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Entering into US session, Swiss Franc is trading as the strongest one. It's followed by Dollar as the second strongest as the greenback is trying to stage a rebound before weekly close. New Zealand Dollar is the third strongest. On the other hand, Sterling seems to be troubled by EU's rejection of UK Prime Minister Theresa May's Chequers Brexit proposals. It's followed by Yen, which is the second weakest, on strong global risk appetite. Euro's rally is losing some momentum after mixed PMI data.

Major European stock indices extend this week's rebound. At the time of writing, FTSE is up 0.89%, DAX up 0.42%, CAC up 0.65%. German 10 year bund yield is dropping back -0.0065, back at 0.465. Yesterday's break of 0.5 handle was possibly a false dawn. Earlier today, Nikkei closed up 0.82%, Hong Kong HSI gained 2.50%. Singapore Strait Times rose 1.17%. China Shanghai SSE added 2.50% to 2797.48. 2800 handle is now within touching distance for the SSE.

Nikkei's rally is rather impressive this week, partly helped by the selloff in Yen. Immediate focus will be on 24129.34 high next week. Based on current upside acceleration, it's likely that this handle is taken out firmly to resume the long term up trend.

Friday September 21: Five things the markets are talking about

Aside from trade, tariff and retaliation, central banks are upping the ante to “normalize” interest rates.

This week, Norway's Norges Bank has joined the BoE, and the central banks of the Czech Republic and Romania in withdrawing some of its stimulus, while Sweden's Riksbank has indicated that it may raise its key rate before the end of the year. The ECB plans to end QE this December, while next week the Fed is expected to hike +25 bps (Sep 26) – the market will be looking for any comments on the impact of escalating trade tensions.

Earlier this week the BoJ kept its stimulus policy unchanged, however, the move overnight to cut the purchases of super long-bonds would suggest that the period of easy-money era is ending. In Hong Kong, the HKD has surged the most in 15-years in part due to the prospect for higher interest rates there.

There are a number of EM hotspots that the market is also focusing on, in particular – Turkey & South Africa. The lack of details on how Turkey can achieve a soft landing for an economy that topped the G20 growth charts in 2017/18 continues to contribute to a volatile TRY, but a plan is forthcoming.

While in South Africa this morning, President Ramaphosa announced details of a stimulus package to take immediate effect to battle the country's technical recession.

With trade war concerns receding in the background, the U.S dollar is on track to close out the week trading atop of its seven-month lows against G10 currency pairs as stronger equity markets and rising bond yields encourage investors to purchase riskier assets.

Note: Expect today's session to be volatile as its quadruple witching – futures and options on indexes and individual stocks expire.

On tap: Canadian CPI and retail sales at 08:30 am EDT

1. Stocks rally to records

With Wall Street indexes hitting a record high again yesterday has encouraged Asian and Euro bourses to take flight.

In Japan, equities rallied to an eight-month high, with noted gains in insurance, energy, and shipping stocks. The Nikkei did fade late, but still gained +0.8%. Financials were helped by the BoJ's offer to buy less super-long bonds. The broader Topix gained +0.9% to hit a four-month high.

Down-under, the Aussie stock market again underperformed in the region overnight. The S&P/ASX 200 finished up +0.4%. The index ticked up +0.5% for the week, a second consecutive modest gain. Providing intraday pressure were utilities, which lost -0.5% last night, but consumer staples rallied that much while materials jumped a further +1.5% and IT climbed +2.2%. In S. Korea, the Kospi closed +0.68% higher on Friday as investors risk appetite recovered. For the week, the benchmark index climbed +0.9%.

In China, stocks surged overnight before a long holiday weekend, with investor sentiment boosted by hopes that a government effort to boost domestic demand could help offset effects of an escalating trade war. At the close, the blue-chip CSI300 index rallied +3.0%, its biggest one-day gain in four-months. The Shanghai Composite Index gained +2.5%, closing out its best week in six months.

In Hong Kong, stocks ended higher for a fourth consecutive session overnight, helped by consumer and technology shares, as sentiment improved after the Sino-U.S trade war unfolded in ways less damaging than feared. The Hang Seng index ended +1.73% higher, while the China Enterprises Index closed +2.17% firmer.

In Europe, regional bourses continue to rise despite sluggish PMI results. In the U.K, the FTSE is supported by positive Brexit comments, while in Italy; bourses are supported by budget talks.

Note: Expect stock markets to be influenced by today's quadruple witching hour.

