Sample Category Title

Daily Pivots: (S1) 1.2023; (P) 1.2081; (R1) 1.2116; More...

Intraday bias in GBP/USD stays neutral at this point. Further decline is still mildly in favor. On the downside, break of 1.1960 will resume the fall from 1.2446, as the third leg of the corrective pattern from 1.2445, to 1.1840 support, and possibly below. On the upside, though, break of 1.2192 will resume the rise from 1.1960 to retest 1.2445/6.

In the bigger picture, rise from 1.0351 medium term bottom is at least correcting whole down trend from 1.4248 (2021 high). Further rise is expected as long as 1.1644 resistance turned support holds. Next target is 61.8% retracement of 1.4248 to 1.0351 at 1.2759. Sustained break there will pave the way back to 1.4248.

Daily Pivots: (S1) 0.9206; (P) 0.9229; (R1) 0.9261; More...

Outlook in USD/CHF is unchanged and intraday bias stays neutral. On the upside, firm break of 0.92879 resistance will confirm short term bottoming at 0.9058, and bring stronger rise to 0.9407 resistance. On the downside, however, sustained break of 0.9058 will resume larger decline from 1.0146 instead.

In the bigger picture, rise from 0.8756 (2021 low) has completed at 1.0146, well ahead of 1.0342 long term resistance (2016 high). Based on current downside momentum, fall from 1.0146 should be a medium term down trend itself. Next target is a test on 0.8756 low. Strong support should be seen there to bring rebound. Still, further decline will now be expected as long as 0.9407 resistance holds, in any case.

Daily Pivots: (S1) 1.0644; (P) 1.0699; (R1) 1.0731; More...

Intraday bias in EUR/USD stays on the downside at this point. Fall from 1.1032 is in progress for 38.2% retracement of 0.9534 to 1.1032 at 1.0463. Strong support should be seen around there to bring rebound, at least on first attempt. On the upside, above 1.0790 minor resistance will turn bias back to the upside for retesting 1.1032 high instead.

In the bigger picture, the rally from 0.9534 low (2022 low) is a medium term up trend rather than a correction. Further rise is in favor to 61.8% retracement of 1.2348 (2021 high) to 0.9534 at 1.1273 next. This will remain the favored case as long as 1.0482 support holds.

Daily Pivots: (S1) 130.21; (P) 131.04; (R1) 132.28; More...

Intraday bias in USD/JPY remains on the upside at this point. Break of 132.89 will resume whole rebound from 127.20 short term bottom. Further rally should then be seen to 38.2% retracement of 151.93 to 127.20 at 136.64, even as a correction to the decline from 151.39. For now, further rise is in favor as long as 129.79 support holds, in case of retreat.

In the bigger picture, prior of 55 week EMA (now at 131.47) raises the chance of medium term bearish reversal, but that's not confirmed yet. Strong rebound from current level, followed by sustained break of 38.2% retracement of 151.93 to 127.20 at 136.64 will argue that price actions from 151.93 is merely a corrective pattern. However, rejection by 136.64 will solidify medium term bearishness for 61.8% retracement of 102.58 to 151.93 at 121.43 and 38.2% retracement of 75.56 to 151.93 at 122.75.

Selloff in Yen continues today even though 10-year JGB yield closed above BoJ's 0.5% cap. Traders are probably positioning for a not-that-hawkish BoJ governor nomination by the government tomorrow. Dollar also softens as major European indexes rise, together with US futures. Sterling firms up ahead of a string of economic data this week, including employment (Tue), CPI (Wed) and retail sales (Fri). Aussie and Kiwi are also trading slightly higher. Euro is mixed for now, even though European Commission projects a better economic outlook with higher growth and lower inflation for this year.

Technically, GBP/CHF should be close to complete the corrective pattern from 1.1574. Firm break of 1.1206 minor resistance should have 4 hour 55 EMA taken out too. Bias will be turned back to the upside for 1.1433 resistance first. Sustained break there will raise the chance of resuming larger rally through 1.1574 high. The next few days would be important for the pound, with clearing of 1.1206 as the first step for GBP/CHF.

