Sample Category Title

Pivot (invalidation): 2596.00

Our preference Long positions above 2596.00 with targets at 2657.00 & 2685.00 in extension.

Alternative scenario Below 2596.00 look for further downside with 2578.00 & 2545.00 as targets.

Comment The RSI is bullish and calls for further upside.

Pivot (invalidation): 10950.00

Our preference Short positions below 10950.00 with targets at 10810.00 & 10700.00 in extension.

Alternative scenario Above 10950.00 look for further upside with 11000.00 & 11070.00 as targets.

Comment The index currently faces a challenging resistance area at 10950.00.

Pivot (invalidation): 52.05

Our preference Long @ 52.69 with targets @ 53.30 & 53.80 in extension.

Alternative scenario Below 52.05 look for further downside with 51.65 & 51.05 as targets.

Comment The RSI advocates for further advance. The prices are seeking support from the ascending 20-period moving average.

Pivot (invalidation): 15.5600

Our preference Short positions below 15.5600 with targets at 15.4800 & 15.4300 in extension.

Alternative scenario Above 15.5600 look for further upside with 15.6100 & 15.6500 as targets.

Comment The RSI is mixed to bearish.

Pivot (invalidation): 1295.00

Our preference Short positions below 1295.00 with targets at 1288.50 & 1286.50 in extension.

Alternative scenario Above 1295.00 look for further upside with 1297.00 & 1299.50 as targets.

Comment As Long as 1295.00 is resistance, look for choppy price action with a bearish bias.

Daily Pivots: (S1) 0.9903; (P) 0.9929; (R1) 0.9969; More....

Intraday bias in USD/CHF remains on the upside. Current rebound from 0.9716 is targeting 0.9963 resistance first. Break there should confirm completion of corrective fall from 1.0128 to 0.9716. Further rise should then be seen to retest 1.0128. However, break of 0.9856 minor support will turn bias back to the downside for 0.9716 low.

In the bigger picture, current development suggests that rise from 0.9186 has possibly completed with three waves up to 1.0128 already. Decline from 1.0128 could either be correcting this move, or reversing the trend. As long as 0.9541 support holds, we'd slightly favor the former scenario, and expect another rise through 1.0128 at a later stage. However, sustained break of 0.9541 will confirm trend reversal and bring deeper fall back to 0.9186 low.

Daily Pivots: (S1) 1.1371; (P) 1.1388; (R1) 1.1407; More.....

EUR/USD formed a temporary low at 1.1370 and intraday bias is turned neutral first. But further decline is expected as long as 1.1489 minor resistance holds. We're holding on to the case that corrective rise from 1.1215 has completed earlier than expected at 1.1569. Deeper fall should be seen to 1.1307 support. Break there will likely resume larger down trend from 1.2555 through 1.1215 low. On the upside, above 1.1489 minor resistance will turn bias back to the upside for 1.1569 instead.

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.

• Rates: Eco data vs risk sentiment
  A WSJ article suggested that the US pondered dropping Chinese tariffs. Risk sentiment improved, even if the headlines were later denied by a US Treasury official. Downside risks to US eco data and caution going into the long weekend hang in the balance with stronger stock markets. We have an upward bias for core bonds with outperformance of US Treasuries.
• Currencies: dollar shows mixed picture. EUR/USD to bottom out?
  The dollar gained against the yen yesterday, but showed no clear trend against the euro as risk sentiment remained constructive. Easing tensions on global trade and a continuation of the risk rebound might be slightly euro supportive. Sterling extends its rebound as markets see a growing chance of Brexit to be delayed despite current political stalemate

