Sample Category Title

• Canadian GDP rose 0.3% in January, the strongest increase in 8 months and solidly above expectations.
• Gains were broadly-based with 18 of 20 industries expanding in the month.
• The energy sector was less of a drag than we thought, though oil and gas output still fell as Alberta’s mandatory production cuts took effect.
• Construction and manufacturing industries posted solid gains after softening toward the end of last year.
• The services sector grew at a trend-like pace, having provided consistent support over this recent soft patch in growth.

After declines in three of the prior four months, we would have been happy just to see a positive number. In the event, January’s 0.3% growth was well ahead of expectations and the details were encouraging. Energy and mining was more or less the economy’s only weak point, though that was fully expected with mandatory production cuts taking effect at the start of the month. The worst should be over for the energy industry as production curtailments are gradually scaled back and producers benefit from higher prices. Outside of energy, growth picked up nicely with GDP excluding oil and gas up 0.5% in the month and 2% over the last year. Overall, today’s data remain consistent with our view that the economy’s soft patch over Q4/18 and Q1/19 will prove transitory.

Daily Pivots: (S1) 1.1204; (P) 1.1233; (R1) 1.1253; More.....

EUR/USD is losing downside momentum as seen in 4 hour MACD. But with 1.1285 minor resistance intact further decline is in favor for 1.1176 support. Decisive break there will resume whole decline from 1.2555. On the upside, however, break of 1.1285 minor resistance will turn bias back to the upside for 1.1448 instead.

In the bigger picture, medium term outlooks is a bit mixed for now as there are conflicting signals. We'll turn neutral first. On the downside, decisive break of 61.8% retracement of 1.0339 (2016 low) to 1.2555 (2018 high) at 1.1186 will resume the whole down trend from 1.2555. Next target will be 1.0339 low. Nevertheless, break of 1.1569 resistance should confirm medium term bottoming. Stronger rebound should be seen back to 38.2% retracement of 1.2555 to 1.1176 at 1.1703. In that case, the structure of the rise from 1.1176 and reaction to 1.1703 fibonacci level will be watched for making an assessment on whether medium term trend has reversed, or rebound form 1.1176 is merely a correction.

Daily Pivots: (S1) 1.2978; (P) 1.3096; (R1) 1.3157; More....

Intraday bias in GBP/USD remains neutral first. As long as 1.2960 support holds, further rally remains in favor. On the upside, firm break of 1.3381 will resume the rebound from 1.2391 to 61.8% retracement of 1.4376 to 1.2391 at 1.3618 next. However, on the downside, decisive 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 now 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) 0.9939; (P) 0.9957; (R1) 0.9973; More.....

Intraday bias in USD/CHF remains neutral and consolidation from 0.9879 might extend. As long as 1.0010 minor resistance holds, further decline is mildly in favor. On the downside, below 0.9879 will resume the fall from 1.0124 to 0.9716 key support. Nevertheless, break of 1.0010 will turn bias back to the upside for 1.0124/28 resistance zone.

In the bigger picture, focus is back on medium term trend line (now at 0.9846). 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.

Daily Pivots: (S1) 110.17; (P) 110.50; (R1) 110.98; More...

Intraday bias in USD/JPY remains neutral at this point. On the upside, break of 110.95 minor resistance will argue that the pull back from 112.13 has completed at 109.17. In this case, intraday bias will be turned back to the upside for retesting 112.13. On the downside, break of 109.71 will resume the decline from 112.13 to 38.2% retracement of 104.69 to 112.13 at 109.28. Break of 109.28 will target 61.8% retracement at 107.53 next.

In the bigger picture, while the rebound from 104.69 was strong, USD/JPY failed to sustain above 55 week EMA (now at 110.91), and was kept well below 114.54 resistance. Medium term outlook is turned mixed and we'll wait for the structure of the fall from 112.13 to unveil to make an assessment later. For now, more range trading is expected between 104.69 and 112.13 first.

Daily Pivots: (S1) 1.3408; (P) 1.3431; (R1) 1.3466; More...

