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The New Zealand Dollar has declined about 0.86% against the US Dollar during the last 24 hours. A breakout occurred through the lower boundary of a junior ascending channel pattern during Thursday's trading session.

Given that a breakout had occurred, it is likely that the currency exchange rate will continue its decline within this session. The potential downside target will be near the weekly S1 at 0.6758.

However, a support cluster formed by the combination of the weekly PP and the 200-hour simple moving average at 0.6808 could hinder the NZD/USD exchange rate from hitting the given target today.

Italian Deputy Prime Minister Luigi Di Maio, head of ruling Five-Star Movement, said that President Sergio Mattarella support signing up as part of China's "Belt and Road" initiative. He noted that "I am pleased to see the president's office has shown its support to the MOUs." He added that the MOUS will help Italy's port infrastructure and boost export to China.

On the other hand, another Deputy Prime Minister Matteo Salvini, head of coalition partner League, warned he will firmly oppose to the MOUs, if that compromises national security. He also said earlier this week that "we're absolutely not ready to do so if it's a question of foreign companies colonizing Italy."

Prime Minister Giuseppe Conte indicated that he might sign the Belt and Road MOUs when Chinese President Xi Jinping visits Rome and Palermo later this month.

Bloomberg reports that the planned summit between Trump and Chinese President Xi Jinping to seal the trade deal would be postponed to April. One of the reason is that China prefers a formal state visit rather than a low-profile appearance just to sign the deal.

But more importantly, as US Trade Representative Robert Lighthizer said earlier this week that there are still unresolved major issues". We've repeatedly pointed out that there has been no concrete details on the core issues, including IP theft, forced technology transfer and market distortion by state-owned enterprises.

Trump has also tried to tone down on the agreement yesterday as he said "I'm in no rush. I want the deal to be right. ... I am not in a rush whatsoever. It's got to be the right deal. It's got to be a good deal for us and if it's not, we're not going to make that deal." And, he is also open to complete the trade agreement before or after the summit.

Former head of National Economic Council Gary Cohn said in a Freakonomics interview that Trump "needs a win" and he is "desperate right now" for a trade deal with China. Cohn added, "the only big open issue right now that he could claim as a big win that he'd hope would have a big impact on the stock market would be a Chinese resolution."

EUR/USD has edged lower on Thursday, after posting four straight winning days. Currently, the pair is trading at 1.1307, down 0.19% on the day. On the release front, German CPI rebounded in February with a gain of 0.4%, after a decline of 0.5% a month earlier. In the U.S., the key event is unemployment claims, which is projected to edge up to 225 thousand. On Friday, the eurozone releases consumer inflation data. The U.S. will publish the Empire State Manufacturing Index and UoM Consumer Sentiment.

European inflation indicators are in market focus on Thursday and Friday. German CPI improved to 0.4%, but fell shy of the forecast of 0.5%. On Friday, the eurozone releases CPI, with an estimate of 1.0%. With inflation levels running well below the ECB target of around 2%, the ECB can afford to take hold interest rate levels at a flat 0.0%. At a time when Germany and the rest of the eurozone are mired in an economic slowdown, the bank will have little appetite for raising rates. In last week’s rate statement, the ECB set guidance at maintaining rates until 2020, and this dovish stance soured investors on the euro, sending the currrency sharply lower.

The eurozone manufacturing sector has struggled, but there was some positive news on Wednesday, as the reading of 1.4% was the strongest gain since August 2017. Germany, the largest economy in the eurozone, has been posting weak manufacturing data. Industrial production fell 0.8% in January, missing expectations. The indicator managed only two gains in the second half of 2018 and has started 2019 with a decline. Last week, factory orders plunged 2.6%, marking a third successive decline. The U.S-China trade war has dampened global growth, which has reduced the demand for German exports and weighed heavily on manufacturing activity.

EURGBP is having a volatile week, with the price spiking to a two-week high of 0.8675 on Monday and then falling sharply to a 23-month low of 0.8470 on Wednesday. The short-term risk could be currently viewed as neutral-to bearish as the RSI continues to slide sideways below 50 and the MACD is reversing south to meet its red signal line. The flat Tenkan-sen and the falling blue-Kijun sen lines also indicate the lack of positive signs.

The price could retest the 0.8470 bottom if negative momentum resumes. Beating that level, the pair could turn even more bearish in the bigger picture, with the price heading lower to meet the 0.8400 psychological level. Investors could also pay attention to the 0.8330 area which has been quite restrictive during 2016-2017.

Alternatively, a close above 0.8540 could send the price up to the 0.8616-0.8655 area taken from the lows on January 25 and November 13 respectively. Slightly higher, the door could open for the 0.8690 barrier while further improvement may see resistance coming from the 50-day MA currently at 0.8726.

