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Daily Pivots: (S1) 1.1249; (P) 1.1290; (R1) 1.1315; More.....

With 1.1329 minor resistance intact, intraday bias in EUR/USD remains mildly on the downside. Current development suggests that corrective pattern from 1.1215 has completed already. Further decline should be seen through 1.1215 low to 1.1186 fibonacci level. On the upside, break of 1.1329 minor resistance will turn intraday bias neutral and bring consolidations first, before staging another decline.

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) 1.2824; (P) 1.2883; (R1) 1.2922; More....

Intraday bias in GBP/USD remains on the downside with 1.2938 minor resistance intact. As noted before, current development suggests that rebound from 1.2391 has completed at 1.3217 already, after rejection by 1.3174 key resistance. Further decline would be seen back to retest 1.2391 low. On the upside, above 1.2938 minor resistance will turn intraday bias neutral first.

In the bigger picture, the rejection by 1.3174 key resistance revived the original view on GBP/USD. That is, decline from 1.4376 is possibly resuming long term down trend from 2.1161 (2007 high). Firm break of 1.2391 will solidify this bearish case and target 1.1946 (2016 low). However, decisive break of 1.3174 will invalidate this bearish case again and turn outlook bullish.

Daily Pivots: (S1) 109.93; (P) 110.20; (R1) 110.65; More...

At this point, further rise could still be seen in USD/JPY. But we'd expect strong resistance from 61.8% retracement of 114.54 to 104.69 at 110.77 to limit upside to bring near term reversal. On the downside, break of 109.66 minor support will turn intraday bias back to the downside for 108.49. Break will confirm completion of rebound from 104.69. However, sustained trading above 110.77 will dampen our bearish view and target a test on 114.54 resistance instead.

In the bigger picture, while the rebound from 104.69 is strong, there is no change in the view that it's a corrective move. That is, fall from 114.54, as part of the decline from 118.65 (2016 high), is not completed yet. Break of 104.62 will target 100% projection of 118.65 to 104.62 from 114.54 at 100.51, which is close to 100 psychological level. Nevertheless, sustained trading above 55 day EMA (now at 110.41) will dampen this bearish view and turn focus back to 114.54 resistance instead.

Daily Pivots: (S1) 1.0000; (P) 1.0027; (R1) 1.0068; More....

USD/CHF's rally accelerates to as high as 1.0092 so far today. Intraday bias stays on the upside for 1.0128 resistance. Decisive break there will confirm resumption of up trend from 0.9186. Next target will be 100% projection of 0.9541 to 1.0128 from 0.9716 at 1.0303. On the downside, below 1.0039 minor support will turn intraday bias neutral first and bring consolidations. But retreat should be contained well above 0.9908 support to bring another rally.

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.

Swiss Franc is overwhelmingly the weakest one today with fresh selling in early US session. While Japanese Yen is also weak, it's a relatively distant second. Both are pressured by extended rebound in global stocks. Meanwhile, additional pressure is seen on Franc from strong rebound in oil prices and emerging market currencies. Currently, both USD/TRY and USD/ZAR are down nearly -0.3%.

Return of risk appetite is benefiting Australian Dollar most. Investors are cheering the deal in US Congress to avert another government shut down, with funding for 90km of bordering fencing. Also, there seems to be some quiet optimism on US-China trade talks. Though, US Treasurer Steven Mnuchin and USTR Robert Lighthizer arrived in Beijing today for trade talks, without any notable comments so far.

Dollar and Euro are mixed for the moment. Sterling also stays mixed as UK Prime Minister delivered her Brexit update in the parliament. The most important thing to note is that if she cannot get an approvable new deal by February 26, the Commons will be given a chance to vote on a plan B on the following day.

Technically, USD/CHF's rally is accelerating towards 1.0128 key resistance. Break will confirm medium term up trend resumption. EUR/CHF's break of 1.1376 minor resistance also suggests that pull back from 1.1444 has completed. Further rise is now likely through this level to 1.1501 key resistance. While AUD/USD is strong, upside is so far still capped by dovish RBA expectation. Further decline will remain in favor for the near term as long as 0.7107 minor resistance holds.

In Europe, currently, FTSE is down -0.07%. DAX is up 1.03%. CAC is up 0.86%. German 10-year yield is up 0.0204 at 0.143. Earlier in Asia, Nikkei rose 2.61%. Hong Kong HSI rose 0.10%. China Shanghai SSE rose 0.68%. Singapore Strait Times dropped -0.16%. Japan 10-year JGB yield rose 0.0184 to -0.009, staying negative.

