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The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.13583
Open: 1.13892
% chg. over the last day: +0.28
Day's range: 1.13725 – 1.13956
52 wk range: 1.1214 – 1.2557

Yesterday, USD kept losing positions against the basket of major currencies. The US index (#DX) updated the local minimums after the dowish comments by Jerome Powell. The official is sure in the economic growth of the country. At the same time, the Central Bank will not increase the key interest rates. Right now the EUR/USD is moving in a flat. The key support and resistance levels are 1.13700 and 1.14000. Keep an eye on the Washington/Beijing trading negotiations. You should open positions from the key levels.

At 17:00 (GMT+2:00) the US will publish the index of opened sales on the real estate market.

The indicators point to the power of the buyers, the price fixed above 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 EUR/USD.

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: 1.13700, 1.13500, 1.13200
Resistance levels: 1.14000, 1.14500

If the price fixes above the round 1.14000, expect the quotes to rise toward 1.14300-1.14500.

Alternatively, the quotes can descend toward 1.13500-1.13300.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.31083
Open: 1.32519
% chg. over the last day: +1.23
Day's range: 1.32336 – 1.32837
52 wk range: 1.2438 – 1.4378

GBP/USD is in a steady rising trend. Yesterday the quotes grew by 150 points and updated the annual maximums. The PM of the UK, Theresa May, offered the British Parliament to vote for post-poning Brexit in order to manage the process better and make it less chaotic. Right now the quotes are testing the 1.32800 mark, with 1.32150 acting as the near support. There are further growth prospects.

The Economic News Feed for 27.02.2019 is calm.

The indicators point to the power of the buyers, the price fixed above 50 MA and 200 MA

The MACD histogram is in the positive zone but below the signal line, which gives a weak signal to sell GBP/USD.

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

Trading recommendations

Support levels: 1.32150, 1.31500, 1.31000
Resistance levels: 1.32800, 1.33500

If the price fixes above 1.32800, expect the quotes to grow toward 1.33400-1.33600.

Alternatively, the quotes can correct toward 1.31700-1.31300.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.31863
Open: 1.31657
% chg. over the last day: -0.20
Day's range: 1.31530 – 1.31763
52 wk range: 1.2248 – 1.3664

Yesterday USD/CAD held the local resistance at 1.32400 and started to descend once more. The CAD is recovering due to the positive oil quotes dynamics. Right now the currency pair is consolidating aroun 1.31500-1.31850. It can descend further, but so far you should open positions from the key levels.

The Economic News Feed for 27.02.2019:

• Economic Event (CAD) – 00:00 (GMT+2:00);
• Economic Event (CAD) – 00:00 (GMT+2:00);
• Economic Event (CAD) – 00:00 (GMT+2:00);

The indicators point to the power of the buyers, the price fixed below 50 MA and 200 MA.

The MACD histogram is in the negative zone and keeps lowering, which gives a weak signal to sell USD/CAD.

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

Trading recommendations

Support levels: 1.31500, 1.31150, 1.31000
Resistance levels: 1.31850, 1.32150, 1.32400

If the price lowers below 1.31500, expect the quotes to fall toward 1.31000.

Alternatively, the quotes can correct toward 1.32150-1.32400.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 111.029
Open: 110.568
% chg. over the last day: -0.45
Day's range: 110.354 – 110.628
52 wk range: 104.56 – 114.56

USD/JPY is showing a bearish mood. During the last two days, yen recovered by more than 60 points. The quotes updated the local minimums. Right now the price is testing the support at 110.250-110.350 with 110.500 acting as a mirror resistance. The quotes have a tendency to descend. The US currency is under pressure after the dowish comments by Powell. You should open positions from the key levels.

The Economic News Feed for 27.02.2019 is calm.

The price fixed below 50 MA and 200 MA which points to the power of the sellers.

The MACD histogram is in the negative zone and keeps lowering, which points to the bearish mood.

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

Trading recommendations

Support levels: 110.350, 110.000
Resistance levels: 110.500, 110.650, 110.800

If the price fixes below 110.350, expect the quotes to fall toward 110.000.

Alternatively, the quotes can grow toward 110.700-110.900.

Wednesday February 27: Five things the markets are talking about

Rising geopolitical tensions dominates trading this morning, sending global equities and futures lower as India clashes with Pakistan.

