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USDJPY has been developing within an upward sloping channel over the last two months, after the significant rebound on the ten-month low of 104.64. The bullish tendency drove the price near the 61.8% Fibonacci retracement level of the downleg from 114.55 to 104.64, around 110.75, pointing the start of a new positive structure in the near term.

However, technical indicators have been moving with weak momentum over the past few sessions. The RSI indicator is sloping to the downside, approaching the 50 level, while the MACD oscillator is flattening near the trigger line above the zero line.

On the upside, the price could attempt to overcome the 111.40 resistance and the 200-day simple moving average (SMA), retesting the upper boundary of the channel around 111.70, which if successfully broken the door could open for the 112.30 barrier, taken from the inside swing bottom on November 2018. Should traders continue to move the market higher, resistance could then run towards the 113.70 hurdle, where it topped in December 2018.

A reversal to the downside, could find immediate support at the 110.35 level, which overlaps with the 20-day SMA ahead of the 40-day SMA and the 50.0% Fibonacci region near 109.60. If the latter fails to hold bearish movements, the next target could be at the 38.2% Fibonacci, which conflicts with the 108.40 support.

Turning to the long-term trading view, the outlook has been neutral since March 2017 and only a decisive close above the 11-month high of 114.55 could resume the bullish picture. On the other hand, a decline below 104.64 could shift the picture to bearish.

The British pound continues to trade above the 1.3300 resistance level against the US dollar as the breakout move higher in the pair gathers pace. The GBPUSD pair has a strong bullish momentum while trading above the 1.3300 level, although the overall intraday bias remains in place while price trades above the 1.3230 level. The 1.3400 level currently offers the strongest form of technical resistance above the current monthly high, at 1.3349.

The GBPUSD pair has a bullish bias while trading above the 1.3230 level, key technical resistance is found at the 1.3349 and 1.3400 levels

If the GBPUSD pair trades below the 1.3230 level, sellers may test towards the 1.3200 and 1.3160 support levels.

The euro currency is coming under slight selling pressure against the US dollar on Thursday after buyers repeatedly failed to break through the 1.1400 resistance level. The EURUSD is currently trading within a rising price channel on the four-hour time frame, with price now testing key trendline support. The overall intraday bias surrounding the EURUSD is bearish while trading below 1.1370 support level.

The EURUSD pair is only bullish while trading above the 1.1370 level, key resistance is found at the 1.1400 and 1.1450 levels.

If the EURUSD pair trades below the 1.1370 level, key support is found at the 1.1350 and 1.1337 levels.

Last week, the price of cryptocurrencies rose sharply after it emerged that JP Morgan is planning to launch its own cryptocurrency. The news was big because JP Morgan is one of the biggest banks in the world facilitating more than $6 trillion local and international transactions every day.

JP Morgan updates were followed by another report that said how the biggest oil companies had signed up for Vakt, another blockchain project that aims to simplify transactions in the industry. Other commodity groups like those dealing with agriculture are experimenting on their own blockchain projects as they attempt to simplify operations and boost margins.

The optimism on the currencies faded after Warren Buffet’s interview with CNBC, in which he downplayed the value of cryptocurrencies. Instead, he focused on the value of blockchain and how it would transform the industry. Traders on their part started to think about the impact of Vakt and JP Morgan’s products and how it would affect current cryptocurrencies like Bitcoin and Ethereum. This led to a sharp decline in their price. Yesterday, the two currencies reached lows of $3640 and $124 before paring the losses.

The ETH/USD pair is trading at 135, which is higher than yesterday’s low of 124. On the four-hour chart, the price is slightly lower than the 58-day EMA while the RSI is trading at 47. The Parabolic SAR of average points to a more downward movement while the on-balance volume indicator remains at elevated levels. There is a likelihood that the ETH/USD pair will remain within these levels.

Asian markets moved slightly lower today after disappointing numbers. In China, the manufacturing PMI number for February was 49.2. This was lower than the consensus estimates of 49.5. It was also the third month of straight declines, which is an indication of the softening of the Chinese economy. A PMI figure of below 50 is an indication of contraction. The non-manufacturing PMI for the month was 54.3, which was also lower than the expected 54.5.

