Sample Category Title

Daily Pivots: (S1) 0.8512; (P) 0.8560; (R1) 0.8590; More...

Intraday bias in EUR/GBP remains on the downside at this point. Sustained break of 61.8% projection of 0.9101 to 0.8617 from 0.8840 at 0.8541 will pave the way to long term projection target at 0.8416 next. On the upside, above 0.8596 minor resistance will turn intraday bias neutral and bring consolidation, before staging another fall.

In the bigger picture, EUR/GBP is seen as staying in long term range pattern started at 0.9304 (2016 high). On the downside, decisive break of 0.8620 support resumed the falling leg from 0.9305 (2017 high). Next target is 100% projection of 0.9305 to 0.8620 from 0.9101 at 0.8416. In this case, we'd expect strong support around 0.8312 to contain downside and bring rebound.

Daily Pivots: (S1) 1.5840; (P) 1.5902; (R1) 1.5983; More....

Intraday bias in EUR/AUD remains neutral for the moment and further rise remains mildly in favor. On the upside, decisive break of 1.6060 resistance should confirm that decline from 1.6765 has completed. Further rally should then be seen to retest 1.6765 high. On the downside, however, break of 1.5721 will extend the decline to 1.5346 support instead.

In the bigger picture, as long as 1.5346 support holds, outlook will remain bullish. Uptrend from 1.1602 (2012 low) is expected to resume sooner or later. Break of 1.6765 will target 61.8% retracement of 2.1127 (2008 high) to 1.1602 at 1.7488 next. However, firm break of 1.5346 key support will indicate trend reversal, with bearish divergence condition in weekly MACD, and turn outlook bearish.

Daily Pivots: (S1) 1.1360; (P) 1.1378; (R1) 1.1403; More...

Intraday bias in EUR/CHF remains neutral as it's staying in range of 1.1310/1444. As long as 1.1310 support holds, further rise is mildly in favor. On the upside, break of 1.1444 will resume the rebound from 1.1181 to 1.1501 key resistance next. Nevertheless, sustained break of 1.1310 will suggest that rebound from 1.1181 might be completed. Intraday bias will be turned back to the downside for 1.1181 low again.

In the bigger picture, price actions from 1.2004 medium term top is seen as a correction only. Downside should be contained by 1.1154/98 support zone to complete it and bring rebound. Decisive break of 1.1501 (38.2% retracement of 1.2004 to 1.1173 at 1.1490) will confirm completion of the correction, on bullish convergence condition in daily MACD. Further rise should be seen to 61.8% retracement at 1.1687 and above next.

Daily Pivots: (S1) 1.3137; (P) 1.3187; (R1) 1.3220; More...

Intraday bias in USD/CAD remains neutral at this point. On the upside, above 1.3242 support will turn bias back to the upside for 1.3340 resistance first. Break will complete head and should bottom pattern (ls: 1.3180, h: 1.3068, rs: 1.3112). In that case, further rise should be seen back to 1.3664 resistance. On the downside, decisive break of 1.3068 low will firstly resume whole fall from 1.3664. Secondly, it will be a strong sign of medium term bearish reversal.

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 1.3099) 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.

Daily Pivots: (S1) 0.7112; (P) 0.7156; (R1) 0.7184; More...

AUD/USD is staying in range of 0.7054/7206 and intraday bias remains neutral first. On the downside, decisive break of 0.7054 support should confirm completion of rebound from 0.6722. Further decline should then be seen to 61.8% retracement of 0.6722 to 0.7295 at 0.6941 next. On the upside, though, break of 0.7206 will turn focus back to 0.7295 resistance instead.

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.

Daily Pivots: (S1) 1.1354; (P) 1.1378; (R1) 1.1395; More.....

EUR/USD is losing some upside momentum as seen in 4 hour MACD. But further rise is still expected as long as 1.1316 minor support holds. Current rally is seen as another leg in the consolidation pattern from 1.1215 and could target 1.1514 resistance and above. On the downside, though, break of 1.1316 minor support will argue that the rebound is completed. Intraday bias will be turned back to the downside for 1.1215 low.

In the bigger picture, as long as 1.1814 resistance holds, down trend down trend from 1.2555 medium term top is still in progress and should target 61.8% retracement of 1.0339 (2017 low) to 1.2555 at 1.1186 next. Sustained break there will pave the way to retest 1.0339. However, break of 1.1814 will confirm completion of such down trend and turn medium term outlook bullish.

Daily Pivots: (S1) 1.3244; (P) 1.3298; (R1) 1.3362; More....

