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More than two weeks after the USA extended deadlines, Chinese-American trade talks seem to be coming to an end. China is rightfully worried, because its growth target for 2019 has been reduced to 6-6.50% and might be reduced further; its budget deficit target of 2.80% of GDP has been set to prevent too much decline. Currently trading at 6.7097, USD/CNY is expected to stay flat until upcoming announcements.

Investors are worried, too, hoping to avert US tariffs on USD 250 billion on Chinese goods. Trade figures came well below consensus in February, with exports, down 20.70% (consensus: -5%) amid Chinese New Year effects, and imports continued down, suggesting Chinese domestic demand is softening. New loans hit CNY 885.8 billion in the same period, below expectations but still up since the beginning of the year, up 4.12 trillion year-to-date compared to 3.2 trillion in the same period last year. As trade talks continue, we expect the discussion to accelerate, as the agreement needs to be very specific. For the time being, Chinese authorities will closely monitor shadow banking risk and maintain credit growth

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.12474
Open: 1.12895
% chg. over the last day: +0.33
Day's range: 1.12774 – 1.12968
52 wk range: 1.1214 – 1.2557

Yesterday EUR started to recover against the USD. EUR/USD quotes updated the local maximums. USD is under pressure after weak inflation report fro the US. The basis index on consumer goods in February grew by 0.1% which is lower than the expected growth of 0.2%. EUR/USD is consolidating around 1.12650-1.13000. The quotes can correct further. The market participants are waiting for important statistical reports. The Brexit vote in the UK parliament is in the spotlight. You should open positions from the key levels.

The Economic News Feed for 13.03.2019:

Industrial Production Volume (EU) – 12:00 (GMT+2:00);

Report on Orders of Durable Goods (US) – 14:30 (GMT+2:00);

Manufacturers' Price Index (US) – 14:30 (GMT+2:00);

Indicators do not provide precise signals, the price has crossed 50 MA.

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

The Stochastic Oscillator is in the neural zone, the %K line is above the %D line which points toward a bullish mood.

Trading recommendations

Support levels: 1.12650, 1.12450, 1.12200
Resistance levels: 1.13000, 1.13200, 1.13450

If the price fixes above 1.13000, a further correction is expected toward 1.13400-1.13600.

Alternatively, the quotes can fall toward 1.12300-1.12000.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.31890
Open: 1.30747
% chg. over the last day: -0.67
Day's range: 1.30621 – 1.31569
52 wk range: 1.2438 – 1.4378

Volatility and trading activity in GBP reached a maximum since June 2016. Yesterday the UK currency was under pressure because of the Brexit vote. British parliament refused to accept the deal proposed by Theresa May, today there will be a new vote on leaving without a deal at all. Most experts agree that hard Brexit will greatly damange the country economy. Today GBP/USD recovered the majority of the losses. The key trading range is 1.31000-1.31550. Keep an eye on the Brexit vote.

Spring forecast for the UK budget will be published at 14:30 (GMT+2:00)

The indicators do not provide precise signals, the price has crossed 50 MA and 200 MA.

The MACD histogram is close to 0.

The Stochastic Oscillator is in the overbought zone, the %K line is above the %D line, which gives a weak signal to buy GBP/USD.

Trading recommendations

Support levels: 1.31000, 1.30600, 1.30150
Resistance levels: 1.31550, 1.32000, 1.32500

If the price fixes above the 1.31550, look for the market entry points to open long positions. The price will move toward 1.32000-1.32500.

Alternatively, the quotes can fall toward 1.30600-1.30200.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.33944
Open: 1.33536
% chg. over the last day: -0.24
Day's range: 1.33486 – 1.33711
52 wk range: 1.2248 – 1.3664

USD/CAD started to descend. Yesterday the trading instrument updated the local minimums. USD/CAD quotes found support at 1.33500 level. 1.33850 acts as a mirror resistance. USD is under pressure due to weak inflation reports. CAD is additionally supported by the positive oil quotes dynamic and can correct further. Keep an eye on the US economic reports.

The Economic News Feed for 13.03.2019 is calm.

The indicators do not provide precise signals, the price has crossed 200 MA.

