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Daily Pivots: (S1) 1.1331; (P) 1.1343; (R1) 1.1364; More....

EUR/CHF's rise from 1.1162 is still in progress and intraday bias stays on the upside for 1.1384 resistance. Break will target 1.1444 key resistance next. On the downside, however, break of 1.1281 minor support will indicate completion of the rebound and turn bias back to the downside for 1.1162 low.

In the bigger picture, multiple rejection by 55 week EMA indicates medium term bearishness. Focus remains on 1.1154/98 support zone (2016 high and 61.8% retracement of 1.0629 to 1.2004 at 1.1154). Decisive break there will confirm resumption of whole down trend from 1.2004 and long term bearish reversal. EUR/CHF should then target 1.0629 support and below. This will now remain the favored case as long as 1.1444 resistance holds. However, decisive break of 1.1444 will indicate completion of fall from 1.2004 and turn medium term outlook bullish.

• Rates: Wait-and-see
  Friday's profit taking move on core bond markets didn't continue yesterday. Investors hold a wait-and-see approach ahead of key data later this week, including Chinese GDP, EMU PMI's and US retail sales. First non-financials publish Q1 results today and might set the tone for the rest of earnings season while affecting general risk sentiment.
• Currencies: EUR/USD settles cautiously above 1.13
  EUR/USD managed a close just above 1.13 yesterday but the situation is fragile. The turnaround in growth sentiment last week did not find full confirmation in yesterday's earnings and data. The earnings season will stay crucial for risk sentiment but we expect market moves to be rather muted ahead of important data later this week.

The Sunrise Headlines

• US equity markets closed yesterday's session close to unchanged, recovering from intraday losses. Asian equities are largely trading higher this morning with Chinese indices outperforming and Japanese bourses lagging behind.
• Chicago Fed president Charles Evans sees the federal fund rate unchanged into the fall of 2020 as inflation has been below the 2% target. Would core inflation move down to 1.5%, Evans said a rate cut could be needed.
• François Villeroy, ECB member and loudest critic of the ECB's negative interest-rate policy, said the benefit of the measure still outweighs the drawbacks. He added that if the measure has side effects, mitigation measures could be taken.
• The Reserve Bank of Australia has discussed interest-rate cuts in a review of policy scenarios, according to the April 2 board meeting minutes. The RBA concluded that there is “no strong case” for adjustments in the near term.
• Toshimitsu Motegi, Japan's Minister of Economy said he had constructive talks with his US Trade Rep. Lighthizer, but stressed that talks regarding currency rates should be held off for now and be discussed between finance ministers.
• Khalifa Haftar, Eastern Libyan and ex-general of dictator Gadaffi, tried to stage a coup by issuing an arrest warrant for Libyan PM Fayez al-Serraj. Haftar's troops advanced to Tripoli two weeks ago, but failed to take control of the capital city.
• Today's US eco calendar contains the NAHB Housing Market Index (Apr). The UK prints labour data (Feb), while the ZEW investor sentiment for the EMU and Germany will be released. Fed's Kaplan and ECB's Nowotny speak.

Currencies: EUR/USD Settles Cautiously Above 1.13

EUR/USD cautioiusly settles above 1.13

Dollar volatility was very limited at the start of week. The dollar initially stayed in the defensive. EUR/USD retested Friday's intraday high (around 1.1320) multiple times going into US dealings but the move lacked momentum. New (US) earnings and data (NY manufacturing index) were insufficient to sustain Friday's rally of optimism. Risky assets (equities) and oil lost modest ground, the dollar recouped some of the previous losses. EUR/USD eventually closed virtually unchanged and was able to hold on to the 1.13-barrier. USD/JPY managed a close above 112.

Asian markets are trading mostly in positive territory following a lacklustre US session. The Aussie dollar took a hit after minutes of the central bank revealed a rate cut would “likely be appropriate” if inflation does not increase and unemployment rises. AUD/USD slipped from to 0.715. EUR/USD hovers around 1.13. USD/JPY again fell just below 112.

In today's economic calendar we'll watch for the German ZEW investor sentiment to leave the sub zero area behind. Markets expect an uptick from -3.6 to 0.5. Risks are on the upside given the strong equity performance during the survey period. In the US the NAHB housing market index and March industrial data is worth watching. Investors will look for signs of (hard and soft) data to bottom out after a weaker series. We're also keeping an eye at the first set of high profile Q1 non-financial earnings. But market positioning might stay muted ahead of tomorrow's Chinese Q1 GDP (and EMU PMI's on Thursday).

