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A narrow ascending channel pattern continued to guide the US Dollar higher against the Canadian Dollar. The currency pair appreciated by about 100 base points during yesterday's trading session.

The exchange rate is currently trading near the upper boundary of a medium-term ascending channel pattern at 1.3436.

If the resistance level formed by the upper boundary of the channel pattern holds, a decline towards the 50-hour SMA at 1.3384 could be expected within this session.

Moreover, If the pair passes the medium-term channel, the next target will be near the Janaury 29 high at 1.3700.

The New Zealand Dollar depreciated about 49 base points against the US Dollar on Wednesday. The decline was stopped after the exchange rate pierced the weekly S1 at 0.6765.

The currency pair breached both the upper boundary of a descending channel pattern and the 50-hour simple moving average at 0.6783 during the middle of Thursday's trading session.

Most likely, it is expected that the currency exchange rate will make some gains within this session.

However, technical indicators demonstrate that the descending channel pattern is likely to guide the pair lower today.

EUR/USD

Current level - 1.1306

Intraday allow a brief rebound to 1.1340-50, which should be followed by another leg downwards, to 1.1214.

USD/JPY

Current level - 111.76

Despite the slow pace, I still favor a dip to 111.20 support area, before attempting another test of 112.20 zone.

GBP/USD

Current level - 1.3165

There is still a chance for a short-lived test of 1.3210-20 area, before drowning towards 1.3000 zone.

Euro headwinds approaching

The single currency is under pressure: inflation stagnates while confidence indicators contract and January retail sales figures revised at 0.30% yearly and -1.40% monthly from initial estimates of 2.20% and 1.30%. This should prompt revisions in growth and inflation guidance from the European Central Bank – which meets today.

Although the ECB is expected not to change the refinancing rate, a new long-term refinancing of banks might come into play. Reactions on EUR traders will depend on Draghi’s sentiment at today’s press conference. Further monetary easing amid a potential economic downtrend should weigh on the single currency. Currently trading at 1.1310, EUR/USD is heading along 1.1267 short-term.

Lull before the storm?

Low interest rates, decent global growth, stable monetary policy from Europe and America and expansionary policy from Japan and China are all good for equities. Yet there might be overcorrection. The USA economy has slowed, so has the world’s, and the threat of recession has risen. The pace for annualized gain on the S&P 500 is a whopping 65%. Yet volatility is very low level, suggesting complacency. Perhaps it is the sweet lull of expansionary monetary policy that we have witnessed over the last ten years.

Corporate earnings have eroded leaving current valuations high unless there is a stream of good news (US-China deal, No Brexit, Dovish Fed, recovery in China growth). While the US Federal Reserve will accept inflation above 2% (which factors in wage growth), this will directly affect earnings. A strong global labour market pushes up prices even as growth decelerates. Labour costs are a lagging indicator: wages top after recession is well underway. For investors, a mildly defensive position with thematic trades plus diversification and rebalancing will smooth out coming volatility.

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.13073
Open: 1.13068
% chg. over the last day: -0.03
Day's range: 1.13011 – 1.13157
52 wk range: 1.1214 – 1.2557

EUR has stabilized. The financial market participants are waiting for the Central Bank meeting. The regulator is supposed to leave the interest rate without changes. Keep an eye on the comments and rhetorics by the CBE representatives. The bank is also discussing the possibility of renewal of the long-term credit operations TLTRO to stimulate the European economy. The EUR/USD currency pair is consolidating around 1.12900-1.13200. You should open positions from these levels.

At 14:45 (GMT+2:00) CBE will declare the new key interest rate.

GDP Report (EU) – 12:00 (GMT+2:00);

Report on primary unemployment benefits requests (US) – 15:30 (GMT+2:00);

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

The MACD histogram is close to 0.

The Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which points to the bullish mood.

Trading recommendations

Support levels: 1.12900, 1.12500
Resistance levels: 1.13200, 1.13450, 1.13650

If the price fixes below the support level of 1.12900, expect the quotes to fall toward 1.12500-1.12300.

Alternatively, the quotes can grow toward 1.13500-1.13700.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.31729
Open: 1.31690
% chg. over the last day: +0.18
Day's range: 1.31586 – 1.31846
52 wk range: 1.2438 – 1.4378

GBP/USD has stabilized. The financial market participants are waiting for the new info regarding Brexit. The quotes have stabilized around 1.31350 and 1.31850. The trading instrument started to descend. The demand for the USD remains high. You should open positions from these levels.

