Sample Category Title

Pivot (invalidation): 0.6980

Our preference Long positions above 0.6980 with targets at 0.7005 & 0.7025 in extension.

Alternative scenario Below 0.6980 look for further downside with 0.6960 & 0.6945 as targets.

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

Pivot (invalidation): 1.3460

Our preference Short positions below 1.3460 with targets at 1.3400 & 1.3375 in extension.

Alternative scenario Above 1.3460 look for further upside with 1.3490 & 1.3515 as targets.

Comment The RSI calls for a new downleg.

Pivot (invalidation): 1.0180

Our preference Short positions below 1.0180 with targets at 1.0160 & 1.0145 in extension.

Alternative scenario Above 1.0180 look for further upside with 1.0195 & 1.0210 as targets.

Comment The RSI lacks upward momentum.

Pivot (invalidation): 110.95

Our preference Short positions below 110.95 with targets at 110.55 & 110.30 in extension.

Alternative scenario Above 110.95 look for further upside with 111.10 & 111.30 as targets.

Comment A break below 110.55 would trigger a drop towards 110.30.

Pivot (invalidation): 1.3085

Our preference Long positions above 1.3085 with targets at 1.3150 & 1.3175 in extension.

Alternative scenario Below 1.3085 look for further downside with 1.3045 & 1.3015 as targets.

Comment The RSI calls for a rebound.

Pivot (invalidation): 1.1180

Our preference Long positions above 1.1180 with targets at 1.1215 & 1.1240 in extension.

Alternative scenario Below 1.1180 look for further downside with 1.1160 & 1.1145 as targets.

Comment The RSI advocates for further upside.

• Rates: US ready to walk the trade talk
  Mixed reactions across Asia/Europe/US suggest doubt on whether or not this tariff threat is more than a negotiating tactic. The US walking the talk is the last thing the fragile global economy can use right now. We hold our positive bias towards core bonds. The EC's Spring forecasts are a wildcard today with possible repercussions for Italian BTP's.
• Currencies: Dollar still doesn't profit from risk-off due to trade uncertainty EUR/USD showed remarkable resilience yesterday even as uncertainty on trade weighed on global markets. Trade tensions probably will remain the key driver global FX trading today. For now the dollar doesn't profit. Markets apparently assume that (global) uncertainty might raise the chance of a Fed rate cut further out, potentially reducing USD interest support

The Sunrise Headlines

• US equity markets lost up to 0.50% after recovering of steeper intraday losses. Asian shares are trading mixed with China trying to recover from yesterday's steep decline. Japan underperforms after being closed for over a week.
• USTR Lighthizer confirmed the threat to move ahead with higher tariffs on Chinese goods by Friday. He accused China of “reneging on prior commitments”. Chinese VP Liu He is still expected in Washington this Thursday to continue talks
• Turkey's election board cancelled the result of Istanbul's mayoral election and ordered new municipal elections. Turkish President Erdogan had requested a rerun as his candidate lost narrowly. The Turkish lire lost over 2%.
• Ukraine's new president, Volodymyr Zelensky, opened the dialogue with the EU in an attempt to bolster his credibility by pledging to push through on anti-corruption and judicial reforms. He said EU support would be crucial.
• The US Federal Reserve raised concerns about high levels of lending by US business who are already highly indebted. However, the Fed didn't indicate any course of action to restrain the very high appetite for risk in US corporations
• The Reserve Bank of Australia held its cash rate at 1.5%, the record low since August 2016, despite expectations of a possible rate cut. The RBA states that the weaker Q1 consumer inflation wasn't enough to already cut interest rates.
• Today's economic calendar only contains secondary data in the US. German factory orders disappointed. The EU Commission releases its Economic Forecasts. The US taps the market with a 3-yr Note auction.

