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EURUSD is pushing hard to enter the 1.13 neighbourhood and pierce its 50-day simple moving average (SMA) after a bullish week. Technically, the risk seems to be skewed to the upside as the RSI is holding a positive slope above its 50 neutral mark and the MACD continues to distance itself above its red signal line. However, with the stochastics fluctuating near overbought territory, any gains could come limited.

Should the pair overcome the 23.6% Fibonacci of 1.1326 of the downleg from 1.1814 to 1.1175, the focus will shift straight up to the upper surface of the Ichimoku cloud, near 1.1370. Clearing the cloud, the bulls would aim for the 200-day SMA currently at 1.1440 but the 38.2% Fibonacci of 1.1420 could prove a hurdle as in previous sessions.

On the downside, support could immediately appear near 1.1268 which if broken could send the price down to the 1.1200-1.1175 restrictive zone. Beneath the latter, the sell-off could pick up speed towards 1.1060, a frequently tested level in 2016.

In medium-term picture, EURUSD is in a downtrend since early January and only a decisive close above the 200-day SMA could increase hopes for a bull market.

European equities look set to attempt to follow the trend from Asian markets on Monday morning by starting the week off in the green, as risk sentiment increases following a strong start to the latest US earnings season. JPMorgan and Wells Fargo setthe tone late last week with strong earnings reports, providing confidence to equity traders that corporate America is performing well amid robust economic conditions in the United States. Further encouraging readings during the remainder of the earnings season should feed into the broader risk sentiment narrative, and help improve investor confidence, as long as the releases do not reveal any negative surprises.

China showing further signs of stabilizing

Adding to the risk appetite seen in early trade this week are China's March external trade figures, which were released at the end of last week and helped ease some of the concern over a decline in the nation's economic momentum. China's exports for the month surprised to the upside, suggesting that global demand for trade remains intact and that the Chinese economy will find solid footing as a result.

China's Q1 GDP, as well as March's industrial production and retail sales data, are all due for release on Wednesday.These will be treated as tier-one economic releases from China and the data should offer further indication as to how the world's second largest economy is holding up. Note that the IMF recently revised China's forecasted growth higher, in contrast to the lower projections for global growth.

Should the “China-stabilizing” narrative gather momentum, complemented by evidence of stimulus measures feeding into China's economy in the months ahead, this should offer room for more gains in emerging market assets over the near-term.

Dollar steadies as markets await latest US data

The United States is also slated to announce its March industrial production and retail sales data this week, along with the latest Markit Purchasing Managers Index (PMI). Markets are expecting the US economy to showcase its resilience, especially for retail sales, which are hoping to rebound following February's slump.

However, any data announcement that undershoots market expectations will be seen as a threat that will weigh negatively on the Dollar Index.

Given the Federal Reserve's already dovish tone, further hints of a steeper slowdown in the US economy could hasten speculation of a Fed rate cutand may give Dollar bears reason to break the Greenback's recent resilience around the 97 mark.

• Rates: Q1 earnings, Chinese growth and EMU PMI's
  Chinese lending data kickstarted a significant profit taking move on core bond markets last Friday, temporary shelving economic doom thoughts. Q1 earnings season, Chinese growth data and EMU PMI's will prove whether or not this is warranted. Medium term technical pictures of the German/US 10-yr yield are about to turn more neutral.
• Currencies: Cautious sentiment turnaround to further support the euro?
  The euro showed remarkable resilience over the last few days. EUR/USD shifted further away from key support close at the 1.12 area, to regain the 1.13 barrier currently as global growth sentiment cautiously turned for the better. This week's event calendar might prove a litmus test for that sentiment turnaround.

The Sunrise Headlines

• US equity markets edged higher on Friday as Q1 earnings season kicked off well. The DJI (+1.03%) outperformed. Asian equities are largely trading with gains this morning with Japanese and Chinese indices outperforming.
• PM May's government continues talks with the Labour party, though there are little signs of progress. They seek to combine the benefits of a customs union, whilst holding the flexibility to pursue an independent trade policy.
• US President Trump criticized the Fed again, saying that both the stock market and GDP would be higher if it hadn't been for the central bank's tightening cycle. ECB chief Draghi said he is worried about central bank's independence.
• US Treasury Secretary Steven Mnuchin said that the talks with China are edging closer to an accord. He said that the US is open for an enforcement mechanism and added that the mechanism could work ‘in both directions'.
• The Swiss National Bank could further reduce its already ultra-low interest rates if necessary, according to SNP chief Thomas Jordan. He added that the country's tiering system, to soften negative rates for banks, is still appropriate.
• Finland's Social Democrats are close to win the Finnish general elections, though very narrowly. The leftist party is said to have 17.7% of the votes, more than the Finns Party (17.5%), an anti-immigration and Eurosceptic movement.
• Today's US eco calendar only contains the Empire Manufacturing gauge for April. The EMU calendar is empty. ECB's Villeroy and Fed's Evans speak. Q1 earnings season continues with Goldman Sachs and Citigroup

Currencies: Cautious Sentiment Turnaround To Further Support The Euro?

