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Daily Pivots: (S1) 0.9900; (P) 0.9949; (R1) 0.9978; More...

Intraday bias in EUR/CHF remains neutral for the moment. Outlook is unchanged that corrective decline from 1.0095 should have completed at 0.9704. Further rally is in favor as long as 0.9856 minor support holds. Above 0.9995 will target 1.0040 and then 1.0095. However, firm break of 0.9856 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 1.0011) 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).

In this technical blog, we will look at the past performance of the 1-hour Elliott Wave Charts of Ethereum. We presented to members at the elliottwave-forecast. In which, the rally from 10 March 2023 low unfolded as an impulse structure. And showed a higher high sequence favored more upside extension to take place. Therefore, we advised members not to sell the pair & buy the dips in 3, 7, or 11 swings at the blue box areas. We will explain the structure & forecast below:

Ethereum 1-Hour Elliott Wave Chart From 3.22.2023

Here’s 1 hr Elliott wave chart from the 3/22/2023 New York update. In which, the cycle from the 3/10/2023 low ended in wave 3 as an impulse structure at $1846 high. Down from there, the pair made a pullback in wave 4 to correct that cycle. The internals of that pullback unfolded as a zigzag structure where wave ((a)) at $1725 low. Wave ((b)) ended at $1839.90 high and wave ((c)) managed to reach the blue box area at $1719.14- $1644.23 area. From there, buyers were expected to appear looking for the next leg higher or for a 3-wave bounce minimum.

Ethereum 1 Hour Latest Elliott Wave Chart From 3.24.2023

This is the latest 1 hr Elliott wave Chart from the 3/24/2023 update. In which the pair is showing a strong reaction higher taking place, right after ending the pullback within the blue box area. Allowed members to create a risk-free position shortly after taking the long position at the blue box area.

USDCAD has been consolidating losses since the day it surged to 1.3860 and holds near the 20-day simple moving average (SMA).

The momentum indicators, though, are currently suggesting that the sell-off may have found a bottom and the pair may be pushing for some recovery. The RSI and the Stochastics are pointing up, with the former standing in the positive region and the second one posting a bullish crossover between its %K and %D lines.

A closing price above 1.3860 could boost buying interest and confirm additional gains towards the 1.3975 resistance, taken from the peak in October 2022.

In the event of a pullback below 1.3640, the bears may push harder to clear the 50-day SMA, which stands around the 1.3520 support level and head for the 200-day SMA at 1.3360. Any movements beneath this line could endorse the negative structure.

In brief, USDCAD seems to be searching for a recovery, though only a closing price above the 1.3860 territory would convince that the worst has passed, at least in the medium-term.

GBP/USD tests supply area

The pound holds onto its gains after the BoE raised its rates by 25 bp as expected. On the daily chart, the pair is still in a horizontal consolidation between 1.1800 and 1.2450. Zooming into the hourly time frame, Sterling has been recovering along a rising trend line which indicates mounting buying pressure. The supply zone around 1.2340 and 1.2400 from an early February sell-off is an important cap. A breakout could lead to a bullish continuation in the medium-term. The area between the trend line and 1.2220 is the first support.

USD/CHF gives up gains

The Swiss franc strengthened after the SNB also raised its policy rate by 50 bp. After hitting resistance at 0.9340, the US dollar has given back its latest gains, which indicates the bulls’ struggle to turn sentiment around. 0.9100 right over the double bottom (0.9080) on the daily chart is a critical floor and its breach would signal that the path of least resistance is down, potentially triggering a broader sell-off towards the psychological level of 0.9000. 0.9240 is the first resistance to ease the selling pressure.

EUR/JPY seeks support

The Japanese yen bounces back over an upbeat core CPI in February. The bears’ double push was halted at 139.00 with long lower shadows suggesting a rejection of lower offers. But the euro’s bounce turned south in the supply zone around 143.50 near the start of last week’s sharp liquidation. 140.50 is a key support to keep the rebound intact as a lack of follow-up buying may threaten the floor at 139.00. Buyers would regain control of the direction if they manage to push back above the fresh resistance at 143.00.

Daily Pivots: (S1) 1.3651; (P) 1.3695; (R1) 1.3758; More....

USD/CAD defended 1.3650 support again and recovered. Intraday bias remains neutral first. On the upside, break of 1.3860 will resume the rally from 1.3261 to retest 1.3976 high. However, firm break of 1.3650 will mix up the near term outlook and bring deeper pullback to 55 day EMA (now at 1.3578).

In the bigger picture, the up trend from 1.2005 (2021 low) is still in progress. Break of 1.3976 will confirm resumption and target 61.8% projection of 1.2401 to 1.3976 from 1.3261 at 1.4234. Firm break there will pave the way to long term resistance zone at 1.4667/89 (2016, 2020 highs). On the downside, break of 1.3261 support is needed to confirm medium term topping. Otherwise, outlook will remain bullish even in case of deep pull back.

Daily Pivots: (S1) 0.6652; (P) 0.6704; (R1) 0.6737; More...

Intraday bias in AUD/USD is turned neutral with current retreat. Above 0.6578 will resume the rebound from 0.6563 to 55 day EMA (now at 0.6769). Sustained break there will pave the way back to retest 0.7156 high. On the downside, however, below 0.6648 minor support will turn intraday bias back to the downside for 0.6563 low.

In the bigger picture, as long as 61.8% retracement of 0.6169 to 0.7156 at 0.6546 holds, the decline from 0.7156 is seen as a correction to rally from 0.6169 (2022 low) only. Another rise should still be seen through 0.7156 at a later stage. However, sustained break of 0.6546 will raise the chance of long term down trend resumption through 0.6169 low.

