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For the 24 hours to 23:00 GMT, the USD declined 0.38% against the CHF and closed at 0.9561.

Macroeconomic data indicated that Switzerland’s seasonally adjusted unemployment rate remained steady at 2.9% in March, meeting market consensus.

In the Asian session, at GMT0300, the pair is trading at 0.9569, with the USD trading 0.08% higher against the CHF from yesterday’s close.

The pair is expected to find support at 0.9547, and a fall through could take it to the next support level of 0.9524. The pair is expected to find its first resistance at 0.9601, and a rise through could take it to the next resistance level of 0.9632.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.52% against the CAD and closed at 1.2706.

The Canadian Dollar gained ground against the USD, after a business survey by the Bank of Canada (BoC) supported expectations for further interest rate hikes.

The BoC, in its latest business outlook survey, stated that firms remain upbeat about future sales, business investment and hiring despite heightened trade uncertainties.

In the Asian session, at GMT0300, the pair is trading at 1.2680, with the USD trading 0.20% lower against the CAD from yesterday’s close.

The pair is expected to find support at 1.2630, and a fall through could take it to the next support level of 1.2581. The pair is expected to find its first resistance at 1.2774, and a rise through could take it to the next resistance level of 1.2869.

Ahead in the day, traders would look forward to Canada’s housing starts data for March and building permits data for February.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, Gold rose 0.38% against the USD and closed at USD1340.00 per ounce, amid renewed geopolitical tensions and a broad weakness in the greenback.

In the Asian session, at GMT0300, the pair is trading at 1337.20, with gold trading 0.21% lower against the USD from yesterday’s close.

The pair is expected to find support at 1330.90, and a fall through could take it to the next support level of 1324.60. The pair is expected to find its first resistance at 1342.70, and a rise through could take it to the next resistance level of 1348.20.

The yellow metal is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

For the 24 hours to 23:00 GMT, Silver rose 0.61% against the USD and closed at USD16.47 per ounce, tracking gains in gold prices.

In the Asian session, at GMT0300, the pair is trading at 16.47, with silver trading flat against the USD from yesterday’s close.

The pair is expected to find support at 16.33, and a fall through could take it to the next support level of 16.19. The pair is expected to find its first resistance at 16.575, and a rise through could take it to the next resistance level of 16.68.

The white metal is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, Crude Oil rose 1.69% against the USD and closed at USD63.25 per barrel, on the back of rising tensions in the Middle East.

In the Asian session, at GMT0300, the pair is trading at 63.85, with oil trading 0.95% higher against the USD from yesterday's close.

The pair is expected to find support at 62.65, and a fall through could take it to the next support level of 61.44. The pair is expected to find its first resistance at 64.50, and a rise through could take it to the next resistance level of 65.14.

Crude oil is trading above its 20 Hr and 50 Hr moving averages.

Daily Pivots: (S1) 0.7665; (P) 0.7687; (R1) 0.7723; More...

AUD/USD recovers strongly today and reaches as high as 0.7737 so far. But still, it's staying in range between 0.7642 and 0.7784 and intraday bias remains neutral. As long as 0.7784 holds, near term outlook stays bearish for another decline. On the downside, break of 0.7642 will turn bias to the downside to extend recent fall from 0.8135 to retest 0.7500 key support level. On the upside, however, break of 0.7784 will suggest near term reversal and turn bias to the upside for 0.7915 resistance first.

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.

Asian markets responded positively to the highly anticipated speech by China President Xi Jinping. At the time of writing, Nikkei is trading up 0.65% and HK HSI is up 1.14%. But it should be noted that Nikkei is already trading way off today's high at 21933.99. We could see the pattern in the US markets overnight repeat. That, DOW initially surged to 24373.18 but ended up closing at 23979.10, up only 0.19 pts. More importantly, DOW closed below yesterday's open at 24037.52. We'd like to point out that Xi's speech didn't do anything to ease the tension between US and China. Markets were probably just relieved as Xi didn't say anything over the top to worsen the situation.