Sentiment turnaround to further support the euro?

The euro has been trading surprisingly resilient over the last few days. The common currency withstood a dovish ECB on Wednesday and was propelled by strong Chinese data on Friday. Global growth concerns eased further on the first and decent Q1 2019 (bank) earnings. EUR/USD did retreat from its intraday high at 1.323 on news that the EU had listed US imports worth €20 bn that it could hit with tariffs after president Trump's tariff threat earlier. The U. of Michigan consumer confidence (96.9) in the US missed estimates (98.2) slightly, but with little impact on trading. The couple closed just short of the 1.13 barrier, up from 1.1253. USD/JPY regained the 112-level for the first time since December.

Risk sentiment during Asian trading hours is constructive. Virtually all equity markets follow WS's upbeat Friday session. Sentiment might also have been boosted by Mnuchin's positive comments related to the US-Sino trade talks. EUR/USD is cautiously creeping higher in the low 1.13's. USD/JPY fell below, but is still trading close to, 112.

Today's event calendar is meagre. The NY Empire Manufacturing received a hit in March and is expected to recover from 3.7 to 8 in April. We side with consensus, but doubt whether today's data will have a major impact on trading, even in the case of a (limited) surprise. Q1 earnings are likely to set the tone for sentiment and trading the following days. China's Q1 GDP and EMU PMI's are this week's apex.

The euro drifted further away from the 1.1177/87 support last week and came close to a recovery of the 1.13 barrier despite a soft ECB. 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 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. It would require strong negative EMU news or surprisingly strong US data. In case of a break above 1.13, next high-profile EUR/USD resistance comes in at 1.1448.

Lack of data and relevant Brexit news resulted in a choppy, narrow trading day for EUR/GBP on Friday. EUR/GBP closed higher at 0.8641. Brexit has been postponed, but with a clear lack of solution(s) to resolve the current impasse. Domestic (political) uncertainty is expected to keep sterling at a (technical and headline driven) leash. We see little reasons to turn more positive on the Queen's money and assume the EUR/GBP 0.85 support area to be solid.

EUR/USD escapes the downward trend channel and regains the 1.13- level as growth sentiment turned for the better.

Daily Pivots: (S1) 1.3299; (P) 1.3344; (R1) 1.3375; More...

Intraday bias in USD/CAD remains neutral for consolidation below 1.3467. 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.

Daily Pivots: (S1) 0.7127; (P) 0.7160; (R1) 0.7204; More...

Intraday bias in AUD/USD remains mildly on the upside for the moment. Rebound from 0.7003 is in progress for 0.7206 resistance first. Break will likely resume larger rebound from 0.6722 through 0.7295 resistance. On the downside, though, break of 0.7115 minor support will turn intraday bias back to the downside for 0.7003/7052 support zone instead.

In the bigger picture, break of medium term channel resistance is the first sign of bullish reversal. But there is no confirmation yet. As long as 0.7393 resistance holds, larger fall from 0.8135 is still expected to resume later. Such decline 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.

Gold remains under pressure and the risk is still to the downside as prices continue to drift lower from the 23.6% Fibonacci retracement level of the upleg from 1160 to 1346.61 around 1302 and beneath the 20- and 40-simple moving averages (SMAs) in the daily timeframe. The short-term technical indicators are bearish and point to more weakness in the market. The RSI indicator is moving slightly lower in negative territory, while the stochastic oscillator entered the oversold zone.

The next target is the April 4 low at 1280 and marginally below that point lies the 38.2% Fibonacci of 1375. At this stage the market would likely see a resumption of the downtrend from the ten-month peak of 1346.61 and put in place a lower low at the 50.0% Fibonacci of 1253.

Upside moves are likely to find resistance at the 23.6% Fibonacci of 1302. There is an important resistance zone between this level and the 1310 barrier as it encapsulates the Ichimoku cloud. Rising above this area would help shift the focus to the upside towards 1324. Breaking this level could see a re-test of the 1346.61 high and turn the bias to bullish.

Concluding, the yellow metal seems to be bearish in the short-term picture as it failed to jump above 1324 and only a daily close above the ten-month peak could confirm the medium-term bullish structure again.

Daily Pivots: (S1) 1.1260; (P) 1.1292; (R1) 1.1331; More.....

Intraday bias in EUR/USD remains mildly on the upside. Current rebound from 1.1183 could extend 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) 1.3036; (P) 1.3085; (R1) 1.3120; More....

Intraday bias in GBP/USD remains neutral as consolidation from from 1.3381 is still extending. For now, 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.

Daily Pivots: (S1) 1.0004; (P) 1.0020; (R1) 1.0044; More...

Intraday bias in USD/CHF remains neutral at this point. 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.