In a broader perspective the euro drifts further away from the 1.1177/87 support, despite a soft ECB. EUR/USD even recaptured the 1.13 level although the situation is fragile. Global economic sentiment has turned for the better recently. Last week's price actions shows the euro is still net benefiter of such circumstances. We watch for Q1 earnings/guidance, Chinese GDP and EMU PMI's to confirm that turnaround. We maintain the view that a EUR/USD break lower ST isn't evident given the Fed's wait-and-see bias unless surprisingly weak/strong EMU/US data. In case of a sustained break above 1.13, next highprofile EUR/USD resistance comes in at 1.1448.

Sterling found itself in calm waters yesterday. Talks between May and Corbyn are ongoing but little news escapes the room. EUR/GBP edged lower to around 0.862 (down from 0.865) during a predominantly technical trading session. Brexit has been postponed but the impasse remains. We see little reasons to turn more positive on the pound and assume the EUR/GBP 0.85 support area to be solid.

EUR/USD holds on to the 1.13 level but the situation is fragile as markets look for confirmation of the sentiment turnaround.

Daily Pivots: (S1) 1.1293; (P) 1.1307; (R1) 1.1317; More.....

EUR/USD is losing some upside momentum as seen in 4 hour MACD. But with 1.1250 minor support intact, further rise is in favor to 1.1448 resistance and above. But in that case, we'd expect strong resistance between 1.1448/1569 to limit upside. On the downside, below 1.1250 minor support will turn bias to the downside. Decisive break of 1.1176 will resume the down trend from 1.2555.

In the bigger picture, EUR/USD has been losing downside momentum around 61.8% retracement of 1.0339 (2016 low) to 1.2555 (2018 high) at 1.1186. But for now, there is no clear sign of medium term reversal yet. Downside from 1.2555 is expected to resume sooner or later as long as 1.1569 structural resistance holds. Decisive break of 1.1186. could pave the way back to 1.0339 low.

Daily Pivots: (S1) 1.3074; (P) 1.3097; (R1) 1.3122; More....

Intraday bias in GBP/USD remains neutral as consolidation from 1.3381 is extending. Further rise is expected as long as 1.2960 support holds. On the upside, decisive break of 1.3381 resistance ill resume whole rise from 1.2391. Next target will be 61.8% retracement of 1.4376 to 1.2391 at 1.3618 next. However, on the downside, sustained break of 1.2960 will indicate that rebound from 1.2391 has completed earlier than expected. Deeper fall would then be seen to 1.2773 support for confirmation.

In the bigger picture, medium term decline from 1.4376 (2018 high) should have completed at 1.2391. Rise from 1.2391 is seen as the third leg of the corrective pattern from 1.1946 (2016 low). Further rise could be seen through 1.4376 in medium term. On the downside, though, break of 1.2773 support will dampen this view. Focus will be turned back to 1.2391 low and break will resume the fall from 1.4376 to 1.1946.

The Australian dollar weakened sharply against the USD after the Reserve Bank of Australia (RBA) released meeting minutes. The minutes showed that officials were considering a rate cut if inflation did not move higher and unemployment rose. In these circumstances, officials said that a rate cut from the current 1.50% would be necessary. Presently, the unemployment rate is at an eight-year low of 4.9% while inflation is slightly below the 2% target.

Sterling was relatively unmoved in overnight trading as traders waited for the employment numbers. The unemployment rate is expected to remain unchanged at 3.9%. It has been at this level since February this year. The average earnings (ex-bonus) is expected to remain unchanged at 3.4%. The claimant count change is expected to decline to 20K, from the previous month’s 27K. The UK has two main challenges. Firstly, a no-deal Brexit will not be in its interest according to research by various entities. Secondly, the continued delay on the Brexit issue will lead to faded optimism among investors.

The earning season will continue today in the United States. Companies like Bank of America, Blackrock, Johnson & Johnson, Omnicom, Wipro, and UnitedHealth will release its earnings before the markets open. Others like Netflix, United Continental, CSX, and Interactive Brokers will release their earnings after the market closes. These results will come after the disappointing results from Goldman Sachs, whose profit of $2.25 billion was 21% lower than the same period a year ago. Its trading profit slowed by 18% from a year ago.

EUR/USD

The EUR/USD pair moved up slightly to a high of 1.1300 ahead of the ZEW economic sentiment. This price is higher than yesterday’s low of 1.1292. On the hourly chart, the pair’s price is close to the middle line of the Bollinger Bands while the MACD has crossed the neutral line. The momentum indicator has remained relatively unchanged. The pair could move up to the previous high of 1.1325.