The Japanese yen was little moved against the USD after disappointing industrial numbers. In January, the industrial production declined by a MoM rate of 3.7%. This was lower than the expected decline of -2.4%. In December, the industrial production had declined by 0.1%. Retail sales in January rose by 0.6%, which was also lower than the expected 1.4%. These numbers show that the world’s second-largest economy is having significant challenges.

The EUR/USD pair was relatively unmoved in the Asian session. The pair will be watched closely today as the EU and US release important data. In the afternoon, US will release the Q4 GDP reading, which is expected to show that the economy expanded by 2.6%. This is after expanding by 3.4% in the third quarter. The initial jobless claims are expected to improve by 221K while the continuing jobless claims are expected to increase by 1,733K. In Europe, the February CPI for Germany is expected to improve to 1.5% while the HICP is expected to remain unchanged at 1.7%. The French and Spanish CPI are expected to remain unchanged at 1.1% 0.9% respectively.

EUR/USD

The EUR/USD pair was little moved at 1.1377. On the 4-hour chart, this level is slightly above the 21-day and 42-day moving averages while the RSI is currently at 57. The signal line of the MACD has remained unchanged at a level above the neutral line while the strength of the Bulls Power is a bit weak. The pair is expected to remain along these levels, but this could change after the release of US GDP numbers.

USD/JPY

The USD/JPY pair pared the gains made on Tuesday, when the pair reached a high of 111.07. It is now trading at 110.87, which is along the 14-day EMA. This level is also between the upper and middle line of the Bollinger Bands while the momentum indicator is moving lower after peaking yesterday. The pair will likely be a bit volatile today as traders watch out for the talks between North Korea and the United States.

GBP/JPY

The GBP/JPY continued to rally as traders lowered the likelihood that the UK will leave the EU without a deal. The pair reached an intraday high of 148.07, from a low of 133 in January. On the eight-hour chart, this price is slightly close to the important resistance level of 149.78. It is also above the 14-day, 21-day, and 200-day moving averages while the RSI has moved to the overbought territory. The pair will likely continue the upward trend today.

Since bottoming at $42.36 on December 24, 2018, Crude Oil (CL_F) has rallied more than 30%. The initial rally to $55.75 on February 4, 2019 took the form of an Impulse Elliott Wave structure. We label this 5 waves rally as wave ((A)) of a zigzag Elliott Wave structure in higher degree. Then the pullback to $51.27 ended wave ((B)) as the chart below shows. From there, Oil has broken above wave ((A)), suggesting that the next leg higher in wave ((C)) has started.

Internal of wave ((C)) is unfolding as a 5 waves impulse where wave (1) ended at $57.61 and wave (2) ended at $55.02. As is typical of an impulse, we can see the fractal nature with wave (1) further subdivides into 5 waves impulse in lesser degree. Wave (2) unfolded as an Expanded Flat Elliott Wave structure where wave A ended at $56.64, wave B ended at $57.81, and wave C ended at 55.02. Oil is now within wave (3) of ((C)) and should continue higher while dips stay above $55.02, but more importantly above $51.27. This view will gain validity if Oil starts to break above February 22 peak at $57.81. We don’t like selling Oil

1 Hour Crude Oil (CL_F) Elliott Wave Chart

General Trend:

• Telecom services, IT and Financial companies decline in Shanghai
• Utilities companies outperform in Australia
• Marine/Transportation, Electric Appliance and Machinery companies underperform in Japan
• BoJ’s Suzuki said it is important to maintain powerful monetary easing
• Bank of Korea Gov reiterated not time yet to consider rate cut
• Aussie rises on better Capex data, but pares gain after China PMIs
• US/North Korea summit in Vietnam due to conclude today
• MSCI is expected to announce decision related to China stock weights on March 1st (Friday)
• China Feb Caixin Manufacturing PMI data due for release on Friday

