GBP/USD's consolidation from 1.3381 extends last week and outlook remains unchanged. Initial bias remains neutral this week first. Further rise is still mildly in favor as long as 1.2960 support holds. On the upside, decisive break of 1.3381 will extend the rise from 1.2391 and target 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.

In the longer term picture, current development argues that corrective pattern from 1.1946 (2016 low) is extending with another rise. But there is no change in the long term bearish outlook as long as 38.2% retracement of 2.1161 (2007 high) to 1.1946 at 1.5466 holds. An eventual downside breakout through 1.1946 is still in favor in the long term.

USD/CHF's corrective recovery from 0.9879 extended higher last week and breached 1.0010 minor resistance. But it failed to sustain above the resistance. Initial bias remains neutral this week first. On the upside, sustained break of 1.0010 will suggest that pull back from 1.0124 has completed. Intraday bias will be turned back to the upside for 1.0124/28 resistance zone. On the downside, break of 0.9879 will resume the fall from 1.0124 to 0.9716 key support.

In the bigger picture, focus is back on medium term trend line (now at 0.9865). Decisive break there will argue that whole rise from 0.9186 has completed. Further break of 0.9716 will confirm reversal and target next support level at 0.9541. Nevertheless, there is still a chance that price action from 1.0128 are forming a consolidative pattern with fall from 1.0124 as third leg. If this is the case, stronger support should be seen between 0.9716 and the trend line to contain downside.

In the long term picture, price actions from 0.7065 (2011 low) are not clearly impulsive yet. Thus, we'll treat it as developing into a corrective pattern, at least, until a firm break of 1.0342 resistance.

Despite some volatility, AUD/USD was bounded in range below 0.7168 last week and near term outlook remains unchanged. Initial bias remains neutral this week first. On the upside, firm break of 0.7168 resistance will suggest that the corrective decline from 0.7295 has completed at 0.7003 already. Intraday bias will be turned to the upside to resume the rebound from 0.6722 through 0.7295. On the downside, though, sustained break of 0.7052 will target 0.7004 first. Break will resume the fall from 0.7295 instead.

In the bigger picture, as long as 0.7393 resistance holds, fall from 0.8135 is still expected to extend. 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.

In the longer term picture, prior rejection by 55 month EMA maintained long term bearishness in AUD/USD. That is, down trend from 1.1079 (2011 high) is still in progress. Sustained break of 0.6826 will target 0.6008 low and then 61.8% projection of 1.1079 to 0.6826 from 0.8135 at 0.5507.

USD/CAD dipped to 1.3296 last week but was held well above 1.3250 support and recovered. Initial bias remains neutral this week first and more consolidation could be seen. On the upside, firm break of 1.3467 resistance will resume rise from 1.3068. Further rally should be seen to retest 1.3664 next. On the downside, sustained break of 1.3250 will indicate completion of whole rebound from 1.3068. In that case, deeper fall would be seen back to 1.3068/3112 support zone.

In the bigger picture, structure of the medium term rise from 1.2061 (2017 low) to 1.3664 is not clearly impulsive. Hence, we'd stay cautious on strong resistance from 61.8% retracement of 1.4689 (2016 high) to 1.2061 at 1.3685 and 1.3793 resistance to limit upside, and bring medium term topping. But in any case, medium term outlook will stay bullish as long as channel support (now at 1.3210) holds. Sustained break of 1.3793 will pave the way to retest 1.4689 (2015 high). However, firm break of the channel support should confirm reversal and target 1.2061 low again.

In the longer term picture, corrective fall from 1.4689 (2015 high) should have completed with three waves down to 1.2061, just ahead of 50% retracement of 0.9406 (2011 low) to 1.4689 (2015 high) at 1.2048. The development keeps long term up trend from 0.9406 and that from 0.9056 (2007 low) intact. For now, there is still prospect of extending the long term up trend through 1.4689.

GBP/JPY recovered to 147.19 last week but lost momentum well below 148.87 resistance. Initial bias remains neutral this week and more consolidation could be seen first. 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.

