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EURUSD remains under pressure and the risk is still to the downside as prices continue to drift lower from the 1.1450 high and the 23.6% Fibonacci retracement level of the downleg from 1.1815 to 1.1175, near 1.1325. Also, the price found strong obstacle around the 40-simple moving average (SMA) in the daily timeframe.

The RSI is hovering just below 50 and the stochastic oscillator has reached oversold area, with the %K line set for a bullish cross with the %D line, a signal that a possible upside reversal is nearing.

Immediate resistance could come from the 23.6% Fibonacci of 1.1325. A decisive break above the SMAs, could send prices towards the upper Bollinger band around 1.1400 before a test of the 38.2% Fibonacci of 1.1420 and the 1.1450 resistance. Moreover, if the market pushes the pair even higher, the 50.0% Fibonacci around 1.1500 could also act as a significant hurdle.

On the other hand, if the price fails to jump above the SMAs, it could hit the 1.1270 bottom again, where a possible penetration of this obstacle could drive the pair even lower, probably towards the lower Bollinger Band near 1.1200 and then until the 21-month low of 1.1175. More downside pressure could open the door for the 1.1115 level, taken from the low on June 2017.

Summarizing, EURUSD seems to be bearish-to-neutral in the short-term, while in the medium-term, the pair continues to post lower lows and lower highs, framing a bearish picture.

General Trend:

• Samsung warns on Q1, shares decline over 0.5%
• Japanese equity markets out perform supported by Marine/Transportation, Machinery, Real Estate and Electric Appliance companies; Softbank lags
• Nintendo rises over 5% amid speculation related to new Switch models
• Telecom services and Industrial companies decline in China
• Australian rare earth miner Lynas Corp receives bid from Wesfarmers
• McDonald’s to acquire AI company Dynamic Yield, no terms disclosed but said to be more than $300M deal
• FOMC member Rosengren comments on Fed balance sheet, Q1 growth
• UK Parliament votes to take control of Brexit, passing the Letwin Amendment
• Reserve Bank of New Zealand (RBNZ) due to hold policy meeting on Wed
• China bank earnings in focus: ICBC and China Construction Bank are expected to report on Thursday, Bank of China and Agbank results seen on Friday

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened slightly lower
• (AU) RBA Assistant Gov Ellis: Weak income growth is weighing on household consumption; still a bit off from unemployment level that would drive materially faster wages; will not move with other countries on rates - speaking at HIA March Industry Outlook Breakfast
• (NZ) New Zealand Feb Trade Balance (NZ$): +12M v -200Me; Exports: 4.82B v 4.7Be; Imports: 4.8B v 4.9Be; Trade Balance (12-month YTD): -6.6B v -6.7Be
• LYC.AU Wesfarmers make conditional non-binding offer at A$2.25/shr cash
• (AU) Australia sells A$150M v A$150M indicated in 0.75% Nov 2027 indexed bonds, avg yield 0.27%, bid to cover 3.7x
• (NZ) New Zealand Feb New Residential Mortgage Lending Y/Y: 2.8% v 9.6% prior

Japan

• Nikkei 225 opened +0.9%
• (JP) BOJ Harada: Biggest contribution of QQE has been the productivity rise - speaking at Daiwa Institute of Research conference (after the close yesterday)
• (JP) Bank of Japan (BOJ) Summary of Opinions for Mar 24 and 25 meeting: In order to maintain the highly accommodative financial conditions, it is essential to persistently continue with the current monetary easing policy while taking account of developments in economic activity and prices
• (JP) Japan Feb PPI Services Y/Y: 1.1% v 1.1%e
• (JP) Japan Fin Min Aso: CPI target is not a case of prices can go up at any cost, not saying price target should be withdrawn
• (JP) Japan MoF sells ¥399.2B v ¥400B indicated in 0.80% (prior 0.8%) 40-yr JGBs, highest accepted yield 0.6100% v 0.7400% prior, bid to cover: 3.50x v 3.79x prior
• (JP) Bank of Japan (BOJ) Feb Core CPI Y/Y: 0.4% v 0.5% prior

Korea

• Kospi opened +0.4%
• 005930.KR Guides Q1 to be lower than market expectations; decline in memory chip and display prices larger than expected
• (KR) South Korea Finance Ministry: Fiscal policy will help sustain growth; concerns are rising over growth potential

