Sample Category Title

Pivot (invalidation): 111.25

Our preference Long positions above 111.25 with targets at 111.70 & 111.90 in extension.

Alternative scenario Below 111.25 look for further downside with 111.00 & 110.80 as targets.

Comment The RSI calls for a new upleg.

Pivot (invalidation): 1.3025

Our preference Long positions above 1.3025 with targets at 1.3050 & 1.3080 in extension.

Alternative scenario Below 1.3025 look for further downside with 1.3010 & 1.2990 as targets.

Comment A support base at 1.3025 has formed and has allowed for a temporary stabilisation.

Pivot (invalidation): 1.1200

Our preference Long positions above 1.1200 with targets at 1.1230 & 1.1245 in extension.

Alternative scenario Below 1.1200 look for further downside with 1.1175 & 1.1165 as targets.

Comment The RSI has just landed on its neutrality area at 50% and is turning up.

Short Term Elliott Wave view in CADJPY calls the bounce to 84.37 on April 17, 2019 as wave 2. The pair is currently in wave 3 lower and the internal subdivides as an impulse Elliott Wave structure. Down from 84.37, wave (i) ended at 83.49, wave (ii) ended at 83.925, wave (iii) ended at 82.66, wave (iv) ended at 83.33, and wave (v) ended at 82.53. This 5 waves decline ended higher degree wave ((i)) of 3. Pair is currently in wave ((ii)) of 3 correction and the internal subdivides as a Flat Elliott Wave structure.

A Flat is an ABC structure with subdivision of 3-3-5. Up from 82.53, we can see wave (a) ended at 83.2 and subdivides in 3 waves. Wave (b) ended at 82.59, and wave (c) is in progress and subdivides in 5 waves. The blue box of 83.26 – 83.67 shows 100% – 161.8% fibonacci extension of wave (a)-(b). This is the area where wave ((ii)) can potentially complete. More importantly however, as far as the invalidation level of 84.37 stays intact, expect the bounce to fail and pair to extend lower.

1 Hour CADJPY Elliott Wave Chart Post Market Update

General Trend:

• Most of Asia (including China, Hong Kong, Japan) is closed for holiday, most of Europe is also closed
• European markets that are open today include the UK, Denmark and Netherlands
• Apple rises over 4% in after hours trading post earnings, supports Nasdaq Futures
• Australian financials rise as ANZ reported H1 profit growth
• Qantas names new CFO designate
• NZD and bond yields decline on weaker Q1 private wages and employment change
• Australian Manufacturing PMI surveys give conflicting signals in April
• Australia Corelogic House Price Index sees 19th consecutive m/m decline in April, but pace of decline slows
• AUD/NZD seen in focus for next week, RBA due to meet on May 7th (Tuesday) and RBNZ to meet on May 8th (Wed)
• US/China trade talks in focus: There is press speculation that the US may drop demands related to cyber theft in order to speed up trade deal (FT)
• South Korea exports drop for 5th straight month in April, pace of decline slows for chip shipments and exports to China
• Venezuela’s Maduro said a ‘small’ coup had been defeated; Crude Futures decline led by WTI
• US Fed decision expected later today
• On Thursday, China and Japan will be closed for holidays, both countries are also closed on Friday
• US companies expected to report earnings on Wed morning include ADP, Carlyle Group, Clorox, CVS, Estee Lauder, Garmin, Hilton Worldwide, Humana, Johnson Controls, KBR, L-3 Technology , Royal Caribbean, Scotts Miracle-Gro, Spirt Aerosystems, Molson Coors, Willis Towers Watson, YUM! Brands

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened +0.1%
• ANZ.AU Reports H1 (A$) Cash profit 3.56B v 3.49B y/y; Rev 9.8B v 9.9B y/y
• GMA.AU Reports Q1 (A$) Net 47.8M v 8.4M y/y, Net premiums earned A$72.9M v A$67.4M y/y; Considering up to 100M share buyback over 1-year period; CEO Georgette Nicholas to retire
• (AU) Australia Apr AIG performance of Manufacturing Index: 54.8 v 51.0 prior (highest since Oct 2018)
• (NZ) Odds of RBNZ rate cut rise after weaker than expected Q1 employment change and private wages data: Markets are now pricing in a 56% chance of rate cut at May 8th meeting v 40% prior - US financial press
• (NZ) New Zealand Debt Management Office (DMO): Proposes new framework to access bond auctions; overall aim relates to support of secondary market liquidity
• (AU) Australia Apr CoreLogic House Price Index M/M: -0.5% v -0.7% prior (19th consecutive decline)

Japan

• Nikkei 225 closed all week for holiday
• (JP) Japan new emperor Naruhito ascends throne: Pledges to carry out duties in accord with constitution