U.S stocks are set to open in the ‘black' (+0.1%).

Indices: Stoxx50 +0.7% at 3,428, FTSE +0.8% at 7,429, DAX +0.7% at 12,418, CAC-40 +0.8% at 5,494, IBEX-35 +0.6% at 9,639, FTSE MIB +0.9% at 21,588, SMI

2. Oil higher on supply worries, but Trump's call for lower prices drags

Oil prices are a tad higher this morning after falling in yesterday's session as U.S President Donald Trump urged OPEC to lower crude prices at its meeting in Algeria this weekend (Sep 23).

Note: OPEC and its allies are scheduled to meet on Sunday to discuss how to allocate supply increases to offset a shortage of Iran supplies due to U.S sanctions.

Brent crude for November delivery is up +26c, or +0.33%, at +$78.96 a barrel, while
U.S West Texas Intermediate crude for October delivery is up +7c, or +0.10% at +$70.39 a barrel.

Trump took to twitter and called on OPEC to lower prices, saying, “they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices”.

Trump's veiled threats are unlikely to force OPEC and its allies to agree to an official increase in crude output on Sunday.

The fact that Sino-U.S trade tensions have somewhat dissipated is helping precious metal prices. Ahead of the U.S open, gold prices remain better bid on the back of a weaker U.S dollar and are heading for its first weekly gain in a month. Spot gold is up +0.3% at +$1,210.68, after touching its highest since Sept. 13 at +$1,211.02. It has rallied +1.3% so far this week. U.S gold futures are up +0.3% at +$1,215 per ounce.

3. Italian bond yields fall as investors await budget clarity

Italian bond yields are under some pressure this morning as the market awaits clarity on the 2019 budget and after the 5-Star Movement denied a report that Deputy PM Di Maio had threatened to pull his party out of the government.

An ISTAT report shows that the budget deficit as a proportion of national output was slightly higher last year than previously estimated, but that debt was lower also helped to push down yields.

Italian BTP yields are down -5 bps along the curve, having jumped by up to +12 bps yesterday. Elsewhere, Germany's 10-year Bund yield has eased to +0.47% as some Euro investors returned to safe-haven assets.

Note: Bunds backed up to a four-month high of +0.506% Wednesday, but have struggled to maintain this level, rallying back down after renewed Brexit concerns and the infighting in the Italian government.

In Japan, the Bank of Japan (BoJ) has cut its purchase of super long JGB's. This has send Japanese yields to 2018 highs. The 40-year yield has jumped +5 bps to +1.04% while 10's gained +1.5 bp to +0.13%.

Stateside, the yield on 10-year Treasuries has jumped + 2 bps to +3.08%, the highest in more than four-months.

4. Hong Kong dollar spikes

Expectations of a rise in bank lending rates and tightness in cash supplies caused a sharp spike in HKD overnight, pulling it off the weak end of its narrow trading band it had been stuck in for the six-months.

The HKD rallied to $7.8244, hitting its highest levels since late February. Since March, it had stayed near $7.85, the lower end of the Hong Kong Monetary Authority's (HKMA) managed trading band.

USD/INR rose to an intraday high of $72.47 before fading after a sharp spike lower in Indian Indices on liquidity concerns of Indian Housing name Dewan Housing.

ZAR (+0.46% to $14.2629) found support after S. African President Ramaphosa announced a number of policy reform plans this morning, including re-prioritising +$3.5B of public spending to boost economic growth and create jobs.

GBP/USD (£1.3185) falls from yesterday's highs as the E.U warns the U.K of a possible “no-deal” Brexit. Initial support is around £1.3171.

5. Euro zone business growth eased

Data this morning showed that Euro zone business growth eased this month although optimism picked up a tad from last month's two-year low.

Nevertheless, growth remained robust and firms were able to increase prices, which should keep the ECB happy.

Digging deeper, there remains a divergence between services and manufacturing – the dominant service industry beat forecasts for no change in the pace of growth from last month. IHS Markit's Euro Zone Services Flash Purchasing Managers' Index (PMI) rose to 54.7 from 54.4.

Manufacturers however failed to live up to expectations. The factory PMI slumped to a two-year low of 53.3 from 54.6 – the market was looking for 54.4.

Divergence raises the question, how long can you maintain a strong service sector growth without an upbeat manufacturing sector?

