Sample Category Title

Daily Pivots: (S1) 0.9259; (P) 0.9298; (R1) 0.9345; More...

The break of 0.9392 minor resistance suggests short term bottoming in USD/CHF. Intraday bias is turned back to the upside for recovery to 38.2% retracement of 1.0037 to 0.9254 at 0.9553 first. At this point, there is no clear sign of trend reversal yet. We'd be cautious on strong resistance from 0.9553 to limit upside and bring decline resumption. ON the downside, break of 0.9254 will resume larger down trend from 1.0342.

In the bigger picture, the strong break of 0.9420 support suggests that fall from 1.0342 is developing into a medium term down trend. Deeper fall 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, break of 0.9640 resistance is needed to be the first sign of medium term bottoming. Otherwise, outlook will stay bearish even in case of strong rebound.

Daily Pivots: (S1) 1.3856; (P) 1.3927; (R1) 1.4020; More.....

With 1.3999 minor resistance intact, intraday bias in GBP/USD remains on the downside. The decline from 1.4345 short term top would extend to 1.3651 resistance turned support. For the moment, it's unsure whether the decline is correcting rise from 1.3038, or that from 1.1946, or it's reversing the trend. Break of 1.3651 will turn focus to key fibonacci level at 1.3429. On the upside, above 1.3999 minor resistance will turn intraday bias neutral first.

In the bigger picture, sustained break of 1.3835 key resistance level indicates that rebound from 1.1946 is at least correcting the long term down from from 2007 high at 2.1161. Further rise should now be seen back to 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466. Medium term outlook will stay bullish 38.2% retracement of 1.1946 to 1.4345 at 1.3429, in case of deep pull back.

Daily Pivots: (S1) 1.2315; (P) 1.2374 (R1) 1.2436; More....

EUR/USD weakens mildly in early US session. But after all, it's staying in consolidation pattern from 1.2537 and intraday bias remains neutral. As long as 1.2222 support holds, further rise is in favor. Sustained break of 1.2494/2516 will target 100% projection of 1.0569 to 1.2091 from 1.1553 at 1.3075 next. However, break of 1.2222 will indicate rejection from 1.2494/2516, on bearish divergence condition in 4 hour MACD, and turn near term outlook bearish for 1.1915 support first.

In the bigger picture, rise from 1.0339 medium term bottom is still seen as a corrective move for the moment. But key fibonacci level at 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516 is looking vulnerable. Sustained break of 1.2516 will carry larger bullish implication and target 61.8% retracement of 1.6039 to 1.0339 at 1.3862. Nonetheless, rejection from 1.2516 will maintain long term bearish outlook and keep the case for retesting 1.0039 alive.

Dollar is generally firmer today, except versus Yen as global markets stabilized. At the time of writing, DAX is trading up 0.8%, CAC 40 up 0.6% and FTSE up 0.8%. US futures point to a slightly lower open but loss will be limited initial trading. Euro is also mildly firmer as sup[ported by positive news from EU. On the other hand, Aussie and Kiwi are trading as the weakest ones. In particular, Kiwi is back under some pressure ahead of tomorrow's RBNZ rate decision.

EC upgrades Eurozone growth forecast

European Commission raised Eurozone growth forecast in today's report. 2018 GDP is projected to grow 2.3%, up from November forecast of 2.1%. 2019 GDP is projected to grow 2.0%. For EU excluding UK, GDP growth is seen at 2.5% in 2018 and 2.1% in 2019. UK is projected to grow 1.4% in 2018. Eurozone inflation is projected to be at 1.5% in 2018 and 1.6% in 2019. Both figures are below ECB's 2% target. EU economic affairs commissioner Pierre Moscovici said that "Europe's economy has entered 2018 in robust health" and "growth is also more balanced than it was a decade ago."

Germany: Grand coalition deal finally agreed

German Chancellor's CDU/CSU finally closed the deal with the SPD to reform the grand coalition government. That came after three days of "extra time" negotiations. A formal announcement will be made later today, including the details of the coalition. Next, SPD members are expected to vote on whether to accept the coalition agreement. The results of the vote are expected by March 4.

ECB Lautenschlaeger: Banks must be ready for Brexit

ECB Executive Board member Sabine Lautenschlaeger urged that "banks must be ready for Brexit; it will happen." And, "any bank that wishes to relocate from the UK to the euro area should really have submitted its license application already." Also, "if it hasn't, it should do so by the end of the second quarter of 2018 at the latest." Regarding the so called transition period, Lautenschlaeger noted that "we cannot be sure whether the transition period will really happen".

On the data front

Canada building permits rose 4.8% mom in December. Swiss foreign currency reserves dropped to CHF 731b in January. German industrial production dropped -0.5% mom in December. Japan leading indicator dropped to 107.9 in December, labor cash earnings rose 0.7% yoy.