Korea

• Kospi closed for holiday
• (KR) South Korea Apr Trade Balance $4.1B v $3.7Be; Exports Y/Y: -2.0% v -5.9%e; Imports Y/Y: +2.4% v -1.0%e; Q1 semiconductor export volume -12% y/y
• (KR) North Korean First Vice Foreign Minister Choe Son-hui: There could be "unwanted consequences" if Washington does not shift its policy on the North's denuclearization within this year
• (KR) Bank of Korea (BOK) Gov Lee: expect economy to improve in Q2 2019 - Local Press

China/Hong Kong

• Hang Seng and Shanghai Composite closed for holiday
• (CN) China said to seek to stabilize employment; to spend CNY100B to increase jobs - financial press
• (US) White House drops cyber theft demands in effort to accelerate trade deal with China – FT
• (CN) US Treasury Sec Mnuchin: Confirms meeting with China Vice Premier Liu He on Tuesday night, had 'nice' working dinner
• (US) White House Chief of Staff Mulvaney: reiterates US won't make an agreement with China unless it's a great deal; These talks can't go on forever
• (HK) Macau Apr Gaming Rev (MOP) 23.6B v 23.8Be v 25.8B prior; Y/Y: -8.3% v -7.6%e

North America

• (US) Weekly API Oil Inventories: Crude: +6.8M v -3.1M prior
• AAPL Reports Q2 $2.46 v $2.37e, Rev $58B v $57.6Be; Approves added $75B share buyback (8% market cap) and raises Quarterly dividend 5.5% to $0.77 from $0.73 (indicated yield 1.53%)
• Wynn [WYNN]: Massachusetts Gaming Commission to impose $35M fine on the company, will be allowed to retain gambling license
• Nabriva Therapeutics [NBRV]: Receives Complete Response Letter from FDA on NDA for Intravenous CONTEPO (fosfomycin) for injection: CRL requests Nabriva address issues related to facility inspections and manufacturing deficiencies at one of Nabriva’s contract manufacturers prior to the FDA approving the NDA
• McGraw-Hill speculated to plan all-stock merger with Cengage, combined company could be worth ~$5.0B (US financial press)
• (VE) Venezuela President Maduro appears on TV with defense Min Padrino and Socialist Party VP Cabello: Armed forces defeated a small coup, coup plans come from US and Colombia
• (US) Pres Trump: Our Federal Reserve has incessantly lifted interest rates, even though inflation is very low, and instituted a very big dose of quantitative tightening
• (US) Special Counsel Mueller reportedly said that AG Barr's summary of his report did not fully capture the context, nature and substance of investigation - press
• (US) US Senators including Grassley (Senate Finance Committee Chair) said to plan to meet on Thursday to discuss trade - US financial press

Europe

• (UK) Apr BRC Shop Price Index: Y/Y 0.4% v 0.9% prior (first decline in 6 months)
• (CN) Former UK PM David Cameron said to miss target for planned $1.0B Chinaa related fund, notes tepid interest among potential investors and Brexit-related uncertainty - FT

Levels as of 1:20 ET

• Nikkei 225, closed, ASX 200 +0.8%, Hang Seng closed; Shanghai Composite closed; Kospi closed
• Equity Futures: S&P500 +0.4%; Nasdaq100 +0.7%, Dax closed; FTSE100 +0.4%
• EUR 1.1223-1.1211 ; JPY 111.50-111.32 ; AUD 0.7057-0.7034 ;NZD 0.6683-0.6627
• Gold -0.3% at $1,281/oz; Crude Oil -0.9% at $63.30/brl; Copper +0.1% at $2.910/lb

Market movers today

Today's main event is the FOMC meeting tonight; however, the Fed has stated that it is on hold, so we expect it to keep the target range unchanged at 2.25-2.50%.

Moreover, we get the ISM manufacturing in the US and UK. We still expect US manufacturing to have peaked and to move slightly lower before stabilising (still above 50). Based on a weighted average of the regional PMIs, we expect numbers to come in at 55.0 (currently 55.3).

It is a TARGET holiday in Europe today, which means European fixed income markets are closed.

Selected market news

The price of Brent crude rose briefly above USD73/bbl on the news of a military coup attempt in Venezuela led by opposition leader Guaido and backed by the US. Later, API was said to report that US crude stocks rose 6.8mb last week, which helped reverse sentiment in the oil market. The oil market is clearly concerned about the ramifications for Venezuela's oil production and exports of a further deterioration of the situation. Venezuela is currently producing 800-900k/b - down about 50% from a year ago.

South Korea's exports dropped 2% y/y in April, which is less than the 8.2% y/y drop seen in March and also less than the consensus expectation of a 5.9% y/y decline. In the bigger picture, this development gives some rise to the notion that Chinese economic activity is slowly picking up further supporting Chinese external demand.

Euro area Q1 GDP growth rose to 0.4% from 0.2% in Q4. Recent improvement in industrial production data has already signalled a pick-up compared to the gloomy H2 18 growth momentum in contrast to PMIs, although the overall growth pace remains below potential.

