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Daily Pivots: (S1) 145.71; (P) 146.41; (R1) 147.75; More...

A temporary low is in place at 144.97 as GBP/JPY recovers. Intraday bias is turned neutral first. But still, outlook remains bearish with 150.92 resistance intact. Deeper decline is expected. Break of 144.97 will extend the fall from 156.69 to 143.51 medium term fibonacci level next. We'll look for bottoming signal there. But firm break will target 139.29 support.

In the bigger picture, the case for medium term reversal continues to build up. There is bearish divergence condition in daily MACD. 146.96 support was taken out. And GBP/JPY was rejected by 55 month EMA. Break of 38.2% retracement of 122.36 to 156.59 at 143.51 will pave the way to 61.8% retracement at 135.43 and below. This will now be the preferred case as long as 150.92 resistance holds.

The euro continues to move higher against the greenback, as a return to risk-on trading sentiment is causing the U.S dollar to weaken on Tuesday. The EURUSD pair has again found strong technical resistance around the 1.2360 region, with price-action currently consolidating around the 1.2350 level ahead of the European session open. Further strong gains remain likely for the euro above the 1.2360 level, which represents the neckline of a bullish inverted head and shoulders pattern.

The EURUSD is strongly bullish above the 1.2364 level, further upside towards the 1.2430 and 1.2550 levels remains possible.

Should the EURUSD pair fail to move above the 1.2364 level, price-action may correct back towards the 1.2305 and 1.2259 support regions.

The British pound continues to recover against the greenback, as bullish comments from UK PM Theresa May and a return to risk-on trading sentiment help to underpin sterling strength. The GBPUSD earlier reached a high of 1.3878, but has now retraced lower, with price-action currently consolidating just below the 1.3850 region. Traders now look towards a key-note speech from Bank of England member Haldane during the European trading session, and the key 90.00 level on the U.S dollar index.

The GBPUSD pair remains bullish above the 1.3807 level, buyers will continue to target the 1.3858 and 1.3914 resistance levels.

Should GBPUSD price-action move below the 1.3807 level, key intraday technical support is then found at the 1.3765 and 1.3711 levels.

Daily Pivots: (S1) 129.89; (P) 130.45; (R1) 131.55; More....

Strong rebound from 129.34, together with bullish convergence condition in 4 hour MACD, suggests short term bottoming there. Intraday bias is mildly on the upside for 38.2% retracement of 137.49 to 129.34 at 132.45. But overall, decline from 137.49 shouldn't be finished yet. We'd still expect another fall to 126.61 medium term fibonacci level at a later stage.

In the bigger picture, current development argues that rise from 109.03 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. On the upside, break of 137.49 is needed to confirm medium term rise resumption. Otherwise, risk will now stay on the downside even in case of strong rebound.

Central banks are headlining a relatively subdued trading session on Tuesday, giving investors the latest clues about the future of monetary policy in regions as diverse as Australia, United Kingdom and United States.

The European data wire begins at 08:15 GMT with a report on Swiss consumer prices. The consumer price index (CPI) is forecast to rise 0.2% in February, which translates into a year-over-year gain of 0.5%.

Shifting gears to North America, the US Commerce Department will report on factory orders at 15:00 GMT. The report is expected to show a 1.3% drop in the headline figure.

Commodity traders will also look to a weekly inventory report from the American Petroleum Institute (API) for clues about the supply/demand balance of US commercial crude. The API report is a precursor to the official data courtesy of the Energy Information Administration (EIA). The EIA report is due Wednesday morning.

On the monetary policy front, speeches from Federal Reserve governors William Dudley and Lael Brainard will make headlines throughout the North American session. Bank of England (BOE) official Andrew Haldane and the Reserve Bank of Australia’s Philip Lowe are also scheduled to speak publicly Tuesday.

Earlier in the day, the RBA voted to keep interest rates at a record low of 1.5% in a decision that was widely forecast by the financial markets. The central bank is expected to remain on the sidelines for the foreseeable future in support of a stronger domestic economy.

Meanwhile, the Australian Bureau of Statistics reported a slower than expected rise in retail sales. Receipts at retail outlets edged up 0.1% in January after falling 0.5% the previous month. Analysts had forecast a 0.4% increase month-on-month.