Currencies: Dollar Still Doesn't Profit From Risk-Off Due To Trade Uncertainty

USD doesn't attract major safe haven flows

EUR/USD trading was an era of relative calm yesterday. Asian/European equities were heavily sold after president Trump threatened to raise additional tariffs on Chinese imports. There were substantial losses in several smaller EM/less liquid currencies, but EUR/USD held a tight range close to, mostly slightly below 1.12. So, the dollar hardly profited from the risk-off. The US currency also lost interest rate support the euro and the yen. The risk-off eased in US trading, but that didn't help the dollar much. EUR/USD finished the day at 1.1199, almost unchanged from Friday. USD/JPY closed at 110.75 (from 111.10).

This morning, Asian equities recover a small part of yesterday's sell-off. Japan reopens with a substantial loss after the Golden week holidays. The yuan loses further ground as uncertainty on the trade talks/increase of tariffs persists. The RBA left its policy rate unchanged. Markets were balanced between a rate cut or an unchanged decision. Activity slowed, declining house prices are weighing on consumption and inflation eased, but a solid labour market prevented RBA to lower rates already. AUD/USD jumped back above the 0.70 handle (currently 0.7040 area).

Today, the eco calendar is thin. Markets will keep a look at the German factory orders and the European Commission Spring forecasts. Less negative EC forecasts might be a marginal euro positive. However, the US-China-trade turbulence will dominate global trading.

Yesterday and on Friday, the dollar failed to profit from solid US eco data and/or a context (risk-off) that is usually USD supportive. FX (and other) investors probably still see a decent chance of Fed rate cuts if the economic context deteriorates and/or if inflation were to stay low. This perception weighs on the dollar or at least demands perfect US data to support any further USD gains. We maintain the view that the EUR/USD 1.1110 support area won't be that easy to break.

UK markets were closed yesterday, but sterling reversed part of Friday's gain as press comments from both Conservative and labour officials suggested that some high hurdles still have to be conquered to reach a Brexit deal. EUR/GBP returned to the mid 0.85 area. Today, a new round of talks between both parties is scheduled for release. However, the result remains highly uncertain as are the chances for approval of a deal in Parliament. For now, we don't expect sterling to get additional support from investors anticipating a political agreement on Brexit.

EUR/USD: uncertainty on global trade doesn't help the dollar

Bitcoin is starting to receive a fresh round of buying demand in early Tuesday trade with the number one cryptocurrency breaking through the $5,800 resistance level. The $5,620 is now former key resistance turned key support if the BTCUSD pair moves below the $5,800 level. Overall, the BTCUSD pair is targeting the $6,000 level and possibly the $6,300 resistance level.

The BTCUSD pair is bullish while trading above the $5,620 level, key intraday resistance is found at the $6,000 and $6,300 levels.

If the BTCUSD pair trades under the $5,800 level, sellers may test towards the $5,620 and $5,480 support levels.

The euro is attempting to recover bullish momentum against the US dollar in early Tuesday trade after the pair stabilized above the 1.1190 support level. The EURUSD pair is likely to target the 1.1265 level, although the 1.1250 level still offers strong intraday technical resistance. The four-hour time frame is starting to show a potential head and shoulders pattern taking shape.

The EURUSD pair is only intraday bullish while trading above the 1.1190 level, key technical resistance is found at the 1.1250 and 1.1264 levels.

If the EURUSD pair moves below the 1.1190 level, key technical support is found at the 1.1164 and 1.1135 levels.

The British pound is trading above to the 1.3100 level against the US dollar in early Tuesday trade as the pair attempts to recover back towards the 1.3174 resistance level. The GBPUSD pair still has a bullish weekly trading bias while trading above the important 1.3064 level. Traders remain cautious about GBPUSD positioning, due to the much-anticipated release of the United Kingdom first-quarter GDP report later this week.

The GBPUSD pair is only intraday bearish while trading below the 1.3100 level, key support is found at the 1.3064 and 1.3000 levels.

If the GBPUSD pair trades above the 1.3100 level, key intraday resistance is found at the 1.3150 and 1.3174 levels.