MACD is in the negative zone but above the signal line which gives a weak signal to sell USD/CAD.

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: 1.33500, 1.33000
Resistance levels: 1.33850, 1.34200, 1.34600

If the price fixes below 1.33500, expect further correction toward the round 1.33000.

Alternatively, the quotes can grow toward 1.34200-1.34500.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 111.003
Open: 111.205
% chg. over the last day: +0.23
Day's range: 111.193 – 111.464
52 wk range: 104.56 – 114.56

USD/JPY shows an ambigous technical picture. The quotes are consolidating around 111.200-111.500. The demand for safe assets growth due to the Brexit vote. The investors are waiting for the US inflation report. You should open positions from the key levels.

The Economic News Feed for 13.03.2019 is calm.

The indicators do not provide precise signals, the price fixed between 50 MA and 200 MA.

The MACD histogram is in the positive zone and keeps rising, which points toward a bullish mood.

The Stochastic Oscillator is in the neutral zone, the %K line is above the %D line which points toward the growth of the USD/JPY quotes.

Trading recommendations

Support levels: 111.200, 110.900, 110.600
Resistance levels: 111.500, 111.800, 112.000

If the price fixes below 111.200, expect the quotes to fall toward 110.900-110.700.

Alternatively, USD/JPY can correct toward 111.800-112.000.

The British pound was under pressure after the Brexit vote in the UK Parliament. So, the House of Commons did not support again the Brexit deal offered by Theresa May. 391 members of Parliament spoke against the deal, 242 supported. Today, a new vote on the no-deal Brexit is to be held. If lawmakers vote against it, then on Thursday a vote on the Brexit delay will be held.

According to most economists, the "tough" Brexit will cause significant damage to the country's economy. Pound has recovered some of the losses during early London trading session on Wednesday. Most financial market participants expect British lawmakers to vote against no-deal Brexit. Pound is additionally supported by positive economic data from the UK. Thus, manufacturing production increased by 0.8% in January instead of the forecasted growth by 0.2%. Monthly GDP (3m/3m) also showed growth by 0.5% instead of 0.2%.

The US dollar weakened against a basket of major currencies after the publication of weak economic data. Thus, the core consumer price index rose only by 0.1% in February, while experts expected growth by 0.2%. The dollar index (#DX) closed the trading session in the negative zone (-0.28%). Today, investors also expect the publication of important economic data from the US.

The "black gold" prices are rising after the publication of the API data on the reduction of stocks in the US. At the moment, futures for the WTI crude oil have approached $57.25 per barrel. At 16:30 (GMT+2:00), a report on the EIA crude oil inventories will be published in the US.

Market Indicators

• Yesterday, there was a variety of trends in the US stock market: #SPY (+0.38%), #DIA (-0.35%), #QQQ (+0.55%).
• The 10-year US government bonds yield has been declining. Currently, the indicator is at the level of 2.61-2.62%.

The news feed on 13.03.2019:

• Preliminary data on the annual budget in the UK at 14:30 (GMT+2:00);
• Statistics on durable goods orders in the US at 14:30 (GMT+2:00);
• Producer price index in the US at 14:30 (GMT+2:00).

The US dollar is trapped inside a narrow price against the Japanese yen, with the risk-sensitive currency pair trading between the 111.10 to 111.45 levels. If USDJPY buyers can break above the range, the 111.60 level offers the strongest form of near-term resistance. The MACD indicator on the four-hour time frame suggests that bullish momentum is gathering strength in the short-term.

The USDJPY pair is intraday bullish while trading above the 111.45 level, key resistance is found at the 111.60 and 112.00 levels.

If the USDJPY pair falls below the 111.10 level, sellers may test towards the 110.90 and 110.60 support levels.

The euro has advanced to a fresh weekly trading high against the US dollar during the European trading session, with the pair testing towards the 1.1300 resistance level. The EURUSD pair holds an intraday bullish bias while trading above the 1.1290 level and may test towards the 1.1325 level. The MACD indicator on the four-hour time frame has also just turned bullish.

The EURUSD pair is strongly bullish while trading above the 1.1290 level, key technical resistance is found at the 1.1325 and 1.1360 levels.

