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Dollar jumps sharply today as markets responded positively to comments from Fed official. Also, as political risks in Europe subsides, traders are getting more certain that Fed will hike in June. Indeed, Fed fund futures are now pricing in 87.7% chance of a June hike, comparing with 67.5% a week ago. Dollar index reaches as high as 99.55 so far today and the break of 99.46 resistance is seen as an indication of near term reversal. Meanwhile, the Japanese yen is trading as the weakest major currency, together with Swiss Franc, as markets are back into risk seeking mode. FTSE, DAX and CAC are all trading mildly higher after yesterday's brief pull back. US futures also point to higher open as NASDAQ and S&P 500 could extend the record runs.

Dollar index in near term reversal

Dollar index's break of 99.46 resistance should confirm near term bottoming at 98.54, after drawing support from lower trend line. The development is so far in line with our view that price actions from 103.82 are merely a consolidation pattern. Judging from the current structure, it's likely a triangle (or a falling wedge as some may call it). Immediate focus is turned back to 55 day EMA (now at 100.01. Sustained break there will now raise the chance that such correction is completed. And in that case, we'll see further rally to 101.34 resistance for confirmation.

In the currency markets, USD/JPY led the way by completing the corrective fall from 118.65 to 108.12 and is back at 113.95. USD/CHF's rally was also impressive and revived the case that correction from 1.0342 is completed 0.9812. Focus will now be on 1.0874 in EUR/USD and 1.2830 in GBP/USD. Firm break of these two support should confirm underlying strength in the greenback.

Cleveland Fed Mester: Be very vigilant against falling behind

Cleveland Fed President Loretta Mester said yesterday that Fed had already met the "maximum employment" part of the duel mandate. Meanwhile, inflation is also "nearing our 2 percent goal". To her, risks are "roughly balanced" and she urged to be "very vigilant against falling behind" and there should be no delay in further policy tightening. She warned that "if we delay too long in taking the next normalization step...we could risk a recession." Mester also sounded trying to talk down Q1 weakness as she said "although we live in a high-frequency world, we cannot overreact to transitory movements in incoming data." And she expects a "rebound in consumer spending over the rest of the year".

Conservatives open record lead over Labour in UK

In UK, latest poll by ICM published yesterday showed that Prime Minister Theresa May's Conservatives is having a record 22 point lead of opposition Labour. It's believed that May will continue with her campaign in securing strong mandate for Brexit negotiation. In particular, May would see newly elected French President-elect Emmanuel Macron's landslide victory as a strong sign of unity in France and EU. And as May said, "he was elected with a strong mandate which he can take as a strong position in the negotiations. In the UK we need to ensure we've got an equally strong mandate and an equally strong negotiating position. And every vote for me and my team will strengthen my hand in those Brexit negotiations."

Prospect of hawkish BoE twist

Meanwhile, focus will also be on BoE Super Thursday this week. While no change in policies is generally expected, a focus will be on the vote split. It should be reminded again then Sterling launched this round of rally against Dollar and Euro after Kristin Forbes surprised the markets by voting for a rate hike back in March. MPC hawks could look through Q1 growth weakness and instead got more nervous with headline CPI back in target range at 2.3% yoy in March. Also, markets are only pricing in less than 60% chance of any move by BoE before end of 2018. There is much room for a hawkish twist in BoE's announcements this weak that could lift Sterling further.

On the data front...

Canada building permits dropped -5.8% mom in March. Germany trade surplus narrowed to EUR 19.6b in March, industrial production dropped -0.4% mom. Swiss unemployment rate dropped to 3.3% in April. Japan labor cash earnings dropped -0.4% yoy in March. Australia retail sales rose 0.1% mom in March.

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 112.66; (P) 112.98; (R1) 113.56; More...

USD/JPY's rally accelerates to as high as 114.10 so far today. The development is in line with our view that correction from 118.65 has completed with three waves down to 108.12. Intraday bias remains on the upside for 115.49 resistance next. Firm break there will now resume larger rally from 98.97 to 125.85 high. On the downside, below 113.04 minor support will turn bias neutral and bring consolidations before staging another rally.

