Sample Category Title

Daily Pivots: (S1) 0.7738; (P) 0.7754; (R1) 0.7771; More...

AUD/USD rises to as high as 0.7796 so far today. The break of 0.7784 minor resistance is taken as the first sign of near term reversal. Intraday bias is back on the upside for 0.7915 resistance first. Break there will confirm that whole decline from 0.8135 has completed. On the downside, below 0.7737 minor support will turn bias back to the downside for 0.7642 instead.

In the bigger picture, medium term rebound from 0.6826 is seen as a corrective move. It might still extend higher but 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. On the downside, break of 0.7500 support will now be an important signal that such corrective rebound is completed. In that case, AUD/USD would be heading back to 0.6826 low in medium term.

Daily Pivots: (S1) 1.2559; (P) 1.2590; (R1) 1.2620; More....

With 1.2622 minor resistance intact, intraday bias in USD/CAD remains on the downside. Sustained trading below 61.8% retracement of 1.2246 to 1.3124 at 1.2581 will bring deeper fall to 1.2061/2246 support zone. On the upside, above 1.2622 will bring recovery. But upside should be limited below 1.2814 support turned resistance and bring another fall.

In the bigger picture, current development turns favors to the case that rise from 1.2061 is a corrective three wave pattern. It could have completed at 1.3124 after hitting 38.2% retracement of 1.4689 to 1.2061 at 1.3065. Focus is now back on 1.2061 and 50% retracement of 0.9406 (2011 low) to 1.4689 (2015 high) at 1.2048. Decisive break there will resume larger down trend from 1.4689 (2016 high) to 61.8% retracement of 0.9406 to 1.4689 at 1.1424.

Daily Pivots: (S1) 151.62; (P) 152.25; (R1) 153.33; More...

GBP/JPY's rally from 144.97 continues today and reaches as high as 153.56 so far. Break of near term channel resistance shows upside acceleration. Intraday bias stays on the upside for a test on 156.59 high next. On the downside, below 152.23 minor support will turn intraday bias neutral first. But another rise would be expected as long as 150.58 resistance turned support holds.

In the bigger picture, the outlook is turning mixed again. On the one hand, the cross was rejected by 55 month EMA (now at 154.20) after breaching it briefing. On the other hand, there was no sustainable selling pushing it through 38.2% retracement of 122.36 to 156.59 at 143.51. The most likely scenario is that GBP/JPY is turning into a sideway pattern between 143.51 and 156.59. And more range trading would now be seen before a breakout, possibly on the upside.

Daily Pivots: (S1) 131.96; (P) 132.14; (R1) 132.49; More....

EUR/JPY's rally resumed after brief consolidation and reaches as high as 132.74 so far. Intraday bias is back on the upside and rebound from 128.94 should target 61.8% retracement of 137.49 to 128.94 at 134.22 and above. On the downside, below 131.79 minor support will turn intraday bias neutral first.

In the bigger picture, price action from 137.49 medium term top are developing into a corrective pattern. Strong support from 55 EMA (now at 129.91) suggests that the first leg has completed at 128.94 already. Nonetheless, break of 137.49 is needed to confirm resumption of the rise from 109.03 (2016 low). Otherwise, we'd expect more corrective range trading another, with risk of another fall to 38.2% retracement of 109.03 to 137.49 at 126.61 before completion.

Daily Pivots: (S1) 1.1834; (P) 1.1862; (R1) 1.1887; More...

Intraday bias in EUR/CHF remains on the upside and further rally is expected to 1.2 handle first. Break will target 61.8% projection of 1.0629 to 1.1832 from 1.1445 at 1.2188 next. On the downside, below 1.1826 minor support will turn intraday bias neutral first. But retreat should be contained well above 1.1649 support to bring another rise.

In the bigger picture, decisive break of 1.1832 should now extend the medium term up trend through prior SNB imposed floor at 1.2000. 2013 high at 1.2649should be the next target. Outlook will remain bullish as long as 1.1445 support holds, even in case of deep pull back.

Daily Pivots: (S1) 0.8700; (P) 0.8677; (R1) 0.8712; More...

Intraday bias in EUR/GBP remains on the downside as fall from 0.8967 is in progress. 61.8% projection of 0.9305 to 0.8745 from 0.8967 at 0.8621 is first target. Sustained break there will pave the way to 100% projection at 0.8407. On the upside, above 0.8670 minor resistance will turn intraday bias neutral first. But outlook will now stay bearish as long as 0.8796 resistance holds.