New Zealand job data won't change RBNZ neutral stance

New Zealand employment rose 0.5% qoq in Q4, slowed from Q3's 2.2% qoq but beat expectation of 0.4% qoq. Unemployment rate dropped to 4.5%, down from 4.6% and was better than expectation of 4.7%. The unemployment rate was also the lowest in 9 years since 2008. The news is certainly welcomed by RBNZ ahead of the rate decision on Thursday. Nonetheless, no one is expecting any change to the 1.75% official cash rate. There is however a risk that RBNZ would try to talk down the exchange rate after recent appreciations.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.2315; (P) 1.2374 (R1) 1.2436; More....

EUR/USD weakens mildly in early US session. But after all, it's staying in consolidation pattern from 1.2537 and intraday bias remains neutral. As long as 1.2222 support holds, further rise is in favor. Sustained break of 1.2494/2516 will target 100% projection of 1.0569 to 1.2091 from 1.1553 at 1.3075 next. However, break of 1.2222 will indicate rejection from 1.2494/2516, on bearish divergence condition in 4 hour MACD, and turn near term outlook bearish for 1.1915 support first.

In the bigger picture, rise from 1.0339 medium term bottom is still seen as a corrective move for the moment. But key fibonacci level at 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516 is looking vulnerable. Sustained break of 1.2516 will carry larger bullish implication and target 61.8% retracement of 1.6039 to 1.0339 at 1.3862. Nonetheless, rejection from 1.2516 will maintain long term bearish outlook and keep the case for retesting 1.0039 alive.

Economic Indicators Update

GOLD: The commodity turned lower on sell on Tuesday and was seen following through on Wednesday. On the downside, support comes in at the 1,320.00 level where a break will turn attention to the 1,310.00 level. Further down, a cut through here will open the door for a move lower towards the 1,300.00 level. Below here if seen could trigger further downside pressure towards the 1,290.00 level. Conversely, resistance resides at the 1,350.00 level where a break will aim at the 1,360.00 level. A turn above there will expose the 1,370.00 level. Further out, resistance stands at the 1,380.00 level. All in all, GOLD looks to weaken further.

The DAX index has posted gains in the Wednesday session. Currently, the index is trading at 12,490.00, up 0.79% on the day. On the release front, German Industrial Production declined 0.6%, close to the estimate of -0.7%. This marked the third decline in four months. On Thursday, Germany releases Trade Balance.

It's been a volatile week for global stock markets, and the DAX has not been immune. The index declined 4.2% last week, as a sharp decline in Deutsche Bank shares sent European stock markets lower on Friday. The slide continued this week, as strong US employment numbers raised concerns of higher inflation and additional rate hikes by the Federal Reserve. Higher US rates would be bad news for European stock markets, as investors would be attracted to dollar-denominated assets. US stock markets were in red territory on Monday, and the Dow Jones posted its biggest one-day loss ever. However, US stock markets rebounded on Tuesday and the trend has continued in the Asian and European markets on Wednesday.

Germany is close to a new government, as the socialist SDP and Angela Merkel's conservatives are expected to announce an agreement later on Wednesday. Merkel has made major concessions in order to reach a deal, including giving the SDP the powerful finance ministry. This would likely mark a shift in Germany's eurozone policy, which had been marked by a conservative stance under former finance minister Wolfgang Schaeuble. Members of the eurozone that have been struggling, such as Greece, will likely get a more sympathetic ear from the SDP than they did from Schauble. The coalition agreement still requires the consent of a majority of the 464,000 members of the SDP.

The German economy continues to shine, despite the ongoing coalition negotiations, which have dragged on since September. A spokesman for the SPD party, which is negotiating with Angela Merkel's conservative bloc, said on Tuesday that a deal is "90-95%" done. For her part, Merkel has said that she is willing to make painful concessions in order to form a government. Both parties have stated that they want to reach an agreement on Tuesday. If there is an announcement later in the day, the euro could move higher.

The USD/CAD has been in a retracement mode but without an additional momentum to break recent highs. The pair is making a lower high now and if 1.2560 holds we might see a u-turn on the price. Targets are W H3 and W L3 levels - 1.2468 and 1.2376, but in the case you are trading intraday pay attention to W H1 - W L1 levels 1.2437 and 1.2405 respectively. A spike above 1.2560 could turn the price bullish again targeting 1.2606 and 1.2653.