EUR/USD

Europe’s common currency has returned to form in recent sessions, with the EUR/USD exchange rate approaching multi-week highs. The pair has added roughly 250 pips since the beginning of March and is currently trading in the mid-1.2300 range. Key levels to watch include 1.2206, the low from 9 February, and 1.2401, the short-term resistance level.

AUD/USD

Australia’s dollar picked up steam on Tuesday even as the economic data failed to inspire confidence in the local recovery. AUD/USD advanced 0.3% to 0.7784. The pair continues to trade in a familiar range following a multi-legged breakdown from highs near 0.8000 in mid-February.

GBP/USD

Cable also pointed higher on Monday, as prices continued to claw back toward the mid-1.3800 region. At the time of writing, GBP/USD was trading at 1.3843, where it was little changed compared to the previous close. Sterling has gained traction in the wake of Theresa May’s acknowledgment that a Brexit transition deal was in the works. Brexit talks will continue to influence the British pound in the short term.

Daily Pivots: (S1) 1.5849; (P) 1.5892; (R1) 1.5925; More....

With 1.5786 minor support intact, further rise is expected in EUR/AUD for 61.8% projection of 1.5258 to 1.5816 from 1.5626 at 1.5971. Break there target 100% projection at 1.6184. On the downside, break of 1.5786 will rise the chance of near term reversal and turn bias to the downside for 1.5626 support.

In the bigger picture, medium term rise from 1.3624 is still in progress for 1.6587 key resistance. At this point, we'd be cautious on strong resistance from there to limit upside. But decisive break will confirm resumption of long term rise from 1.1602. On the downside, break of 1.5153 support is needed to indicate completion of the medium term rise. Otherwise, outlook will remain bullish in case of pull back.

Currency pair EUR/USD

The EUR/USD showed strong bullish momentum at the support zone (green). A bullish breakout above resistance (orange/red) could confirm the continuation of the uptrend whereas a bearish break below support makes a wave 4 (pink) less likely and a downtrend more probable.

The EUR/USD could make a bearish pullback via an ABC pattern (blue) within wave 2 (purple).

Currency pair GBP/USD

The GBP/USD is building a bullish channel (green) after bouncing at the 61.8% Fibonacci level.

The GBP/USD is probably not in a bearish wave 4 anymore after breaking above the bottom of wave 1 (dotted red). It could now be in a bullish wave 4 (grey), unless price breaks above the bottom of the wave 1 (red line).

Currency pair USD/JPY

The USD/JPY could have completed a bearish wave 5 (blue) at the most recent lower low around 105.

A bearish extension is still possible as the USD/JPY could be building a bearish wave 4 (green) correction, but a break above the resistance trend line(red) would invalidate this.

Daily Pivots: (S1) 0.8878; (P) 0.8913; (R1) 0.8941; More...

At this point, further rise is still expected in EUR/GBP. Prior break of 0.8928 resistance indicates near term trend reversal. Decline from 0.9305 has completed at 0.8686 after hitting 61.8% retracement of 0.8312 to 0.9305. Further rise should be seen back to 61.8% retracement of 0.9305 to 0.8686 at 0.9069. Firm break there will target retest of 0.9305 high. On the downside, below 0.8877 minor support will dampen this bullish view and target 0.8771 support instead.

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 conf irm 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.

Headlines/Economic Data

General Trend: Asian equity markets rise amid rebound in steel makers and earlier gains in the US

Asian automakers also trade generally higher

Energy producers gain after rise in oil prices on Monday

RBA expects faster economic growth in 2018 vs 2017; notes wage growth ‘appears to have troughed’

Weaker yen boosts Japanese exporters, especially auto makers

Australia Q4 Net Exports expected to subtract from GDP; Q4 GDP data due on Wednesday’s session

Korean Won (KRW) gains over 0.5% versus US dollar as talks between the two Koreas in focus

Australia/New Zealand

ASX 200 opened +0.3: closed +1.1%

ASX 200 Energy Index +2%, Utilities +1.8%, Telecom +1.6% Resources +1.5%, Consumer Discretionary +1.1%, Financials +1%

NZM.NZ Terminates merger agreement with Fairfax’s Stuff Limited, will continue with appeal

(AU) Australia Q4 Current Account (A$): -14.0B v -12.2Be; Net Exports of GDP: -0.5% v -0.6%e