German HICP was 2.1% in April. The so-called 'Easter effect' took service price inflation from 1.2% in March to 2.1% in April. The strong German inflation outcome supports our call for a marked pick-up in euro area core and headline inflation on Friday (1.2% and 1.8%, respectively).

The effective Fed funds rate rose to 2.45% on Monday (reported yesterday), which now leaves it only 5bp below the upper bound in the Fed's 2.25%-2.50% target range. We do not expect the Fed to make a 5bp 'adjustment cut' of its interest on excess reserves (IOER) at the meeting tonight, but the Fed will likely discuss what to do at upcoming meetings if the upward pressure on Fed funds does not ease over the coming months.

For the 24 hours to 23:00 GMT, the EUR rose 0.27% against the USD and closed at 1.1214, amid upbeat economic data.

On the data front, the Euro-zone's seasonally adjusted flash gross domestic product (GDP) climbed 0.4% on a monthly annual basis in 1Q 2019, surpassing market consensus for a rise of 0.3%. In the prior quarter, the GDP had recorded a revised gain of 0.2%. Moreover, the region's unemployment rate unexpectedly fell to a rate of 7.7% in March, declining to its lowest level since September 2008 and compared to 7.8% in the prior month. Market participants had anticipated the unemployment rate to remain unchanged.

Separately, in Germany, the preliminary consumer price index advanced 2.0% on a yearly basis in April, following a rise of 1.3% in the previous month. Market participants had envisaged the CPI to register a climb of 1.5%. Moreover, the nation's seasonally adjusted unemployment rate remained unchanged at 4.9% in April, at par with market expectations. Also, the Gfk consumer confidence index remained steady at a level of 10.4 in May, defying market expectations for a fall to a level of 10.3.

In the US, data showed that the Chicago Fed purchasing managers' index dropped to a level of 52.6 in April, compared to a reading of 58.7 in the previous month. Markets had expected the index to record a fall to a level of 58.5. Additionally, the nation's pending home sales declined for the 15th straight month by 3.2% on an annual basis in March, following a decrease of 5.0% in the preceding month.

On the other hand, the US CB consumer confidence index rose to a level of 129.2 in April, surpassing market consensus for a gain to a level of 126.8. In the prior month, the index had recorded a revised level of 124.1.

In the Asian session, at GMT0300, the pair is trading at 1.1217, with the EUR trading slightly higher against the USD from yesterday's close.

The pair is expected to find support at 1.1186, and a fall through could take it to the next support level of 1.1154. The pair is expected to find its first resistance at 1.1239, and a rise through could take it to the next resistance level of 1.1260.

Amid no major releases in the Euro-zone today, traders would keep an eye on the US Federal Reserve's interest rate decision along with the US ADP employment change, the Markit manufacturing PMI and the ISM manufacturing index, all for April as well as the US construction spending data for March, set to release later in the day

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the GBP rose 0.80% against the USD and closed at 1.3035.

In the Asian session, at GMT0300, the pair is trading at 1.3042, with the GBP trading 0.05% higher against the USD from yesterday's close.

Overnight data indicated that UK's BRC shop price index rose 0.4% on a yearly basis in April, following a rise of 0.9% in the previous month.

The pair is expected to find support at 1.2966, and a fall through could take it to the next support level of 1.2891. The pair is expected to find its first resistance at 1.3083, and a rise through could take it to the next resistance level of 1.3125.

Moving ahead, traders would await UK's Nationwide house price index and the Markit manufacturing PMI, both for April, along with net consumer credit and mortgage approvals, both for March, scheduled to release in a few hours

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.21% against the JPY and closed at 111.45.

In the Asian session, at GMT0300, the pair is trading at 111.46, with the USD trading marginally higher against the JPY from yesterday’s close.

The pair is expected to find support at 111.26, and a fall through could take it to the next support level of 111.07. The pair is expected to find its first resistance at 111.63, and a rise through could take it to the next resistance level of 111.81.

With no macroeconomic releases in Japan today, traders would closely monitor global macroeconomic releases for further direction.

The currency pair is trading between its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD slightly declined against the CHF and closed at 1.0192.

Data indicated that Switzerland’s KOF leading indicator eased to a level of 96.2 in April, following a reading of 97.4 in the prior month. Market participants had envisaged the indicator to record a reading of 97.0.

In the Asian session, at GMT0300, the pair is trading at 1.0192, with the USD trading flat against the CHF from yesterday’s close.

The pair is expected to find support at 1.0176, and a fall through could take it to the next support level of 1.016. The pair is expected to find its first resistance at 1.0206, and a rise through could take it to the next resistance level of 1.0220.

In absence of macroeconomic releases in Switzerland today, investors would focus on global macroeconomic releases for further cues.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.