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Daily Pivots: (S1) 1.0368; (P) 1.0383; (R1) 1.0405; More....

Outlook in EUR/CHF remains unchanged. Recovery from 1.0298 might still extend higher, but upside should be limited well below 1.0510 resistance to bring another fall. Break of 1.0298 will resume the down trend from 1.1149 and target 161.8% projection of 1.1149 to 1.0694 from 1.0936 at 1.0200 next.

In the bigger picture, long term down trend from 1.2004 (2018 high) is still in progress. Next target is 61.8% projection of 1.2004 to 1.0505 to 1.1149 at 1.0223. On the upside, firm break of 1.0505 support turned resistance is needed to be the first sign of medium term bottoming. Otherwise, outlook will remain bearish even in case of rebound.

Daily Pivots: (S1) 0.7081; (P) 0.7131; (R1) 0.7166; More...

AUD/USD's fall from 0.7313 resumes after brief recovery and intraday bias is back on the downside for retesting 0.6991/2 support zone. Further break there will resume larger down trend from 0.8006, and carries larger bearish implication. Next target will be 100% projection of 0.7555 to 0.6992 from 0.7313 at 0.6750. On the upside, break of 0.7180 minor resistance will mix up the near term outlook and turn intraday bias neutral first.

In the bigger picture, strong rebound from 0.6991 key structural support will retain medium term bullishness. That is, whole up trend from 0.5506 is still in progress. Firm break of 0.7555 resistance will target 0.8006 high and above. However, sustained break of 0.6991 will argue that the whole up trend from 0.5506 might be finished at 0.8006, after rejection by 0.8135 long term resistance. Deeper decline would then be seen back to 61.8% retracement of 0.5506 to 0.8006 at 0.6461.

Daily Pivots: (S1) 1.2586; (P) 1.2637; (R1) 1.2714; More...

USD/CAD's rise from 1.2448 resumed after brief retreat and intraday bias back on the upside for 1.2812 resistance first. Break there will target 1.2963 high next. On the downside, below 1.2558 minor support will turn bias back to the downside for 1.2448 instead.

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 form 1.4667 and that carries larger bearish implications too.

Daily Pivots: (S1) 114.07; (P) 114.38; (R1) 114.99; More...

Intraday bias in USD/JPY remains neutral at this point. On the upside, break of 115.05 minor resistance will revive near term bullishness and bring retest of 116.34 high first. On the downside, break of 113.47 will resume the corrective fall from 116.34 to 112.52 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 110.91) holds.

Daily Pivots: (S1) 0.9194; (P) 0.9220; (R1) 0.9268; More....

USD/CHF rises further to as high as 0.9256 so far today and focus is now on 0.9276 resistance. Break there should resume the choppy rise from 0.8925 through 0.9372 resistance. On the downside, firm break of break of 0.9084 support will argue that choppy rise from 0.8925 has completed, and bring deeper fall back to 0.8925.

In the bigger picture, the corrective structure of the rebound from 0.8925 argues that fall from 0.9471 is not complete yet. It could either be the second leg of pattern from 0.8756 (2021 low), or resuming larger down trend from 1.0237 (2018 high). We'd pay attention to the downside momentum and assess the odds later. But for now, medium term outlook will be neutral at best as long as 0.9471 resistance holds.

Daily Pivots: (S1) 1.3431; (P) 1.3478; (R1) 1.3511; More...

GBP/USD's fall resumes by breaking 1.3435 and intraday bias is back on the downside. As noted before, rebound from 1.3158 could have completed at 1.3748 already. More importantly, larger fall from 1.4282 is probably not over yet. Intraday bias is back on the downside for retesting 1.3158 first. On the upside, though, above 1.3523 minor resistance will turn bias back to the upside for retesting 1.3748.

In the bigger picture, strong support was seen from 38.2% retracement of 1.1409 to 1.4248 at 1.3164. The development suggests that 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.

Swiss trade surplus came in at CHF 3.69B in December, below expectation of CHF 5.23B. For 2021 as a whole, exports rose 15.2% to a new record high at CHF 259.5B. Imports rose 10.1% to CHF 200.8B. Trade surplus swelled to CHF 58.7B.

