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Notes/Observations

BOJ Kuroda press conference dampened any expectations of QE exit plans; noted too early to discuss policy exit given weak inflation

Euro Zone May CPI confirmed remained below the ECB target for the 2nd straight month

Overnight

Asia:

Bank of Japan (BOJ) left Interest Rates unchanged at -0.10% (as expected); maintained 10-year JGB Yield Control (YCC) at 0.00% (no set time) and annual pace of asset purchases at ¥80T

Europe:

Eurogroup's Dijsselbloem: we have achievements on all elements on Greece. Greece will maintain a 3.5% surplus until 2022. Debt relief would be granted after bailout ends with success in 2018

Eurogroup statement noted that Euro Zone Finance Ministers agreed on €8.5B loan to Greece. Ready to implement extensions of the weighted average maturities and further deferral of EFSF interest by between 0-15 years. Debt relief for Greece would be granted after bailout ends with success in 2018

IMF's Lagarde: To propose approval in principle on Greece; to discuss the Greek accord with the IMF in July. Intended to propose a loan for Greece in the range of $2B; to propose to exec board an approval in principle of a standby arrangement for Greece below $2B. Needed to see more details on Greek debt measures in the weeks ahead; currently, as is, Greek debt was not sustainable

Greek Fin Min Tsakalotos: There was a strong growth package, including launch of a state development bank. The point of this whole exercise was to leave the program next year. Issue of accessing the debt markets is a technical issue; Greece's return to the debt market to depend on a judgment call; would receive clearance to access debt markets in due course

UK and EU officials reportedly to begin formal Brexit talks on Monday, June 19th, as expected - PM May: time for a Northern Ireland deal is running out; must come to agreement by June 29th

DUP party said not calling for UK to stay in EU single market or customs union as part deal to support Conservative party in Govt; decreases hopes the agreement could lead to a less extreme form of Brexit

Americas:

Special Counsel Mueller was looking into finances and business dealings of Jared Kushner - China US Treasury holding for April rose to its highest level since Oct ($1.092T vs. $1.088T m/m)

Economic Data

(EU) Euro Zone May CPI M/M: -0.1% v -0.1%e; Y/Y (Final Reading): 1.4% v 1.4%e; CPI Core Y/Y (Final reading): 0.9% v 0.9%e

Fixed Income Issuance:

None seen

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx50 +0.6% at 3547, FTSE +0.4% at 7449, DAX +0.5% at 12750, CAC-40 +0.9% at 5266, IBEX-35 +0.7% at 10776 FTSE MIB +0.7% at 20999, SMI +0.9% at 8933, S&P 500 Futures +0.2%]

Market Focal Points/Key Themes European Indices trade higher across the board rebounding from yesterday's falls, with macro economic news in focus. as well as triple witching Friday. The French CAC outperforms while the UK FTSE under performs following the BoE rate decision and minutes yesterday. On the corporate front UK Supermarket giant Tesco reported better then expected UK LFL sales, whilst group sales lagged, Nestle shares trade higher after talk of possible sale of US confectionery division. Newly listed ALD Automotive and Indorisa Pharma opened for trade today with Indorsia higher by over 20% after spinning off from Actelion.

Equities

Consumer discretionary [Tesco [TSCO.UK] -0.6% (Q1 update), Nestle [NESN.CH] +1.8% (Reportedly considering strategic options for US confectionery division, including possible sale),SThree [STHR.UK] +3.3% (Earnings)]

Telecom: [Avanti Communication Group [AVN.UK] +47% (Super facility)]

Industrials: [Rolls Royce [RR.UK] +0.9% (Trading update)

Financials: [ Record Plc [REC.UK] +12% (Earnings), SocGen [GLE.FR] +1.4% (ALD Automotive IPO)]

Healthcare: [ Indorsia Pharma [IDIA.CH] +17.5% (Spin off from Actelion)]

Speakers

ECB's Villeroy (France): Must complete Basel III bank capital requirement discussions. Unilateral deregulation would be a 'lose-lose' game with grave consequences

EU's Moscovici noted that the Greece agreement makes progress on debt management

EU's Dombrovskis: Finance Ministers continue to work on Non-performing loans (NPLs)