EUR/USD has paused in the Friday session, after posting strong gains on Thursday. Currently, the pair is trading at 1.1772, down 0.05% on the day. On the release front, German and eurozone manufacturing PMIs disappointed, missing their estimates. There are no major U.S events on the schedule.

German and eurozone manufacturing PMIs were soft in September. The German indicator dropped sharply, from 56.1 to 53.7, missing the estimate of 55.7 points. This marked the weakest reading since August 2016. It was a similar story from eurozone manufacturing PMI, which fell from 54.6 to 53.3, the lowest level since October 2016. This marked the ninth straight month that the indicator has weakened – in December 2016, the indicator stood at 60.6 points. There was better news from services PMIs. German Flash Final Services PMI rose to 56.5, above the estimate of 55.1 points. The eurozone release improved to 54.7, above the estimate of 54.5 points.

The US-China trade war is heating up, with the two economic giants exchanging tariffs this week. On Monday, U.S President Trump announced 10% tariffs on some $200 billion worth of Chinese goods. China quickly responded, slapping 10% tariffs on $60 billion in US exports. These tit-for-tit tariffs have become a familiar script, only this time investors haven’t panicked and snapped up U.S dollars. Investors are somewhat relieved that the tariffs are just 10%, and China is taking measures to reduce the effect of the tariffs on its economy, including increasing stimulus and infrastructure spending. Global growth remains strong, despite the tariff spat. However, China has also threatened to cancel upcoming trade talks with the U.S, in protest of the recent U.S tariff.

WTI oil regained traction and managed to cover a part of previous day’s losses, sparked by President Trump’s request to OPEC to lower prices.

Oil bounced from $70 zone where yesterday’s pullback found support, keeping overall bullish bias intact.

However, bulls still face strong headwinds from barriers at $71.20/30 zone ( Fibo 61.8% of $75.34/$64.43 descend) where triple upside rejection was registered in recent sessions, on repeated failure to close above Fibo barrier.

Sustained break here is needed to signal continuation of recovery phase from $64.43 (16 Aug low) towards next target at $72.77 (Fibo 76.4% of $75.34/$64.43).

Bullish techs were hit by recent conflicting fundamentals that resulted in repeated failures to resume uptrend, but WTI contract is on track for bullish weekly close which adds to positive outlook.

Key supports at $69.50 zone (rising 10SMA / daily cloud top) need to hold and keep bulls in play.

Res: 71.38, 71.64, 72.00, 72.77
Sup: 70.00, 69.50, 69.31, 68.94

The euro currency continues to push higher against the US dollar, with price testing the 1.1800 level for the first time since July. The EURUSD pair has looked past much weaker than expected eurozone manufacturing PMI data this morning, with the greenback driving the action in the foreign exchange market. Buyers will try to test the 1.1850 level, while sellers will attempt to push price towards the 1.1730 support level.

The EURUSD pair strongly bullish while trading above the 1.1730 level, key resistance is now found at the 1.1850 and 1.1910 levels.

If the EURUSD pair moves below the 1.1730 level, key support is found at 1.1700 and 1.1650 levels

The US dollar has moved within touching distance of the 113.00 level against the Japanese currency, with buyers now looking towards the July trading high, at 113.17. The USDJPY pair has soared over the rising US ten-year Treasury yield, as it approaches levels not seen since 2011. Buyers will aim to break the 113.17 level, while sellers need to push price below the 112.20 level.

The USDJPY pair is strongly bullish while trading above the 112.20 level, key resistance is found at the 113.17 and 113.44 levels.

If the USDJPY pair trades below the 112.40 level, key support is found at the 112.20 and 111.74 levels.

• Investors in buoyant mood despite trade tariffs;
• Sterling slips as May is humiliated in Salzburg;
• Euro edges lower on weaker PMIs.

Investors continue to brush off the ongoing trade dispute between the US and China, along with negative Brexit developments in Salzburg, with stocks in Europe trading higher to end the week.

Another winning day would cap a very good week for stock markets, with the Dow and S&P 500 both trading in record territory – the first time for the former since January – and those in Europe and Asia very much taking new US and Chinese tariffs in their stride. This may be a case of the tariffs already being priced in or being a little softer than was expected, but the important thing is it's far from the end and investors may not be so buoyant if Donald Trump responds quickly and aggressively as he's suggested he will.

The pound is paring its gains on Friday after the EU rejected Theresa May's Chequers proposal, casting doubt on a compromise being found despite the UK being only months from leaving the block. Clearly traders don't view this as too significant a setback or I would expect the drop off in the currency to be much larger and the rejection hardly comes as a surprise given that officials have publicly criticised the proposal in the past.

