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Daily Pivots: (S1) 0.8841; (P) 0.8860; (R1) 0.8876; More...

Downside momentum in EUR/GBP is a bit weak as seen in 4 hour MACD. But still, with 0.8896 minor resistance intact, intraday bias remains on the downside for 0.8871 support first. Break there will confirm completion of rebound from 0.8686 and target a retest of this low. On the upside, above 0.8896 minor resistance will turn bias neutral first. Further break of 0.8967 will resume the rebound from 0.8686 to 61.8% retracement of 0.9305 to 0.8686 at 0.9069.

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) 1.5630; (P) 1.5706; (R1) 1.5773; More....

Intraday bias in EUR/AUD remains neutral at this point. On the downside, decisive break of 1.5626 near term support will firstly resume the fall from 1.5976. Secondly, that will also raise the odds of larger reversal. Deeper fall should then be seen to 61.8% retracement of 1.5153 to 1.5976 at 1.5467 and below. However, on the upside, break of 1.5787 minor resistance will indicate completion of the pull back from 1.5976. And, intraday bias will be turned back to the upside for retesting 1.5976 high instead.

In the bigger picture, change of medium term reversal is increasing with EUR/AUD just missing double projection target. They are 61.8% projection of 1.4421 to 1.5770 from 1.5153 at 1.5987, and 100% projection of 1.3624 to 1.5226 from 1.4421at 1.6023. Also, bearish divergence condition remains in daily MACD. Break of 1.5626 support will add to this bearish case and target 1.5153 key support for confirmation. Nonetheless, before that happens, as long as 1.5153 support holds, medium term rise from 1.3624 could still extend to retest 1.6587 high.

Daily Pivots: (S1) 0.7847; (P) 0.7881; (R1) 0.7912; More...

AUD/USD lost momentum after failing to stay above 0.7892 resistance. Intraday bias is turned neutral first. We're slightly favoring the case that corrective pull back from 0.8135 has completed with three waves down to 0.7712. Further rise is expected as long as 0.7772 minor support holds. Above 0.7892 again will target 0.7988 resistance. Decisive break there will bring larger rally resumption. Nonetheless, on the downside. On the downside, below 0.7772 will turn bias to the downside for 0.7712. Break there will resume whole fall from 0.8135.

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.

Daily Pivots: (S1) 1.2924; (P) 1.2950; (R1) 1.2979; More....

USD/CAD is staying in range of 1.2802/3000 and intraday bias remains neutral first. On the upside, break of 1.3000 will resume medium term rebound from 1.2061 and target 1.3065 medium term fibonacci level. On the downside, in case of another decline as consolidation from 1.3000 extends, we'd expect strong support from 38.2% retracement of 1.2246 to 1.3000 at 1.2712 to contain downside and bring rise resumption.

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, drawing support from 50% retracement of 0.9406 (2011 low) to 1.4689 (2015 high) at 1.2048. Further rally should be seen back to 38.2% retracement of 1.4689 to 1.2061 at 1.3065 first. Break will target 61.8% retracement at 1.3685. This will be the preferred case now as long as 1.2687 support holds.

Daily Pivots: (S1) 1.2338; (P) 1.2375 (R1) 1.2404; More....

EUR/USD is still bounded in range of 1.2268/2445 and intraday bias remains neutral. On the upside, break of 1.2445 will target a test on 1.2555 high. Decisive break there will resume medium term rally and carry larger bullish implication. But again, break of 1.2268 will argue that fall from 1.2555 is resuming. And intraday bias will be turned back to the downside for 1.2154 support and below.

In the bigger picture, key fibonacci level at 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516 remains intact despite attempts to break. Hence, rise from 1.0339 medium term bottom is still seen as a corrective move for the moment. Rejection from 1.2516 will maintain long term bearish outlook and keep the case for retesting 1.0039 alive. Firm break of 1.1553 support will add more medium term bearishness. However, sustained break of 1.2516 will carry larger bullish implication and target 61.8% retracement of 1.6039 to 1.0339 at 1.3862.

