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Daily Pivots: (S1) 160.93; (P) 161.35; (R1) 161.97; More...

Intraday bias in GBP/JPY remains neutral at this point. Risk will stay on the downside as long as 163.32 resistance holds. Fall from 165.99 is seen as part of the whole fall from 172.11. Sustained break of 158.54 will argue that larger decline from 172.11 is resuming through 155.33 low. However, break of 163.32 will bring stronger rise back to 165.99 resistance instead.

In the bigger picture, as long as 38.2% retracement of 123.94 (2020 low) to 172.11 (2022 high) at 153.70 holds, medium term bullishness is retained. That is, larger up trend from 123.94 (2020 low) is still in progress. Break of 172.11 high to resume such up trend is expected at a later stage.

Daily Pivots: (S1) 141.30; (P) 141.73; (R1) 142.40; More....

Range trading continues in EUR/JPY and intraday bias remains neutral. Risk remains on the downside as long as 143.61 resistance holds. Break of 138.81 will affirm the bearish case that fall from 145.55 is a leg inside the whole corrective decline from 148.38. Next target is 137.37 low, and then 135.40 fibonacci level. However, break of 143.61 will dampen the bearish case and bring stronger rise to 145.55 resistance instead.

In the bigger picture, as long as 55 week EMA (now at 139.58) holds, larger up trend from 114.42 (2020 low) is still in progress for 149.76 long term resistance. However, sustained break of 55 week EMA will bring deeper fall to 38.2% retracement of 114.42 to 148.38 at 135.40. Decisive break there will raise the chance of trend reversal, and target 61.8% retracement at 127.39.

Daily Pivots: (S1) 0.8771; (P) 0.8789; (R1) 0.8807; More...

Outlook in EUR/GBP remains mixed and intraday bias stays neutral first. On the upside, break of 0.8864 will target 0.8924 resistance first. Firm break there should resume larger rise from 0.8545 through 0.8977 high. However, decisive break of 0.8717 support will resume the decline from 0.8977 instead.

In the bigger picture, outlook remains rather mixed for now, except that price actions from 0.9267 (2022 high) are part of the long term range pattern from 0.9499 (2020 high). With 0.8720 support intact, rise from 0.8545 is in favor to continue through 0.8977. However, firm break of 0.8720 will argue that such rebound has completed, and open up deeper fall through this support level.

Daily Pivots: (S1) 1.6131; (P) 1.6188; (R1) 1.6225; More...

Sideway trading continues in EUR/AUD and intraday bias remains neutral. Further rally is expected as long as 1.6053 support holds. Decisive break of 61.8% projection of 1.4281 to 1.5976 from 1.5254 at 1.6302 will resume larger rally from 1.4281 to 1.6389 fibonacci level and then 1.6434 resistance. However, firm break of 1.6053 will indicate rejection by 1.6302 and turn bias back to the downside for 1.5848 support.

In the bigger picture, the strong support from 55 week EMA (now at 1.5404) is raising the chance of bullish trend reversal. Focus is now on 1.6434 cluster resistance (38.2% retracement of 1.9799 to 1.4281 at 1.6389). Sustained break there should confirm that whole down trend from 1.9799 (2020 high) has completed. Further rally should then be seen to 61.8% retracement at 1.7691. However, rejection by this cluster resistance will make medium term outlook neutral at best.

Daily Pivots: (S1) 0.9908; (P) 0.9946; (R1) 1.0013; More...

Intraday bias in EUR/CHF remains neutral and further rise is in favor with 0.9837 minor support intact. On the upside, break of 0.9995 will affirm the case that correction from 1.0095 has completed at 0.9704. Further rally should be seen through 1.0040 to retest 1.0095 high. However, firm break of 0.9837 will dampen this bullish view and turn bias back to the downside for 0.9704 support instead.

In the bigger picture, prior rejection by 55 week EMA (now at 1.1002) and 38.2% retracement of 1.1149 to 0.9407 at 1.0072 suggests that medium term outlook is staying bearish. That is, down trend from 1.2004 is not completed 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).

