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Daily Pivots: (S1) 1.4854; (P) 1.4910; (R1) 1.4955; More...

EUR/AUD is staying in range of 1.4682/5053 and intraday bias remains neutral. On the upside, break of 1.5053 will resume the rebound from 1.4318 to target 61.8% retracement of 1.6223 to 1.4318 at 1.5495. However, firm break of 1.4682 will argue that the rebound has completed and bring retest of 1.4318 low.

In the bigger picture, as long as 1.5354 support turned resistance holds, larger down trend form 1.9799 (2020 high) is still expected to continue. On resumption, next target is 61.8% projection of 1.9799 to 1.5250 from 1.6434 at 1.3623, which is close to 1.3624 long term support (2017 low). However, firm break of 1.5354 will indicate medium term bottoming and bring stronger rally.

Daily Pivots: (S1) 0.8379; (P) 0.8398; (R1) 0.8429; More...

Intraday bias in EUR/GBP is turned neutral again as EUR/GBP recovered after dipping to 0.8365. On the upside, above 0.8465 will turn focus back to 0.8511 resistance intact. Further break of 0.8511 will reaffirm that 0.8201 is a medium term bottom, and target 0.8697 medium term fibonacci level next. On the downside, below 0.8365 will bring deeper pull back.

In the bigger picture, a medium term bottom could be in place at 0.8201, on bullish convergence condition in daily and weekly MACD. Rise from there could either be a correction to the down trend from 0.9499 (2020 high), or a medium term up trend itself. In either case, further rise should be seen to 38.2% retracement of 0.9499 to 0.8201 at 0.8697. Sustained break there will target 61.8% retracement at 0.9003.

Daily Pivots: (S1) 1.0237; (P) 1.0264; (R1) 1.0301; More....

EUR/CHF's break of 1.0289 minor resistance suggests that pull back from 1.0369 has completed. Intraday bias is back on the upside for 1.0369/0400 resistance zone. Firm break there will resume the rebound from 0.9970 to 1.0610 structural resistance. On the downside,e below 1.0186 will extend the corrective pattern from 1.0400 with deeper fall back to 1.0086 support.

In the bigger picture, as long as 1.0505 support turned resistance (2020 low) holds, long term down trend from 1.2004 (2018 high) is expected to continue. Next target is 100% projection of 1.2004 to 1.0505 to 1.1149 at 0.9650. However, firm break of 1.0505 will suggest medium term bottoming, and bring stronger rebound towards 1.1149 structural resistance.

Daily Pivots: (S1) 1.0476; (P) 1.0523 (R1) 1.0555; More...

Intraday bias in EUR/USD remains neutral at this point and some more consolidations could be seen. Upside of recovery should be limited by 1.0756 support turned resistance to bring fall resumption. Break of 1.0470 will target 161.8% projection of 1.1494 to 1.0805 from 1.1184 at 1.0069.

In the bigger picture, the decline from 1.2348 (2021 high) is expected to continue as long as 1.1185 support turned resistance holds. The break of 1.0635 (2020 low) now raises the chance that it's resuming long term down trend from 1.6039 (2008 high). Retest of 1.0339 (2017 low) low should be seen next. Decisive break there will confirm this bearish case.

Daily Pivots: (S1) 1.2444; (P) 1.2521; (R1) 1.2568; More...

GBP/USD is still bounded in consolidation from 1.2410 and intraday bias remains neutral first. In case of stronger recovery, upside should be limited below 1.2999 support turned resistance. On the downside, break of 1.2410 will target 161.8% projection of 1.3641 to 1.2999 from 1.3297 at 1.2258.

In the bigger picture, rise from 1.1409 (2020 low) has completed at 1.4248, ahead of 1.4376 long term resistance (2018 high). Based on current momentum, fall from 1.4248 is probably the start of a long term down trend. The break of 61.8% retracement of 2.1161 to 1.1409 at 1.2493 is affirming this bearish case too. For now, deeper decline would be seen as long as 1.3158 support turned resistance holds. Next target is 1.1409 low.

