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Although all attention is on the bonfire that is oil prices today, the oil price collapse is being felt across other asset classes.

The emotional week that had been the lot of commodity traders gave no respite today in Asia. The global sell-off in anything that seems to be dug or pumped out of the ground continued apace with Dalian iron ore futures in China limit down again for the 2nd day in a row. Shanghai steel futures were also smelted aggressively. But it was crude oil that took the centre of attention.

But it was crude oil that took centre stage. Both Brent and WTI followed last night's 5% sell-off with another quick fire 4 % tank to the downside as they broke their overnight New York lows. To their credit, both have since made all of those losses back to be almost unchanged from last nights close into Europe. The price action had a certain stop-loss smell about it with an algorithmic fill at the worst touch.

The reasons have been talked about extensively, but it is worth noting that oil by my reckoning is off around 9 % for the week leaving OPEC looking down the barrel (not an oil barrel), ahead of late Mays will they won't they meeting. Although today's bounce back has been impressive, it would be a brave man to pick the bottom of crude oil now. If this price action can't grease the wells for a production cut extension, I don't know what will.

The Europeans and the Japanese will probably not be happy either. Both are busily quantitatively easing, and their growth targets may come under severe pressure if China has in fact sneezed. A sustained commodity (read oil) sell-off may torpedo their inflation KPI's as well even if they can label it just “transitory.” This is a theme that few seem to have thought about yet.

Of course, it's not just oil that has felt the chill winds of potentially higher U.S. rate and a China slowdown. Copper has also been beaten out of shape, and the flow through from oil has made its presence felt in other markets. Maybe the saying that when the U.S. sneezes, the rest of the world catches a cold, should be swapped out with when China sneezes?

For some other markets with a high beaten beta to oil and hard commodities, the picture isn't so bright either.

EUR/NOK

The NOK/Oil correlation trade has been back with a passion for the last couple of weeks. Being pretty much a one-way trade from 9.2000 two weeks ago, until the highs of 9.5800 today in Asia. Like both crudes, it has made a sprightly come back into Europe with NOK rallying to 9.4900 in early trading. With such a high correlation, it may have done enough for the week unless oil tanks again this evening.

Looking at the technicals, 9.5800 is, in fact, a double top and first resistance. Above this, we have a triple daily top from December from the 9.7400 region.

Support is hard to find with nothing until the 9.2500 breakout level and then 9.0700 which bisects the 100 and 200-day moving averages.

USD/CAD

Has rallied nearly 100 points in 24 hours from 1.3700 but has significantly, just failed ahead of 1.3800 today before rallying back to 1.3760. In the short term, its rally coincided with the bounce in oil after Asia's sell-off suggesting that at these levels, it may need crude to collapse again to make progress topside ahead of today's Non-Farm Payrolls.

Still, in the bigger picture, the chart does not make happy reading with asthmatic economic data, worries over mortgage lenders AND commodity prices combining to make the Loonie (CAD) look unloved still in the bigger picture.

USD/CAD has resistance at 1.3800 with a daily close implying a possible technical move to 1.4000. Support is found around 1.3600 and then 1.3525.

AUD/USD

The lucky country dollar finally succumbed to the iron ore, copper, gold, silver, oil sell-off today. Giving up support at 7400 to finish just below around 7390.

A daily close below the former implies AUD could move towards the 7300 level and then possibly 7150 after that. Resistance lies at the 7450 area and then 7550.

AUD's fate is tied to China's though, given that China buys everything that Australia digs out of the ground. China data, absent a lethargic RBA on the monetary policy front, should be followed closely. One could say that when/if China sneezes, Australia contracts TB.

AUSTRALIA 200

Unsurprisingly the ASX 200 has been on the back foot all week. Even less surprisingly is that it has been led lower by mining and energy companies of which Australia has many. Today's move in oil and iron ore twisted the knife further in, but Australia has been grappling with other issues.

Most notably an over-valued property market in Sydney and Melbourne, with an increasing militant RBA willing to do something about it. Asthmatic unemployment and wage data leaving the RBA unable to raise rates to counter the above and reaching for the RBNZ's macro-prudential handbook.

