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The Eurozone single currency appreciated about 88 base points against the Japanese Yen on Friday. The exchange rate was guided by the 50-hour simple moving average during the previous trading session.

Monday's trading session began with bearish momentum. By the middle of the trading day, the currency pair has breached a support level formed by the 50-hour SMA at 126.96.

If the currency exchange rate passes the weekly pivot point t 126.70, the next target for bearish traders will be near the 100-hour SMA at 126.46.

However, if the weekly PP holds, the EUR/JPY pair will continue to maintain the junior ascending channel pattern within this session.

On Monday, the EUR/USD began the day's trading above the support of the various hourly simple moving averages. Although, it began to immediately decline.

By the middle of the day's trading session the rate had fallen below the 1.1350 level and it was expected to continue its decline. Namely, the pair had no support as low as the weekly S1 at 1.1324.

On the other hand, the rate has already made a too sharp move downwards. Due to that reason it might first consolidate the decline by trading sideways.

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.13703
Open: 1.13802
% chg. over the last day: +0.05
Day's range: 1.13490 – 1.13812
52 wk range: 1.1214 – 1.2557

EUR/USD is showing an ambiguous technical picture. The trading instrument is moving in a flat. The local support and resistance levels are 1.13500 and 1.13750. The demand for the USD remains high. Additional support is given by the positive US Treasury bonds dynamic. The negotiations between the Washington and Beijing are in the spotlight. According to WSJ, US and China made progress in the negotiations and can reach an aggreement by March 27. The EUR/USD quotes have a tendency to descend. You should open positions from the key levels.

The Economic News Feed for 04.03.2019 is calm.

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

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

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

Trading recommendations

Support levels: 1.13500, 1.13250, 1.13000
Resistance levels: 1.13750, 1.14000, 1.14200

If the price falls below 1.13500, expect the quotes to fall toward 1.13250-1.13000.

Alternatively, the quotes can grow toward 1.14000-1.14200.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.32614
Open: 1.32476
% chg. over the last day: -0.44
Day's range: 1.32246 – 1.32514
52 wk range: 1.2438 – 1.4378

GBP/USD stabilized after the sharp rally last week. The demand for GBP has grown after statements from the UK Prime Minister. Theresa May mentioned that British parliamentaries could vote to postpone Brexit. Right now the quotes are consolidating and a technical correction is possible soon. The local support and resistance levels are 1.32150 and 1.32450. You should open positions from these levels and watch the Brexit news feed closely.

At 11:30 (GMT+2:00) the UK will publish the Construction PMI.

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

The MACD histogram is close to 0.

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: 1.32150, 1.31500, 1.31000
Resistance levels: 1.32750, 1.33450, 1.34000

If the price fixes below 1.32150, expect the quotes to correct toward 1.31600-1.31400.

Alternatively, the quotes can grow toward 1.33300-1.33500.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.31690
Open: 1.32756
% chg. over the last day: +0.97
Day's range: 1.32737 – 1.33022
52 wk range: 1.2248 – 1.3664

On Friday USD/CAD was in an aggressive buyout. CAD was weakened against the USD by 1% and the quotes reached the round 1.33000. The Statistical Service of Canada published a weak GDP report. According to it, in the fourth quarter the economic growth slowed to 0.1%, in comparison to the previous value of 0.5%. Right now the quotes are consolidating around 1.32700-1.33050. You should open positions from these levels. The trading instrument has further growth prospects.

The Economic News Feed for 04.03.2019 is calm.

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, the %K line is above the %D line, which points to the bullish mood.

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: 1.32700, 1.32400, 1.32000
Resistance levels: 1.33050, 1.33500

If the price fixes above 1.33050, expect further growth of USD/CAD. The movement will tend toward 1.33400-1.33600.

Alternatively, the quotes can correct toward 1.32400-1.32200.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 111.375
Open: 111.841
% chg. over the last day: +0.48
Day's range: 111.755 – 112.014
52 wk range: 104.56 – 114.56

USD/JPY is consolidating after the long rally last week. The quotes are testing the local levels of 111.750 and 112.000. A technical correction is possible soon. Keep an eye on the US Treasury bonds dynamic. You should open positions from the key levels.

