Sample Category Title

Cable remains firmly in red on Monday and extends steep fall into third straight day, dragged by fresh risk aversion that pushed global stocks lower.

After last week’s strong upside rejection and weekly close below pivotal 1.33 support (the pair was down 0.7% for the week), bears cracked next significant supports at 1.3164/61 (Fibo 38.2% of 1.1409/1.4249/Dec 8 low), marking full retracement of 1.3161/1.3748 upleg and pressuring another key level at 1.3121 (200WMA).

Earlier completion of failure swing pattern on daily chart added to strong bearish stance, with firm break of 1.3161 pivot to complete larger failure swing pattern on weekly chart and generate stronger bearish signal for extension towards 1.3000 (psychological) and 1.2829 (50% retracement of 1.1409/1.4249.

Firmly bearish daily studies support scenario, however bears may face headwinds on oversold condition and hold for consolidation before resuming.

Bears are expected to remain in play as long as price action stays below broken 1.3300 support, now reverted to strong resistance.

Res: 1.3245; 1.3272; 1.3300; 1.3320.
Sup: 1.3161; 1.3141; 1.3106; 1.2950.

Daily Pivots: (S1) 114.49; (P) 115.02; (R1) 115.40; More...

Intraday bias in USD/JPY remains neutral as sideway trading continues. On the upside, firm break of 116.34 will resume larger up trend from 102.58 to 118.65 long term resistance next. On the downside, though, break of 114.40 will continue the corrective pattern from 116.34 with another fall to 113.46 support.

In the bigger picture, no change in the view that rise from 102.58 is the third leg of the up trend from 101.18 (2020 low). Such rally should target a test on 118.65 (2016 high). Sustained break there will pave the way to 120.85 (2015 high) and raise the chance of long term up trend resumption. This will remain the favored case as long as 55 week EMA (now at 111.64) holds.

Daily Pivots: (S1) 0.9152; (P) 0.9181; (R1) 0.9198; More....

Range trading continues in USD/CHF and intraday bias remains neutral for the moment. Choppy rise from 0.8925 would still be in favor to extend higher as long as 0.9090 support holds. Break of 0.9341 will target 0.9372 resistance and then 0.9471. On the downside, however, break of 0.9090 will bring deeper fall back to 0.8925 support.

In the bigger picture, medium term outlook will be neutral at best as long as 0.9471 resistance holds. Larger down trend could still extend through 0.8756 (2021 low). However, firm break of 0.9471 will argue that the trend has already reversed and rebound the rally from 0.8756 with another impulsive move.

Daily Pivots: (S1) 1.3173; (P) 1.3264; (R1) 1.3325; More...

GBP/USD's fall form 1.3748 is still in progress and intraday bias remains on the downside for 1.3158 support first. Firm break there will carry larger bearish implications. Next target is 61.8% projection of 1.4248 to 1.3158 from 1.3748 at 1.3074. For now, outlook will stay bearish as long as 1.3416 resistance holds, in case of recovery.

In the bigger picture, as long as 38.2% retracement of 1.1409 to 1.4248 at 1.3164 holds, up trend from 1.1409 (2020 low) is still in progress. On resumption, next target will be 38.2% retracement of 2.1161 to 1.1409 at 1.5134. Nevertheless sustained break of 1.3164 will argue that whole rise from 1.1409 has completed and bring deeper fall to 61.8% retracement at 1.2493.

Daily Pivots: (S1) 1.0855; (P) 1.0962; (R1) 1.1037; More...

Intraday bias in EUR?USD stays on the downside at this point. Sustained break of 61.8% projection of 1.2265 to 1.1120 from 1.1494 at 1.0786 will pave they way to 100% projection at 1.0349 next. On the upside, above 1.1007 minor resistance will turn intraday bias neutral and bring consolidations first, before staging another decline.

In the bigger picture, the decline from 1.2348 (2021 high) is expected to continue as long as 1.1494 resistance holds. Firm break of 1.0635 (2020 low) will raise the chance of long term down trend resumption and target a retest on 1.0339 (2017 low) next. Nevertheless, break of 1.1494 will maintain medium term neutral outlook, and extend range trading first.

Entering into US session, markets are starting to digest the steep moves made earlier today. Euro is paring some losses and it's indeed trading in black against Sterling, Swiss and Yen at the time of writing. Swiss Franc has apparently turned weaker, probably on concern that SNB could intervene any time market stabilizes. Nevertheless, Aussie remains the strongest one, leading other commodity currencies firm, while Dollar is mixed. In other markets, Gold is considered failing to sustain above 2000 handle for now, and turned into consolidations first. WTI crude oil is also retreating back below 120 handle.

Technically, we'll keep an eye on 1.1007 minor resistance in EUR/USD, 126.91 minor resistance in EUR/JPY and 1.0115 minor resistance in EUR/CHF. Break of these levels should indicate that selling climax in Euro has passed for the moment. That is, Euro would likely turn into consolidations first, even though near term bottoming might still be far away.

In Europe, at the time of writing, FTSE is down -0.23%. DAX is down -1.36%. CAC is down -1.14%. Germany 10-year yield is up 0.054 at -0.014. Earlier in Asia, Nikkei dropped -2.94%. Hong Kong HSI dropped -3.87%. China Shanghai SSE dropped -2.17%. Singapore Strait Times dropped -1.21%. Japan 10-year JGB yield dropped -0.0053 at 0.147.

