Sample Category Title

Pivot (invalidation): 0.7075

Our preference Long positions above 0.7075 with targets at 0.7120 & 0.7140 in extension.

Alternative scenario Below 0.7075 look for further downside with 0.7055 & 0.7030 as targets.

Comment The RSI is mixed to bullish.

Pivot (invalidation): 1.3305

Our preference Short positions below 1.3305 with targets at 1.3260 & 1.3230 in extension.

Alternative scenario Above 1.3305 look for further upside with 1.3330 & 1.3355 as targets.

Comment A break below 1.3260 would trigger a drop towards 1.3230.

Pivot (invalidation): 1.0015

Our preference Short positions below 1.0015 with targets at 0.9985 & 0.9970 in extension.

Alternative scenario Above 1.0015 look for further upside with 1.0030 & 1.0040 as targets.

Comment As Long as the resistance at 1.0015 is not surpassed, the risk of the break below 0.9985 remains high.

Pivot (invalidation): 109.70

Our preference Long positions above 109.70 with targets at 110.10 & 110.30 in extension.

Alternative scenario Below 109.70 look for further downside with 109.55 & 109.40 as targets.

Comment The RSI is bullish and calls for further upside.

Pivot (invalidation): 1.2960

Our preference Short positions below 1.2960 with targets at 1.2900 & 1.2875 in extension.

Alternative scenario Above 1.2960 look for further upside with 1.2975 & 1.2995 as targets.

Comment The RSI advocates for further downside.

Pivot (invalidation): 1.1345

Our preference Short positions below 1.1345 with targets at 1.1300 & 1.1280 in extension.

Alternative scenario Above 1.1345 look for further upside with 1.1360 & 1.1375 as targets.

Comment The RSI is bearish and calls for further decline.

Rates: Event risk looms large
The German 10-yr yields break below 0.15%, suggests a further slide towards 0% or lower. Risk sentiment will be reliable for today's intraday gyrations amid an empty eco/event calendar. Investors might take a cautious start as event risk looms large this week with US-Sino trade talks, a brexit vote and the US Congress budget talks deadline.

Currencies: Dollar continues challenging recent ST high
The EUR/USD decline slowed temporary on Friday, but in the end the dollar maintained the benefit of the doubt as several pending event risks continue to spook global investors. Today, global sentiment and technical considerations will again dominate USD trading. EUR/USD 1.1290/67 is the next support that is coming on the radar.

The Sunrise Headlines

• US equity markets closed mixed and little changed on Friday. Asian equities are trading mixed this morning as well, with Chinese indices outperforming after being closed for a week-long holiday. Japanese indices are closed for the day.
• US Congressional talks on border security funding broke down over the weekend. The political deadlock rises the chances of a new government shutdown, that will take effect if no compromise is reached by Friday.
• UK PM May agreed to have a fresh round of talks with Labour leader Jeremy Corbyn to discuss a soft Brexit. Corbyn's proposal would keep the UK tied to Single market and locked in a customs union with the EU. (Bloomberg)
• Italy's Dept. PM Salvini's League party emerged as the strongest party after regional elections in Abruzzo, according to a local news agency. The party is said to take 29% of the votes, compared to 18% for coalition partner 5SM.
• Moody's lifted Russia's credit rating to investment grade (Ba1 to Baa3), after it was downgraded to junk in 2015. The country's finance ministry vowed further action to entice fresh capital. The rating is now par with S&P and Fitch
• IMF's new chief economist Gita Gopinath has backed the US Federal Reserve's view to pause interest rate hikes and endorses the data-driven approach. She said the shift in Fed policy will provide a lot of support for the global economy.
• Today's economic calendar is rather thin. The US remains empty while the UK prints 4th quarter GDP results, next to consumption and trade data. ECB's VP Luis de Guindos speaks in Madrid.

Currencies: Dollar Continues Challenging Recent ST High

USD continues to challenge recent ST top

The EUR/USD decline that reigned for the whole of last week slowed temporarily on Friday. EMU eco data were second tier and mixed. A first test of the 1.1325 area was rejected. Early in US dealings, it looked that the some end of week profit taking on EUR/USD shorts could be on the cards. However, a persistent fragile risk sentiment blocked the EUR/USD rebound. EUR/USD even returned to the week lows and closed at 1.1323. USD/JPY finished marginally lower at 109.73.