Headlines/Economic Data

Japan

• Nikkei 225 opened -0.1%
• (JP) JAPAN JAN PRELIM INDUSTRIAL PRODUCTION M/M: -3.7% V -2.5%E (largest decline since Jan 2018); Y/Y: 0.0% V +1.3%E; Cuts assessment of industrial production, says output is 'stalling'
• (JP) Bank of Japan (BOJ) Board Member Suzuki: Important to maintain powerful monetary easing; BOJ does not intend to raise interest rate levels now, so will act swiftly through market operations if yields rise rapidly
• (JP) Japan Labor Ministry: No systemic cover-up of incorrect data - Japanese Press
• 7203.JP Said to seek price cuts from auto parts companies for the April-Sept period - Japanese Press
• (JP) Japan Investors Weekly Net Buying of Foreign Bonds: ¥1.01T v ¥196.2B prior; Foreign Buying of Japan Stocks: -¥15.2B v -¥52.9B prior
• (JP) Japan Jan Department Store and Supermarket Sales y/y: -3.3% v -1.8%e
• (JP) JAPAN JAN PRELIM RETAIL SALES M/M: -2.3% V -0.8%E; Retail Trade y/y: 0.6% v 1.4%e
• (JP) Japan Chief Cabinet Sec Suga: Will go ahead with arranging Japan/US trade talks schedulr
• (JP) Japan MoF sells ¥2.1T v ¥2.1T indicated in 0.10% (0.10% prior) 2-yr JGBs, avg yield: -0154% v -0.167% prior, bid to cover 5.27x v 6.08x prior
• (JP) Japan Dec Vehicle Production Y/Y: -0.7% v 4.6% prior
• (JP) Japan PM Abe confirms LDP party to discuss chance of him serving a 4th term - Japanese Press

Korea

• Kospi opens -0.1%
• (KR) North Korea Leader Kim: If I wasn't ready to denuclearize I wouldn't be at the summit
• (KR) President Trump: Very productive talks with N. Korea Kim, no matter what happens will have a deal that is good for both US and N. Korea; Deal will likely take more than 2 days
• (KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 1.75%; AS EXPECTED
• (KR) US negotiators said to have dropped demands for North Korea to provide an inventory of its nuclear weapons and ballistic missile programs - press
• (KR) South Korea Jan Industrial Production m/m: 0.5% v 0.3%e; y/y: 0.1% v 1.2%e
• (KR) South Korea Jan Cyclical Leading Index Change: -0.4 v -0.2 prior
• (KR) South Korea Jan Retail Sales m/m: 0.2% v -0.2% prior; y/y: 4.0% v 3.0% prior
• (KR) North Korea leader Kim: Have a feeling good results will come from meeting with Trump
• (KR) US President Trump: North Korea will have economic powerhouse, look forward to helping with the economy; appreciate no testing of weapons; I'm in no rush but we don’t want testing
• (KR) South Korea FSC to ban banks form having exposures above 25% of core capital - Yonhap
• (KR) South Korea National Pension Fund: 2018 return -0.92% (first negative return since 2008)

China/Hong Kong

• Hang Seng opens -0.1%; Shanghai Composite opens -0.1%
• (US) Trade Rep Lighthizer: it's too early to predict the outcome US-China trade talks - congressional testimony
• (CN) CHINA FEB OFFICIAL (NBS) MANUFACTURING PMI: 49.2 V 49.5E (multi-year low, 3rd consecutive month of contraction); Non-Manufacturing PMI: 54.3 v 54.5e; Composite PMI: 52.4 v 53.2 prior
• (CN) China Vice Premier Han Zheng: All regions and government departments need to get a clear picture of the country's grain stockpiles to help ensure grain security – Xinhua
• (CN) US pressuring China to commit to monthly meetings for lower level officials, quarterly meetings at the vice ministerial level and semiannual meetings at the ministerial level that would help enforce trade deal – press
• (CN) China Jan Swift Global Payments CNY: 2.2% v 2.1% prior
• (CN) China PBoC Open Market Operation (OMO): Skips OMO operations v CNY60B injected in 7-day reverse repos prior; Net: CNY0B injected v CNY40B injection prior
• (CN) China PBoC sets Yuan Reference Rate: 6.6901 v 6.6857 prior
• (CN) China National Bureau of Stats (NBS): Real 2018 GDP per capita 6.1%; real disposable income per capita +6.5% y/y
• (CN) China PBoC Wang Jingwu (head of financial stability dept): Central bank to block transmission risks across markets, regions and borders; to prevent abnormal fluctuations and 'resonances' in financial market - financial press
• (CN) Various companies in China have reported goodwill impairment related losses - China Securities Times
• (HK) HK$ 1-month HIBOR +7bps to 1.00036% (highest level since Dec 2018); Overnight +62bps to 1.03893% (highest since late Jan); 3-month +1bps to 1.56732%

