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European equity markets are poised to open around half a percentage point higher on Wednesday, with the FTSE the notable underperformer after the pound rallied following Theresa May’s appeal to the opposition to help break the Brexit impasse.

Sterling higher as May reaches out to the opposition to break Brexit impasse

The next stage in the Brexit saga began on Tuesday evening as ay appealed to the opposition leader to engage in talks to break the impasse. It’s still not clear whether we’re seeing a genuine attempt to find a solution that can win the support of a majority of MPs or if this is more political games to alleviate the pressure on the government and make the opposition look uncooperative, or even obstructive, in their attempts to force an election. I guess we’ll see just how much both sides truly want to find a workable solution in the coming days.

Still, the move from May has resonated well in the markets, as she once again voiced her opposition to no-deal, something Parliament can actually agree with her on. A long extension now looks almost inevitable, although as ever in the Brexit process, if there’s one thing we can be confident about it’s that no one really knows what will happen next. Perhaps the fear of a soft Brexit will win over some remaining hard-liners and May will try her hand at one more vote on her deal. I wouldn’t put anything past her at this stage. We have one week to go until the emergency EU summit and a week is a very long time in Brexit.

US and China resume trade talks in Washington

Positive reports in regard to US-China trade talks, which are set to resume in Washington today, helped lift sentiment again overnight with markets building on optimism from earlier in the week that stemmed from some encouraging Chinese PMIs. The reports are not necessarily out of the blue and we’ve known this week’s talks are happening but on something so significant, investors want to be constantly reassured.

We’re being told that we’re 90% of the way there which is obviously encouraging but the final 10% - which apparently includes the enforcement mechanism and the removal of tariffs – could take some time to iron out. I think investors are happy to be patient here in the hope that the two sides get this right and put an end to a trade war that has clearly taken its toll on markets. This is a major headwind that investors will be very relieved to see resolved.

Bitcoin holding on to Tuesday’s gains

It was like the good old days in the crypto market on Tuesday, as traders in Europe and the US woke up to a more than 20% rally in bitcoin. Safe to say, it had become the forgotten instrument for a while as the very volatility it was known for slipped away and price consolidated around $4,000. In the absence of any real catalyst though, many are left to question whether there’s anything of substance behind the bounce or if it’s just a short squeeze.

Bitcoin has found some resistance around $5,100 – previous support – but the real test will come around $6,000 which was a significant support zone throughout 2018, a break of which in November sparked the move back to almost $3,000.

Oil building momentum but runs into resistance

Oil prices appear to have found a little bullish momentum again in the last few days, with the rallies we’ve seen in equity markets clearly a major factor. Another reported inventory build from API on Tuesday may have taken some of the gloss off the rally, which should make today’s EIA number all the more interesting, but momentum still looks very much with the bulls.

That said, $70 may provide significant resistance for Brent, with WTI potentially finding similar issues around $63. Falling US oil rig numbers and stabilised output at 12.1 million barrels a day may provide a boost for oil bulls, with rising production here being one of the main drags on prices.

Gold stabilises below $1,300

A softer dollar over the last 24 has given some reprieve to gold, which slipped below $1,300 last Thursday as the greenback benefited from weakness across a variety of other currencies. The key area for gold remains around $1,280, which has offered significant support since the start of the year. There have been numerous supporting factors for the yellow metal, although with risk appetite returning and the dollar remaining strong it remains challenging for bulls.

Market movers today

In the UK, focus remains on Brexit after PM May's intervention yesterday evening. It would be positive for sentiment if May and Corbyn could find common ground but we still cannot rule out a no deal Brexit at this point, although we remain optimistic that the politicians want to go a long way to avoid that.

In Europe, retail sales in February are due out at 11:00 CEST. Given the weakness in Europe lately, it feels like every data release is important. Our base case is still that we should soon see improvement in Europe. In Norway, we get house price data.

In the US, we are looking forward to the release of the ISM non-manufacturing index for March, which is a better indicator of GDP growth than ISM manufacturing. Based on the ISM indices, US growth was decent in Q1. ADP employment is due out at 14:15 CEST. We also have plenty of Fed speakers today.