Summing up, EURGBP could post a neutral-to-bearish performance in the short-term, while in eh medium-term, the steeper negative slope in the 50-day MA indicates that the bearish outlook is not likely to change anytime soon.

Currently trading at 0.85370, EUR/GBP is valued at a 22-month low, heading along 0.85510 short-term. Parliament is expected to start another Brexit vote at 17:00 GMT. The battle between to impose a negotiated Withdrawal Agreement continues. Time is running short: an extension of negotiations would need to be approved by the European Union during its summit next Thursday. An extension until 30 June 2019 might be agreed. We question whether Prime Minister Theresa May’s Withdrawal Agreement or any alternatives are even feasible. GBP-positive scenarios are either an acceptance of the existing Withdrawal Agreement or of an extension.

Two days of intense debates were capped yesterday in defeat for the government. UK Attorney General Geoffrey Cox warned that the country could remain stuck in the bloc’s customs union. Last night Parliament voted not to allow a hard Brexit – but this was non-binding. Lawmakers will be focused on extending the divorce period, accepting May’s deal or staying in the EU.

China volatility creates opportunity

The Chinese economy continues to suffer under US tariffs and slower domestic demand, despite efforts by policy makers to provide economic stimulus. Factory output rose 5.3% annually but declined 0.4% from December. This is the weakest reading since 1995. Chinese exports fell 21% in February from a year earlier. The stock market suffered deep decline in 2018 (CSI 300 Index down -26%). Yet these revaluations created a unique situation. Chinese stocks are up 27.8% this year through 5 March.

The MSCI Indexes will increase weighting of China-A shares for 5% to 20% by yearend. This will push USD 67 billion of investment into mainland China equities. Historically China stocks have been driven by retail investors, due to information gaps and liquidity issues. Now they are attracting institutional investors hungry to get a piece of the world’s second largest economy. The yuan has gained widely on expectations for a US-China deal: it should stabilize USD/CNY around 6.7 or even higher. U.S. Trade Representative Robert Lighthizer indicated that negotiations are in their final weeks. The positive effect on China stocks will be profound.

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.12895
Open: 1.13312
% chg. over the last day: +0.39
Day's range: 1.13124 – 1.13373
52 wk range: 1.1214 – 1.2557

EUR/USD keeps showing a positive trend. Yesterday the quotes grew by 50 points. The trading instrument updated the local maximums. The US published weak economic reports. The EUR is currently consolidating around 1.130100-1.13400. The quotes can grow further, you should open positions from these levels.

The Economic News Feed for 14.03.2019:

Import/Export Price Index (US) – 14:30 (GMT+2:00);

Number of Primary Unemployment Applications (US) – 14:30 (GMT+2:00);

Primary Real Estate Sales (US) – 16:00 (GMT+2:00);

The price fixed above 50 MA and 200 MA which points to the power of the buyers.

The MACD histogram is in the positive zone but below the signal line which gives a weak signal to buy EUR/USD.

The Stochastic Oscillator started to leave the oversold zone, the %K line is above the %D line which also points to the bullish mood.

Trading recommendations

Support levels: 1.13100, 1.12800, 1.12450
Resistance levels: 1.13400, 1.13650, 1.14000

If the price fixes above 1.13400, expect the quotes to grow toward 1.14000.

Alternatively, the quotes can fall toward 1.12800-1.12600.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.30747
Open: 1.33169
% chg. over the last day: +1.62
Day's range: 1.32393 – 1.33308
52 wk range: 1.2438 – 1.4378

During the last two days of trading, the GBP strengthened against the USD. The quotes grew by 200 points. The Birtish Parliament refused the hard Brexit. Today a new voote is planned to postpone Brexit. The quotes are consolidating around 1.32400-1.33150. You should open positions from these levels.

The Economic News Feed for 14.03.2019 is calm. Keep an eye on the reports from the US.

The price fixed above 50 MA and 200 MA which points toward the power of the buyers.

The MACD histogram is in the positive zone, the %K line is crossing the %D line. There are no signals at the moment.

The Stochastic Oscillator is in the neutral zone, the %K line is crossing the %D line. There are no signals at the moment.

Trading recommendations

Support levels: 1.32400, 1.32000, 1.31500
Resistance levels: 1.33150, 1.33750

If the price fixes above 1.33150, expect the quotes to grow toward 1.33700-1.34000.

Alternatively, the quotes can fall toward 1.31600-1.31300.

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.33536
Open: 1.32987
% chg. over the last day: -0.42
Day's range: 1.32871 – 1.33197
52 wk range: 1.2248 – 1.3664

USD/CAD keeps showing a bearish mood. Yesterday the quotes set new local minimums. CAD is supported by positive oil prices and weak economic releases from the US. The key levels are 1.32850 and 1.33350. The quotes can fall further. You should open positions from the key levels.