If the EURUSD pair moves under the 1.1290 level, sellers may test back towards the 1.1260 and 1.1230 levels.

EUR/USD is steady in the Wednesday session. Currently, the pair is trading at 1.1294, up 0.06% on the day. On the release front, eurozone industrial production sparkled with a gain of 1.4%, above the estimate of 1.0%. In the U.S., there are a host of key events. Core durable goods orders are expected to remain at 0.1%, while core durable goods is forecast to slide by 0.5%. On the inflation front, PPI and Core PPI are both projected to post a slight gain of 0.2%. On Thursday, Germany posts CPI and the U.S. posts unemployment claims.

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.

The Federal Reserve has been in dovish mode since the start of the year, and weak inflation data has meant there is little pressure on policymakers to raise rates in the near future. Core CPI edged down to 0.1%, while CPI remained steady at 0.2%. Consumer inflation remains well below the Federal Reserve’s target of 2.0 percent, so there is little pressure on the Fed to raise rates anytime soon. Policymakers have been signaling that the Fed could stay on the sidelines until the second half of 2019, and this stance was underscored by Fed Chair Powell in a television interview on Sunday. Powell left no doubt about where the Fed stands, saying that the Fed would remain patient and was in no hurry to change interest rate policy. The dovish stance of the Fed could weigh on the dollar, as a lack of rate hikes makes the greenback less attractive to investors.

The pound tumbled against a number of its counterparts, as UK's Attorney General had stated that legal risks arising from the revised Brexit deal remained the same, strengthening argumentation of hard Brexiteers. The revised plan was rejected by the UK parliament late in the evening by a strong majority, practically putting an end to Theresa May's efforts. The UK Parliament is to have a second vote tonight as to whether it wants to leave the EU without a deal or on an agreed basis. Our base scenario is for the UK Parliament to reject a no deal departure from the EU as past votes seem to increase the probabilities for such an outcome, yet uncertainty remains. Theresa May has promised Tory MPs a “free vote”, so a number of Conservative MPs could be voting against a no deal Brexit. Should the UK Parliament reject the no deal scenario as well, then a third vote will be taking place tomorrow on whether to ask for an extension of the Brexit date currently being the 29th of March. Despite the UK Parliament closing the door on Theresa May's deal, we see the case for new opportunities opening for the UK. We expect volatility to be maintained for the GBP. Cable tumbled yesterday with the drop reaching 200 pips at some points, yesterday breaking the 1.3175 (R1) support level (now turned to resistance), yet managed to land above the 1.3070 (S1) support line. We could see the pair strengthening today in anticipation of the UK Parliament's decision, yet the actual decision per se could provide further support should it be a rejection of a no deal departure of the UK from the EU and vice versa. Should the market favor the pair's long positions as expected, we could see it breaking the 1.3175 (R1) resistance line. On the other hand should the pair come under the selling interest of the market, we could see cable's price action, breaking the 1.3070 (S1) support line and aim for the 1.2990 (S2) support barrier. Please be advised that should the UK Parliament vote in favor of a no deal Brexit, we could see the pound tumbling once again and the pair could break all of our support levels aiming for lower grounds, having an asymmetrically strong negative reaction to the news. Also some volatility could be present during the release of the US financial data and the presentation of Philip Hammond's Spring Forecast statement in the UK Parliament.

USD remains rather steady at modest growth of US retail sales

The USD weakened yesterday as soft US inflation data were released for February. The USD was also weakened as the US treasury yields dropped somewhat, taking off some of yesterday's shine from the greenback. Analysts point out that risk sentiment seems to be back off and that the USD may weaken even further, albeit it should be noted that the USD's direction seems indecisive currently, as all the spotlights are on the Brexit procedures. We expect some volatility to be maintained and today's financial release to be of importance regarding the USD's direction. EUR/USD rose yesterday breaking the 1.1260 (R1) resistance line (now turned to support). We maintain a bullish outlook for the pair and for our view to change in favour of a sideways movement, we would require a clear breaking of the upward trendline incepted since the 8th of March. Should the bulls maintain their control over the pair's direction, we could see it breaking the 1.1300 (R1) resistance line and aim for higher grounds. Should the bears take over we could see the pair breaking the prementioned upward trendline, the 1.1260 (S1) support line and aim lower.