The ASX is worthy of a full-colour high definition chart today. The technicals show the ascending triangle is looking in some danger now. The ASX has failed around 5950 four times now since March.

From its present 5835 level, we have initial support at 5785, the April lows. Below there the ascending line part of the triangle and solid support comes in at 5770 with the 100-day moving average just below that at 5749. This 5740/5775 area becomes must hold support in the bigger technical picture?

With multiple failures at 5950 and what looks like a looming test of longer term support, the question is, could this commodity sell-off induce the first long-term top in a developed stock market in well, a long time?

The sharp depreciation in commodity prices overnight has weighed on risk sentiment, with global stocks poised to remain depressed on Friday as questions are raised over the health of the global economy. Asian shares have struggled to maintain gains and the lack of appetite for risk should expose European equities to further losses. Wall Street was mostly lower on Thursday after the sell-off in energy stocks, and may be positioned for steeper losses this afternoon as investors adopt a cautious approach ahead of the US Non-Farm Payroll data. With depressed oil prices, lingering geopolitical tensions, Brexit developments, and Trump uncertainties still weighing on sentiment, a pending stock market correction may be on the table.

Dollar static ahead of NFP

The Greenback was on standby during Friday’s trading session ahead of a crucial US Non-Farm Payroll data that may approve or dismiss the heated market speculations of a June interest rate increase. A solid US labour market data for April may compliment the Fed hawks and confirm expectations of a rate hike in June. However, if job growth fails to meet market forecasts and wage growth softens, the Dollar will find itself exposed to heavy losses as optimism over a June interest rate hike fades. From a technical standpoint, the Dollar Index remains on the back foot on the daily charts. Sellers have exploited the technical bounce to drag the Greenback lower. The pending NFP report will heavily impact where the Dollar Index concludes this week, with traders carefully observing the 98.80 support and 99.40 resistance.

Euro bulls make an early appearance

The increasing expectation that Emmanuel Macron will be the next French President has installed Euro bulls with enough confidence to send the EURUSD to a fresh six-month high at 1.099. With the current polls showing Macron holding a solid 20 point lead over Marine Le Pen, I may not be the only one saying that a Macron victory has already been 'baked in' to the markets. Since markets are widely expecting Macron to be declared victorious, we would see some additional support for the EU currency, but further gains could be limited after the rally seen in the Euro since the first round of voting. I still feel markets should remain diligent and investors cautious as the threat of a Trump-style victory for Marine Le Pen would create tremors across the financial markets. From a technical standpoint, the EURUSD is heavily bullish on the daily charts and a breakout above 1.1000 should open a path towards 1.1100.

WTI Crude under renewed selling pressure

WTI Crude received a pummelling this week with prices sinking deeper into the abyss during early trading on Friday due to heightened concerns over the oversupply of oil in global markets. The bearish price action on WTI clearly questions the market confidence over OPEC’s ability to stabilize the saturated markets, with discussions being raised of whether the supply extension may have any positive impact on oil prices. With the aggressive pumping of US Shale contributing to oversupply woes, WTI Crude remains fundamentally bearish moving forward. From a technical standpoint, WTI Crude remains under intense selling pressure, with the next level of interest at $43. In an alternative scenario, previous support at $47 could transform into a dynamic resistance that encourages a decline back towards $44 and $43 respectively.

Commodity spotlight – Gold

The prospect of higher US interest rates continues to pressure Gold with the zero-yielding metal hovering around $1232 as of writing. A touch of optimism over Emmanuel Macron winning the second round of the French Presidential election has complimented the downside, as the risk-on trading mood limited the attraction for safe-haven investments. Although geopolitical tensions and uncertainty over Brexit and Trump may support the metal in the medium to longer term, short term bears remain in firm control. With Gold potentially finding itself dictated by US rate hike expectations, further downside should be expected as the Federal Reserve maintains a hawkish stance. The yellow metal is at risk of depreciating further if a solid Non-Farm Payroll report this evening confirms expectations of a June interest rate hike.