In the longer term picture, the rise from 122.36 (2016 low) to 156.59 (2018 high) doesn't display a clear impulsive structure. Thus, we're treating price actions from 122.36 as a corrective pattern. In case of an extension, strong resistance is likely to be seen at 50% retracement of 195.86 (2015 high) to 122.36 at 159.11 to limit upside. On the downside, break of 131.51 support will bring 122.26 low back into focus.

EUR/JPY's rebound from 123.65 extended to as high as 125.50 last week but lost momentum since then. Initial bias is turned neutral this week first. Current development argues that corrective pull back from 127.50 might have completed already. Hence, further rise is expected as long as 124.47 minor support intact. On the upside, above 125.50 will turn bias to the upside for 126.78/127.50 resistance zone. However, on the downside, break of 124.47 will turn bias back to the downside for 123.65 support instead.

In the bigger picture, EUR/JPY is staying well inside medium term falling channel from 137.49 (2018 high). It's also held below 55 week EMA (now at 127.53). Thus, down trend from 137.49 might still extend lower. Break of 118.62 will target 109.03/114.84 long term support zone. On the upside, however, break of 127.50 will solidify the case of medium term bullish reversal. Rise from 118.76 should extend to 133.12 key resistance instead.

In the long term picture, EUR/JPY is staying in long term sideway pattern, established since 2000. Fall from 137.49 is seen as a falling leg inside the pattern. Break of 118.62 will extend this falling leg through 109.03 low. On the upside, break of 133.12 resistance bring retest of 149.76 (2014 high).

EUR/GBP gyrated in range of 0.8474/8722 last week and outlook remains unchanged. Initial bias stays neutral this week first and more consolidative trading could seen. Overall, as long as 0.7822 resistance holds, near term outlook remains bearish. On the downside, firm break of 0.8474 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.

In the long term picture, we're holding on to the view that rise from 0.6935 (2015 low) is resuming the up trend from 0.5680 (2000 low). As long as 50% retracement of 0.6935 to 0.9304 at 0.8120 holds, further rise should be seen through 0.9305 to 0.9799 and above down the road.

EUR/AUD dropped further to 1.5714 last week but failed to sustain below 1.5721 low and recovered. Initial bias is neutral this week first. More sideway trading could be seen. But in case of strong recovery, upside should be limited by 1.6122 resistance to bring fall resumption. On the downside, sustained break of 1.5721 will resume the decline from 1.6765 to 1.5346 key support next.

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.

In the longer term picture, the rise from 1.1602 long term bottom (2012 low) is still in progress for 61.8% retracement of 2.1127 to 1.1602 at 1.7488. Firm break there will pave the way to 100% projection of 1.1602 to 1.6587 from 1.3624 at 1.8069. This will remain the favored case as long as 1.5346 remains intact.

EUR/CHF's corrective recovery from 1.1162 extended higher last week. Initial bias stays neutral first and more consolidative could be seen. But after all, as long as 1.1256 minor resistance holds, near term outlook remains bearish and further decline is expected. On the downside, decisive break of 1.1154 key fibonacci level will confirm resumption of whole downtrend from 1.2004. That should then pave the way to 61.8% projection of 1.2004 to 1.1173 from 1.1444 at 1.0930. However, break of 1.1256 will indicate short term bottoming and turn bias back to the upside for 1.1310 support turned resistance first.

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.

In the long term picture, the current development argues that long term up trend has completed at 1.2004 after rejection of 1.2 key resistance. Sustained break of 1.1198 support will confirm this bearish case and target 1.0629 and below.

After a strong Q1, risk appetite extended into the first week of Q2. The most notable improvements were seen in the bond markets, as German 10-year yield turned positive again. US 10-year yield also reclaimed 2.5 handle. However, stocks and 10-year yield are both near to key resistance zone. Reversals could be around the corner. Besides, the positive development was not too much reflected in the currency markets, which is a sign of indecisiveness.

