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Daily Pivots: (S1) 145.15; (P) 145.42; (R1) 145.67; More...

With 143.72 support intact, near term outlook in GBP/JPY remains cautiously bullish. That is, rise from 131.51 is in favor to extend. On the upside, break of 147.19 resistance will target 148.98/149.48 resistance zone first. However, on the downside, decisive break of 143.72 will indicate near term reversal, after rejection by 149.48 key resistance. In that case, intraday bias will be turned to the downside for 141.00 support first.

In the bigger picture, focus is staying on 149.98 key resistance. Decisive break there should confirm that medium term fall from 156.59 (2018 high) has completed at 131.51 already. Rise from 131.51 is then seen as the third leg of the corrective pattern from 122.36 (2016 low). GBP/JPY should then target 156.59 and above. However, rejection by 149.98 will retain medium term bearishness and could extend the fall from 156.59 through 131.51 to 122.36.

Daily Pivots: (S1) 124.56; (P) 124.89; (R1) 125.09; More....

Intraday bias in EUR/JPY remains neutral and outlook is unchanged. Corrective rise from 124.09 is expected to be limited by 125.29 resistance to bring another decline. Fall from 126.79 is seen as the third leg of the corrective pattern from 127.50. On the downside, break of 124.09 will target 123.65 support and below. However, sustained break of 125.28 will turn focus back to 126.79 resistance instead.

In the bigger picture, there is no confirmation of completion of the down trend from 137.49 (2018 high) yet. In case of an extension, break of 118.62 will target 109.03/114.84 long term support zone. However, break of 127.50 will solidify the case of medium term bullish reversal. Further decisive break medium term channel resistance will affirm reversal and target 133.12 key resistance and above.

Daily Pivots: (S1) 0.8578; (P) 0.8616; (R1) 0.8641; More...

EUR/GBP is staying in consolidation from 0.8472 and intraday bias remains neutral. In case of another rise, upside should be limited by 0.8722 resistance. On the downside, firm break of 0.8472 will resume larger down trend for 0.8416 long term projection next. On the upside, though, sustained break of 0.8722 will suggest near term reversal and bring stronger rise back to 0.8840 resistance and above.

In the bigger picture, EUR/GBP is seen as staying in long term range pattern started at 0.9304 (2016 high). Current fall from 0.9305 (2017 high) is a falling leg inside the pattern. Such decline could extend to 100% projection of 0.9305 to 0.8620 from 0.9101 at 0.8416 and possibly below. But for now, we'd expect strong support around 0.8312 support to contain downside and bring rebound.

Daily Pivots: (S1) 1.5905; (P) 1.5949; (R1) 1.6004; More...

Intraday bias in EUR/AUD remains on the upside for 1.6122 resistance. We're still slightly favoring the bullish case that correction from 1.6765 has completed with three waves down to 1.5683. Decisive break of 1.6122 will confirm this bullish case and bring retest of 1.6765 high next. Near term outlook will now remain cautiously bullish as long as 1.5806 support holds, in case of retreat.

In the bigger picture, as long as 1.5346 support holds, outlook will still remain bullish. Uptrend 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) 1.1377; (P) 1.1408; (R1) 1.1427; More...

EUR/CHF is staying in consolidation from 1.1476 and intraday bias remains neutral first. On the upside, sustained break of 38.2% retracement of 1.2004 to 1.1162 at 1.1484 will confirm completion of corrective fall from 1.2004. Further rally should then be seen to 61.8% retracement at 1.1682 and above. On the downside, sustained break of 55 day EMA (now at 1.1335) will pave the way back to 1.1162 low.

In the bigger picture, at this point, we're slight 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. And, firm break of 1.1154 is needed to confirm down trend resumption. Otherwise, medium term outlook will be neutral at worst.

Daily Pivots: (S1) 1.3385; (P) 1.3423; (R1) 1.3476; More...

USD/CAD's pull back from 1.3521 was contained at 1.3376 and recovered. Break of 1.3439 minor resistance turns intraday bias back to the upside for 1.3521 resistance. Break will resume the whole rise from 1.3068 to retest 1.3664 high. On the downside, below 1.3376 will turn bias to the downside for 1.3274 support. Break will indicate that choppy rebound from 1.3068 has completed at 1.3521. Near term outlook will be turned bearish for retesting 1.3068 support.