In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. It's uncertain whether it's completed yet. But in case of another fall, downside should be contained by 61.8% retracement of 75.56 to 125.85 at 94.77 to bring rebound. Meanwhile, break of 115.49 resistance will extend the rise from 98.97 to retest 125.85. Overall, rise from 75.56 is still expected to resume later after the correction from 125.85 completes.

Economic Indicators Update

EUR/JPY - 124.03

Recent wave: wave v of (C) ended at 94.12 and major correction in wave A has ended at 149.79

Trend: Near term up

Original strategy:

Sold at 124.00, Target: 122.20, Stop: 124.60

Position: - Short at 124.00
Target: - 122.20
Stop: - 124.60

New strategy :

Hold short entered at 124.00, Target: 122.20, Stop: 124.60

Position: - Short at 124.00
Target:  - 122.20
Stop:- 124.60

Although the single currency has rebounded after finding support at 122.98 and marginal gain from here cannot be ruled out, as long as resistance at 124.55 (yesterday’s high) holds, further consolidation would take place and mild downside bias remains for another retreat, below support at 122.92-98 would suggest a temporary top is possibly formed, bring further fall to 122.60 but break of 122.00-10 is needed to add credence to this view, bring retracement of recent upmove to 11.50 first.

In view of this, we are holding on to our short position entered at 124.00. Above said resistance at 124.55 would abort and signal recent upmove is still in progress and may extend further gain towards 125.00 level but loss of upward momentum should prevent sharp move beyond 125.40-50, risk from there is seen for another retreat later. 

Our latest preferred count is that wave (ii) is ABC-X-ABC which ended at 123.33 and wave (iii) is unfolding with wave iii ended at 100.77, followed by wave iv at 111.57 and wave v as well as the wave (iii) has ended at 97.04, followed by wave (iv) at 111.43 and wave (v) has ended at 94.12 which is also the end of the larger degree v, this also implied the major wave (C) has also ended there, hence major correction has commenced from there with (A) leg unfolding in its lower degree wave c which has possibly ended at 145.69. Under this count, A-B-C wave (B) has commenced with A leg ended at 136.23, wave B at 143.79 and wave C has possibly ended at 149.79.

Our larger degree count is that the decline from 139.26 is wave (C) and is sub-divided into a diagonal triangle i-ii-iii-iv-v with wave i - 105.44, wave ii- 123.33, wave iii - 97.03, wave iv - 111.43, followed by the final wave v as well as the end of wave (C) at 94.12, this also mark the bottom of larger degree wave B. Under this count, major rise in wave C has commenced as an impulsive wave with minor wave III ended at 145.69, wave V is still in progress for further gain to 150.00. Having said that, this so-called wave V could well be the first leg of larger degree 5-waver wave C and this wave C should bring at least a retest of wave A top at 169.97 (July 2008).

AUD/USD – 0.7354

Recent wave: Wave 5 ended at 1.1081 and major correction has commenced for fall to 0.7000 and then towards 0.6500-10

Trend: Near term down

Original strategy :

Sell at 0.7470, Target: 0.7300, Stop: 0.7530

Position: -
Target:  -
Stop: -

New strategy :

Buy at 0.7300, Target: 0.7500, Stop: 0.7240

Position: -
Target:  -
Stop:-

Although aussie has fallen again after brief recovery and near term downside risk remains for recent decline to extend further weakness to 0.7320, loss of downward momentum should prevent sharp fall below 0.7295-00 (76.4% retracement of 0.7158-0.7750) and bring rebound later, above 0.7425-30 would bring rebound to 0.7490-00 but break of 0.7510 is needed to signal low is formed, bring test of subsequent rise towards resistance at 0.7556 which is likely to hold from here. 

In view of this, we are inclined to turn long on next decline. Below 0.7245-50 would risk weakness to 0.7200-10, however, reckon previous support 0.7158 would contain downside and aussie may stage another strong rebound from there later this week. 