Notes/Observations

Focus on US Apr Payroll report with jobs seen rebounding and wages rising

Macron increases poll lead as French presidential campaign enters into home-stretch

UK PM May's Conservatives make gains in local elections

Overnight:

Asia:

RBA Quarterly Statement on Monetary Policy (SOMP): Inflation and GDP forecast little changed from Feb statement. Reiterates view that appreciating AUD currency would complicate their economies transition

Japan, China and South Korea's Trilateral financial leaders: Will resist all forms of protectionism; agreed that trade is the most important engines of economic growth

US House passes bill that would expand sanctions against North Korea. Voted 419-1 to impose new sanctions that target North Korea shipping industry and use of slave labor.

Europe:

Parliamentary By-Election results: Tories making early gains. Conservatives have gained control of five councils while Labour have lost control of two. Liberal Democrats have lost several seats. UKIP has lost all the seats it has been defending so far

German Finance Ministry: There is no debt relief being prepared for Greece at this time

EMMI Industry Body Report on Euribor Administration: Will work in coming months to develop new hybrid methodology based on transactions. Discard Euribor rate reform following market test that showed impact on volatility and volumes

Americas:

House of Representatives passes ACHA Obamacare healthcare replacement bill (Yeas 217, nays 213 (20 GOP no votes, no Democrats voted in favor of it). Bill now sent to the Senate for consideration

Senate passed the $1.1T omnibus spending bill (vote was 79-18) to fund govt through end of Sept, as expected. bill now goes to President Trump for signature

Energy:

OPEC and Non-OPEC producers expected agree to a six month extension of output cut agreement, but not likely to increase the size of the cut from current 1.8M bpd

Economic Data

(CH) Swiss Apr Foreign Currency Reserves (CHF): 695.9B v 690.5Be

(SE) Sweden Mar Industrial Production M/M: 0.3% v 0.6%e; Y/Y: 3.8% v 3.4%e

(HK) Hong Kong Mar Retail Sales Value Y/Y: +3.1% v -0.9%e (first rise since Feb 2015); Retail Sales Volume Y/Y: +2.7% v -1.0%e

Fixed Income Issuance:

(IN) India sold total INR150B vs.INR150B indicated in 2022, 2029, 2033 and 2055 bonds

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx50 -0.3% at 3616, FTSE +0.1% at 7255, DAX -0.3% at 12606, CAC-40 -0.2% at 5362, IBEX-35 -0.2% at 10995, FTSE MIB -0.2% at 21122, SMI -0.3% at 8953, S&P 500 Futures +0.1%]

Market Focal Points/Key Themes European indices trade off the session lows but lower across the board with the exception of the FTSE100, taking queue from a weaker session in Asia overnight being led lower on commodity price concerns. Airline stocks are outperforming this morning with IAG and Air France trading at year highs, and Easyjet trading higher following strong April Metrics. April US Non Farm Payrolls will be the main focus looking ahead, as well as another bout of earnings, notably from Cigna and Cognizent Tech and

Equities

Consumer discretionary [ International Consolidated Airlines [IAG.UK] +5% (Earnings, April metrics), Marks and Spencer [MKS.UK] +5.4% (Names new Chairman), Pearson [PSON.UK] +11% (Q1 update, Affirms outlook, simplification plan), Easyjet [EZJ.UK] +3.5% (April metrics), Heidelberger Druck -5% (Earnings)]

Industrials: [Evonik [EVK.DE] -1% (Earnings), Skanska [SKAB.SE] flat (Earnings), Porr [ABS2.DE] -4%, Strabag[STR.AT] -4% (report that it has been raided on collusion suspicions)]

Telecom: [Telefonica Deutschland [O2D.DE] -6% (Earnings)] - Healthcare: [Smith & Nephew +3.0% (Q1 results)]

Utilities: [Engie [ENGI.FR] -1.4% (Earnings)]

Speakers

Italy Stats Agency (ISTAT) Monthly Economic Note: Leading indicator is positive but showing some deceleration. Economic growth was more constrained compared to previous months

German Bundesbank's Dombret (ECB SSM member): Most bankers expect a hard or very hard Brexit

Czech PM Sobotka: will NOT submit his resignation (withdraws offer); proposed to dismiss his finance minister Babis

