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Daily Pivots: (S1) 129.82; (P) 130.59; (R1) 131.98; More....

EUR/JPY's rebound form 128.94 extends to as high as 131.80 so far. However, it's still limited below 132.40 resistance. Intraday bias remains neutral with outlook staying bearish. Another decline is expected. On the downside break of 128.94 will extend the whole fall from 137.49 to 126.61 medium term fibonacci level next. Nonetheless, break of 132.40 should confirm short term bottoming and turn bias back to the upside for stronger rebound.

In the bigger picture, current development argues that rise from 109.03 (2016 low) has completed at 137.49, on bearish divergence condition in weekly MACD. Deeper fall should be seen to 38.2% retracement of 109.03 to 137.49 at 126.61 first. Sustained break there would pave the way to 61.8% retracement at 119.90. On the upside, break of 132.40 resistance will indicate that the pull back is completed and bring retest of 137.49. But still, break of 137.49 is needed to confirm medium term rise resumption. Otherwise, outlook is neutral at best for consolidations.

Daily Pivots: (S1) 0.8721; (P) 0.8742; (R1) 0.8767; More...

Breach of 0.8757 minor resistance argues that EUR/GBP formed a short term bottom at 0.8666 after failing to sustain below 0.8686. Intraday bias is turned back to the upside for 38.2% retracement of 0.8967 to 0.8666 at 0.8781 first. Break will target 61.8% retracement at 0.8852 and above. On the downside, firm break of 0.8666 will resume the decline from 0.9305 and pave the way to 0.8303 key support zone next.

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) 1.5982; (P) 1.6056; (R1) 1.6138; More....

EUR/AUD reaches as high as 1.1631 so far as recent rally extends. Intraday bias remains on the upside at this point. Sustained break of 61.8% projection of 1.5130 to 1.5976 from 1.5621 at 1.6130 will target 100% projection at 1.6444 next. On the downside, break of 1.5857 support is needed to indicate short term topping. Otherwise, outlook will remain bullish in case of retreat.

In the bigger picture, current development suggests that rise from 1.3624 is not completed yet. And it's still in progress for 1.6587 key resistance level. We'd be cautious on strong resistance from there to limit upside, on bearish divergence condition in daily MACD. But for now, break of 1.5621 support is needed to be the first sign of medium term reversal. Otherwise, outlook will stays bullish even in case of deep pull back.

Market movers today

The preliminary Spanish CPI data will provide the first clues to march inflation in Euroland.

The US Treasury continues with the sale of T-bills (USD89bn) and 5Y bonds (USD35bn) after yesterday's 2Y auction, which drew the highest yield since 2008.

A string of tier-2 data from Sweden and Euroland. These are not expected to have much of a market impact.

We published our Q2 macroeconomic outlook for the Nordic economies this morning.

Selected market news

The Asian equity markets followed the positive trend from the US markets as tensions over the possible trade was between US and China have eased. There have been talks between US Treasury Secretary Steven Mnuchin and his Chinese counterparts on how to reduce the trade gap between China and the US as well as China avoiding the tariffs on exports to the US.

Furthermore, the North Korean leaders made a surprise visit to China, which was also seen as a positive factor for the markets with the South Korean won strengthening this morning. Hence, the Nikkei jumped more than 2% this morning. The JPY weakened modestly against the dollar.

Yesterday's auction of 2Y US Treasury bond drew the highest yield since 2008 on the 2Y bonds. The bid-to-cover was in line with previous auctions but market makers had to take a larger share of the auction. Focus is now on the 5Y auction tonight.

Russia's rouble saw significant pressure yesterday as the USD/RUB spiked 1.2% within a few hours as more than half of the EU countries, the US and Ukraine announced they are expelling more than 100 Russia's diplomats in support of the UK's allegations against Russia in the nerve-agent poisoning case on the British soil. Australia and Canada have also joined the action of expelling several Russian diplomats. US President Donald Trump has also ordered for Russia's consulate in Seattle to be closed. As we have been pointing out, the major mover for the RUB in the near term remains geopolitics. In the current setup, we recommend being RUB sellers before Russia's response appears as we could easily see a tit-for-tat escalation. Yet, looking at Russian macro fundamentals, we remain RUB bullish in the long term.

Daily Pivots: (S1) 1.1713; (P) 1.1743; (R1) 1.1798; More...

EUR/CHF surges to as high as 1.1772 so far today. Break of 1.1748 confirms resumption of the rise from 1.1445. Intraday bias is back on the upside for retest 1.1832 resistance. At this point, we're remain cautious on strong resistance from there to bring another fall to extend recent corrective pattern. Though, firm break will confirm resumption of larger up trend. On the downside, break of 1.1649 support will turn focus back to 1.1445 instead.