That said, reports do suggest that EU officials have taken a harder line against May following her insistence that it's Chequers or no deal. Clearly they believe this is a bluff and haven't taken to kindly to such a stance so late in the day. May now faces a tough challenge in returning to the UK ahead of the Conservative party conference no closer to a deal than she was before, leaving her with a massive target on her back as certain colleagues look to position themselves as a better alternative.

The euro is also paring earlier gains after PMIs for September painted a slightly gloomier picture, particularly for the manufacturing sector where trade conflicts, Brexit and falling global demand contributed to a decline in optimism. Manufacturers are clearly a little nervous about the number of risks for the sector and the volatility and difficulties in emerging markets right now will not be giving them much reason for optimism.

The euro area has been experiencing something of a slowdown for much of the year but this hasn't deterred the ECB which still plans to end its bond buying program in December and consider a rate hike in the second half of next year. The latter plans may be shelved though if the economic situation doesn't improve, something policy makers hope will naturally follow an easing of trade tensions and resolution on Brexit. Right now though this feels a long way away.

Notes/Observations

• German and French Manufacturing PMIs miss estimates, Services PMIs mixed
• Asian Stocks continue to recover; Shanghai Comp has biggest weekly rise in 2.5 years
• Japan Long end yields hit multi-month high after BoJ trims daily purchases

Asia:

• Japan 30-yr yield hits highest level since Oct 2017 after BoJ trims daily purchases of over 25-year JGBs; 40-yr JGB yield trades above 1.04% (highest since Jan), Yen hits two month lows
• S&P affirms Australia sovereign rating at AAA; raises outlook to Stable from Negative -Japan core CPI edges higher but remains well below the BoJ 2% target
• Asian Indices closed sharply higher , Shanghai composite rises 4.3% for the week its biggest weekly gain in 2.5 years
• India's NIFTY 50 suffered mid day plunge before recovering; Dewan housing traded as much as 60% lower on liquidity concerns before recovering after management commentary

Europe:

• France PMI fell short of estimates marking a 3 month low as a result of a broad-based slow down across the manufacturing and service sector
• German PMIs came in mixed with manufacturing confidence taking a big hit in September, deteriorating to its lowest in almost four years
• UK senior minister reportedly suggests PM May will have to rewrite her Chequers Brexit plan

Economic Data:

• (FR) FRANCE SEPT PRELIMINARY MANUFACTURING PMI: 52.5 V 53.3E
• (FR) Services PMI: 54.3 v 55.3e (26th month of expansion)
• (DE) GERMANY SEPT PRELIMINARY MANUFACTURING PMI: 53.7 V 55.7E
• (DE) Services PMI: 56.5 v 55.0e (63rd month of expansion)
• (EU) EURO ZONE SEPT PRELIMINARY MANUFACTURING PMI: 53.3 V 54.5E
• (EU) Services PMI: 54.7 v 54.4e (63rd month of expansion)
• (UK) AUG PUBLIC FINANCES (PSNCR): +£3.1B V -£19.2B PRIOR; NET BORROWING: +£5.9B V +£3.0BE
• (CH) Swiss Aug M3 Money Supply Y/Y: 2.5% v 2.4% prior
• (NL) Netherlands Q2 Final GDP Q/Q: 0.8% v 0.7%e; Y/Y: 3.1% v 2.9%e
• (PL) Poland Aug Retail Sales M/M: 0.9% v 1.0%e; Y/Y: 9.0% v 9.1%e
• (FR) France Q2 Wages Q/Q: 0.4% v 0.4%e
• (FR) France Q2 Final GDP Q/Q: 0.2% v 0.2%e; Y/Y: 1.7% v 1.7%e

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx50 +0.7% at 3,428, FTSE +0.8% at 7,429, DAX +0.7% at 12,418, CAC-40 +0.8% at 5,494, IBEX-35 +0.6% at 9,639, FTSE MIB +0.9% at 21,588, SMI +0.3% at 9,024, S&P 500 Futures +0.1%]
• Market Focal Points/Key Themes: European indices open broadly higher and maintained the trend as the session wore on; UK equities supported on Brexit comments; Italy supported during budget talks; markets influenced by quadruple witching day; materials stocks among best performers with all sectors trading in the green; potential interest in Deliveroo from Uber dragging on delivery stocks such as Just eat and Delivery Hero; news flow light with no major earnings expected during US session

