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Ethereum has moved to a new 2019 trading high, with the second largest cryptocurrency by market capitalization receiving a boost from the recent breakout rally in Bitcoin. The first bullish target for the ETHUSD pair is the $230.00 level, with the $270.00 level extended weekly resistance. Sellers need to move price below the $185.00 level to shift the strong bullish sentiment towards the ETHUSD pair.

The ETHUSD pair is bullish while trading above the $185.00 level, key resistance is found at the $230.00 and $270.00 levels.

If the ETHUSD pair trades below the $185.00 level, key support is found at the $175.00 and $168.00 levels.

The British pound has started to recover higher against the US dollar ahead of the release of important United Kingdom Wage and Earnings data later this morning. The GBPUSD pair has a bullish intraday bias while trading above the 1.3064 level and could start to target the 1.3100 level. If the GBPUSD pair falls below the 1.2990 level, sellers are likely to target the 1.2966 support level.

The GBPUSD pair is intraday bullish while trading above the 1.3064 level, key resistance is located at the 1.3100 and 1.3155 levels.

If the GBPUSD pair trades below the 1.2990 level, key intraday support is found at the 1.2966 and 1.2925 levels.

The US dollar has fallen to a fresh monthly trading low against the Japanese yen currency after the Chinese government announced retaliatory measures to US trade tariffs. The 108.49 level is major weekly support if sellers move the USDJPY pair below the 109.00 support level. The USDJPY pair offers only limited technical support until the 107.90 level if the 108.49 level is breached.

The USDJPY pair is heavily bearish while trading below the 109.50, key support is found at the 109.00 and 108.49 levels.

If the USDJPY pair trades above the 109.50 level, key intraday resistance is found at the 109.80 and 110.00 levels.

Global stocks declined sharply as traders worried about an escalating trade war. In the United States, the Dow lost 620 points while Nasdaq lost 269 points. In Asia, the Shanghai and Nikkei declined by 10 points and 108 points respectively. These losses came after China announced that it would retaliate against the tariffs levied by the United States. The new tariffs will go into effect on June 1. Amidst all the turmoil, there is hope that things could change in June after Trump meets with China’s Xi Jinping in Japan during the G20 summit.

Sterling continued to decline after opinion polls showed that Theresa May could be at risk. Recent polls show that Nigel Farage’s Brexit Party has continued to gain in popularity ahead of the European elections that will happen later this month. If May’s party loses, it will be unlikely for her to remain as Prime Minister. Today, traders will focus on UK jobs numbers. The unemployment rate is expected to remain at 3.9% while average earnings with bonus are expected to rise by 3.4%, down from the previous 3.5%.

The euro rose slightly against the USD in the Asian session ahead of key data from the EU. In Germany, the CPI is expected to remain unchanged at 2.0%. The harmonized CPI is expected to remain unchanged at 2.1%. The ZEW economic sentiment for March is expected to increase to 5.1 from the previous 3.1. The current conditions are expected to increase to 6 from the previous 5.5. The industrial production is expected to decrease by -0.8% on an annual basis.

EUR/USD

The EUR/USD pair rose slightly to a high of 1.1240 from the previous low of 1.1219. On the hourly chart, this price is slightly above the 25-day and 50-day moving averages. The RSI has moved slightly higher to the current 55 while the volumes have remained subdued. Today, the pair could move in either direction as traders receive important data from the EU and as the trade war escalates.

XAU/USD

The XAU/USD pair rose to a high of 1303. This was the highest level since April 15. The gains came as investors rushed to safe havens. On the four-hour chart, the pair is above the 25-day and 50-day moving averages. The price is along the upper line of the Bollinger Bands while the RSI has continued to rise to the overbought level. The pair could continue to rise, to test the 1350 level.

GBP/USD

The GBP/USD pair declined to a low of 1.2940. On the hourly chart, this price is below the 25-day and 50-day moving averages and between the middle and lower lines of the Bollinger Bands. The money flow index has declined to the current 32, which is close to the oversold level. The pair could continue to decline ahead of the European elections.

Pivot (invalidation): 61.70

Our preference Short positions below 61.70 with targets at 60.65 & 60.30 in extension.

Alternative scenario Above 61.70 look for further upside with 61.95 & 62.30 as targets.

Comment As Long as the resistance at 61.70 is not surpassed, the risk of the break below 60.65 remains high.

Pivot (invalidation): 14.7000

Our preference Long positions above 14.7000 with targets at 14.8600 & 14.9000 in extension.

Alternative scenario Below 14.7000 look for further downside with 14.6000 & 14.5500 as targets.

Comment The RSI is mixed to bullish.

Pivot (invalidation): 1295.50

Our preference Long positions above 1295.50 with targets at 1303.00 & 1306.00 in extension.

Alternative scenario Below 1295.50 look for further downside with 1291.50 & 1288.00 as targets.

Comment Technically the RSI is above its neutrality area at 50.