The Economic News Feed for 04.03.2019 is calm.

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 gives a weak signal to buy USD/JPY.

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

Trading recommendations

Support levels: 111.750, 111.500, 111.200
Resistance levels: 112.000, 112.500

If the price fixes above the round 112.000, expect the quotes to grow toward 112.400-112.600.

Alternatively, the quotes can correct toward 111.500-111.300.

On Friday, the US dollar strengthened against the basket of major currencies. The dollar index (#DX) closed in the positive zone (+0.42%). Investors follow the negotiations between the US and China closely. According to The Wall Street Journal, China and the United States are close to reach trade agreement. Beijing agreed to reduce tariffs and lift restrictions on imports of American cars, agricultural and chemical products. In turn, Washington will cancel the increase in duties on a number of Chinese goods. The US currency is additionally supported by the positive dynamics of the US government bonds yield.

The sentiment of financial market participants has improved in relation to the British pound. Last week, UK Prime Minister, Theresa May, reported that British lawmakers could vote to postpone the Brexit. EU chief Brexit negotiator, Michel Barnier, has announced that the European Union is ready to help reach an agreement on Brexit. At the moment, the GBP/USD currency pair has become stable.

The "black gold" prices have been recovering after a rapid fall on Friday, March 1. At the moment, futures for the WTI crude oil are testing the mark of $56.10 per barrel.

Market Indicators

On Friday, the bullish sentiment was observed in the US stock market: #SPY (+0,62%), #DIA (+0,44%), #QQQ (+0,69%).

The 10-year US government bonds yield has continued to grow. At the moment, the indicator is at the level of 2.75-2.76%.

The news feed on 04.03.2019:

The index of economic activity in the UK construction sector at 11:30 (GMT+2:00).

The pair holds in red in Europe on Monday, as mixed Australian data partially offset positive signals from renewed optimism on possible US/China trade deal.

Fresh weakness pressures again key Fibo support at 0.7070 (38.2% of 0.6706/0.7295) which contained last Friday’s extension of three-day fall, after the support limited attacks in Feb.

Daily techs remain negative, as plethora of south-turning and converging daily MA’s weigh and momentum is breaking into negative territory.

Eventual break of 0.7070 pivot and nearby thin daily cloud (0.7059/50) would open way for fresh acceleration towards psychological 0.70 support, possibly to 0.6931 (Fibo 61.8% of 0.6706/0.7295) in extension.

Traders focus tomorrow’s RBA policy meeting for fresh signals, with the central bank widely expected to stay unchanged and dovish rhetoric on slowing growth that would add to negative signals on RBA’s plans for tightening policy in 2019.

Res: 0.7114, 0.7127, 0.7141, 0.7163
Sup: 0.7070, 0.7054, 0.7000, 0.6931

CADJPY was capped by the red Tenkan-sen line today after the strong pullback from the two-and-a-half month high of 85.25 on Friday. Also, the pair dropped back below the 61.8% Fibonacci retracement level of the downleg from 89.25 to 76.60, around 84.40. The RSI and the MACD are moving sideways in the positive zone, suggesting a possible downside retracement.

Further losses could find immediate support at the 83.96 barrier, before moving towards the 20-day simple moving average (SMA) currently at 83.62. Steeper declines could send the market until the 50.0% Fibonacci of 82.90, which stands near the 40-day SMA and then could move even lower touching the 82.26 hurdle, breaking the ascending channel.

In the event of positive pressures, the market could meet resistance at the 85.25 region, while more gains would endorse the bullish bias, surpassing the upper band of the channel. The next level is coming from the 86.25 obstacle and then from the 87.00 psychological level.

To sum up, CADJPY holds a slightly bullish profile in the short-term, following the pullback on the two-year low of 76.60.

