Sample Category Title

Pivot (invalidation): 1.3270

Our preference Long positions above 1.3270 with targets at 1.3340 & 1.3370 in extension.

Alternative scenario Below 1.3270 look for further downside with 1.3255 & 1.3230 as targets.

Comment The RSI calls for a new upleg.

Pivot (invalidation): 1.0070

Our preference Short positions below 1.0070 with targets at 1.0035 & 1.0020 in extension.

Alternative scenario Above 1.0070 look for further upside with 1.0095 & 1.0110 as targets.

Comment The RSI calls for a drop.

Pivot (invalidation): 110.60

Our preference Short positions below 110.60 with targets at 110.10 & 109.90 in extension.

Alternative scenario Above 110.60 look for further upside with 110.80 & 110.95 as targets.

Comment The RSI is bearish and calls for further downside.

Pivot (invalidation): 1.2830

Our preference Short positions below 1.2830 with targets at 1.2770 & 1.2740 in extension.

Alternative scenario Above 1.2830 look for further upside with 1.2850 & 1.2875 as targets.

Comment As Long as the resistance at 1.2830 is not surpassed, the risk of the break below 1.2770 remains high.

Pivot (invalidation): 1.1270

Our preference Long positions above 1.1270 with targets at 1.1310 & 1.1325 in extension.

Alternative scenario Below 1.1270 look for further downside with 1.1245 & 1.1230 as targets.

Comment The RSI lacks downward momentum.

• Rates: Dovish ECB speak hints at readiness to act
  Dovish ECB comments from Coeuré, Villeroy and Rehn hint at ECB action via a fresh round of TLTRO’s or changing the forward guidance on interest rates if the slowdown takes on a permanent character. German Bunds outperform US Treasuries, but strong bourses cap Bund gains. US markets are closed today for Presidents Day, suggesting a slow start.
• Currencies: EUR/USD decline to slow
  EUR/USD touched a minor correction low on Friday, but sentiment improved later. Poor US data are easing the USD’s recent momentum. A constructive risk sentiment due to hopes on easing trade tensions might be slightly euro supportive. Will this week’s EMU confidence data finally give some comfort, too?

The Sunrise Headlines

• US equities surged to a 10-week high on Friday with all major benchmarks closing in green. The Dow Jones gained 1.74%. Asian equity markets are gaining ground this morning with China outperforming.
• US democrats are preparing legal action against President Trump’s use of his ‘emergency powers’ to fund the border wall, as last week’s approved spending bill does not contain sufficient funds to deliver one of his key promises.
• The UK-Japan trade talks soured after a letter, sent by UK foreign secretary Jeremy Hunt, was badly received by Japanese officials. Japan briefly considered cancelling a round of trade talks this week and is preparing a proper response.
• The ECB could change its interest-rates guidance if the economic slowdown of the EU economy persists, according to ECB governor Villeroy. His remarks are another dovish signal, after governor Coeuré hinted on a new TLTRO on Friday.
• Wilbur Ross, US Commerce Secretary, has submitted his report to president Trump whether imported vehicles pose a national security threat. If so, the US could impose tariffs on car import. Trump has now 90 days to decide.
• Australia’s key political parties have been hacked by a “sophisticated state actor”, said Australian PM Scott Morrison. With key elections lined up in May, the country fears of foreign meddling in the political campaigns.
• Today’s eco calendar is completely empty. The US financial markets are closed for US Presidents day. The UK prints secondary housing data for February.

Currencies: EUR/USD Decline To Slow

EUR/USD decline to slow?