Note: Tensions escalated after Pakistan shot down an Indian fighter jet in Kashmir.

The yen has strengthened along with U.S Treasuries as the market waits for part-two of Fed Reserve Chairman Jerome Powell's testimony to Congress. At yesterday's testimony, Powell gave no indication that the Fed is prepared to alter monetary policy any time soon.

Across the pond, U.K Prime Minister Theresa May said if a vote on her Brexit deal by March 12 failed, she would offer a vote on a no-deal Brexit and then a vote on extending Article 50 (Mar 13, 14). However, PM May indicated that the third vote would only allow a “short, limited” extension of Article 50. She also said this extension still wouldn't rule out no-deal Brexit.

Elsewhere, crude oil prices are climbing, reversing some of the losses from earlier in the week that were driven mostly by criticism from President Trump that prices are too high.

On tap: Canada inflation at 08:30 am ET and the Fed's Powell delivers part two of his semi-annual testimony on monetary policy and the state of the economy to a House committee at 10:00 am ET.

1. Stocks mixed results

In Japan, the Nikkei closed higher overnight as investors bought into defensive stocks and real estate firms, and took profit from machinery shares that had rallied on progress in Sino-U.S trade talks. The Nikkei share average gained +0.5%, the broader Topix added +0.2%.

Down-under, Aussie shares ended higher overnight on strength in financial stocks, though some investors stayed cautious while waiting for the U.S-Korea summit in Hanoi and for details of what a Sino-U.S trade agreement might contain. The S&P/ASX 200 index rose +0.4%. Yesterday, the benchmark fell -0.9%. In S. Korea, the Kospi (+0.37%) ended higher as the Fed confirmed it's ‘dovish' stance.

In China, Shanghai stocks ended higher overnight, after the Fed's Jerome Powell reinforced the U.S central bank's recent shift towards a more “patient” approach on policy in the face of a slowing economy. The blue-chip CSI300 index fell -0.2%, while the Shanghai Composite Index rallied +0.4%. While in Hong Kong, the Hang Seng index traded down -0.5%.

In Europe, regional bourses trade lower across the board following a mixed session in Asia and lower US futures.

U.S stocks are set to open in the ‘red' (-0.32%).

Indices: Stoxx600 -0.59% at 371.42, FTSE -0.79% at 7,095.39, DAX -0.74% at 11,456.89, CAC-40 -0.35% at 5,220.46, IBEX-35 -0.62% at 9,170.09, FTSE MIB -0.04% at 20,450.50, SMI -0.64% at 9,395.50, S&P 500 Futures -0.32%

2. Oil rallies as OPEC set to continue supply cuts, gold steady

Oil prices have rallied overnight after a report of declining U.S crude inventories and as OPEC+ seems content to stick to its supply cuts despite pressure from President Trump.

Brent crude futures are at +$65.48 per barrel, up +27c, or +0.4% from Tuesday's close.
U.S West Texas Intermediate (WTI) crude oil futures are at +$55.89 per barrel, up +39c, or +0.7%.

Data yesterday from the API showed that U.S crude oil inventories fell by -4.2M barrels in the week to Feb. 22, to +444.3M barrels.

Crude oil prices have generally received support this year from supply curbs by OPEC+ who agreed in 2018 to cut output by -1.2M bpd to prop up prices.

Note: OPEC+ has indicated it will continue to withhold supply despite pressure from Trump this week to stop artificially tightening markets.

Expect investors to take directional support from this morning's EIA report at 10:30 am ET.

Ahead of the U.S open, gold is holding steady despite the ‘big' dollar trading near its three-week lows, after U.S Fed Powell reiterated that the central bank “will be patient in hiking interest rates.” Spot gold is down -0.1% at +$1,327.26 per ounce, while U.S gold futures are flat at +$1,329.

3. Strong Spanish bond sales a good sign

Spanish government bond yields are holding close to their two-year lows this morning after a very strong 15-year bond sale. Even the eurozone periphery bonds are in demand as progress in Sino-U.S trade talks continue to support a healthy demand for riskier assets.

Note: This week sees a number of periphery auctions. Expect dealers to cheapen up their curves to take down supply.

