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Daily Pivots: (S1) 106.21; (P) 106.46; (R1) 106.84; More...

USD/JPY is staying in consolidation above 105.54 temporary low. Intraday bias remains neutral first. Upside of recovery should be limited below 108.72 support turned resistance and bring fall resumption. Below 105.54 will extend the larger fall from 118.65 and target 100% projection of 118.65 to 108.12 from 114.73 at 104.20 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.

Daily Pivots: (S1) 0.9261; (P) 0.9290; (R1) 0.9318; More...

USD/CHF's consolidation from 0.9186 is still in progress and intraday bias stays neutral. We'd expect upside of recovery to be limited by 0.9469 resistance to bring fall resumption. Break of 0.9186 will extend the larger down trend to 0.9115 medium term projection level next. However, considering bullish convergence condition in 4 hour MACD, break of 0.9469 will indicate near term reversal and turn outlook bullish for 55 day EMA (now at 0.9545) and above.

In the bigger picture, fall from 1.0342 is developing into a medium term down trend. Deeper decline should be seen to 100% projection of 1.0342 to 0.9420 from 1.0037 at 0.9115. Break will target 161.8% projection at 0.8545. In any case, sustained trading above 55 day EMA is needed to be the first sign of medium term reversal. Otherwise, outlook will stay bearish even in case of strong rebound.

Daily Pivots: (S1) 1.2526; (P) 1.2559; (R1) 1.2592; More....

Intraday bias in USD/CAD remains neutral for the moment as range trading continues. On the upside, above 1.2687 will extend the rebound from 1.2246 to retest 1.2919 key near term resistance. On the downside, below 1.2450 will target 1.2246 first. Break there will extend the fall from 1.2919 and target 1.2061 keys support level.

In the bigger picture, the rebound from 1.2246 is mixing up the medium term outlook. Nonetheless, USD/CAD is staying below falling 55 week EMA, hence, the bearish case is in favor. That is, fall from 1.4689 is not completed yet. Sustained break of 1.2061 key support will carry larger bearish implication and target 61.8% retracement of 0.9406 to 1.4689 at 1.1424. However, firm

Daily Pivots: (S1) 0.7894; (P) 0.7915; (R1) 0.7931; More...

Intraday bias in AUD/USD remains neutral at this point. On the upside, above 0.7988 will extend the rebound to retest 0.8135. On the downside, below 0.7758 will resume the fall from 0.8135 and target 0.7500 key near term support. At this point, there is no strong case for a range breakout yet and 0.7500/8135 could hold for a while.

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) 148.89; (P) 149.18; (R1) 149.48; More...

Consolidation from 147.95 temporary low is still in progress and intraday bias in GBP/JPY remains neutral. In case of another recovery, upside should be limited by 151.19 resistance to bring fall resumption. Break of 147.95 will extend the fall from 156.69 and target 146.96 support next. Considering bearish divergence condition in daily MACD, firm break of 146.96 will be another sign of medium term trend reversal. On the upside, break of 151.19 will indicate short term bottoming and turn bias back to the upside for rebound.

In the bigger picture, the case for medium term reversal continues to build up on loss of medium term momentum as seen in 4 hour MACD. Also, firm break of 146.96 will indicate rejection by 55 month EMA and add to that case of reversal. In that case, deeper fall would be seen to 38.2% retracement of 122.36 to 156.59 at 143.51 and then 61.8% retracement at 135.43. Meanwhile, break of 156.59 will extend the rise from 122.36 to 61.8% retracement of 195.86 to 122.36 at 167.78.

Daily Pivots: (S1) 131.89; (P) 132.13; (R1) 132.46; More....

Near term outlook remains bearish with 133.38 resistance intact. Sustained trading below 132.04 cluster support (23.6% retracement of 114.84 to 137.49 at 132.14) will indicate larger trend reversal on bearish divergence condition in daily MACD. In such case, deeper decline would be seen for 38.2% retracement at 128.38 first. However, rebound from 132.04 will retain near term bullishness. Break of 133.38 minor resistance will turn bias back to the upside for 137.49 again.

In the bigger picture, bearish divergence condition in weekly MACD indicates loss of medium term upside momentum. Sustained break of 132.04 will be the early sign of long term reversal and should bring deeper fall back to retest 124.08 key support level. Meanwhile, break of 137.49 will resume the up trend from 109.03 to 141.04/149.76 resistance zone.

Daily Pivots: (S1) 1.1506; (P) 1.1520; (R1) 1.1538; More...

Consolidation from 1.1445 is still in progress and intraday bias remains neutral. Also, with 1.1639 resistance intact, near term outlook remains bearish. Break of 1.1445 will resume the corrective fall from 1.1832 and target 1.1355 cluster support (38.2% retracement of 1.0629 to 1.1832 at 1.1372.) At this point, we'd expect strong support from there to contain downside and bring rebound.

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.

