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Daily Pivots: (S1) 144.55; (P) 145.30; (R1) 145.83; More...

Intraday bias in GBP/JPY remains neutral as consolidation from 148.87 is extending. On the downside, sustained 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. On the upside, decisive break of 149.48 key resistance will carry larger bullish implication and target 156.58 resistance next.

In the bigger picture, focus is now 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.

AUDUSD is paring the limited losses that posted on Tuesday, but the technical indicators suggest a continuation of the recent neutral situation in the short-term. The MACD oscillator entered the positive territory, surpassing the trigger line, however, it is still moving with weak momentum. Furthermore, the RSI indicator is pointing marginally up near the neutral threshold of 50. Both are suggesting that significant gains are less likely to occur. It is worth mentioning that the price is still developing within the Ichimoku cloud which continues to have a sideways move.

Further upside movement may initially find strong resistance at the 0.7170 barrier, which has been a congested area over the last two months, before heading even higher until the 0.7200 psychological level. Breaking this line, the focus will shift straight to the 38.2% Fibonacci retracement level of the downleg from 0.8135 to 0.6745, around 0.7275.

On the flipside, in case of an ease below the bullish cross of the 20- and 40-simple moving averages, the price could stop at the 23.6% Fibonacci of 0.7070. Should the pair resume negative momentum, the base created by the lower boundary of the Ichimoku cloud at 0.7020 and the 0.7000 handle could attract traders’ attention.

In brief, AUDUSD is holding a neutral bias in the near-term, while in the medium-term picture, the pair is in a sideways move within the 0.7390 – 0.7000 area. A drop below 0.7000 could confirm the bearish structure again.

Short Term Elliott Wave view on Nikkei Futures suggests the pullback to 20704 ended wave (2). The Index then resumed higher in wave (3) which ended at 21985. The internal of wave (3) subdivided as an impulse Elliott Wave structure. Up from 20704, wave 1 ended at 21415, wave 2 ended at 20985, wave 3 ended at 21765, wave 4 ended at 21490, and wave 5 of (3) ended at 21985. We can also see the internal of wave 1, 3, and 5 all subdivide as an impulse (5 waves) of lesser degree. This is an illustration of fractal within Elliott Wave where each wave consists of smaller waves and the pattern repeats indefinitely.

Wave (4) dips appears complete after a 3 waves pullback ended at 21427 – 21583 blue box area. The internal of wave (4) unfolded as a zigzag Elliott Wave structure where wave A ended at 21735, wave B ended at 21835, and wave C ended at 21565. At this stage, Nikkei still needs to break above wave (3) at 21985 to avoid a double correction in wave (4). While dips continue to stay above wave (2) low at 20704, expect Index to extend higher in wave (5).

1 Hour Nikkei (NKD_F) Elliott Wave Chart Asia Update

Market movers today

It's a busy day today with lots of data and events. The ECB kicks of the action with its meeting and press conference at 14.30 CEST. We expect Draghi to repeat his 'delayed, not derailed' inflation message, therefore no new policy signals from the ECB. However, we expect Draghi to strike an overall cautious tone and the ECB to keep its downside risks assessment on growth, see ECB Preview - No new policy actions expected as 'inflation is delayed, not derailed ', 5 April 2019. We expect questions on a tiering system and Draghi may reflect on the recent ECB lending survey (see below).

US inflation data is also set for release at 14.30 CEST. We agree with the consensus that we will see an unchanged core inflation rate of 2.1% y/y.

Tonight at 18:00 CEST, the EU leaders are set to meet to discuss and decide on whether to grant the UK another Brexit extension and, in that case, for how long. Yesterday, EU Council President Donald Tusk sent the EU leaders a letter suggesting a flexible approach by extending the deadline for one year with the possibility of the UK leaving earlier if the Brexit deal passes the House of Commons. While Tusk's letter is positive, we note he is considered one of the more "soft" Brexiteers and some EU leaders including French President Macron are more sceptical. A long extension is also our base case (75%) but we cannot rule out neither a short extension nor a no deal Brexit (both 10%), see Brexit Monitor: Long extension despite Brexit fatigue , 8 April.

The FOMC minutes from the March meeting are due for release at 20.00 CEST. It was the meeting of the big dovish turn, but we doubt the minutes will add much more colour to the shift in the Fed's message as we have had a wide range of Fed speeches explaining the move.

In Norway, it's time for inflation for March and we get the inflation expectations survey from Sweden. The Riksbank's Ohlsson also speaks, see page 2 for more details.

Selected market news

The risk market took a breather yesterday as equities were lower and bond yields declined. The decline in sentiment also put a halt to the rise in the oil price seen lately. Asian markets are also lower but mostly catching up with the decline in the US and Europe.

Markets faced some headwinds from a new downbeat IMF outlook , as global growth for 2019 was revised lower by 0.2 percentage points to 3.3% for 2019. However, the IMF expects a recovery in H2 19, paving the way for global growth of 3.6% in 2020. The news of US tariffs on USD11bn of EU goods, on Monday night, also weighed on risk sentiment.

