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Daily Pivots: (S1) 0.9912; (P) 0.9970; (R1) 1.0005; More....

EUR/CHF's break of 0.9953 resistance turned support indicates short term topping at 1.0095. Intraday bias is mildly on the downside for 55 day EMA (now at 0.9877), or further to 38.2% retracement of 0.9407 to 1.0095 at 0.9832. On the upside, above 0.9998 minor resistance will turn bias back to the upside for retesting 1.0095 high instead.

In the bigger picture, break of 38.2% retracement of 1.1149 to 0.9407 at 1.0072 and 55 week EMA (now at 1.0041) is taken as an initial sign of long term bullish reversal. Further rally is expected as long as 55 days EMA (now at 0.9866) holds. Next target is 1.0505 cluster resistance (2020 low at 1.0505, 61.8% retracement of 1.1149 to 0.9407 at 1.1484). Reactions from there should reveal long term momentum.

Daily Pivots: (S1) 0.6945; (P) 0.6971; (R1) 0.7013; More...

Intraday bias in AUD/USD remains neutral as consolidation continues below 0.7018. Outlook will stay bullish as long as 0.6721 support holds. Break of 0.7018 will resume larger rise from 0.6169 to 61.8% projection of 0.6169 to 0.6892 from 0.6721 at 0.7168.

In the bigger picture, corrective decline from 0.8006 (2021 high) should have completed with three waves down to 0.6169 (2022 low). Further rally should be seen to 61.8% retracement of 0.8006 to 0.6169 at 0.7304. Sustained break there will pave the way to retest 0.8006. This will now remain the favored case as long as 0.6721 support holds.

Daily Pivots: (S1) 1.3360; (P) 1.3399; (R1) 1.3428; More....

Intraday bias in USD/CAD stays neutral at this point. While further decline could be seen, downside should be contained above 1.3224 key support level. Above 1.3451 minor resistance will turn bias back to the upside for 1.3704 resistance. However, sustained break of 1.3222/4 cluster support will resume the whole fall from 1.3976 and carry larger bearish implications.

In the bigger picture, as long as 1.3222 cluster support (38.2% retracement of 1.2005 to 1.3976 at 1.3223) holds, larger up trend from 1.2005 (2021 low) is still expected to resume through 1.3976 high at a later stage. However, firm break of 1.3222/3 will indicate that the trend might have reversed. Deeper fall would be seen to next cluster support at 1.2726 (61.8% retracement at 1.2758).

Daily Pivots: (S1) 1.0752; (P) 1.0811; (R1) 1.0846; More...

EUR/USD is staying in consolidation from 1.0873 and intraday bias remains neutral. Further rally is expected as long as 1.0482 support holds. On the upside, break of 1.0873 will resume larger rally from 0.9534 to 61.8% projection of 0.9630 to 1.0733 from 1.0482 at 1.1164 next.

In the bigger picture, current development suggests that the rally from 0.9534 low (2022 low) is a medium term up trend rather than a correction. Further rally 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) 1.2206; (P) 1.2253; (R1) 1.2336; More...

Intraday bias in GBP/USD stays on the upside at this point. Rise from 1.1840 is in progress for retesting 1.2445 high. Firm break there will resume whole rally from 1.0351 to 1.2759 fibonacci level. On the downside, break of 1.2168 minor support will turn intraday bias neutral again.

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) 0.9181; (P) 0.9228; (R1) 0.9269; More...

USD/CHF is still bounded in range of 0.9165/9407 and intraday bias stays neutral. Also, outlook remains bearish as long as 0.9407 resistance holds. Break of 0.9165 will resume whole fall from 1.0146. However, firm break of 0.9407 will turn bias back to the upside for stronger rebound.

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) 127.71; (P) 128.44; (R1) 128.88; More...

USD/JPY rebounds notably but there is no confirmation of reversal yet. Intraday bias remains neutral first. On the upside, firm break of 133.61 support turned resistance will firstly confirm short term bottoming at 127.20. More importantly, whole correction from 151.93 might have completed too. Bias will then be turned back to the upside for 38.2% retracement of 151.93 to 127.20 at 136.64 first. However, break of 127.20 will resume the decline form 151.93 to 121.43 fibonacci level next.

In the bigger picture, the firm break of 55 week EMA (now at 131.59) raises the chance of medium term bearish reversal, but that's not confirmed yet. Strong support could be seen around 61.8% retracement of 102.58 to 151.93 at 121.43 and 38.2% retracement of 38.2% retracement of 75.56 to 151.93 at 122.75 to bring rebound. But break of 134.76 resistance is needed to indicate bottoming first. Otherwise further fall will remain in favor.

Yen falls broadly after BoJ defied some speculations and kept yield cap unchanged today. The announcement also sent Nikkei sharply higher while shot 10-year JGB yield down. Nevertheless, it's still a bit early to confirm reversals in Yen crosses. Meanwhile, commodity currencies are trading firmer today. European majors are on the weaker side. In particular, Euro looks relatively vulnerable in crosses on reports that ECB is considering to slow down rate hike in March. Dollar is mixed for now, and looks forward to retail sales and PPI data.