In the currency markets, commodity currencies are broadly higher today while Yen and Swiss Franc are generally weak. This is in-line with receding risk aversion. The picture is pretty much the same for the week with Aussie, Kiwi and Loonie being strong and Yen being. But the difference is that Dollar is trading as the second weakest one for the week.

Technically, Dollar and Yen will likely continue to be left behind by others. The main question for today is whether Europeans or commodity currencies will lead the way. For now, favors are on Aussie's and Canadian's side.

China Xi delivered calm but uninspiring speech

China President Xi Jinping delivered a calm but uninspiring speech at the highly anticipated Boao Forum for Asia today. The markets nonetheless welcomed it. Xi echoed the line of the government on the commitment to global multilateral framework like G20, APEC. And he urged the world not to return to "Cold War" mentality, and "zero-same game thinking", as they are outdated. Xi also talked about the plans to further open up the massive Chinese markets to foreign investments. The measures would include "significantly" lowering import tariffs for autos, enforcing intellectual property protection, and improving investment protections for foreign companies.

In our view, the tone and messages of Xi's speech is expected. And important point to note is that the pledge to open up the markets have been delivered by various Chinese leaders for two decades but actual delivery has been relatively small. And whatever Xi said, they are still words for the moment. And more importantly, "China still have the option of opening the markets to all but those who don't commit to multilateral frameworks."

So, the speech itself is targeted to the world in general, rather than the US. There was certainly no escalation in the tensions with US resulted from the speech. But Xi didn't express his intention to solve the tension neither. What's next still depends on whether Trump will tripled down version of tariffs on USD 150b of Chinese imports in total. Or he will back down again like on other issues.

More details on Xi here with a video of his speech with English translation voice over.

Dallas Fed Kaplan: Trade rhetoric could have chilling effect

Dallas Fed President Robert Kaplan reiterated his expectation for two for rate hikes this year. And, 2018 is seen a a relatively solid year for growth to him. But Kaplan also noted that it is going to be watching the yield curve "very carefully". And he won't "blindly" support rate hikes if yield curve keeps flattening.

In addition, like other Fed officials, Kaplan said it's "too early to judge" how the trade spat between the US and China is going to affect the economy. But he warned that if the rhetoric goes on for long enough at this level, it is "having somewhat a chilling effect".

He added that "I'm still hopeful when we look back a year or two from now you'll see very little actually done in the way of tariffs that were implemented". And, "that would be my base case, and I think we are in the early innings of this."

Australia NAB business condition dropped sharply from record high, confidence eased

Australia NAB business confidence dropped another 2 pts to 7 in March, down from 9. Business conditions dropped 6 pts from February's record high at 20 to 14. That's 3 points lower than January's 17. Nonetheless, the condition reading remains well above historical average at 5.5. NAB pointed out that the US announcement of tariffs on USD 50b of Chinese imports could have affected sentiments.

NAB saw that "purchase cost growth has been moving higher since late 2016" and that could be "providing a tentative sign of inflationary pressure." On the other hand, "labour cost (wage bill) growth moderated after rising the previous month", which could have offset some of the inflationary pressure.

Canadian Dollar urged on positive BoC Business Outlook Survey

Canadian Dollar surged overnight as the BoC's Business Outlook Survey painted a positive picture. Business sentiments were supported by "healthy" sales prospects. Capacity and labor pressures are "evident" in most regions due to strong demand. In particular, "intentions to increase investment continue to be widespread." And, "employment intentions are solidly positive, based on firms' plans for hiring to support expected sales growth or to expand operations." However, BoC noted some firms cited "rising protectionism and reduced competitiveness" of the US as factors limiting the impact on their sales.

IMF Furusawa: Global economy continues to strengthen on the back of investment and trade

IMF Deputy Managing Director Mitsuhiro Furusawa delivered an opening remarks to the 9th IMF-Japan High-Level Tax Conference for Asian Countries today. There he noted that the global economy continues to "strengthen on the back of investment and trade". He firstly pointed to "resilient" capital flows to the emerging market. And, the US tax reform is expected to boost growth "temporarily". For the world, the current upswing provides an "ideal opportunity" for reforms to boost output potential. However, Furusawa also emphasized that this will require "strategies to ensure fiscal sustainability and financial resilience" at the same time.

