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The pair accelerated lower on Friday after downbeat China’s export data and significant narrowing of trade surplus revived worries of global growth slowdown and sparked fresh risk aversion.

Fresh bears surged through strong support at 111.40 (converged 10/200/100 SMA’s) and tested rising 20SMA (111.00) where temporary footstep was found.

Initial reversal signal is developing on daily chart, with weekly close below broken cluster of MA’s to add to negative outlook, however, further verification of trend change would be required on extension below 20 and 30SMA’s (111.00 / 110.51 respectively).

US jobs data are expected to provide fresh signal and could reverse current pullback on strong outcome today.

Res: 111.40, 111.65, 111.85, 112.13
Sup: 111.00, 110.74, 110.51, 110.01

Daily Pivots: (S1) 1.3424; (P) 1.3446; (R1) 1.3479; More...

USD/CAD is losing some upside momentum as seen in 4 hour MACD. But intraday bias stays on the upside with 1.3413 minor support intact. Current rise from 1.3068 should extend to retest 1.3664 and then 1.3685 fibonacci level. On the downside, below 1.3413 will turn intraday bias neutral and bring consolidation first, before staging another rise.

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 1.3118) 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.

As expected the ECB remained on hold at 0.0%, yet had a clearly dovish approach in its accompanying statement and economic projections. The bank changed its forward guidance on interest rates and announced new targeted longer-term refinancing operation (TLTRO). The bank also had some downward revisions regarding its economic forecasts as now the headline inflation rate is expected to slow down reaching 1.2% yoy for 2019 and the GDP growth rate to reach 1.1% yoy. In his press conference ECB president Mario Draghi stated that the measures are aiming at lifting inflation and are adding accommodation, while at the same time denied that there were any discussions for cutting the deposit rate. We expect the EUR to remain under pressure despite its relative stabilization in the Asian session today. EUR/USD tumbled yesterday, breaking all of our support lines and stabilising during the Asian session below the 1.1215 (R1) support line (now turned to resistance). We expect the pair to remain under pressure as currently the common currency remains in a weak position, yet the pair might prove sensitive to the release of the US employment report for February. Please note that the RSI indicator in the 4 hour chart has dropped well below the reading of 30, implying a rather overcrowded short position. Should the bears continue to dictate the pair's direction, we could see it breaking the 1.1165 (S1) support line and aim for lower grounds. Should on the other hand the bulls take over, we could see it breaking the 1.1215 (R1) resistance line and aim for the 1.1260 (R2) resistance barrier.

GBP weakens on Brexit impasse.

The GBP dropped yesterday against the USD, as the negotiations between the UK and the EU have reached an impasse. EU negotiators rejected the latest proposals on the Irish backstop presented by Britain's attorney general Cox. UK government sources, stated that there seems to be little hope for something to change in the next days adding to the pessimistic outlook. Analysts pointed out that the market gets conflicting messages from London and that negative news are flowing from Brussels, keeping the pound in tight range and under pressure we would add. Cable dropped testing the 1.3070 (S1) support line, yet failing to break it. We could see the pair maintaining bearish tendencies today especially should the Brexit impasse persist. On the other hand the pair may prove sensitive to the release of the US employment report for February. Should the pair remain under the selling interest of the market, we could see it breaking the 1.3070 (S1) support line and aim for the 1.2990 (S2) support barrier. Should on the other hand the market favour the pair's long positions, we could see it aiming if not breaking the 1.3175 (R1) resistance line.

Today's other economic highlights

In today's European session we get Germany's factory orders growth rate for January. In the American session we get the US employment report for the February as well as Canada's employment data for February. As for speakers ECB's Yves Mersch will be speaking. On Saturday during the Asian session we get China's inflation measures for February and take a special notice of Fed Chair Jerome Powell speaking. On Sunday no major releases are expected as well as during Monday's Asian session.

GBP/USD

Support: 1.3070 (S1), 1.2990 (S2), 1.2900 (S3)
Resistance: 1.3175 (R1), 1.3270 (R2), 1.3360 (R3)

EUR/USD H4

Support: 1.1165 (S1), 1.1125 (S2), 1.1080 (S3)
Resistance: 1.1215 (R1), 1.1260 (R2), 1.1300 (R3)

The USDJPY pair is under pressure towards the 111.00 support level on Friday, as traders move into the safety of the Japanese yen currency. The USDJPY pair is currently testing major trendline support from a rising price channel on the four-hour time frame. A sustained move below the channel may encourage sellers to test towards the important 110.60 technical level.

