Sample Category Title

Pivot (invalidation): 1.1265

Our preference Long positions above 1.1265 with targets at 1.1305 & 1.1320 in extension.

Alternative scenario Below 1.1265 look for further downside with 1.1245 & 1.1220 as targets.

Comment Even though a continuation of the consolidation cannot be ruled out, its extent should be limited.

AUDUSD stretched slightly to the downside today, falling back below the 23.6% Fibonacci retracement level of the downleg from 0.8135 to 0.6746, around 0.7070 and the Ichimoku cloud.

The technical picture remains to the upside as the MACD is trying to post a bullish crossover with the trigger line, while the stochastic is approaching the overbought zone. Also, currently, the price is trading below the 20- and 40-simple moving averages (SMAs) in the daily timeframe and the red Tenkan-sen and the blue Kijun-sen lines are sloping down, suggesting negative momentum.

Should bearish action continue below the 0.7000 region, support could be found around the 0.6825 barrier, taken from low on January 2016. A successful break lower, could then bring the ten-year low of 0.6746 back into view.

In case of a recovery above the Ichimoku cloud and the 20- and 40-SMAs, the 0.7200 handle could provide nearby resistance. If the bulls push the pair even higher, the 38.2% Fibonacci of 0.7275 and the 0.7295 resistance could come in focus.

Overall, in the long-term, AUDUSD stands in a narrow range within the 0.7000-0.7390 area over the last seven months.

The euro currency continues to trade around key weekly resistance against the US dollar, with the pair pressing against the key 1.1290 level. The next strong directional move is likely to come soon as the MACD indicator on the four-hour time frame has corrected back to neutral. Bearish pressure will soon start to build if buyers fail to break above the key weekly resistance area, at 1.1290.

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 fails around the 1.1290 level, sellers may test back towards the 1.1230 and 1.1200 levels.

The British pound is trading back under the 1.3100 level against the US dollar after British PM Theresa May’s Brexit vote in UK Parliament was voted down on Tuesday. Sellers are now back in control of the GBPUSD pair and will need to move price back under the 1.3055 level in order to maintain the bearish momentum. The 1.3180 level offers the strongest form of near-term resistance above the 1.3100 level.

The GBPUSD pair is only bearish while trading below the 1.3100 level, key technical support is found at the 1.3055 and 1.2970 levels

If the GBPUSD pair trades above the 1.3100 level, buyers may test towards the 1.3180 and 1.3260 resistance levels.

After yesterday’s drop, the sterling was little moved in overnight trading after Theresa May lost an important parliamentary vote. The legislators opposed her proposals by 391 to 292 in a major blow to the prime minister. This happened after the attorney general warned that the concessions by the European Union were not enough. In the note, he said that the country would be forced to remain in the EU customs union against its will in case of disagreements. After this vote, the MPs will likely vote again on a no-deal Brexit or an extension. Since most of them don’t want a no-deal, they will likely vote for an extension. This extension will lead to more uncertainties for the country.

The price of crude oil was little moved after data from American Petroleum Institute (API) showed that there was a drawdown in inventories last week. The drawdowns increased by 2.58 million barrels. The reduction in inventories came a week after they increased by more than 7.9 million barrels. Later today, the Energy Information Administration (EIA) will release the inventory numbers, which are expected to show an increase of 2.9 million barrels. The commitment of traders (COT) data released on Friday showed that more traders expect the price to move up, fueled by a reduction of OPEC supplies and a relatively strong demand.

Focus will again remain on the US dollar as the country releases important durable goods data. The core durable goods orders for January are expected to grow by 0.1%, which will be unchanged from that of December. On a MoM basis, the goods are expected to decline by -0.5%. The shipments of non-defense and non-air goods is expected to drop by 0.1% in the month after being unchanged in December. Another important data release will be the PPI, which is expected to grow by 1.9%, down from the previous 2.0%. These numbers will come a day after the country released weak inflation numbers.