This morning, Spain's 10-year bond yield has fallen to a 28-month low of +1.126% after yesterday's sovereign sale and holding near to that level this morning has pulled Italian and Portuguese equivalents lower too.

Also providing some support for E.U regional product is the fact that the Fed's Jerome Powell threw up no surprises yesterday – the Fed is in no rush to makes any changes to interest rates anytime soon, decisions are “data dependent.”

Elsewhere, the yield on U.S 10-year Treasuries has eased -1 bps to +2.63%, the lowest in a month. In Germany, the 10-year Bund yield fell less than -1 bps to +0.11%, while in the U.K, the 10-year Gilt yield has climbed less than +1 bps to +1.21%, the highest in three-weeks.

4. Dollar's slippery slope

Ahead of the U.S open, the ‘mighty' USD is on ‘soft' footing in the aftermath of Fed Chair Powell's semi-annual testimony in Congress and seems well contained within recent quarterly ranges for G10 currency pairs. The Fed chair reiterated that policy decisions would continue to be “data dependent” and that in no rush to make a judgment about changes in policy.

Sterling (££1.3294) trades atop its six-month high as PM May bought herself more time to secure a Brexit agreement. With a little more than a month to go before the UK's scheduled exit from the E.U, lawmakers have yet to settle on a deal with the bloc.

The EUR is unmoved by the weakening consumer sentiment in Europe, given that it had already risen to the key psychological level of €1.14 on the back of a weaker dollar. Analysts are anticipating that the ‘single' unit will begin to struggle to rise from here. Strong resistance at €1.1425-30.

5. Eurozone slowdown fears underlined by weak money & lending data

Data this morning showed that Bank lending to eurozone businesses slowed sharply last month, supporting recent evidence of an economic slowdown in the region.

According to the ECB, lending to non-financial corporations grew +3.3%, down from an annual growth rate of +3.9% in the previous month.

The ECB's key indicator of the money supply, M3, grew +3.8% y/y through January, down from December's +4.1% growth rate. Markets were looking for a +4% growth.

A positive in today's report was that lending to households was stable in January. It rose +3.2% y/y, the same as in December 2018.

Notes/Observations

• India-Pakistan tensions escalate after Pakistan shoots down Indian fighter jet
• Various Euro region data mixed (Italy, Sweden, Euro Zone)

Asia:

• BOJ Board Member Kataoka (dissenter) reiterated his view and disagreed that BOJ should persistently continue with easing to reach price goal. Prolonging easy policy would heighten uncertainty over prospects for hitting price goal. Should address side effects by hitting price goal early to prevent easy policy from being prolonged
• BOJ Dep Gov Amamiya: BoJ had no intention of issuing digital currencies now

Europe:

• UK Cabinet members said to have warned PM May that Brexit could be delayed by up to two years
• Tory parliament member Rees-Mogg (Euro-sceptic) said not yo insist on getting rid of the Ireland backstop in Brexit and could live with the backstop if there was a clear exit date
• UK Govt No Deal impact analysis: despite mitigating steps taken, there were areas where impact on trade, businesses and individuals would be significant. Impact from no deal expected to be more severe in Northern Ireland than in Great Britain
• UK Feb BRC Shop Price Index Y/Y: 0.7% v 0.3%e (highest since March 2013)
• ECB's Coeure (France): shadow production of ECB overnight rate was working well

Americas:

• Fed Chair Powell Semi-annual testimony: Fed was now in position to evaluate the appropriate time and approach for end of balance sheet runoff. Reasonable starting point for estimate of required reserves was around $1T plus a buffer

Energy:

• Weekly API Oil Inventories: Crude: -4.2M v +1.3M prior
• Russia Energy Min Novak stated that the country had cut oil output between 140-150K bpd from Dec and now fully in compliance with the OPEC+ deal