UK Chancellor of Exchequer Hammond: Govt to take pragmatic approach in Brexit negotiations; to find a solution that works. Have set out a very clear desired outcome in planned EU talks but would not give 'blow-by-blow accounts. Set out to prioritize jobs and growth

Portugal Fin Min Centeno: Govt plan to maintain the cash buffer as it continues to make early repayments of its IMF loan over the next 30 months. To pay €1.0B by end of June as soon as we have the formal authorization from the European institutions

Luxembourg Fin Min Gramegna: Good compromise on Greece from Eurogroup; gives country a bit of buffer with aid payout; Euro Zone gave Greece room to maneuver. Saw good solution for Greece and Europe on debt in coming months

Greece PM Tsipras: Have taken a definitive step to exit crisis

BOJ Gov Kuroda post rate decision press conference reiterated view that to adjust monetary policy as needed to maintain momentum in achieving the 2% price target; still quite a distance to achieve target, only half-way there. Recovery has turned to a moderate expansion. Taking time to end the deflation mindset in Japan. Reiterated that expects prices to rise gradually from here. Rising wages to lead to higher selling and service prices. To conduct bond purchases to achieve yield target; no pre-set idea about the pace of bond buying; amount to be result of yield target. Not appropriate to present specific plan about any exit from stimulus. Hard to give simulations about what will happen to BOJ earnings during exit. Growing talk of a policy exit is due to what's happening with central banks in the US, Europe

China FX regulator SAFE reiterated that forex supply and demand remained balanced in May

Currencies

USD/JPY was higher above the 111.30 level in the session as the BOJ post rate press conference saw Gov Kuroda note that the BoJ was not planning to release simulations regarding a pullback of its easy-money policies. Some in the market had speculated the central bank could start to float the idea of a possible future exit. Kuroda press conference dampened any expectations of QE exit plans. The yen currency softer as a result. Kuroda noted that growing talk of a policy exit was due to what's happening with central banks in the both US, Europe.

The EUR/USD retraced its post FOMC losses but remained below the 1.12 level. Euro Zone May CPI confirmed remained below the ECB target for the 2nd straight month

Fixed Income

Bund futurestrade at 164.28 down 30 ticks after a technical break and now are at the lows for June. Resistance lies near the 164.60 level, followed by 165.52. A break of the 163.89 support level could see lows target 162.05 followed by 160.30.

Gilt futurestrade at 128.71 down 22 ticks after extending its declines from Wednesday's high 130.23. Price fell below 129.14 level and now initial support lies 128.27 level, with key support at the 127.96 support level. An acceleration lower could test the 127.43 region. Resistance lies at the 129.80 level followed by 132.65.

Friday's liquidity report showed Thursday's excess liquidity fell to €1.662T a decrease of €14B from €1.676T prior. Use of the marginal lending facility rose to €226M from €180M prior.

Corporate issuancesaw $3B come to market via 1 issues headlined by Brighthouse Financial Inc. -2-part senior unsecured note offering. This week's issuance is at $14.0B, lower than the analysts' issuance target to come in around $20B. For the week ending Jun 14th Lipper US fund flows reported IG funds net inflows $2.603B bringing YTD inflows to $64.29B, High yield funds reported outflows of $0.2B bringing YTD outflows to $4.70B.

Looking Ahead

06:00 (IE) Ireland Apr Trade Balance: No est v €5.1B prior

06:00 (UK) DMO to sell combined £3.0B in 1-month, 3-month and 6-month bills (£1.5B, £0.5B and £1.0B respectively)

06:30 (RU) Russia Central Bank (CBR) Interest Rate Decision: Majority of analysts expect Russia to cut its Key 1-week Auction Rate by 25bps to 9.00%

06:45 (US) Daily Libor Fixing

07:30 (BR) Brazil Apr Economic Activity (Monthly GDP) M/M: +0.2%e v -0.4% prior; Y/Y: -1.4%e v +1.1% prior

07:30 (IN) India Weekly Forex Reserves

08:00 (IS) Iceland May Unemployment Rate: No est v 2.1% prior

08:00 (BE) Belgium Debt Agency (BDA) announcement of upcoming OLO auction for Mon, Jun 19th

08:15 (UK) Baltic Dry Bulk Index

08:30 (US) May Housing Starts: 1.22Me v 1.172M prior; Building Permits: 1.25Me v 1.2228M prior (revised from 1.229M)