General Trend:

• Financials lead early gains in Shanghai on better March bank lending data
• Chinese brokerage firm GF Securities rises over 5% in HK on guidance
• Shandong Chenming Paper drops over 6%, warned on Q1 profits amid lower prices
• Nikkei-weighted Softbank rises over 4%, continues to gain after Uber’s IPO filing
• Japan Display gains after agreeing to financial aid package from China/Taiwan investor group
• Japanese and Australian financials trade generally higher after US bank earnings, rise in bonds yields
• Australian equities lag on declines in Resource, Utility and Consumer Discretionary companies
• Commodities currencies outperform on better than expected China March banking lending and trade balance data
• The analyst debate on China’s monetary policy outlook has continued ahead of Wednesday’s Q1 China GDP release; China 10-yr bond futures hit Nov 2018 lows
• US may deemphasize the issue of Chinese state industrial subsidies in current trade talks amid lack of an agreement (financial press)
• US/Japan due to hold first round of trade talks on April 15-16th (Mon-Tues) in Washington D.C
• Reserve Bank of Australia (RBA) to release April policy meeting minutes on Tuesday (April 16th)
• Shanghai Auto Show is due to be held between April 18-25th
• The 125th China Import and Export Fair (Canton Fair) is due to open today (largest trade fair in China), first phase expected to be held April 15-19th

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened +0.1%
• (NZ) New Zealand Mar Performance of Services Index: 52.9 v 53.8 prior
• RIO.AU Approves additional $302M investment in Resolution copper project in Arizona; Has the potential to supply ~25% of US copper demand

Japan

• Nikkei 225 opened +1.2%
• 7269.JP To book ¥80B loss in FY18/19 due to recall of 2.0M cars in Japan - Nikkei
• 6752.JP Responds to Tesla CEO Musk comment that Panasonic is holding up production: Gigafactory is not running at full 35GWh capacity
• (JP) OECD: May be premature for Bank of Japan (BOJ) to focus on details of exit strategy; Govt measures will offset blow from 2019 sales tax hike and will have limited effect on demand
• (JP) Japan saw net immigration rise for a sixth straight year to a record high in the year through Oct 1st – Nikkei

Korea

• Kospi opened +0.4%
• (KR) Pres Trump: still have an "excellent" relationship with North Korea's Kim Jong Un, a third Summit would be good
• (KR) South Korea may not be excluded from US FX watch list in H1 -Korean press
• 005490.KR Will reorganize liquefied natural gas (LNG) operations as part of efforts to enhance business efficiency - Yonhap

China/Hong Kong

• Hang Seng opened +0.7%; Shanghai Composite opened +1.4%
• (CN) China PBoC Open Market Operation (OMO): Skips for 18th straight session: Net: CNY0 v CNY0 prior
• (CN) China PBoC sets yuan reference rate: 6.7112 v 6.7220 prior
• (US) Treasury Sec Mnuchin: US/China trade talks close to final round - US financial press
• (CN) US said to compromise on China state industrial subsidies to reach trade deal - Financial Press
• (CN) CHINA MAR AGGREGATE FINANCING (CNY): 2.86T V 1.85TE (Friday after the close)
• (CN) CHINA MAR NEW YUAN LOANS (CNY): 1.69T V 1.225TE (strongest since Feb 2017) (Friday after the close)
• (CN) CHINA MAR M2 MONEY SUPPLY Y/Y: 8.6% V 8.2%E (Friday after the close)
• (CN) China companies raising funds from new share issuance and IPOs rose in Q1 for the 1st time in 5 quarters; Q1 82 equity financing transactions totaling CNY74.7B, +80% q/q - Press

North America

• (US) President Trump: If the Fed had done its job properly, which it has not, the Stock Market would have been up 5000 to 10,000 additional points, and GDP would have been well over 4% instead of 3%...with almost no inflation. Quantitative tightening was a killer, should have done the exact opposite! – tweet
• ADS Enters agreement to sell Epsilon to Publicis for $4.4B (€3.9B) cash
• ADSW Expected to announce deal to be acquired by Waste Management for ~$2.9B including $5.0B in debt - financial press

Europe

• PUB.FR Reports Q1 Rev €2.1B v €2.1Be; organic sales -1.6%
• (UK) Apr Rightmove House Prices M/M: 1.1% v 0.4% prior; y/y: -0.1% v -0.8% prior
• (UK) Dep PM Lidington: Would like Govt and Labour to agree on binding mechanism for way ahead; customs union compromises still possible; Govt remains against second referendum – press
• (EU) ECB's Draghi: Worried about central bank independence in other countries, especially in US; does not think cases of interference are undermining global confidence
• (UK) Analysts concerned if UK Labour Party's Corbyn becomes Prime Minister, will restrict arms sales
• (IR) Iran protested by taking to the streets burning US flags for US decision naming the Islamic Revolutionary Guard a terrorist organization - financial press

Levels as of 01:20ET

• Hang Seng +0.6%; Shanghai Composite +1.2%; Kospi +0.4%; Nikkei225 +1.4%; ASX 200 -0.0%
• Equity Futures: S&P500 -0.0%; Nasdaq100 -0.1%, Dax +0.1%; FTSE100 -0.1%
• EUR 1.1300-1.1315; JPY 111.92-112.10; AUD 0.7164-0.7181; NZD 0.6762-0.6783
• Commodity Futures: Gold -0.3% at $1,291/oz; Crude Oil -0.5% at $63.57/brl; Copper -0.2% at $2.94/lb