Australia/New Zealand

• ASX 200 opened flat
• (AU) AUSTRALIA Q4 PRIVATE CAPITAL EXPENDITURE Q/Q: 2.0% V 1.0%E
• HVN.AU Reports H1 (A$) underlying Net 209.7M v 209.4M y/y; EBITDA 383.4M v 377.8M y/y; Rev 4.0B v 3.9B y/y
• (JP) Japan Jan beef imports from TPP members increase 57% y/y - Japan Press
• (NZ) New Zealand Feb ANZ Activity Outlook: 10.5 v 13.6 prior; Business Confidence: -30.9 v -24.1 prior
• (NZ) New Zealand sells NZ$200M in Apr 2029 bonds; avg yield 1.8098% v 2.2709% prior; bid to cover 3.49x v 1.59x prior

Other Asia

• OLAM.SG Reports Q4 (S$) Net 75.3M v 265.1M y/y; Rev 8.5B v 7.2B y/y
• (JP) Bank of Japan (BOJ) signs bilateral swap agreement with India, effective immediately; Enables both countries to swap their local currencies against USD for up to $75B

North America

• (US) Former Trump attorney Cohen: regarding campaign collusion with Russians, says I wouldn't use the word 'colluding'; there was something odd about back-and-forth praise with Pres Putin; not really sure can answer collusion question; I am aware of other possible illegal acts by Pres Trump that are being investigated by New York federal prosecutors
• CELG Wellington Management does not support Bristol-Myers Squibb’s acquisition of Celgene
• HPQ Reports Q1 $0.52 v $0.52e, Rev $14.7B v $15.1Be
• (US) DOE CRUDE: -8.7M V +2.5ME; GASOLINE: -1.9M V -1ME; DISTILLATE: -0.3M V -2ME

Europe

• (UK) Feb Lloyds Business Barometer: 4 v 19 prior
• (UK) Parliament approves Amendment calling for vote on whether to rule out 'no deal' and extend Article 50; approves Amendment affirming Citizen's Rights even in a 'no deal' Brexit
• (EU) ECB's Villeroy (France): still believes normalization of monetary policy is desirable; if current downturn happens to be more durable, then ECB will adapt - press interview
• GAZP.RU Sees 2019 gas output at 495.1 BCM; said to consider paying out 50% of profit in dividends after 2020 - US financial press
• (UK) France President Macron: EU would grant a request to extend Brexit but only if UK justified its request with a clear objective (call an election, hold a second referendum, or present a new plan) - press
• (UK) Govt said to have asked EU to ringfence citizens' rights; would protect the 3.5M EU citizens living in the UK and 1.3M UK citizens living in EU in the event of a no deal Brexit - press

Levels as of 12:50ET

• Hang Seng 0.0%; Shanghai Composite -0.5%; Kospi -1.0%; Nikkei225 -0.8%; ASX 200 +0.3%
• Equity Futures: S&P500 -0.2%; Nasdaq100 -0.3%, Dax -0.3%; FTSE100 -0.1%
• EUR 1.1364-1.1386; JPY 110.81-110.02 ; AUD 0.7130-0.7166; NZD 0.6834-0.6856
• Commodity Futures: Gold -0.1% at $1,319/oz; Crude Oil -0.2% at $56.86/brl; Copper -0.5% at $2.95/lb

Market movers today

Today, the initial estimate of US GDP growth in Q4 is due out (the release has been postponed due to the shutdown). Our estimate is that US GDP grew by 2.1% q/q AR but there are downside risks after yesterday's foreign trade report, so it may come out in the range 1.5-2.0%.

In Europe, we get regional HICP inflation data for February during the day.

In the Scandies, there is plenty of data due out today. In Sweden, Q4 GDP and retail sales for January are due. In Norway, the credit indicator (C2) is due out and Norges Bank Governor Olsen is due to speak at 11:00 CET. In Sweden, retail sales for January are also due.

Selected market news

Overnight, new key figures released for China and Japan painted a relatively downbeat picture of the economy. Chinese PMIs for both the manufacturing sector and non-manufacturing sector disappointed the consensus expectation, falling to 49.2 (from 49.5) and 54.3 (from 54.7), respectively. The Japanese economy also seems to be struggling. Industrial production dropped 3.7% m/m in January and retail fell 2.3% m/m. The disappointing key figures have sparked speculation about whether Japan's economy is headed for a recession in early 2019.

