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Daily Pivots: (S1) 1.3152; (P) 1.3211; (R1) 1.3255; More....

Intraday bias in GBP/USD remains neutral as range trading continues inside 1.2960/3381. 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) 0.9914; (P) 0.9940; (R1) 0.9976; More.....

Intraday bias in USD/CHF remains neutral and consolidation from 0.9879 might extend further. 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) 110.26; (P) 110.48; (R1) 110.74; More...

Intraday bias in USD/JPY remains neutral for the moment. With 110.95 minor resistance intact, further decline is mildly in favor. 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. 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.

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) 0.7054; (P) 0.7098; (R1) 0.7128; More...

AUD/USD is staying in range of 0.7056/7168 and intraday bias remains neutral first. On the downside, break of 0.7056 minor support will turn bias to the downside for 0.7003 first. Break will resume the whole decline from 0.7295. On the upside above 0.7168 will resume the rebound from 0.7003 towards 0.7295 high instead.

In the bigger picture, as long as 0.7393 resistance holds, we'd treat fall from 0.8135 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.

Daily Pivots: (S1) 1.3381; (P) 1.3410; (R1) 1.3444; More...

Intraday bias in USD/CAD remains neutral and further rise is expected as long as 1.3352 minor support holds. On the upside, firm break of 1.3467 resistance will reinforce the case that corrective pull back from 1.3664 has completed at 1.3068. USD/CAD should then target a test on 1.3664. On the downside, break of 1.3352 minor support will turn intraday bias back to the downside for 1.3250 support first.

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.

Daily Pivots: (S1) 1.1166; (P) 1.1194; (R1) 1.1214; More...

EUR/CHF drops to as low as 1.1173 so far and intraday bias remains on the downside. Decisive break of 1.1173 low (inside 1.1154/98 key support zone) will carry larger bearish implication and could trigger downside acceleration. Next downside target will be 61.8% projection of 1.2004 to 1.1173 from 1.1444 at 1.0930. On the upside, though, break of 1.1256 minor resistance will turn bias back to the upside for recovery to 1.1310 support turned resistance.

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.

The forex markets are relatively quiet as quarter end approaches. Sterling remains stuck in range as Brexit stalemate continues. The UK Parliament continued to tell the world what they don't want regarding Brexit, but not they really want. Meanwhile, US-China trade talks are resuming in Beijing today. There are reports of unprecedented progress in the negotiations. Yet it remains uncertain when the deal would be reached, or whether it could be. Treasury yields extended recent decline with US 10-year yield firmly taken out 2.4 handle overnight. US yield curve inversion continue to worsen but there is no clear responses from the stock markets yet.

Technically, Euro will be an interest currency to watch today. Other than New Zealand Dollar, Euro's weakness is most apparent. Recession worries, falling treasury yields and Brexit stalemate are all playing a part. EUR/CHF is now pressing key support level 2018 low at 1.1173 after recent extended decline. Decisive break there will resume larger down trend from 1.2004. EUR/JPY is pressing 123.82 minor support. Break will resume the fall from 127.50 and solidify near bearish reversal for 118.62 low. EUR/GBP recovered just ahead of 0.8474 support but looks vulnerable to break to resume medium term down trend. EUR/USD's fall from 1.1448 is also in progress for 1.1176 low.

In Asia, Nikkei is currently down -1.37%. Hong Kong HSI is up 0.03%. China Shanghai SSE is down -0.26%. Singapore Strait Times is up 0.24%. Japan 10-year JGB yield is down -0.016 at -0.082. Overnight, DOW dropped -0.13%. S&P 500 dropped -0.46%. NASDAQ dropped -0.63%. 10-year yield dropped -0.040 to 2.374.

All Brexit alternatives voted down while May gains support for her deal

The UK Parliaments once again expressed what they don't want about Brexit, without saying what they want. With April 12 cliff-edge looming, there is still no sign of a breakthrough.

All eight Brexit alternatives were defeated in the UK House of Commons on Wednesday. That means no majority emerged support any options including no deal, a referendum, a customs union and a Norway-style deal. The closet results was for a "permanent and comprehensive UK-wide customs union with the EU", which was voted down by 264 to 272. The call for confirmatory referendum was voted down by 268 to 295.

Meanwhile, Prime Minister Theresa May offered to resign if her Brexit deal gets approved by the parliament in a third meaningful vote. She told the Conservative 1922 Committee that "I know there is a desire for a new approach – and new leadership – in the second phase of the Brexit negotiations, and I won't stand in the way of that." She added "I am prepared to leave this job earlier than I intended in order to do what is right for our country and our party."

With May's offer, more hard-line Brexiteers turned to support her deal. A key consideration is that the change in leadership for the most important of next phase in negotiations. Trade negotiations and futures relationship will be on the line, which Brexiteers would be eager to get a firmer control on. However, it remains uncertain how May could get enough votes as Northern Ireland's DUP repeated its objection to the deal.