The Economic News Feed for 07.03.2019 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 but below the signal line, which gives a weak signal to buy GBP/USD.

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

Trading recommendations

Support levels: 1.31350, 1.30800, 1.30500
Resistance levels: 1.31850, 1.32400, 1.32800

If the price fixes below 1.31350, expect the quotes to fall toward 1.30800-1.30500.

Alternatively, the quotes can grow toward 1.32300-1.32600.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.33502
Open: 1.34366
% chg. over the last day: +0.66
Day's range: 1.34299 – 1.34471
52 wk range: 1.2248 – 1.3664

CAD started losing positions yesterday, since Bank of Canada kept the monetary positions at the same level. The regulator is worried about the economic situation in the country and is not going to raise the rates any time soon. An additional pressure on CAD is caused by weak economic reports from canada. Right now the quotes are consolidating around 1.34150-1.34500. You should open positions from these levels.

The Economic News Feed for 07.03.2019 is calm. At 15:30 (GMT+2:00) Canada will publish a report on the building permissions.

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 points toward the correction of the USD/CAD quotes.

The Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which points toward the correction of USD/CAD.

Trading recommendations

Support levels: 1.34150, 1.33700, 1.33350
Resistance levels: 1.34500, 1.35000

If the price fixes above 1.34500, expect tje qiptes to grow toward 1.35000.

Alternatively, the quotes can correct toward 1.33800-1.33600.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 111.849
Open: 111.765
% chg. over the last day: -0.21
Day's range: 111.575 – 111.800
52 wk range: 104.56 – 114.56

USD/JPY keeps moving sideways. There is no single defined trend. The investors are waiting for additional drivers. The demand for the safe haven currencies remains before the ECB meeting today and the US Labour Market report for December set to release on March 8. The local support and resistance levels are 111.550 and 111.800. You should open positions from these levels.

The Economic News Feed for 07.03.2019 is calm.

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

The MACD histogram is in the negative zone but above the signal line, which points toward selling USD/JPY.

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

Trading recommendations

Support levels: 111.550, 111.200, 111.050
Resistance levels: 111.800, 112.000, 112.500

If the price fixed below 111.500, expect the quotes to fall toward 111.250-111.000.

Alternatively, the quotes can correct toward 112.000-112.300.

Notes/Observations

• Focus on ECB rate decision. No change in rates but market eyeing by what is or isn't said on TLTRO (Note: any policy announcement would be viewed as a positive surprise) - Brexit talks appear to be heading nowhere very fast

Asia:

• Australia Jan Trade Balance: A$4.5B v A$2.8Be for its 13th straight surplus and 2nd largest on record with both exports and imports improve
• Australia Jan Retail Sales missed expectations (M/M: 0.1% v 0.3%e)
• China Fin Min Liu Kun: Tax cuts are top fiscal policy in 2019, especially small companies and manufacturers; Pressure to balance fiscal Rev and spending is very pronounced this year

Europe:

• EU officials said to be pessimistic about possibility of a Brexit breakthrough being within reach. Increasing concern on the European side that any concessions the bloc would be prepared to give wouldn't be sufficient to win a majority in the House of Commons
• House of Lords supported amendment to remain in EU customs union by 207-141 vote (Note: another defeat for PM May)
• UK Cabinet said to expect Brexit deal defeat next week by 100 votes after talks in Brussels collapsed without progress
• UK Govt said to plan to establish advisory groups to examine alternative arrangements related to the Ireland border
• BoE's Saunders (hawk): BOE has room to wait to see how Brexit unfolds; reiterates BOE response to Brexit is not automatic

Americas:

• Fed Beige Book noted that the economy continued to grow in late Jan and Feb with 10 of 12 districts reporting slight to moderate pace of expansion
• Fed's Williams (moderate, voter): Fed could afford to be flexible and wait for data; labor markets were strong with no signs of inflationary pressures. Did not need to tighten policy as much as previously thought - President Trump: trade talks with China continue to move along well; there will be a good deal or no deal
• Huawei to sue US for barring their equipment from certain networks