Equities

• Consumer discretionary: EuropaCorp ECP.FR +5.3% (potential asset sale), Moss Bros MOSB.UK -13.3% (results)
• Consumer staples: Danone BN.FR +0.5% (analyst action)
• Energy: Repsol REP.ES -2.5% (Caixabank sells stake)
• Industrials: Alstom ALO.FR +0.9% (contract win)
• Materials: Nyrstar NYR.BE -35.4% (profit warning), Vicat VCT.FR +5.7% (discussions with Ciplan)
• Technology: Smiths Group SMIN.UK -6.4% (results)

Speakers

• (CN) China Foreign Ministry: lodged stern representations with U.S.; strongly urges U.S. to withdraw sanctions
• (CY) Cyprus Fin Min Georgiades: last few years have been good for domestic economy; will continue reform agenda

Currencies

• USD/INR rose to an intraday high of 72.47 before fading after a sharp spike lower in Indian Indices on liquidity concerns of Indian Housing name Dewan Housing. GBP/USD falls from highs approaching the 1.31 handle as the EU warns the UK of a possible No-deal Brexit. Down support initially lies around 1.3171

Fixed Income

• Bund Futures trades at 158.89 up 2 ticks after mixed PMI readings in Europe. Resistance moves to 161.82 then 163. A downside break of 158.25 sees 157.69 initially.
• Gilt futures trades at 120.92 down 5 ticks following the move in Treasuries. Continued support at 120.50, with a continued move higher targeting 123.93 then 124.00.
• Friday 's liquidity report showed Thursday's excess liquidity fell from €1.862T to €1.851T. Use of the marginal lending facility stayed steady from €30M to €30M.
• Corporate issuance saw 5 high grade issuers raise $6.7B in the primary market; lipper fund flows IG came in at $1.2B, while HY saw $966M of inflows

Looking Ahead

• 06:00 (IE) Ireland Aug PPI M/M: No est v -1.7% prior; Y/Y: No est v -0.8% prior
• 07:00 (BR) Brazil Sept FGV Consumer Confidence: No est v 83.8 prior
• 07:30 (CL) Chile Central Bank Meeting Minutes
• 07:30 (IN) India Weekly Forex Reserves
• 08:00 (BR) Brazil Sept IBGE Inflation IPCA-15 M/M: 0.2%e v 0.1% prior; Y/Y: 4.4%e v 4.3% prior
• 08:15 (UK) Baltic Dry Bulk Index
• 08:30 (CA) Canada Aug CPI M/M: No est v 0.5% prior; Y/Y: No est v 3.0% prior, CPI Core- Common Y/Y: No est v 1.9% prior, CPI Core- Median Y/Y: No est v 2.0% prior, CPI Core- Trim Y/Y: No est v 2.1% prior, Consumer Price Index: No est v 134.3 prior
• 08:30 (CA) Canada July Retail Sales M/M: +0.3%e v -0.2% prior; Retail Sales Ex Auto M/M: +0.6%e v -0.1% prior
• 09:00 (MX) Mexico July Retail Sales M/M: No est v 0.0% prior; Y/Y: No est v 3.7% prior
• 09:45 (US) Sept Preliminary Markit Manufacturing PMI: 55.0e v 54.7 prior, Services PMI: 55.0e v 54.8 prior, Composite PMI: No est v 54.7 prior
• 13:00 (US) Weekly Baker Hughes Rig Count data
• 15:00 (CO) Colombia July Economic Activity Index (Monthly GDP) Y/Y: 3.0%e v 2.9% prior

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.16720
Open: 1.17764
% chg. over the last day: +0.88
Day's range: 1.17726 – 1.18027
52 wk range: 1.0571 – 1.2557

Yesterday, the US dollar weakened against the basket of major currencies. The escalation of the trade conflict between the US and China slowed, which led to an increase in demand for risky assets. The EUR/USD quotations increased by more than 100 points. At the moment, the trading instrument is consolidating in the range of 1.17700-1.18000. The EUR/USD currency pair is tending to growth. Positions must be opened from the key levels.

The news feed on 2018.09.21:

A number of indices on economic activity in Germany and the Eurozone at 10:30 (GMT+3:00) and 11:00 (GMT+3:00)

Indicators point to the power of buyers: the price has 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.

Stochastic Oscillator is located in the neutral zone, the %K line has crossed the %D line. There are no signals at the moment.

