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Daily Pivots: (S1) 1.1936; (P) 1.1955; (R1) 1.1975; More...

Intraday bias in EUR/CHF remains neutral as consolidation from 1.2004 is still unfolding. With 1.1888 minor support intact, further rally is expected. Sustained break of 1.2 level will extend larger up trend to 61.8% projection of 1.0629 to 1.1832 from 1.1445 at 1.2188. However, consider bearish divergence condition in 4 hour MACD, break of 1.1888 will indicate short term topping. In that case, deeper pull back would be seen back to 1.1445/1832 support zone.

In the bigger picture, long term up trend in EUR/CHF is still in progress. Prior SNB imposed floor at 1.2000 was already met but there is no sign of reversal yet. As long as 1.1445 support holds, we'd expect the up trend to extend to 2013 high at 1.2649 next.

Daily Pivots: (S1) 1.2814; (P) 1.2865; (R1) 1.2896; More....

Intraday bias in USD/CAD remains neutral for consolidation below 1.2913 temporary top. As long as 1.2748 minor support holds, further rise is expected. Break of 1.2913 will target a test on 1.3124 high next. Though, break of 1.2748 will turn focus back to 1.2526 support instead.

In the bigger picture, current development suggests 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.

Daily Pivots: (S1) 0.7499; (P) 0.7529; (R1) 0.7568; More...

Intraday bias in AUD/USD remains neutral for consolidation above 0.7472 temporary low. As long as 0.7583 minor resistance holds, the consolidation should be relatively brief and recent fall should resume sooner rather than later. Below 0.7472 and sustained break of 0.7500 will indicate medium term reversal and target next support at 0.7328. However, break of 0.7583 will indicate short term bottoming, on bullish convergence condition in 4 hour MACD. And stronger rebound could be seen back to 38.2% retracement of 0.8135 to 0.7472 at 0.7725 and possibly above.

In the bigger picture, medium term rebound from 0.6826 is seen as a corrective move. Decisive break of 0.7500 key support will suggest that such correction is completed. In that case, 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) 1.1914; (P) 1.1955 (R1) 1.1999; More....

Downside momentum in EUR/USD continues to diminish with 4 hour MACD staying above signal line. But with 1.2008 minor resistance intact, intraday bias remains on the downside for 200% projection of 1.2475 to 1.2214 from 1.2413 at 1.1891. Break will target 261.8% projection at 1.1730. On the upside, though, break of 1.2008 minor resistance will indicate short term bottoming and bring stronger rebound back to 4 hour 55 EMA (now at 1.2064) or above.

In the bigger picture, current decline and firm break of 1.2154 support confirms rejection by 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. A medium term top should be in place at 1.2555 and deeper decline would be seen back to 38.2% retracement of 1.0339 to 1.2555 at 1.1708 first. With current downside acceleration, there is prospect of hitting 61.8% retracement at 1.1186 before completing the decline. But still, we'll need to look at the structure to before deciding if it's a corrective or impulsive move.

Daily Pivots: (S1) 1.3478; (P) 1.3532; (R1) 1.3578; More...

Downside momentum in GBP/USD continues to diminish with 4 hour MACD staying above signal line. But with 1.3588 minor resistance intact, intraday bias remains on the downside for 1.3448 fibonacci level next. On the upside, above 1.3588 minor resistance will argue that a short term bottom is formed. In that case, stronger recovery could be seen back to 4 hour 55 EMA (now at 1.3725) and above before staging another fall.

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). Deeper decline should be seen to 38.2% retracement of 1.1936 (2016 low) to 1.4376 at 1.3448 first. Break will target 61.8% retracement at 1.2874 and below. Outlook will stay bearish as long as 55 day EMA (now at 1.3925) holds, even in case of strong rebound.

Daily Pivots: (S1) 0.9965; (P) 0.9994; (R1) 1.0025; More...

Upside momentum continues to diminish with 4 hour MACD staying below signal line. But with 0.9937 minor support intact, intraday bias in USD/CHF stays on the upside for 1.0037 resistance. Decisive break there will pave the way to 1.0342 key resistance next. On the downside, though, below 0.9937 minor support will indicate short term topping. And, in that case, deeper retreat could be seen to 4 hour 55 EMA (now at 0.9904) and below before staging another rise.

In the bigger picture, medium term decline from 1.0342 has completed with three waves down to 0.9186. Rise from there is currently viewed as a leg inside the long term range pattern. Hence, while further rally would be seen, we'd be cautious on strong resistance from 1.0342 to limit upside. For now, further rise is expected as long as 0.9648 resistance turned support holds, even in case of pull back.