Intraday bias in GBP/USD remains on the upside at this point. As noted before, whole decline from 1.4376 should have completed at 1.2391. Further rise should be seen to 61.8% retracement of 1.4376 to 1.2391 at 1.3618 next. Sustained break will pave the way to 1.4376. On the downside, below 1.3233 will turn bias neutral and bring consolidations first, before staging another rally.

In the bigger picture, medium term decline from 1.4376 (2018 high) should have completed at 1.2391. Rise from 1.2391 is now seen as the third leg of the corrective pattern from 1.1946 (2016 low). Further rise could be seen through 1.4376 in medium term. On the downside, though, break of 1.2773 support will turn focus back to 1.2391 low and then 1.1946.

Daily Pivots: (S1) 0.9979; (P) 0.9997; (R1) 1.0033; More...

Further decline is mildly in favor in USD/CHF as long as 1.0024 minor resistance holds. Sustained trading below 55 day EMA (now at 0.9969) should confirm completion of rise form 0.9716, after rejection by 1.0128 resistance. In that case, deeper fall would be seen back towards 0.9716 support. On the upside, break of 1.0024 minor resistance will turn bias back to the upside for 1.0098 instead.

In the bigger picture, USD/CHF drew strong support from medium term trend line and rebounded. That suggests rise from 0.9186 is still in progress. Further break of 1.0128 will confirm up trend resumption and target 1.0342 key resistance. Nevertheless, break of 0.9716 will dampen this bullish view and at least bring deeper fall to 0.9541 key support.

Daily Pivots: (S1) 110.53; (P) 110.81; (R1) 111.26; More...

USD/JPY recovered ahead of 110.25 minor support but upside is held below 111.23 resistance. Intraday bias remains neutral first. On the downside, break of 110.25 minor support will suggest rejection by 61.8% retracement of 114.54 to 104.69 at 110.77. And in that case, the rebound from 104.69 has likely completed. Intraday bias will be turned back to the downside for 108.49 support for confirmation. Nevertheless, firm break of 111.23 should confirm resumption of rise from 104.69 for 114.54 resistance.

In the bigger picture, while the rebound from 104.69 was stronger than expected, it's struggle to get rid of 55 day EMA completely. Outlook is turned mixed first. On the downside, break of 108.49 support will revive that case that such rebound was a correction. And, larger down trend is still in progress for another low below 104.62. But sustained trading above 55 day EMA will turn focus to 114.54. Decisive break there will confirmation completion of the decline from 118.65 (2016 high).

The finance markets turned mixed in Asian session today. Yen was sold off overnight, following the strong rebound in US treasury yields. In particular 30-year yield staged the biggest rise in a about a month and looks completed the consolidation from 3.109. But there is no follow through selling in Yen so far. Nevertheless, Yen remains the weakest one for the week. Sterling is the strongest one on fading risk of no-deal Brexit.

While the events in the past 24 hours were rather high profile, little reactions were triggered. USTR Robert Lighthizer's testimony on China trade talk, Fed Chair Jerome Powell's testimony and Trump-Kim summit in Vietnam are shrugged off. Swiss Franc was briefly shot up by Pakistan-India tensions but there was no follow through buying. Markets could be awaiting Q4 GDP from the US for the next move.

Technically, Sterling aside, direction in the forex markets is not clear. Dollar weakened this week against Euro, and Swissy but downside momentum looks to be diminishing. USD/JPY and EUR/JPY remains bounded in tight range. AUD/USD and USD/CAD are also staying in familiar range too. Again, US GDP could be the trigger for breakouts.

In Asia, Nikkei is down -0.35%. Hong Kong HSI is up 0.10%. China Shanghai SSE is down -0.35%. Singapore Strait Times is down -0.57%. Japan 10-year JGB yield is up 0.0002 at -0.024. Overnight, DOW dropped -0.28%. S&P 500 dropped -0.05%. NASDAQ rose 0.07%. 10-year yield rose 0.057 to 2.693. 30-year yield rose 0.063 to 3.069.

USTR Lighthizer: Market outcomes to determine winners, not state-capitalism and technology theft

In his testimony to House Ways and Means Committee on China trade negotiation, US Trade Representative Robert Lighthizer laid down the principle that the US "can compete with anyone in the world". But he emphasized "we must have rules, enforced rules". And "market outcomes" rather than "state-capitalism" and "technology theft" determine winners. China's unfair trade practices are "major threats to our economy".