Indonesia Economic Affairs Min Nasution: 2017 GDP Growth seen between 5.2%-5.3% range. Exports to be main driver of growth, along with household consumption and govt spending

Saudi Oil Min Al-Falih commented after speaking with Russia's Energy Min Novak of a growing consensus among OPEC and Non-Opec members on need to continue re balancing the oil market . Both Russia and Saudi ministers to meet in Beijing within 10 days to discuss oil markets

Currencies

USD on some soft footing against the European pairs heading into the April US payroll data. Yield divergence

EUR/USD edging towards the key psychological 1.10 level. Analyst cited commentary from ECB chief economist Praet on Thursday and appearing to be shifting guidance into a data dependent approach. Praet hinted at more upbeat economic assessment as growth firmed up

The GBP/USD was back above the 1.29 level and recovering from losses from earlier in the week. GBP benefiting from UK local elections which suggested PMMay's Conservative Party was on course for a sweeping victory at the upcoming Jun 8th Parliamentary election. If May does secure a laeger majority in Parliament then that could help give her a better hand while negotiating a Brexit deal with the European Union victory

Fixed Income

Bund futures trade at 161.15 up 18 ticks but still near the week's low. A break of 160.64 support level could see lows target 160.41 followed by 159.01. Resistance remains near the 161.88 level followed by 163.54.

Gilt futures trade at 128.11 higher following a range bound trading week. A continuation of the pullback from the 129.14 April 18th high has price eyeing the 127.50 support level. An acceleration lower could test the 126.62 region. Resistance stands at 128.49 then 128.81 followed by 129.14.

Friday's liquidity report showed Thursday's excess liquidity rose to €1.649T a gain of €4B from €1.645T prior. Use of the marginal lending facility dropped to €312M from €340M prior.

Corporate issuance saw over $10.6B come to market via 5 issues headlined by Apple's $7B 6-part senior unsecured note offering and Northern Trust $2.25B in a 3-part senior unsecured note offering. For the week ending May 3rd Lipper US fund flows reported IG funds net inflows $1.05B bringing YTD inflows to $49.1B, High yield funds reported outflows of $385.6M bringing YTD outflows to $4.37B.

Looking Ahead

(PT) Portugal Debt Agency (IGCP) possible announcement for upcoming auction

(RO) Romania Central Bank (NBR) Interest Rate Decision: Expected to leave Interest Rates unchanged at 1.75%

06:00 (IE) Ireland Apr Live Register Monthly Change: No est v -3.9K prior

06:00 (IE) Ireland Mar Industrial Production M/M: No est v -15.5% prior; Y/Y: No est v -9.9% prior

06:00 (UK) DMO to sell combined £2.5B in 1-month, 3-month and 6-month bills (£0.5B, £0.5B and £1.5B respectively)

06:45 (US) Daily Libor Fixing

07:30 (CL) Chile Mar Economic Activity Index (Monthly GDP) M/M: -0.2%e v -0.7% prior; Y/Y: -0.4%e v -1.3% prior

07:30 (IN) India Weekly Forex Reserves

08:00 (PL) Poland Apr Official Reserves: No est v $112.0B prior

08:00 (CL) Chile Mar Nominal Wage M/M: +0.4%e v -0.4% prior; Y/Y: 4.0%e v 4.2% prior

08:00 (RO) Romania Central Bank gov Isarescu post rate decision press conference

08:15 (UK) Baltic Dry Bulk Index

08:30 (US) Apr Change in Nonfarm Payrolls: +190Ke v +98K prior, Change in Private Payrolls: +190Ke v +89K prior, Change in Manufacturing Payrolls: +10Ke v +11K prior

08:30 (US) Apr Unemployment Rate: 4.6%e v 4.5% prior, Underemployment Rate: No est v 8.9% prior, Change in Household Employment (civilian labor force): No est v +160.2K prior, Civilian Labor Force Participation Rate: No est v 63.0 prior

08:30 (US) Apr Average Hourly Earnings M/M: 0.3%e v 0.2% prior; Y/Y: 2.7%e v 2.7% prior; Average Weekly Hours: 34.4e v 34.3 prior

