Sample Category Title

Pivot (invalidation): 0.7060

Our preference Long positions above 0.7060 with targets at 0.7100 & 0.7120 in extension.

Alternative scenario Below 0.7060 look for further downside with 0.7040 & 0.7025 as targets.

Comment The RSI calls for a new upleg.

Pivot (invalidation): 1.3340

Our preference Short positions below 1.3340 with targets at 1.3285 & 1.3270 in extension.

Alternative scenario Above 1.3340 look for further upside with 1.3370 & 1.3390 as targets.

Comment The RSI is bearish and calls for further downside.

Pivot (invalidation): 1.0040

Our preference Short positions below 1.0040 with targets at 1.0015 & 1.0000 in extension.

Alternative scenario Above 1.0040 look for further upside with 1.0050 & 1.0065 as targets.

Comment The RSI has broken down its 30 level.

Daily Pivots: (S1) 147.24; (P) 148.05; (R1) 148.72; More...

Intraday bias in GBP/JPY remains neutral first/. On the upside, decisive break of 149.48 key resistance will carry larger bullish implication and target 156.58 resistance next. On the downside, though, break of 143.72 support will indicate near term reversal and turn outlook bearish for 141.00 support.

In the bigger picture, the strong rebound from 131.51 suggests that medium term fall from 156.59 (2018 high) has completed already. The corrective structure of such decline in turn argues that it's the second leg of the corrective pattern from 122.36 (2016 low). And this pattern is starting the third leg. On the upside, decisive break of 149.48 will pave the way to 156.59 resistance and above. However, firm break of 141.00 support will dampen this view and turn focus back to 131.51 low instead.

Rates: US eco data overshadowed by looming Fed?
We expect US eco data to beat consensus today, but they might be overshadowed by next week's FOMC meeting which will likely result in a more dovish US monetary policy stance. The US 10-yr yield is still battling with 2.61% intermediate support. ECB Rehn, who is one of the frontrunners for succeeding President Draghi, speaks on monetary policy.

Currencies: EUR/USD to remain well supported ahead of next week's Fed meeting
The EUR/USD rebound took a breather as risk sentiment turned less buoyant and as news flow was less euro supportive. Still, the dollar remains in the defensive as markets expect the Fed to cement expectations for a (prolonged?) pause. The sterling rally also met resistance as uncertainty remains elevated even as chances on a no-deal Brexit have diminished

The Sunrise Headlines

• US equity markets halted a three-day rally, ending close to opening levels yesterday. Asian equities are largely trading in green this morning with Chinese indices outperforming.
• UK Parliament voted to extend the Brexit deadline beyond March 29. PM May will now put her Brexit deal again to a vote on Tuesday. If passed, an extension until the end of June is likely. Otherwise, a longer extension is inevitable.
• The US Senate voted to block President Trump's declaration of a national emergency to free funds to build his wall at the Mexican border. US President Trump already said to veto this decision and to continue with his plans.
• North Korean Vice Foreign Minister Choe Son Hui said his leader Kim Jong Un will decide soon whether to keep the denuclearization talks with the US ongoing. He added that the US threw away a golden opportunity when in Hanoi.
• China has passed a new investment law granting foreign companies equal standing with state-owned businesses. PM Li Keqiang said he hopes this will pave the way to a new trade deal with the US.
• The Bank of Japan has left its policy balance rate unchanged at -0.1% and said it will keep the asset purchases steady, while it downgraded its assessment of exports, factory output and overseas economies.
• Today's US eco calendar contains the Empire Manufacturing Survey (March), Industrial production data (February) and University of Michigan Consumer Confidence (March). ECB's Rehn speaks