The ECB lending survey released yesterday showed that credit standards were broadly unchanged for enterprises but tighter for housing loans ( link to survey ). The most interesting part was that while a clear majority of banks said negative rates weighed on profitability, a small majority also said it had a positive impact on their lending volumes. It will be interesting to see how the survey affects the ECB's message on tiering today.

For the 24 hours to 23:00 GMT, the EUR rose 0.08% against the USD and closed at 1.1266.

The US dollar declined against the euro, amid concerns over US-EU trade tensions, after President Donald Trump stated that he would impose tariffs on EU products.

In the US, data showed that the US NFIB small business optimism index climbed to a level of 101.8 in March, compared to a level of 101.7 in the previous month. Meanwhile, the nation's JOLTs job openings declined to a 11-month low level of 7087.0K in February, compared to a revised level of 7625.0K in the prior month. Markets had expected JOLTs job openings to drop to a level of 7550.0K.

In the Asian session, at GMT0300, the pair is trading at 1.1259, with the EUR trading 0.06% lower against the USD from yesterday's close.

The pair is expected to find support at 1.1249, and a fall through could take it to the next support level of 1.1238. The pair is expected to find its first resistance at 1.1277, and a rise through could take it to the next resistance level of 1.1294.

Moving ahead, traders would await the European Central Bank's (ECB) interest rate decision, set to release later in the day. Later in the day, the US consumer price index and average weekly earnings, both for March along with the MBA mortgage applications will keep traders on their toes. Also, the Federal Reserve's March meeting minutes, will garner significant amount of investor attention.

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

For the 24 hours to 23:00 GMT, the GBP marginally declined against the USD and closed at 1.3056, after the IMF cut UK’s growth forecast to 1.2% this year and warned that a no-deal Brexit would push the economy into a two-year recession.

In the Asian session, at GMT0300, the pair is trading at 1.3052, with the GBP trading slightly lower against the USD from yesterday’s close.

The pair is expected to find support at 1.3015, and a fall through could take it to the next support level of 1.2977. The pair is expected to find its first resistance at 1.3106, and a rise through could take it to the next resistance level of 1.3159.

Looking forward, investors would closely monitor UK’s gross domestic product, trade balance data, industrial production and manufacturing production, all for February, scheduled to release in a few hours.

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

For the 24 hours to 23:00 GMT, the USD declined 0.30% against the JPY and closed at 111.15.

In the Asian session, at GMT0300, the pair is trading at 111.18, with the USD trading slightly higher against the JPY from yesterday's close.

Overnight data showed that Japan's machinery orders climbed 1.8% on a monthly basis in February, rising for the first time in four months and compared to a fall of 5.4% in the preceding month. Market participants had envisaged machinery orders to record a gain of 2.8%.

The pair is expected to find support at 110.98, and a fall through could take it to the next support level of 110.77. The pair is expected to find its first resistance at 111.39, and a rise through could take it to the next resistance level of 111.59.

Trading trend in the Japanese Yen today, is expected to be determined by Japan's machine tool orders for March, set to release in a while.

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

For the 24 hours to 23:00 GMT, the USD rose 0.06% against the CHF and closed at 0.9997.

In economic news, Switzerland's seasonally adjusted unemployment rate remained unchanged at 2.4% in March, at par with market expectations.

In the Asian session, at GMT0300, the pair is trading at 1.0004, with the USD trading 0.07% higher against the CHF from yesterday's close.

The pair is expected to find support at 0.9986, and a fall through could take it to the next support level of 0.9969. The pair is expected to find its first resistance at 1.0015, and a rise through could take it to the next resistance level of 1.0027.

Amid no major economic releases in Switzerland today, investor sentiment would be determined by global macroeconomic factors.

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

For the 24 hours to 23:00 GMT, the USD rose 0.14% against the CAD and closed at 1.3331.

In the Asian session, at GMT0300, the pair is trading at 1.3335, with the USD trading a tad higher against the CAD from yesterday’s close.

The pair is expected to find support at 1.3300, and a fall through could take it to the next support level of 1.3264. The pair is expected to find its first resistance at 1.3355, and a rise through could take it to the next resistance level of 1.3374.

Amid lack of economic releases in Canada today, traders would focus on global macroeconomic events for further direction.

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

For the 24 hours to 23:00 GMT, the AUD slightly rose against the USD and closed at 0.7124.

LME Copper prices rose 1.0% or $65.5/MT to $6498.0/MT. Aluminium prices declined 0.4% or $7.5/MT to $1851.0/MT.

In the Asian session, at GMT0300, the pair is trading at 0.7113, with the AUD trading 0.15% lower against the USD from yesterday’s close.

Overnight data showed that Australia’s Westpac consumer confidence index registered a rise of 1.9% to a level of 100.7 on a monthly basis in April, compared to a level of 98.8 in the prior month.

The pair is expected to find support at 0.7099, and a fall through could take it to the next support level of 0.7086. The pair is expected to find its first resistance at 0.7139, and a rise through could take it to the next resistance level of 0.7166.

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