08:30 (CA) Canada Apr Int'l Securities Transactions: No est v C$15.1B prior

10:00 (US) Jun Preliminary University of Michigan Confidence: 97.0e v 97.1 prior

10:00 (US) May Labor Market Conditions Index Change: 3.0e v 3.5 prior

11:00 (EU) Potential sovereign ratings

(PT) Portugal Sovereign Debt to be rated by Fitch

(UK) United Kingdom Sovereign Debt to be rated by DBRS

12:45 (US) Fed's Kaplan speaks in Dallas

13:00 (US) Weekly Baker Hughes Rig Count Data

Equity bulls were missing in action on Thursday after a selloff in technology shares and prospects of higher US interest rates pressured World stocks. Markets have washed away the caution during Friday's trading session as Asian stocks steadied after the Bank of Japan left monetary policy unchanged. European equities found themselves supported by the renewed appetite for risk, and this positive momentum could rollover into Wall Street in the afternoon.

This has been an action-packed week layered with central bank meetings and political developments with investors most likely using the weekend to digest the myriad of news events.

Bank of Japan holds fire

As widely expected the Bank of Japan offered no surprise to markets by keeping monetary policy unchanged in its June board review. The central bank left interest rates unchanged at -0.1% and the 10-year government bond yield around zero while maintaining its mammoth annual holding of bonds at 80 trillion yen. Although Friday's statement did adopt a more upbeat tone with the BoJ upgrading its assessment for private consumption and overseas growth, inflation is still far from the 2% target.

When focusing on the USDJPY, the extreme divergence in monetary policy between the Federal Reserve and Bank of Japan could play a role in where the pair concludes this year. While prices are currently bearish amid risk aversion, the prospects of higher US interest rates could empower USDJPY bulls in the medium to longer term. From a technical standpoint, the current bearish trend is at risk of becoming invalidated if prices breakout and close above 111.60.

WTI Crude struggles below $45

Oil prices descended deeper into the abyss on Thursday as bearish investors exploited the unexpectedly large build in gasoline inventories to instigate renewed rounds of selling. The King Dollar's return weighed heavily on the commodity by making it more expensive for buyers utilizing other currencies. With oil displaying repeated signs of weakness despite OPEC cutting production by 1.8 million barrels a day and US Shale pumping incessantly, there is a threat of price weakness becoming a recurrent theme.

Sentiment remains firmly bearish towards oil with further downside expected as the oversupply fears grant sellers the permission to attack the commodity. From a technical standpoint, WTI Crude is heavily bearish on the daily charts. Traders may utilize the dynamic $45 resistance to send WTI towards $43.

Gold bears conquer $1260

Gold found itself vulnerable to heavy losses on Thursday, building on the selling momentum that started during Wednesday evening after the Federal Reserve dished out an unexpected hawkish surprise. A resurgent Dollar amid the Fed's optimism over US economic growth has contributed to Gold's woes with the metal descending to a fresh week low at $1252 during early trading on Friday.

With the zero-yielding metal visibly dictated by US interest rate hike expectations, there is a risk of further downside if speculations mount over the Federal Reserve raising rates again this year. Although risk aversion from both Brexit developments and political uncertainty in Washington could support prices, short-term bears remain in control below $1260. From a technical standpoint, previous support around $1260 could transform into a dynamic resistance that encourages a decline towards $1240.

Currency spotlight – EURUSD

The EURUSD tumbled to a two-week low at 1.1132 on Thursday after the more hawkish tone by the Federal Reserve boosted the US Dollar. Regardless of recent losses, sentiment towards the Euro remains bullish and the currency should remain supported by the encouraging macrofundamentals from the European economy.

Focusing on the technicals, the EURUSD remains bullish on the daily charts and may be in the process of creating a new higher low. A breakout above 1.1230 should encourage a further incline higher towards 1.1300. In an alternative scenario, weakness below 1.1100 opens a path back towards 1.1000.

The pair extends recovery above 111.00 barrier on Friday, following strong rally and close above 200 SMA barrier on Thursday.

The dollar remains supported after FOMC and strong US data while yen weakened further after Bank of Japan kept monetary policy and asset purchases unchanged.