Currencies: EUR/USD To Remain Well Supported Ahead Of Next Week's Fed Meeting

EUR/USD rather well protected ahead of the Fed

This week's euro rebound slowed yesterday. IFO downgraded its growth outlook for Germany (0.6% for 2019). US eco data were mixed and didn't provide directional guidance even as markets assume the Fed to stay soft next week. The risk of a disorderly Brexit was seen declining due to recent votes in the UK Parliament. Yesterday's vote to delay Brexit added to that picture, but it was expected and didn't provide any further support for the euro or sterling anymore. A pause in the risk rally also blocked further euro gains. EUR/USD closed at 1.1304 (from 1.1327). USD/JPY followed a broader USD rebound (close at 111.70). Overnight, sentiment on Asian markets turned again positive. Chinese officials including Premier Li confirmed selective (fiscal) stimulus to support growth and job creation. The BOJ as expected left its policy unchanged but downgraded its assessment on the economy due to a less favourable international context. The BOJ decision is only of second tier importance for (FX) markets in Asia. USD/JPY hovers in the 111.70 area. The risk-on trade helps putting a floor for EUR/USD (1.1315 area). Today, the EMU calendar contains the final CPI and Italian industrial production. In the US, the Empire survey, production and Michigan consumer confidence will be released. US data are expected to rebound after soft/poor numbers the previous month. Still, it is unlikely they will change markets' assessment on the Fed's cautious stance next week. (Moderately) positive US data might even support the ST risk rebound which shouldn't be too bad for EUR/USD and USD/JPY. Brexit might move a bit to the background as a driver for (FX) trading. This week, EUR/USD profited from the risk rebound, at least partially supported by soft expectations on next week's Fed meeting. After a pause yesterday, it looks the risk rebound might continue. Whatever, we don't expect a big dollar comeback ahead of next week's Fed meeting, Post-ECB euro negativism eased and the technical picture for EUR/USD become more stable compared to this time last week. The 1.12 range bottom survived. Any further sustained rebound needs better EMU data. As long as the EMU eco picture remains foggy, more EUR/USD consolidation might be in the cards (1.12/1.14 area).

Yesterday, the sterling rebound did run into resistance. A non-deal scenario has become for less likely after this week's votes in parliament. Still, visibility on the outcome of the political process remains limited. This is a fortiori the case for the fallout on the economy. We don't front-run on possible further Brexit-related GBP-gains from current levels. The 0.85 area might become a ST floor for EUR/GBP

EUR/USD: rebounds from 1.12 range bottom due risk rebound and as markets position for a soft Fed next week

Daily Pivots: (S1) 125.92; (P) 126.25; (R1) 126.60; More....

Intraday bias in EUR/JPY remains on the upside for 127.50 resistance. With 124.23 cluster support (38.2% retracement of 118.62 to 127.50 at 124.10) intact, rise from 118.61 is in favor to extend. On the upside, break of 127.50 will target 129.50 resistance next. On the downside, however, decisive break of 124.10/23 should confirm completion of whole rebound from 118.61. Deeper fall should at least be seen to 61.8% retracement at 122.01 and below. In this case, the chance of resuming larger down trend will also increase.

In the bigger picture, current development argues that medium term decline from 137.49 (2018 high) has completed with three waves down to 118.62 already. Decisive break of 133.12 resistance will confirm this bullish case. And whole up trend from 109.03 (2016 low) might resume through 137.49 in that case. On the downside, break of 124.23 support will invalidate this case. And in such case, the down trend from 137.49 could possibly resume through 118.62.

Daily Pivots: (S1) 0.8498; (P) 0.8530; (R1) 0.8569; More...

EUR/USD is staying in range of 0.8474/8676 and intraday bias remains neutral. Further decline is expected as long as 0.8676 resistance holds. On the downside, break of 0.8474 will resume larger down trend to 0.8416 long term projection next. However, firm break of 0.8676 resistance will indicate short term reversal and bring further rise to 0.8840 resistance.

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 is now targeting 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.

Daily Pivots: (S1) 1.5957; (P) 1.6007; (R1) 1.6053; More....

Intraday bias in EUR/AUD remains neutral as this point and consolidation from 1.5721 could extend. The fall from 1.6765 is probably still in progress. Break of 1.5721 low will extend the decline and target 1.5346 support. On the upside, above 1.6122 will resume the corrective rise from 1.5721.

In the bigger picture, as long as 1.5346 support holds, outlook will 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.

Pivot (invalidation): 111.75

Our preference Short positions below 111.75 with targets at 111.45 & 111.25 in extension.

Alternative scenario Above 111.75 look for further upside with 111.90 & 112.00 as targets.

Comment The RSI shows downside momentum.

Daily Pivots: (S1) 1.1335; (P) 1.1356; (R1) 1.1369; More...

Intraday bias in EUR/CHF remains neutral as consolidation from 1.1444 is in progress. As long as 1.1310 support holds, further rally remains in favor. On the upside, break of 1.1444 will resume the rebound from 1.1181 and target 1.1501 key resistance next. On the downside, firm break of 1.1310 will indicate completion of the rebound. In that case, intraday bias will be turned back to the downside for 1.1181 low again.

In the bigger picture, price actions from 1.2004 medium term top is seen as a correction only. Downside should be contained by 1.1154/98 support zone to complete it and bring rebound. Decisive break of 1.1501 (38.2% retracement of 1.2004 to 1.1173 at 1.1490) will confirm completion of the correction. Further rise should be seen to 61.8% retracement at 1.1687 and above next.