The USDJPY pair is bearish while trading below the 111.60 level, key technical support is found at the 111.00 and 110.60 levels.

If the USDJPY pair trades above the 111.60 level, buyers may test towards the 112.00 and 112.20 resistance levels.

The euro currency has remained under downside pressure against the US dollar during the European trading session, with the pair now awaiting the US monthly job report. Bearish intraday selling pressure should continue while price trades below the neckline of the head and shoulders pattern on the four-hour time frame. A break below the 1.1170 support level may trigger further losses in the EURUSD pair towards the 1.1120 level.

The EURUSD pair is bearish while trading below the 1.1230 level, key technical support is found at the 1.1170 and 1.1120 levels.

If the EURUSD pair moves above the 1.1230 level, buyers may test towards the 1.1260 and 1.1300 levels.

Daily Pivots: (S1) 0.6995; (P) 0.7023; (R1) 0.7043; More...

AUD/USD is losing some downside momentum as seen in 4 hour MACD. But intraday bias stays on the downside with 0.7051 minor resistance intact. Fall from 0.7295 should target 61.8% retracement of 0.6722 to 0.7295 at 0.6941. Break will bring retest of 0.6722 low. On the upside, break of 0.7051 minor resistance will turn intraday bias neutral and bring consolidation, before staging another decline.

In the bigger picture, as long as 0.7393 resistance holds, we'd treat fall from 0.8135 as resuming long term down trend from 1.1079 (2011 high). Decisive break of 0.6826 (2016 low) will confirm this bearish view and resume the down trend to 0.6008 (2008 low). However, firm break of 0.7393 will argue that fall from 0.8135 has completed. And corrective pattern from 0.6826 has started the third leg, targeting 0.8135 again.

Cable consolidates above strong supports at 1.3050 zone (converged 20/30SMA’s) approached on Thursday’s bearish acceleration through pivotal 1.3129 Fibo support (38.2% of 1.2772/1.3349 rally) that resulted in daily fall of 0.65%.

Sterling was pulled lower by Euro’s weakness and Brexit uncertainty ahead of Tuesday’s key vote on Brexit plan and on track for bearish weekly close and weighed by thickening and falling weekly Ichimoku cloud.

Weaker daily momentum could add to negative outlook but further hesitation on approach to 1.3050 pivots could be anticipated on oversold stochastic and neutral RSI.

Corrective upticks should ideally hold below broken Fibo support / 5SMA (1.3129/40) to keep bears intact and guard upper pivot at 1.3182 (10SMA).

Eventual break below 1.3150 would risk test of key support at 1.2993 (200SMA / Fibo 61.8% of 1.2772/1.3349).

Repeated close below weekly cloud base (1.3248) would also add to negative signals.

Res: 1.3108, 1.3129, 1.3140, 1.3182
Sup: 1.3068, 1.3050, 1.3012, 1.2993

The Euro trades near fresh multi-month low at 1.1176 (the lowest since June 2017), posted after strong fall on Thursday.

Dovish tones from the ECB which delayed its first rate hike after crisis to 2020, cut economic forecast and launch of new stimulus in form of cheap loans to the banks, hit the single currency which fell 1% on Thursday (the second biggest one-day loss in 2019).

Strong bearish acceleration on Thursday generated bearish signal on break and close below important Fibo support at 1.1186 (61.8% retracement of larger 1.0340/1.2555 ascend).

Weekly close below here would confirm negative signal and maintain bearish pressure for extension towards 1.1093 (the neckline of weekly asymmetric H&S pattern) and psychological 1.10 support.

Oversold daily studies suggest consolidative / corrective action, as traders take profit from Thursday’s strong fall.

Former low at 1.1234 now marks initial resistance, with extended upticks to be ideally capped at 1.1270 (Fibo 38.2% of 1.1419/1.1176 / falling 5SMA).

Mixed signals from EU countries in early European session had little impact on Euro, with focus turning towards US jobs data.