Fed George: More time and evidence needed to separate signal from noise

Kansas City Fed President Esther George said in a speech that weakness in Q1 growth could reflect "transitory factors" such as the government shutdown, financial volatility, an unusually harsh winter, and heightened policy uncertainty. But over the medium term, the "generally positive outlook" of the US economy has "several prominent downside risks".

The biggest risks come from slower growth abroad, "particularly in China, the euro area, and the United Kingdom." Together with waning fiscal and monetary stimulus, they "represent a stronger headwind" then George's baseline forecast. Right now, she noted that "data are noisy" and more time and evidence are needed to "separate the signal from the noise".

Unprecedented progress made on forced technology transfer as new round of US-China trade talks start

US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin arrive in Beijing  today for a new round of trade negotiations Ahead of that Reuters reported that there were unprecedented progress on a core issue in technology transfers.

Citing unnamed officials, it's said that China's proposals went further than in the past, which created hope for an eventual trade deal. The discussions on forced technology transfer covered areas that were not touched before, in terms of both scope and specifics.

Meanwhile, the texts of agreements moved forward in all areas even though they're not where the US want to be. The areas are believed to include forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade.

Another official noted that some of the tariffs imposed since last year will stay even after a deal is made. And this will be an important issue to resolve, as an important part of the final deal. But for now, there is no clear timeline for completing the deal yet. And negotiations could drag on till June.

New Zealand ANZ business confidence dropped, RBNZ cut sooner rather than later

New Zealand ANZ Business Confidence dropped to -38 in March, down from -30.9. Activity Outlook also dropped to 6.3, down from 10.5. ANZ noted that GDP growth has moderated but is still respectable. However, leading indicators are suggesting that the economy is "running out of steam quite rapidly".

In particular, export intentions dropped to levels lower than during the Asian Financial Crisis of 1998-9 and the Global Financial Crisis of 2008-9. Sharply lower export intentions despite a well-behaved exchange rate suggest global factors are a part of slowdown in momentum.

Overall, ANZ expects next move in RBNZ to be a cut, "with a growing risk that it is sooner rather than later."

Looking ahead

Eurozone will release M3 money supply and confidence indicators. Germany will release March CPI flash. US will release Q4 GDP final, jobless claims and pending home sales.

EUR/CHF Daily Outlook

Daily Pivots: (S1) 1.1166; (P) 1.1194; (R1) 1.1214; More...

EUR/CHF drops to as low as 1.1173 so far and intraday bias remains on the downside. Decisive break of 1.1173 low (inside 1.1154/98 key support zone) will carry larger bearish implication and could trigger downside acceleration. Next downside target will be 61.8% projection of 1.2004 to 1.1173 from 1.1444 at 1.0930. On the upside, though, break of 1.1256 minor resistance will turn bias back to the upside for recovery to 1.1310 support turned resistance.

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.

Economic Indicators Update

The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products (ex. SPR) stocks climbed +0.06 mmb to 1221.91 mmb in the week ended March 22. Crude oil inventory increased +2.8 mmb to 442.28 mmb (consensus: -1.2 mmb). Inventories rose in 3 out of 5 PADDs with PADD 3 (Gulf Coast) seen a +4.58 mmb increase. Meanwhile, Cushing stock added +0.54 mmb to 46.92 mmb. Utilization rate dropped -2.3% to 86.6% while crude production steadied at 12.1M bpd for the week. Crude oil imports decreased -0.39M bpd to 6.54M bpd in the prior week.Concerning refined oil product inventories, gasoline inventory declined -2.88 mmb to 238.52 mmb as demand fell -3.03% to 9.12M bpd. The market had anticipated a -2.78 mmb drop in stockpile. Production slid -2.7% to 9.66 bpd while imports declined -13.24% to 0.69M bpd during the week.Distillate inventory fell -2.08 mmb to 130.17 mmb. Demand declined -10.41% to 4.22M bpd. The market had anticipated a -1.09 mmb decline in inventory. Imports soared +91.18% to 0.2M bpd while production was largely unchanged at 4.93M bpd during the week.

Released after market close on Wednesday, the industry- sponsored API estimated that crude oil inventory increased +1.9 mmb during the week. For refined oil products, gasoline stockpile drew -3.5 mmb while distillate decreased -4.31.61 mmb.

STOCKS

Fear of recession is keeping the global equity markets volatile and mixed with an upmove one day and a fall the other day. The price action for a few sessions/days will need a close watch to get a clear indication on the next move. The bias however remains in favor of a fall going forward in many indices.

The 21-day moving average (25735) resistance continues to cap the upside in Dow (25625.59, -32.14, -0.13%). This keeps the possibility alive of the index falling to 25200 levels. The index will get a breather only on a decisive close above the 21-day moving average which will then pave way for a test of 26000 and 26100.

DAX (11419.04, -0.44, 0.00%) has sustain above 11400 to keep alive the chances of testing 11500 and 11550 levels. A fall below 11400 can take it lower to 11300.

Nikkei (21019.41, -359.32, -1.68%) has tumbled below the 100-day moving average support level of 21228 and looks vulnerable to test 20900.

