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Daily Pivots: (S1) 1.5639; (P) 1.5684; (R1) 1.5720; More....

EUR/AUD's decline extends lower today and breaks 1.5621 key support level. That's taken as an indication of medium term reversal. Intraday bias remains on the downside for 1.5153 support next. On the upside, break of 1.5726 resistance is needed to indicate short term bottoming. Otherwise, outlook will remain bearish in case of recovery.

In the bigger picture, rally from 1.3624 (2017 low) should have completed at 1.6189 already, ahead of 1.6587 key resistance (2015 high). 1.6189 is seen as a medium term top. Deeper fall would be seen to 38.2% retracement of 1.3624 to 1.6189 at 1.5209 first. Decisive break there will pave the way to 61.8% retracement at 1.4604. In that case, we'll look for bottoming again below 1.4604. On the upside, break of 55 day EMA (now at 1.5849) is needed to indicate completion of the fall from 1.6189. Otherwise, further fall is expected in medium term, even in case of strong rebound.

Daily Pivots: (S1) 0.8722; (P) 0.8739; (R1) 0.8756; More...

Intraday bias in EUR/GBP remains neutral with mixed near term outlook. On the downside, break of 0.8679 support should confirm completion of the rebound form 0.8620. And intraday bias will be turned back to the downside for this support. Whole decline from 0.9305 will likely be resuming too. On the upside, above 0.8844 will resume the rebound from 0.8620 and target 0.8967 cluster resistance (50% retracement of 0.9305 to 0.8620 at 0.8963).

In the bigger picture, for now, the decline from 0.9305 is seen as a leg inside the long term consolidation pattern from 0.9304 (2016 high). Such consolidation pattern could extend further. Hence, in case of strong rally, we'd be cautious on strong resistance by 0.9304/5 to limit upside. Meanwhile, in another decline attempt, we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside.

Daily Pivots: (S1) 1.1708; (P) 1.1765; (R1) 1.1801; More...

EUR/CHF's decline continues today and reaches as low as 1.1717 so far. Intraday bias remains on the downside for 61.8% retracement of 1.1445 to 1.2004 at 1.1659. Sustained break will target key support level at 1.1445. On the upside, above 1.1770 minor resistance will turn bias neutral first. But near term outlook will remain bearish as long as 1.1864 support turned resistance holds.

In the bigger picture, current development suggests solid rejection by prior SNB imposed floor at 1.2000. Considering bearish divergence condition in daily MACD, 1.2004 could be a medium term top. And price action from 1.2004 is correcting the up trend from 1.0629. Hence, for now, deeper fall could be seen back to 1.1445, which is close to 38.2% retracement of 1.0629 to 1.2004 at 1.1479. We'd expect strong support from there to bring rebound to extend the medium term corrective pattern.

Daily Pivots: (S1) 1.3442; (P) 1.3485; (R1) 1.3515; More...

GBP/USD's fall from 1.4376 has finally resumed and it dips to as low as 1.3409 so far. Intraday bias is back on the downside for 50% retracement of 1.1946 to 1.4376 at 1.3161 next. On the upside, break of 1.3568 resistance is needed to indicate short term bottoming. Otherwise, outlook will remain bearish in case of recovery.

In the bigger picture, current development suggests that whole medium term rebound from 1.1936 (2016 low) has completed at 1.4376 already, with trend line broken, on bearish divergence condition in daily MACD, after rejection from 55 month EMA (now at 1.4223). 38.2% retracement of 1.1936 (2016 low) to 1.4376 at 1.3448 should now be firmly taken out. Next target will be 61.8% retracement at 1.2874 and below. Outlook will stay bearish as long as 55 day EMA (now at 1.3801) holds, even in case of strong rebound.

Daily Pivots: (S1) 0.7489; (P) 0.7519; (R1) 0.7540; More...

Intraday bias in AUD/USD remains neutral as this point as range trading continues above 0.7411. Stronger rebound cannot be ruled out. But upside should be limited by 38.2% retracement of 0.8135 to 0.7144 at 0.7688 to bring decline resumption eventually. On the downside, break of 0.7411 will resume the fall from 0.8135 and target cluster support at 0.7328 (61.8% retracement of 0.6826 to 0.8135 at 0.7326).