W H1 -. Weekly Camarilla Pivot (Interim resistance - Weak)

W H2 - Weekly Camarilla Pivot (Weekly resistance)

W H3 - Weekly Camarilla Pivot (Weekly resistance - main)

W H4 - Weekly Camarilla Pivot (Strong Weekly Resistance)

W L4 - Weekly Camarilla Pivot (Interim support - Strong)

W L3 – Weekly Camarilla Pivot (Interim support - Main)

W L2 – Weekly Camarilla Pivot (Interim support)

W L1 - Weekly Camarilla Pivot (Interim support - Weak)

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

WTI oil price fell to new three-week low at $63.03 on Wednesday, signaling continuation of steep decline from $66.28 on Fri/Mon, which was interrupted by consolidation phase on Tuesday. Fresh weakness probes again below cracked daily Kijun-sen ($63.46), looking for fresh bearish signal on close below. Pivotal support at $62.50 (Fibo 38.2% of $55.81/$66.64 upleg) is coming in focus and break here is needed to signal deeper correction. Scenario is supported by daily 10/20SMA's in bearish setup and momentum entering negative territory. API report on Tuesday showed a 1.05 million barrels drop in crude inventories, against expected build of 2.5 million barrels. Focus turns towards today's release of EIA crude stocks report which is forecasted for 3.18 million barrels build, the second increase in crude inventories (after last week's 6.77 million barrels build) following ten straight weeks of draws in crude stocks. Negative numbers today (further increase in oil stocks) would add on persisting pressure on oil prices due to recent strong fall in global stocks and rising fears on steady increase in US oil production which increased nearly 20% since mid-2016 and threatening to further distract efforts from major oil producers to stabilize oil market by reducing output.

Res: 63.46, 64.16, 64.46, 64.72
Sup: 63.03, 62.83, 62.50, 61.79

Here are the latest developments in global markets:

FOREX: The yen extended its uptrend against the dollar, sending dollar/yen lower to 109.10 as investors maintained their risk-averse behavior after the recent sell-off in stock markets. The dollar index, though, was building positive momentum on the back of a weaker euro and pound, climbing to 89.87 (+0.33%). Euro/dollar slipped to 1.2342 (-0.30%) and pound/dollar weakened to 1.3872 (-0.44%) after the ECB board member, Sabine Lautenschlaeger questioned whether the transitional period after Brexit will “really happen”, arguing that Britain-based banks have not yet submitted their license application to reallocate to the Euro area and the deadline was already ticking down. The antipodean currencies were on the backfoot as well. Aussie/dollar fell down to 0.7860 (-0.54%) and kiwi/dollar dropped to 0.7311 (-0.33%) ahead of the RBNZ policy meeting, unable to sustain gains from yesterday’s better-than-expected dairy prices and employment data. Dollar/swissie and dollar/loonie changed hands at 0.9398 (+0.43%) and 1.2513 (+0.20%) respectively.

STOCKS: European stocks managed to rebound after recent losses, following their US and Asian counterparts. The pan-European STOXX 600 and the blue-chip Euro STOXX 50 were almost 1.0% up at 1130 GMT, with every single sector comprising the indices being in the green. The German DAX 30 and the French CAC 40 were higher by 0.77%, the Italian FTSE MIB jumped by 1.05% and the British FTSE 100 increased by 0.75%. US stock futures were pointing to a positive open.

COMMODITIES: Oil prices pared earlier gains as concerns of a rising US output continued to weigh on the markets. WTI crude was last seen at $63.27/barrel (-0.20%) and Brent was lower at $66.80 (-0.09%). In precious metals, gold consolidated gains at $1328.43/ounce (+0.27%).

The aussie is viewed as a liquid proxy for China’s economy due to the two nations’ close economic ties – China is Australia’s largest export and import partner – and thus will also be gathering attention as the figures hit the markets.

Upbeat data could incentivize forex market participants to place long aussie/dollar positions. In this scenario, the pair might meet resistance around 0.7893, this being the 38.2% Fibonacci retracement level of the December 8 to January 26 upleg (0.7893 failed to provide support on the way down during Wednesday’s trading and could instead act as a barrier to the upside). This area also includes the 0.79 handle, a level of potential psychological significance. Further above, the focus would shift to the range around the 23.6% Fibonacci mark at 0.7986.

In case of weaker-than-anticipated figures however, aussie/dollar might head lower. Support in this case might come around the 50% Fibonacci mark at 0.7818 (including the 0.78 handle and the current level of the 50-day moving average). Steeper declines would shift the focus to the 61.8% Fibonacci level at 0.7743. Notice that the current level of the 200-day MA roughly coincides with this point. It should be pointed out that there is negative momentum at the moment for AUDUSD, with the pair looking set to finish the day lower on Wednesday after declining in all but one of the preceding seven trading days.

The euro has slipped lower during the European trading session, following its second technical rejection from the 1.2400 level. The EURUSD pair is currently trading around the 1.2370 region, as a marginal rebound in the value of the U.S dollar index and continued market jitters keep the pair's upside contained. Moving in to the U.S session, traders will look to the 1.2350 to 1.2400 price-range for confirmation of the EURUSD pairs next directional move.

The EURUSD pair will likely encounter further downside pressures below the 1.2350 level, intraday support is found at the 1.2313 and 1.2275 levels.

If the EURUSD pair can move above the 1.2400 technical level, upside objectives remain 1.2432, 1.2474 and 1.2500.