Daily Pivots: (S1) 0.9727; (P) 0.9758; (R1) 0.9807; More....

Intraday bias in USD/CHF remains on the upside for the moment. Current rally should target next medium term projection level at 0.9864. On the downside, however, break of 0.9669 minor support should indicate short term bottoming, and turn bias back to the downside for deeper pull back.

In the bigger picture, down trend from 1.0342 (2016 high) should have completed with three waves down to 0.8756 (2021 low) already. Rise from 0.8756 is likely a medium term up trend of its own. Next target is 100% projection of 0.8756 to 0.9471 from 0.9149 at 0.9864. This will now remain the favored case as long as 0.9459 resistance turned support holds.

Daily Pivots: (S1) 129.71; (P) 130.09; (R1) 130.57; More...

Intraday bias in USD/JPY remains neutral for consolidation below 131.24. Near term outlook remains bullish with 126.91 support intact. Break of 131.24 will resume recent up trend to 261.8% projection of 109.11 to 116.34 from 114.40 at 133.26. However, considering bearish divergence condition in 4 hour MACD, break of 126.91 will confirm short term topping and turn bias back to the downside for a correction.

In the bigger picture, current rally is seen as part of the long term up trend form 75.56 (2011 low). Sustained trading above 61.8% projection of 75.56 (2011 low) to 125.85 (2015 high) from 98.97 at 130.04 will pave the way to 100% projection at 149.26, which is close to 147.68 (1998 high). For now, this will remain the favored case as long as 121.27 support holds.

Daily Pivots: (S1) 1.2841; (P) 1.2878; (R1) 1.2915; More...

Intraday bias in USD/CAD stays on the upside for the moment. Current rise from 1.2401 should target 1.3022 fibonacci level next. Decisive break there will carry larger bullish implications. In any case, outlook will stay cautiously bullish as long as 1.2717 support intact, in case of another retreat.

In the bigger picture, focus stays on 38.2% retracement of 1.4667 (2020 high) to 1.2005 (2021 low) at 1.3022. Sustained break there should confirm that the down trend from 1.4667 has completed after defending 1.2061 long term cluster support. Further rise would then be seen towards 61.8% retracement at 1.3650. However, rejection by 1.3022 will maintain medium term bearishness. Break of 1.2005 will resume the down trend from 1.4667 and that carries larger bearish implications too.

EUR/USD

During yesterday's trading session, the currency pair did not undergo drastic changes and we witnessed a slight decline, which the bulls limited above the key support level at 1.0481. With a possible predominance of the buyers and a successful breach of the first resistance at 1.0565, it is possible to witness an attack on the next significant level at 1.0653. Today, there is no planned economic news and statements that are expected to affect the move of the currency pair, so the main driving force remains the complicated economic situation.

USD/JPY

With the Ninja, we saw a slight decline, which remained limited above the support level at 128.87. A short correction followed, with the price consolidating just below the resistance level at 130.25 at the time of writing. A possible bull predominance and a breach of the mentioned resistance would strengthen the positive sentiment of the investors. On the other hand, if the bears manage to establish themselves on the market, then their first significant support would be the level at 128.87.

GBP/USD

Yesterday started promising for the bulls, and during the early hours of the trading session, they managed to overcome the first resistance at 1.2500. Subsequently, their hopes for further growth were overshadowed by the failure to breach the key resistance at 1.2600 and the subsequent decline towards 1.2500 – a level that already plays the role of support. Therefore, the most likely scenario for today is for a consolidation around the current level.

EUGERMANY40

During the previous trading session, the German index failed to breach the resistance at 14120, followed by a decline towards the support zone at 13850. Since the beginning of today's session, we see a bull predominance and the current breach of the resistance at 13958 has not yet been confirmed. A confirmation of the breach could lead to an attack on the next important resistance at 14120. The unemployment change data for Germany (today; 07:55 GMT) could lead to increased volatility for the index.