Eurozone Sentix dropped to -7, worst fall in expectations than pandemic

Eurozone Sentix Investor Confidence dropped sharply from 16.6 to -7.0 in March, well below expectation of 5.1. That;s also the lowest level since November 2020. Current Situation index dropped from 19.3 to 7.8, lowest since May 2021. Expectations index dropped from 14.0 to -20.8, lowest since August 2012.

Sentix said: "The first economic indication after the Russian invasion of Ukraine has it all: The economy in Euroland collapses dramatically in the month of March! The assessment of the economic situation decreased by 11.5 points and the expectations decreased by 34.75 points, which is more than ever before in the history of sentix. Even the Corona pandemic or the banking crisis had not led to such a sharp drop in the future outlook!"

From Germany, retail sales rose 2.0% mom in January, versus expectation of 1.9% mom. Factory orders rose 1.8% mom, versus expectation of 1.0% mom.

Swiss foreign currency reserves dropped to CHF 938B in February.

Australia AiG services rose to 60 in Feb, grew strongly

Australia AiG Performance of Services Index rose 3.8 pts to 60.0 in February. Looking at some details, sales rose 9.7 pts to 68.6. Employment dropped -2.0 to 54.7. New orders rose 3.2 to 61.1. Supplier deliveries rose 7.6 to 59.0. Input prices dropped -0.1 to 66.0. Selling prices dropped -1.9 to 60.3. Average wages dropped -1.0 to 55.9.

Innes Willox, Chief Executive of Ai Group, said: "Australian service sector businesses grew strongly in February with sales, employment and new orders all adding to the gains in the December-January period. Prices of inputs and wages were up but not as dramatically as in the manufacturing and construction sectors. Selling prices remained at a level that suggests a capacity to recover a proportion of cost increases in the market."

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.0855; (P) 1.0962; (R1) 1.1037; More...

Intraday bias in EUR?USD stays on the downside at this point. Sustained break of 61.8% projection of 1.2265 to 1.1120 from 1.1494 at 1.0786 will pave they way to 100% projection at 1.0349 next. On the upside, above 1.1007 minor resistance will turn intraday bias neutral and bring consolidations first, before staging another decline.

In the bigger picture, the decline from 1.2348 (2021 high) is expected to continue as long as 1.1494 resistance holds. Firm break of 1.0635 (2020 low) will raise the chance of long term down trend resumption and target a retest on 1.0339 (2017 low) next. Nevertheless, break of 1.1494 will maintain medium term neutral outlook, and extend range trading first.

Economic Indicators Update

• CADCHF reversed from support area
• Likely to rise to resistance level 0.7300

CADCHF continues to rise after the earlier reversal from the support area located between the key support level 0.7200, lower daily Bollinger Band and the 61.8% Fibonacci correction of the previous upward wave 2 from December.

The upward reversal from this support area will most likely form the daily Bullish Engulfing.

CADCHF can be expected to rise further toward the next resistance level 0.7300 (which has been reversing the pair from last month).

• GBPCHF reversed from support area
• Likely to rise to resistance level 1.2280

GBPCHF currency pair recently reversed up from the support area located between the multi-month support level 1.2135 (previous monthly low from October) and the lower daily Bollinger Band.

The upward reversal from this support area stopped the previous impulse waves 5 and (3).

Given the oversold reading on the daily Stochastic indicator, strong swiss franc outflows- GBPCHF can be expected to rise further toward the next resistance level 1.2280 (former monthly low from January).

Spot gold hit $2000 per ounce this morning, for the first time since August 2020, as uncertainty about global economy in light of the consequences of the Russia-Ukraine war and Western sanctions on Russia, as talks about including Russian energy products into the package of restrictions, strongly increased global uncertainty and boosted safe-haven demand.

The yellow metal advanced 2.6% last week, as crisis deepened, but advanced 1.2% only in early Monday’s trading after starting the week with gap higher, signaling that the latest acceleration could extend much higher. Close above $2000 is needed to confirm strong bullish bias and expose targets at $2015/$2049 (Aug/Sep 2020 peaks) which guard a record high at $2074, posted in Oct 2020.

Further escalation of the crisis could inflate gold price above these levels and unmask next targets at $2100 (round-figure) and $2168 (Fibo 123.6% projection of the rally from $1676 (Mar 2021 low).

Solid supports lay at $1980/74 (broken Fibo 76.4% of $2074/$1676 / Feb 24 spike high), followed by daily Tenkan-sen ($1940) and trendline support at $1925.

Res: 2015; 2049; 2074; 2100.
Sup: 1980; 1974; 1950; 1940.

Dax index opened with gap-lower on Monday and broke below 13000 marks to hit 1650, the lowest since November 2020, driven by fresh wave of risk aversion.

Global markets panicked after the US and Western allies announced plans to impose a ban on importing Russian energy products, which were so far excluded from the wide package of sanctions.

The news sent shockwaves across the markets and raised fears that such measure could strongly hurt bloc’s economy, heavily dependent on Russian energy and significantly slow economic growth, as record inflation could rise further.

The index extends steep fall into third straight week, following nearly 8% drop last week and break of key technical supports at 13668 and 13101 (base of thick weekly cloud / Fibo 38.2% of 7940/1629 rally) that generated strong bearish signal, adding to negative outlook, as global migration from riskier assets into safety accelerates on the latest signals of possible deepening of crisis.

Bears focus initial target at 12116 (50% retracement of 7940/16292) and could extend towards 11314 (Oct 2020 through), with limited upticks on oversold conditions to provide better levels for re-entering bearish market.

Res: 12801; 12959; 13101; 13668.
Sup: 12423; 12116; 12000; 11314.