In Europe, at the time of writing, FTSE is up 0.25%. DAX is up 0.46%. CAC is up 0.83%. Germany 10-year yield is up 0.015 at 2.381. Earlier in Asia, Nikkei dropped -0.88%. Hong Kong HSI dropped -0.12%. China Shanghai SSE rose 0.72%. Singapore Strait Times dropped -1.07%. Japan 10-year JGB yield rose 0.0129 to 0.504.

European commission upgrades 2023 growth forecasts, lowers inflation slightly

In the Winter interim Forecast, European commission upgraded growth projections for Eurozone in 2023 and downgraded inflation projections.

"Europe's economy is proving resilient in the face of current challenges. We were able to narrowly avoid a recession. We are somewhat more optimistic about growth prospects and the projected decline in inflation this year," said Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People.

"We have entered 2023 on a firmer footing than anticipated: the risks of recession and gas shortages have faded and unemployment remains at a record low," said Paolo Gentiloni, Commissioner for Economy.

GDP growth forecasts for:

• 2023 at 0.9% (upgraded from Autumn's 0.3%).
• 2024 at 1.5% (unchanged).

HICP inflation forecasts for:

• 2023 at 5.6% (downgraded from 6.1%).
• 2024 at 2.5% (downgraded from 2.6%).

ECB Centeno: For sure, we're much closer to that terminal rate than before

ECB Governing Council member Mario Centeno told BloombergTV, "for sure, we're much closer to that terminal rate than before... We're approaching it and I think March will be a great moment for us to be very clear about it."

Meanwhile, for the central bank to slow tightening pace from current 50bps per meeting, Centeno said, "we really need to see inflation converging to 2% in the medium term".

He added, the new forecasts in March are "going to tell us exactly where we are in that process".

Swiss CPI bounce back to 3.3% yoy in Jan

Swiss CPI rose 0.6% mom in January, above expectation of 0.5% mom. Core CPI (excluding fresh and seasonal products, energy and fuel) was flat mom. Domestic product prices rose 1.0% mom while imported product prices dropped -0.6% mom.

Compared with the same month of the previous year, CPI accelerated from 2.8% yoy to 3.3% yoy, well above expectation of 2.9% yoy. Core CPI rose from 2.0% yoy to 2.2% yoy. Domestic product inflation jumped from 1.9% yoy to 2.6% yoy. Imported product inflation slowed from 5.8% yoy to 5.2% yoy.

NZ BusinessNZ services rose to 54.5, but negative comments trend higher

New Zealand BusinessNZ Performance of Services Index rose from 52.0 to 54.5 in January. Looking at some details, activity/sales rose form 51.9 to 52.1. Employment rebounded strongly from 46.9 to 51.9. New orders/business dropped from 57.7 to 54.5. Stocks/inventories rose from 51.6 to 54.3. Supplier deliveries dropped from 53.9 to 52.0.

BusinessNZ chief executive Kirk Hope said: "Despite the halt in lower expansionary levels, the trend of a higher proportion of negative comments continued in January (61.7%), compared with 58.2% in December and 47.3% in November. The holiday season was a common theme, along with the shortage of labour and general market uncertainty that has been evident for some months now".

BNZ Senior Economist Doug Steel said that "as encouraging as January's PSI result might look, we are reluctant to read too much into one month's result – especially around the holiday period".

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 130.21; (P) 131.04; (R1) 132.28; More...

Intraday bias in USD/JPY remains on the upside at this point. Break of 132.89 will resume whole rebound from 127.20 short term bottom. Further rally should then be seen to 38.2% retracement of 151.93 to 127.20 at 136.64, even as a correction to the decline from 151.39. For now, further rise is in favor as long as 129.79 support holds, in case of retreat.

In the bigger picture, prior of 55 week EMA (now at 131.47) raises the chance of medium term bearish reversal, but that's not confirmed yet. Strong rebound from current level, followed by sustained break of 38.2% retracement of 151.93 to 127.20 at 136.64 will argue that price actions from 151.93 is merely a corrective pattern. However, rejection by 136.64 will solidify medium term bearishness for 61.8% retracement of 102.58 to 151.93 at 121.43 and 38.2% retracement of 75.56 to 151.93 at 122.75.