AUD/USD

The AUD/USD pair declined sharply after the RBA left open the likelihood of a rate cut. The pair reached a low of 0.7138, which was the lowest level since Friday last week. It is also close to the 61.8% Fibonacci Retracement level. The decline led the RSI to reach the oversold level of 30. The Demarker too has moved further below the oversold level. There is a likelihood that the pair will resume the upward trend because the bank’s plan to cut rates was already expected.

GBP/USD

The consolidation of the GBP/USD pair continued ahead of the jobs numbers. The pair is currently trading at 1.3088, which is along the 25-day and 50-day moving averages. The symmetrical triangle continued to form, with the apex being close. The price is also along the 50% Fibonacci Retracement level. Therefore, there is a likelihood that the pair’s price will breakout in either direction.

Daily Pivots: (S1) 1.0018; (P) 1.0033; (R1) 1.0056; More...

Intraday bias in USD/CHF remains neutral first. With 0.9977 minor support intact, further rise is in favor. Above 1.0046 will extend the rebound from 0.9879 and turn bias to the upside for 1.0124 resistance. However, as the structure of the rise is corrective looking, we'd expect strong resistance from 1.0124 to limit upside to bring another reversal. On the downside, below 0.9977 minor support will turn bias to the downside for 0.9879 support.

In the bigger picture, loss of upside momentum is seen is bearish divergence in daily MACD. But there is no clear sign of bearish reversal in USD/CHF yet. Rise fro 0.9186 is likely still in progress. Decisive break of 1.0128 resistance will resume this medium term rally to 1.0342 resistance next. This will remain the preferred case now, as long as 0.9716 support holds.

Daily Pivots: (S1) 111.91; (P) 112.01; (R1) 112.12; More...

With 4 hour MACD crossed below signal line, intraday bias in USD/JPY is turned neutral. Further rise is still mildly in favor with 111.69 minor support intact. Sustained break of 112.13 key resistance will resume whole rise from 104.69 for 100 % projection of 109.71 to 111.82 and 110.84 at 112.95 first. On the downside, below 111.69 minor support will turn bias to the downside for 110.84 support. Break will bring deeper fall back to 109.71 support.

In the bigger picture, medium term outlook in USD/JPY remains a bit mixed as it's staying inside falling channel from 118.65, but there are signs of bullish reversal. On the upside, break of 114.54 resistance will revive the case the corrective fall from 118.65 has completed with three waves down to 104.69. And whole rise from 98.97 (2016 low) is resuming for 118.65 and above. But before that, outlook stays neutral first.

Daily Pivots: (S1) 1.3299; (P) 1.3351; (R1) 1.3406; More...

USD/CAD rebounded strongly ahead of 1.3284 support but stays inside range below 1.3467 resistance. Intraday bias remains neutral for more consolidations first. Current development suggests that rise from 1.3068 is not finished, and further rise is in favor as long as 1.3250 support holds. On the upside, firm break of 1.3467 will confirm this case and target 1.3664 resistance next. However, decisive break of 1.3250 will turn bias back to the downside for 1.3068/3112 support zone instead.

In the bigger picture, USD/CAD is staying well inside medium term rising channel (support at 1.3212). Thus, even though upside momentum and structure are unconvincing, further rise is still in favor. Decisive break of 61.8% retracement of 1.4689 (2016 high) to 1.2061 at 1.3685 and 1.3793 will pave the way to retest 1.4689 (2015 high). However, firm break of the channel support should indicate bearish reversal, after rejection by 1.3793, and bring deeper fall to 1.3068 support for confirmation.

Litecoin is struggling to advance above the $80.00 on Tuesday, as the fifth largest cryptocurrency fails to attract fresh buying interest. The Ichimoku indicator on the daily time frame is currently showing that the $75.00 level is acting as major weekly support. If sellers manage to move the LTCUSD pair under the $75.00 level, a further decline towards the $65.00 level seems likely.

The LTCUSD pair is only bullish while trading above the $75.00 level, key resistance is found at the $100.00 and $120.00 levels.

If the LTCUSD pair trades below the $75.00 levels, key support is found at the $65.00 and $58.00 levels.

The British pound is consolidating below the 1.3100 level against the US dollar as traders await the release of key jobs and earnings data from the Uk economy. Better than expected economic data could lift the GBPUSD pair towards the 1.3125 level, with the 1.3200 level extended resistance. Worse than expected data could provoke a decline towards the 1.3055 level, with the 1.2980 extended support.

The GBPUSD pair is only bullish while trading above the 1.3100 level, key intraday resistance remains at the 1.3125 and 1.3200 levels.

If the GBPUSD pair trades under the 1.3100 level, key intraday support is found at the 1.3055 and 1.2980 levels.