Shanghai (3018.15, -4.57, -0.15%), though has bounced from around 2988, needs a strong rise past 3039 (21-day moving average) to gain strength and revisit 3100-3120 levels. Inability to breach 3039 can pull it lower to 2970 and will keep the possibility high of the index falling to 2900.

Sensex (38132.88, -100.53, -0.26%) has to sustain above 38000 in order to move up to 38500 and higher levels again. A break below 38000 can drag it to the crucial support level of 37730. A fall below 37730 can trigger profit-booking and drag the index to 37250 in the coming days.

Nifty 50 (11445.05, -38.20, -0.33%) can fall to 11350 while it trades below 11500. A break below 11350 can pull it further lower to 11240. A decisive close above 11500 is needed for it to gain bullish momentum to target 11700-11750 levels thereafter.

COMMODITIES

Commodities are struggling to gain strength as the dollar index has been inching higher over the last few days. Gold and Silver has come-off yesterday contrary to our expectation for an upmove. Oil and copper remains mixed in the near term.

The rally to 1330 that we have been mentioning over the last few days has not materialized in Gold (1309). While below 1313, a dip to 1305 and 1300 is possible in the near term.

Silver (15.29) has declined below the support level of 15.35 and can test 15.2 in the coming sessions. A break below it can drag it to 15. A strong rise past 15.4 is needed for it to test 15.5 and 15.6 levels again.

Copper (2.86) remains mixed and can remain volatile between the support at 2.84 and resistance at 2.89. A breakout on either side of 2.84 or 2.89 will decide the next move.

WTI (59.15) is still struggling to get strong follow through buyers above 60. A dip to 58 is possible on a break below 58 in the near term.

Brent (67.6) has come-off from around 68.35 and can dip to 67. A range bound move between 66.5 and 68.5 can be seen for sometime before we see a fresh rally to 70.

FOREX

Currencies are mixed. Euro could strengthen a bit while US Dollar Index could face some resistance near 97.00/20. Euro-Yen looks weak. EM currencies including USDINR has weakened a bit against the US Dollar since yesterday.

Dollar-Index (96.89) is trading below resistance zone of 97.0-97.20. While 97.20/00 holds, the index could see some corrective fall in the near term targeting 96.50 or lower again.

Euro (1.1254) is almost stable and while below 1.13, chances of falling towards 1.12/11 remains on the cards. If Dollar index falls from 97.0/20, downside for Euro could be limited.

Euro-Yen (123.99) has fallen towards our downside levels of 123.60 mentioned yesterday. While below 124.40/00, Euro-Yen looks bearish towards 123.00-122.80 levels in the near term.

Dollar Yen (110.18) could see a short corrective upmove towards 112 in the near term. In the longer term, a chance of a fall towards 109.50/00 is still in place.

Aussie (0.7089) has fallen and while resistance at 0.7150 holds, Aussie could fall towards 0.70-0.6950 levels.

Pound (1.3182) is almost stable. Immediate support is seen near 1.31 which if holds could take Pound towards 1.33/34 again on the upside.

USDCNY (6.7322) is has moved up rising beyond our expected 6.72. While above 6.73, Yuan may continue to weaken towards 6.75 which is an interim resistance and could probably push down prices in the medium term.

Dollar-Rupee (68.88) could move up today to possibly open with a gap up near 69 as indicated by the NDF rates at 69.09. A break above 69 would take it again to test 69.25 over the next 1-2 sessions.

INTEREST RATES

Overall the sharp recent fall in the yields and yields spreads could recover in the coming sessions as they trade near support levels.

The US yields have fallen as expected. The 10YR (2.35%) and 30Yr (2.80%) has exactly fallen as expected and could possibly pause near current levels attempting to recover a bit in the coming sessions. There is some scope of falling towards 2.70% (30YR) and 2.30% (10Yr) which could be the maximum downside that we may look for just now. Preference is for a corrective upmove from near current levels.

The German-JGB 10Yr (0.01%) has also come down to test support and could possibly bounce back from here towards 0.06%. This rise could pull up Euro-Yen in the near term.

The US-JGB 10Yr (2.44%) has also got support near 2.4% which could hold in the near term producing a bounce towards 2.50% or higher.

The 10YR GOI (7.4823%) needs to decide if it would hold above 7.45% and rise up towards 7.55% or break below 7.45% to target 7.35/30% on the downside.

New Zealand ANZ Business Confidence dropped to -38 in March, down from -30.9. Activity Outlook also dropped to 6.3, down from 10.5. ANZ noted that GDP growth has moderated but is still respectable. However, leading indicators are suggesting that the economy is "running out of steam quite rapidly".

In particular, export intentions dropped to levels lower than during the Asian Financial Crisis of 1998-9 and the Global Financial Crisis of 2008-9. Sharply lower export intentions despite a well-behaved exchange rate suggest global factors are a part of slowdown in momentum.

Overall, ANZ expects next move in RBNZ to be a cut, "with a growing risk that it is sooner rather than later."

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