Daily Pivots: (S1) 1.0796; (P) 1.0863; (R1) 1.0900; More...

A temporary top is formed at 1.0929 in EUR/USD with current retreat. Intraday bias is turned neutral first. Further rally is in favor as long as 4 hour 55 EMA (now at 1.0739) holds. Above 1.0929 will target 1.1032 high first. Decisive break there will resume whole up trend from 0.9534 and target 1.1273 fibonacci level next. However, firm break of 4 hour 55 EMA will likely extend the corrective pattern from 1.1032 and bring deeper decline back towards 1.0515.

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) 1.2251; (P) 1.2298; (R1) 1.2333; More...

Intraday bias in GBP/USD is turned neutral again with current retreat. For now, further rise is expected as long as 1.2177 minor support holds. Above 1.2342 will target 1.2455/6 resistance zone. Decisive break there will resume larger rise from 1.0351, and target 1.2759 fibonacci level. On the downside, however, break of 1.2177 minor support will argue that corrective pattern from 1.2445 is extending with another falling leg, and turn bias to the downside for 1.2009 support instead.

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.

Daily Pivots: (S1) 0.9129; (P) 0.9156; (R1) 0.9192; More...

USD/CHF's fall from 0.9339 should still be in progress and intraday bias stays on the downside for retesting 0.9058 low. Decisive break there will resume larger down trend from 1.1046. On the upside, above 0.9205 support turned resistance will turn intraday bias neutral again. Overall outlook will stay bearish as long as 0.9474 fibonacci level holds.

In the bigger picture, fall from 1.1046 (2022 high) should still be in progress with 38.2% retracement of 1.0146 to 0.9058 at 0.9474 intact. Prior rejection by 55 week EMA was a medium term bearish sign. Break of 0.9058 will resume such decline towards 0.8756 support (2021 low). But overall, such fall is still as a leg in the long term range pattern from 1.0342 (2016 high). So, downside should be contained by 0.8756 to bring reversal.

Markets

The ECB hiked last week and signaled more to come if the base scenario unfolds. The Fed on Wednesday hiked and struggled to convince markets that this won’t be the last of the cycle. The Bank of England yesterday took a middle road. It raised the policy rate by 25 bps to 4.25%. Inflation in February ran higher than expected but mainly due to what it considers a one-off and it is still expected to ease materially in coming months. Yet, the economy and labour market proved stronger than expected. Against this background, the BoE kept further tightening conditional to evidence of more persistent inflation. About recent financial system developments, the BoE said it’ll consider its potential impact (on credit conditions) in the new forecasts at that May meeting. Money markets bet on one more 25 bps move in Q2 and start pricing in a first rate cut by the end of the year. Short UK gilt yields gapped about 10 bps lower at the open in a catch-up move with the US with losses building to 20 bps later on. Safe haven bids intensified during US dealings, where recessionary and financial stability concerns flared up again. US yields dropped another 10 bps in the 2y-3y segment while adding 4.6 bps at the long end (30y). German Bunds outperformed vs Treasuries, losing 7.2 (30y) - 18.1 (2y) bps despite more hawkish ECB rhetoric. It called off EUR/USD’s attempt to settle above 1.09 with a close at 1.0831 instead. Sterling showed some volatility around the BoE decision but closed higher in the end, helped by a late-session sentiment rebound which also kept US equities off intraday lows. EUR/GBP fell from 0.8849 to 0.8816.

Japanese inflation numbers for February and March PMIs grab the most attention this morning (see below). Asian- Pacific region trade mixed. Core bonds grind higher, pushing US cash yields 2.7-4.3 bps down. Combined with solid Japanese data, the yen receives a little boost. USD/JPY tested the 130 big figure, EUR/JPY falls to 141.

Japanese PMIs were just the start of today’s worldwide coverage. All of them (US, UK end Euro Area) last month showed a large upside surprise, suggesting strong(er than feared) economic resilience. For this month, analysts expect a marginal retreat in US and UK business confidence and a stabilization in the Euro Area. Even in case of an upward surprise (we don’t think the financial ripples to already surface in the March readings), bond markets are unlikely to react accordingly in the current environment. The easiest way for core bond yields is down still, especially in the US. This could quickly cap this morning’s early but very unconvincing attempt by the dollar to recover a bit from the whammy over the recent days.

News and views

Japanese headline inflation slowed as expected from 4.3% Y/Y to 3.3% Y/Y in February. Core CPI (ex fresh food) slowed from 4.2% Y/Y to 3.1% Y/Y. Government energy subsidies are fully responsible for the lower readings. CPI stripping out both fresh food and energy prices rose further from 3.2% Y/Y to 3.5% Y/Y, the highest level since 1981 and outpacing forecasts (3.4% Y/Y)! The data for once don’t add pressure on new BoJ-governor Ueda to take next steps in the policy normalisation process. The recent market turmoil put the spotlight away from the lagging BoJ. Japanese March PMI printed stronger with the composite measure rising from 51.1 to 51.9. Both manufacturing (48.6 from 47.7) and services (54.2 from 54) contributed positively. The Japanese yen is one of the star performers this month with USD/JPY this morning testing the 130 big figure.

Hungarian PM Orban’s envoy to the EU, Janos Boka, said that the EU’s executive arm will early next week respond to Hungarian proposals on judicial reforms which should help unblock €28bn in recovery funds frozen over a rule of law dispute. “We are very close to an agreement and don’t see any open political questions remaining.” In a separate dispute, the EU is withholding €22bn of funds over violations against the EU Charter of Fundamental Rights. On this issue, Boka said that work wasn’t progressing as fast as one would hope. The forint enjoyed a nice comeback over the past days as core bond yields nosedived. EUR/HUF returned from a failed test of 400 towards the low 380- area currently.