Trading recommendations

Support levels: 1.17700, 1.17400, 1.17100
Resistance levels: 1.18000, 1.18500

If the price fixes above the round level of 1.18000, further growth of the EUR/USD quotes is expected. The movement is tending to 1.18400-1.18600.

An alternative may be the reduction of the EUR/USD currency pair to 1.17400-1.17100.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.31061
Open: 1.32500
% chg. over the last day: +0.96
Day's range: 1.32121 – 1.32764
52 wk range: 1.2361 – 1.4345

Yesterday aggressive purchases of GBP/USD were observed. The growth of quotations exceeded 140 points. Additional support for the pound was provided by the positive statistics on retail sales in the UK. At the moment, the GBP/USD quotations went down. The key trading range is 1.32100-1.32750. The positions must be opened from these marks.

Today, the news feed on the UK economy is calm.

Indicators point to the power of buyers: the price has 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.

Stochastic Oscillator is located in the neutral zone, the %K line has crossed the %D line. There are no signals at the moment.

Trading recommendations

Support levels: 1.17700, 1.17400, 1.17100
Resistance levels: 1.18000, 1.18500

If the price fixes above the round level of 1.18000, further growth of the EUR/USD quotes is expected. The movement is tending to 1.18400-1.18600.

An alternative may be the reduction of the EUR/USD currency pair to 1.17400-1.17100.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.31061
Open: 1.32500
% chg. over the last day: +0.96
Day's range: 1.32121 – 1.32764
52 wk range: 1.2361 – 1.4345

Yesterday aggressive purchases of GBP/USD were observed. The growth of quotations exceeded 140 points. Additional support for the pound was provided by the positive statistics on retail sales in the UK. At the moment, the GBP/USD quotations went down. The key trading range is 1.32100-1.32750. The positions must be opened from these marks.

Today, the news feed on the UK economy is calm.

The price has fixed below 50 MA and 200 MA, which indicates the power of sellers.

The MACD histogram is in the negative zone, but above the signal line, which gives a weak signal to sell USD/CAD.

Stochastic Oscillator is in the neutral zone, the %K line has crossed the %D line. There are no signals at the moment.

Trading recommendations

Support levels: 1.28900, 1.28500
Resistance levels: 1.29300, 1.29800, 1.30150

If the price fixes below the local support of 1.28900, the USD/CAD quotes are expected to fall further. The movement is tending to 1.28500-1.28300.

Alternative option. If the price fixes above the level of 1.29300, you need to look for entry points to the market to open long positions. The target level of movement is tending to 1.29700-1.29900.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 112.254
Open: 112.440
% chg. over the last day: +0.19
Day's range: 112.429 – 112.874
52 wk range: 104.56 – 114.74

The bullish sentiment is prevailing on the USD/JPY currency pair. At the moment, the quotes are consolidating. The local support and resistance levels are 112.550 and 112.850. The trading instrument is tending to growth. We recommend paying attention to the yield of US government bonds. Positions must be opened from key levels.

The news feed on the economy of Japan is calm today.

The price has fixed above 50 MA and 200 MA, which signals the power of buyers.

The MACD histogram is located in the positive zone and above the signal line, which gives a strong signal to buy USD/JPY.

Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which indicates the bearish sentiment.

Trading recommendations

Support levels: 112.550, 112.400, 112.100
Resistance levels: 112.850, 113.000

If the price fixes above the resistance level of 112.850, further growth of the USD/JPY quotes is expected. The movement ie tending to 113.000-113.300.

Alternative option. If the price fixes below 112.550, we recommend you to look for entry points to the market to open short positions. The target movement level is 112.300-112.100.

The Aussie dollar maintains firm bullish tone and rallies for the fifth straight day, to crack psychological 0.7300 barrier and hit new three-week high at 0.7304.

Bulls show signs of fatigue on approach to strong barriers at 0.7312 (Fibo 76.4% of 0.7381/0.7085, reinforced by falling 55SMA).

Overbought slow stochastic and momentum turning south, add to signals of consolidative / corrective action.

Broken Fibo 61.8% barrier marks initial support at 0.7268, with deeper dips expected to find support above 30SMA (0.7241).

The pair is on track for strong bullish weekly close (the biggest weekly gains since the first week of July 2017) which confirms strong bullish stance.

Res: 0.7312, 0.7362, 0.7381, 0.7395
Sup: 0.7280, 0.7268, 0.7241, 0.7215