US Treasurer Mnuchin and USTR Lighthizer arrive in Beijing for trade talks

US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer arrived in Beijing today, ahead of the high-level meeting on Thursday. Mnuchin told reporters that "it's great to be here back in Beijing," and "we're looking forward to several important days of talks." Lighthizer arrived earlier but didn't any any questions from reporters.

UK PM May: Parliament can vote on Brexit plan B is no new deal is agreed by Feb 26

UK Prime Minister Theresa May said in the parliament that she told European Commission President Jean-Claude Juncker last week that UK wanted "legal binding" changes to the withdrawal agreement that it would not be kept in the backstop. But Juncker insisted EU would not reopen negotiation on the withdrawal agreement.

May told lawmakers such request for renegotiation was "reasonable". But she also admitted that "some time" is needed to complete the process of negotiating a better deal on Irish backstop. Though, May is still aiming to leave the EU on March 29. She also promised that if she cannot get a deal by February 26, the Commons will have a chance to vote on a plan B the following day.

For this week, it's confirmed that there will be no meaningful vote in the Commons, but amendable motion for debate on Thursday.

BoE Carney: Brexit is the first test of a new global order

BoE Governor Mark Carney noted in a speech "The global outlook" today that global growth momentum is now "weakening in all major regions" and "downside risks have intensified". Also, the proportion of the global economy growing above trend has fallen from four-fifths to one-third.

Tighter financial conditions could be part of the reasons for the deceleration. But he warned, "potentially more seriously, the slowing in global momentum may also be the product of rising trade tensions and growing policy uncertainty." And, "risks from China and from de-globalisation are significant and growing." Carney also emphasized "contrary to what you might have heard, it isn't easy to win a trade war."

He added that Brexit is the "first test of a new global order". It could be the "acid test" of "whether a way can be found to broaden the benefits of openness while enhancing democratic accountability." And, Brexit can also lead to "new form of international cooperation and cross-border commerce built on a better balance of local and supranational authorities."

Bundesbank Weidmann: Acting beyond mandate will undermine trust in ECB

Bundesbank President Jens Weidmann warned today that the Eurozone is still not crisis proof. He pointed out that "certain issues like the lack of credibility of fiscal rules or the harmful sovereign-bank nexus still have to be adequately addressed."

At the same time, fighting crises could force unelected ECB bankers to take political positions that's beyond its own mandate. And, "acting beyond the mandate would also undermine people's trust in the central bank."

He added, "at the end of the day, it could become more and more difficult for the European Central Bank to focus on its promise of a stable currency."

ECB Knot: Wait-and-see attitude is probably the optimal attitude

ECB Governing Council member Klaas Knot said there is no need to raise interest rates before more sign of inflation pickup to target. He said "we will have to be patient and also, in my view, modest with respect to the precise moment at which we can expect inflation to converge toward our medium-term objective." And, at this moment, a "wait-and-see attitude is probably the optimal attitude."

Knot also tried to play down recession risk despite economic slow down. He said "the current situation might last a few quarters, but I'm still positive  . . .  that afterwards growth will return to levels slightly above potential again."

NAB on RBA: Next rate move could be down rather than up

Australia NAB Business Condition staged a moderate rebound in January up from 2 to 7 and beat expectation of 4. That came after the sharp decline from 11 to 3 in December. Business Confidence also rose slightly from 3 to 4. NAB noted that even after the recovery, "conditions and forward orders continue to trend lower and still show a sizeable decline over the past 6 months."

Alan Oster, NAB Group Chief Economist noted that "Based on the confirmation that conditions have deteriorated further and our current set of forecasts we now see the RBA staying in neutral for the foreseeable future, though think the next move could be down rather than up based on the current trajectory of growth and growing downside risks".

Also from Australia, home loans dropped -6.1% mom in December versus expectation of -2.0% mom.

RBNZ survey: Inflation, house price and GDP expectations dropped

RBNZ quarterly survey showed inflation expectation for a year ahead dropped from 2.09% to 1.82%. One-year house price expectations dropped sharply from 2.86% to 1.91%. One-year rolling annual GDP expectation dropped slightly from 2.44% to 2.38%. Regarding RBNZ monetary policy, a net 75.6% of respondents believe monetary conditions in one year's time will be easier than neutral.

USD/CHF Mid-Day Outlook

Daily Pivots: (S1) 1.0000; (P) 1.0027; (R1) 1.0068; More....