On the 4-hour chart, the move from 0.8066 is the wave 5 with i: 0.8860, ii: 0.8315, wave iii is an extended move ended at 1.0183, iv: 0.9706 and wave v has ended at 1.1081 (also the top of entire wave 5). The subsequent selloff is the major correction which is unfolding as ABC-X-ABC and 2nd A leg has ended at 0.8848, followed by a-b-c wave B which ended at 0.9758, hence, 2nd C wave is now in progress and indicated downside target at 0.7000 and 0.6950 had been met, so further fall to 0.6710-20 cannot be ruled out.

• Odds on June Fed rate hike hits 88% as USD rebounds;
• European yields rise as traders anticipate tightening message from ECB next month;
• Commodity bounce aids equities rise but Gold remains under pressure.

As the dust continues to settle on the French election result, it seems calm has returned to financial markets with Monday’s brief relief rally coming to an abrupt halt before attention shifted straight back to the upcoming movements from central banks.

With the eurozone political distraction now seemingly being put to one side, it would appear that traders are once again focused on the upcoming central bank meetings with June being seen as a big month for both the Fed and the ECB. The US dollar is rising for a second day today, having fallen to its lowest level since November prior to this. Traders appear increasingly confident about the prospect of a second rate hike this year in June, with it now 88% priced in according to implied odds from Fed Funds futures rates. A third this year is also more than 60% priced in.

It seems that the passing of the French election has also switched the conversation back to the ECB, with traders anticipating that the central bank will put in place for further reductions in bond buying and possible rate increases by the end of the year. We could get some hint of this in June and with 10-year yields on the rise in European bond markets again today, we may already be starting to see this being priced in.

Having rallied into the French second round result, EURUSD is trading in the red for a second day after failing to hold above 1.10 – an important resistance level for the pair. With the pair having broken below 1.09 today, further downside could be on the cards, with 1.0850 being an important level below.

Equity markets are being supported today, partly by improved risk appetite but more broadly by the bounce in commodity markets. Oil is trading slightly higher today having pared substantial losses over the last couple of days. Still, it continues to hold below a prior support zone, with $50 in Brent and $47.50 in WTI now being notable levels to the upside.

Gold on the other hand continues to trade in the red today, with stronger dollar, improved risk sentiment and reduction in political risk all weighing on the yellow metal. There’s been a notable inverse correlation with the euro over the last few weeks, highlighting the link between political risk and its safe haven appeal but with the election now behind us, that link may start to weaken. With the dollar showing positive signs, Gold may remain under pressure, with $1,220 below being the next notable support level.

Euro geo-political risks have abated somewhat, at leas until next month's French Parliamentary elections, now that Emmanuel Macron handily won the French Presidential election over the weekend. Long euro asset profit taking has been the order of the day over the past 36-hours.

For the time being, for investors and dealers, they now have to revert back to basic fundamentals and focus again on the possibility of rate differentials widening, similar to 'old' school FX.

Overnight, global equity markets were mixed, with Asian shares slipping after a rally to a two-year high while European stocks were bolstered by corporate earnings. The 'mighty' U.S dollar has found some traction, while crude oil reversed some of its losses, but remains in trouble.

1. Global equities mixed results

Asian stocks were largely quiet in the overnight session after strong gains yesterday.

In Japan, the Nikkei eased -0.1% after Monday's +2.3% jump to a 17-month high. If signs of a Fed June rate hike increase many dollar 'bulls' now see Yen under performing towards ¥115.00 region, which could see the Nikkei get to 20,500. The broader Topix fell -0.3% after closing at the highest since December 2015 in the previous session.

In Hong Kong, the Hang Seng index rose +0.2%, as China fell further after yesterday's slide. The Shanghai Composite pared early losses to recently to close -0.3% lower on the session.

In China, stocks fluctuated after erasing more than -$500B from equity values amid a crackdown on financial leverage.

Markets in Korea are closed as voters there elect a new president. The Kospi hit a record high Monday while jumping +2.3%, the biggest daily gain in 20-months.

