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The Aussie dollar moved lower after hitting marginally higher recovery high at 0.7757 in early Asian trading, unable to sustain probes above falling 10SMA (currently at 0.7740). The pair returned to negative tone in early Tuesday's trading, despite strong recovery on Monday, showing no significant reaction to renewed risk sentiment in the markets on fading fears on global trade war. Limited recovery of base metals weighs on Aussie along with firmly bearish daily techs ( formation of 20/100SMA bear-cross and Monday and today's formation of 30/200 SMA death-cross increases bearish pressure) and failure at initial 10SMA barrier keeping the downside at risk. Return to last week's low at 0.7672 would be likely near-term scenario while falling 10SMA caps. Conversely, bullish scenario sees break above 10SMA as initial requirement, with extension above 0.7765/76 (Fibo 38.2% of 0.7916/0.7672 / 100SMA), needed to confirm and signal stronger recovery of 0.7916/0.7672 bear-leg.

Res: 0.7740, 0.7757, 0.7775, 0.7805
Sup: 0.7720, 0.7686, 0.7672, 0.7641

The pair ticked higher in extension of strong bounce on Monday and hit session high at 105.75, helped by fresh risk sentiment. Recovery approaches initial barriers at 105.83/87 (falling 10SMA/Fibo 61.8% of 106.64/104.63), with downside risk fading and signaling further upside on break above 10SMA pivot. Monday's rally formed bullish outside day which supports scenario, however overall structure remains firmly bearish sees risk of recovery stall which would mark current action as consolidative before broader bears resume. Plethora of barriers provided by falling MA's (10/20/30 SMA) lies between 105.83 and 106.33 and marks pivotal zone, break of which is required to neutralize persisting downside threats and trigger stronger recovery.

Res: 105.83, 106.05, 106.33, 106.64
Sup: 105.38, 105.24, 105.00, 104.63

BoE just released the record of the Financial Policy Committee (FPC) meeting on March 12.

Here are some points to note:

Regarding the risks of disruption to UK financial services arising from Brexit:

The FPC

• Reviewed progress on the checklist that it published in November, of actions that would mitigate risks of disruption associated with Brexit to important financial services used by households and businesses. It judged that since November, in the United Kingdom, progress had been made. Nonetheless, material risks remained, particularly in areas where actions would be needed by both the UK and EU authorities. The FPC re-emphasised the importance that preparations continue to be made and actions taken by relevant authorities to tackle these risks.

Regarding Crypto-assets:

The FPC

• Reviewed the financial stability risks from crypto-assets. It recognised the potential benefits of the technologies underlying crypto-assets and of their potential to create a more distributed and diverse payments system. It judged that existing crypto-assets did not currently pose a material risk to UK financial stability. The FPC made clear that it would act to ensure the core of the UK financial system remained resilient if linkages between crypto-assets and systemically important financial institutions or markets were to grow significantly.

Full report can be found here

As China began trading Oil in Chinese Yuan contracts, there was an air of risk-off to start the week, as the Dax almost made a double bottom with the 6th of February lows shortly after NYSE opened yesterday. Stocks globally rallied during the latter part of the US session yesterday, and during the Asian session earlier today. German import prices were negative for this month, which is good for input costs/prices for exporting companies on the Dax, and is largely expected with the EUR strengthening generally. On the flipside, the strengthening EUR could be seen as a rise in export prices and weakening demand and income for Dax companies.

The DAX30 is within the POC zone and it could reject from 11947-12020. Descending trend line is still keeping the bearish trend intact. Targets are 11843, 11767 and 11600. Have in mind that if the price gets to 11600-636 it could reject to the upside. However a spike above 12075 negates this bearish scenario and next target could possibly be 12205.

W H3 - Weekly Camarilla Pivot (Weekly Interim Resistance)

W H4 - Weekly Camarilla Pivot (Strong Weekly Resistance)

D H4 - Daily Camarilla Pivot (Very Strong Daily Resistance)

D L3 – Daily Camarilla Pivot (Daily Support)

D L4 – Daily H4 Camarilla (Very Strong Daily Support)

POC - Point Of Confluence (The zone where we expect price to react aka entry zone)

Cable eases in early European trading after folding within tight consolidation overnight and retested Monday’s seven-week high at 1.4244.