GBP/USD

The GBP/USD pair was little moved in overnight trading as traders waited for another parliamentary vote later today. It is now trading at 1.3088, which is slightly higher than yesterday’s low of 1.3000. On the hourly chart, the pair is slightly below the 42-day and 21-day moving averages. The RSI is relatively unmoved at the 46 level and the price is between the 23.6% and 38.2% Fibonacci Retracement level. Today, the pair will likely be volatile as the game of chicken on Brexit continues.

EUR/USD

The EUR/USD pair was relatively unmoved as traders focused on Brexit. The current level of 1.1285 is slightly lower than the yesterday high of 1.1300. The pair is however in a relatively upward momentum, which is fueled by the weak economic data from the US. This has seen it increase from a low of 1.1170 on Friday to the high of 1.1300. On the hourly chart, the price is along the middle line of the Bollinger Bands while the RSI has remained slightly below the 70 level. The pair will likely continue the upward momentum.

XTI/USD

The price of US crude oil moved slightly higher after the release of lower inventories. It is now trading at $57.42, which is slightly higher than yesterday’s low of $56.90. On the hourly chart, the pair has formed a v-shape pattern, after climbing from the low of 54.70 starting on Friday last week. This price is along the middle line of the Bollinger Bands while the RSI has remained under the 70 level. The ADX has moved to below 20. There is a possibility that the pair will continue the upward momentum to test the resistance level of 60.

In this blog, I want to share with you some Elliott Wave charts of EURGBP which we presented to our members recently. You see the 1-hour updated chart presented to our clients on the 03/09/19. The higher degree trend of the pair is to the downside. So our members know that the right side is to the downside. Consequently, we advised members that we do like the selling of the EURGBP.

EURGBP ended the cycle from 02/14/19 peak in black wave ((w)) at 02/27/19 low (98.96). Above from there, we expected a bounce to occur in black wave ((x)). The bounce unfolded in an Elliott Wave Zig Zag correction structure. We advised members that EURGBP should continue lower and that we wanted to sell the pair. Therefore, we expected sellers to appear in the sequences of 3, 7 or 11 swings. At the 100 – 1.618 Fibonacci extension of blue (a)-(b) which came at around 0.86531-0.87263 area and that was the first area for selling the EURGBP for us with a potential stop loss above 0.87274 invalidation level.

EURGBP 03.09.2019 1 Hour Chart Elliott Wave Analysis

In the last Elliott Wave chart. You can see that the EURGBP reached the blue box area. So we opened a short position at the blue box (0.86531). The pair extended a little bit into the blue box but then it reacted nicely lower. Any trades from our blue box area shown in the chart above were risk-free, which means the stop-loss should be moved to break even, looking now for another extension lower. Please keep in mind that the 1-hour chart which I presented has changed. This blog should just illustrate how accurate our blue boxes are, and how our members trade our 3-7 or 11 swings strategy.

If you are interested in how to trade our blue box areas and want to understand how Elliott Wave works. Then I recommend you to get a shot on our special promotion which we are currently running below. We present a lot of trading setups in our 3 Live Trading Rooms.

EURGBP 03.11.2019 1 Hour Chart Elliott Wave Analysis

General Trend:

• ZTE declines over 6% on plan by controlling shareholder to cut stake, Shanghai Telecom Services index underperforms
• Ping An Insurance rises on earnings and buyback
• Sportswear firm XTEP International rises over 13% in Hong Kong, reported earnings on Tuesday
• Securities brokers, Electric Appliance companies and Softbank decline in Japan
• Australian Dollar (AUD) and bond yields decline after weaker consumer confidence data
• UK Parliament expected to vote on ‘no-deal’ Brexit on Wednesday (March 13th)
• China’s Feb Industrial Production, Fixed Asset Investment (YTD) and Retail Sales data are due for release on March 14th (Thursday)

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened -0.0%
• (AU) Australia Mar Westpac Consumer Confidence Index: 98.8 v 103.8 prior; m/m: -4.8% v +4.3% prior (largest decline since 2015)
• (AU) Australia banks said to be considering divesting New Zealand operations in light of new NZ capital requirements - Aussie press
• CTD.AU Confirms market speculation has held prelim talks on travel business with Capita Plc
• SIG.AU API proposal is not in the best interest of shareholders
• (NZ) New Zealand Civil Aviation Authority: Suspends operation of Boeing 737 MAX aircraft to or from New Zealand
• Virgin Australia [VAH.AU]: Will not rollout Boeing 737 Max planes until completely satisfied with safety

