Sample Category Title

The British pound has erased its strong weekly gains against the US dollar following renewed demand for the greenback amongst investors. The 1.2890 level is the key downside level to watch intraday, with technical selling likely to increase if bears hold price below this key area. Bulls now need to move price above the 1.2950 level to stabilize the GBPUSD pair from further intraday declines.

The GBPUSD pair is bearish while trading below the 1.2950 level, key support is located at the 1.2890 and 1.2866 levels.

If the GBPUSD pair trades above the 1.2950 level, key intraday resistance is found at the 1.2966 and 1.2990 levels.

Litecoin is once again testing towards the best levels of 2019, with the sixth largest cryptocurrency facing formidable resistance from the $100.00 level. The Ichimoku indicator is showing that the LTCUSD pair is pushing through cloud resistance on the weekly time frame. Sellers need to move the price below the $77.00 level to shift the current bullish bias surrounding the LTCUSD pair.

The LTCUSD pair is only bullish while trading above the $77.00 level, key resistance is found at the $100.00 and $130.00 levels.

If the LTCUSD pair trades below the $77.00 level, key support is found at the $65.00 and $58.00 levels.

US stocks rose yesterday after a few weeks of turmoil. The gains were broad-based, but technology played an important role in the recovery. The Nasdaq index rose by more than 100 points while the Dow gained by more than 200. These gains continued in Asia this morning. In China, the Shanghai and A50 indices rose by 1% and 1.5% respectively. Investors are optimistic that US and China will reach an agreement within the next few weeks.

The Australian dollar declined today after China released weak economic numbers. In April, industrial production rose by an annualized rate of 5.4%, which was lower than the 6.5% that traders were expecting. In March, industrial production rose by 8.5%. The fixed asset investments in the country increased by 6.1%, which was lower than the consensus estimate of 6.4%. Retail sales increased by 7.2%, lower than the expected 8.6%.

Today, traders will focus on crude oil, the Japanese yen, the USD, and the euro. On crude oil, the EIA is expected to release the inventories data. These numbers are expected to have declined by 800K in the past week. Yesterday, data from API showed that inventories rose by more than 8.6 million barrels. In Japan, the country will release the housing starts and construction orders. In Europe, Germany will release its Q1 GDP data while France will release the CPI numbers. Italy will release the industrial sales while the EU will release the GDP and employment numbers. From the US, traders will receive manufacturing data and retail sales information.

EUR/USD

The EUR/USD pair was relatively unmoved ahead of key economic data from Europe and the United States. The pair is now trading at 1.1207, which is slightly higher than yesterday’s lows. On the hourly chart, this price is close to the middle line of the Bollinger Bands and is along the important green support shown below. The two lines of the Relative Vigor Index (RVI) are moving higher and heading closer to the neutral level. Today, the pair could resume the downward trend to test the important support of 1.1180.

USD/JPY

The USD/JPY pair moved up slightly to the important resistance level of 109.60. This was higher than yesterday’s low of 109.00. On the four-hour chart below, this price was slightly below the 25-day and 50-day moving averages. The dots of the Parabolic SAR are on the upper side. At the same time, the RSI has continued to move up and is currently close to 50. Today, the pair could move up to test the important level of 110.

AUD/USD

The AUD/USD pair declined to a low of 0.6920, which was the lowest level since January. This price is below the 50-day and 25-day moving averages while the RSI remains slightly above the oversold level. The money flow index has stabilized below 50 while the dots of the Parabolic SAR are on the upper side. The pair will likely continue moving lower to test the support of 0.6900.

• Rates: Trade jitters ease, mitigating flight to safe havens.
  The risk-off that dominated markets lately eased yesterday, putting a halt to the core bond rally for now. German Bunds outperformed as Italy suggested it might disobey EU fiscal rules. US eco data today include the April retail sales. German Q1 GDP printed in line with expectations. The risk relief might continue for no, though we err on the side of caution.
• Currencies: EUR/USD rally slows as USD doesn't lose interest rate support, for now
  The dollar bottomed yesterday. Easing of global tensions halted investors' quest for Fed easing further down the road, giving the dollar some relief. Eco might get some more weight in the intraday FX price action today. For now, we assume that the bottom in EUR/USD (topside of the dollar) is well protected unless Europe is more openly involved in the trade war.