China/Hong Kong

• Hang Seng opened +0.5%; Shanghai Composite opened +0.5%
• (CN) China Premier Li: To use reform and opening up as a driving force to further stimulate market vitality to ensure the healthy development of the Chinese economy - speaking at China Development Forum 2019 yesterday
• (CN) China PBoC Open Market Operation (OMO): Skips for 5th consecutive session; Net drains CNY50B v CNY60B prior
• (CN) China PBoC sets yuan reference rate: 6.7042 v 6.7098 prior
• 000002.CN Reports FY18 (CNY) Net 33.8B v 34.3Be, Rev 297.7B v 328Be
• 1208.HK To declare force majeure on Las Bambas contracts; Production and transport to be progressively impacted starting later this week due to protesting activity
• (CN) China city of Shanghai will increase minimum wage by 2.5%, effective in April
• (CN) China CSRC (securities regulator) tightens rules for convertible bond subscriptions
• (CN) China State Owned Enterprises (SOEs) Jan-Feb profit growth said to be 'solid', the combined profits of SOEs were CNY452B (+10% y/y) and revenues were CNY8.7T (+6.3% y/y) - Xinhua

Other Asia

• (TH) Thailand Feb Manufacturing Production Index Y/Y: -1.6% v +0.4%e
• (SG) Singapore Feb Industrial Production M/M -4.1% v -2.6%e; Y/Y: 0.7% v -0.04%e

North America

• (US) Fed’s Rosengren (moderate, voter): Shortening duration of Fed holdings aids flexibility; it may be important for Fed to increase share of Treasury bills, lower duration of its balance sheet more quickly; personal opinion is negative rates not the best way to respond to next recession - speaking in Hong Kong
• CBS Expected to resume merger talks with Viacom - NY Post

Europe

• (UK) Parliament passes Amendment A (Letwin): approves to take control of parliamentary time to hold indicated votes on Brexit alternatives on March 27th
• (FR) France and China sign deals worth billions of euro yesterday on China President Xi's visit to France

Levels as of 1:20 ET

• Nikkei 225, +2.2%, ASX 200 +0.1%, Hang Seng +0.1%; Shanghai Composite -1%; Kospi +0.3%
• Equity Futures: S&P500 +0.3%; Nasdaq100 +0.3%, Dax +0.4%; FTSE100 +0.3%
• EUR 1.1323-1.1310; JPY 110.24-109.93 ; AUD 0.7129-0.7107 ;NZD 0.6925-0.6906
• Gold -0.3% at $1,324/oz; Crude Oil +0.7% at $59.24/brl; Copper -0.1% at $2.854/lb

Market movers today

Today's calendar is rather thin. Although we have a range of Fed speakers today (Evans, Harker and Daly), they will likely fade into the background for markets for now, as the Fed has clearly signalled it is on hold for the rest of the year.

In Scandinavia, Danish retail sales are due for release (see next page).

Overnight to Wednesday, the central bank of New Zealand will meet (no rate change is expected). We also get Chinese industrial profits.

Next focal point for markets are the indicative votes in the UK parliament and some notable ECB speakers at the Watcher's conference tomorrow.

Selected market news

Yesterday, PM Theresa May was forced to abandon plans to hold a third 'meaningful vote', after members of parliament voted in favour of taking control over the Brexit process by demanding a series of indicative votes on a way forward taking place on Wednesday. While this is another sign that May is Prime Minister in name only, it may actually help getting her deal over the finish line, as some of the Brexiteers, who have made life very difficult for her, seem afraid of losing control of Brexit, as it increases the likelihood of a softer Brexit (customs union or Norway-style single market participation) or a long extension. Still, May will likely need to get more Labour MPs on board to get her deal through parliament. The indicative votes will not be legally binding and hence we do not know how the EU will respond. As the issue in the UK parliament is still that there is no majority for anything, it remains to be seen whether this is the start towards a compromise in a softer Brexit direction. Our base case remains a long extension but the development on Wednesday is crucial near term. We cannot rule out Theresa May resigning or a general election at this point.

The Eurozone gloom that captured markets late last week subsided somewhat yesterday, when Germany's Ifo index for March painted a somewhat less bleak picture of the state of the economy than the PMIs on Friday, see Flash Comment: Growing manufacturing abyss challenges Eurozone outlook . Both companies' assessment of the current situation as well as business expectations registered a first small rebound since August 2018. That said, with abundant challenges still on the horizon - not least with regard to Brexit - the German economy is far from being out of the woods just yet.

Despite a better than feared Ifo reading, the global FI rally got another boost yesterday as the 10Y US treasury yield dropped below 2.40% and 10Y German Bund yields dropped to -3bp. Still, as pessimism over the global growth outlook eased a little, FX markets calmed down a bit after a nervous end to last week, while Asian equities rebounded overnight and S&P 500 futures also point to a higher opening today. Along with global markets Brent oil rebounded above USD67/bbl on news of a surge in Russian crude exports.

For the 24 hours to 23:00 GMT, the EUR rose 0.17% against the USD and closed at 1.1315.