USD/CHF's rally accelerates to as high as 1.0092 so far today. Intraday bias stays on the upside for 1.0128 resistance. Decisive break there will confirm resumption of up trend from 0.9186. Next target will be 100% projection of 0.9541 to 1.0128 from 0.9716 at 1.0303. On the downside, below 1.0039 minor support will turn intraday bias neutral first and bring consolidations. But retreat should be contained well above 0.9908 support to bring another rally.

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.

Economic Indicators Update

Entering into US session, Yen and Swiss Franc remain the weakest ones for today and the week as stocks rebound continue. DOW futures are currently up 200 pts, cheering the deal in US Congress to avert another government shut down, with funding for 90km of bordering fencing. Dollar is following as the third weakest. US Treasurer Steven Mnuchin and USTR Robert Lighthizer arrived in Beijing today for trade talks, without any notable comments so far.

Meanwhile, Australian Dollar is the strongest one, followed by Canadian. WTI is back at 53.8 after defending 51.37 support earlier. Sterling stays mixed as UK Prime Minister delivered her Brexit update in the parliament. The most important thing to note is that if she cannot get an approvable new deal by February 26, the Commons will be given a chance to vote on a plan B on the following day.

In Europe, currently:

• FTSE is down -0.07%.
• DAX is up 1.03%.
• CAC is up 0.86%.
• German 10-year yield is up 0.0204 at 0.143.

Earlier in Asia:

• Nikkei rose 2.61%.
• Hong Kong HSI rose 0.10%.
• China Shanghai SSE rose 0.68%.
• Singapore Strait Times dropped -0.16%.
• Japan 10-year JGB yield rose 0.0184 to -0.009, staying negative.

BoE Governor Mark Carney noted in a speech today that global growth momentum is now "weakening in all major regions" and "downside risks have intensifed". Also, the proportion of the global economy growing above trend has fallen from four-fifths to one-third.

Tighter financial conditions could be part of the reaons for the deceleration. But he warned, "potentially more seriously, the slowing in global momentum may also be the product of rising trade tensions and growing policy uncertainty." And, "risks from China and from de-globalisation are significant and growing." Carney also emphasized "contrary to what you might have heard, it isn't easy to win a trade war."

He added that Brexit is the "first test of a new global order". It could be the "acid test" of "whether a way can be found to broaden the benefits of openness while enhancing democratic accountability." And, Brexit can also lead to "new form of international cooperation and cross-border commerce built on a better balance of local and supranational authorities."

Full speech "The global outlook".

ECB Governing Council member Klaas Knot said there is no need to raise interest rates before more sign of inflation pickup to target. He said "we will have to be patient and also, in my view, modest with respect to the precise moment at which we can expect inflation to converge toward our medium-term objective." And, at this moment, a "wait-and-see attitude is probably the optimal attitude."

Knot also tried to play down recession risk despite economic slow down. He said "the current situation might last a few quarters, but I'm still positive . . . that afterwards growth will return to levels slightly above potential again."

EURAUD is retreating near 1.5900 below the 23.6% Fibonacci retracement level of the upleg from 1.3625 to 1.6558, approaching the mid-level of the Bollinger Band (20-simple moving average) in the daily chart. Over the last month, the price has been moving sideways in the Bollinger Band within the 1.5715 support and the 1.6035 resistance.

The technical structure suggests a bearish momentum as well. The stochastic oscillator printed a bearish crossover within the %K and %D lines slightly below the overbought zone, while the RSI indicator is trying to enter the negative territory.

An extension to the downside and below the 20-day SMA could meet the support level of 1.5715. Further down, support could run towards the 38.2% Fibonacci near the psychological level of 1.5500.

On the other side, if the pair strengthens, the 23.6% Fibonacci and the 40-day SMA could act as strong resistance obstacles for the bulls. A jump above these lines could find immediate resistance near the upper Bollinger band, which overlaps with the 1.6035 barrier. A bullish run higher could send prices towards the 1.6350 hurdle, recorded on October 11.

The long-term picture continues to look predominantly bullish, with trading activity taking place above both the 50- and 200-SMAs.

UK Prime Minister Theresa May said in the parliament that she told European Commission President Jean-Claude Juncker last week that UK wanted "legal binding" changes to the withdrawal agreement that it would not be kept in the backstop. But Juncker insisted EU would not reopen negotiation on the withdrawal agreement.

May told lawmakers such request for renegotiation was "reasonable". But she also admitted that "some time" is needed to complete the process of negotiating a better deal on Irish backstop. Though, May is still aiming to leave the EU on March 29. She also promised that if she cannot get a deal by February 26, the Commons will have a chance to vote on a plan B the following day.

For this week, it's confirmed that there will be no meaningful vote in the Commons, but amendable motion for debate on Thursday.