Sample Category Title

Cable traded in a narrow range and without clear direction in Asian session on Monday, but holds near-term bullish bias following gap-higher opening at the beginning of the week.

Receding concerns about no-deal Brexit, President Trump's criticism of the Fed and high dollar, as well as optimism over US/China trade deal boosted risk appetite and improved pair's sentiment.

Two-day pullback from new high at 1.3349 found footstep at 1.3172, keeping pivotal supports at 1.3155 (10SMA) and 1.3129 (Fibo 38.2% of 1.2772/1.3349) intact and reducing risk of deeper pullback for now.

Last week's strong bullish close (the second straight bullish week) and firmly bullish weekly techs are supportive factors, however, failure at weekly cloud base (1.3265) and weekly close below cloud after strong upside rejection, weighs and keeps in play risk of fresh weakness.

Fresh bulls pressure rising daily 5SMA (1.3252) break above which would generate fresh bullish signal and keep near-term focus shifted higher.

Highs of last Fri./Thu (1.3286/1.3319 respectively) mark next targets ahead of key barrier at 1.3349 (27 Feb high), break of which would signal bullish continuation.

Conversely, violation of 1.3155/29 pivots would signal deeper correction of 1.2772/1.3149 upleg.

Res: 1.3253, 1.3286, 1.3319, 1.3349
Sup: 1.3213, 1.3172, 1.3155, 1.3129

Asian equity markets entered the trading week on a front foot, followingnews that the United States and China were close to a breakthrough deal that could lift most, if not all, US tariffs on Chinese goods.

The key question is - will all tariffs will be removed instantly, or will they be gradually dialled back? While the renewed risk appetite is seen boosting European and US stocks, investors should consider how much upside is left, given that markets have been actively pricing in the possible resolution to the trade saga. Once this major chapter is closed, what will markets focus on next – global monetary policy, the global slowdown, or other major risks?

China will be in the spotlight this week, as the government announces its 2019 economic growth targets and five-year development plan atthe National People’s Congress in Beijing on 5 March. In the leadup to this summit, the world’s second largest economy has seen growth moderating, due in part to the ongoing trade tensions. Hence, policymakers are said to be contemplating stimulus measures, such as a tax cut, to help boost domestic consumption. Should such measures be announced out of Beijing this week, thesemay serve as another catalyst for the risk-on sentiment going up a notch.

Focus turns to the European Central Bank meeting on Thursday, where monetary policy is expected to be left unchanged. The central bank will also be keeping an eye on what Beijing conveys to the rest of the world this week. China’s softening domestic demand has weighed on European exports, and a reversal of the trend would be welcomed by the ECB. Mario Draghi’s outlook for the Eurozone will be closely scrutinized this week, after having already highlighted downside risks to economic growth followingthe January meeting. With Eurozone’s factory output contracting in February, led by Germany and Italy, and with new orders seeing theirbiggest drop in nearly six years, concerns remain elevated over the health of the Eurozone economy. The fact the ECB’s policy decision this week come hours after the Eurozone’s final reading on 4Q GDP suggests that this will be an eventful week for the Euro. I see a further deterioration in projections and a dovish Mario Draghi weighing heavily on the Euro this week.

Back in the United Kingdom, Prime Minister Theresa May is reportedly getting hints that Parliament is now warming up to her Brexit deal. When considering how her deal was squarely rejected back in January, this is certainly a significant turnaround. The Pound is likely to remain sensitive and volatile ahead of a vote on the revised Brexit deal on 12 March. Although Theresa May has opened up the possibility of delaying Brexit beyond the 29 March deadline, lessons from the past have taught investors to always expect the unexpected when dealing with Brexit. The Pound’s outlook remains clouded by the endless uncertainty surrounding Brexit, and this continues to be reflected in the currency’s price action.

Across the Atlantic, all attention will be directed towards the US jobs report on Friday, which should provide insight into the health of the labour market. A string of disappointing economic reports from the United States coupled with a ‘patient’ Fed havefuelled expectations over the central bank taking a break on monetary tightening this year. Although the Greenback has displayed resilience against Trump’s comments about Dollar strength, the currency is likely to be seen depreciating if the jobs report fails to reach market expectations.

Pivot (invalidation): 56.45

Our preference Short positions below 56.45 with targets at 55.55 & 55.25 in extension.

Alternative scenario Above 56.45 look for further upside with 56.85 & 57.25 as targets.

Comment The RSI lacks upward momentum.

Pivot (invalidation): 15.3900

Our preference Short positions below 15.3900 with targets at 15.1100 & 14.9200 in extension.

Alternative scenario Above 15.3900 look for further upside with 15.5000 & 15.6200 as targets.

Comment As Long as the resistance at 15.3900 is not surpassed, the risk of the break below 15.1100 remains high.

Pivot (invalidation): 1304.00

Our preference Short positions below 1304.00 with targets at 1290.00 & 1286.00 in extension.

Alternative scenario Above 1304.00 look for further upside with 1312.50 & 1317.00 as targets.

Comment As Long as the resistance at 1304.00 is not surpassed, the risk of the break below 1290.00 remains high.

Pivot (invalidation): 2782.00

Our preference Long positions above 2782.00 with targets at 2816.50 & 2830.00 in extension.

Alternative scenario Below 2782.00 look for further downside with 2764.00 & 2750.00 as targets.

Comment The RSI is bullish and calls for further upside.

Pivot (invalidation): 11512.00

Our preference Long positions above 11512.00 with targets at 11670.00 & 11720.00 in extension.

Alternative scenario Below 11512.00 look for further downside with 11458.00 & 11415.00 as targets.

Comment Investors have to remain cautious since these levels may trigger profit taking.

Pivot (invalidation): 5.3810

Our preference Short positions below 5.3810 with targets at 5.3610 & 5.3430 in extension.

Alternative scenario Above 5.3810 look for further upside with 5.3930 & 5.4050 as targets.

Comment A break below 5.3610 would trigger a drop towards 5.3430.

Pivot (invalidation): 0.7105

Our preference Short positions below 0.7105 with targets at 0.7065 & 0.7050 in extension.

Alternative scenario Above 0.7105 look for further upside with 0.7125 & 0.7145 as targets.

Comment A break below 0.7065 would trigger a drop towards 0.7050.

Pivot (invalidation): 1.3240

Our preference Long positions above 1.3240 with targets at 1.3310 & 1.3350 in extension.

Alternative scenario Below 1.3240 look for further downside with 1.3205 & 1.3175 as targets.

Comment The RSI is bullish and calls for further advance.