EUR/USD was pushed back and forth by conflicting drivers on Friday. The pair dropped to the 1.1235 area as ECB’s Coeure talked soft on inflation and on ECB policy. At the same time, the Empire manufacturing survey printed strong supporting the dollar. However, fortunes changed again. US January production missed the consensus by a wide margin, creating doubts on US economic strength after very weak retail sales published on Thursday. On the EMU side of the story, European assets (financial equities, peripheral bonds) rebounded as ECB’s Coeure indicated that the bank is discussing new TLTRO’s. Headlines on the US-China trade talks also turned more constructive. EUR/USD closed little changed at 1.1296. Poor US data also prevented USD/JPY to profit from the risk-on (close 110. 47 from 110.48). Sentiment in Asia remains risk-on this morning as both US and China officials signalled progress in the trade talks, which continue this week. Chinese and Japanese equities are taking the lead in the rally with gains between 1.50% and 3.0%+. The (trade-weighted) dollar (96.80 area) is trading off recent peak levels. EUR/USD tries to regain the 1.13 level. USD/JPY hovers in in the mid 110 area. Today, the eco calendar is empty. US markets are closed in observance of Presidents Day and there are no important EMU data. Later this week, the US China trade talks will remain in focus. Markets will also keep a close eye at the next set of EMU confidence indicators (ZEW, PMI’s, Ifo) and the assessment of ECB and Fed policy makers on recent eco developments (including Fed minutes on Wednesday). Last week, the dollar initially maintained the benefit of the doubt, but poor US retail sales and production data also raised doubt on the US economy. We start the week with a cautious/rather balanced EUR/USD bias. We keep the view that improvement in the global trade picture and better EMU data are need to improve sentiment on EUR/USD. There are hopeful signs on trade, but the jury is still out. EUR/USD 1.1216 marks the Nov low. EUR/USD 1.1287 is 61% retracement 2016 low/2018 top). The EUR/USD downside looks a bit more solid versus last week.

A technical rebound of sterling was supported by a solid UK January retail sales release last Friday. EUR/GBP finished the week at 0.8762. This week, UK PM and members of her government will start a new campaign to convince EU leaders to save hear Brexit deal ahead of the February 27 deadline. As we don’t expect a break-through anytime soon, we stay cautious on sterling. More technical trading around current levels might be on the cards.

USD trade-weighted (DXY) dollar ally running into resistance

The US dollar is attempting to recover higher against the Japanese yen currency on Monday after the pair found strong support from the 110.24 level. The movement of the USDJPY pair is increasingly being driven by news from Sino-US trade talks, with markets still optimistic a deal can be reached. Traders should carefully watch for a break of the 110.24 to 110.80 price range, as it will likely signal the next short-term directional move.

The USDJPY pair is only bullish while trading above the 110.40 level, key technical resistance is found at the 110.80 and 111.10 levels.

If the USDJPY pair moves below the 110.40 level, sellers may test towards the 110.24 and 109.80 support levels.

The euro currency has recovered above the 1.1300 level against the US dollar on hopes that the European Central Bank may provide new loans to troubled European banking institutions. EURUSD bulls need to break above the 1.1337 resistance level to keep the recent bullish move intact. The MACD indicator on the four-hour time frame is signalling that further upside in the pair remains possible.

The EURUSD pair is only bearish while trading below the 1.1300 level, key technical support is found at the 1.1260 and 1.1238 levels.

If the EURUSD pair moves above the 1.1300 level, buyers may test towards the 1.1337 and 1.1370 resistance levels.

Ethereum has made a strong move higher on Monday, with the ETHUSD pair making close to double-digit intraday gains after bulls convincingly broke above the $120.00 level. Further upside towards the $150.00 level remains possible as the technical breakout is still gathering momentum. Both the Relative Strength Index and MACD indicators on the four-hour time frame are starting to turn bullish.

The ETHUSD pair is bullish while trading above the $120.00 level, key resistance is found at the $150.00 and $160.00 levels.

If the ETHUSD pair trades below the $120.00 level, key support is found at the $115.00 and $109.00 levels.

On Friday, the cryptocurrency universe received positive news. Before the US market opened, reports said that JP Morgan was preparing to launch its own cryptocurrency. The currency will be known as the JPM Coin and is expected to be launched within a few months.

The currency will not be available to retail investors. Instead, the bank will use the concept of blockchain to create the currency, which will then be used for large international fund transfers. This concept will solve a very major problem that exists today. When international companies transfer funds globally, it usually takes a few days. This is because the funds have to pass through a number of firms such as intermediaries. Therefore, the coin will reduce the lag from days to just minutes.

This news is very important because of what JP Morgan is to the financial world. It is one of the largest banks with a market capitalization of more than $350 billion. It has assets of more than $2.6 trillion. Every day, the bank transacts more than $6 trillion for large companies. Its entry to the blockchain industry marks the first time a major US institution has done this. It is also a surprise because JP Morgan’s CEO has been one of the major critics of the currencies. Each coin will be worth a dollar, making it a stablecoin.

The BTC/USD pair moved to a high of 3725, which is the highest level since mid-January. Today, the pair moved slightly lower to 3662 as traders internalize the news of the new JP Morgan coin. On the four-hour chart, the pair’s price is along the 50% Fibonacci Retracement level. The price is also above the 21-day EMA. In the short term, the pair could remain stagnant as traders consider the implications of the news.