General Trend:

• Asian equities trade mostly higher as Japan returns from holiday
• Energy shares gain as WTI Crude moves above $70/bbl for the first time since late 2014; Iran nuclear deadline in focus
• Nasdaq Futures rise over 0.7% during Asia
• No trade deal announced following last week’s US/China talks
• PBoC skips daily open market operation, says banking system liquidity at ‘relatively high level’
• Standard Chartered HK raises US dollar (USD) deposit rates amid rise in money market rates
• This week, Japan PM Abe and China Premier Li are expected to hold a summit in Tokyo

Headlines/Economic Data

Japan

• Nikkei 225 opened +0.2%; closed -0.0%
• TOPIX Securities index -1.6%, Marine Transportation -0.8% ; Iron & Steel +1.1%, Retail Trade +0.5%, Real Estate +0.5%
• (JP) Bank of Japan (BOJ) March 8-9th Policy Meeting Minutes: BOJ should maintain easy policy as still a long way to go to hit price goal
• (JP) Japan said to target summit with North Korea by the end of 2018 - US financial press

Korea

• Kospi opened closed for holiday
• (KR) US official Bolton said to say that President Trump and North Korea leader Kim will meet in mid-June - South Korea Press
• (KR) Bank of Korea (BOK) Gov Kim: Korea-Japan talks for currency swap deal could resume soon

China/Hong Kong

• Hang Seng opened +0.6%, Shanghai Composite +0.1%
• Hang Seng Energy index +2.3%, Consumer Goods +1.9%, Materials +1.4%, Services +0.8%, Telecom +0.8%, Financials +0.6%; Info Tech -0.2%
• Shanghai Composite property index rises over 1%
• (CN) Summary of US visit to China to discuss trade dispute last week: not much headway made; US asked China to reduce its trade surplus by $200B while China requested the US dial back its tariff threat and end an investigation into forced technology transfers
• 763.HK Taiwan said to extend ZTE export curbs to DRAM chips - Taiwanese Press
• (CN) China said to be planning a $47B fund to boost Its semiconductor industry - press
• (CN) China Ministry of Commerce (MOFCOM) with other departments to announce series of measures aimed at boosting imports, including food and medical equipment and medicine
• (CN) China Banking and Insurance Regulatory Commission (CBIRC): commercial bank's risk exposure to an interbank client shall not exceed 25% of its tier one capital, effective July 1st with 3-yr transition period
• (CN) China PBoC Open Market Operation (OMO): Skips v Injected CNY20B in 7-day reverse repos prior; Net: CNY0B drain v CNY40B drain prior
• (CN) China PBoC sets yuan reference rate: 6.3584 v 6.3521 prior
• (CN) PBoC Gov Yi Gang: There has been no FX intervention in nearly 1-year - Chinese Press
• (HK) Hong Kong SFC said to plan regulations related to sales of margin loans – HK Press
• (HK) Hong Kong 3-month HKD Hibor rises for 16th straight session; continues to trade at highest since 2008, currently near 1.74220%

Australia/New Zealand

• ASX 200 opened +0.2%, closed +0.3%
• ASX 200 Resources index +1%, REIT +0.7%, Energy +0.5%, Financials +0.2%
• Westpac Banking, WBC.AU Reports H1 (A$) Cash profit 4.3B v 4.2Be; Net interest income 8.3B v 7.7B y/y
• (AU) Australia Apr AIG Performance of Construction Index: 55.4 v 57.2 prior
• (AU) Australia to release 2018/19 budget May 8th: govt is projecting a return to surplus in 2019/20, a year earlier than the 2020/21 prior forecast.
• (AU) Australia buys back A$400M bonds across 2019 lines
• (AU) Australia PM Turnbull announce review into fuel reserves, with only just days of emergency stocks remaining – press; Note according to Fairfax: Australia only a 22-day supply of crude oil, 59 days of LPG, 20 days of petrol, 19 days of aviation fuel and 21 days of diesel.
• (AU) Australia sells A$400M v A$400M indicated in May 2028 bonds, avg yield 2.7436% v 2.6149% prior, bid to cover: 4.72x v 4.17x prior
• (AU) Australia Apr NAB Business Conditions: 21 v 15 prior; Confidence: 10 v 8 prior
• Blue Sky, [-10%], BLA.AU To withdraw FY18 earnings guidance; to withdraw FY18 and FY19 guidance for fee earning AUM; Chairman to stand down from role at AGM

North America

• (US) Volcano Kilauea on Hawaii erupts, destroys 9 homes; officials unsure when eruptions will stop; also reports of a 6.9 and 5.4 magnitude earthquake
• (US) Fed's Quarles (hawk, FOMC voter): AI in finance can help make bank credit more available; big data can help financial stability - speaking at conf in Florida
• (US) Fed's Kaplan (dove, non-voter): US growth faces challenges in the medium term; US debt is on an unsustainable path relative to GDP
• Berkshire Hathaway [BRK.A]: Reports Q1 Net EPS (Class A) -$692 v +$2,469 y/y; Rev $58.5B v $65.2B y/y