(AU) AUSTRALIA JAN RETAIL SALES M/M: 0.1% V 0.4%e

(AU) RESERVE BANK OF AUSTRALIA (RBA) LEAVES CASH RATE TARGET UNCHANGED AT 1.50%; AS EXPECTED

Looking ahead: Australia Q4 GDP data due to be released on Wed, RBA Gov Lowe scheduled to speak (topic: ‘The Changing Nature of Investment’)

China/Hong Kong

Shanghai Composite opened flat, Hang Seng -0.2%

Hang Seng Energy Index +2.7%, Info Tech +2.6%, Materials +1.8%, Services +1.3%, Consumer Goods +1.2%, Financials +1.2%

(CN) China PBoC monetary policy expected to be more flexible this year; Should cut RRR to prevent risks from slower growth - China Securities Journal

(CN) According Financial Stability Board (FSB) stats China shadow banks account for 15% of global market, with ~$7T of the global $45.2T global shadow banking assets

(CN) China PBoC Open Market Operation (OMO): Skips reverse repo operations for the 2nd consecutive session; Net drain nil v CNY100B prior

(CN) PBOC SETS YUAN REFERENCE RATE AT 6.3386 V 6.3431 PRIOR

Japan

Nikkei225 opened +1.7%; closed: +1.8%

TOPIX Iron & Steel +2.4% Index, Electric Appliances +2.3%

Cosmetics company Shisheido [4911.JP] gains over 4% following release of FY18-20 corporate strategy

(JP) Barclays pushes back forecast for BoJ policy changes to 2019 – US financial press

(JP) Top analysts say a worsening in trade concerns could weigh on foreign demand for Japanese equities – US financial press

(JP) Japan Trade Min Seko: Japanese products contribute to US growth and jobs

(JP) Japan's Persol, Recruit, and other major human resource firms to start providing commutation allowances for temporary workers in administrative positions from April this year as labor shortages become an increasingly serious issue - Nikkei

(JP) Japan Cabinet approves plan to improve the accuracy of prelim GDP data - financial press

(JP) Japan Govt approves signing of TPP FTA without the US - Nikkei (to happen later this week in Chile)

(JP) Japan MoF sells ¥800B v ¥800B indicated in 0.8% (0.8% prior) 30-yr bonds; Avg yield: 0.75% v 0.820% prior; Bid to cover: 4.24x v 4.27x prior

(JP) BoJ Gov Kuroda: BOJ is keeping policy very accomodative, takes time to get rid of deflationary mindset - Confirmation Hearings

Looking Ahead: Additional confirmation hearings for the BoJ Dep Gov Nominees (Amamiya, Wakatabe) set for Wed, March 7th

Korea

Kospi opens +1.1%

Shares of Samsung Electronics gain over 3% (declined ~1.8% on Monday’s session)

LG Display’s shares underperform amid cautious broker commentary

(KR) North Korea and South Korea hold high level talks today, North Korea has a "firm will" to advance relations with South Korea. Kim Jung Un has agreed to meet with South Korea President Moon after successful talks.

(KR) SOUTH KOREA FEB CPI M/M: 0.8% V 0.5%E; Y/Y: 1.4% V 1.2%E

(KR) South Korea Jan Current Account: $2.68B v $4.1B prior; Balance of Goods (BOP): $8.11B v $8.2B prior

(KR) South Korea to talk about revision of property holding tax - Korean press

(KR) South Korea to challenge US steel tariffs in G20 - Korean press

(KR) South Korea to announce scale and date of military drills with US after the 18th (were delayed due to Olympics)

(KR) South Korea sells 30-yr bonds; avg yield 2.735%

Other Asia

(PH) Philippines Feb CPI M/M: 0.8% v 1.0% prior; Y/Y: 4.5% v 4.1%e (Highest annual pace since 2014)

Punjab National Bank [PNB.IN] Foreign banks said to stop sales of gold to the bank - Indian Press

North America

US equity markets ended broadly higher: Dow +0.7%, S&P500 +0.8%, Nasdaq +0.7%, Russell 2000 +0.7%

S&P500 Utilities +2%, Financials +1.4%, Real Estate +1.4%

(US) On Thursday (Mar 8th), US President Trump expected to discuss impact of planned tariffs with US companies that use aluminum and steel - US financial press

(US) President Trump: Will not back down on trade; I don't think we will have a trade war; Reiterates threat to raise tax on car imports