Japan

• Nikkei 225 opened -0.4%
• (JP) JAPAN FEB PPI (CGPI) M/M: 0.2% V 0.1%E; Y/Y: 0.8% V 0.7%E
• (JP) JAPAN JAN CORE MACHINE ORDERS M/M: -5.4% V -1.5%E (largest decline since Sept 2018); Y/Y: -2.9% V -2.1%E
• (JP) Japan Jan Tertiary Industry Index M/M: +0.4% v -0.3%e
• (JP) Japan Chief Cabinet Sec Suga: Up to BOJ to decided monetary policy; hope that BOJ continues to make efforts to reach 2% CPI target
• (JP) Japan Regional Banks' Assoc Head: BOJ's easy policy has had sufficient benefits to the economy, as various side-effects of financial intermediation, JGB market emerging; Want the BOJ to take into account the side effects of guiding monetary policy
• 7201.JP Confirms to withdraw premium brand Infiniti to exit Western Europe early 2020; will end production of 2 models in UK this year – press
• RNO.FR To create new Renault-Nissan-Mitsubishi alliance operating board
• (JP) Quarterly venture capital investment in Japan has fallen for the first time in more than 3-years, due to investor worries over exposure to China – Nikkei
• 7203.JP Workers said to receive base pay increase of ¥10.7K, below increase sought by the union - Japanese Press

Korea

• Kospi opened -0.2%
• (KR) South Korea Feb Unemployment Rate: 3.7% v 4.2%e
• (KR) US Sec of State Pompeo: North Korea needs to act on its pledge to dismantle its nuclear weapons program – Yonhap
• (KR) IMF: Maintains South Korea 2019 GDP growth forecast at 2.6%, risks to domestic economy tilted towards the downside
• (KR) North Korean leader Kim Jong-un was not included in a list of deputies newly elected to the rubber-stamp parliament; if true would be the first time the leader has not held a seat - Yonhap

China/Hong Kong

• Hang Seng opened flat; Shanghai Composite opened +0.1%
• (CN) China PBoC Open Market Operation (OMO): Skips OMO (10th consecutive skip); Net: nil v nil prior
• (CN) China PBoC Sets Yuan Reference Rate: 6.7114 v 6.7128 prior
• (CN) US Trade Rep Lighthizer: Talks with China on trade are in their final weeks, whether there is a deal or no deal – Nikkei
• 2318.HK Reports FY18 (CNY) Net 107.4B v 97.5Be, Rev 1.08T v 974B y/y; Plans to buyback CNY5.0-10.0B in shares
• 763.HK Controlling shareholder plans to cut its A-Share holding in the company by up to 2% via bloack trades within 90 days
• (CN) Shift in China breeding of pigs, caused rally in US hog futures – press
• (CN) China PBoC said to be studying impact of rate overhaul on banks' loan pricing - financial press
• (CN) China Foreign Investment Law (FIL) draft includes provision that requires Chinese officials to protect commercially confidential information they obtain from overseas businesses – SCMP
• (CN) China National Bureau of Statistics chief Ning Jizhe: Economy has achieved a good start to 2019 despite a recent drop in sales of cars and mobile phones; there is stable industrial production and steady employment in first 2 months of the year - SCMP
• 293.HK Reports final FY18 (HK$) Net +2.3B v -1.3B y/y; Rev 111.1B v 97.3B y/y

North America

• (US) Weekly API Oil Inventories: Crude: -2.6M v +7.3M prior
• BA FAA: Continues to review Boeing 373 Max, so far no basis to order grounding; No other civil authorities provided data to warrant action
• (CA) Canada Transport Minister to hold news conference on Wed to discuss Boeing 737 MAX 8 aircraft, along with safety and security; Officials see no reason at this time to ground the planes