Market picture

After spending most of Tuesday below $27.0K, bitcoin began to gain strength towards the end of the day, trading at $27.5K on Wednesday morning, up 2.3%. Total crypto market capitalisation rose 3% to $1.16 trillion, driven by general demands for risky assets following optimism around Alibaba and continued confidence in an imminent Federal Reserve rate cut.

Technically, BTCUSD found support from buyers after a correction to 76.4% of the rally since March 10th. Such shallow retreats (compared to a typical pullback to 61.8%) are characteristic of strong bull markets. More cautious investors may prefer to wait for confirmation of new bullish momentum with a takeover of $29.0K.

News background

Changpeng Zhao, head of major cryptocurrency exchange Binance, has denied allegations made by the Commodity Futures Trading Commission (CFTC). He said the CFTC’s claim contained an “incomplete statement of facts” and was “unexpected and disappointing”. Zhao pointed to the firm’s mandatory KYC programme, blocking US users, interaction with authorities and commitment to transparency.

Adam Cochran, a partner at venture capital firm Cinneamhain Ventures, described the CFTC’s lawsuit as an attempt to deal a fatal blow to Binance and did not rule out that the authorities “have a good chance of success”. The regulator classified BTC, Ethereum, Litecoin, USDT and BUSD as “commodities” in the lawsuit.

According to Thanefield Capital, exchange customers withdrew more than $1 billion from their accounts overnight following the CFTC’s lawsuit. According to Coinglass, Binance users started 3,611 BTC overnight. Binance’s spot market share shrank by nearly 10% in a week.

After a month of litigation, US authorities secured a $1 billion settlement between bankrupt crypto lender Voyager and Binance.US.

Speculators have stepped up transfers of BTC to exchanges, confirming profit-taking, Glassnode noted. However, most investors are willing to hold the coins for longer, hoping that the uptrend will continue.

Under pressure from critics, the UK government has abandoned the Royal Mint’s plans to issue non-exchangeable Royal Mint NFT tokens.

Cycle from 9.28.2022 low has ended as a 5 waves impulse at 15706.51. We labelled this rally as wave ((1)) as the 1 hour chart below shows. Wave ((2)) pullback is currently in progress to correct cycle from 9.28.2022 low. The decline from wave ((1)) peak on March 7, 2023 is unfolding as a double three Elliott Wave structure. Down from March 7, 2023 high, wave ((a)) ended at 14664.17 and rally in wave ((b)) ended at 15153.11. Final leg wave ((c)) lower ended at 14458.39 which completed wave W in higher degree. Wave X rally is now in progress to correct cycle from 3.7.2023 high with internal subdivision as a zigzag structure.

Up from wave W, wave ((a)) ended at 15298.49 and pullback in wave ((b)) ended at 14809.82. Wave ((c)) higher is in progress to retest wave ((1)) high at 15706.51 before the Index turns lower. A 100% Fibonacci extension of wave ((a)) comes at 15644.18 which is a possible target for wave ((c)) of X. Near term, as far as pivot at 15706.51 high stays intact, expect the rally to fail and the Index to resume lower again.

DAX 1 Hour Elliott Wave Chart

DAX Elliott Wave Video

https://www.youtube.com/watch?v=4pH4o56d-jc

Markets

German yields rebounded another 6.5 bps across the curve yesterday. US yields ended over 10 bps higher at the front end (2-3y) with gains at the longer end limited to 1-3 bps (10-30y). The European trading session went without a splash. Early US eco data included unexpectedly strong increases for both the March Richmond Fed Manufacturing index (-5 from -16 vs -10 expected) and consumer confidence (104.2 from 103.4 vs 101 expected). Details from the Richmond survey showed significant improvements in new orders and shipments and a more modest increase in employment. The forward looking part of the report suggests more wage pressure ahead with prices paid & received further mean reverting. The interesting part of the consumer confidence was that the survey date was March 20, in the midst of the regional banking crisis. The stronger number suggests that the strong labour market trumps any worries about potential consequences of the collapse of SVB and some others. On top, especially expectations for the future improved (+2.6). Just like PMI’s last Friday, markets didn’t respond to the numbers. For the moment, their reaction function is asymmetric. They need more convincing to shy away from the idea that central banks are at/very near the end of their policy normalization cycles. We stick to our view that more ground has to be covered. If not, central banks risk running behind the curve in the second half of this year. That suggest that more (hawkish) repositioning will follow if data hold their course. The first reference are EMU inflation numbers on Thursday and on Friday. The US Treasury continued its end-of-month refinancing operation yesterday with a $43bn 5-yr Note sale. The auction stopped through the WI yield with the bid cover in line with recent average (2.45). Overall, the auction thus fared better than Monday’s 2-yr Note auction. The Treasury sells $35bn 7-yr Notes tonight.