Macro

• (UK) United Kingdom: Reportedly this week's high level talks in Brussels didn't go well and were in fact some of the worst-tempered of the two year process. The UK sent Attorney General Geoffrey Cox for the first time to join the negotiations. The pro-Brexit lawyer tried once again to change the Irish border backstop, but with the EU sticking to its refusal to re-open the withdrawal agreement, officials were apparently not impressed by his rhetoric. The renewed souring of the talks could also spill over into the apparently inevitable talks about a delay of the Brexit date.
• (EU) Eurozone: The main focus of today's ECB meeting is the guidance and indication that they will introduce on a new round of TLTROs. The updated staff projections should bring downward revisions to growth and inflation projections, and while ECB's Lane said recently that that these may not be very large, earlier reports suggested they would be sufficient to justify a new round of funding. Draghi will probably deliver his usual caveated performance where the initial statement sounds less dovish then markets expect, but the press conference compensates for that with the assurance that the ECB is still willing to do whatever it takes.

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 -0.42% at 373.90, FTSE -0.52% at 7,158.87, DAX -0.53% at 11,526.43, CAC-40 -0.39% at 5,268.38, IBEX-35 +0.09% at 9,305.49, FTSE MIB -0.17% at 20,816.50, SMI -0.52% at 9,348.50, S&P 500 Futures -0.23%]
• Market Focal Points/Key Themes: European Indices trade mostly lower across the board following a mixed session in Asia and lower US Index futures ahead of today ECB rate meeting. On another busy morning for corporate earnings, German Tyre manufacturer Continental trades lower after reporting final results and affirmed outlook; Bokskalis falls 8% after reporting a loss for the full year, while fashion name Hugo Boss trades lower after slightly better earnings. Elsewhere Countrywide, Axel Springer, NMC Health and Schroders among some of the other names declining on Earnings. Meanwhile French advertising name JCDecaux trades higher after growth in profits in Revenue, with Informa, Inmarsat, Premier Oil and Melrose Industries among other names higher on earnings. Elsewhere Dialog Semi trades lower following the acquisition of Mobile Communications. Looking ahead notable earners include Tech Data, Kroger and Care.com among others.

Equities

• Consumer discretionary: Hugo Boss [BOSS.DE] -2% (final earnings), JC Decaux [DEC.FR] +4% (earnings), Greggs [GRG.UK] n/c (earnings)
• Consumer staples: Elis [ELIS.FR] -6.5% (earnings)
• Financials: Aviva [AV.UK] -3% (earnings), Alfa Financial Software [ALFA.UK] +24% (earnings)
• Industrials: Continental [CON.DE] -1% (final earnings), Melrose [MRO.UK] +3.5% (earnings)
• Technology: Axel Springer [SPR.DE] -7% (earnings), Dialog Semiconductor [DLG.DE] -3% (acquisition), Ultra Electronics [ULE.UK] +7.5% (analyst action)

Speakers

• BOE's Tenreyro: Smooth Brexit alone is not enough for rate hikes. Wanted to see stronger domestic pressure before raising rates. Needed only a small amount of tightening over the coming three years after a smooth Brexit
• Sweden Central Bank (Riksbank) Gov Ingves stated that needed to watch inflation pressure closely. Repo Rate path was not a promise. Board considering going from 6 to 5 policy meetings per year
• Italy Govt did not agree on TAV railway on Wed (Mar 6th). Needed to review TAV funding with EU and France
• EU's Hogan reiterated that ball was in UK's court on Brexit; talks were at a sensitive stage
• Thailand Constitutional Court ordered the dissolution of Thai Raksa Chart Party (opposition) over princess PM nomination
• US State Dept official: Talks are ongoing with all eight countries that received waivers on Iran oil back in November (**Reminder: in Nov US issued waivers to eight countries (China, India, Italy, South Korea, Turkey, Taiwan, Greece, and Japan) which will allow them to continue importing Iranian crude oil)

Currencies/Fixed Income

• FX markets were again quiet during the European session with the focus on the upcoming ECB meeting. - EUR/USD was steady holding above the 1.13 level ahead of the ECB rate decision. No change in rates was expected but market would be eyeing by what would or not stated in regards to the TLTRO operation. Given the recent prolonged economic slowdown in the region there was some expectations that the ECB would be eventually forced to provide further stimulus and shift its rate guidance. Market expectations for the ?rst potential rate hike was seen in early Q4 2020 compared to the ECB forward guidance of key rates to remain at present level at least through the summer of 2019.
• Brexit talks appear to be heading nowhere very fast but the GBP/USD was steady at 1.3155