Elsewhere

US BRC retail sales monitor rose 1.4% yoy in March. Canada will release building permits later today. US PPI and wholesale inventories will also be released.

AUD/USD Daily Outlook

Daily Pivots: (S1) 0.7665; (P) 0.7687; (R1) 0.7723; More...

AUD/USD recovers strongly today and reaches as high as 0.7737 so far. But still, it's staying in range between 0.7642 and 0.7784 and intraday bias remains neutral. As long as 0.7784 holds, near term outlook stays bearish for another decline. On the downside, break of 0.7642 will turn bias to the downside to extend recent fall from 0.8135 to retest 0.7500 key support level. On the upside, however, break of 0.7784 will suggest near term reversal and turn bias to the upside for 0.7915 resistance first.

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.

Economic Indicators Update

NZDUSD short term Elliott Wave view suggests that the decline to 0.715 low on March 21 ended Primary wave ((2)). Primary Wave ((3)) is in progress as a 5 waves where wave 1 of ((3)) is unfolding as a 5 waves diagonal Elliott Wave structure. A 5 waves diagonal is different than 5 waves impulse in that the subdivision of wave 1, 3, and 5 in diagonal is in 3 waves, instead of 5 waves in impulse. Up from 0.715 low, Minute wave ((i)) ended at 0.7303, Minute wave ((ii)) ended at 0.7184, Minute wave ((iii)) ended at 0.7322, and Minute wave ((iv)) ended at 0.7239.

In the case of NZDUSD, we can see the internal of Minute wave ((i)), ((iii)), and ((v)) have subdivision of 3 waves. For example, the internal of Minute wave ((i)) unfolded as a 3 waves corrective Elliott Wave structure called zigzag where Minutte wave (a) ended at 0.7263, Minutte wave (b) ended at 0.72, and Minutte wave (c) of ((i)) ended at 0.7303. The internal of Minute wave ((iii)) also unfolded as 3 waves corrective Elliott Wave structure called a Flat. Up from 0.7303, Minutte wave (a) ended at 0.7248, Minutte wave (b) ended at 0.7193, and Minutte wave (c) of ((iii)) ended at 0.7322. Finally, internal of Minute wave ((v)) also unfolded in 3 waves where Minutte wave (w) ended at 0.7305, Minutte wave (x) ended at 0.7275, and Minutte wave (y) of ((v)) is in progress to 0.734 – 0.735.

Once pair reaches 0.734 – 0.7357, it should complete Minor wave 1 diagonal and end cycle from 3.21.2018 low (0.715). Pair should then pullback in Minor wave 2 in 3, 7, or 11 swing to correct cycle from 3.21.2018 low before the rally resumes. We don’t like selling the pair and expect Minor wave 2 decline in the pair to find buyers in 3, 7, or 11 swing as far as pivot at 0.715 stays intact.

NZDUSD Elliott Wave 1 Hour Chart

Dallas Fed President Robert Kaplan reiterated his expectation for two for rate hikes this year. And, 2018 is seen a a relatively solid year for growth to him. But Kaplan also noted that it is going to be watching the yield curve "very carefully". And he won't "blindly" support rate hikes if yield curve keeps flattening.

In addition, like other Fed officials, Kaplan said it's "too early to judge" how the trade spat between the US and China is going to affect the economy. But he warned that if the rhetoric goes on for long enough at this level, it is "having somewhat a chilling effect".

He added that "I'm still hopeful when we look back a year or two from now you'll see very little actually done in the way of tariffs that were implemented". And, "that would be my base case, and I think we are in the early innings of this."

STOCKS

Dow (23979.10, +0.19%) has been fluctuating within the 23300-24500 region for quite some time now. The upper levels of 24500 may gradually come down to narrow the trade region to 24250-23300 in the next few sessions. The index may spend another week in this range before trying to break on either side sharply.

Dax (12261.75, +0.17%) has broken above 12300 resistance mentioned yesterday. Now the next resistance near 12500 is the only barrier which could push the index back towards 12300 or lower in the next few sessions. If Dax manages to break above 12500 in the coming sessions, it could start moving higher towards 12800 again. Watch price action near interim resistance at 12500.