Europe

• (US) France, Germany, UK joint comment: EU must be ready to react to US trade tariffs - financial press
• (IR) Iran President Rouhani said government has plans in place for any decision that US President Trump might make regarding nuclear agreement – financial press
• BPI.PT CaixaBank has acquired a 8.4% stake in Banco BPI from Allianz Group for €178M/€1.45/shr, will propose de-listing of BPI to raise stake to 100%
• Swiss Re [RUKN.CH]: Follow Up: Talks with Softbank said to be near collapse - financial press
• Air France [AF.FR]: Chairman and CEO Jean-Marc Janaillac confirms decision to resign, effective may
• (GR) Top four Greek banks would lose €15.B of capital by 2020 under an adverse economic scenario

Levels as of 02:00ET

• Hang Seng +0.4%; Shanghai Composite +1.3%; Kospi closed
• Equity Futures: S&P500 +0.3%; Nasdaq100 +0.7%, Dax +0.2%; FTSE100 closed
• EUR 1.1978-1.1941; JPY 109.22-108.75; AUD 0.7543-0.7512;NZD 0.7041-0.7012
• Jun Gold 0.0% at $1,315/oz; Jun Crude Oil +0.9% at $70.31/brl; Jul Copper -0.1% at $3.08/lb

One of the first things i stumbled into this morning was a potential setup on the USDSGD pair. After a lengthy downtrend we've seeing price stall/consolidate for a couple of months now. Consider the daily chart below.

You can see that our red supply zone has been tested numerous times in the past, and since price has approached it yet again, we're awaiting to see if it has the momentum to launch through or if it will respect the area of resistance and grind lower toward our demand zone (blue). It's early days yet, as I like to see a few more tests of consolidation zones before it breaks, but it seems to be shaping up.

Let's drop down to the 4H timeframe.

You can see in the recent candles that there has been some indecision at these recent highs, which could indicate that price isn't yet ready to break upward. This could potentially be played as a range trade, where a trader could look for a convincing rejection of resistance aiming to target 1.32 area or even down to our coloured support zone.

Market movers today

Today is a very quiet day in terms of economic data releases with German factory orders and euro area Sentix investor confidence being the two most interesting releases.

Notice that the UK is closed due to Early May Bank Holiday.

Selected market news

Friday's April US jobs report was moderate and mixed . Non-farm payrolls and wage growth were lower than expected, but the unemployment rate hit a near post-millennial low. The numbers were skewed by the weather and a fall in the size of the labour force. The market reaction was positive. Initially US Treasury yields fell slightly, but as equity markets rallied, rates begun to rise in tandem. EUR/USD tested new lows (1.1912). We expect the Fed to raise rates three times this year with risks skewed towards a fourth hike.

Non-farm payrolls came in below market expectations of 193,000 at 164,000. Weather affected payrolls negatively. After six months of hovering at 4.1% the unemployment rate tapped a post-December 2000 low at 3.9%, primarily through a fall in the size of the labour force.

Market attention is centred on wage growth, as due to structural reasons the unemployment rate continues to be a biased indicator of business cycle attrition. Alas, average hourly earnings grew below expectations at an annual rate of 2.6%. May average earnings growth was revised down from 2.7% to 2.6%.

Also on Friday emerging markets flared up. Argentina defended its tumbling currency by hiking interest rates a third time in a week from 27.25% to 40%. The Turkish lira also hit multi-year lows against the dollar. We have consistently flagged large current account deficits, accelerating inflation and low FX reserves as key macroeconomic detractors for these currencies.

Daily Pivots: (S1) 108.69; (P) 108.98; (R1) 109.32; More...

Intraday bias in USD/JPY remains neutral for the moment. The pull back from 110.02 short term top halted after drawing support from near term channel. But break of 110.02 is needed to confirm resumption of rise from 104.62. Otherwise, more consolidation could be seen. And below 108.64 will bring deeper fall to 38.2% retracement of 104.62 to 110.02 at 107.95. In that case, we'd expect strong support fro 107.95 to contain downside and bring rebound. On the upside, break of 110.02 will resume the rise from 104.62 to t 61.8% retracement of 114.73 to 104.62 at 110.86 next.

In the bigger picture, corrective decline from 118.65 (2016 high) has completed with three waves down to 104.62. Rise from 104.62 is possibly resuming the up trend from 98.97 (2016 low). This will be the preferred case as long as 55 day EMA (now at 107.95) holds. Decisive break of 114.73 resistance will confirm our view and target 118.65 and above. However, sustained break of 55 day EMA will dampen this bullish view and turn focus back to 104.62 low instead.