Long bullish candle that was left on Thursday underpins fresh bullish action which met target at 111.37 (daily Kijun-sen) and eyes target at 111.58 (50% retracement of 114.36/108.80 descend).

Bulls may extend towards 111.80/88 zone (daily cloud base / 100SMA) but consolidation phase may precede fresh extension higher as slow stochastic is entering overbought territory.

Strong bids lay at 110.69 (converged 20/200SMA’s) where extended corrective dips are expected to find solid support.

The pair is on track for strong bullish weekly close which would support further recovery.

Res: 111.37, 111.58, 111.88, 112.12
Sup: 111.00, 110.83, 110.69, 110.41

The most anticipated event this week was clearly the FOMC meeting announcement on Wednesday night. A key question was to what extent a so-called data-dependent Fed would factor in a string of weak data, notably on the inflation side and change the stance of its monetary policy. Markets had remained remarkably convinced that a hike was in the making but we were less sure and stood by our call that the data-dependent Fed would keep rates unchanged and instead announce details about their plan for reducing the balance sheet, also called quantitative tightening.

In the end, the Fed both hiked its policy rate by 25 basis points AND laid out its plans for the reduction of its balance sheet. At the same time, the Fed continued to signal another hike this year and three hikes next year. How did Fed governor Yellen sell this rather hawkish twist to monetary policy and what will the market implications be in the near and longer term?

The FED meeting on Wednesday clearly signalled a shift in the Fed's focus. It downplayed the drop in core inflation as temporary (although Yellen did say that they are monitoring inflation developments ‘closely') while attaching greater importance to the fall in unemployment rates, which they expect will reignite wage growth and help push up inflation to the central bank's two percent target. With the US economy expected to grow close to 2% over the next two years, we should see further falls in the unemployment rate.

But we have doubts how fast this will translate into a higher wage growth and thereby inflation. At the press conference, Yellen did acknowledge that the US Phillips curve is rather flat (meaning that the low unemployment rate is not yet translating into higher nominal wage growth) and that the estimate of the unemployment rate below which wages start to rise faster is uncertain. Following the meeting, we are still expecting a hike in December but have become less certain while now only expecting 1-2 hikes next year (down from 3).

Fixed income: long-term yields kept in check

While the more hawkish Fed has certainly put upward pressure on the shorter end of the yield curve, the case for higher longer term yields is more uncertain at least near term. So far the longer-term US yields have declined following the Wednesday meeting. While the balance sheet reduction will soon be started by the Fed, it will still be re-investing sizeable amounts. Furthermore, the relatively weak inflation pressures and expectations also limit the pressure on long-term yields. Furthermore, both Bank of Japan (this morning) and the ECB (last week) signalled no rush to exit their quantitative easing programmes, which will also help keep a lid on global long-term rates. Hence we continue to see the longer-term yields being held in check for most part of 2017.

Equities: sell on rallies near-term

The Fed decisions on Wednesday are not fundamentally changing our view. We still see equities going through a mild downward adjustment following sizeable gains in the spring and stretched valuations. However, if we get a third hike this year as signalled in the dots (our take would be in December), then this could change and we would find ourselves in a situation similar to 2004-05, where US-T sold off, while equities fared fairly well.

FX – further downside to EUR/USD near-term, higher later in 2017

The hawkish twist to the Fed's decision on Wednesday is clearly aiding the USD. This has lent support to our tactically bearish EUR/USD trading recommendation. We continue to see further downside for the cross near-term with the ECB being side-lined in coming months by a sustained deterioration in the inflation outlook and a Fed determined to move on with policy normalisation. Furthermore, the mixture of a BOJ continuing its extraordinary easing programme and the Fed moving towards the exit should also support the USD/JPY, where we see the cross moving to 112 in 1-3M and 116 in 6-12M.

Rising risk of a slowdown in China

It was noteworthy that the Fed removed the monitoring of ‘global economic and financial developments' from its statement on Wednesday, indicating that it is less concerned about the negative impact of global developments on the US economy. This may in our view be a bit premature as we see rising risks of an economic slowdown in China after the withdrawal of stimulus measures and the crackdown on the shadow banking sector. This week we saw a further slowdown in credit supply, falling to the lowest level since October last year, mostly on account of a sharp contraction in shadow banking finance. Adding in a more hawkish Fed, the pressure on Chinese economies markets may grow in the coming months, which risks having repercussions for the global economy.