Rates: Investors flee to safe havens as China retaliates
China is not standing down and promised to retaliate with tariffs on US imports. US equities retreated heavily with investors fleeing to safe havens. US Treasuries heavily outperformed other core bonds. Sentiment eased overnight, but we remain cautious on further improvement. Today's eco calendar will need to take investors off-guard in order to have an impact.

Currencies: USD decline the take a breather, at last for now.
The USD was captured in a new selling wave yesterday as China retaliated on last week's US tariffs hike. The dollar lost further interest rate support as markets anticipate a Fed rate cut later this year. Overnight, trade tension show tentative signs of cooling down. If so, the dollar might enter calmer waters, at least temporary

The Sunrise Headlines

• The US-Sino tit-for-tat trade war dealt a huge blow to stock markets yesterday with US indices losing 2.4% to 3.4%. Losses on Asian markets are smaller this morning as remarks by US President Trump bring some minor reprieve.
• After first threatening to impose tariffs on another $300bn worth of Chinese goods in one month's time, US President Trump said that he has a feeling that trade talks are going to be very successful in about 3 or 4 weeks.
• Boston Fed Rosengren, voter, warned that the accelerating trade war is increasing the risk of something bad happening to the US economy. Therefore it's wise to keep rates steady for now.
• UK PM May's cabinet meets today to assess Brexit talks with Labour. Key opposition demands, customs union & referendum on any deal, are probably insurmountable. A new series of Commons votes on Brexit options is then likely.
• The Financial Times reports that global market regulators are beginning to offer big concessions to help banks struggling away from Libor. They would be allowed to develop new rates to more closely match funding and lending costs.
• Facebook is raising its minimum wage for contract workers from $15/hour to $18 or $20 because current standards are no longer enough for those who live in expensive areas like the San Francisco Bay Area.
• Today's economic calendar contains UK labour market data, German ZEW investor sentiment, US NFIB small business optimism and export/import prices. Italy taps the bond market. ECB Villeroy, Fed Williams and Fed George speak.

Currencies: USD Decline The Take A Breather, At Last For Now

Dollar sell-off to take a breather?

Investors yesterday awaited the next steps in the US China trade war. This next step occurred early in US dealings as China imposed reciprocal measures against last week's US tariffs hike. US yields and the US-German rate differential declined sharply as markets prepared for Fed rate cuts. The dollar took another hit. However, the US currency soon found a floor. Especially, the loss against the euro was reversed quite easily, probably as markets realised that the trade fallout on Europe will also be substantial. EUR/USD even closed slightly lower at 1.1222. USD/JPY closed at 109.30 (from 109.95)

This morning, Asian equities show modest losses as president Trump gave some 'comforting comments' even as the US is still preparing additional tariffs. The trade-weighted dollar stabilizes near 97.30. USD/JPY rebounds (109.65 area), but so does EUR/USD (1.1240 area). The yuan basically stabilizes (USD/CNY 6.8725 area). China apparently doesn't seek further yuan weakness as a weapon in the trade war.

The final German final CPI is expected at 2.1% Y/Y. ZEW confidence is forecast to improve from 3.1 to 5. A downward surprise, especially for the CPI might ease the euro positive momentum. US NFIB small business confidence and import prices will be released. Price action suggests the trade war narrative is turning less aggressive, allowing investors to take a breather after the risk sell-off.

Last week, the trade dispute weighed more on the USD than on the euro (and the yen) as markets see a rising chance for Fed cuts as tensions might undermine US growth. However, the USD decline slowed yesterday. EMU growth is also at risk. In this context, it isn't evident to see sustained euro outperformance. We expect the EUR/USD 1.11/1.14 range to hold. Intermediate resistance is coming in at 1.1265 (almost tested yesterday) and 1.1324.

Yesterday, EUR/GBP drifted higher in the 0.86 big figure. Initially, the moves in EUR/GBP and cable were at least partially USD and/or euro driven. Still underlying sentiment on sterling remained weak as markets saw momentum in the Brexit talks between labour and the government further eroding. Today, the UK labour data will be published. We doubt the rapport will be able to help sterling. The stalemate in the Brexit talks and rising tensions in the conservative party on PM May's position will probably keep sterling in the defensive. 0.8682 resistance and the 0.8722 MT range top are within reach.

EUR/USD: dollar decline to slow, at least temporary?

Pivot (invalidation): 2827.00

Our preference Short positions below 2827.00 with targets at 2800.00 & 2785.50 in extension.

Alternative scenario Above 2827.00 look for further upside with 2840.50 & 2871.75 as targets.

Comment The RSI advocates for further decline.

Pivot (invalidation): 11980.00

Our preference Short positions below 11980.00 with targets at 11805.00 & 11730.00 in extension.

Alternative scenario Above 11980.00 look for further upside with 12060.00 & 12140.00 as targets.

Comment The RSI is bearish and calls for further decline.