In the bigger picture, USD/CAD is staying well inside medium term rising channel (support at 1.3255). Thus, the up trend from 1.2061 (2017 low) should be in progress. On the upside, decisive break of 61.8% retracement of 1.4689 (2016 high) to 1.2061 at 1.3685 will pave the way to 78.6% retracement at 1.4127 next. This will remain the favored case as long as 1.3068 support holds. However, sustained break the channel support will be the first sign of medium term reversal. Firm break of 1.3068 would confirm.

Daily Pivots: (S1) 0.6995; (P) 0.7028; (R1) 0.7049; More...

Intraday bias in AUD/USD remains neutral as consolidation from 0.6988 is in progress. In case of another rise, upside should be limited by 0.7081 minor resistance to bring fall resumption. On the downside, break of 0.6988 will extend the fall from 0.7295 to 100% projection of 0.7295 to 0.7003 from 0.7205 at 0.6913. Decisive break there will indicate further downside acceleration. However, sustained break of 0.7081 will dampen this bearish case and turn focus back to 0.7205 resistance instead.

In the bigger picture, with 0.7393 key resistance intact, medium term outlook remains bearish. The decline from 0.8135 (2018 high) is seen as resuming long term down trend from 1.1079 (2011 high). Decisive break of 0.6826 (2016 low) will confirm this bearish view and resume the down trend to 0.6008 (2008 low). However, firm break of 0.7393 will argue that fall from 0.8135 has completed. And corrective pattern from 0.6826 has started the third leg, targeting 0.8135 again.

• Rates: Fed cuts IOER; soft inflation transient?
  A disappointing US manufacturing ISM and a 5 bps IOER cut by the Fed were offset by Fed Chair Powell’s suggestion that soft inflation was transient. US Treasuries eventually closed a tad softer. Today’s session is probably less interesting, bridging yesterday’s Fed with tomorrow’s payrolls and non-manufacturing ISM. The US S&P 500 shows a bearish engulfing pattern.
• Currencies: Fed Powell blocks further decline of the dollar, for now.
  The dollar traded in the defensive in the run-up to the yesterday’s Fed policy decision, but rebounded as Fed’s Powell signaled that there is currently no case for a rate cut. The dollar rebounded during the press conference. Still the US currency remains vulnerable as soft US price and/or activity data might easily revive calls for a Fed rate cut.

The Sunrise Headlines

• US equities lost ground (-0.75%) yesterday after setting fresh record highs earlier in the trading day. Asian shares are trading mixed with mainland Chinese and Japanese bourses closed.
• The US Fed left its policy rate unchanged at 2.25%-2.50%. Fed chief Powell added that he sees no immediate need to move interest rates either higher or lower. The Fed expects inflation to rebound and the economy to stay healthy.
• The US and China concluded productive trade talks in Beijing yesterday, with some sources expecting a deal by the end of next week, incl. the removal of some of the US import tariffs. Negotiations continue in Washington next week.
• UK PM May and Labour leader Corbyn have both signalled to edge closer to a Brexit deal. May said she could move on one of her key red lines and allow the UK to maintain a joint customs regime with the EU, a key Labour demand.
• US April ISM Manufacturing fell to 52.8 from 55.3 in March (vs. 55 consensus), with new orders and employment dragging sentiment down. ADP employment change beat expectations in April with a 275k growth, up from 129k in March.
• Bank of Canada chief Poloz said he still foresees a need for policy interest rates to rise, once factors that are currently slowing the economic expansion will vanish. He does thinks accommodative rates are needed for now.
• Today’s economic calendar contains this week’s jobless claims in the US. The Bank of England holds its April policy meeting. Norway and Sweden print April Manufacturing PMI’s. ECB chief economist Praet speaks

Currencies: Fed Powell Blocks Further Decline Of The Dollar, For Now.

Powell blocks further USD loss, at least for now.