The oil market recovered most of the lost ground from earlier this week yesterday. The comments from US President Donald Trump on Monday that OPEC should 'relax' were countered by hawkish comments from OPEC members, led by Saudi Arabia yesterday. The message from the oil cartel was that output cuts are needed to preserve oil price stability. Brent rose back above USD66/bbl yesterday.

Yesterday's Brexit vote was not as dramatic as one could have expected. The Cooper amendment, which was changed so as to put PM Theresa May's pledge down in writing, passed as expected and things now come down to three key votes in mid-March (vote on full deal on Tuesday 12 March, vote on support for no deal on Wednesday 13 March and vote for extension of Article 50 on Thursday 14 March). We think the most likely outcome is that the House of Commons will vote in favour of asking the EU27 for an extension of Article 50 by two to three months. While the risk of a 'no deal' Brexit has declined, it has not disappeared. We stick to our long-held view that the two most likely scenarios are either May's deal (or something very similar) passing eventually or a second EU referendum.

Fed Chair Jerome Powell said during his second day of congressional testimony that the Fed is close to finalising its plan for the ongoing balance sheet run-off, also known as quantitative tightening.

For the 24 hours to 23:00 GMT, the EUR declined 0.16% against the USD and closed at 1.1375.

Macroeconomic data showed that that the Euro-zone's final consumer confidence index climbed for a second consecutive month to a level of -7.4 in February, in line with market consensus and confirming the preliminary print. In the previous month, the index had recorded a reading of -7.90.

On the other hand, the region's economic sentiment indicator declined for the eighth consecutive month to a level of 106.1 in February and less than market expectations for a fall to a level of 106.0. In the previous month, the indicator had recorded a revised level of 106.3. Meanwhile, the business climate indicator remained steady at 0.69, defying market consensus for a fall to a level of 0.66.

The US dollar strengthened against the euro, as cautious comments from the US Trade Representative, Robert Lighthizer, sparked worries over progress in US-China trade talks.

In the US, data indicated that the US advance goods trade deficit widened to $79.5 billion in December, following a deficit of $70.5 billion in the previous month. Market participants had envisaged the nation to post a deficit of $73.6 billion. Further, the nation's pending home sales declined 3.2% on an annual basis in January, compared to a fall of 9.5% in the preceding month. Markets had envisaged pending home sales to drop 4.6%.

On the contrary, the US factory orders rebounded 0.1% on a monthly basis in December, undershooting market expectations for a rise of 0.6%. In the previous month, factory orders had recorded a revised decline of 0.5%. Additionally, the final durable goods orders advanced 1.2% on a monthly basis in December, confirming the preliminary print and following a revised gain of 1.0% in the previous month. Further, the nation's MBA mortgage applications climbed 5.3% on a weekly basis in the week ended 22 February 2019, compared to a rise of 3.6% in the previous week.

In the Asian session, at GMT0400, the pair is trading at 1.1378, with the EUR trading slightly higher against the USD from yesterday's close.

The pair is expected to find support at 1.1359, and a fall through could take it to the next support level of 1.1341. The pair is expected to find its first resistance at 1.1400, and a rise through could take it to the next resistance level of 1.1423.

Looking ahead, traders would await Germany's consumer price index for February, set to release in a few hours. Later in the day, the US annualised gross domestic product for 4Q and the Chicago Purchasing Managers' Index for February along with initial jobless claims, will pique significant amount of investors' attention.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the GBP rose 0.41% against the USD and closed at 1.3313, amid reduced possibilities of a no-deal Brexit.

On the data front, UK's Gfk consumer confidence index unexpectedly climbed to a level of -13.0 in February, compared to a level of -14.0 in the prior month. Market participants anticipated the index to ease to a level of -15.0. Meanwhile, Britain's Lloyd's business barometer eased to a level of 4.0% in February, compared to a level of 19.0% in preceding month.

In the Asian session, at GMT0400, the pair is trading at 1.3300, with the GBP trading 0.10% lower against the USD from yesterday's close.

The pair is expected to find support at 1.3239, and a fall through could take it to the next support level of 1.3177. The pair is expected to find its first resistance at 1.3356, and a rise through could take it to the next resistance level of 1.3411.

Trading trend in the UK today is expected to be determined by UK's Nationwide house price index for February, set to release in a while.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.