Macro

• (EU) Eurozone: January M3 money supply growth was much weaker than expected, with the annual rate falling to just 3.8% y/y from 4.1% y/y in December. The counterparts showed that the growth rate of loans to non-financial corporations fell to 2.2% y/y from 2.8% y/y, which will give Praet something to argue with at the next council meeting, as it backs up his warning that banks are stretched, which continue to struggle with negative interest rates could worsen the slowdown by curtailing access to credit.
• (UK) United Kingdom: The pound has continued to rally after the prime minister late yesterday put in an option for parliament to vote on a three-month delay in Brexit, which will happen on March 14 in the event that: the government's withdrawal deal fails to win sufficient support in the House of Commons (which looks all but inevitable); and secondly a subsequent vote on leaving the EU without a deal, which has been set for March 13, also fails.
• (US) United States: Fed Chairman Powell's testimony was summed up by "we're in no rush to make a judgement on policy" and we will "allow the data to come in." We'll wait and allow the crosscurrents time to clarify. He reiterated that the baseline outlook is a "good one, favorable one," but "foreign risks are particularly relevant," citing the slowing in advanced economies, and particularly in Europe. The economy is in good shape, unemployment is low, confidence still at positive levels. Thus nothing specific on balance sheet normalization but reserve balances will be higher than pre-crisis levels, at about $1T plus a buffer confirming the dovish tone set at the January FOMC.

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 -0.59% at 371.42, FTSE -0.79% at 7,095.39, DAX -0.74% at 11,456.89, CAC-40 -0.35% at 5,220.46, IBEX-35 -0.62% at 9,170.09, FTSE MIB -0.04% at 20,450.50, SMI -0.64% at 9,395.50, S&P 500 Futures -0.32%]
• Market Focal Points/Key Themes: Equities European Indices trades lower across the board following a mixed session in Asia and lower US futures. On the political front the UK Government put out its no deal impact analysis, warning the impact on Northern Ireland would be more than the rest of the UK. Reports suggest Brexiteers are considering voting for PM May's deal only if this is followed by a resignation. As a results further momentum has been seen in Sterling reaching a 6 month high. On another busy day for corporate earnings shares of Bayer rise over 4% as EBITDA and Rev beat consensus, the company also announced its facing over 11k Glyphosate lawsuits in the US. Rio Tinto gains following earnings and a declaration of a special dividend, with BioMerieux, Sydbank, Suez among other names trading higher. Meanwhile MetroBank in the UK shed almost 20% after announcing a £350M equity raise as well as earnings; Ahold Delhaize falls on earnings with Ted Baker, Beiersdorf, Kuehne & Nagel and Solvay among other notable decliners on earnings. In other news Marks and Spencers fall 9% after announcing a rights issue to fund its JV with Ocado, Ocado rises over 4% on top of sharp gains yesterday on rumors of the deal. Air France falls over 10% as the Dutch Government disclosed over 12% stake, while Playtech gains on a long term agreement with GVC. Looking ahead notable earners include Bestbuy, TJX, Campbell's Soup, AES and Office Depot among others.
• Consumer discretionary: Air France-KLM [AF.FR] -12% (Dutch govt acquires stake), Ahold Delhaize [AD.NL] -2% (earnings), ITV [ITV.UK] -1.5% (earnings), Ocado [OCDO.UK] +1.5%, Marks & Spencer [MKS.UK] -8% (Marks & Spencer confirms to acquire 50% stake in Ocado's UK retail operations), Ted Baker [TED.UK] -13% (profit warning), Beiersdorf [BEI.DE] -9% (earnings)
• Materials: Rio Tinto [RIO.UK] +1.5% (earnings; exploration update)
• Healthcare: Bayer [BAYN.DE] +4% (earnings),
• Industrials: SAS [SAS.SE] +0.5% (earnings), Taylor Wimpey [TW.UK] +1% (earnings), Georg Fischer [FIN.CH] +1% (earnings), Interserve [IRV.UK] +4% (earnings; placing)
• Utilities: Suez [SEV.FR] +2% (earnings; appoints Chairman)

Speakers

• EU's Dombrovkis: EU conceptually open to an extension of Brexit. Fiscal uncertainty in Italy had hurt its growth outlook. EU report to find 'excessive imbalances' and stressed that Italy must put its debt on a clear downward path. Reiterated view that Germany needed to increase its domestic demand
• German Cabinet said to agree that Bundesbank President Weidmann can extend his term by another 8 years (as speculated)
• ECB's Weidmann (Germany): German economic slowdown had extended into 2019 with growth to be well below the 1.5% potential. Saw no reason to be overly pessimistic about the Economic slowdown as domestic growth supported by rising employment and wages. ECB next steps to depend on inflation developments over the medium term
• Russia said not to be discussing any limits on grain exports
• Pakistan Foreign Ministry: Pakistan had 'no intention for escalation', jets fired across India border from its air space. Purpose of the strikes were to demonstrate the right and capability for self-defense.
• Saudi Energy Minister Khalid al-Falih stated that should see oil demand recovering from Q2; oil market was responding to output cuts; Saw the likelihood of output cuts extension in H2
• Venezuela Oil Min Quevedo: Oil production currently at 1.5M bpd and selling approx. 1.2M bpd

