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Daily Pivots: (S1) 0.8514; (P) 0.8541; (R1) 0.8560; More...

EUR/GBP's decline continues today and intraday bias stays on the downside. Fall from 0.8977 should target 161.8% projection of 0.8977 to 0.8717 from 0.8874 at 0.8453. However, break of 0.8611 resistance will indicate short term bottoming, and turn bias back to the upside for stronger rebound.

In the bigger picture, the down trend from 0.9267 (2022 high) is still in progress. It's seen as part of the long term range pattern from 0.9499 (2020 high). Deeper fall would be seen towards 0.8201 (2022 low). But strong support should be seen from there to bring reversal. This will now remain the favored case as long as 0.8717 support turned resistance holds.

Daily Pivots: (S1) 1.5873; (P) 1.5915; (R1) 1.5954; More...

Intraday bias in EUR/AUD stays neutral at this point. Strong support is expected from around 100% projection of 1.6785 to 1.6134 from 1.6513 at 1.5862 to complete the fall from 1.6785. On the upside, break of 1.6101 resistance will confirm short term bottoming, and turn bias back to the upside for rebound.

In the bigger picture, price actions from 1.6785 are seen as a correction to up trend from 1.4281 (2022 low) only. Strong support should be seen around 38.2% retracement of 1.4281 to 1.6785 at 1.5828 to complete the first leg and bring rebound. However, sustained trading below 1.5828 will raise the chance of trend reversal and target 61.8% retracement at 1.5238.

Daily Pivots: (S1) 0.9758; (P) 0.9771; (R1) 0.9795; More...

Intraday bias in EUR/CHF stays neutral for the moment. A short term bottom should be in place after hitting 61.8% retracement of 0.9407 to 1.0095 at 0.9670. Further rally is in favor. Break of 0.9793 and sustained trading above 55 D EMA (now at 0.9777) will add to case that whole correction from 1.0095 has completed. Intraday bias will be back on the for 0.9878 resistance next.

In the bigger picture, prior rejection by 38.2% retracement of 1.1149 to 0.9407 at 1.0072 suggests that medium term outlook is staying bearish. The pair is also capped below 55 W EMA (now at 0.9924). Down trend from 1.2004 (2018 high) is not complete yet and is in favor to resume through 0.9407 at a later stage. However, decisive break of 1.0095 resistance will raise the chance of bullish trend reversal. Rise from 0.9407 should then target 1.0505 cluster resistance (2020 low at 1.0505, 61.8% retracement of 1.1149 to 0.9407 at 1.1484).

Hello traders. In this technical article we’re going to take a look at the Elliott Wave charts charts of Ethereum ( ETHUSD ) published in members area of the website. As our members know ETHUSD reached extreme zone ( buying zone) in the cycle from the April 16th peak. In further text we’re going to explain the Elliott Wave structure and the forecast.

ETHUSD 4h Hour Asia Elliott Wave Analysis 06.04.2023

ETHUSD is showing incomplete bearish sequences in the cycle from the April 16th peak. At this stage we believe correction is unfolding as Elliott Wave Double Three Pattern. We call (x) blue connector completed at the 1927 high. As far as the price stays below that high, Ethereum should ideally make another leg down toward 1668.4-1450.5 area. At the marked blue box zone buyers should ideally appear again.

ETHUSD 4h Hour Asia Elliott Wave Analysis 06.18.2023

We got the decline as expected. Eventually ETHUSD reached extreme zone, blue box (buying zone). So far reaction from the blue box is still shallow. Ethereum still can see another leg down within extreme zone to complete the cycle.

Markets

The consumer confidence of the University of Michigan was he only market relevant data release on Friday, but it brought somewhat of a mixed message, especially for bond investors. Consumers’ assessment, both on current conditions (63.9 from 59.2) and on expectations (68.0 from 64.9) printed stronger than expected but inflation expectations for the year ahead unexpectedly softened from 4.2% to 3.3%. Yields whipsawed after the release, but there was no lasting directional impact. Plenty of mostly hawkish oriented policy makers were eager to give their view on the ECB strategy going forward. ECB’s Wunsch was most specific in its guidance as he said that ‘if core inflation keeps around 5.0% on a yearly basis in the coming months, then we will have to increase beyond September’. Assuming two additional hikes in July and September, this suggests that a cycle peak ECB deposit rate of 4.25% would be a real possibility. BuBa’s Nagel and Austria’s Holzmann were on the same line. Others including ECB Chair Lagarde were more reluctant to comment on what might happen beyond the clearly flagged July hike. German yields took a breather after last week’s upleg, easing between 0.3 bps (2-y) and 3.4 bps (30-y). The 2.55% level proves to be tough resistance for the German 10-y yield. US interest rate markets showed somewhat of a different picture as they had to adjust after a ‘too’ strong setback on the back of higher (weaker than expected) jobless claims on Thursday. US yields rebounded between 7.25 bps (2-y) and 1.5 bps (30-y). Even so, US 2 & 10-y yields also feel headwinds from resistance at respectively 4.8% and 3.85%. Real yields (10-y currently 1.54%) again nearing the cycle peak probably was factor slowing the US equity rally (Nasdaq -0.67%). At 4395, the EuroStoxx 50 (+0.68%) is only a whisker away from the cycle top. On FX markets, the dollar mostly kept Thursday’s post-claims/post-ECB losses. EUR/USD closed marginally lower at 1.0937. Sterling continues to profit from ‘comfortable’ interest rate support with EUR/GBP drifting further south in the 0.85 big figure (close 0.8532).