Selected market news

Global growth optimism continued in the European equity markets. However, noteworthy the European bond market remained supported throughout the day as Brexit fears dominated before PM Theresa May's Brexit intervention in the evening. Overnight risk appetite got a new boost with media (FT) reports that the US and China are about to finalise a trade deal and as Brexit news removed fears of an imminent hard Brexit. Asian equities are higher and 10Y Treasury yields are back 2.5%.

Yesterday, PM Theresa May said she wants to find common ground on Brexit with Labour leader Jeremy Corbyn, which is quite unusual in the UK given the old two-party system. A way forward could involve accepting a permanent customs union, something which Labour has advocated for a long time while May has objected (and the proposal was only three votes from reaching a majority in Monday's indicative vote), but it is definitely not without risk for May, as it may split her party in two. When analysing Brexit, it is important to remember that it is also about history - May probably would not want to be the prime minister getting the UK out of the EU without a deal, as it may have a long-lasting damaging impact on the UK, economically and politically. May, if her words can be trusted, finally decided country was above party. The hard Brexiteers are clearly upset and may even vote against the government in a no confidence vote if May finalises Brexit with Corbyn, so any agreement would involve Corbyn accepting no snap election until after the withdrawal. Any plan must also be built on the Withdrawal Agreement, which will upset the supporting party, the DUP. The Brexiteers and the DUP also have some thinking to do, as Brexiteers have to support May's deal to avoid a softer Brexit and the DUP risks losing power after May reached out to Corbyn.

For now, we stick to our view that we are heading for a long extension to at least year-end but we have to monitor the development over the next week, ahead of the EU summit on 10 April. May also said yesterday that she hoped the negotiations could be sorted out quickly (there is talk the government aims within the next three days) so the UK only needs the short extension to 22 May still. Overall, yesterday's development was positive, as it indicates the risk of a no deal Brexit remains low, but not negligible.

General Trend:

• FT: US and China continue to haggle on trade deal enforcement and implementation; have resolved most other issues (in line with prior reports)
• China Daily commentary: Prudence urged amid enthusiasm for the stock market
• Bank of Communications declines, China Social Security Fund plans to cut stake; Shanghai Banking index lags on session
• Japanese outperformers include Marine/Transportation, Securities, Electric Appliance and Machinery companies.
• Fast Retailing rises over 4% after monthly SSS
• Aussie iron ore miners continue to gain as Chinese prices hit record highs
• Australia has record trade surplus in Feb as imports decline
• Bank of Japan (BOJ) leaves daily bond buying amounts unchanged, despite some analysts speculating that it could cut purchases
• Japan expected to sell 30-yr JGBs on Thursday
• China Vice Premier Liu He is expected to resume trade talks with US officials in Washington today (April 3rd)

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened %
• (AU) Australia Govt 2019/20 budget: forecasts budget surplus of A$7.1B in 2019-2020; Cuts FY19/20 GDP growth forecast from 3.00% to 2.75% (after the close yesterday)
• (AU) Australia Feb Final PMI Services: 49.3 v 49.8 prelim; PMI Composite: 49.5 v 50.0 prelim
• (AU) Australia sees 2019/20 gross bond issuance at ~A$58.0B vs ~A$54B for the current year; to add new issuance for June 2031 and May 2032
• (AU) RBC Capital says risks are still skewed toward RBA rate cuts after recent government budget - US financial press
• (AU) Australia Feb Trade Balance (A$): 4.8B v 3.7Be (record); Exports M/M: 0% v +5% prior; Imports M/M: -1% v +3% prior
• (AU) AUSTRALIA FEB RETAIL SALES M/M: 0.8% V 0.3%E (fastest rise since Nov 2017)
• (NZ) New Zealand Fin Min Robertson: Global slowdown is a risk to the economy

Japan

• Nikkei 225 opened +0.3%
• 9983.JP To raise pay for Spring 2020 hires by 20% - Japan press
• 7203.JP Reportedly plans to grant royalty-free access to its hybrid-vehicle technology patents to maintain sector's viability against pure electric vehicles – Nikkei
• (JP) Japan pushing China on protection of intellectual property as part of trade talks that are currently ongoing - Nikkei
• (JP) Japan said to be concerned that US trade talks will focus on car exports - UK Press
• (JP) Japan Mar PMI Services: 52.0 v 52.3 prior; PMI Composite: 50.4 v 50.7 prior
• (JP) BoJ Dep Gov Wakatabe: inflation has been subdued globally