Daily Pivots: (S1) 0.8847; (P) 0.8858; (R1) 0.8872; More...

No change in EUR/GBP's outlook as range trading continues inside 0.8686/8928. Intraday bias remains neutral and deeper fall is mildly in favor with 0.8928 resistance intact. On the downside, firm break of 0.8686 will resume whole decline from 0.9305. As 61.8% retracement of 0.8312 to 0.9305 should then be taken out too, deeper decline would be seen to retest 0.8303/8312 support zone. Nonetheless, on the upside, break of 0.8928 will indicate near term reversal and turn outlook bullish for 0.9304 resistance.

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) 1.5653; (P) 1.5675; (R1) 1.5700; More....

EUR/AUD weakens notably today but stays above 1.5606 so far. Intraday bias stays neutral first with focus back on 1.5606. Firm break of 1.5606 will argue that a short term top is formed. Intraday bias will be turned back to the downside for 55 day EMA (now at 1.5476) and below. Nonetheless, break of 1.5816 should now confirm resumption of medium term rise from 1.3264. In that case, EUR/AUD should target 1.6587 key long term resistance.

In the bigger picture, medium term rise from 1.3624 is not completed yet. Sustained break of 1.5770 will extend the rise to retest 1.6587 (2015 high). However, considering bearish divergence condition in daily MACD, break of 1.4949 cluster support (38.2% retracement of 1.3624 to 1.5770 at 1.4950) will indicate medium term reversal. And there is prospect of retesting 1.3624 low in that bearish case.

Dollar trades mildly higher today as risk markets are back on the defensive side. Yen is trading as the weakest one so far even though Nikkei is down -0.9% at the time of writing. Swiss Franc and Kiwi follows closely. Notable strength is seen in Aussie after RBA minutes showed neutral stance. Major forex pairs are crosses are generally stuck in range. Nonetheless, the dip in EUR/AUD is seen as a early sign of near term reversal and will be closely watched.

RBA cautiously neutral

RBA minutes showed that policymakers are maintaining the cautiously neutral stance. The low interest rate is helping to bring down unemployment rate and keep inflation inside target band. But it echoed recent comments from officials that "further progress on these goals was expected over the period ahead but the increase in inflation was likely to occur only gradually as the economy strengthened." The minutes also warned that "there was still a risk that growth in consumption might turn out to be weaker than forecast if household income growth were to increase by less than expected." It's generally expected that RBA will be on hold throughout 2018. But views on whether it will hike in early 2019 are divided.

BoJ to continue virtual normalization

Former BoJ board member Takahide Kiuchi said a "de-facto normalization" of monetary is already taking place with the central bank. And, the reappointment of Haruhiko Kuroda as Governor, and Executive Director Masayoshi Amamiya as the next deputy, showed the governments wants "continuity". Therefore, under the new board, BoJ will continue with such "virtual normalization". Meanwhile, Kiuchi said the reappointment of Kuroda shows Prime Minister Shinzo Abe is more focused on maintaining market stability and sustaining growth, rather than achieving the inflation target.

SPD members to vote on grand coalition

In Germany, over 450k members of the Social Democratic party will start voting on reforming the grand coalition with Chancellor Angela Merkel's Christian Democratic Union. They will have until March 2 to submit their votes. Result is expected to be announced on March 4. SPD leader Andrea Nahles said in an interview that there will be an "intense debate". She also said earlier that there is no "Plan B" if the notion is voted down by SPD members. And a new election could be the ultimate outcome should that happens. Newspaper Bild am Sonntag polled the mayors of the 35 biggest towns and cities ruled by the SPD. 26 of them said they back the notion. So far, the vote is wide open.

Elsewhere

New Zealand PPI input rose 0.9% qoq in Q4, PPI output rose 1.0% qoq. German PPI, ZEW will be the main focus in European session. Swiss will release trade balance while UK will release CBI trends total orders. Eurozone will also release consumer confidence. Canada wholesale sales will be featured.

EUR/AUD Daily Outlook

Daily Pivots: (S1) 1.5653; (P) 1.5675; (R1) 1.5700; More....

EUR/AUD weakens notably today but stays above 1.5606 so far. Intraday bias stays neutral first with focus back on 1.5606. Firm break of 1.5606 will argue that a short term top is formed. Intraday bias will be turned back to the downside for 55 day EMA (now at 1.5476) and below. Nonetheless, break of 1.5816 should now confirm resumption of medium term rise from 1.3264. In that case, EUR/AUD should target 1.6587 key long term resistance.

In the bigger picture, medium term rise from 1.3624 is not completed yet. Sustained break of 1.5770 will extend the rise to retest 1.6587 (2015 high). However, considering bearish divergence condition in daily MACD, break of 1.4949 cluster support (38.2% retracement of 1.3624 to 1.5770 at 1.4950) will indicate medium term reversal. And there is prospect of retesting 1.3624 low in that bearish case.

Economic Indicators Update