In the bigger picture, there are various ways to interpret price actions from 0.9304 high. But after all, firm break of 0.9304/5 is needed to confirm up trend resumption. Otherwise, range trading will continue with risk of deeper fall. And in that case, EUR/GBP could have a retest on 0.8303. But 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) 1.5852; (P) 1.5907; (R1) 1.5945; More....

EUR/AUD drops to as low as 1.5848 today and breaches 1.5857 support. Intraday bias is cautiously on the downside now. Sustained break of 1.5857 will be an early sign of trend reversal and deeper fall should be seen to 1.5621 key support for confirmation. On the upside, above 1.5904 will indicate support from 1.5857 and turn bias neutral first.

In the bigger picture, the case for medium term reversal is building up in EUR/AUD. Bearish divergence condition in daily MACD indicates further look of upside momentum ahead of 1.6587 key resistance (2015 high). Break of 1.5621 should confirm medium term topping and bring deeper fall back to 1.5153 and possibly below. Meanwhile, even in case of up trend resumption, we'd be cautious on strong resistance from 1.6587 to limit upside and bring reversal.

Australian dollar strengthens broadly in Asia session as lifted mildly by China's trade data. The Aussie is also among the strongest ones for the week, together with Canadian Dollar and New Zealand Dollar. Euro suffered some selloff overnight, in particular against, Sterling. But the common currency quickly found footing against Dollar.

The financial markets are pretty steady elsewhere. Nikkei is trading up 0.67% at the time of writing while HK HSI is flat. DOW jumped 1.21% to close at 24483.05 but it's limited below near term resistance at 24622.3. S&P 500 was also capped by equivalent resistance at 2672.08. After a brief surge to 1365.24 earlier in the week, Gold dipped back into established range and is hovering around 1340 for the moment. On the other hand, WTI crude oil is staying firm at around 67 after this week's rally.

Technically, one key focus today is 1.2302 in EUR/USD. Despite yesterday's selloff, EUR/USD is still holding onto this minor support level. That makes the rise from 1.2214 slightly in favor to extend through 1.2396 resistance. Meanwhile, EUR/AUD is also pressing 1.5857 support for the moment. Firm break of which will be an early sign of medium term trend reversal and could drag the cross down to 1.5621 in near term.

Trump reconsiders joining TPP, but wait...

Syria tension is temporarily off the focus for the moment. Attention has turned to report that US President Donald Trump ordered White House economic adviser Larry Kudlow and Trade Representative Robert Lighthizer to examine the benefits of re-entering the Trans-Pacific Partnership trade pact. That sounded to be another 180 degree turn in Trump's position as withdrawing TPP was among the first things he did after taking office.

However, Trump himself tweeted today that "Would only join TPP if the deal were substantially better than the deal offered to Pres. Obama. We already have BILATERAL deals with six of the eleven nations in TPP, and are working to make a deal with the biggest of those nations, Japan, who has hit us hard on trade for years!"

Japan Finance minister Taro Aso also said that Trump "is a person who could change temperamentally, so he may say something different the next day". Aso also emphasized that "after the U.S. withdrawal, Japan, recognizing the significance of free trade, has led the initiative in pulling together the TPP 11."  Aso would welcome US rejoining "if it's true" and hailed that "our efforts have borne fruit if the United States judged it would be better to rejoin."

China reported rare trade deficit in March, Q1 imports from EU surged

China reported a rate trade deficit of USD -5b in March versus expectation of USD 27.8b surplus. That's also the first monthly trade deficit since last February. Imports rose 5.9% yoy while exports dropped -2.7% yoy. Trade surplus with US dropped to USD 15.3b. In CNY terms trade balance came in at CNY -30b deficit versus expectation of CNY 160b surplus. Imports dropped -9.8% yoy while exports also dropped -9.8% yoy.

For the quarter from January to March, 2018, China's trade surplus came in at USD 49.1b, dropped -23.2% yoy from Q1 of 2017. Exports rose 14.1% yoy. But import grew even stronger by 18.9% yoy. In CNY terms, Q1 trade surplus rose came in at CNY 326.2b with exports increased by 7.4% yoy and imports jumped even stronger by 11.7% yoy.