The dollar traded soft in the run-up to the Fed decision yesterday. The ADP job report was strong but the US manufacturing ISM signalled a sharp slowdown in the sector, weighing on the dollar. The USD dropped (temporarily) further as the Fed acknowledged recent decline in both headline and core inflation. However, US yields and the USD rebounded as Fed’s Powell later indicated that this decline was seen as transitory. The FOMC agreed that there was no case for a rate move in either direction. EUR/USD dropped from the 1.1265 area to close at 1.1196. USD/JPY also reversed an initial decline to finish the session at 111.38.

Asian equity markets are trading mixed to slightly higher, but key Japan and mainland China markets are closed. The dollar shows no clear trend (DXY near 97.60; USD/JPY near 111.55). EUR/USD tries to regain the 1.12 handle. Risky assets are slightly supported by headlines (CNBC) that the US and China are close to a trade deal.

Later today, the final EMU manufacturing PMI’s are expected to confirm a sluggish momentum in the sector. In the US, the jobless claims, productivity and labour cost data and the final March order data will be published. However, USD traders will look forward to tomorrow’s US payrolls. Headlines on trade and/or Brexit remain wildcards.

Earlier this week, the euro was supported by better than expected EMU data while the dollar traded in the defensive ahead of the Fed meeting. Fed’s Powell didn’t give in to calls for a (precautionary) rate cut. This might prevent further USD selling for now. That said, calls for a Fed rate cut will easily resurface if US activity and/or price data would soften further. We retain the working hypothesis that sustained USD gains from current levels won’t be easy. A break of EUR/USD below the 1.1110 support area might be difficult.

Yesterday, sterling gained some ground on rumours that the conservatives and labour were coming closer to a Brexit deal. EUR/GBP dropped below the 0.86 level. Today, the focus for sterling trading will be on local elections in the UK. The BoE will also announce its policy decision and publish an inflation report. The BoE will probably continue to support the idea of a limited tightening longer term, but stay on hold as long as uncertainty on (the consequences of) Brexit persists. The day-to-day momentum is GBP-constructive, but we don’t preposition for a big leap higher.

EUR/USD: Fed Powell blocks further USD decline, but US currency probably remains vulnerable to soft US data.

Daily Pivots: (S1) 1.1166; (P) 1.1216; (R1) 1.1244; More.....

EUR/USD's rebound from 1.1111 was held at 1.1264 and dropped sharply. Intraday bias remains neutral first and outlook is unchanged. Price actions from 1.1111 are seen a corrective move. In case of another rise, upside should be limited well below 1.1324 resistance to bring fall resumption. On the downside, below 1.1175 minor support will turn bias to the downside for 1.1111 first. Break there will resume larger down trend from 1.2555. However, firm break of 1.1324 resistance will be an early indication of larger bullish reversal and turn focus to 1.1448 resistance.

In the bigger picture, down trend from 1.2555 (2018 high) has just resumed. Current fall should now target 78.6% retracement of 1.0339 (2016 low) to 1.2555 (2018 high) at 1.0813. Sustained break there will pave the way to retest 1.0339. On the downside, break of 1.1448 resistance is needed to be the first sign of medium term bottoming. Otherwise, outlook will stay bearish in case of rebound.

Daily Pivots: (S1) 1.3018; (P) 1.3060; (R1) 1.3093; More....

Intraday bias in GBP/USD remains on the upside as rebound from 1.2865 should extend higher. Current development suggests that corrective pull back from 1.3381 has completed at 1.2865. Also, with 1.2773 key support intact, near term bullishness is retained. Further rise should be seen back to retest 1.3381 first. Break will resume whole rebound from 1.2391. On the downside, though, break of 1.2865 will target 1.2773 key support.

In the bigger picture, medium term decline from 1.4376 (2018 high) halted after hitting 1.2391. The structure of the rebound from 1.2391 suggests that it's a corrective move. In case of another rise, strong resistance could be seen around 61.8% retracement of 1.4376 to 1.2391 at 1.3618 to limit upside. On the downside, break of 1.2773 support will suggests that such corrective rise is completed and bring retest of 1.2391 low first.