Currencies/Fixed Income

• USD on soft footing in the aftermath of Fed Chair Powell semi-annual testimony in Congress. The Fed chair reiterated that policy decisions would continue to be data dependent" and that in no rush to make a judgment about changes in policy.
• GBP near 5-month highs as PM May bought herself more time to secure a Brexit agreement

Economic Data

• (NL) Netherlands Feb Producer Confidence Index: 6.3 v 5.8 prior
• (NO) Norway Jan Retail Sales (with auto/fuel) M/M: 1.6% v 0.9%e
• (NO) Norway Dec AKU Unemployment Rate: 3.7% v 3.8%e
• (FI) Finland Feb Consumer Confidence Index: 15.5 v 17.2 prior; Business Confidence: -2 v +4 prior
• (TR) Turkey Feb Economic Confidence: 79.4 v 78.5 prior
• (ES) Spain Dec Total Mortgage Lending Y/Y: 23.1% v 12.8% prior; House Mortgage Approvals Y/Y: 0.9% v 14.2% prior
• (SE) Sweden Feb Consumer Confidence: 92.5 v 93.8e; Manufacturing Confidence: 114.3 v 110.0e; Economic Tendency Survey: 102.4 v 100.5e
• (HU) Hungary Jan Unemployment Rate: 3.7% v 3.7%e
• (SE) Sweden Jan Household Lending Y/Y: 5.4% v 5.5% prior
• (SE) Sweden Jan Trade Balance (SEK): +1.2B v -4.7B prior
• (EU) Euro Zone Jan M3 Money Supply Y/Y: 3.8% v 4.0%e
• (IT) Italy Feb Consumer Confidence Index: 112.4 v 113.4e; Manufacturing Confidence: 101.7 v 101.5e; Economic Sentiment: 98.3 v 99.2 prior - (CH) Swiss Feb Credit Suisse Expectations Survey: -16.6 v -44.0 prior
• (IS) Iceland Feb CPI M/M: +0.2% v -0.4% prior; Y/Y: 3.0% v 3.4% prior
• (PT) Portugal Feb Consumer Confidence Index: -8.3 v -7.2 prior; Economic Climate Indicator: 2.1 v 2.1 prior
• (EU) Euro Zone Feb Business Climate Indicator: 0.69 v 0.66e; Consumer Confidence (final): -7.4 v -7.4e; Economic Confidence: 106.1 v 106.0e; Industrial Confidence: -0.4 v +0.1e; Services Confidence: 12.1 v 10.9e

Fixed Income Issuance

• (IN) India sold total INR100B vs. INR100B in 3-month, 6-month and 12-month bills
• (DK) Denmark sold total DKK5.58B in 3-month and 6-month bills
• (IT) Italy Debt Agency (Tesoro) sold total €6.0B vs. €4.75-6.0B indicated range in 5-year and 10-year BTP bonds
• Sold €2.0B vs. €1.5-2.0B indicated range in 2.45% Oct 2023 BTP bonds; Avg Yield: 1.59% v 1.49% prior; Bid-to-cover: 1.46x v 1.33x prior
• Sold €4.0 vs. €3.25-4.0B indicated range in new 3.00% Aug 2029 BTP; Avg Yield: 2.81% v 2.60% prior; Bid-to-cover: 1.31x v 1.36x prior
• (IT) Italy Debt Agency (Tesoro) sold €1.25B vs. €0.75-1.25B indicated range in Jan 2025 CCTeu (Floating rate Note); Avg Yield: 1.83% v 1.65% prior; Bid-to-cover: 1.62x v 1.29x priorr