The Economic News Feed for 14.03.2019 is calm.

The price fixed below 50 MA and 200 MA which points to the power of the buyers.

The MACD histogram is in the negative zone but above the signal line which gives a weak signal toward selling USD/CAD.

The Stochastic Oscillator is in the neutral zone, the %K line is below the %D line which points toward a bearish mood.

Trading recommendations

Support levels: 1.32850, 1.32350, 1.32000
Resistance levels: 1.33350, 1.33850, 1.34200

If the price fixes below 1.32850, expect the quotes to correct toward 1.32400-1.32000.

Alternatively, the quotes can grow toward 1.33700-1.34000.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 111.344
Open: 111.274
% chg. over the last day: -0.13
Day's range: 111.144 – 111.722
52 wk range: 104.56 – 114.56

USD/JPY started to grow and updated the local maximums. The quotes are at 111.750 with 111.450 actubg as a mirror support, and can grow further. Keep an eye on the US economic reports and open positions from the key levels.

The Economic News Feed for 14.03.2019 is calm.

The indicators point toward the power of the buyers, the price fixed above 50 MA and 200 MA.

The MACD histogram is in the postiive zone and above the signal line which points towards purchasing USD/JPY.

The Stochastic Oscillator is in the overbought zone, the %K line is crossing the %D line. There are no signals at the moment.

Trading recommendations

Support levels: 111.450, 111.150, 110.900
Resistance levels: 111.750, 112.000

If the price fixes above 111.750, expect the quotes to grow toward 112.000-112.250.

Alternatively, the quotes can fall toward 111.300-111.000.

The latest economic releases from the United States confirm the words by Fed Chairman, Jerome Powell, that the regulator has taken a wait-and-see attitude towards a change in monetary policy. Yesterday, the US dollar weakened against a basket of major currencies after the publication of weak statistics. Thus, core durable goods orders declined by 0.1% in January, although investors expected growth by 0.1%. Producer price index rose by only 0.1% in February instead of the expected growth by 0.2%. The dollar index (#DX) closed the trading session in the negative zone (-0.44%).

The pound strengthened by 2% against the "greenback" after yesterday's vote in the UK Parliament. British lawmakers refused to exit the European Union without any agreements. Today, investors have taken a wait-and-see attitude before the UK Parliament vote on the extension of Brexit date, which expires on March 29. British Prime Minister, Theresa May, opposes Brexit without an agreement with Brussels. She still hopes to make a good deal for the UK and the EU.

Today, during the Asian trading session weak economic data have been published in China. Thus, the volume of industrial production in the country rose to 5.3% in February instead of 5.5%. Financial market participants expect new information on trade negotiations between Washington and Beijing. According to the US President, Donald Trump, negotiations between the United States and China are succeeding and China is seeking to conclude a beneficial deal for both countries.

The "black gold" prices have continued to rise amid a reduction in crude oil inventories in the US. At the moment, futures for the WTI crude oil have approached $58.65 per barrel.

Market Indicators

• Yesterday, the bullish sentiment was observed in the US stock market: #SPY (+0.66%), #DIA (+0.58%), #QQQ (+0.75%).
• The 10-year US government bonds yield rose slightly. Currently, the indicator is at the level of 2.63-2.64%.

The news feed on 14.03.2019:

• Export and import price indices in the US at 14:30 (GMT+2:00);
• Initial jobless claims in the US at 14:30 (GMT+2:00);
• New home sales in the US at 16:00 (GMT+2:00).

USDJPY sees rally with eyes on key resistance area located at 1.1213. Further out, resistance comes in at 112.50 level. Above this level will shift focus to the 113.00 level with a cut through sending the pair towards the 113.50 level. A break through here will open the door for more gain towards the 114.00. Its daily RSI points higher suggesting further upside pressure. On the downside, support comes in at the 111.00 level where a break will target the 110.50 level. Below that level will turn focus to the 110.00 level and then lower towards the 109.50 level. On the whole, USDJPY faces further upside pressure threats.

The pair regains traction on Thursday and probes above 200SMA, which capped narrow-range action in past three days.

With downside being protected by rising 20SMA, bulls look for eventual break and close above 200SMA that would generate strong bullish signal for extension towards next key barriers at 112.13/20 (2019 high/Fibo 76.4% of 114.54/104.59) and possible acceleration to 113+ zone on break.

Broken 200SMA now offers initial support (111.41), guarding lower pivot at 111.16 (20SMA).

Res: 111.73, 111.85, 112.20, 112.60
Sup: 111.41, 111.16, 110.81, 110.35