In the bigger picture, a medium term top should be in place at 1.1832 on bearish divergence condition in daily MACD. But there is no indication of long term reversal yet. As long as 1.1198 resistance turned support holds, we'd still expect another rise through prior SNB imposed floor at 1.2000.

Short term Elliott Wave view in DAX suggests Primary wave ((B)) ended at 12434.7 on 3.16.2018. The decline from there is unfolding as a 5 waves impulse Elliott Wave structure. Down from 12434.7, Minor wave 1 ended at 12160, Minor wave 2 ended at 12375.5, Minor wave 3 ended at 11827, Minor wave 4 ended at 11987.50, and Minor wave 5 is proposed complete at 11706.50. The 5 waves move lower ended Intermediate wave (1) of a higher degree.

Intermediate wave (2) bounce is in progress to correct cycle from 3.16.2018 high as a zigzag Elliott Wave structure. A zigzag is a 5-3-5 structure and has a label of ABC. Potential target for Intermediate wave (2) is 12068.9 – 12261.06, which is the 50 – 76.4% retracement of the decline from 3.16.2018 high. As far as pivot at 3.16.2018 high (12434.7) stays intact during the bounce, expect Index to extend lower again afterwards. We don’t like buying the Index.

DAX 1 Hour Elliott Wave Chart

Daily Pivots: (S1) 0.7710; (P) 0.7730; (R1) 0.7768; More...

Intraday bias in AUD/USD remains neutral at this point as consolidation from 0.7671 temporary continues. With upside limited well below 0.7915 resistance, near term outlook remains bearish. Break of 0.7671 will resume whole decline from 0.8135 and target 0.7500 key support level next. However, break of 0.7915 resistance will indicate near term reversal and turn focus back to 0.8135 high 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) 1.2813; (P) 1.2868; (R1) 1.2896; More....

USD/CAD continues to stay in range of 1.2802/3124 and outlook is unchanged. Intraday bias stays neutral first. For the moment, we continue to expect strong support from 1.2802 cluster support zone (38.2% retracement of 1.2246 to 1.3124 at 1.2789) to contain downside and bring rebound. Larger rise is expected to resume later. And break of of 1.3124 will target 161.8% projection of 1.2061 to 1.2916 from 1.2246 at 1.3629 next. However, firm break of 1.2789/2802 will raise the chance of rejection by 1.3065 medium term fibonacci level and bring deeper fall to 55 day EMA (now at 1.2750) and below.

In the bigger picture, we're favoring the medium term bullish case. That is, larger down trend from 1.4689 has completed at 1.2061 as a correction, drawing support from 50% retracement of 0.9406 (2011 low) to 1.4689 (2015 high) at 1.2048. Sustained break of 38.2% retracement of 1.4689 to 1.2061 at 1.3065 will pave the way to 61.8% retracement at 1.3685. This will be the preferred case now as long as 1.2802 support holds. However, rejection by 1.3065 will argue that price action from 1.2061 is merely a three wave corrective pattern. And 1.2061 will be put back into focus with medium term bearishness revived.

Daily Pivots: (S1) 0.9442; (P) 0.9469; (R1) 0.9493; More...

USD/CHF is staying in range of 0.9423/9568 and intraday bias remains neutral first. As noted, rebound from 0.9186 might not be finished yet. But considering divergence condition in 4 hour MACD, even in case of another rise, upside should be limited by 0.9626 key fibonacci level. Break of 0.9432 support will indicate near term reversal and completion of rebound from 0.9186. In this case, intraday bias will be turned back to the downside for retesting 0.9186 low. However, sustained break of 0.9626 will carry larger bullish implications.

In the bigger picture, fall from 1.0342 is seen as a medium term down trend. Main focus is on 38.2% retracement of 1.0342 (2016 high) to 0.9186 (2018 low) at 0.9626. Sustained break there will add to the case of trend reversal and target 61.8% retracement at 0.9900 and above). However, rejection from 0.9626 will maintain medium term bearishness for another low below 0.9186.

Daily Pivots: (S1) 104.84; (P) 105.15; (R1) 105.71; More...

USD/JPY's recovery from 104.62 extends higher today. But it's limited well below 106.63 resistance so far. Intraday bias remains neutral with outlook bearish. Another decline is expected and break of 104.62 will resume larger fall fro 104.20 projection level first. Sustained break there will pave the way to 98.97 (2016 low). Nonetheless, break of 106.63 will indicate short term bottom and turn bias back to the upside for stronger rebound.

In the bigger picture, medium term down trend from 118.65 (2016 high) is still in progress and extending. Build up in downside momentum argues that it might be extending the whole corrective pattern from 125.85 (2015 high). 100% projection of 118.65 to 108.12 from 114.73 at 104.20 will be a key level to watch as firm break there could bring downside acceleration. And in that case, 98.97 key support level (2016 low) would at least be breached. This bearish case will now be favored as long as 108.12 support turned resistance holds.