Looking Ahead

• (BR) Brazil Jan Central Govt Budget Balance (BRL): No est v -31.8B prior
• (CO) Colombia Jan Industrial Confidence: No est v -1.1 prior; Retail Confidence: No est v 29.3 prior
• 05:30 (EU) ECB allotment in 3-month LTRO tender
• 05:30 (DE) Germany to sell €3.0 B in 0.25% Feb 2029 Bunds
• 05:30 (GR) Greece Debt Agency (PDMA) to sell €875M in 26-week bills
• 06:00 (BR) Brazil Feb FGV Inflation IGPM M/M: 0.7%e v 0.0% prior; Y/Y: 7.4%e v 6.7% prior
• 06:45 (US) Daily Libor Fixing
• 07:00 (US) MBA Mortgage Applications w/e Feb 22nd: No est v +3.6% prior
• 07:00 (BR) Brazil Jan National Unemployment Rate: 11.9%e v 11.6% prior
• 07:00 (BR) Brazil Jan PPI Manufacturing M/M: No est v -1.1% prior; Y/Y: No est v 9.1% prior
• 07:00 (UK) Weekly PM May question time in House of Commons
• 08:00 (UK) Baltic Dry Bulk Index
• 08:00 (IT) Italy Fin Min Tria in Parliament
• 08:30 (US) Dec Final Wholesale Inventories M/M: 0.4%e v 1.1% prelim; Retail Inventories M/M: 0.2%e v -0.6% prior
• 08:30 (US) Dec Advance Goods Trade Balance: -$73.9Be v -$70.5B prior
• 08:30 (CA) Canada Jan CPI M/M: +0.2%e v -0.1% prior; Y/Y: 1.4%e v 2.0% prior; CPI Core- Common Y/Y: 1.9%e v 1.9% prior; CPI Core- Median Y/Y: 1.8%e v 1.8% prior; CPI Core- Trim Y/Y: 1.9%e v 1.9% prior; Consumer Price Index: 133.6e v 133.4 prior
• 08:30 (BR) Brazil Jan Total Outstanding Loans (BRL): No est v 3.260T prior; M/M: No est v 1.8% prior
• 09:00 (MX) Mexico Jan Trade Balance: -$3.9Be v $1.8B prior
• 09:00 (MX) Mexico Jan Unemployment Rate (Seasonally Adj): 3.6%e v 3.6% prior; Unemployment Rate: 3.6%e v 3.4% prior
• 10:00 (US) Jan Pending Home Sales M/M: +1.0%e v -2.2% prior; Y/Y: -4.6%e v -9.5% prior
• 10:00 (US) Dec Factory Orders: +0.6%e v -0.6% prior; Factory Orders (Ex-transportation): No est v -1.3% prior
• 10:00 (US) Dec Final Durable Goods Orders: No est v 1.2% prelim; Durables Ex Transportation: No est v 0.1% prelim; Capital Goods Orders (Non-defense/ex-aircraft): No est v -0.7% prelim; Capital Goods Shipments (Non-defense/ex-aircraft): No est v 0.5% prelim
• 10:00 (US) Fed Chair Powell testifies before House Banking Committee (Semi-annual testimony)
• 10:30 (US) Weekly DOE Crude Oil Inventories
• 12:00 (CA) Canada to sell 2-year notes
• 13:00 (MX) Mexico Central Bank (Banxico) Quarterly Inflation Report (QIR)
• 14:00 (AR) Argentina Dec Economic Activity Index (Monthly GDP) M/M: No est v -2.3% prior; Y/Y: -5.2%e v -7.5% prior

Has May done enough to avoid another setback today?

It could be quite a fiery session in Parliament on Wednesday, after Theresa May took the decision to pull the "meaningful vote" on her Brexit deal. Once she took this decision it was always going to be a matter of damage control and her decision to offer a vote on no deal and an extension, in the event hers is rejected on 12th, may just be enough to buy her a little time.

It's not going to win her any popularity contests, that's for sure, nor will it quell the accusations of running down the clock. But let's face it, when has May ever cared about her popularity or doing things in an honourable way. In fact, you could say that about many of her colleagues as well throughout this process. For May it's about Parliament backing her deal before March 29th and her being the Prime Minister that delivered Brexit. And right now, this looks the most likely outcome.

The markets seem to certainly agree. Although that doesn't necessarily fill me with comfort or give me more conviction in my view. We're not too far from the three year anniversary of the event that kicked all this off and at the start of that night, markets strongly suggested that the country would vote remain and we all know how that turned out.