This morning, Asian indices are trading mixed with several markets reopening after Lunar New Year holidays, but Japanese markets are closed today. In thin holiday trading, USD/JPY tries another attempt to test/regain the 110 barrier. EUR/USD (1.1325 area) continued to hover near recent lows. (FX) markets are pondering the next moves in the US-China trade talks that will continue this week. In thin Asian markets, there was some kind of a brief ‘mini-flash-crash' of the Swiss Franc this morning. EUR/CHF spiked temporary to the 1.14+ area, but soon returned to well-known territory in the 1.1325 area.

There are only second tier data in the US and Europe. So, global risk sentiment, influenced by headlines on the China-US trade talks, on global growth and on a potential new US government shutdown, will set the tone for FX trading. The trade-weighted dollar is still testing the 96.67 neck-line/resistance, but a clean break didn't occur yet. Still it looks that the dollar retains the benefit of the doubt as long as the pending event risks continue to weigh on markets.

Over the previous 10 days, EUR/USD was captured in a gradual, but protracted downtrend as disappointing EMU data outweighed the late January soft U-turn of the Fed. The day-to-day momentum is USD supportive & euro-cautious. EUR/USD 1.1290/67 is next support ahead of the 1.1218 Nov low. After recent news/decline, quite some euro negative news should be discounted. That said, for now there is no trigger in sight to reverse the USD-positive/euro negative momentum.

EUR/GBP was locked in a narrow range in the mid 0.87 area Friday. The positive impact of Thursday's BoE statement was worked out and there was no new Brexit news. Today, UK Q4 GDP and December production data are interesting, but the focus is on the UK-EU Brexit talks. A potential new vote in the UK Parliament on Thursday is the next point of reference for sterling trading. For now, we assume more technical trading around current levels

EUR/USD nearing the 1.1290/67 support area

Daily Pivots: (S1) 1.3230; (P) 1.3280; (R1) 1.3329; More...

Intraday bias in USD/CAD remains neutral at this point. At this point, we're favoring the case that decline from 1.3664 has completed with three waves down to 1.3068 already, on bullish convergence condition in 4 hour MACD, just ahead of medium term channel support. Hence, rise will stay on the upside as long as 1.3068 holds. Break of 1.3375 resistance will confirm this bullish case and target a test on 1.3664 high.

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 1.3086) 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.

EURUSD has tumbled over the preceding five consecutive days, falling back below the 20- and 40-simple moving averages (SMAs) in the daily timeframe. Also, the SMAs posted a bearish crossover last Friday, signaling negative movement. Currently, the price is attempting a rebound on the near-term ascending trend line, around the 1.1300 psychological level, erasing some significant losses.

Looking at the technical indicators, the %K line of the stochastic oscillator recorded a positive cross with the %D line in the oversold zone, suggesting upside recovery, while the RSI indicator is flattening in the negative zone.

If prices continue to try to jump higher, immediate resistance level would come from the 23.6% Fibonacci retracement level of the downleg from 1.1815 to 1.1215, near 1.1360, while slightly above this area, the 20- and 40- SMAs lie around 1.1390 and 1.1400 respectively. Should the price surpass these lines, the 38.2% Fibonacci could act as resistance for the bulls at 1.1445. Moreover, the 50.0% Fibonacci of 1.1515 appeared a heavy obstacle for investors and therefore could gather extra attention when the price comes near this zone.

To the downside, the 1.1300 mark could be of psychological significance and therefore a potential support level to keep in mind is the uptrend line around this figure. Slipping lower, and breaking the diagonal line, would open the door for the 1.1265 – 1.1290 support area. If negative pressures become stronger, attention would shift towards the 17-month low of 1.1215.

To sum up, EURUSD has been maintaining a neutral to bullish outlook over the last three months, however, an advance above the 61.8% Fibonacci of 1.1585 would change the outlook to a strongly bullish one in the short-term.

Daily Pivots: (S1) 0.7064; (P) 0.7086; (R1) 0.7110; More...

Intraday bias in AUD/USD remains neutral for consolidation above 0.7060 temporary low. More consolidation could be see, but risk will remain on the downside as long as 0.7295 resistance holds. For now, we're favoring the case that rebound from 0.6722 has completed at 0.7295 already. On the downside, firm break of 0.7076 cluster support (38.2% retracement of 0.6722 to 0.7295 at 0.7076) should confirm this bearish case and target 61.8% retracement at 0.6941 next.

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.