US30

With the American blue chips, we've been observing a bear market since last week. During today's session, the price of the index consolidated below the resistance level at 33164. If the bears want to establish full control over the market, then they must first breach the support at 32340. The first key resistance lies at 34103, but the sentiment is still mostly negative as the ten-year U.S. treasury yields exceeded 3% for the first time since 2018 and traders prepare for the Fed to raise the interest rates.

Markets

Markets yesterday had to cope with multiple, divergent pieces of news both on inflation and growth. Most data still suggested that the former is becoming an ever bigger hurdle for the second. Chinese data are flagging that strict corona measures cause the second largest economy to be a drag rather an a motor for world growth as it will add both to supply chain disruptions annex higher prices and hamper demand at the same time.

EC confidence declined faster than expected from 106.7 to 105. The supply/industry related subseries were not too bad, but the European consumer clearly fears the war in Ukraine to spark a protracted cost of living crisis (-22.0 from -16.9).

US eco data of late were resilient but the April manufacturing ISM (55.4 from 57.1 vs 57.6 expected) shows that prices/supply issues are still abundant, but demand shows tentative signs of easing, too. Initially, all this led to outright risk-off, especially on European indices. The EuroStoxx50 lost 1.85%. US indices after a hesitant start finally rebounded (Dow +0.26%, Nasdaq + 1.63%).

US yields didn’t change course despite uncertainty on growth, rising between 4.7/4.9 bps (5-y/10y) and 1.7 bps (2-y). The decomposition of the move in the 10-y yields was striking. The US 10-y real yield jumped more than 15 bps to 0.14%, partially compensated by a decline in inflation expectations (-11 bps). Two days before the Fed decision, market confidence is high that Fed rate hikes and QT will do the job.

The German yield curve also steepened with the 2-y yield easing 1.9 bps and the 30-y rising 4.8 bps. There was a slight easing in EMU inflation expectations, too. However, 10-y EMU inflation swaps now moved above their US counterparts (3.08% vs 3.0%), illustrating the loss of confidence in the ECB’s mandate to anchor inflation at its 2.0% target over the policy horizon, or even far beyond.

The DXY USD index reversed Friday’s correction (close 103.74) but didn’t break last week’s top. EUR/USD still struggles to avoid a break below 1.05. Sterling initially outperformed the euro, but a late session setback even caused EUR/GBP to close north of 0.84.

This morning Japanese and main Chinese markets are closed. Later today US JOLTS job openings, German and EMU labour market data are interesting but no market mover. Investors will mainly count down to tomorrow’s Fed decision, unless some unexpected news from the Ukraine conflict were to interfere. We keep a close eye whether the US real yield will extend its journey further into positive territory. In more constructive risk sentiment, this shouldn’t immediately translate into a further acceleration of the dollar. That said, the US currency clearly remains in pole position. At the same time, it will be difficult for EUR/USD to avoid a return to the 1.0341 correction low, unless the ECB decisively steps up its anti-inflation commitment.

News Headlines

The Reserve Bank of Australia completed a Riksbank-style sudden policy U-turn by lifting its policy rate this morning from 0.1% to 0.35%. More rate hikes are coming to ensure a return of inflation towards target. The RBA also decided to no longer reinvest proceeds of maturing government bonds. The Australian economy has proven to be resilient and inflation has picked up more quickly, and to a higher level, than was expected. There is also evidence that wages growth is picking up, a key factor for the RBA to start a tightening cycle. Australian GDP growth is forecast to remain strong at 4.25% this year and 2% next. A further rise in inflation is expected short term (6% headline; 4% core), before moderating towards 3% (upper tolerance band) by mid-2024. AUD/USD (0.71) bounces away from the danger/support zone in the low 0.70-area. The AUD swaps curve bear flattens with yields rising by 2.7 bps (30-yr) to 13.5 bps (2-yr). Australian markets discount another 250 cumulative bps of rate hikes this year.