The Sunrise Headlines

• US equity markets gained up to 0.75% yesterday as new trade optimism supported risk sentiment. Most Asian equities opened in green, with Chinese and Japanese indices outperforming.
• US Treasury Secretary Mnuchin is said striving for easing Chinese tariffs, while US Trade rep. Lighthizer is more reserved about the idea. The Treasury department later denied the news, but it moved financial markets anyway.
• US President Trump cancelled the US delegation’s trip to the World Economic Forum in Davos, as the partial government shutdown continues. He also blocked Democrat House Speaker Pelosi’s trip overseas in a sign of rising tensions.
• A top North Korean delegation travels to Washington today for talks with US Secretary of State Pompeo and possibly with US President Trump. The meeting aims at paving the way for a second US-North Korea nuclear summit.
• Norway's Prime Minister Erna Solberg secured a centre-right majority government by adding the small CDP to her minority three-party coalition. It’s the first conservative-led government in Norway in over three decades.
• Japanese consumer inflation (Y/Y) dropped in December to 0.7%, a seven-month low and down from 0.9% a month before, as household spending is further cooling. The data comes ahead of next week’s Bank of Japan meeting.
• Today’s US economic calendar contains Industrial Production for December and the University of Michigan consumer confidence for January. Fed’s Williams and Harker speak. December UK retail sales feature on the agenda as well

Currencies: Dollar Shows Mixed Picture. EUR/USD To Bottom Out?

Dollar still looking for direction

Global markets initially show no clear trend yesterday. The equity rally slowed (temporarily) and so did the rebound of the dollar. Later in the session, US yields rose a few bps and equities resumed their uptrend. The move was supported by decent US eco data and by press headlines that the US was considering easing China trade tariffs. The impact on the dollar was mixed. USD/JPY gained some further ground and closed the session at 109.26. EUR/USD didn’t go anywhere and finished at 1.1389 (from 1.1392). This morning, Asian markets are joining the risk rally from the US yesterday evening. Investors continued to hope for easing trade tensions between the US and China even as the US Treasury officials denied yesterday’s reports on the US considering rolling back tariffs. USD/JPY (109.35 area) is gaining modestly further ground. EUR/USD is currently hovering just below 1.14. The yuan is losing a few ticks despite the constructive risk sentiment (USD/CNY 6.7775 area, PBOC liquidity). There are no important data in Europe later today. In the US December production data and consumer confidence from the University of Michigan will be published. A decline from 98.3 to 96.8 is expected. The risk probably is for negative surprise as the impact of the shutdown is filtering through. If so, it might be a tentative negative for the dollar. This morning, the global positive risk sentiment supports USD/JPY. Market speculation on easing trade tensions should be neutral or maybe even slightly positive for EUR/USD. This week, markets turning more uncertain on EMU growth compared the US, weighed on the euro and supported the dollar. This balance might tilt again (e.g. due to the shutdown) but for now the dollar gets the benefit of the doubt. We still see no big case for a sustained USD rally and look for a EUR/USD bottoming out process. Yesterday’s intraday price action suggests such pattern might be in the making. EUR/USD 1.1309 is first minor support.

Sterling continued its rebound yesterday. The poltical stalemate on Brexit persists. UK PM May is talking to MP’s from several parties but labour leader Corbyn still refuses to cooperate. Still, markets continue to see rising chances for a new referendum or for a delay of the March 29 Brexit deadline. For now this scenario is considered as sterling positive. EUR/GBP dropped below the 0.88 support. The 0.8656/21 range bottom is key. We consider the sterling rally as a bit premature, but the day-to-day momentum on sterling is cleary improving

EUR/USD: no high profile story to guide trading. Tentative signs of EUR/USD to bottom out?

XAUUSD (1291.60): The consolidation in gold prices continued with price action trading tighter into a range. This potentially opens the upside to price action which could see the ascending triangle being validated. A close above 1296 could see price posting gains towards 1310 at the very least. Alternately, to the downside, the declines are likely to stall near the 1280 support which has managed to hold the drops so far.

AUDUSD (0.7190): The Australian dollar retested the price level of 0.7191 after breaking below this level. Price action briefly posted gains above this level before settling back. A close below 0.7191 could potentially signal the downside in the Australian dollar. This could open the way for the price to test the lower support at 0.7022. Alternately, if price manages to close above 0.7191, the AUDUSD could be on track to maintain the gains for targeting 0.7292 where the next resistance level will be established.