Also, the FOCBS said US became Switzerland's largest buyer in 2021. Foreign trade with China rose to new high. Double-digit growth rates were observed in deliveries to Europe (+18.1%, or +21.9B) and North America (+17.0%, or +7.4B). Shipments to Asia were also up by 9.0%, or CHF 4.4B.

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Germany Gfk Consumer Sentiment for February rose 0.2 pts to -6.7, better than expectation of -8.0. In January, economic expectations rose from 17.1 to 22.8. Income expectations rose from 6.9 to 16.9. Propensity to buy rose from 0.8 to 5.2.

"Despite rising incidences and inflation, consumers are once again showing some optimism at the beginning of the year. In particular, they are hoping for a slight alleviation in price trends, as in January 2022 the base effect resulting from the January 2021 reversal of the VAT cut will mitigate the inflation rate to some degree. Nevertheless, consumers price expectations remain significantly higher than in recent years.", explains Rolf Bürkl, GfK consumer expert. "In addition, experts assume that the pandemic situation would ease in the spring, which will lead to a number of restrictions being removed."

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Short Term Elliott Wave view in USDCAD suggests that rally from October 20, 2021 low is unfolding as a zigzag Elliott Wave structure. Up from October 20 low, wave (A) ended at 1.2963 and pullback in wave (B) ended at 1.244. Pair has resumed higher in wave (C) with subdivision as a 5 waves impulse structure. Up from wave (B), wave (i) ended at 1.2587 and dips in wave (ii) ended at 1.2551. Pair resumes higher in wave (iii) towards 1.268 and pullback in wave (iv) ended at 1.264. Last leg higher wave (v) ended at 1.27019 and this completed wave ((i)) in higher degree. Pullback in wave ((ii)) has ended at 1.2556 with internal as a zigzag.

Down from wave ((i)), wave (a) ended at 1.2616, and wave (b) ended at 1.2669. Wave (c) lower ended at 1.2556 and completed wave ((ii)) in higher degree. Pair has resumed higher in wave ((iii)) and broken above wave ((i)). Up from wave ((ii)), wave (i) ended at 1.2647 and pullback in wave (ii) ended at 1.2578. Near term, as far as pivot at 1.2447 low stays intact, expect dips to find support in 3, 7, or 11 swing for further upside. Potential target higher in the shorter cycle is 100% – 161.8% Fibonacci extension from January 19, 2022 low which comes at 1.2809 – 1.296.

USDCAD 45 Minutes Elliott Wave Chart

Jerome Powell didn’t really sooth investors’ nerves at yesterday’s policy statement. He said that the Federal Reserve (Fed) won’t refrain from back-to-back rate hikes to get the inflation situation straight. His words sent the US stocks lower, and the US dollar higher.

Apparently, the recent market rout hasn’t given cold feet to Powell and the Fed members, meaning that they are ready to take on more losses on the equities front to get inflation under control. After all, one leg of their dual mandate goal is price stability - and the other is a healthy labour market. The mandate is not to offer the market a sustained and a powerful rally, although a full-blast financial crisis is an undesired side-effect.

Plus, the rising oil prices will likely continue pressuring the consumer prices higher in the coming months. Crude oil prices continue rising partially due to the OPEC’s inability to increase supply against its will, and partially due to the mounting tensions at the Ukrainian border. The price of a barrel of US crude is now flirting with the $89 mark, and it’s just a matter of time before we see the price of a barrel test and eventually surpass the $90 mark.

Today, the US will reveal its latest GDP data, and the expectation is that the US may have grown some 5.5% in the Q4. Any positive surprise could further revive the Fed hawks, while any negative surprise would barely tickle the doves, unless the numbers are real ugly, which I doubt.

In the FX, the US dollar had a strong session on the back of a decidedly hawkish Fed. The US dollar index rallied to 96.70. As such, the dollar index rebounded 2% since the mid-January dip and is clearly on a rising path for the next couple of months. A further rally to the 98-100 region is certainly on the cards in the actual environment of tightening Fed, and a bit less hawkish others.

The Bank of Canada removed its exceptional forward guidance, but kept its rates unchanged at yesterday’s meeting, and no one really expects the Europeans to do anything more hawkish than buying less bonds to stop inflation from rising. So, the EURUSD is now preparing to test the November lows, and this time, the support will likely give in to the bears.