Yesterday’s bond sell-off no longer went hand-in-hand with rebounding stock markets. Main indices managed a slightly positive close in Europe and suffered small losses in the US. EUR/USD did extend Monday’s rebound with the pair finishing an inch away from 1.0850 compare to opening levels at 1.08. EUR/GBP closed broadly flat at 0.8790. We expect this week’s trading dynamics to remain at play today given the very thin eco calendar. We must add that the vigor already diminished yesterday compared to Monday and that it could weaken further still today. German/French consumer confidence and US pending home sales are the unattractive highlights. Central bank speeches remain a wildcard.

News & Views

Australian inflation eased from 7.4% to 6.8% in February, representing a bigger-than-expected deceleration. Core inflation retreated from 7.5% to 6.9%. Most components experienced milder yet still-high price increases. Housing (9.9%) and food (8%) showed the steepest inflation, followed by household furnishings (6.6% and) recreation (6.4%). Prices of education, insurance/financial services and alcohol & tobacco even accelerated again in year-on-year terms. The second monthly decline in a row strengthens the RBA’s view that inflation indeed peaked in Q4 last year. Odds for another rate hike diminished significantly in the wake of the recent turmoil on financial markets. With today’s data, markets not only assume a pause in the tightening cycle in April, in their view it is also the end. The RBA lifted rates by 350 bps to 3.6% over the past year. Australian swap yields ease 4.7-8.8 bps across the curve with the long end outperforming. The Aussie dollar holds steady around the 0.67 big figure.

Greek PM Mitsotakis called general elections for May 21. That’s two months earlier as the government suffers from a wave of protests over the country’s deadliest train crash in its history. Support for Mitsotakis’s ruling centre-right party has fallen. But the New Democracy party still has an opinion poll lead over Syriza, the main contender currently. The elections will be the first under the recently introduced system of proportional representation, making it difficult for a single party to form a government. If coalition talks fail, a second ballot under a semi-proportional system is expected to be held by the beginning of July at the latest.

Daily Pivots: (S1) 1.0811; (P) 1.0830; (R1) 1.0865; More...

Intraday bias in EUR/USD remains neutral at this point. Further rally is in favor after receiving support from 4 hour 55 EMA (now at 1.1767). Break of 1.0929 will extend the rise from 1.0515 to retest 1.1032 high. Firm break there will resume larger up trend from 0.9534 to 1.1273 fibonacci level next. However, break of 1.0711 will turn bias to the downside to extend the corrective pattern from 1.1032 with another decline.

In the bigger picture, rise from 0.9534 (2022 low) is in progress with 38.2% retracement of 0.9534 to 1.1032 at 1.0460 intact. The strong support from 55 week EMA (now at 1.0623) was also a medium term bullish sign. Next target is 61.8% retracement of 1.2348 (2021 high) to 0.9534 at 1.1273. Sustained break there will solidity the case of bullish trend reversal and target 1.2348 resistance next (2021 high).

Daily Pivots: (S1) 1.2298; (P) 1.2324; (R1) 1.2366; More...

Break of 1.2342 suggests that rise from 1.1801 is resuming. Intraday bias is back on the upside for 1.2445/6 resistance zone. Firm break there will resume larger rally from 1.0351, and target 1.2759 fibonacci level. For now, near term outlook will remain bullish as long as 1.2177 support holds, even in case of another retreat.

In the bigger picture, price action from 1.2445 are seen as a corrective pattern to rise from 1.0351 medium term bottom (2022 low). Resumption of the rally from 1.0351 is expected and break of 1.2446 will target 61.8% retracement of 1.4248 (2021 high) to 1.0351 at 1.2759. This will remain the favored case as long as 38.2% retracement of 1.0351 to 1.2445 at 1.1645 holds.