LOGI Guides initial FY19 Rev growth in 'high single-digit'; Op $310-320M; affirms FY18 Rev +12-14% y/y; Op $270-280M

Looking ahead: US Weekly API Crude Oil Inventories due for release

Europe

(UK) Reportedly the EU's initial offer on trade will not be very detailed; The lack of detail in the offer would leave the UK having to renegotiate large parts of its trade agreement with the EU during the post-Brexit period. The UK has been seeking to have the entire trade accord squared away before the March 2019 Brexit – press

(UK) Senior EU Brexit negotiator Rynck: not likely that there will be certainty about future ties to the EU by this fall [*Note: previously EU had sought to wrap up trade negotiations by Nov]

(UK) Feb BRC Sales LFL y/y: 0.6% v 0.5%e

OPEC Sec Gen Barkindo: Demand has not been this solid and positive since before the financial crisis; Have to wait on a decision about whether production cuts will be extended into 2019; Shale producers are interested in a dialogue with OPEC, but will not be discussion production cuts or prices

Telecom Italia [TIT.IT]: Elliott said to build stake in the company - US financial press

Levels as of 01:00ET

Hang Seng +1.7%; Shanghai Composite +0.8%; Kospi +1.5%

Equity Futures: S&P500 +0.0%; Nasdaq 100 +0.2%, Dax +0.1%; FTSE100 -0.1%

EUR 1.2332-1.2363; JPY 106.16-106.47; AUD 0.7761-0.7792 ; NZD 0.7203-0.7245

Apr Gold +0.3% at $1,324/oz; Apr Crude Oil +0.2% at $62.70/brl; Mar Copper +0.5% at $3.14/lb

Market movers today

In terms of data there are no global market movers in today's session and markets will continue to focus on Trump's protectionist measures and possible counter -measures from countries hurt by the announced tariffs. The political situation in Italy will also be on the radar.

The EU is expected to publish its draft guidelines for the future relationship between the UK and EU today. According to the press, we should not expect very detailed guidelines, as the EU wants the UK to concretise the relationship it wants.

The Fed's Vice-Chairman Bill Dudley is set to participate in a roundtable discussion on St . Thomas, but the subject is the effect of the hurricanes on the Virgin Islands and Puerto Rico. Therefore, it is unlikely he will address the out look for monetary policy.

Meanwhile, in the Scandies, the big event of the day is Norges Bank's Regional Network Survey, which is t he cent ral bank's preferred indicator of the economic out look. In Sweden, we will follow Riksbank Governor Stefan Ingves and Deputy Governor Henry Ohlsson at tending a parliamentary hearing as well as the release of industrial product ion data. For more information, see page 2.

Selected market news

Global risk appetite has improved at the beginning of the week as concerns of a global trade war stemming from more protectionist US policies have eased amid Republican lawmakers and influential investors publicly questioning Trump's intended tariffs on steel and aluminium. This morning, most Asian equity indices have followed their US counterparts into green territory, the USD has stabilised and US 10Y Treasury yields have risen 9bp from Friday's low.

Following the defeat of the Democratic Party (DP) at the Italian election, former Italian Prime Minister Matteo Renzi has resigned as DP leader. Meanwhile, Renzi will head t he part y's talks in the at tempt to create a new government and has re-emphasised that the DP will not enter a coalition with either the League or the Five Star – the two ant i-establishment parties that stand as winners following Sunday's vote. Going forward, the negotiations remain messy and the next important date will be 23 March when both houses of Parliament are due to come together for the first time. In our view, it remains unlikely that we will have an Italian government in place before May or June and at this stage we cannot rule out new elect ions in H2 this year.

The monthly house price sta istics from Real Estate Norway showed that house prices in Norway rose by a seasonally-adjusted 0.4% m/m in February, see chart. In addition, the details showed a further improvement in the sales-to-stock ratio, suggesting that house prices are very close to fully bottoming out . This reduces the downside risk of the economic out look ahead of today's Regional Network Survey an d next week's Norges Bank monetary policy meeting.

This morning, the Reserve Bank of Australia has as expected kept the cash rate unchanged at 1.5%. The accompanied statement was fairly neutral and AUD/USD is little changed post the announcement . Going forward, we st ill pencil in one rate hike over the coming 12M.