Economic Indicators Update

Hello Traders in this blog we will see how CL_F Crude Oil Futures found support from equal legs area and reacted higher within wave 2. Many traders are wondering whether Crude Oil will still trade lower or higher after it’s larger degree peak it made from March 7th, 2022. In this article we will only look at the near term 1 hour cycle. Here at Elliott Wave Forecast we teach our members how the market is trading in our age. Elliott Wave is just the language we use to determine a cycle.

These days high frequency computers are moving the market most of the time. We call these high frequency trading areas, equal legs and blue boxes. Let’s now have a look at Crude Oil and see within it’s short term 4 hour cycle where it was going.

CL_F 4 Hour 02.04.2023 Weekend Update Update

It was apparent that cycle from 12.09.2022 ended wave 1 and started to pullback. After completing the first leg lower in ((w)) and bounced in ((x)) we can then calculate the reaction area lower. In this case equal legs area goes from 73.59 – 69.82 in which in was reached and reacted higher as we will see. These equal legs areas of the market is where we are expecting a reaction with an 85% chance. This is where buyers and sellers agree to a reaction.

CL_F 4 Hour Weekend Update 02.11.23

And as seen above it moved higher and already ended wave ((i)) of 3. Pullback in ((ii)) is in place and moved higher in (i) of ((iii)). Next it expects pullback in (ii) before next move higher in (iii) of ((iii)) of 3. You can learn what’s next for Crude Oil as well as the longer term view by becoming a member here at Elliott Wave Forecast. You can learn how to trade the right side and when to enter and/or exit the market. Alongside with daily Live Analysis Sessions & Live Trading Room. On top of that we have a 24 hour live chat and chat room in which we answer any questions for each instrument. Click the links below to sign up or try first our 14 day trial.

Cable dips further in early Monday’s trading, remaining at the back foot, following Friday’s 0.56% fall.

Fresh weakness retraced over 61.8% of last week’s 1.1960/1.2193 recovery leg, which was strongly rejected last Thursday and left a bull-trap above 55DMA.

Near-term structure is negative, as daily studies show strong bearish momentum and a multiple bear-crosses of 10;20;30;55 DMA’s.

Bears pressure psychological 1.20 support, where last week’s action faced strong headwinds and was rejected.

Violation of 1.20 level would risk test of key supports at 1.1960 (Feb 7 spike low and 1.1942 (200DMA), break of which would spark an acceleration towards next key supports at 1.1841/1.1796 (Jan 6 trough/daily cloud base).

Broken Fibo support at 1.2073 (61.8%) now acts as resistance and should ideally cap upticks to keep fresh bears intact.

Res: 1.2073; 1.2100; 1.2144; 1.2179.
Sup: 1.2000; 1.1942; 1.1900; 1.1841.

With the preliminary fourth-quarter GDP print on Friday saving the UK from declaring two consecutive quarters of negative growth, the focus turns to Tuesday's inflation numbers. The calendar is filled with economic data releases including labour market statistics on Tuesday, but the market seems to care primarily about the CPI prints. Could we finally see the much-awaited dip in inflationary pressures or will the Bank of England remain under pressure to adopt a more aggressive strategy?

Sticky inflation, many reasons

The repeatedly positive news on the employment front has been set aside as the focus rests on the elevated inflation rates. Particularly in the case of the UK, the CPI year-on-year change remains in double digits for the past four months, despite the decent deceleration seen elsewhere. Interestingly, the electricity, gas and other fuels subcomponent of the CPI continues to fuel the elevated UK inflation prints amidst a continued drop in oil and gas prices in Europe. One of the main reasons for this condition could potentially be the lower energy support programmes offered by the UK government compared to the other two heavyweight countries in Europe, Germany and France. Critically, the UK government’s Energy Price Guarantee is changing from April 2023 and another rise in energy costs for households is on the cards, which could potentially mean that the much-wanted dip in CPI might be pushed even further out.

Pressure on the BoE to increase?