Lighthizer said there were "very intense, extremely serious, and very specific negotiation with China on crucial structural issues for several months" and "real progress" were made. US could "turn the corner" in the economic relationship with China "if" they can reach a satisfactory solution to the all-important outstanding issue of enforceability as well as some other concerns. But "much still needs to be done" before an agreement is reached, and "more importantly, after it is reached."

He also emphasized that the administration is "pressing for significant structural changes" rather than "soybean solution". The US is "very aware of " the history with China and the "disappointments that have resulted from promises that were not kept" And, "the reality is this is a challenge that will go on for a long, long time." He added that "if there is disagreement at my level, the U.S. would expect to act proportionately but unilaterally."

Meanwhile, as the agreements are settlements of China's violations of Section 301 of the Trade Act of 1974. So they are executive actions that do not require Congress' approval. China talks are more in common with a sanctions-monitoring regime than a traditional trade pact.

Fed Powell: Balance runoff likely settles at around 16-17% of GDP

In the second day of Congressional Testimony, Fed Chair Jerome Powell said Fed will stop the balance sheet runoff this year. The balance sheet will then be at around 16-17% of GDP, up from 6% before the financial crisis. Considering that the US GDP is currently at around USD 20T, the balance sheet would eventually be between USD 3.2T and USD 3.4T. The Balance sheet is currently just over USD 4T.

Powell said "we've worked out, I think, the framework of a plan that we hope to be able to announce soon that will light the way all the way to the end of balance sheet normalization". And, "we going to be in a position ... to stop runoff later this year."

He also bluntly noted that Fed is "not looking at a higher inflation target, full stop", even if Fed is rethinking its policy framework for this year.

China PMI manufacturing dropped to 49.2, new export orders hit decade low

The official China PMI manufacturing dropped to 49.2 in February, down from 49.5 and missed expectation of 49.5. That's the third straight month of sub-50 reading. Looking at the details new export orders index dropped -1.7 to 45.2, its lowest level in 10 years, suggesting trade war with the US continues to have an impact on exports. Production dropped -1.4 to 49.5. Employment dropped -0.3 to 47.5. PMI services dropped to 54.3, down from 54.7, missed expectation of 54.5.

However, analyst Zhang Liqun tried to talk down the deterioration in the statement. He noted that the decline in PMI was mainly due to Lunar New Year factor. He pointed to the significant decline in the production, the purchase volume, and the raw material inventory as indications.

Also from Asia, Japan industrial production dropped -3.7% mom in January versus expectation of -2.5% yoy. Japan retail sales rose 0.6% yoy in January, below expectation of 1.5% yoy.

ANZ business confidence dropped to -30.9, RBNZ to cut in November

New Zealand ANZ Business Confidence dropped to -30.9 in February, down from -24.1. Activity Outlook dropped to 10.5, down fro 13.6. ANZ noted that recent improvement in business activity stalled. Export intentions fell to the weakest since March 2009. Pricing intentions remain range-bound.

ANZ also noted that "Clearly the economy is stretched at the moment, but it does appear that momentum has waned markedly over the last six months." And it expects RBNZ to become "less certain that core inflation will continue rising towards the midpoint of the target band". ANZ forecasts a cut in OCR in November.

Also from down under, Australia private capital expenditure rose 2.0% in Q4 versus expectation of 1.0%. Private sector credit rose 0.2% mom in January versus expectation of 0.3% mom.

Looking ahead

The calendar is rather busy today. Swiss will release GDP and KOF. Germany will release import price and CPI. France will release GDP. Later in the day, US will finally release Q4 GDP. jobless claims and Chicago PMI will be featured. Canada will release current account, IPPI and RMPI.

USD/JPY Daily Outlook

Daily Pivots: (S1) 110.53; (P) 110.81; (R1) 111.26; More...

USD/JPY recovered ahead of 110.25 minor support but upside is held below 111.23 resistance. Intraday bias remains neutral first. On the downside, break of 110.25 minor support will suggest rejection by 61.8% retracement of 114.54 to 104.69 at 110.77. And in that case, the rebound from 104.69 has likely completed. Intraday bias will be turned back to the downside for 108.49 support for confirmation. Nevertheless, firm break of 111.23 should confirm resumption of rise from 104.69 for 114.54 resistance.

In the bigger picture, while the rebound from 104.69 was stronger than expected, it's struggle to get rid of 55 day EMA completely. Outlook is turned mixed first. On the downside, break of 108.49 support will revive that case that such rebound was a correction. And, larger down trend is still in progress for another low below 104.62. But sustained trading above 55 day EMA will turn focus to 114.54. Decisive break there will confirmation completion of the decline from 118.65 (2016 high).

Economic Indicators Update