Hopes grew for a possible deal between the US and China, to close their tariff disputes during today’s Asian session. Hopes were fueled by a media report on Sunday, stating that China and the US could reach a formal agreement at a summit around the 27th of March. It should be noted that US government economic adviser Larry Kudlow had stated on Friday that there was much progress in the talks with Chinese representatives. Analysts point out that despite the trade news, pushing the USD lower against a number of Asian currencies, it strengthened against the safe haven JPY. Should there be further positive headlines reeling in, regarding the trade talks we could see the USD’s position as a safe haven being undermined. USD/JPY rose on Friday and during today’s Asian session, yet remaining between the 112.55 (R1) resistance line and the 111.40 (S1) support line. We could see the pair moving in a sideways movement today unless further positive headlines about the US Sino trade negotiations push the pair higher. Should the pair find fresh buying orders along its path, we could see it breaking the 112.55 (R1) resistance line, while if the pair comes under the selling interest of the market, we could see it breaking the 111.40 (S1) support line.

RBA Interest rate decision

The Aussie could be in for a bumpy week as number of Australian and Chinese data are due out. Starting with RBA’s interest rate decision tomorrow during the Asian session (05:30,GMT+2), the bank is widely expected to remain on hold at +1.50 %.According to AUD OIS, there is a chance of 99% for such a scenario and should the bank do so, we could see the markets attention turning to the accompanying statement. With the CPI rate being below the bank’s target range of 2.00% -3.00% and the GDP rate forecasted to slow down for Q4, there seems to be little room for the bank to maneuver. Should a dovish tone prevail in the accompanying statement, we could see the Aussie weakening. AUD/USD opened with a positive gap during today’s Asian session stabilising and remaining above the 0.7065 (S1) support line. We could see on the one hand the pair being pushed upwards by positive headlines regarding the US-Sino trade relationships, while on the other hand RBA’s interest rate decision along with other financial releases this week could keep the pair under pressure. Should the bears be in control of the pair’s direction, we could see it breaking the 0.7065 (S1) support line and aim for the 0.6985 (S2) support barrier. Should on the other hand the bulls take over, we could see the pair, breaking the 0.7150 (R1) resistance line aiming for higher grounds.

Today’s other economic highlights

During the European session today, we get Turkey’s CPI rate for February, UK’s Construction PMI for February and Eurozone’s PPI rate for January.

As for the rest of the week

On Tuesday, from Australia we get the Current Account balance for Q4, RBA’s Interest Rate Decision, UK’s Services PMI for February, Eurozone’s Retail sales for January, and the US ISM Non-Mfg PMI for February. On Wednesday, we get Australia’s GDP for Q4, form Turkey CBRT’s interest rate decision, the US trade balance for December, form Canada BoC’s interest rate decision and the Ivey PMI for February. On Thursday, we get Australia’s Retail Sales for January and ECB’s Interest rate decision. On Friday, we get Japan’s GDP for Q4, China’s Trade Balance for February, Germany’s Factory orders for January, the US employment report for February, as well as Canada’s employment data for February. On Saturday, from China we get the PPI and CPI rates for February.

USD/JPY

Support: 111.40 (S1), 110.15 (S2), 109.20 (S3)
Resistance: 112.55 (R1), 113.70 (R2), 114.50 (R3)

AUD/USD H4

Support: 0.7065 (S1), 0.6985 (S2), 0.6915 (S3)
Resistance: 0.7150 (R1), 0.7230 (R2), 0.7330 (R3)

Eurozone Sentix Investor Confidence improved to -2.2 in March, up from -3.7 and beat expectation of -3.1. Current Situation index dropped from 10.8 to to 6.3, lowest since September 2016 and the seventh monthly decline. Expectations Index improved to -10.3, up from -17.3. Sentix noted that the indexes are "sending signs of stablisation" and "fueling hopes that there will be no recession. However, "it is too early to give the all-clear".

And, thematically "investors expect slight support from monetary policy in the coming months from a pause in the interest rate cycle. Nevertheless, the central bank policy barometer does not give the impression that a sustained easing of monetary policy is to be expected. On the one hand, a rapid comeback of the economy would also surprise the central bank and, on the other, investors expect inflationary pressures to rise again.