In the bigger picture, medium term rebound from 0.6826 is seen as a corrective move. Break of 0.7500 key support suggests that such correction is completed at 0.8135. Deeper decline would be seen back to retest 0.6826 low. In case of another rise, we'd expect strong resistance from 38.2% retracement of 1.1079 to 0.6826 at 0.8451 to limit upside to bring long term down trend resumption eventually.

Daily Pivots: (S1) 1.2808; (P) 1.2863; (R1) 1.2941; More.....

Intraday bias in USD/CAD remains neutral as it's staying in range of 1.2728/2996. For now, we're viewing price actions from 1.3124 as a corrective move that could be completed at 1.2526 already. Break of 1.2996 will turn bias to the upside and extend the rise from 1.2526 to 1.3124 key resistance next. However, break of 1.2728 will dampen this bullish view and bring deeper fall back to 1.2526 and possibly below.

In the bigger picture, we're favoring the case that that rebound from 1.2061 has not completed yet. Focus is back on 38.2% retracement of 1.4689 to 1.2061 at 1.3065. Sustained trading above there will confirm medium term bullish reversal. That is, down trend from 1.4689 has completed at 1.2061 already. In that case, next target will be 61.8% retracement at 1.3685. However, break of 1.2526 support will dampen this bullish view again. And, focus will be back on 1.2061 key support level, which is close to 50% retracement of 0.9406 (2011 low) to 1.4689 (2015 high) at 1.2048.

Daily Pivots: (S1) 1.1739; (P) 1.1782 (R1) 1.1814; More....

EUR/USD's fall extends to as low as 1.1721 so far today. Intraday bias remains on the downside for 38.2% retracement of 1.0339 to 1.2555 at 1.1708 medium term fibonacci level first. Decisive break there will target 50% retracement at 1.1447 next. On the upside, touching 1.1821 minor resistance will turn bias neutral and bring consolidations. But outlook will continue to stay bearish as long as 1.1995 resistance holds.

In the bigger picture, current development suggests that EUR/USD was rejected by 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. And, a medium term top was formed at 1.2555 already. Decline from there should extend further. Break of 38.2% retracement of 1.0339 to 1.2555 at 1.1708 will pave the way to 61.8% retracement at 1.1186. For now, even in case of rebound, we won't consider the fall from 1.2555 as finished as long as 55 day EMA (now at 1.2113) holds.

EURUSD has come under renewed selling pressure over the last five trading days, slipping below the 1.1820 key level. The price remains under pressure and risk is still to the downside as prices continue to drift lower, hitting a new 5-month low of 1.1739. The short-term technical indicators are bearish, pointing to more weakness in the market.

Having a look at the daily timeframe, the single currency is developing well below the 20- and 40-simple moving averages (SMAs) versus the greenback. The RSI indicator declined below the 30 level, signaling further losses, while the MACD oscillator fell below the trigger line and is strengthening its negative momentum.

Immediate support is being provided by the 38.2% Fibonacci retracement level around 1.1720 of the upleg from 1.0340 to 1.2554. Moreover, should prices dip lower again, the next support would likely come from the 1.1550 barrier, taken from the low on November 2017.

In case of an upward attempt, EURUSD would likely meet resistance at the 1.1820 barrier. A break above this level, would ease the downside pressure, and touch the 20-day SMA around 1.1950. Further gains could drive the pair towards the 23.6% Fibonacci mark of 1.2030 and would help turn the short-term bias to a slightly positive one.

In the medium-term, the bullish outlook turned to bearish as the price dropped below the significant 1.2160 hurdle, which was acting as strong support of the trading range 1.2160 – 1.2540. Also, the price completed the fifth straight negative week.