Europe

• (UK) PM MAY'S REVISED BREXIT DEAL REJECTED BY PARLIAMENT BY 391-242 VOTE
• (UK) Prime Min May spokesperson: no more talks with the EU are currently planned; PM May has not discussed resigning; PM will set out how she plans to vote on no deal in her opening remarks tomorrow
• (DE) Germany Foreign Minister Maas: Getting closer to 'no-deal' scenario, notes UK parliament's rejection of PM May's Brexit deal - financial press
• (UK) A group of UK lawmakers said to test whether parliament would support seeking 'standstill arrangements' with the EU - financial press

Levels as of 1:25 ET

• Nikkei 225, -1.2%, ASX 200 -0.2%, Hang Seng -0.5%; Shanghai Composite -0.7%; Kospi -0.6%
• Equity Futures: S&P500 -0.1%; Nasdaq100 -0.1%, Dax -0.2%
• EUR 1.1292-1.1284 ; JPY 111.36-111.24 ; AUD 0.7083-0.7054 ;NZD 0.6863-0.6852
• Gold +0.5% at $1,304/oz; Crude Oil +0.5% at $57.17/brl; Copper -0.2% at $2.925/lb

Market movers today

After PM Theresa May's defeat yesterday on the new Brexit deal, the House of Commons is voting tonight on whether it can support leaving the EU without a deal. We maintain our view that the House of Commons will vote to reject a no deal Brexit and instead tomorrow vote in favour of an extension, see also Brexit Monitor: Brexit goes to overtime 11 March. Also look out for responses from EU leaders and politicians.

In the euro area , focus is on the January industrial production figures, which will shed some light on how the economy started the year. In December, production declined by 4.2% y/y - the biggest decline since the financial crisis. Already released country data paints a somewhat mixed picture for January, with industrial activity picking up in Spain, France and even Italy, while Germany continues to struggle with headwinds from the car sector. We will also listen to the ECB's Couere for clues on whether the ECB wants to correct last week's market interpretation of its stance.

In the US, capital goods data for January is released. New capital goods orders have been falling since September last year, indicating a slowdown in investments at the beginning of 2019. Overall, we expect investments to continue growing in 2019 but probably not at the same pace as 2017 and 2018.

In Sweden , Prospera is releasing its big Q1 inflation expectations survey, see page 2.

Selected market news

As we had expected, PM Theresa May suffered another defeat on her Brexit deal. Still, the defeat was smaller than the first time around (149 versus 230 last time) and 40 Conservative MPs switched, including the former Brexit secretary David Davis .

While we expect the House of Commons to support an extension, the EU27 needs to grant it unanimously. While EU leaders and EU Council President Donald Tusk have said they want good explanations for an extension, we think a short extension to mid-May (before the European elections) is quite likely. EU leaders are clearly annoyed by Brexit, as they have other issues to deal with, but it is probably more problematic for the UK to kick the can further down the road. However, given the size of May's defeat, the EU leaders will discuss whether they prefer to offer a long extension.

As most expect an extension and think at some point there will be a third attempt to get May's deal through, it was not a big cost for MPs to vote against her deal again . During the day, however, we think it was clear that the Brexiteers are under increasing pressure to deliver Brexit, as the alternative is a softer Brexit (or a reversal), not a cleaner/harder one. Besides David Davis supporting the deal, prominent Brexiteers such as Jacob Rees-Mogg also seem to be softer. This is also why our base case remains that the deal will pass eventually, but of course uncertainty is high.

Daily Pivots: (S1) 144.19; (P) 145.93; (R1) 147.27; More...

Intraday bias in GBP/JPY remains neutral at this point. On the upside, break of 148.75 will resume rebound from 131.51 and target 149.48 key resistance next. On the downside, break of 143.72 will resume the pull back from 148.57 to 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.

Daily Pivots: (S1) 125.18; (P) 125.51; (R1) 126.00; More....

Intraday bias in EUR/JPY remains mildly on the upside for the moment. Pull back from 127.50 could have completed at 124.27. 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.