Nikkei (21772.71, +0.44%) faces resistance near 21800 on the 3-day candles. If that breaks on the upside, the index could turn bullish targeting 22500 in the medium term. If 21800 holds, Nikkei could come off to 21000.

Shanghai (3155.53, +0.55%) has some chances of moving up or at least to remain stable while above 3100. The support at 3100 looks like it lacks the strength to push the index higher just now which could lead to some consolidation in the 3200-3100 region for the coming sessions. A fall below 3100, if seen could take it down to 3000. Else a gradual and slow rise back towards 3200+ levels could be possible soon.

Nifty (10379.35, +0.46%) tested 10400 on the upside yesterday. As mentioned yesterday, Nifty could find some rejection near 10400-10500 region which could lead to a short dip towards 10300-10250 levels. Sensex (33788.54, +0.48%) could face similar rejection from 34000 levels in the next 1-2 sessions.

COMMODITIES

Brent (68.99) tested 67 and has seen a decent bounce from there. If the rise continues, it may head back towards 70-71 levels in the near term. Nymex WTI (63.85) bounced from support as mentioned yesterday. It could move higher towards 65. Near term looks bullish.

Gold (1334.22) is stuck in the narrow 1320-1350 region and is likely to remain stable in the coming sessions too. No major movement expected this week.

Copper (3.099) has risen in the last couple of sessions and is trading just below resistance near 3.10. If 3.10 holds, Copper could come off towards 3.05-3.00 again; else a break above 3.10 could take it higher towards 3.15.

FOREX

Dollar index (89.89) has dipped further after testing resistance on 3 day and weekly candles near 90.5-90.6 last week. The 13 day and 21 day moving average lines on the daily line chart could provide some interim support near present levels. On break of the moving averages, the next downside targets are seen as support on weekly line chart near 89.5 and lower support near 89.25 on daily candles.

Euro (1.2311), after having bounced from support near 1.2225 on daily candles yesterday, is probably facing some interim resistance from the 21 days moving average line on the daily line chart. A breach of the same would take it towards resistance on daily line chart near 1.245. A decisive breach above 1.25-1.26 would imply medium term bullishness for the Euro. While it stays below 1.25-1.26, it could continue its ranging between 1.215-1.255 of the past 2 months.

Dollar Yen (107.07) as per our expectation yesterday, is getting some support by earlier resistance trendline on daily candles and daily line chart near 106.8. If it stays above this level and then moves beyond its previous high of 107.9 (seen in Feb end), it could imply medium term bullishness for Dollar Yen.

Euro Yen (131.85) as we predicted yesterday has breached resistance in downward channel on 3 day and weekly candles as the Euro has moved up towards 1.232 and the Dollar Yen has stayed above 106.80. If Euro moves further up towards 1.245 and Dollar Yen towards 107.5, it would imply Euro Yen touching 133-134. However, the 21 week moving average line near 133 on the weekly line chart might keep the upside restricted in the short term.

Pound (1.4127) as per our expectation is moving up towards 1.42 (seen as resistance on daily and 3 day candles). If it stays above 1.39-1.40, it could be headed in the medium term towards resistance near 1.46 on the weekly line chart.

Dollar Rupee (65.0225) : Support at 64.80 held yesterday. See chances of 65.20 in 2-3 days.

INTEREST RATES

US long term yields have been moving in a downward channel since the Fed rate hike last month. The US CPI data release tomorrow (11th April) could be important for yields – analysts expect some moderation in monthly gain figures; however the year-on-year gain figures could reflect higher inflation (which could be slightly misleading considering last year’s low figures in March).

High year on year figures could take yields higher temporarily but a moderation in monthly gains could mean that yields will continue moving down through Apr-May.

US 10 Yr Yield (2.8046%), 30 Yr (3.016%), 5 Yr (2.623%), 2 Yr (2.2987%) :

The 10 Year instead of dipping lower towards support near 2.74% on the short term chart, has moved up and might test resistance near 2.83%-2.85% in the next 1-2 days.

The 30 yr yield as expected, has dipped further towards 3% after having tested channel resistance near 3.07%.