Gold looking bearish in the near-term?

Gold has lost a bit of its allure over the last week which may be indicative of a trade that's become a little overcrowded and prone for correction. The momentum indicators certainly suggest this may be the case and the recent consolidation off the highs, despite some dollar weakness, also suggests this is a move that's run out of steam.

The dollar aspect is particularly interesting as previous, periods of strength merely slowed or paused the rally and those of weakness spurred it on. If this trend has reversed then it doesn't bode well for gold in the near term. Longer term though I remain bullish, it's just a question of how large a correction we could see. The key supports here remain unchanged at $1,320 and $1,300.

Oil continues to pare gains

A surprise drawdown in inventories – reported by API on Tuesday – gave oil prices a lift and is continuing to do so ahead of the EIA release today. With Saudi Energy Minister Khalid al-Falih appearing undeterred by Trump's latest attack on the cartel and indicating that cuts will need to continue into the second half of the year, upward pressure on oil may persist longer term.

Of course, downside pressures may remain for now but Falih appeared comfortable with his assessment that demand will pick up, which will be reflected in the inventory numbers eventually.

The Euro maintains positive tone and probes again into daily cloud, after cloud base was cracked on Tuesday's strong rally, which confirmed break out of four-day congestion and signaled continuation of recovery leg from 1.1234 (15 Feb low).

The pair showed little reaction on mixed EU data but maintains strong bullish momentum.

Tuesday's close above 55SMA was bullish signal, with bulls expected to be additionally attracted by thinning daily cloud which twists later this week. Bulls need break above pivotal Fibo barrier at 1.1407 (Fibo 61.8% of 1.1514/1.1234) to generate fresh bullish signal for recovery extension towards trendline resistance at 1.1461 (bear-trendline drawn off 1.1815, 24 Sep high) which would unmask falling 200SMA (1.1512).

Broken 30SMA (1.1363) needs to contain extended dips and keep bulls in play.

Res: 1.1407, 1.1448, 1.1461, 1.1512
Sup: 1.1382, 1.1363, 1.1337, 1.1316

The Australian Dollar appreciated about 56 base points against the US Dollar on Tuesday. The currency pair tested a resistance level formed by the weekly R1 at 0.7201 during yesterday's trading session.

As for the near future, it is likely that the AUD/USD exchange rate makes a brief retracement towards a support cluster formed by the 100– and 200-hour simple moving averages at 0.7143.

A possible upside sentiment from the support cluster as mentioned earlier could follow afterwards.

The US Dollar edged lower against its Canadian peers on Tuesday. The exchange rate lost about 79 base points of its values during Tuesday's trading session. In the meantime, the overall market sentiment remained bearish during the first half of today's session.

Technical indicators demonstrate that the decline of the currency pair will continue within this session. The potential downside target will be at a swing lower of 1.3120 within this session.

However, it is expected that the currency exchange rate makes a retracement towards the 200-hour simple moving average at 1.3209 today.

The New Zealand Dollar traded with low volatility against the US Dollar on Tuesday. The 50-hour simple moving average provided support for the currency pair at 0.6886 during yesterday's session.

Everything being equal, it is likely that the exchange rate edges lower towards a support cluster formed by the 100– and 200—hour simple moving averages at 0.6854 within this session.

However, technical indicators demonstrate otherwise. Technical sentiment continues to flash buy signals on both the smaller and the larger time frames chart.

Downside sentiment dominated the Euro against the US Dollar on Tuesday. A breakout through the lower boundary of an ascending channel occurred at the end of yesterday's trading session.

Most likely, it is expected that the currency pair maintains the downward momentum today. However, buyers could push the price towards a resistance level formed by the weekly R1 at 126.03 within this session.

If the resistance line as mentioned above holds, a potential downside reversal is likely to occur.

Bundesbank President Jens Weidmann said today that German economy growth will "fall well short of the potential rate of 1.5 percent in 2019". That's because "there is much to suggest that the dip in growth here in Germany has persisted into the current year".

However, he emphasized that the prerequisites for growth remain intact, including low financing cost, expansion in employment market and rising wages. Thus, there is no reason for pessimism yet.

Separately, it's reported that German cabinet gave green-light for a second eight-year term for Weidmann, as the current term expires at the end of APril.