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Daily Pivots: (S1) 0.8428; (P) 0.8536; (R1) 0.8601; More...

EUR/GBP is staying in range of 0.8474/8676 despite brief breach of 0.8474. Intraday bias remains neutral first. Also, 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) 1.5931; (P) 1.5972; (R1) 1.6009; More....

EUR/UAD is still bounded in consolidative trading from 1.5721 and intraday bias remains neutral first. 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.

Daily Pivots: (S1) 1.1357; (P) 1.1369; (R1) 1.1383; More...

EUR/CHF is staying in consolidation from 1.1444 and intraday bias remains neutral. Consolidation from 1.1444 could extend further. But 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.

Market movers today

After the UK parliament in yesterday's vote also rejected leaving the EU without a deal, the third and final vote today will show whether the House of Commons can instead converge to agree on asking for an extension of Art. 50. Even if the vote eventually passes, the question remains whether the EU27 leaders will grant an extension and whether it will be a short or long one. According to people familiar with the PM, May said that she will be looking for a two-month extension. Initial comments from the EU's chief negotiator, Barnier, does not seem promising in postponing Brexit.

In the US, we get January new home sales numbers and we will continue to keep an eye on the housing market, since it has begun to show weakness. Higher mortgage rates are probably the driver of this weakening.

In Europe, it is relatively quiet on the data front with final February inflation figures from Germany and France.

In Sweden, unemployment data for February is released and in light of the weakening economy we are expecting the labour market to deteriorate, albeit very slowly.

Selected market news

As expected, the House of Commons rejected a no deal Brexit yesterday. Still, it was quite interesting that a small majority (312 vs 308) voted in favour of a very clear rejection of a no deal Brexit (stronger than what May had put forward). This supports our long-held view that a small majority in the House of Commons will go a long way to avoid a no deal Brexit. We expect the House of Commons to vote in favour of an extension of the Article 50 deadline today but the most important question is whether the EU27 will try to leverage on May's new defeat by demanding a long extension instead of just a short one, which has been our base case so far. We need to follow the response closely ahead of next week's EU summit. Also, it increases the pressure on the Brexiteers, as it is a warning shot that the alternative to May's deal is not a harder/cleaner Brexit but a softer one or perhaps even a reversal.

The reaction in the Asian equity markets to the no-vote has been muted this morning. Focus has been more on the data from the US and China. Retail sales from China were in line with expectations while industrial production was slightly lower. Hence, we have a mixed session with some Asian markets moving slightly lower and others slightly higher.

GBP/USD moved as high as 1.335 late yesterday, but has bounced back towards 1.325 in Asian trade this morning. 10Y US Treasury yields rose modestly by 1-2bp.

In our previous Chart of The Day on February 28, we suggested that Crude Oil (CL_F) is on the verge of a breakout. It has now confirmed our view as price extends higher and breaks above March 1 high at $57.88. The production output’s curb by the OPEC members as well as the political upheaval in Venezuela have contributed to the strength in Oil. Technical wise, the sequence remains bullish from both Dec 24, 2018 low and Feb 11, 2019 low. In the chart below, we can see a bullish sequence stamp and right side up to clearly show the direction that we prefer.

Since forming intermediate high on February 21 at $57.61, Oil has been in sideways and complex correction. The rally to $57.61 ended wave (1), and wave (2) pullback has ended at $54.49. The internal of wave (2) unfolded as a double three Elliott Wave structure. Down from $57.61, wave W ended at $55.02, wave X ended at $57.39, and wave Y of (2) ended at $54.52. Oil has since rallied and broken to new high above March 1 high ($57.88). This confirms the view that the next leg higher has started. Near term, while dips stay above $54.49, expect Oil to resume higher. A 100% extension from December 24, 2018 low can see Oil reaching $63.2 -$66 area next. The 4 hour chart below shows the sequence of higher high and higher low since December 2018 low.