Economic Data

• (NL) Netherlands Feb CPI M/M: 0.9% v 0.1% prior; Y/Y: 2.6% v 2.2% prior
• (NL) Netherlands Feb CPI EU Harmonized CPI M/M: 1.3 v 0.2% prior; Y/Y: 2.6% v 2.3%e
• (ZA) South Africa Feb Gross Reserves: $50.8B v $50.8B prior; Net Reserves: $43.7B v $43.5Be
• (CH) Swiss Feb Unemployment Rate: 2.7% v 2.7%e; Unemployment Rate (Seasonally Adj): 2.4% v 2.4%e
• (DK) Denmark Jan Industrial Production M/M: -9.5% v +11.9% prior
• (RO) Romania Q4 Preliminary GDP (2nd reading) Q/Q: 0.7%e v 0.7% advance; Y/Y: 4.1%e v 4.1% advance
• (NO) Norway Jan Industrial Production M/M: -2.2% v -0.8% prior; Y/Y: -3.4% v 1.3% prior
• (NO) Norway Jan Manufacturing Production M/M: -0.2% v +0.4%e; Y/Y: 4.0% v 2.5% prior
• (MY) Malaysia end Feb Foreign Reserves: $102.4B v $102.3B mid-month
• (CH) Swiss Feb Foreign Currency Reserves (CHF): 738.8B v 742.4B prior
• (AT) Austria Feb Wholesale Price Index M/M: +0.7% v -0.6% prior; Y/Y: 2.3% v 0.8% prior
• (HU) Hungary Jan Industrial Production M/M: 0.6% v 2.6% prior; Y/Y: 5.0% v 3.2%e
• (RU) Russia Narrow Money Supply w/e Mar 1st (RUB): 10.17T v 10.24T prior
• (BR) Brazil Feb FIPE CPI (Sao Paulo) M/M: 0.5% v 0.5%e
• (CN) China Feb Foreign Reserves: $3.090T v $3.087Te
• (UK) Feb Halifax House Prices M/M: 5.9% v 0.1%e; 3M/Y: 2.8% v 1.0%e
• (SE) Sweden Feb Average House Prices (SEK): 2.984M v 3.212M prior
• (SE) Sweden Feb Budget Balance (SEK): 41.1B v 8.7B prior
• (IT) Italy Jan Retail Sales M/M: +0.5% v -0.6% prior; Y/Y: +1.3% v -0.8% prior
• (ZA) South Africa Q4 Current Account Balance (ZAR): -110B v -163Be; Current Account to GDP Ratio: -2.2% v -3.2%e
• (CZ) Czech Feb International Reserves: $143.1B v $144.0B prior
• (SG) Singapore Feb Foreign Reserves: $292.5B v $293.9B prior
• UN FAO World Food Price Index: 167.5 v 164.8 prior; M/M: 1.7% v 1.8% prior
• (EU) Euro Zone Q4 Final GDP Q/Q: 0.2% v 0.2%e; Y/Y: 1.1% v 1.2%e
• (EU) Euro Zone Q4 Household Consumption Q/Q: 0.2% v 0.2%e; Govt Expenditures Q/Q: 0.7% v 0.4%e; Gross Fixed Capital Q/Q: 0.6% v 0.3%e
• (EU) Euro Zone Q4 Final Employment Q/Q: 0.3% v 0.3% prelim; Y/Y: 1.3% v 1.2% prelim
• (GR) Greece Q4 Final GDP Q/Q: -0.1% v +0.2%e; Y/Y: 1.6% v 2.2% prelim; GDP NSA (unadj) Y/Y: 1.6% v 2.4% prelim
• (GR) Greece Dec Unemployment Rate: 18.0% v 18.3% prior