USD/CAD's sharp decline and break of 1.3352 minor support suggests that rebound from 1.3250 has completed at 1.3451 already. Intraday bias is turned back to the downside for 1.3250 support. Firm break there will indicate completion of whole rebound from 1.3068. In that case, deeper fall would be seen back to 1.3068.3112 support zone. On the upside, break of 1.3467 will target a test on 1.3664 high.

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 1.3192) 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.

Canadian Dollar jumps sharply in early US session after stronger than expected GDP data. At least, the three month-rolling average remained in expansion despite the contraction in December and November. Additionally, WTI crude oil surged through recent resistance to resume larger up trend to as high as 60.72. For now, New Zealand Dollar is the second strongest for today, paring some of this week's steep losses.

Sterling is the third strongest after rebounding just ahead of near term support against Dollar and Yen. There is clearly no following through buying in the Pound as focus remains on the Brexit Withdrawal Agreement (WA) vote. It's confirmed by EU that, approving the WA is enough for pushing Article 50 extension from April 12 to May 22. Still, it's unsure whether there is enough votes, in particular without Northern DUP's support. Also, only 23 Conservatives who voted against the Brexit deal confirmed they will support now, including Dominic Raab, Jacob Rees-Mogg and Boris Johnson.

Staying in the currency markets, Yen is the weakest one for today, as global stocks strengthen. Also, US 10-year yield is back up 2.4 handle at 2.42 as it enters into consolidation mode. Dollar follows as second weakest after larger than expected moderation in core PCE inflation. US Treasury Secretary Steven Mnuchin tweeted that this round of trade talks in Beijing has concluded. He described the talks as "constructive". And he looks forward to meeting Chinese Vice Premier Liu He in Washington next week to continue the "important" discussions.

In Europe, FTSE is currently up 0.47%. DAX is up 0.93%. CAC is up 0.83%. German 10-year yield is up 0.0135 at -0.053. Earlier in Asia, Nikkei rose 0.82%. Hong Kong HSI rose 0.96%. China Shanghai SSE rose 3.20%. Singapore Strait Times rose 0.29%. Japan 10-year yield rose 0.0034 to -0.09.

Canadian Dollar jump as GDP grew 0.3% in Jan, well above expectation

Canadian Dollar jumps after stronger than expected GDP report. Real GDP grew 0.3% mom in January, well above expectation of 0.1% mom. It's also strong enough to offset contraction in both December and November. On three month rolling average basis, real GDP edged up 0.1%, unchanged from the three-month rolling average in December. Manufacturing and construction contributed most to January's GDP growth. Ning and oil and gas extraction contracted.

Also from Canada, IPPI rose 0.3% mom in February while RMPI rose 4.6% mom.

US core PCE inflation slowed to 1.8%, missed expectations

US personal income rose 0.2% in February, below expectation of 0.3%. It "primarily reflected increases in wages and salaries, government social benefits to persons, and proprietors' income "

Personal spending rose 0.1% in January, below expectation of 0.3%. It "primarily reflected decreases in personal dividend income, farm proprietors' income, and personal interest income"

Headline PCE slowed to 1.4% yoy in January, down from 1.% yoy, matched expectation. Core PCE slowed to 1.8% yoy, down from 2.0% yoy and missed expectation of 1.9% yoy.

Swiss KOF rose to 97.4, still point to rather weak growth in coming months

Swiss KOF Economic Barometer rose to 97.4 in March, up from 93.0 and beat expectation of 93.9. The improve is predominantly due to "positive impulses" from manufacturing, as driven by the electrical industry, followed by the metal industry, mechanical engineering and the textile industry.

KOF Noted in the release that "recent downward tendency has at least for the time being ended." However, the current reading is still "markedly below its average". Hence, Swiss economy can expect to experience rather weak growth in the coming months.

Also from Europe...

A bunch of data is released in European session but they received little attention. UK Q4 GDP was finalized at 0.2% qoq, unrevised. Total business investment dropped -0.9% qoq, revised up from -1.4% qoq. Current account deficit narrowed to GBP -23.7B. M4 money supply rose 0.3% mom in February. Mortgage approvals dropped to 64k in February.