1 Hour CL_F Elliott Wave Chart

4 Hour CL_F Elliott Wave Chart

General Trend:

• Asian indices trade mixed
• IT and Telecom Services shares weigh on Shanghai Composite
• Chinese airlines rise in Hong Kong following recent earnings form Cathay Pacific
• China Unicom rises over 3% in Hong Kong post earnings
• Hyundai Motor declines over 4%, adviser of South Korea National Pension said to reject proposals from Elliott
• Brokerage and Iron/Steel companies rise in Japan
• Softbank rises over 3%, speculated to be considering investment in Uber unit
• Longer dated JGB yields hit lows not seen since 2016 amid focus on BOJ policy meeting, China data
• China Stats Official: Lunar New Year timing impacted data and may also impact March data
• China NPC expected to vote on foreign investment law on Friday (March 15th)
• British Pound (GBP) weakens during Asian trading,
• On Thursday, UK parliament is expected to vote on whether to extend Article 50 and push back the March 29th departure date from the EU.

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened +0.2%
• CBA.AU Has suspended demerger plan for wealth management and broking unit
• (AU) Australia Mar Consumer Inflation Expectation: 4.1% v 3.7% prior
• (NZ) New Zealand sells NZ$250M v NZ$250M indicated in 3.00% 2029 bonds: avg yield 2.030%, bid to cover 2.56x

Japan

• Nikkei 225 opened +0.9%
• (JP) Japan Fin Min Aso: Japan may ban South Korean new visa issuances and money transfers if South Korea seizes assets of Japanese firms - Japanese Press
• (JP) Japan Investors Weekly Net Buying of Foreign Bonds: ¥245.7B v ¥456.1B prior; Foreign Buying of Japan Stocks: -¥1.16T v -¥340.5B prior
• (JP) Japan mulls slight downgrade to economic view in March – Nikkei
• (JP) Japan PM Abe: Want to put my energy into final term as LDP President - speaking in parliament

Korea

• Kospi opened +0.2%
• 005380.KR Main advisor of South Korea's national pension service, Korea Corporate Governance Service (KCGS), sided with Hyundai Motor Co. and Hyundai Mobis Co against Elliott over dividend payments and appointments to the board
• 003490.KR Will not operate 737 Max until safety is guaranteed, not canceling order for 8 737 Max planes
• 005930.KR American marketing head Marc Mathieu said to have left

China/Hong Kong

• Hang Seng opened +0.3%; Shanghai Composite opened -0.4%
• (CN) CHINA FEB INDUSTRIAL PRODUCTION YTD Y/Y: 5.3% V 5.6%E (17-yr low)
• (CN) CHINA FEB FIXED ASSETS INVESTMENT (EX-RURAL) YTD Y/Y: 6.1% V 6.1%E
• (CN) CHINA FEB RETAIL SALES YTD Y/Y: 8.2% V 8.2%E
• (CN) CHINA FEB PROPERTY INVESTMENT Y/Y: 11.6% V 9.5% PRIOR
• (CN) CHINA FEB SURVEYED JOBLESS RATE: 5.3% V 4.9% PRIOR
• (CN) China National Bureau of Stats (NBS): China economy still faces downward pressure; faces many external uncertainties; Lunar New year weighed on data, may also do so in March
• (CN) China PBoC Sets Yuan Reference Rate: 6.7009 v 6.7114 prior
• (CN) China PBoC Open Market Operation (OMO): Skips OMO (11th consecutive skip); Net: nil v nil prior
• (CN) S&P: Expect that China will fall well short of its target of cutting taxes and fees by CNY2.0T in 2019, expect only CNY1.5T
• (CN) China Feb YTD Off Balance Sheet Financing (CNY): decline of 21.7B v avg monthly decline of CNY209.2B in Q4 - Xinhua
• (CN) Pres Trump: We're in no rush to complete China trade deal; talks are going along 'very nicely'
• (EU) European Commission official released a paper labeling China as an “economic competitor” and “a systemic rival promoting alternative models of governance”
• (CN) China Credit insurer Coface report says 62% of Chinese firms survey saw payment delays in 2018 - HK Press
• 1055.HK China Southern Airlines: Reports Feb load factor 85.2% +1.7ppts y/y
• 762.HK China Unicom: Reports FY18 (CNY) Net 10.2B v 8.1Be, EBITDA 84.9B v 86.3Be, Rev 290.9B v 287.1Be

Other Asia

• SEMI: Sees 2019 Global fab spending -14% y/y; 2020 global fab spending +27% y/y

North America

• FB Federal prosecutors in the US said to launch criminal probe into the company's data-sharing agreements – NYT
• (IA) US said to seek to reduce Iran oil sales by about 20% to less than 1M bpd from May - financial press