Fixed Income Issuance

• (ES) Spain Debt Agency (Tesoro) sold total €3.256B vs. €2.5-3.5B indicated range in 2023, 2029 and 2048 bonds
• Sold €1.02B in 0.35% July 2023 SPGB; Avg yield: 0.142% v 0.164% prior; Bid-to-cover: 2.13x v 2.44x prior (Feb 21st 2019
• Sold €1.63B in 1.45% Apr 2029 SPGB; Avg Yield: 1.222% v 1.285% prior, bid-to-cover: 1.19x v 1.23x prior (Feb 21st 2019)
• Sold €606M in 2.7% Oct 2048 SPGB; Avg Yield: 2.362% v 2.583% prior; Bid-to-cover: 1.50x v 1.58x prior (Sept 6th 2018)
• (ES) Spain Debt Agency (Tesoro) sold €745M vs. €0.5-1.0B indicated range in inflation-linked 1.0% Nov 2030 bonds (SPGBei); Real Yield: 0.111% v 0.252% prior; Bid-to-cover: 1.70x v 2.10x prior
• (FR) France Debt Agency (AFT) sold total €9.493B vs. €8.5-9.5B indicated range in 2029, 2034 and 2045 bonds
• Sold €6.494B in new 0.50% May 2029 Oat; Avg Yield: 0.57% v 0.57% prior; Bid-to-cover: 1.88x v 2.1x priot (Feb 7th 2019)
• Sold €2.299B in 1.25% May 2034 Oat; Avg Yield: 0.99% v 1.11% prior; Bid-to-cover: 1.94x v 1.72x prior (Jan 10th 2019)
• Sold €700M in 3.25% May 2045 Oat Avg Yield: 1.42%; Bid-to-cover: 2.66x (syndicated on May 16th 2017)
• (SE) Sweden sold SEK500M vs. SEK500M indicated in 0.125% Dec 2027 inflation-linked bonds; Avg Yield: -1.4880% v -1.4053% prior; Bid-to-cover: 5.52x v 3.02x prior

Looking Ahead

• (IL) Israel Feb Foreign Currency Balance: No est v $118.2B prior
• (UR) Ukraine Feb CPI M/M: 0.6%e v 1.0% prior; Y/Y: 9.0%e v 9.2% prior
• 05:30 (HU) Hungary Debt Agency (AKK) to sell 12-month bills
• 06:00 (IE) Ireland Feb Live Register Monthly Change: No est v -3.2K prior; Live Register Leve: No est v 200.3K prior
• 06:00 (ZA) South Africa Jan Electricity Production Y/Y: No est v -1.8% prior; Electricity Consumption Y/Y: No est v 0.0% prior
• 06:30 (CL) Chile Feb Trade Balance: $0.8Be v $1.0B prior; Total Exports: $5.9Be v $6.7B prior; Total Imports: $5.1Be v $5.6B prior; Copper Exports: No est v $2.5B prior
• 06:30 (CL) Chile Feb International Reserves: No est v $38.9B prior
• 06:45 (US) Daily Libor Fixing
• 07:00 (CL) Chile Jan Nominal Wage M/M: No est v 0.5% prior; Y/Y: No est v 3.8% prior
• 07:30 (US) Feb Challenger Job Cuts: No est v 50.3K prior; Y/Y: No est v 18.7% prior
• 07:45 (EU) ECB Interest Rate Decision: Expected to leave key rates unchanged; Expected to leave Main 7-Day Refinancing Rate unchanged at 0.00%; Expected to leave Marginal Lending Facility unchanged at 0.25%; Expected to leave Deposit Facility Rate unchanged at -0.40%
• 08:00 (PL) Poland Feb Official Reserves: No est v $113.7B prior
• 08:00 (RU) Russia Gold and Forex Reserve w/e Mar 1st: No est v $480.5B prior
• 08:00 (RU) Russia Feb Official Reserve Assets: $476.0Be v $475.9B prior
• 08:00 (BR) Brazil Feb PMI Services: No est v 52.0 prior; PMI Composite: No est v 52.3 prior
• 08:00 (UK) Baltic Dry Bulk Index
• 08:30 (US) Initial Jobless Claims: 225Ke v 225K prior; Continuing Claims: 1.77Me v 1.805M prior
• 08:30 (US) Q4 Final Nonfarm Productivity: 1.5%e v 2.2% prior (revised from 2.3%); Unit Labor Costs: 1.7%e v 0.9% prior
• 08:30 (CA) Canada Jan Building Permits M/M: -5.0%e v +6.0% prior
• 08:30 (US) Weekly USDA Net Export Sales
• 08:30 (EU) ECB's Draghi holds post rate decision press conference
• 08:30 (EU) ECB updates its Staff Projections
• 09:00 (MX) Mexico Feb CPI M/M: 0.0%e v 0.1% prior; Y/Y: 4.0%e v 4.4% prior; CPI Core M/M: 0.4%e v 0.2% prior
• 09:30 (TR) Turkey Feb Cash Budget Balance (TRY): No est v 2.5B prior
• 10:00 (PT) Portugal PM Costa in Parliament
• 10:00 (BR) Brazil to sell Sept 2025 LFT
• 10:30 (US) Weekly EIA Natural Gas Storage Inventories
• 11:00 (US) Treasury announcement on upcoming 3-year, 10-year and 30-year bonds
• 11:30 (US) Treasury to sell 4-Week and 8-Week Bills
• 12:00 (US) Q4 Household Change in Net Worth: No est v $2.070T prior
• 12:15 (US) Fed's Brainard (dove, voter)
• 12:30 (BE) ECB's Praet (Belgium, chief economist)
• 12:45 (CA) Bank of Canada (BOC) Patterson
• 15:00 (US) Jan Consumer Credit: $17.0Be v $16.6B prior
• 18:00 (PE) Peru Central Bank (BCRP) Interest Rate Decision: expected to leave Reference Rate unchanged at 2.75%