GOLD Trading lower within uptrend channel.

Gold is consolidating within uptrend channel. Hourly support is located at 1246 (18/05/2017 low). Stronger support is given at 1195 (10/03/2017 low). Expected to show renewed upside pressures.

In the long-term, the technical structure suggests that there is a growing upside momentum. A break of 1392 (17/03/2014) is necessary ton confirm it, A major support can be found at 1045 (05/02/2010 low).

SILVER Selling demand.

Silver declines. Closest support is given at 16.44 (18/05/2017 low). Strong support is given at 16.06 (09/05/2017 low). Key resistance is given at a distance at 19.00 (09/11/2017 high). The road seems wide open for further decline.

In the long-term, the death cross indicates that further downsides are very likely. Resistance is located at 25.11 (28/08/2013 high). Strong support can be found at 11.75 (20/04/2009).

CRUDE OIL Heading to support at 43.76.

Crude oil is finally continuing its decline since the recent collapse from $52. Support is given at a distance 43.76 (05/05/2017 low). Expected to show further decline.

In the long-term, crude oil has recovered after its sharp decline last year. However, we consider that further weakness are very likely. Strong support lies at 24.82 (13/11/2002) while resistance can now be found at 55.24 (03/01/2017 high).

EUR/JPY Lack of follow-though.

EUR/JPY has bounced back after breaking hourly support given at 122.56 (18/05/2017 low) has been broken. Hourly resistance can be found at 125.82 (16/05/2017 high). Major support is given at 114.90 (18/04/2017 low).

In the longer term, the technical structure validates a medium-term succession of lower highs and lower lows. As a result, the resistance at 149.78 (08/12/2014 high) has likely marked the end of the rise that started in July 2012. Strong support at 94.12 (24/07/2012 low) looks nonetheless far away.

EUR/GBP Bearish pressures increase.

EUR/GBP is back below former support given at 0.8787 (13/03/2017 high). Other support can be found at 0.8652 (08/06/2017 low). Expected to further decline.

In the long-term, the pair has largely recovered from recent lows in 2015. The technical structure suggests a growing upside momentum. The pair is trading above from its 200 DMA. Strong resistance can be found at 0.9500 psychological level.

EUR/CHF Back to bearish.

EUR/CHF's bearish pressures are back. Yet, we believe that the medium-term pattern suggests us to see continued bearish pressures towards hourly support that can be found at 1.0792 (03/05/2017 low).

In the longer term, the technical structure is mixed. Resistance can be found at 1.1200 (04/02/2015 high). Yet,the ECB's QE programme is likely to cause persistent selling pressures on the euro, which should weigh on EUR/CHF. Supports can be found at 1.0184 (28/01/2015 low) and 1.0082 (27/01/2015 low).

USD/CHF Strengthening.

USD/CHF is pushing higher. Hourly resistance given at 0.9727 (09/06/2017 high) has been broken. Strong resistance is given at 1.0107 (10/04/2017 high). Expected to show continued short-term bullish pressures.

In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours nonetheless a long term bullish bias since the unpeg in January 2015.

USD/CAD Consolidating higher.

USD/CAD has strongly declined and is now consolidating higher. Hourly support found at 1.3324 (13/04/2017 high) has been broken. Expected to show continued weakness towards support given at 1.3010 (16/02/2017 low)

In the longer term, the pair lies in a bullish channel since a year. Strong resistance is given at 1.4690 (22/01/2016 high). Long-term support can be found at 1.2461 (16/03/2015 low).

AUD/USD Wide-open for further increase.

AUD/USD is pushing higher since the pair has failed to reach hourly support given at 0.7329 (09/05/2017 low). As long as prices remain below resistance at 0.7608 (17/04/2017 high), there are nonetheless strong downside risks.

In the long-term, we are waiting for further signs that the current downtrend is ending. Key supports stand at 0.6009 (31/10/2008 low) . A break of the key resistance at 0.8295 (15/01/2015 high) is needed to invalidate our long-term bearish view.

EUR/USD Consolidating above 1.1100.

EUR/USD is trading lower. The pair is still trading below strong resistance given at 1.1300 (09/11/2017 high). Hourly support is given at 1.1110 (22/05/2017 low) has been broken. Stronger support lies at 1.0842 (11/05/2017 low) and key support is given at 1.0494 (22/02/2017 low). Expected to show renewed bullish pressures.