Amidst these developments, the December unemployment rate is seen stable at 3.7% with a monthly employment change of 40k. Additionally, the January CPI print is forecast by the Reuters poll to show a 10.2% year-on-year increase, just a tad lower than the 10.5% change in December. Similarly, the core component of the CPI is seen increasing by 6.2% year-on-year, down from 6.3% in the previous month. These figures are not going to be a pleasant reading for the BoE. Governor Bailey appeared confident at the recent press conference that inflation will continue to fall this year, more rapidly in the second half of 2023, but current evidence is not optimistic. Questions have been raised in government corridors about the BoE strategy going forward, particularly compared to the ECB. The latter is seen by the market hiking more than 100bps by September 2023 while the BoE is expected to make just two more rate hikes, despite the divergence seen in inflation rates lately. The BoE appears to fret about the growth outlook, and thus potentially overlooking its mandate on maintaining monetary stability. Maybe the PPI data, published also on Tuesday, could offer some solace to the bruised BoE. The market tends to ignore this release. However, this seems to have changed lately as the PPI is traditionally seen leading the headline CPI by 4-7 months. Assuming this trend is confirmed again, inflation could potentially surprise on the downside on Tuesday, despite market expectations to the opposite.

Retail sales supported by strong earnings?

Despite the BRC retail sales indicator easing last week, the market is looking for a small improvement at the January retail sales. The gap in the year-on-year figures in the two datasets is expected to be gradually reduced despite the GfK consumer confidence index remaining at record low levels. And this could happen on the back of the increasing average earnings figures. At a year-on-year increase of 6.5%, the average earnings excluding bonuses seem to offer some support to the household facing the strongest inflationary pressures for decades.

Sterling fans look for evidence before another rally

Sterling lovers are trying to find sufficient evidence to stage another rally, potentially continuing on the move recorded since October 2022, despite the recent news flow not supporting their cause. However, the technical picture is showing some early bullish signs. In particular, the stochastic oscillator appears to be suggesting that a bullish divergence is currently developing, as the higher low in the sterling/dollar pair has been met with a lower low in the stochastic. Should this result in a sterling rally, the bulls would love a move up to the 1.2446 area, which twice in the past 60 days has acted as a significant resistance point.

The Japanese yen has started the week with sharp losses. In the European session, USD/JPY is trading at 132.54, up 0.86%.

Japan’s GDP expected to rebound

There are high hopes for the Japanese economy, which is expected to climb by 2% in the fourth quarter, following a 0.8% decline in Q3. Japan reopened to tourists in October, which fueled a recovery in the services sector and this will likely boost GDP. Even so, the economy has headwinds to deal with such as higher inflation and a weaker global economy, which will likely weigh on growth in 2023 Q1.

Ueda to take over at BoJ

There has been a guessing game over the successor to Haruhiko Kuroda as Governor of the Bank of Japan and press reports about a successor have generated plenty of volatility from the Japanese yen. Last week, a report that Deputy Governor Masayoshi Amamiya had been approached for the position sent the yen briefly lower, as Amamiya is considered a dove. Amamiya declined the offer and in a surprise move, the BoJ has decided to appoint Kazua Ueda. The news initially resulted in yen buying, as the markets viewed the choice as a signal for fresh thinking and a change in policy.

This view was quickly dampened by Ueda himself, who said on Friday that current policy settings were appropriate. This has sent the yen sharply lower on Monday. Ueda may be trying to sound diplomatic in order to avoid any waves ahead of his appointment, and it’s very possible he will tighten policy once he’s in charge. In the meantime, the BoJ is expected to maintain its ultra-loose policy, so the yen won’t be getting any help from the BoJ for the time being.

USD/JPY Technical

• USD/JPY has support at 131.38 and 130.71
• There is resistance at 132.96 and 134.18

In the Winter interim Forecast, European commission upgraded growth projections for Eurozone in 2023 and downgraded inflation projections.

"Europe's economy is proving resilient in the face of current challenges. We were able to narrowly avoid a recession. We are somewhat more optimistic about growth prospects and the projected decline in inflation this year," said Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People.

"We have entered 2023 on a firmer footing than anticipated: the risks of recession and gas shortages have faded and unemployment remains at a record low," said Paolo Gentiloni, Commissioner for Economy.

GDP growth forecasts for:

• 2023 at 0.9% (upgraded from Autumn's 0.3%).
• 2024 at 1.5% (unchanged).

HICP inflation forecasts for:

• 2023 at 5.6% (downgraded from 6.1%).
• 2024 at 2.5% (downgraded from 2.6%).

Full release here.