Korea

• Kospi opened flat
• (KR) South Korea Mar Foreign Reserves: $405.3B v $404.7B prior
• (KR) South Korea Finance Min Hong: Extra budget unlikely to reach KRW9.0T - Local press
• (KR) Bank of Korea (BOK) sells KRW3.0T in 2-yr Monetary Stabilization Bonds (MSB); avg yield 1.74% v 1.85% prior

China/Hong Kong

• Hang Seng opened +0.5%; Shanghai Composite opened -0.6%
• (CN) CHINA MAR CAIXIN PMI SERVICES: 54.4 V 52.3E (highest since Jan 2018); PMI COMPOSITE: 52.9 V 50.7 PRIOR
• (CN) China Daily commentary: Prudence urged amid enthusiasm for the stock market; some of the optimism related to the equity markets is linked to the new technology board in China which is expected to be launched in June at the earliest
• 600104.CN Reports FY18 (CNY) Net 36.0B v 36.5Be, Rev 902.2B v 922.7Be; total auto sales 7.05M, +1.7% y/y v 7.26M guided
• (CN) China expected to limit crude steel production capacity in Hebei and Tianjin - China Daily
• (CN) US State Dept Spokesperson: Will not send high-level officials to China Silk-Road summit in April
• (US) US and China continue to haggle on trade deal enforcement and implementation; have resolved most other issues – FT
• (CN) China PBoC Open Market Operation (OMO): Skips for 11th consecutive session: Net: CNY0 v CNY0 prior
• (CN) China PBoC sets yuan reference rate: 6.7194 v 6.7161 prior
• (CN) Former PBoC Official: More reserve ratio rate (RRR) cuts create risk for asset bubbles
• (CN) Fitch comments on banks in China: Has negative outlook for the sector, expects net profit growth to be in the single digits in the medium term
• (CN) Woman with China passports arrested at Trump’s Mar-a-Lago resort; the individual was said to have had malware – US Press
• (CN) China Ministry of Foreign Affairs Official Wang: Premier Li to visit Europe April 8-12th (Monday-Friday)

Other Asia

• Asia Development Bank (ADB): Developing Asia growth to soften, inflation to remain subdued; primary risk US/China trade dispute; Sees developing Asia 2019 GDP at 5.7% (prior 5.8%); 2020 at 5.6%

North America

• (US) Pres Trump reportedly told Fed Chair Powell 'I guess I'm stuck with you' – press
• (MX) Mexico Foreign Min Ebrard: US govt has told Mexico that it is so far not going to shut the border
• (US) Fed Nominee Moore: Believe in a stable dollar
• Faulty Boeing 737 Max sensor found in Lion Air crash was traced back to a US repair shop - financial press
• (US) President Trump: Canada knocks the hell out of US on trade, not happy

Europe

• (UK) Mar BRC Shop Price Index Y/Y: 0.9% v 0.7% prior (highest level since Mar 2013)
• (UK) Northern Ireland's DUP statement: PM May's handling of the Brexit negotiations have been lamentable; we remain consistent in judging all Brexit outcomes against our clear unionist principles
• (UK) EU said to be preparing to offer a long delay on Brexit to January or April of 2020 with strict conditions - FT

Levels as of 1:20 ET

• Nikkei 225, +0.9%, ASX 200 +0.7%, Hang Seng +1.1%; Shanghai Composite +0.5%; Kospi +0.9%
• Equity Futures: S&P500 +0.4%; Nasdaq100 %, Dax +0.5%; FTSE100 +0.1%
• EUR 1.1227-1.1199 ; JPY 111.53-111.20 ; AUD 0.7105-0.7053 ;NZD 0.6776-0.6743
• Gold +0.1% at $1,296/oz; Crude Oil +0.3% at $62.77/brl; Copper +0.5% at $2.924/lb

Cycle from Dec 26, 2018 low in S&P 500 (SPX) remains in progress as an impulse Elliott Wave structure. In the 1 hour chart below, we can see wave (4) of this impulsive move ended at 2722.27. The Index has resumed higher in wave (5) with subdivision also as an impulse of lesser degree. Up from 2722.27, wave 1 ended at 2852.42 and wave 2 ended at 2785.02.