Today's other economic highlights

In today's European session we get Eurozone's industrial production growth rate for January. In the American session we get the US durable goods orders growth rates for January, the PPI rate for February and the EIA crude oil inventories figure. In tomorrow's Asian session, we get a number of Chinese data, yet the Industrial output growth rate for January seems to stand out. As for speakers, ECB's Yves Mersch and Benoit Coeure speak. Do not forget also the UK Parliament's votes tonight, and the Spring Forecast statement by Philip Hammond.

GBP/USD

Support: 1.3070 (S1), 1.2990 (S2), 1.2900 (S3)
Resistance: 1.3175 (R1), 1.3265 (R2), 1.3350 (R3)

EUR/USD H4

Support: 1.1260 (S1), 1.1215 (S2), 1.1165 (S3)
Resistance: 1.1300 (R1), 1.1340 (R2), 1.1390 (R3)

The NZD/USD Is bullish on h1 timeframe. We might see a bounce off the W H3 Pivot towards D H3.

The Kiwi has been gaining strength vs the USD and it s clearly reflected on the chart. 0.6826-36 is the POC zone and the bounce targets 0.6848 with a final ATR projection/confluence at 0.6877. Only a close below 0.6814 might put the pair into a neutral territory again. For all bulls, pay attention to W H5- 0.6887 as the pair is unlikely to break this level unless a strong momentum takes place.

The NZD/USD is a slow-moving pair and that is reflected on it ATR numbers, so patience is needed. In the wake of Brexit data, headlines and news, the NZD/USD is a safer pair to trade.

Cable regained traction and bounced to 1.3148 (falling 10SMA) in early Wednesday's trading, following highly volatile action on Tuesday, when the pair trade within nearly 300-pips range.

The British Parliament rejected again PM May's Brexit deal on Tuesday's vote, keeping high uncertainty and deepening political turmoil, just two weeks ahead of planned departure date on 29 March.

Parliament will gather again today and vote whether the Britain will leave the EU without deal, with wide expectations to reject such scenario and vote on Thursday on potential extension of departure time.

Sterling is expected to remain vulnerable, as all possible scenarios are still pending and high volatility could be expected until decisions are made.

Wednesday's dip to 1.30 zone was short-lived as 200SMA continues to underpin and protect the downside, along with daily cloud top.

Rising bullish momentum adds to positive near-term signals, but resistance at 1.3148 is significant (10SMA / Tuesday's post-vote high) and sustained break here is needed to signal further recovery.

Choppy mode is expected to continue until parliament's decisions that would provide fresh direction signals.

Lower triggers are marked by 200SMA and daily cloud top and firm break lower would generate negative signals.

Bullish signal could be expected on close above cracked 1.3200 Fibo barrier (61.8% of 1.3349/1.2960 pullback.

Res: 1.3156, 1.3200, 1.3257, 1.3288
Sup: 1.3124, 1.3098, 1.3051, 1.2987

GBPJPY paused Tuesday’s sell-off near the 20-day moving average (MA) on Wednesday and bounced back into the 146 area. The cautious sentiment, though, has not fully faded as the RSI has yet to show clear positive direction above 50, while the MACD continues to lose strength below its red signal line but with slower speed, both suggesting a neutral bias for the short-term.

A reversal southward could meet the 200-day MA and the 23.6% Fibonacci of the upleg from 132.49 to 148.55, around 144.63. A failure to hold above this level, could open the way towards the 143.11-142.41 area encapsulated by the 50-day MA and the 38.2% Fibonacci. Breaking that restrictive area too, the sell-off could pick up steam under 141, the previous low of recent uptrend.

In the positive scenario, further improvement has the potential to retest resistance around 146.65, taken from Monday’s closing price. Slightly higher, the noisy region between 147.20 and 148.55 could halt upside movements as well, though investors would be more eager to buy the pair if the price successfully crawls above the 149.50 roof – in which case the neutral medium-term outlook would also turn positive.