Today, the calendar is extremely thin. US markets are closed for the Juneteenth holiday. In the EMU there no important data. ECB’s Lane, Schnabel, Villeroy and Guindos will speak. We expect the downside both in US and EMU/German yields to remain well protected. After last week’s break higher, EUR/USD might develop a further buy-on-dips pattern. The cycle top at 1.1095 remains the key reference. Later this week, Fed Chair Powell’s testimony before Congress (Wednesday, Thursday) will be closely looked at. On Friday, the PMI’s will give a new update on the health of the economy in most majors countries. In the UK, the BoE on Wednesday still receives key inflation data before deciding on policy the next day. Aside from the BoE, also the Hungarian centrale bank (Tuesday), the Czech National bank (Wednesday) and the Swiss and Norwegian centrale bank (Thursday) will decide on policy.

News and views

The US Treasury in its semiannual report referring to 2022 included seven major economies on its monitoring list for currency practices. It did not, however, label any trading partner as an FX manipulator since none of them had met all three criteria. Even if it did, there are no immediate consequences other than holding talks to address the matter. The list is mainly to pressure those perceived to be artificially keeping their currency weak(er) to gain a competitive advantage. Countries being monitored today are China, South Korea, Germany, Malaysia, Singapore, Switzerland and Taiwan. Japan was dropped. The country in 2022 intervened a number of times but to strengthen the yen against a surging USD. Switzerland had exceeded one of the three criteria and the UST said it will continue a thorough analysis of the country until it no longer meets any of them.

Argentina is on the verge of defaulting once again as soon as the end this month. Some $2.7bn is due to the International Monetary Fund but Argentina’s FX reserves took another blow from a major drought that sunk soy and corn harvests. The country is set to hold talks with the IMF this week and hopes to bring forward more than $10bn in IMF disbursements scheduled for later this year. The government however is reluctant to agree with additional tough austerity measures with October general elections looming. Argentina’s economy is suffering under a whopping 114% inflation, hurting spending power and pushing people ever more in poverty.

Market movers today

Focus this week will be on Flash PMI's for euro and US as well as Japanese CPI. We may also see more policy easing from China.

In the Nordics, the Norges Bank meeting on Thursday will take centre stage. We look for a hike of 25bp and signals of another hike in August.

Today is rather quiet with only US NAHB housing index worth noting. Surprisingly, the US housing market has shown tentative signs of bottoming in recent months. We may also get more news on the visit by US Secretary of State Anthony Blinken to Beijing.

The 60 second overview

Markets: It has been fairly quiet overnight with very limited news for markets to trade on. Focus this morning has primarily been on China following US Secretary of State Blinken's delayed visit to his counterparts in Beijing. Both sides have so far referred to the talks as "candid" marking a seemingly slight improvement of the diplomatic relations between the two super powers.

Also Chinese equities have been in focus this morning with the large Chinese indices trading lower on the back of not least tech- and chipmaker stocks trading heavy following concerns as to a Chinese cyber-security probe. Finally, market expectations for more economic stimulus already tomorrow are building amid the Chinese recovery losing steam.

EUR/USD (temporarily) on the rise. Last week saw EUR/USD complete the largest weekly rise in 2023. The rise was not least boosted by relative monetary policy decisions from the Fed and the ECB. The Fed's decision to leave monetary policy unchanged was expected, but markets struggled to believe the Fed's own expectations of two more 25bp rate hikes. We are not convinced either, and we do not expect more hikes from the Fed. In this regard we believe Friday's release of Michigan inflation expectations supported this call with 1-year expectations dropping sharply to 3.3% in June, from 4.2% in May. For more on our Fed call please see Research US - Fed review: Powell's hawkish bluff, 14 June.