On development to now in the strong improvement in Asia ex-Japan. Overall Investor Confidence index rose 9.9 to 15.3, highest since August 2018. Current Situation index rose from 22.3 to 24.5. Expectations index rose from -1.8 to 6.5, highest since March 2018. Sentix noted that the Chinese "government's measures to stimulate economic growth both in fiscal and monetary terms are well received by the investors surveyed by Sentix.

Full release here.

The pair consolidates within tight range under new multi-week high at 112.07 (posted last Friday), as President Trump’s criticism of the US central bank over too high dollar capped advance, but so far without stronger negative impact for the pair.

Psychological 112.00, Fibo 112.20 barrier (Fibo 76.4% of 114.54/104.59 fall) and 200WMA (112.31) provide strong headwinds and bulls may struggle to break higher and spark fresh acceleration higher on triggering a number of stops parked above.

Daily techs are bullish, but weaker momentum signals extended consolidation.

Broken 200SMA (113.33) reinforced by formation of 5/200SMA Golden Cross, is expected to contain extended dips and keep bulls intact.

Res: 112.07, 112.20, 112.31, 112.60
Sup: 111.75, 111.41, 111.33, 111.05

• Stocks cruise higher on reports that a trade deal is just around the corner
• Dollar advances, despite soft US data and ‘jawboning’ by Trump
• Loonie crushed as Canadian GDP disappoints, oil retreats

Equities bask in trade optimism

US stock markets closed higher on Friday, and futures suggest these indices will likely open in the green on Monday as well, fueled by renewed optimism that a US-China trade deal is just around the corner. Media reports over the weekend reinforced such expectations, indicating that an accord is very close to being struck, with China offering to lower tariffs on several US goods and curbing its own subsidies, in exchange for the immediate removal of US tariffs.

Against this positive backdrop, Asian markets are a sea of green today, as traders continue to reallocate funds towards riskier but higher yielding assets. In the FX world, currencies like the aussie and the kiwi opened with gaps to the upside, though quickly filled those to trade almost unchanged, with the aussie weighed down by a string of disappointing tier-two Australian indicators overnight. As for what’s next, with a deal now practically in the bag, market attention could shift towards the pivotal Trump-Xi meeting that is reportedly being planned for mid-March, where the two leaders are expected to put pen to paper and officially close the deal.

Dollar defies soft data and Trump jawboning, edges higher

The world’s reserve currency continues to defy naysayers, with the dollar index managing to close notably higher on Friday, even despite a bunch of disappointing US data. More impressively, the dollar is building on those gains early on Monday, staying largely unfazed by some remarks from President Trump over the weekend, who for the umpteenth time reiterated that the currency is too strong.

The greenback is currently drawing strength from the latest uptick in US Treasury yields, which are surging on the back of trade optimism, and whose increase amplifies the dollar’s carry appeal via widening interest rate differentials. Hence, the dollar remains ‘the best of all worlds’ for now, given its unique ability to gain both when trade tensions escalate and when they subside.

Loonie pulverized as Canadian GDP disappoints, oil prices drop

The Canadian dollar had the rug pulled out from under it on Friday, losing more than 150 pips versus its US counterpart, following disappointing Canadian GDP data and a sharp drop in oil prices. The nation’s economic growth for Q4 clocked in at a mere 0.4% annualized pace, far below the projected 1.2%. The miss greatly dampened expectations for any further rate hikes by the Bank of Canada, which meets this week. Looking at market pricing, investors now assign a mere 20% chance for just one quarter-point rate increase this year, and if the Bank validates as much on Wednesday, the loonie could continue to suffer.

Light start to a busy week: UK construction PMI today

The economic calendar is relatively light on Monday, with the only tier-one release being the UK construction PMI for February. As always though, Brexit considerations will be far more important in driving the pound, which is on the front foot this week following some encouraging remarks by the EU’s Barnier on Friday that Europe is ready to offer Britain further guarantees on the Irish backstop.

As for the rest of the week, the schedule is quite packed. The RBA will announced its policy decision early on Tuesday, the BoC on Wednesday, and the ECB on Thursday. To top it all off, the week is also filled with several key data releases, the most notable being the US employment report on Friday. In politics, China’s National Congress commences today.