The pair establishes above 111 level in early Monday's trading after the US announced that US-China trade war is on hold. Tensions over bigger trade conflicts which shook markets in past couple of months eased, boosting risk sentiment which pushed the greenback to new four-month highs against yen. Fresh bullish acceleration on Monday marks an extension of strong rally previous week (the third biggest weekly rally this year) and eyes target at 111.96 (weekly cloud base), with break above 112 handle to expose 112.35 (Fibo 76.4% of 114.73/104.63 descend). Today's rally broke above pivotal 110.87 barrier (Fibo 61.8% of 114.73/104.63), which now acts as initial support, with daily close above to confirm strong bullish signal. Rising 10SMA approaches 200SMA in attempts to form golden cross and reinforce strong bullish stance. Corrective downticks on overbought daily techs should be ideally contained at 110.87/60 zone (broken Fibo barrier/last Friday's low), while extended correction is expected to hold above key supports at 110.20/16 (bull-trendline off 104.63 low / broken 200SMA).

Res: 111.48, 111.96, 112.05, 112.35
Sup: 111.00, 110.87, 110.60, 110.15

General Trend:

• US equity futures opened higher as US Treasury Sec Mnuchin said the previously announced tariffs on China would be halted as talks continue
• Asian equities generally track the strength in US futures
• Hang Seng Utilities index rises over 2%; China’s Xi commented on fight against pollution
• Aluminum producer Rusal rallies over 5%; London Metals Exchange (LME) said to seek to lift ban on some of the co.'s products (HK Press)
• US Agricultural commodities rise after Mnuchin’s comments on China; Soybean Futures up over 2%
• Japan exports rebound in April, trade surplus with the US widens
• Japan PM Abe Cabinet approval ratings rebound off of recent lows, say multiple press polls
• New Zealand Q1 retail sales grow at slowest q/q pace since 2015; Kiwi and bond yields decline
• AUD/JPY outperforms; China is Australia’s largest trading partner
• Asian currencies trade generally weaker: Rupiah declines further despite intervention threat
• Indonesia 10-yr bond yield rises over 15bps
• Equity markets in Hong Kong and South Korea to be closed for holidays on Tuesday

Headlines/Economic Data

Japan

• Nikkei 225 opened 0.0%; closed +0.3%
• TOPIX Information & Communications index +0.7%, Securities +0.4%; Marine Transportation -1%, Iron &Steel -1%, Real Estate -0.4%
• (JP) JAPAN APR TRADE BALANCE: ¥626B V ¥440BE; ADJ ¥550B V ¥115BE; Exports y/y: 7.8% v 8.7%e (17th straight rise); Imports y/y: 5.9% v 9.8%e
• (JP) Japan's largest banks sell record super long JGBs in April – JSDA
• (JP) Japan targeting primary balance surplus by FY25 (inline with prior announced expected delay) – Nikkei
• (JP) Japan FSA asked regional banks to limit their unrealized losses on securities investments to the amount of profits on core lending business – financial press

Korea

• Kospi opened +0.1%
• (KR) South Korea Apr PPI m/m: 0.1% v 0.0% prior; y/y: 1.6% v 1.3% prior
• (KR) South Korea May 1-20 Exports Y/Y: +14.8% v 8.3% prior; Imports Y/Y: +10.7% v 20.8% prior
• (KR) South Korea parliament approves KRW3.8T extra budget, will make use of an extra budget as soon as possible to create new jobs for young people and help industrial regions grappling with massive layoffs
• (KR) South Korea sells KRW 824B in 20-yr treasury bonds; avg yield 2.76%
• (KR) Multiple reporters from South Korea said to head to North Korea nuclear testing site - Yonhap [Reminder: On May 13th, it was reported that North Korea was said to be planning to dismantle its nuclear test site at a ceremony planned for May 23-25th (Korean press)]

China/Hong Kong

• Hang Seng opened +0.6%, Shanghai Composite +0.4%
• Hang Seng Utilities index +2.1%, Industrials Goods +1.7%, Info Tech +1.6%, Services +1.4%, Financials +1.2%
• (CN) China agrees to purchase more US goods in effort to avoid trade war, but refuses to commit to US demand to narrow trade gap by $200B
• (US) Treasury Sec Mnuchin: planned tariffs on Chinese steel and aluminum, as well as $150 billion worth of other Chinese goods, would be put on hold as talks with China proceed - press
• (US) US Trade Rep Lighthizer said the US may still resort to tariffs and other tools, including investment restrictions and export regulations unless China makes real structural change to its economy