Europe

• (UK) UK PARLIAMENT REJECTS NO-DEAL BREXIT IN ANY SCENARIO IN 312-308 VOTE, in a defeat for PM May
• (UK) PARLIAMENT VOTES IN FAVOR OF AMENDED MOTION ON 'NO DEAL'; VOTES TO RULE OUT 'NO-DEAL' BREXIT IN 321-278 TALLY
• (UK) PM's office: PM May is NOT considering resigning
• (UK) FEB RICS HOUSE PRICE BALANCE: -28% V -24%E (lowest since May 2011)

Levels as of 1:20 ET

• Nikkei 225, +0.2%, ASX 200 +0.3%, Hang Seng -0.1%; Shanghai Composite -1%; Kospi -0.2%
• Equity Futures: S&P500 -0.1%; Nasdaq100 -0.2%, Dax -0.3%; FTSE100 -1.1%
• EUR 1.1342-1.1318 ; JPY 111.63-111.13 ; AUD 0.7099-0.7061 ;NZD 0.6866-0.6836
• Gold -0.5% at $1,302/oz; Crude Oil +0.3% at $58.42/brl; Copper -0.4% at $2.920/lb

Daily Pivots: (S1) 1.3270; (P) 1.3320; (R1) 1.3351; More...

Current development argues that rebound from 1.3068 has possibly completed with three waves up to 1.3467. Intraday bias mildly on the downside for 1.3068/3112 key support zone. On the upside, though, break of 1.3385 minor resistance will turn bias back to the upside for 1.3467 resistance instead.

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 1.3157) holds. Sustained break of 1.3793 will pave the way to retest 1.4689 (2015 high). Firm break of the channel support should confirm reversal target 1.2061 low again.

For the 24 hours to 23:00 GMT, the EUR rose 0.43% against the USD and closed at 1.1337.

On the data front, the Euro-zone's seasonally adjusted industrial production advanced 1.4% on a monthly basis in January, compared to a fall of 0.9% in the prior month. Market participants had anticipated industrial production to climb 1.0%.

In the US, data indicated that the US producer price index rose 1.9% on an annual basis in February, in line with market expectations. In the previous month, the index had registered a gain of 2.0%. Moreover, the nation's flash durable goods orders unexpectedly climbed 0.4% on a monthly basis in January, defying market expectations for a decline of 0.4%. In the preceding month, durable goods orders had recorded a revised gain of 1.3%. Additionally, the US construction spending rebounded 1.3% on a monthly basis in January, rising to a 9-month high level and following a revised drop of 0.8% in the prior month. Market participants had envisaged construction spending to rise 0.4%. Also, the MBA mortgage applications rebounded 2.3% on a weekly basis in the week ended 08 March 2019, compared to a drop of 2.5% in the previous week.

In the Asian session, at GMT0400, the pair is trading at 1.1322, with the EUR trading 0.13% lower against the USD from yesterday's close.

The pair is expected to find support at 1.1286, and a fall through could take it to the next support level of 1.1251. The pair is expected to find its first resistance at 1.1348, and a rise through could take it to the next resistance level of 1.1375.

Amid lack of macroeconomic releases in the Euro-zone today, investors would closely monitor Germany's consumer price index for February, slated to release in a few hours. Later in the day, the US new home sales for January along with initial jobless claims, will keep traders on their toes.

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

For the 24 hours to 23:00 GMT, the GBP rose 1.77% against the USD and closed at 1.3308.

In the Asian session, at GMT0400, the pair is trading at 1.3252, with the GBP trading 0.42% lower against the USD from yesterday's close.

Overnight data showed that UK's RICS house price balance declined to a level of -28.0 in February, marking its lowest level since May 2011 and compared to a level of -22.0 in the previous month.

The pair is expected to find support at 1.3095, and a fall through could take it to the next support level of 1.2938. The pair is expected to find its first resistance at 1.3395, and a rise through could take it to the next resistance level of 1.3538.

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

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

For the 24 hours to 23:00 GMT, the USD declined 0.09% against the JPY and closed at 111.21.

In the Asian session, at GMT0400, the pair is trading at 111.51, with the USD trading 0.27% higher against the JPY from yesterday’s close.

The pair is expected to find support at 111.14, and a fall through could take it to the next support level of 110.76. The pair is expected to find its first resistance at 111.76, and a rise through could take it to the next resistance level of 112.

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