Down-under, the Aussie S&P/ASX 200 Index dropped -0.5%, hurt mostly by financials on rumours that the Government set to impose a +A$6B levy on lenders in today's budget.

In Europe, equities trade higher across the board, with financials leading the way on the Eurostoxx. Energy shares on the FTSE 100 are under pressure on news that the Conservative Party has pledged to cap energy tariffs.

U.S equities are set to open a tad higher (+0.1%).

Note: The VIX (volatility index) has tumbled to its lowest level in 24-years. it fell -8% to +9.77% Monday

Indices: Stoxx50 +0.5% at 3661, FTSE +0.4% at 7331, DAX +0.5% at 12757, CAC-40 0.4% at 5407, IBEX-35 0.2% at 1124, FTSE MIB +0.9% at 21616, SMI +0.4% at 9074, S&P 500 Futures +0.1%.

2. Oil gives up earlier gains as rising U.S. output, gold lower

Crude oil prices have given up earlier gains overnight, as concerns over slowing demand and a relentless rise in U.S crude output continues to undermine the impact of hopes that OPEC-led production cuts could be extended.

Brent crude futures are at +$49.33 per barrel, down from a high of +$49.60 earlier in the session and near their last close. U.S. West Texas Intermediate (WTI) crude oil futures are trading at +$46.40 per barrel, down from an intra-day high of +$46.66.

In the U.S, increase in production is coming from shale producers. Since the middle of 2016, U.S. crude production has risen by over +10% to +9.3m bpd, which is close to the output of top producers Russia and Saudi Arabia.

Note: The energy market is also eyeing the concerns of China's growth as both imports and exports have slowed.

A decision on whether to continue OPEC and non-OPEC member production cuts is expected at the next official meeting on May 25 in Vienna.

Ahead of the U.S open, gold prices have hit their lowest price in nearly two-months as safe-haven demand diminished on easing political worries after the weekend's France's Presidential election. Spot gold is steady at +$1,226.13 per ounce, after touching +$1,223.34, its lowest since mid-March.

3. Fixed income yields slow march higher

Global yields have trended upward in recent weeks, as alarming geopolitical headlines fade into the background and investors increasingly focus on the potential for the Fed to raise interest rates at their meeting next month. The odds of that happening are currently trading at +80%.

The yields on 10-year Treasury notes are little changed at +2.39%, after climbing +4 bps in yesterday's session. Down-under, yields on Aussie debt with a similar maturity have pushed back +1 bps to +2.68%, while in France, 10-year OAT's yields increased +2 bps to +0.87%.

It seems that the days of these ultra lows yields are numbered, in Germany, 10-year Bunds currently yield +0.44%. It was only 18-months ago that Bunds reached minus -0.19%.

There are a couple of central banks in the frame this week, on Wednesday May 10, the Reserve Bank of New Zealand (RBNZ) and on Thursday, the Bank of England (BoE) – neither are expected change monetary policy soon.

4. Dollar shines brightly

The dollar has gained broadly in the overnight session, rising to an eight-week high against the low-yielding yen of ¥113.69, while the EUR and the pound stay below key resistance levels of €1.1000 and $1.3000, respectively.

The “mighty' dollar continues to derive some support from higher U.S. yields, both nominal and real. Falling commodity prices are also providing support to the greenback, especially against commodity-linked and emerging market currencies.

The EUR/USD trades down -0.1% at €1.0919, while the AUD/USD drops to a four-month low A$0.7347 pressured by a dismal retail sales print overnight (see below).

The pound as been given some support by a strong BRC retail sales survey (British Retail Consortium) overnight, but trades only slightly higher outright, up +0.1% at £1.2952.

5. Blame the weather: Aussie retail sales disappoints

Data overnight showed that Australian retail sales unexpectedly fell -0.1% in March. The market had anticipated a +0.3% rise. The disappointing data may suggest that the Aussie economy is facing headwinds from a weak job market and slack wage growth.