US financial press

• (CN) Analysts warn that addition of 234 China companies to MSCI will not have as big of impact as being claimed – SCMP
• (CN) China Iron & Steel Industry Association: By 2025 crude steel production capacity will be reduced to 10B tons
• (CN) China power companies said to have asked units to avoid buying coal at current high prices - China Daily
• (CN) China PBoC Open Market Operation (OMO): Skips OMO for second consecutive session; Net injection nil v nil prior
• (CN) China to boost the role of price based monetary targets with interest rates as core - press citing 2016-2020 plan for financial sector
• (CN) China PBoC sets yuan reference rate at 6.3852 v 6.3763 prior

Australia/New Zealand

• ASX 200 opened 0.0%, closed -0.1%
• ASX 200 Utilities index +1.1%, Consumer Discretionary +0.5%; Telecom -1.4%, Resources -0.3%, Financials -0.2%
• AGL, [+1.1%], AGL.AU Rejects offer from Chow Tai Fook and Alinta for Liddell; offer is not in best interest of AGL or shareholders; Affirms decision to close Liddell in Dec 2022
• (NZ) NEW ZEALAND Q1 RETAIL SALES EX-INFLATION Q/Q: 0.1% V 1.0%E (weakest reading since Q2 2015); Y/Y: 3.0% V 4.8% PRIOR
• Santos, [+3.5%], STO.AU Advises shareholders to take no action on $5.21/shr ( A$6.95/shr) $10.9B offer from Harbour Energy (above prior offer of $4.98/share); Harbour Energy: Most recent proposal for Santos is 'best and final' - AFR
• (AU) Australia sells A$400M v A$400M indicated in Nov 2022 bonds, avg yield 2.4172% v 2.4294% prior, bid to cover 7.11x v 6.08x prior
• HT&E, [-2%], HT1.AU oOh!Media confirms made a revised offer for Adshel at A$470M cash, offer has not been accepted or rejected yet; HT1.AU oOHMedia offer is not the most attractive, have offered to engage on the offer

Other Asia

• Institute of International Finance (IIF): Currently many emerging markets are more exposed to the appreciation of the US dollar (USD)
• (TH) Thailand Q1 GDP q/q: 2.0% v 1.2%e; y/y: 4.8% v 4.0%e
• (ID) Indonesia Central Bank: To hold 3 FX swap auctions this week: to ensure ample liquidity in interbank market

North America

• TSLA Announces reduction of delay in Model 3 deliveries to 4-6 months (prior 12-18 months) - press
• GE [GE]: Said to be near deal to merge transportation unit with Wabtec [WAB]
• (US) Treasury Sec Mnuchin: President Trump is more interested in striking a good deal with Canada and Mexico than quickly finishing NAFTA talks in order to get a vote from Congress this year - press
• (US) Trump Lawyer Giuliani said Special Counsel Mueller plans to complete obstruction inquiry into the President by Sept 1 – NYT
• (US) US DoJ Spokesperson: Requested expanded review of surveillance application process to determine if there were political motivations in the FBI Russia probe of Trump

Europe

• (UK) Foreign Sec Johnson calls on MPs to give PM May more time and space to deliver on her Brexit promises - UK press
• (UK) May Household Finance Index: 44.7 v 43.4 prior (highest level since Dec 2016)
• (UK) May Rightmove House Prices m/m: 0.8% v 0.4% prior; y/y: 1.1% v 1.6% prior

Levels as of 02:00ET

• Hang Seng +1.2%; Shanghai Composite +0.7%; Kospi +0.2%
• Equity Futures: S&P500 +0.6%; Nasdaq100 +0.8%, Dax closed; FTSE100 +0.6%
• EUR 1.1779-1.1744; JPY 111.29-110.76; AUD 0.7533-0.7511;NZD 0.6932-0.6891
• Jun Gold -0.4% at $1,286/oz; Jul Crude Oil +0.7% at $71.88/brl; Jul Copper +0.8% at $3.08/lb