US Non-farm payrolls (Feb 180K f/c vs 304K in Jan) could further boost dollar on solid results today that would increase pressure on Euro, which is on track for the biggest weekly loss since Feb 2018.

Res: 1.1212, 1.1234, 1.1270, 1.1298
Sup: 1.1176, 1.1127, 1.1093, 1.1000

The European Central Bank (ECB) is stepping in again to support the economy. But markets aren't buying it. EURUSD sank by over onepercent, dipping below 1.118 before climbing back closer to 1.12 at the time of writing, hovering at its lowest level since June 2017.

The ECB confirmed reports leading up to yesterday's policy decision, by unanimously choosing to issue a new series of cheap loans to banks and keep rates on hold at least until the end of 2019. The central bank also downgraded its forecasts for both inflation and economic growth. Needless to say, none of this is positive news for Euro buyers.

Given the drop in the Euro, markets appear to be interpreting this decision as yet another instance in whichthe ECB is behind the curve. With growth and inflation still very much on feeble footing, one interpretation is that previous rounds of “policy accommodation” have failed to sufficiently boost the Eurozone. The ECB's latest round of stimulus also indicates that the economy is far from being able to stand on its own, and is still reliant on “added accommodation”. They're concerned enough by the worsening outlook to warrant a fresh round of stimulus, just three months after ending theirbond-buying programme.

Also note that Europe is still having to contend with “pervasive uncertainties”, as Mario Draghi described it, including Brexit uncertainties, cooling growth in China, and the still-unresolved nature of trade talks between the US and China.

Allthis paints a very gloomy outlook for the Eurozone for 2019, leaving Euro bulls with the enormous task of having to prove their case.

China External Trade Slumps in February

Beyond the dovish ECB forecast, investor confidence is taking another hit with China missing its February external trade target.

Exports declined by more than 20 percent, with imports declining by over fivepercent; both far below market expectations, even after factoring in the Chinese New Year holidays. The threat of US tariffs and a slowing European economy haveweighed on Chinese shipments, adding to concerns surrounding the world's second largest economy.

While China has revisedits 2019 growth targets to 6.0-6.5 percent, policymakers in Beijing have promised stimulus measures, including a three percentage-point cut to its Value Added Tax. Should these stimulus measures start to take effectand reflect positively in China's economic data, this may encourage risk-on sentiment to be reflected in the Yuan, and other Asian currencies.

For now I would however expect risk sentiment to be carried by the recent return of fears over a slowing global economy.

US February NFP Closely Watched

With the EU and China dragging global growth, coupled with Brexit uncertainties, this leaves the United States as the bright spark in a gloomy global economiclandscape. Economic divergence is back in the air, meaning the Greenback has returned as the chosen one for investors' number one currency. It is no coincidence at all that the Dollar Index extended to its highest level of 2019, at the same time that a downbeat Draghi and ECB drove the Euro to its lowest levels of the year so far.

February's US non-farm payrolls, due later today will be the latest indicator of the resilience of US economic growth. While markets project hiring to have moderated compared to January, it's still expected to keep with the broader storyline – the US economy is on solid ground and more importantly, it remains way ahead of its developed peers.

This week, the US Dollar reached a new high for 2019, and may climb even higher should the NFP surprise to the upside. If the global outlook deteriorates further, that may prompt investors to engage in the divergence trade and seek shelter in the Greenback, despite the dovish stance currently held by the Federal Reserve.

Daily Pivots: (S1) 1.1141; (P) 1.1230; (R1) 1.1284; More.....

EUR/USD reached as low as 1.1176 and break of 1.1215 support indicates resumption of whole down trend from 1.2555. Intraday bias stays on the downside for 100% projection of 1.1814 to 1.1215 from 1.1569 at 1.0970 next. On the upside, above 1.1285 minor resistance will turn intraday bias neutral first. But outlook will remain bearish as long as 1.1419 resistance holds.

In the bigger picture, down trend down trend from 1.2555 medium term top is still in progress. 61.8% retracement of 1.0339 (2017 low) to 1.2555 at 1.1186 is also met. Sustained break there will pave the way to retest 1.0339. However, break of 1.1569 resistance will now indicate completion of such down trend and turn medium term outlook bullish.