Wave 1 subdivides as an impulse where wave ((i)) ended at 2736.25 and wave ((ii)) ended at 2723.02. Up from there, wave ((iii)) ended at 2821.24, wave ((iv)) ended at 2803.46, and wave ((v)) of 1 ended at 2852.42. Wave 2 pullback unfolded as double three Elliott Wave structure where wave ((w)) ended at 2802.13, wave ((x)) ended at 2823.28, and wave ((y)) of 2 ended at 2785.02. Wave 3 rally is currently in progress as an impulse. Near term, while dips stay above 2784.94, expect Index to extend higher. We don’t like selling the proposed pullback.

1 Hour SPX Elliott Wave Chart

For the 24 hours to 23:00 GMT, the EUR marginally declined against the USD and closed at 1.1204.

In economic news, the Euro-zone's producer price index (PPI) advanced 3.0% on a yearly basis in February, compared to a revised rise of 2.9% in the prior month. Market participants had envisaged the PPI to register a gain of 3.1%.

In the US, data indicated that the US durable goods orders retreated 1.6% on a monthly basis in February, amid steep fall in local aircraft orders and less than market consensus for a fall of 1.8%. In the prior month, durable goods orders had recorded a revised rise of 0.1%.

In the Asian session, at GMT0300, the pair is trading at 1.1221, with the EUR trading 0.15% higher against the USD from yesterday's close.

The pair is expected to find support at 1.1194, and a fall through could take it to the next support level of 1.1168. The pair is expected to find its first resistance at 1.1237, and a rise through could take it to the next resistance level of 1.1254.

Looking forward, traders would await the Euro-zone's retail sales for February along with the Markit services PMI for March, set to release across the euro bloc. Later in the day, the US ADP employment change, the Markit services PMI and the ISM services PMI, all for March followed by the MBA mortgage applications, will garner significant amount of investors' attention.

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

For the 24 hours to 23:00 GMT, the GBP rose 0.40% against the USD and closed at 1.3129, after Prime Minister Theresa May stated that she would ask the EU for an extension to the Brexit deadline.

On the data front, UK's construction PMI rose to a level of 49.7 in March, compared to a level of 49.5 in the previous month.

In the Asian session, at GMT0300, the pair is trading at 1.3141, with the GBP trading 0.09% higher against the USD from yesterday's close.

Overnight data showed that the BRC shop price index advanced 0.9% on an annual basis in March. In the previous month, the index had recorded a rise of 0.7%.

The pair is expected to find support at 1.3054, and a fall through could take it to the next support level of 1.2966. The pair is expected to find its first resistance at 1.3189, and a rise through could take it to the next resistance level of 1.3236.

Trading trend in the Sterling today, is expected to be determined by UK's Markit services PMI for March, set to release in a few hours.

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

Daily Pivots: (S1) 124.51; (P) 124.70; (R1) 124.94; More....

EUR/JPY's rebound from 123.65 extends higher today. Break of 125.01 minor resistance suggests that pull back from 127.50 has completed with three waves down to 123.56. Intraday bias is turned back to the upside for 126.78/127.50 resistance zone first. On the downside, however, break of 123.56 will resume the fall from 127.50 to 61.8% retracement of 118.62 to 127.50 at 122.01.

In the bigger picture, rebound from 118.62 might have completed earlier than expected at 127.50. EUR/JPY is held well inside medium term falling channel, and below 55 week EMA (now at 127.61). That is, the down trend from 137.49 (2018 high) might still be in progress. Break of 118.62 will target 109.03/114.84 long term support zone. On the upside, however, break of 127.50 will extend the rebound from 118.62 to 133.12 key resistance instead.

For the 24 hours to 23:00 GMT, the USD declined 0.07% against the JPY and closed at 111.33.

In the Asian session, at GMT0300, the pair is trading at 111.50, with the USD trading 0.15% higher against the JPY from yesterday's close.

Overnight data showed that Japan's Nikkei services PMI declined to a level of 52.0 in March, compared to a reading of 52.3 in the prior month.

The pair is expected to find support at 111.30, and a fall through could take it to the next support level of 111.09. The pair is expected to find its first resistance at 111.62, and a rise through could take it to the next resistance level of 111.73.