The price is so far holding above broken bull-channel upper boundary and keeping immediate focus at the upside, for test of next target at 1.4277 (01/02 Feb double-top).

Fresh risk appetite keeps the pair underpinned, as bullish daily techs signal further advance.

However, consolidation may precede fresh upside action as daily techs are extended, with broken channel boundary marking immediate support ahead of 1.4144 (16 Feb high), with broken Fibo barrier at 1.4102 expected to contain extended dips.

Res: 1.4244, 1.4277, 1.4300, 1.4345
Sup: 1.4189, 1.4171, 1.4144, 1.4129

The Euro accelerates higher in early European trading, after holding within narrow range in Asia nd consolidating Monday's strong rally.

Fresh strength probes above 1.2460 barrier (Fibo 76.4% of 1.2555/1.2154 / 20-d upper Bollinger band) where yesterday's rally was capped.

Bulls eye psychological 1.2500 barrier, ahead of 1.2537 (25 Jan high) and could challenge key resistance at 1.2555 (16 Feb high, the highest since mid-Dec 2014) in extension.

Fresh risk sentiment on easing fears about global trade war and bullish daily techs keep the single currency supported, however, overbought slow stochastic signals bulls may hesitate on approach to next targets.

Broken Fibo 61.8% barrier at 1.2402 is expected to keep the downside protected and guard key support at 1.2370 (top of thick daily cloud).

Res: 1.2500, 1.2522, 1.2538, 1.2555
Sup: 1.2446, 1.2412, 1.2402, 1.2370

XAUUSD (1354.10): Gold prices edged higher and look on track to test the 1357.83 level of resistance in the short term. The gains came amid rising concerns about the fallout from the U.S. imposing trade tariffs on goods from China. Following the brief dip back to 1328 last week, the currency pair pushed higher only to pause for a brief consolidation. We expect to see some downside in price action around the 1357 given that the precious metal has seen or established any significant support level in the near term. Watch for break below 1345 which could extend the declines lower to the 1336 level where support is likely to be formed.

GBPUSD (1.4235): The British pound edged higher on the day although the momentum was somewhat weaker compared to the euro currency. Regardless, the British pound rose to a fresh monthly high of 1.4244. Any near term declines could see the GBPUSD posting a short term correction to the 1.4162 level in the short term. Establishing support here could see GBPUSD targeting the previous high and potentially breaking out higher in the medium term.

EURUSD (1.2452): The common currency was seen building up on the bullish momentum as the EURUSD soared to fresh monthly highs on Monday. The gains came amid a slow trading day but the common currency got a boost from hawkish comments from ECB's Weidmann. Weidmann said that the ECB should phase out its stimulus purchases in order to give itself more room in the future in case the economy slows. Weidmann also commented on interest rates in mid-2019 calling it "not entirely unrealistic." The euro currency was seen breaking past the 1.2363 handle where support was established. This quickly resulted in a strong rally. However, we expect the gains to post a correction in the short term especially with the bearish divergence seen on the 4-hour charts. Any declines are likely to stall back at the 1.2363 level in the near term.

The U.S. dollar continued to extend declines on Monday as the U.S. dollar index was seen falling to fresh monthly low. The declines came amid a slow trading day. Economic data was sparse with only second tier data. The Dallas Fed manufacturing report showed that manufacturing production index fell to 12.7 compared to 27.9 in February. Business activity was also seen weaker with the index posting a print of 21.5 compared to February's 37.2.

The euro and the Pound sterling posted strong gains as the market expectations on rate hikes strengthened. ECB member Weidmann spoke to reporters yesterday and came out hawkish on monetary policy. Weidmann is widely tipped to be the next ECB President.

Looking ahead, the economic calendar for the day will see the release of the flash inflation data from Spain. Headline consumer prices are forecast to rise 1.5% on the year, accelerating from 1.1% previously.

Later in the day, the Conference Board's consumer confidence data for the U.S. Consumer confidence is forecast to rise to 131.2, up from 130.8 previously. If the actual data beats estimates, this could be another high in the U.S. consumer confidence as measured by the conference board.

The Richmond Fed will also be releasing the Richmond manufacturing index data. Economists forecast that manufacturing activity in the region slipped to 23 compared to 28 that was registered previously.