Technically, one focus today is on whether Euro's selloff will gain further momentum. Firm break of 0.8768 support in EUR/GBP, which is close to 38.2% retracement of 0.8545 to 0.8896 at 0.8762, will argue that whole rebound from 0.9545 has completed. Deeper fall would be seen back to 61.8% retracement at 0.8679, and possibly further to retest 0.8545 low. If happens, such development would likely be accompanied by deeper selloff in EUR/CHF towards 0.9720 support too.

In Asia, at the time of writing, Nikkei is up 2.54%. Hong Kong HSI is up 0.10%. China Shanghai SSE is up 0.13%. Singapore Strait Times is up 0.20%. Japan 10-year yield is down -0.0802 at 0.424, after diving to as low as 0.368. Overnight, DOW dropped -1.14%. S&P 500 dropped -0.20%. NASDAQ rose 0.14%. 10-year yield rose 0.024 to 3.535.

BoJ keeps yield cap unchanged, downgrades growth forecast

BoJ kept the yield curve control unchanged today, disappointing some who bet for a tweak. Short term policy interest rate is held at -0.10%. The central will continue to purchase JGBs, without setting an upper limit, to keep 10-year yield at around 0%. The range 10-year JGB yield allowed to fluctuate is also kept at around plus and minus 0.50%. The decision was made by unanimous vote.

In the Outlook for Economic Activity and Prices:

• Forecasts of real GDP growth were downgraded across horizon, with fiscal 2022 down from 2.0% to 1.9%, fiscal 2023 down from 1.9% to 1.7%, fiscal 2024 down from 1.5% to 1.1%.
• Forecast of CPI core (all item less fresh food) for fiscal 2022 was raised from 2.9% to 3.0%, fiscal 2023 unchanged at 1.6%, and fiscal 2024 raised from 1.6% to 1.8%.
• Forecast of CPI core-core (all item less fresh food and energy) for fiscal 2022 was raised from 1.8% to 2.1%, fiscal 2023 raised from 1.6% to 1.8%, and fiscal 2024 unchanged at 1.6%.

Fed Barkin: You just can't declare victory too soon

Richmond Fed President Thomas Barkin told Fox Business yesterday that recent inflation reports have been encourage. But the median CPI is "still too high" and, "you just can't declare victory too soon."

"I would want to see inflation compellingly back to our target" before easing up on rate hikes, he said. Meanwhile the terminal rate will be dependent on the "path of inflation".

Looking ahead

UK CPI will be the main focus in European while Eurozone will also released CPI final. Later in the day, US retail sales and PPI will take center stage, with industrial production and business inventories. Canada will release IPPI and RMPI. Fed will also publish the Beige Book economic report.

USD/JPY Daily Outlook

Daily Pivots: (S1) 127.71; (P) 128.44; (R1) 128.88; More...

USD/JPY rebounds notably but there is no confirmation of reversal yet. Intraday bias remains neutral first. On the upside, firm break of 133.61 support turned resistance will firstly confirm short term bottoming at 127.20. More importantly, whole correction from 151.93 might have completed too. Bias will then be turned back to the upside for 38.2% retracement of 151.93 to 127.20 at 136.64 first. However, break of 127.20 will resume the decline form 151.93 to 121.43 fibonacci level next.

In the bigger picture, the firm break of 55 week EMA (now at 131.59) raises the chance of medium term bearish reversal, but that's not confirmed yet. Strong support could be seen around 61.8% retracement of 102.58 to 151.93 at 121.43 and 38.2% retracement of 38.2% retracement of 75.56 to 151.93 at 122.75 to bring rebound. But break of 134.76 resistance is needed to indicate bottoming first. Otherwise further fall will remain in favor.

Economic Indicators Update

BoJ kept the yield curve control unchanged today, disappointing some who bet for a tweak. Short term policy interest rate is held at -0.10%. The central will continue to purchase JGBs, without setting an upper limit, to keep 10-year yield at around 0%. The range 10-year JGB yield allowed to fluctuate is also kept at around plus and minus 0.50%. The decision was made by unanimous vote.

In the Outlook for Economic Activity and Prices:

• Forecasts of real GDP growth were downgraded across horizon, with fiscal 2022 down from 2.0% to 1.9%, fiscal 2023 down from 1.9% to 1.7%, fiscal 2024 down from 1.5% to 1.1%.
• Forecast of CPI core (all item less fresh food) for fiscal 2022 was raised from 2.9% to 3.0%, fiscal 2023 unchanged at 1.6%, and fiscal 2024 raised from 1.6% to 1.8%.
• Forecast of CPI core-core (all item less fresh food and energy) for fiscal 2022 was raised from 1.8% to 2.1%, fiscal 2023 raised from 1.6% to 1.8%, and fiscal 2024 unchanged at 1.6%.

Full statement here.

Full Outlook for Economic Activity and Prices.

Richmond Fed President Thomas Barkin told Fox Business yesterday that recent inflation reports have been encourage. But the median CPI is "still too high" and, "you just can't declare victory too soon."

"I would want to see inflation compellingly back to our target" before easing up on rate hikes, he said. Meanwhile the terminal rate will be dependent on the "path of inflation".