08:30 (CA) Canada Apr Net Change in Employment: +10.0Ke v +19.4K prior; Unemployment Rate: 6.7%e v 6.7% prior

09:00 (EU) EU Foreign Min Mogherini in Italy

09:00 (DE) German Chancellor Merkel campaigns in Schleswig-Holstein (State election)

10:00 (CA) Canada Apr Ivey Purchasing Managers Index (Seasonally Adj): No est v 61.1 prior

10:20 (BR) Brazil Apr Vehicle Production: No est v 234.8K prior; Vehicle Sales: No est v 189.2K prior; Vehicle Exports: No est v 68.5K prior

12:30 (IT) Italy PM Gentiloni in Italy

-12:45 (US) Fed's Williams (non-voter) speaks in Keynote in New York

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

13:30 (US) Fed's Rosengren (non-voter) with members Evans (Voter) and Bullard (non-voter) on panel

13:30 (US) Fed Chair Yellen at Brown University

15:00 (US) Mar Consumer Credit: $14.0Be v $15.2B prior

15:00 (MX) Mexico Citibanamex Survey of Economists

20:00 (CO) Colombia Apr CPI M/M: 0.4%e v 0.5% prior; Y/Y: 4.6%e v 4.7% prior

20:00 (CO) Colombia Apr CPI Core M/M: No est v 0.6% prior; Y/Y: No est v 5.1% prior

Weekend data

(CN) China Apr Trade Balance (CNY terms): 197.2Be v 164.3B prior; Exports Y/Y: 16.8%e v 22.3% prior; Imports Y/Y: 18.0%e v 20.3% prior:

(CN) China Apr Trade Balance (USD terms): No est v $23.9B prior

(CH) China Apr Foreign Reserves: $3.020Te v 3.009T prior

Weekend Events:

Sun (FR) France hold 2nd round of Presidential election

GOLD Strong selling pressures.

Gold continues its decline after the yellow metal has faded near the hourly resistance at 1295 (18/04/2017 high). Hourly support located at 1260 (26/04/2017 low) has been broken. 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 Important selling pressures.

Silver continues its decline. Strong support given at 16.82 (15/03/2017 low) has been broken. Strong 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 Collasping.

Crude oil has broken key support given at 47.01 (22/01/2017 low). The road is wide-open towards support given at 42.20 (14/11/2017 low).

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 Breaking resistance at 123.31.

EUR/JPY's buying pressures are there. Strong resistance standing at 123.31 (27/01/0217 high) has been broken. Major support is given at 114.90 (18/04/2017low). Expected to see further increase towards key resistance given at 124.10 (15/12/2017 high),

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 Trading sideways.

EUR/GBP is trading mixed. 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 Selling pressures arise.

EUR/CHF's selling pressures are increasing. 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).

GBP/USD – 1.2935

Recent wave: Wave V of larger degree wave (III) has ended at 1.1986 and major correction has commenced from there for gain to 1.3000 and 1.3140-50

Trend: Near term up

Original strategy :

Buy at 1.2865, Target: 1.3025, Stop: 1.2805

Position: -
Target:  -
Stop: -

New strategy :

Buy at 1.2775, Target: 1.2965, Stop: 1.2715

Position: -
Target:  -
Stop:-

Although cable has rebounded after finding support at 1.2831, break of recent high at 1.2965 is needed to confirm recent upmove has resumed and extend further gain to psychological resistance at 1.3000 but overbought condition should limit upside to 1.3050 and price should falter below 1.3100. If said resistance at 1.2965 continues to hold, then further choppy trading would take place and another corrective fall to 1.2831 cannot be ruled out, however, reckon 1.2770-75 would limit downside and bring another rise later. We are keeping our view that the wave c as well as larger degree wave B has ended at 1.2109, hence impulsive wave C has commenced from there with wave i of C ended at 1.2616, follow by a correction to 1.2365 (end of wave ii) and wave iii rally is unfolding, hence further gain to indicated upside targets would be seen.