Digging deeper, the demand for food retail and household goods contributed to the monthly fall. The March data contribute to Q1 retail sales rising just +0.1%, below the +0.5% growth expected.

Blame it on the weather – a number of analysts are blaming Cyclone Debbie for the disappointing retail sales headline. Cyclone Debbie damped spending significantly. Sales in Queensland, which bore the brunt of the cyclone, fell by -1.3%. In contrast, sales across the rest of Australia rose by +0.2%.

The CAC is unchanged in the Tuesday session, as the index is trading at 5,399.00. It’s a quiet day on the release front, with no major eurozone of French releases on the schedule. France will release the budget deficit, which is expected to climb to EUR 29.6 billion in March. German Industrial Production declined 0.4%, better than the forecast of -0.6%. On Wednesday, ECB President Mario Draghi will speak about monetary policy at the Dutch House of Representatives.

With the French presidential election now behind us, it’s business as usual for European stock markets. The markets had priced in a decisive Macron win, and perhaps the only surprise is that Emmanuel Macron’s margin of victory for was larger than expected. Throughout the second round of the election campaign, opinion polls showed Macron with a comfortable 20-point edge, and in the end, he beat expectations, beating Marie Le Pen by a margin of 64% to 36%. Although Macron scored a convincing win, fully one third of French voters either abstained or voted a blank ballot as a protest vote. This means that Macron was viewed by many voters as a default choice, as he was seen as more palatable than Le Pen, head of the extremist right-wing party National Front. Macron won’t have much time to bask in the sunlight of victory, with parliamentary elections slated for mid-June. Macron’s En Marche! party is barely a year old and is unlikely to win a majority, which would mean a power-sharing setup in parliament, likely between Macron’s party and the center-right. One important factor in the presidential election was that in both rounds, opinion polls were surprisingly accurate – the concern that many voters would vote Le Pen but wouldn’t admit it to the pollsters did not occur. (In the US election, a sizeable numbers of Trump voters were embarrassed to admit so before the vote, thus skewing opinion polls in favor of Hillary Clinton.) Similar to the presidential election, the parliamentary election is full of uncertainty, and opinion polls during the election campaign will be important as fundamental releases and should be treated as market-movers.

With the US posting solid employment numbers in March, we’re likely to see the Federal Reserve press the rate trigger at the June meeting. Nonfarm Payrolls improved to 211 thousand, easily beating the forecast of 194 thousand. The unemployment rate fell to an impressive 4.4%, compared to the estimate of 4.6%. This was the lowest rate since May 2007. Wage growth remained weak at 0.3%, but still matched the forecast. Still, with such little slack in the labor markets, we should see wage growth start to move higher. If that happens sooner rather than later, the Fed will have to weigh raising rates three more times in 2017. As things stand now, two more moves is the likely scenario. The strong job numbers have cemented a rate hike in June, as the odds of a June hike continue to rise and are currently at 87%, according to the CME Group.

GOLD Consolidating below $1230.

Gold continues its decline after the yellow metal has faded near the hourly resistance at 1295 (18/04/2017 high). Hourly support is now located at 1195 (10/03/2017 low). The road is wide-open for further decline.

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 Weakening towards $16.00.

Silver's bearish pressures are still lively. Strong support is given at 15.63 (20/12/2017 low). Closest support is given at 16.20 (04/05/2017 low). Key resistance is given at a distance at 19.00 (09/11/2017 high). Expected to see continued bearish pressures until at least $16.

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 Consolidating.

Crude oil is bouncing back on short-squeeze move. The commodity has reached a level below $44. Strong support is given at 42.20 (14/11/2017 low). Expected to see renewed bearish pressures.

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).