Daily Pivots: (S1) 1.3926; (P) 1.3961; (R1) 1.3996; More....

GBP/USD is losing some upside momentum as seen in 4 hour MACD. But with 1.3873 minor support intact, intraday bias stays on the upside for 1.4144 resistance. As noted before, corrective pull back from 1.4345 could have completed at 1.3711 already. Break of 1.4144 should confirm this bullish case and target 1.4345 high and above. On the downside, below 1.3873 minor support will turn bias to the downside to extend the corrective fall from 1.4345 instead.

In the bigger picture, as long as 1.3038 support holds, medium term outlook in GBP/USD will remains bullish. Rise from 1.1946 is at least correcting the long term down from 2007 high at 2.1161. Further rally would be seen back to 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466. However, GBP/USD fails to sustain above 55 month EMA (now at 1.4259) so far. Break of 1.3038 support, will suggest that rise from 1.1946 has completed and will turn outlook bearish for retesting this low.

Daily Pivots: (S1) 0.9421; (P) 0.9451; (R1) 0.9477; More...

USD/CHF is still bounded in range of 0.9356/9533 and intraday bias remains neutral first. Still, further rise is in favor as long as 0.9356 support holds. Break of 0.9533 will resume the rebound from 0.9186 and target 0.9626 fibonacci level. However, on the downside, break of 0.9356 will indicate that the rebound has completed. In such case, intraday bias will be turned back to the downside for retesting 0.9186 low.

In the bigger picture, fall from 1.0342 is seen as a medium term down trend. Current development is raising the chance that it is completed. But there is no confirmation yet. Focus will now be back on 38.2% retracement of 1.0342 (2016 high) to 0.9186 (2018 low) at 0.9626. Sustained break there will add much credence 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) 106.01; (P) 106.37; (R1) 106.69; More...

USD/JPY's fall from 107.28 extends to as low as 105.78 but stays above 105.24 low. Intraday bias remains neutral at this point. The consolidative trading from 105.24 is still in progress and could extend. But after all, near term outlook remains bearish with 107.67 resistance intact. And deeper decline is in favor. On the downside, break of 105.24 will resume larger decline from 118.65 and target 100% projection of 118.65 to 108.12 from 114.73 at 104.20 next. On the upside, firm break of 107.67 resistance will indicate near term reversal, on bullish convergence condition in 4 hour MACD. In such case, outlook will be turned bullish for 110.47 resistance next.

In the bigger picture, current development argues that the corrective pattern from 118.65 is extending. The solid break of 61.8% retracement of 98.97 to 118.65 at 106.48 now suggests that the pattern from 125.85 high is possibly extending. Deeper fall could be seen through 98.97 key support (2016 low). This bearish case will now be favored as long as 110.47 resistance holds.

Trade war continued to be the main theme in the financial markets. In particular, investors are getting increasing concerned with the reported USD 40b tariffs on Chinese goods by the US. DOW closed -1.0% lower overnight to 24758.12. S&P 500 was down -0.57% while NASDAQ lost -0.19%. In particular, Boeing dropped more the -2% on worries on retaliation by China. In the currency markets, Canadian Dollar is trading as the weakest major currency for the week, followed by Dollar. Sterling is leading the way, followed by Yen. Both Sterling and Yen are also strong today. SNB rate decision will be a focus today but it's unlikely to trigger much volatility.

ECB Draghi emphasized predictability in monetary policy adjustments

ECB President Mario Draghi emphasized in a conference in Frankfurt yesterday that any monetary policy adjustments must be "predictable" and carried out "at a measured pace". For now, he said ECB "still need to see further evidence that inflation dynamics are moving in the right direction". Therefore, "monetary policy will remain patient, persistent and prudent." Draghi also added that "sharp repricing" in the financial markets must be carefully monitored.

Regarding the steel and aluminum tariffs of the US, Draghi expected the initial impact to be small. However, he warned that "there are potential second-round effects that could have much more serious consequences." And, risks include "retaliation across other goods and an escalation of trade tensions, and the potential for negative confidence effects which would weigh on business investment in particular."