Our preferred count on the daily chart is that cable's rebound from 1.3500 (wave (A) trough) is unfolding as a wave (B) with A ended at 1.7043, followed by triangle wave B and wave C as well as wave (B) has ended at 1.7192, the subsequent selloff is the larger degree wave (C) which is still unfolding with minor wave (III) of larger degree wave 3 ended at 1.1986, hence wave (IV) correction is in progress which could either be a triangle wave (IV) of a complex formation but upside should be limited to 1.3500 and price should falter well below 1.4000, bring another decline in wave (V) of 3 for weakness to 1.1500, then 1.1200.

On the downside, below said support at 1.2831 would bring weakness to support at 1.2805 but reckon downside would be limited and support at 1.2757 should hold, bring another rise later. A drop below this support would defer and signal a temporary top is formed instead, risk correction of recent upmove to 1.2700-10 later. 

GBP/JPY - 145.30

Recent wave: Medium term low formed at 120.50 and (A)-(B)-(C) major correction has commenced with (A) leg ended at 148.45, hence wave (B) is unfolding for retreat to 131.00-10.

Trend: Near term up

Original strategy:

Buy at 144.50, Target: 146.50, Stop: 143.90

Position: -
Target: -
Stop: -

New strategy :

Buy at 142.55, Target: 145.00, Stop: 141.95

Position: -
Target:  -
Stop:-

As sterling has continued trading with a firm undertone, adding credence to our bullish count that recent upmove from 135.60 is still in progress and may extend further gain to 146.00-10, then 146.50, however, near term overbought condition should limit upside to 147.00-10 and price should falter well below previous chart resistance at 148.45, bring retreat later.

In view of this, would not chase this rise here and would be prudent to buy sterling on pullback, below 144.50 would bring correction to 143.80 and possibly towards support at 143.15, however, reckon downside would be limited to 142.50-55 and price should stay well above previous resistance at 142.10-15, bring another upmove later. 

Our preferred count is that larger degree wave V with circle is unfolding from 251.12 with wave (I) 219.34, (II): 241.38 and wave (III) is subdivided into 1: 192.60, 2: 215.89 (23 Jul 2008) and wave 3 ended at 118.87 earlier in 2009. The correction from there to 162.60 is wave 4 which itself is a double three and is labeled as first a-b-c ended at 151.53, followed by wave x at 139.03, 2nd a ended at 162.60, 2nd b at 146.75 and 2nd c leg of wave 4 ended at 163.00. Therefore, the decline from 163.00 to 116.85 is now treated as wave 5 which also marked the end of larger degree wave (III), hence wave (IV) major correction has commenced for retracement of the wave (III) from 241.38 and upside target at 183.95-00 (50% Fibonacci retracement of the wave (II) from 241.38) had been met, a drop below 160.00 would suggest wave (IV) has ended at 195.85, bring decline in wave (V) for initial weakness to 130 (already met) and 120.


EUR/JPY - 123.10




EUR/JPY: Wave v as well as larger degree wave (C) ended at 94.11 and first leg of larger degree wave C upmove has possibly ended at 149.79 and wave 2 correction has possibly ended at 109.49.




The single currency has surged again this week and broke above previous resistance at 123.31, adding credence to our bullish count that correction from 124.10 has ended at 114.85 last month and retest of said resistance is likely, however, break there is needed to confirm early erratic rise from 109.49 low has resumed and extend this move to 124.65, then 125.25-30 (50% Fibonacci retracement of 141.06-109.49) but resistance at 126.47 should hold on initial testing, price should falter below 127.50-60.

The daily chart is labeled as attached, early selloff from 169.97 (July 2008) to 112.08 is wave (A) of B instead of end of entire wave B and then the rebound from there to 139.26 is wave (B), hence, wave (C) has possibly ended at 94.12 with a diagonal triangle as labeled in the daily chart, hence upside bias is seen for further gain. Recent rally above indicated retracement level at 116.69 (50% Fibonacci retracement of the intermediate fall from 139.26-94.12) adds credence to this view and signal major reversal has commenced but first leg of this wave C has possibly ended at 149.79, hence wave 2 has commenced with wave A ended at 126.09, followed by wave B at 141.06, wave C commenced and could have ended at 109.49, above 125.00 would add credence to this view. 