Weekly
    •    Last Candlesticks pattern: Shooting star
    •    Time of formation: 7 Mar 2017
    •    Trend bias: Sideways

Daily
    •    Last Candlesticks pattern: Morning star
    •    Time of formation: 9 May 2017
    •    Trend bias: Near term up

USD/CHF – 1.0009

Although the greenback fell to as low as 0.9859 late last week, the pair continued finding support there and has staged a strong rebound yesterday (formed a long white candlestick), suggesting a potential bullish reversal pattern (morning star) was formed, hence consolidation with upside bias is seen for test of 1.0067 resistance, however, a daily close above there is needed to signal the fall from 1.0108 has ended at 0.9859, bring retest of this level later. Looking ahead, only above there would signal early rise from 0.9813 (Mar low) is underway for headway to 1.0150 but resistance at 1.0171 should remain intact.

On the downside, whilst initial pullback to the Kijun-Sen (now at 0.9984) cannot be ruled out, reckon the Tenkan-Sen (now at 0.9941) would limit downside and bring another rise later. Below 0.9900-05 would risk another test of said support at 0.9859 but break there is needed to revive bearishness and extend the fall from 1.0108 to previous support at 0.9813. Looking ahead, only a drop below this support would indicate the decline from 1.0344 top has resumed instead and extend further fall to 0.9735-40 (76.4% retracement of 0.9550-1.0344) and later towards 0.9700 but reckon 0.9650-60 would hold.

Recommendation: Buy again at 0.9970 for 1.0170 with stop below 0.9870.

On the weekly chart, as the greenback found good support at 0.9859 last week and has rebounded strongly this week, suggesting the retreat from 1.0108 has possibly ended there and consolidation with upside bias is seen for gain to 1.0067, however, break of said resistance at 1.0108 is needed to retain bullishness and signal the rise from 0.9813 low has resumed for test of previous resistance at 1.0171. Looking ahead, a weekly close above there is needed to signal the fall from 1.0344 (Dec high) has ended, bring further rise to 1.0248, a sustained breach above this key level would signal early upmove has possibly resumed, bring test of 1.0335-44 resistance area, above there would provide confirmation and headway to 1.0400-10 and later 1.0500 would follow.

On the downside, although pullback to 0.9970 cannot be ruled out, reckon downside would be limited to 0.9900-10 and bring another rebound later. Below said support at 0.9859 would bring test of strong support at 0.9813 but only break of this level would abort and signal the erratic fall from 1.0344 top is still in progress, bring further decline for retracement of early upmove to 0.9735-40, then 0.9700 but reckon downside would be limited to 0.9640-50 and price should stay well above support at 0.9550.

EUR/JPY Ready for another leg higher.

EUR/JPY's buying pressures are there. Strong resistance standing at 124.10 (15/12/2016 low) has been broken. Major support is given at 114.90 (18/04/2017low). Expected to see further renewed buying pressures towards 125.00.

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 Moving lower.

EUR/GBP is trading lower. The technical structure remains negative as long as the resistance at 0.8530 (25/04/2017 low) holds. Expected to show continued weakness until support given at 0.8304 (05/12/2017 low).

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 Strong bullish pressures.

EUR/CHF's volatility is getting stronger and is now targeting resistance given at 1.0898 (08/12/2017 high). Despite the sharp increase and the recent bullish breakout which is very likely psychological, we believe that the medium-term pattern suggests us to see at some point renewed bearish pressures towards key support that can be found at 1.0623 (24/06/2016 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 Short-term bounce.

USD/CHF is pushing higher. The technical structure has invalidated the short-term negative momentum. Hourly resistance is given at 1.0107 (10/04/2017 high).

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 Renewed bullish pressures.

USD/CAD has declined after failing to reach 1.3800 before bouncing back. Hourly support can be found at 1.3411 (24/04/2017 high) then 1.3353 (20/01/2017 high). Expected to show renewed bullish pressures as long as the pair remains above 1.3530 (27/04/2017 low).

In the longer term, there is a golden cross with the 50 dma crossing the 200 dma indicating further upside pressures. 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 decline.

AUD/USD is trading below 0.7500. As long as prices remain below the resistance at 0.7608 (17/04/2017 high), the short-term technical structure is negative. Key resistance stands at 0.7681 (30/03/2017 high). Expected to show further weakness.

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.