In addition EUR/USD found support last week from the ECB hiking policy rates by 25bp whilst delivering fairly firm guidance towards more tightening in the future on the back of an upward revision to inflation projections by the staff. In contrast to our Fed expectations, we expect two more 25bp hikes from the ECB. Read more in Flash: ECB Review - 'Very likely' to hike again in July, 15 June.

Looking ahead we highlight that EUR/USD is driven by more than relative rates and after last week's rise we expect a move lower in the cross.

Equities took a breather on Friday after another strong week. S&P logged its fifth straight week of gains (2.6% in a week!), something that has not happened since November 2021. Friday sector performance was tightly bunched with rotation into defensives (utilities, materials, consumer staples) and out of growth cyclicals (tech, communications). Europe fared better with Stoxx 600 up 0.4% while S&P500 down as much. US is closed for holiday today.

FI: US 10Y government bond yields ends the week more or less unchanged despite the fairly hawkish comments from the Federal Reserve at the FOMC meeting, while 2Y yields rose 10bp during the week. Hence, the curve flattening of the US curve continued as both the 2-10Y and 10-30Y segments continued to flatten.

We see the same picture for the European yield curves where the curves also continue to flatten from the front end and the slope of both the 2-10Y and 10-30Y German curves flatten as ECB promised more rate hikes.

FX: EUR/USD experienced substantial gains last week, reaching a multi-week high and consolidated around the 1.0950 mark. EUR/GBP moved lower during Friday's session, currently trading at levels last seen September 2022. For UK markets, focus this week turns to CPI out Wednesday and Bank of England meeting Thursday. This week, the big event for NOK FX is the Norges Bank monetary policy meeting on Thursday, where we expect a 25bp hike.

Credit: Credit markets had a slightly positive day on Friday reflecting positive developments in equity markets. Overall iTraxx Main was 1bp tighter at 76bp while iTraxx Xover was 9bp tighter at 397bp.

Daily Pivots: (S1) 1.0916; (P) 1.0944; (R1) 1.0969; More...

Intraday bias in EUR/USD remains on the upside for the moment. Current rise from 1.0634 should target a retest on 1.1094 high. Decisive break there will confirm resumption of whole up trend from 0.9534. On the downside, below 1.0863 minor support will turn intraday bias neutral first.

In the bigger picture, as long as 1.0515 support holds, rise from 0.9534 (2022 low) would still extend higher. Sustained break of 61.8% retracement of 1.2348 (2021 high) to 0.9534 at 1.1273 will solidify the case of bullish trend reversal and target 1.2348 resistance next (2021 high).

Daily Pivots: (S1) 1.2777; (P) 1.2812; (R1) 1.2857; More...

Intraday bias in GBP/USD stays on the upside for the moment. Sustained trading above 61.8% projection of 1.1801 to 1.2678 from 1.2306 at 1.2848 will pave the way to 100% projection at 1.3183 next. On the downside, below 1.2697 minor support will turn intraday bias neutral and bring consolidations first, before staging another rally.

In the bigger picture, the strong support from 55 W EMA (now at 1.2345) is a medium term bullish sign. Outlook will stay bullish as long as 1.2305 support holds. Rise from 1.0351 medium term bottom (2022 low) is expected to extend further to retest 1.4248 key resistance (2021 high).

Daily Pivots: (S1) 0.8912; (P) 0.8930; (R1) 0.8959; More...

Intraday bias in USD/CHF stays on the downside. Deeper decline could be seen to 0.8818 and possibly below. But strong support is still expected from 0.8756 to bring reversal. On the upside, above 0.8983 minor resistance will turn intraday bias neutral first.

In the bigger picture, fall from 1.1046 (2022 high) is seen as a leg in the long term range pattern from 1.0342 (2016 high), which might have completed at 0.8818 already, just ahead of 0.8756 long term support. Sustained trading above 0.9058 support turned resistance should confirm medium term bottoming.

Daily Pivots: (S1) 140.47; (P) 141.19; (R1) 142.54; More...

Intraday bias in USD/JPY remains on the upside at this point, for 61.8% retracement of 151.93 to 127.20 at 142.48 next. Sustained break there will pave the way back to retest 151.93 high. However, rejection by 142.48, followed by break of 139.27 will indicate short term topping and turn bias back to the downside.

In the bigger picture, rise from 151.93 are seen as a corrective pattern to up trend from 102.58. The first leg has completed at 127.20. Rebound from there is seen as the second leg, and should be limited below 151.93. Sustained trading below 55 D EMA (now at 137.47) will argue that the third leg has started back to 127.20 and possibly below.