Germany unemployment dropped -7k in March, versus expectation of -10k. Unemployment rate dropped 0.1% to 4.9%, matched expectations. Retail sales rose 0.9% mom in February, way better than expectation of -0.9% mom. Import price index rose 0.3% mom, below expectation of 0.5% mom. Swiss KOF leading indicator improved to 97.4 in March, up from 93.0.

RBNZ Orr: Markets are forward looking and understands the central bank

RBNZ Governor Adrian Orr noted the sharp selloff in New Zealand Dollar after the central bank turned dovish earlier in Wednesday and signaled the next move in OCR is a cut. He was pleased as "markets have shown that they understand what we are focused on and they are forward looking."

Orr explained that "what we really need is total understanding and confidence from financial markets about our goal, our determination to achieve that goal and the environment and information set we are operating within." He added, "if financial markets watch us and we watch them then we are just looking at a mirror, we are not learning anything.

Orr said markets have to "think very hard and have their own independent mind around what we are trying to achieve. They expressed that, I assume the other day, when the currency went lower."

Released in Asian session

Japan unemployment rate dropped to 2.3% in February, down from 2.5% and beat expectation of 2.5%. Industrial production rose 1.4% mom versus expectation of 1.3% mom. Retail sales rose 0.4% yoy versus expectation of 0.9% yoy. In March, Tokyo CPI core was unchanged at 1.1% yoy. From Australia, private sector credit rose 0.3% mom in February versus expectation of 0.2% mom. New Zealand building permits rose 1.9% mom in February.

USD/CAD Mid-Day Outlook

Daily Pivots: (S1) 1.3408; (P) 1.3431; (R1) 1.3466; More...

USD/CAD's sharp decline and break of 1.3352 minor support suggests that rebound from 1.3250 has completed at 1.3451 already. Intraday bias is turned back to the downside for 1.3250 support. Firm break there will indicate completion of whole rebound from 1.3068. In that case, deeper fall would be seen back to 1.3068.3112 support zone. On the upside, break of 1.3467 will target a test on 1.3664 high.

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 1.3192) 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.

Economic Indicators Update

CRUDE OIL eyes 60.37 resistance zone and beyond as it follows through higher on its Thursday price reversal. Support lies at the 59.50 level where a break will expose the 59.00 level. A cut through here will set the stage for a run at the 58.50 level. Further down, support comes in at the 58.00 level. On the upside, resistance resides at the 60.37/50 levels. Further out, resistance comes in at the 61.00 level. A break above here will aim at the 61.50 level and then the 62.00 level followed by the 62.50 level. All in all, CRUDE OIL eyes 60.37 as it remains biased to the upside.

USDTRY has advanced above the 20- and 40-day simple moving averages (SMAs) and the 23.6% Fibonacci retracement level of the sell-off from 7.1135 to 5.1330, around 5.5970 on Friday. Over the last couple of days, the price has been paring the losses that were posted at the beginning of this week, creating sessions with strong momentum.

Looking at the technical indicators, the stochastic is switching to the upside after the rebound on the 20 level and the bullish cross within the %K and %D lines. Furthermore, the RSI indicator is heading higher in the positive zone.

If the market corrects higher, the bullish action may pause initially near 5.7940 before attention shifts to the 38.2% Fibonacci of 5.8855. A rally on top of the latter would probably stage fresh buying pressure, with the price moving next to the 50.0% Fibonacci of 6.1200.

On the other hand, dropping below the SMAs, could see losses extending towards the 5.3000 critical level. Even lower, the bears could stall around 5.1330 where the November sell-off stopped.

The recent bullish action turned the weak momentum to a more aggressive one, with the shorter-term moving averages (MA) increasing distance above the longer-term Mas, so we could expect further improvement in the market.

US personal income rose 0.2% in February, below expectation of 0.3%. It "primarily reflected increases in wages and salaries, government social benefits to persons, and proprietors' income "

Personal spending rose 0.1% in January, below expectation of 0.3%. It "primarily reflected decreases in personal dividend income, farm proprietors' income, and personal interest income"

Headline PCE slowed to 1.4% yoy in January, down from 1.% yoy, matched expectation. Core PCE slowed to 1.8% yoy, down from 2.0% yoy and missed expectation of 1.9% yoy.

Full release here.