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

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

Yen is back under pressure again today as Asian stock markets extend this week's rally. Stronger than expected Chinese services data is lifting sentiments. Meanwhile, there is somewhat some optimism on US-China trade negotiations, which is restarting in Washington today. International organizations continued to give warnings on global slowdown, including IMF, WTO and Asian Development bank. But their messages are largely ignored by investors.

Staying in the the currency markets, Australian Dollar is the strongest on for today so far, lifted by much stronger than expected retail sales data. At least, relative resilience in consumption could give RBA more time to wait and see before deciding to cut interest rates. New Zealand Dollar follows as the second strongest.

In Asia, Nikkei closed up 0.97%. Hong Kong HSI is up 0.91%. China Shanghai SSE is up 0.57%. Singapore Strait Times is up 0.86%. Japan 10-year JGB yield is up 0.0244 at -0.043, still negative. Overnight, DOW dropped -0.30%. S&P 500 rose 0.00%. NASDAQ rose 0.25%. 10-year yield dropped -0.016 to 2.481.

US-China trade talks to resume, a perceived critical week

US-China trade negotiation will resume on Wednesday with Chinese Vice-Premier Liu He arriving in Washington. Liu will meet both US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

It's reported that an agreement is within reach, covering most of the core issues including intellectual property theft and forced technology transfer. But there is so far no news regarding subsidies for state owned enterprises, which create unfair playing fields.

In addition, the real crucial topic of enforcement is unresolved. The US is believed to be demanding to keep current punitive tariffs until China implements what are agreed. But this is at the same time firmly objected by China.

Nevertheless, US Chamber of Commerce head of International Affairs Myron Brilliant sounded optimistic. He said yesterday that "we're getting to the point where it's clear that both governments want a deal. The presidents want a deal, and they need to get through the end-game issues. This is a critical week."

Brilliant added, "ninety per cent of the deal is done, but the last 10 per cent is the hardest part, it's the trickiest part and it will require trade-offs on both sides."

Australia retail sales rose 0.8%, improvement across most industries

Australia retail sales rose 0.8% mom s.a. in February, much higher than expectation of 0.3% mom. ABS Director of Quarterly Economy Wide Surveys, Ben Faulkner said: "There were improved results across most industries with rises in food retailing (0.8%), department stores (3.5%), household goods retailing (1.1%) and clothing, footwear and personal accessory retailing (1.6%). Other retailing (0.0% and cafes, restaurant and takeaway services (0.0% were relatively unchanged. The rise this month follows subdued results in December 2018 (-0.4%) and January 2019 (0.1%)."

Among the state and territories, there were rises in Queensland (1.4%), New South Wales (0.6%), Victoria (0.8%), Western Australia (0.6%), South Australia (0.7%), the Australian Capital Territory (1.7%) and the Northern Territory (1.4%). There was a fall in Tasmania (-0.7%).

RBA has repeatedly noted that household consumption is a key uncertainty for overall GDP. Tightness in labor market has not much been translated into wage growth and rise is household disposable income. Wealth effect of falling house price could also be a drag. But February data does give some positive news to RBA and some room for it to wait-and-see first.

Australia AiG service index rose to 44.8, but all sectors contract

AiG Performance of Service Index rose 0.3pts to 44.8 in March, indicating a "slower rate of contraction. But it's still the third straight month of contractionary conditions following a positive run through most of 2017 and 2018. Despite the slight improvement, it's should noted that it's the first month since August 2010 that all sectors contract.

Also released, trade surplus widened to AUD 4.80B in February, up from AUD 4.35B and beat expectation of AUD 3.71B. Total exports rose AUD 77M to AUD 39.83B. Total imports dropped AUD -374M to AUD 35.03B.

China Caixin PMI services rose to 54.4, but more evidence need to confirm stabilization

China Caixin PMI services rose to 54.4 in March, up from 51.1, beat expectation of 52.0. That's the highest reading in 14 months. PMI composite rose to 52.9, up from 50.7, strongest since June 2018. Markit also noted that Manufacturers and service providers both signal stronger increases in activity and new work. Renewed rise in manufacturing payrolls leads to first expansion of composite employment for over a year. Overall business confidence edges up to seven-month high.

Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said: "In general, China's economic fundamentals recovered in March, with domestic and external demand as well as manufacturing employment improving. However, business sentiment has remained cautious, and inflation was subdued. The three-month moving average of the Caixin China General Manufacturing PMI remained in contraction territory, while the Caixin China Composite Output Index showed tentative signs of recovery following a relatively subdued start to 2019. More evidence is needed to determine whether the Chinese economy has stabilized."

Further slowdown in developing Asia on slowing global demand and persistent trade tensions

The Asian Development Bank forecasts further slowdown in developing Asia and cited against the backdrop of slowing global demand and persistent trade tensions. In the Asian Development Outlook, ADB projects growth in developing Asia to slow from 5.9% in 2018 to 5.7% in 2019 and 5.6% in 2020. Excluding newly industrialized economies, growth is projected to slow from 6.4% in 2018 to 6.2% in 2019 and 6.1% in 2020.

The report warned that risks remained "tilted to the downside". It said "A drawn-out or deteriorating trade conflict between the People's Republic of China and the United States could undermine investment and growth in developing Asia. With various uncertainties stemming from US fiscal policy and a possible disorderly Brexit, growth in the advanced economies could turn out slower than expected, undermining the outlook for the People's Republic of China and other economies in the region. Though abrupt increases in US interest rates appear to have ceased for the time being, policy makers must remain vigilant in these uncertain times."

IMF Lagarde: Global economy increasingly unsettled, 70% to experience a slowdown this year

IMF Managing Director Christine Lagarde warned yesterday that the global economy is "increasingly unsettled" after two years of good time. She noted that the the economy has "lost further momentum" since the January forecast and hinted at downgrade in the updated forecast next week. Back in January, IMF projected  global growth for 2019 and 2020 at around 3.25%.

Lagarde also said 70% of the global economy will experience a "slowdown" this year. That's a drastic change from two year ago, when 75% experienced an "upswing". Though, she still emphasized that "we do not see a recession in the near term". But there will be pickup in H2 2019 and into 2020.

She outlined three areas of policy actions needed.: (a) Domestic Policies to Build More Resilient and Inclusive Economies; (b) Cross-Border Efforts to Provide a More Level Playing Field; (c) Partnership to Address Global Challenges. In particular, she said tariffs between US and China went up by 25% and "that alone would reduce annual GDP by up to 0.6 percent in the US and by up to 1.5 percent in China." She urged that "these are potentially self-inflicted wounds that should be avoided."

Looking ahead

Services data is the main theme today. Eurozone will release PMI services final and retail sales. UK will release PMI services. US will release ISM non-manufacturing composite.

EUR/JPY Daily Outlook

Daily Pivots: (S1) 124.51; (P) 124.70; (R1) 124.94; More....

EUR/JPY's rebound from 123.65 extends higher today. Break of 125.01 minor resistance suggests that pull back from 127.50 has completed with three waves down to 123.56. Intraday bias is turned back to the upside for 126.78/127.50 resistance zone first. On the downside, however, break of 123.56 will resume the fall from 127.50 to 61.8% retracement of 118.62 to 127.50 at 122.01.

In the bigger picture, rebound from 118.62 might have completed earlier than expected at 127.50. EUR/JPY is held well inside medium term falling channel, and below 55 week EMA (now at 127.61). That is, the down trend from 137.49 (2018 high) might still be in progress. Break of 118.62 will target 109.03/114.84 long term support zone. On the upside, however, break of 127.50 will extend the rebound from 118.62 to 133.12 key resistance instead.

Economic Indicators Update

For the 24 hours to 23:00 GMT, the USD declined 0.09% against the CHF and closed at 0.9981.

Data showed that Switzerland's consumer price index (CPI) advanced 0.7% on an annual basis in March, compared to an advance of 0.6% in the previous month. Market participants had expected the CPI to record a gain of 0.5%.

In the Asian session, at GMT0300, the pair is trading at 0.9981, with the USD trading flat against the CHF from yesterday's close.

The pair is expected to find support at 0.9969, and a fall through could take it to the next support level of 0.9956. The pair is expected to find its first resistance at 0.9997, and a rise through could take it to the next resistance level of 1.0012.

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