Data indicated that Germany's Ifo business climate index unexpectedly advanced to a level of 99.6 in March, marking its first rise since August 2018 and defying market expectations for an unchanged reading. The index had recorded a revised reading of 98.7 in the prior month. Moreover, the nation's Ifo business expectations index rose to a level of 95.6 in March, surpassing market expectations for an advance to a level of 94.0. The index had registered a reading of 93.8 in the previous month. Also, the Ifo current assessment index unexpectedly climbed to a level of 103.8 in March, confounding market expectations for a decline to a level of 102.9. The index had registered a revised level of 103.6 in the preceding month.

In the US, data showed that the US Chicago Fed national activity index eased to a level of -0.29 in February, less than market consensus for a fall to a level of -0.38. In the prior month, the index had recorded a revised reading of -0.25. Additionally, the nation's Dallas Fed manufacturing business index dropped to a level of 8.3 in March, compared to market anticipations for a fall to a level of 9.0. In the preceding month, the index had registered a reading of 13.1.

In the Asian session, at GMT0400, the pair is trading at 1.1316, with the EUR trading a tad higher against the USD from yesterday's close.

The pair is expected to find support at 1.1297, and a fall through could take it to the next support level of 1.1278. The pair is expected to find its first resistance at 1.1333, and a rise through could take it to the next resistance level of 1.1350.

Moving forward, traders would await Germany's GfK consumer confidence index for April, set to release in a while. Later in the day, the US housing starts and building permits, both for February along with the Richmond Fed manufacturing index and the consumer confidence index, both for March, will keep investors on their toes. Additionally, the US house price index for January, will also be on investors radar.

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

For the 24 hours to 23:00 GMT, the GBP rose 0.10% against the USD and closed at 1.3208, amid reports of a third vote on UK’s Prime Minister Theresa May Brexit deal.

In the Asian session, at GMT0400, the pair is trading at 1.3199, with the GBP trading 0.07% lower against the USD from yesterday’s close.

The pair is expected to find support at 1.3157, and a fall through could take it to the next support level of 1.3116. The pair is expected to find its first resistance at 1.3243, and a rise through could take it to the next resistance level of 1.3288.

Trading trend in the Sterling today, is expected to be determined by UK’s BBA mortgage approvals for February, slated to release in a few hours.

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

For the 24 hours to 23:00 GMT, the USD rose 0.20% against the JPY and closed at 110.01.

In the Asian session, at GMT0400, the pair is trading at 110.06, with the USD trading 0.05% higher against the JPY from yesterday’s close.

The pair is expected to find support at 109.79, and a fall through could take it to the next support level of 109.53. The pair is expected to find its first resistance at 110.28, and a rise through could take it to the next resistance level of 110.51.

In absence of key economic releases in Japan today, investor sentiment would be determined by global macroeconomic events.

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 declined 0.20% against the CHF and closed at 0.9922.

On the data front, Switzerland’s total sight deposits eased to a level of CHF575.9 billion in the week ended 22 March 2019, from CHF576.0 billion in the previous week.

In the Asian session, at GMT0400, the pair is trading at 0.9922, with the USD trading flat against the CHF from yesterday’s close.

The pair is expected to find support at 0.9905, and a fall through could take it to the next support level of 0.9888. The pair is expected to find its first resistance at 0.9944, and a rise through could take it to the next resistance level of 0.9966.

With no macroeconomic releases in Switzerland today, investors would look forward to global macroeconomic releases for further directions.

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 declined 0.25% against the CAD and closed at 1.3401.

In the Asian session, at GMT0400, the pair is trading at 1.3391, with the USD trading 0.07% lower against the CAD from yesterday’s close.

The pair is expected to find support at 1.3370, and a fall through could take it to the next support level of 1.3350. The pair is expected to find its first resistance at 1.3428, and a rise through could take it to the next resistance level of 1.3466.

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

For the 24 hours to 23:00 GMT, the AUD rose 0.45% against the USD and closed at 0.7110.

LME Copper prices declined 0.7% or $47.0/MT to $6328.0/MT. Aluminium prices declined 0.6% or $11.0/MT to $1856.0/MT.

In the Asian session, at GMT0400, the pair is trading at 0.7120, with the AUD trading 0.14% higher against the USD from yesterday’s close.

The pair is expected to find support at 0.7086, and a fall through could take it to the next support level of 0.7053. The pair is expected to find its first resistance at 0.7140, and a rise through could take it to the next resistance level of 0.7161.

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

For the 24 hours to 23:00 GMT, Gold rose 0.51% against the USD and closed at USD1327.80 per ounce, amid weakness in the US dollar and US equities.

In the Asian session, at GMT0400, the pair is trading at 1326.60, with gold trading 0.09% lower against the USD from yesterday’s close.

The pair is expected to find support at 1321.40, and a fall through could take it to the next support level of 1316.20. The pair is expected to find its first resistance at 1331.30, and a rise through could take it to the next resistance level of 1336.00.

The yellow metal is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.