In the longer term, the momentum is clearly negative. We favour a continued bearish bias towards parity. Key resistance holds at 1.1714 (24/08/2015 high) while strong support lies at 1.0341 (03/01/2017 low).

GBP/USD Strengthening.

GBP/USD is now pushing up and down around former hourly support given at 1.2757 (21/04/2017 low). Hourly resistance lies at 1.3046 (18/05/2017 high). Expected to show continued short-term increase.

The long-term technical pattern is even more negative since the Brexit vote has paved the way for further decline. Long-term support given at 1.0520 (01/03/85) represents a decent target. Long-term resistance is given at 1.5018 (24/06/2015) and would indicate a long-term reversal in the negative trend. Yet, it is very unlikely at the moment.

USD/JPY Surprising rebound.

USD/JPY's short-term bearish pressures have faded. The pair has surged. Hourly support can be found at 108.89 (14/06/2017 high). Strong support is located at 108.13 (17/04/2017 low). Hourly resistance given at 110.81 (09/06/2017 high) has been broken. Other key supports lie at a distance 106.04 (11/11/2016 low). Expected to show continued increase towards resistance given at 112.13 (24/05/2017 high)

We favor a long-term bearish bias. Support is now given at 96.57 (10/08/2013 low). A gradual rise towards the major resistance at 135.15 (01/02/2002 high) seems absolutely unlikely. Expected to decline further support at 93.79 (13/06/2013 low).

The Bank of Japan maintained their monetary policy on Friday whilst upgrading their assessment of private consumption and overseas growth; signaling its confidence that an export focused economic recovery was broadening and gaining momentum. Short term interest rates will remain at -0.1% and 10-year Government Bond yields close to zero.

Unlike the US Federal Reserve, who have reduced their massive stimulus program, the BOJ is unlikely to adopt the same approach whilst Japanese inflation is nowhere near BOJ’s 2% target.

Following the Policy Decision, a statement from the BOJ stated; “Private consumption has shown increased resilience against a background of steady improvement in the employment and income situation”

In early trading USDJPY touched a high around 111.37 and is currently trading around 111.15. Japan’s Nikkei 225 advanced 0.7%, narrowing its loss for the week to 0.3%.

GBP moved higher on news that Prime Minister Theresa May has reached a “broad agreement on a governing agenda prioritizing Brexit and UK unity with Northern Ireland’s Democratic Unionist Party”. The markets take this as a positive with “stability” returning to the UK Government. GBP has also been bolstered with signs that there is a likely shift in the Bank of England’s policy on keeping UK interest rates at record lows. GBPUSD is currently holding above 1.2750 & EURGBP remains close to the early Friday high of 0.8741.

The Dollar Index rose to 97.539 extending the 0.5% gain it had on Thursday.

With USD strengthening gold has seen muted trading currently trading at $1254.50. If gold fails to recover from current levels it will mark a weekly loss of 1% and a second weekly decline.

WTI also remains “depressed” trading close to a 6 week low due to continued concerns over rising US inventories adding to an already heavy supply of Oil in the global market.

Friday is relatively “light” on economic data releases with the University of Michigan Consumer Sentiment Index at 15:00 BST and Dallas FOMC Member Kaplan speaking at 17:45 BST.

GBPUSD turned bearish in the short term after the pair’s fall from the May 18 high of 1.3046 to the June 9 low of 1.2634. There was a bounce from this level but resistance was found at the 50-day moving average and at the 23.6% Fibonacci retracement level at 1.2821. This is the retracement of the upleg from 1.2108 to 1.3046. Following a pullback from this resistance area, the market is consolidating just below 1.2775, which is now immediate resistance but was support in the past.

It remains to be see whether this bounce from 1.2634 is a temporary correction before a resumption of the downtrend that started from 1.3046. Downside momentum has faded after the RSI’s dip below 50 has resulted in a flattening of the oscillator. But it still remains in bearish territory.

A break below 1.2634 and below important support at the 50% Fibonacci at 1.2574 would increase downside momentum. A deeper decline from here would bring about a resumption of the downtrend from 1.3046 and change the bullish picture that was forming from the rise from 1.2108 to 1.3046.