The Sunrise Headlines

• US stock markets got some (temporary?) reprieve yesterday, recovering between 0.8% and 1.15% (Nasdaq). Asian bourses are positively oriented as well with China outperforming (>+1%) regardless of disappointing eco data.
• China's economy lost steam at the start of Q2 despite this year's fiscal and monetary stimulus . Industrial production (5.4% Y/Y), retail sales (7.2% Y/Y) and investments (6.1% Y/Y) all slowed and fell short of forecasts.
• US President Trump called on the Fed to match China's easy monetary policy to help win the trade war. He later added that US growth would hit 5% “with a little quantitative easing.”
• UK PM May will try her luck a 4th time in parliament early June. She'll table her Brexit deal again. Cross-party talks with opposition Labour haven't yielded an agreement with Corbyn still calling on heavy concessions from conservatives.
• The Saudi energy minister announced that armed drones attacked an oil pipeline two days after the sabotage of oil tankers in the Street of Hormuz. Yemeni rebel Houthis, possibly backed by Iran, are under suspicion.
• US President Trump is rumoured to issue an executive order this afternoon that would forbid US businesses from using telecommunications equipment made by companies that pose a national security risk (Huawei…).
• Today's economic calendar contains US retail sales, Empire Manufacturing business sentiment, industrial production, NAHB Housing index and the 2nd reading of EMU Q1 GDP. Fed Daly, Quarles, Barkin, ECB Coeuré and Praet speak.

Currencies: EUR/USD Rally Slows As USD Doesn't Lose Interest Rate Support, For Now

EUR/USD rally blocked as trade tensions ease

Yesterday, the risk off on the US-China trade dispute eased. US yields didn't decline further, giving the dollar some leeway. In the afternoon, US NFIB small business confidence printed better than expected. On the other hand, Italian PM Salvini advocated that the country might breach the EU budget rules to reduce unemployment, weighing on the euro. EUR/USD closed at 1.1204 (from 1.1222). USD/JPY also profited from the risk-on and finished at 109.66 (from 109.30). This morning, the news flow from Asia is mixed. China April production and retails sales missed the consensus by a big margin. However, any risk-off correction was blocked by the hope for additional stimulus. Even so, the yuan stabilizes against the dollar (USD/CNY 6.875). The slowdown in China weighs on the Aussie dollar (AUD/USD 0.6930 area). EUR/USD stabilizes just north of 1.12. USD/JPY gains a few ticks (109.65).

Later today, markets will look out for potential next developments in the USChina trade dispute. However, the eco calendar is also well filled with the German Q1 GDP growth (expected 0.4% Q/Q). EMU growth is expected to be confirmed at 0.4% Q/Q. Any downside surprise might weigh on the euro. In the US (core) retail sales growth is expected to slow (0.3% M/M) after a strong March reading. We have few reasons to expect a big downside surprise. Last week, the dollar underperformed the euro (and the yen) as markets see a rising chance for Fed cuts as tensions might undermine US growth. This USD decline slowed this week and some euro softness kicked in yesterday. We expect the speculation on Fed rate cuts to persist. This might cap a sustained USD rebound. In a day-to-day perspective, EUR/USD is losing momentum. The pair might cede some further ground in the 1.1110/1.1265 ST range. Still, we don't expect a downside break. The trade war spreading to Europe (e.g. tariffs on autos) is a risk factor.

Yesterday EUR/GBP hovered in the upper half of the 0.86 big figure. UK labour data were ok, but had little impact on trading. UK PM May received permission from her (divided) party to continue talks with labour. This should lead to a new vote on withdrawal agreement in the week of June 03. For now, it doesn't help sterling much. A test of the EUR/GBP 0.8722 MT range top might be in the cards.

EUR/USD: dollar decline slows as does the decline in US yields

The EUR/USD bullish bounce at the Fibonacci levels of wave D vs B could confirm the triangle pattern within a wave 4 (green) correction. In this case, a bearish breakout is expected after price breaks below the 100% Fib and bottom of wave B (orange). This bearish outlook is invalidated if price is able to break above the 100% Fibonacci level of wave C vs A.

