex data below $0.7670.

Australia Q4 capex declined for the 4th straight quarter, and while the decline was bigger than expected, it was also the smallest decline of the past four. Components are typically more critical for this release, and here the picture was more mixed. Economists found the 0.4% rise in Plant/Machinery spending vs decline of 1.9% prior especially noteworthy and shrugged off the initial estimate for next year's spending slowing to A$80.6B from the revised A$112.2B for this year. AUD/USD initially fell on the headline and then recovered all of its lost ground toward the market close.

Rate decisions from Brazil and South Korea were also on the docket today. Brazil was unanimous to cut for the 4th straight time by 75bps - in line with consensus - citing mixed economic activity signs and affirming next year's inflation outlook. BOK stood pat for its 9th straight time and also voted unanimously, though policymakers pledged to monitor external risks of protectionism and US-China policy along with domestic factors such as rising household debt.

After yesterday's property price data from China, Commerce Ministry official said the govt will continue to stabilize housing market and also doing preparation to roll out a property tax, while planning to maintain differentiated curbs across the cities.

China:

(CN) Morgan Stanley raises CNY forecast for 2017-end to CNY7.1 from CNY7.3 - press

(CN) China Deputy Housing Minister: China has the ability and methods to stabilize housing market

Japan:

(JP) Japan's pension fund GPIF had raised its holdings of short-term assets due to negative interest rates; Will switch to JGBs when rates rise - press

(JP) Bank of Japan (BOJ) Member Kiuchi (dissenter): Must make 2% inflation target a medium to long term target

(JP) BOJ considering dates of planned JGB buying operations ahead of time to avoid a jump in yields due to market uncertainty - Nikkei

Australia/New Zealand:

(AU) Economists with AMP, ANZ, and JPMorgan note today's Australia Q4 CAPEX data looks worse than it is given the rise in Plant/Equipment spending - SMH

Asian Equity Indices/Futures (00:00ET)

Nikkei -0.2%, Hang Seng -0.5%, Shanghai Composite -0.4%, ASX200 -0.3%, Kospi flat

Equity Futures: S&P500 -0.1%; Nasdaq flat; Dax -0.1%; FTSE100 -0.2%

FX ranges/Commodities/Fixed Income (00:00ET)

EUR 1.0540-1.0565; JPY 113.10-113.45; AUD 0.7665-0.7700; NZD 0.7175-0.7210

Apr Gold +0.4% at $1,238/oz; Apr Crude Oil +0.9% at $54.08/brl; Mar Copper -0.6% at $2.72/lb

(US) Weekly API Oil Inventories: Crude: -0.9M v +9.9M prior; first draw in 5 weeks

JGB: (JP) Japan's MoF sells ¥1.0T in 0.6% (0.6% prior) 20-year JGBs; Avg yield: 0.669% v 0.589% prior; bid-to-cover: 4.05x (highest since 2014) v 3.54x prior

(CN) PBOC SETS YUAN MID POINT AT 6.8695 V 6.8830 PRIOR; first stronger Yuan setting in 4 sessions

(CN) PBOC to inject combined CNY50B v CNY120B prior in 7-day, 14-day and 28-day reverse repos

SWIFT: CNY use in international transactions: 1.68% of total in Jan v 1.68% prior

Asia equities / Notables / movers by sector

Consumer discretionary: 493.HK Gome Electrical Appliances Holding +3.7% (profit warning); 2020.HK Anta Sports Products -2.3% (FY16 result); QAN.AU Qantas Airways +5.1% (H1 result); CWN.AU Crown Resorts +8.3% (H1 result); Invocare +9.0% (FY16 result); FLT.AU Flight Centre -2.6% (cuts guidance)

Consumer staples: AHY.AU Asaleo Care +7.4% (FY16 result)

Financials: AAD.AU Ardent Leisure -21.1% (H1 result); MMS.AU McMillan Shakespeare +3.2% (Citi raises rating)

Industrials: 7201.JP Nissan Motor Co -0.6% (names new CEO); RCR.AU RCR Tomlinson +7.2% (H1 result)

Technology: ISD.AU iSentia Group -7.5% (Deutsche Bank cuts rating); XIP.AU Xenith IP Group -19.3% (H1 result)

Materials: ILU.AU Iluka Resource -2.1% (FY16 result); AWC.AU Alumina -1.2% (FY16 result); AGO.AU Atlas Iron -9.3% (H1 result); ABC.AU Adelaide Brighton +4.3% (FY16 result)

Healthcare: EHE.AU Estia Health +12.6% (affirms guidance)

Utilities: EPW.AU ERM Power +5.4% (H1 result)