ECB Chief Economist Peter Praet echoed on monetary policy and said it's too soon to declare "mission accomplished" regarding inflation. Meanwhile, "with the passage of time, the indication that policy rates will remain at their present levels well past the end of net asset purchases will gradually cease to provide sufficient guidance". He added that "our forward guidance on the path of our policy rates will have to be further specified and calibrated."

ECB Vice President Vitor Constancio commented on financial stability at the conference. He noted that "the sharp movements that took place in the U.S. equity market in February 2018 demonstrated how sentiment can change very quickly -- and market participants should be well aware of this risk." And, "in an environment characterized by search for yield and depressed volatility, technical factors can greatly amplify initial market movements."

Macquarie pushed back expectation of RBA 2018 hike

More economists are paring back their expectation of an RBA hike this year. Macquarie Bank now no longer sees RBA hiking within 2018. it noted in a report that "the primary reason for pushing back our RBA call is that the Bank can err on the side of growing the economy faster for longer to erode spare capacity and have confidence that inflation is firmly moving back into the 2-3% target." .

It referred to other advanced economies for the pattern of falling unemployment rates without wage growth. At this same time, "Australia's unemployment rate remains at 5.5% and noticeably above 'full employment'." Also, "after two years of below-target inflation, and at least another one to come, there seems little danger of generating a meaningful pick-up in inflation expectations from keeping interest rates low for longer."

Besides, "housing has settled", and "investor activity in the housing market has subsided significantly and housing prices have broadly flattened out. There is "little danger" or "reacceleration in housing price or credit growth." And therefore, "the source of much angst for the RBA — fast growth in housing prices in Sydney and Melbourne - has eased."

NAB recently pushed back their RBA rate expectation too and predicted only one hike this year, not two. Westpac continued to expect no hike until 2019.

The day ahead: SNB to stand pat

The SNB meeting today would bring no change in the monetary policy. Policymakers would reiterate the pledge to intervene the currency market in defense of excessive appreciation of Swiss franc. However, the is less urgency for the central bank to act given the strength in the euro. Swiss will also release PPI in European session.

Later in the day, US will release Empire State manufacturing index, Philly Fed survey, import price index, jobless claims and NAHB housing market index will be featured.

USD/JPY Daily Outlook

Daily Pivots: (S1) 106.01; (P) 106.37; (R1) 106.69; More...

USD/JPY's fall from 107.28 extends to as low as 105.78 but stays above 105.24 low. Intraday bias remains neutral at this point. The consolidative trading from 105.24 is still in progress and could extend. But after all, near term outlook remains bearish with 107.67 resistance intact. And deeper decline is in favor. On the downside, break of 105.24 will resume larger decline from 118.65 and target 100% projection of 118.65 to 108.12 from 114.73 at 104.20 next. On the upside, firm break of 107.67 resistance will indicate near term reversal, on bullish convergence condition in 4 hour MACD. In such case, outlook will be turned bullish for 110.47 resistance next.

In the bigger picture, current development argues that the corrective pattern from 118.65 is extending. The solid break of 61.8% retracement of 98.97 to 118.65 at 106.48 now suggests that the pattern from 125.85 high is possibly extending. Deeper fall could be seen through 98.97 key support (2016 low). This bearish case will now be favored as long as 110.47 resistance holds.

Economic Indicators Update

For the 24 hours to 23:00 GMT, the AUD rose 0.08% against the USD and closed at 0.7875.

LME Copper prices rose 1.9% or $132.0/MT to $7015.0/MT. Aluminium prices rose 0.8% or $16.0/MT to $2096.0/MT.

In the Asian session, at GMT0400, the pair is trading at 0.7878, with the AUD trading slightly higher against the USD from yesterday's close.

Overnight data revealed that Australia's consumer inflation expectation rose to 3.7% in March, compared to a reading of 3.6% in the prior month.

The pair is expected to find support at 0.7857, and a fall through could take it to the next support level of 0.7836. The pair is expected to find its first resistance at 0.7908, and a rise through could take it to the next resistance level of 0.7938.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

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