On the downside, whilst initial pullback to 122.00-10 cannot be ruled out, reckon downside would be limited to 121.00-10 and bring another rise to aforesaid upside targets. Below support at 120.60 would defer and risk deeper pullback to 120.00 but downside should be limited to 119.40-50 and support at 118.90-95 should remain intact, bring another rise later. 



Recommendation: Buy at 121.00 for 124.00 with stop below 120.00.

To re-cap the corrective upmove from the record low of 88.93 (18 Oct 2000), the wave A from there is subdivided as: 1:88.93-113.72, 2:99.88 (1 Jun 2001), 3:140.91 (30 May 2003), 4:124.17 (10 Nov 2003) and 5 ended at record high of 169.97 (21 Jul 2008). The brief but sharp selloff to 112.08 is viewed as a-b-c x a-b-c wave (A) of B. The subsequent rebound to 139.26 is (B) of B and (C) of (B) has possibly ended at 94.12 and in any case price should stay well above previous chart support at 88.93, bring rally in larger degree wave C towards 150.00.

USD/CHF –  0.9891

 
USD/CHF – Wave IV ended at 1.1730 and wave V has possibly ended at 0.7068

 
Although the greenback has fallen again this week and marginal weakness from here cannot be ruled out, however, reckon downside would be limited to 0.9850 and as long as previous support at 0.9813 holds, prospect of another rebound remains and above 0.9965-70 would suggest low is possibly formed but a daily close above 1.0000-08 is needed to signal the fall from 1.0108 has ended, bring further gain to 1.0067 resistance. Looking ahead, once this level is penetrated, this would signal the retreat from 1.0108 has ended, bring retest of this level, having said that, price should falter below resistance at 1.0171, bring retreat later. In the event dollar breaks above said resistance at 1.0171, this would revive our bullish view for the erratic rise from 0.9861 to extend further gain to 1.0200 and possibly test of resistance at 1.0248, however, a daily close above there is needed to signal the retreat from 1.0344 has ended at 0.9861, bring eventual retest of 1.0344.

Our preferred count on the daily chart is that early selloff to 0.9630 is an end of the larger degree wave III and major correction is unfolding from there with a leg ended at 1.2298 (Nov 2008 with (a): 1.0625, (b):1.0011 and (c):1.2298), wave b ended at 0.9910 with (a): 1.0370, (b): 1.1967, (c): 0.9910. The rise from there to 1.1730 is the wave c which also marked the end of wave IV and wave V has possibly ended at 0.7068.


On the downside, whilst marginal weakness from here cannot be ruled out, reckon downside would be limited to 0.9850 and bring another rise later. Only below said support at 0.9813 would abort and confirm another leg of major fall from 1.0344 top is underway for further fall to 0.9735-40, however, oversold condition should prevent sharp fall below 0.9675-80 and price should stay well above 0.9600, bring rebound later.
 
Recommendation: Hold long entered at 0.9905 for 1.0105 with stop below 0.9805

Dollar's long-term downtrend started from 2.9343 (Feb 1995) and it was unfolding as a (A)-(B)-(C) with (A): 1.1100, (B): 1.8310 (26 Oct 2000), then followed by another impulsive wave (C) with wave III ended at 0.9630 (Mar 2008). Under this count, correction in wave IV has possibly ended at 1.1730 and wave V already broke below support at 0.9630 and met indicated downside target at 0.7500 and 0.7400. The reversal from 0.7068 suggests the wave V has possibly ended and the breach of resistance at 0.9595 add credence to this view and indicated upside target at 1.0000 had been met, however, the sharp retreat from 1.0296 to 0.7401 suggests choppy trading would be seen but price should stay above said record low at 0.7068.

USD/CHF Medium-term bearish.

USD/CHF is weakening. The positive shortterm technical structure has been invalidated. Expected to target support given at 0.9814 (27/03/2017 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 Strong bullish pressures.

USD/CAD is pushing higher. Hourly support can be found at 1.3411 (24/04/2017 high) then 1.3353 (20/01/2017 high). Expected to show continued 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.