Also for Q1, export to US rose 14.8% yoy to USD 99.9b while imports from US rose 8.9% yoy to USD 41.7b. Exports to EU rose 13.2% yoy to USD 90.2b while imports from EU rose 17.5% yoy to USD 63.5b.

New Zealand manufacturing PMI signed slower expansion

New Zealand BusinessNZ Performance of Manufacturing Index (PMI) dropped -1.1 to 52.2 in March. That's also the second consecutive decline in 2018 even though it still signaled expansion. Nonetheless, BusinessNZ's executive director for manufacturing Catherine Beard noted a positive point that the proportion of positive comments in March (55.1%) picked up from both February (51.4%) and January (50.7%).  BNZ Senior Economist, Craig Ebert said that the weak spot in March's PMI was its production index.

Looking ahead

The final day of the week could be quite quiet. Germany will release March CPI final in European session. Eurozone will also release trade balance. Later in the day, US will release U of Michigan consumer sentiment.

EUR/AUD Daily Outlook

Daily Pivots: (S1) 1.5852; (P) 1.5907; (R1) 1.5945; More....

EUR/AUD drops to as low as 1.5848 today and breaches 1.5857 support. Intraday bias is cautiously on the downside now. Sustained break of 1.5857 will be an early sign of trend reversal and deeper fall should be seen to 1.5621 key support for confirmation. On the upside, above 1.5904 will indicate support from 1.5857 and turn bias neutral first.

In the bigger picture, the case for medium term reversal is building up in EUR/AUD. Bearish divergence condition in daily MACD indicates further look of upside momentum ahead of 1.6587 key resistance (2015 high). Break of 1.5621 should confirm medium term topping and bring deeper fall back to 1.5153 and possibly below. Meanwhile, even in case of up trend resumption, we'd be cautious on strong resistance from 1.6587 to limit upside and bring reversal..

Economic Indicators Update

Market movers today

Another quiet day in terms of economic data releases with the preliminary US consumer confidence indicator from University of Michigan for April. Despite market volatility and trade policy uncertainty, we do not see the case for a significant drop in consumer confidence at the moment and still expect private consumpt ion to be a main growth driver in the US.

Selected market news

Yesterday's key event s were the ECB minutes and the Swedish inflat ion figures.

Swedish inflation was in line with our expectations, and a tenth below the consensus as downside risk appears to have been realized. Most interest ing here is that CPIF ex. energy remained at 1.5 % yoy, which is 0.3 p.p. below Riksbank's forecast . This means that the decline we expected in April to some extent happened already in March. Over the next four months a lot base effects will be in play. Presumably this number is not what Riksbank hoped for.

The ECB minutes released yesterday do not make us change our assessment of ECB being slow in its normalisat ion process, but risks of ECB coming later than current ly envisaged in June have increased.

Risk sentiment was positive as equity indices rose across Europe and in the US. Overnight , news from Trump indicate that the US may want to join the Trans-Pacific Partnership (a t rade deal which Trump withdrew the US from after taking office). This suggest s another conciliatory signal from the US in recent days and should support risk appet ite. Nikkei is up overnight while Hang Seng is unchanged.

GBPUSD Short Term Elliott Wave view suggests that the rally from 3.1.2018 low (1.371) is unfolding as a 5 waves impulse Elliott Wave Structure. Up from 3.1.2018 low, Minor wave 1 ended at 1.4245 and Minor wave 2 ended at 1.3964. Pair has since broken above Minor wave 1 at 1.4245, suggesting that the sequence from 3.1.2018 low is bullish and the next leg higher in Minor wave 3 has started. Minor wave 3 is in progress with internal subdivision as 5 waves impulse of lower degree. Up from 1.3964, Minutte wave (i) ended at 1.4022, Minutte wave (ii) ended at 1.3981, Minutte wave (iii) ended at 1.422, and Minutte wave (iv) ended at 1.4144.

Pair has scope to do another minor leg higher to complete Minutte wave (v). This next leg higher should also complete Minute wave ((i)) of a higher degree. Afterwards, it should pullback in Minute wave ((ii)) in 3, 7, or 11 swing to correct cycle from 4/5 low before the rally resumes. We don’t like selling the proposed pullback and expect pair to find support in the pullback in 3, 7, or 11 swing as far as pivot at 4/5/2018 low at 1.3964 stays intact.

GBPUSD Elliott Wave 1 Hour Chart