The EUR/USD alternative scenario is mentioned on the 1 hour chart. Price could also be building bearish wave 1-2-3 (orange) pattern if price is able to show strong bearish impulsive price action that can break below the 161.8% Fibonacci level of wave 3 vs 1 (brown).

Daily Pivots: (S1) 141.15; (P) 141.67; (R1) 141.96; More...

Intraday bias in GBP/JPY is turned neutral for consolidation above 141.20 temporary low. In case of stronger recovery, upside should be limited by 143.76 support turned resistance to bring fall resumption. On the downside, break of 141.20 will resume the fall from 148.87 to 61.8% retracement of 131.51 to 148.87 at 138.14 next. Sustained break there will pave the way to retest 131.51 low.

In the bigger picture, current development suggests that GBP/JPY was rejected by 149.98 key resistance. And medium term fall from 156.59 is still in progress. Break of 131.51 will target 122.36 (2016 low). On the other hand, decisive break of 149.98 should confirm that medium term fall from 156.59 (2018 high) has completed at 131.51 already. Further rally would be seen back to 156.59 resistance and above.

Daily Pivots: (S1) 122.48; (P) 122.95; (R1) 123.32; More....

Intraday bias in EUR/JPY remains neutral for consolidation above 122.48 temporary low. In case of stronger recovery, upside should be limited by 124.09/125.29 resistance zone to bring fall resumption. Current development suggests that rebound from 118.62 has completed at 127.50 already. On the downside, break of 122.48 will target retest of 118.62 low.

In the bigger picture, current development argues that rebound from 118.62 is merely a correction and has completed at 127.50. EUR/JPY is staying in long term falling channel from 137.49 (2018 high). Decisive break of 118.62 will confirm resumption of this medium term fall and target 109.20 low. For now, this will be the favored case as long as 125.23 resistance holds.

Daily Pivots: (S1) 0.8661; (P) 0.8677; (R1) 0.8698; More...

Intraday bias in EUR/GBP remains on the upside at this point. Consolidation pattern from 0.8472 is possibly extending with another rising leg. Further rise could be seen to 0.8722 resistance first. Break will target 0.8840 resistance. On the downside, break of 0.8624 minor support will turn bias back to the downside for 0.8472 low instead.

In the bigger picture, medium term decline from 0.9306 (2017 high) is seen as a corrective move. Current development suggests that it's extending through 0.8312 support towards 50% retracement of 0.6935 (2015 low) to 0.9306 at 0.8121. We'll look for strong support around there to contain downside to complete the correction. But for now, break of 0.8681 resistance is needed to be the first sign of medium term bottoming. Otherwise, outlook will stay bearish in case of recovery.

Daily Pivots: (S1) 1.6108; (P) 1.6153; (R1) 1.6179; More...

EUR/AUD is losing some upside momentum as seen in 4 hour MACD. Still, with 1.6086 minor support intact, intraday bias in EUR/AUD remains on the upside. Current rise from 1.5683 should extend to retest 1.6765 high. On the downside, below 1.6086 minor support will turn intraday bias neutral and bring consolidation first, before staging another rally.

In the bigger picture, as long as 1.5346 support holds, outlook will still remain bullish. Up trend from 1.1602 (2012 low) is expected to resume sooner or later. Break of 1.6765 will target 61.8% retracement of 2.1127 (2008 high) to 1.1602 at 1.7488 next. However, firm break of 1.5346 key support will indicate trend reversal, with bearish divergence condition in weekly MACD, and turn outlook bearish.

Daily Pivots: (S1) 1.1283; (P) 1.1307; (R1) 1.1324; More...

Intraday bias in EUR/CHF remains on the downside for the moment. Corrective fall from 1.1476 is in progress towards 1.1162 low. We'd expect strong support above there to bring rebound. On the upside, break of 1.1350 will suggest that the pull back has completed. Intraday bias will be turned back to the upside for 38.2% retracement of 1.2004 to 1.1162 at 1.1484 again.

In the bigger picture, at this point, we're slightly favoring the case that corrective fall from 1.2004 has completed after being supported by 61.8% retracement of 1.0629 to 1.2004 at 1.1154. Decisive break of 1.1501 resistance should confirm and target 1.1713 resistance next. On the downside, firm break of 1.1154 is needed to confirm down trend resumption. Otherwise, medium term outlook will be neutral at worst.