More from Chancellor of the Exchequer Philip Hammond. He told BBC radio that "The government is very clear where the will of parliament is on this. Parliament will vote not to leave the European Union without a deal," and he had "a high degree of confidence about that."

At the same time, he also warned that voting against Prime Minister Theresa May's deal, the UK "will then be in unknown territory where a consensus will have to be forged across the House of Commons and that will inevitably mean compromises being made."

Eurozone Q4 GDP growth was finalized at 0.2% qoq, unrevised. Annually, GDP grew 1.1% yoy. Over the whole 2018, GDP grew 1.8%. During Q4, household final consumption expenditure rose by 0.2%. Gross fixed capital formation increased by 0.6%. Exports increased by 0.9%. Imports increased by 0.5%. Eurozone Employment growth in Q4 was finalized at 0.3% qoq, 1.3% yoy.

Full release here.

Yesterday, the US dollar did not change a lot against a basket of major currencies. The dollar index (#DX) closed the trading session with a slight increase (+0.02%). Yesterday, ambiguous economic reports were published in the US. Thus, ADP nonfarm employment change fell to 183K in February, while experts expected 189K. The trade balance counted to -59.80B instead of -57.90B. The Fed's Beige Book was also published, according to which growth in economic activity in ten of the twelve regions of the US slowed down to slight and modest. At the same time, there was no growth at all in the districts of Philadelphia and St. Louis. The shutdown of the government's work in early 2019 was the reason for the slowdown.

The Canadian dollar reached 2-month lows against the US dollar. The Bank of Canada kept the key marks of the monetary policy at the same level. The regulator is concerned about the growing risks for the country's economy. In the near future, the Central Bank plans to adhere to the current rate of monetary policy and will not consider the interest rate rise. Loonie was under pressure due to weak statistics. Thus, Ivey PMI dropped to 50.6 in February instead of the forecasted value of 55.1. The trade balance counted to -59.80B in December, while experts expected -57.90B.

During the Asian trading session, a report on the volume of retail sales has been published in Australia, which rose by 0.1% in January and was worse than the expected value of +0.3%. Today, investors are focused on the ECB monetary policy statement. The regulator considers the resumption of the targeted longer-term refinancing operations (TLTRO) in order to stimulate the Eurozone economy. We recommend paying attention to the comments by the Central Bank representatives.

The "black gold" prices are rising. At the moment, futures for the WTI crude oil have approached the mark of $56.30 per barrel.

Market Indicators

• Yesterday, there was the bearish sentiment in the US stock market: #SPY (-0.61%), #DIA (-0.51%), #QQQ (-0.57%).
• At the moment, the 10-year US government bonds yield is at the level of 2.68-2.69%.

The news feed on 07.03.2019:

• Eurozone GDP data at 12:00 (GMT+2:00);
• ECB interest rate decision at 14:45 (GMT+2:00);
• Initial jobless claims in the US at 15:30 (GMT+2:00).

GBPUSD made a nice five-wave drop, down from 1.335 level and with it a nice break below the 1.3200 level, where the lower channel line sits. This break and its five-wave drop form the highs can be an early evidence of a change in trend, in minimum three legs. That being said, we also know that after a five-wave movement fully unfolds, that is when a new temporary pullback may follow, and in our case this can already be the case, where we see legs a and b showing up. Once wave b unravels, that is when final wave c may take price towards the potential 1.3205/1.326 region, where resistance and more weakness can be seen.

GBPUSD, 1h