Australian Dollar was the strongest one, partly on risk appetite, partly on Chinese data and trade talks, and partly on its own retail sales data, and a neutral RBA statement. However, firstly, AUD/USD is kept in recent range between 0.7052/7168. EUR/AUD failed to sustain below 1.5721 key support. AUD/JPY also lost momentum ahead of 79.84 key resistance. It's strength is not too convincing.

Pound is the second strongest but was limited generally inside prior week's range. It's a strong signal that there was no clear direction. Meanwhile, Yen gyrated lower, together with Swiss Franc but there was no confirmation of bearish version. Also, neither of them was the weakest, but New Zealand Dollar.

Signs of improvements in the economy, but uncertainties remain

Fundamentally, signs were positive even though uncertainties remained. Both official and Caixin China PMI manufacturing rose back above above 50 in March, suggesting the government's measures are starting to take effect. However, the rebound could also be due to post Lunar New Year seasonal effect. At least one more month of data are needed to confirm bottoming.

In addition to China slowdown, Eurozone recession is another major economic risk. We'd probably need to wait for PMIs in the week of April 22 before clearing the clouds. UK data were distorted by Brexit preparations and could be ignored for a while first, like the markets did. Risks of no-deal Brexit remained as April 12 cliff-edge approaches, which would have an impact of both EU and UK.

Economic data from the US were mixed only. Friday's non-farm payrolls, with 196k growth in March, proved that February's terrible figure was just a blip. ISM manufacturing also improved. However, slight softness was seen in ISM non-manufacturing. February retail sales and durable goods orders were clear disappointments.

US-China trade talks were described as making progress. But no-one really knows how close they were to a deal. Trump was very precise and accurate on the situation with his vague languages. He said there would be a deal "within the next four weeks or maybe less, maybe more".

Bets on Fed rate cut receded

Overall, after the week, markets pared back some bets on a Fed rate cut the the end of the year. Fund fund futures are only pricing in 52.5% change of easing by December 11 meeting. That's notably lower than prior week's 65%. Though, a month ago, there was only around 6% chance of a cut.

10-year yield capped below 2.554 key resistance

10 year yield rose to as high as 2.544 last week before closing at 2.501, up from prior week's 2.414. Friday's single day reversal is worth a note. If could be an early sign of topping, just ahead of 2.554 support turned resistance. With 2.554 intact, rebound from 2.356 is seen as a corrective move. And larger fall from 3.248 is expected to resume sooner or later.

DOW extended rally, but no break of 26951.81 expected

DOW gapped up last week and surged to close at 26424.99, resuming rise from 21712.53. But Friday's post NFP reaction was rather indecisive. Overall, we maintain that rise from 21712.53 is just seen as a leg of the medium to long term consolidation from 26951.81. While further rise cannot be ruled out, decisive break of 26951.81 is not expected. Break of last week's low at 26071.69 will be the first sign of topping. Break of 25425.27 support should indicate near term reversal.

Dollar index lost momentum ahead of 97.71/87 again

Once again, Dollar index lost momentum ahead of 97.71/87 key resistance zone. There is no sign of up trend resumption yet. DXY could continue to gyrate around the nearly flat 55 day EMA. Though, in case of another fall, we're not expecting a break 93.81 support. An eventual upside breakout is still expected.

AUD/USD Weekly Outlook

Despite some volatility, AUD/USD was bounded in range below 0.7168 last week and near term outlook remains unchanged. Initial bias remains neutral this week first. On the upside, firm break of 0.7168 resistance will suggest that the corrective decline from 0.7295 has completed at 0.7003 already. Intraday bias will be turned to the upside to resume the rebound from 0.6722 through 0.7295. On the downside, though, sustained break of 0.7052 will target 0.7004 first. Break will resume the fall from 0.7295 instead.

In the bigger picture, as long as 0.7393 resistance holds, fall from 0.8135 is still expected to extend. 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.

In the longer term picture, prior rejection by 55 month EMA maintained long term bearishness in AUD/USD. That is, down trend from 1.1079 (2011 high) is still in progress. Sustained break of 0.6826 will target 0.6008 low and then 61.8% projection of 1.1079 to 0.6826 from 0.8135 at 0.5507.