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A note on lower timeframe confirming price action...

Waiting for lower timeframe confirmation is our main tool to confirm strength within higher timeframe zones, and has really been the key to our trading success. It takes a little time to understand the subtle nuances, however, as each trade is never the same, but once you master the rhythm so to speak, you will be saved from countless unnecessary losing trades. The following is a list of what we look for:

• A break/retest of supply or demand dependent on which way you're trading.
• A trendline break/retest.
• Buying/selling tails ... essentially we look for a cluster of very obvious spikes off of lower timeframe support and resistance levels within the higher timeframe zone.
• Candlestick patterns. We tend to only stick with pin bars and engulfing bars as these have proven to be the most effective.

EUR/USD

Weekly gain/loss: + 122 pips

Weekly closing price: 1.0724

Downside momentum diminished last week as weekly buyers actively defended 1.0493-1.0605: a demand area that's beautifully positioned around the top edge of the 2017 yearly opening level at 1.0515/support zone at 1.0333-1.0502. Looking above, the next areas to keep an eyeball on this week are resistance at 1.0819 and the 2016 yearly opening level at 1.0873.

On Thursday, we saw daily price chalk up a selling wick off the underside of resistance planted at 1.0772. Some follow-through action was generated on Friday but was not sufficient enough to overcome the nearby support area seen at 1.0714-1.0683. In the event of a break above the current resistance this week, the next upside angle comes in at 1.0850 (another resistance), whereas a violation of the current support area could find the pair looking to test demand pegged at 1.0525-1.0576.

A brief look at recent dealings on the H4 chart shows the 1.07 handle suffered a rather brutal whipsaw going into Friday's US segment. Despite this, the major ended the day relatively unchanged, closing mid-range between the mid-level resistance at 1.0750 and 1.07.

Our suggestions: Thursday's response to the H4 61.8% Fib resistance (upper green line) at 1.0777 (taken from the high 1.0905) is interesting, given that it's bolstered by the noted daily resistance at 1.0772. Therefore, this region is a zone we'll be watching today for potential shorts. Below 1.07, nevertheless, we have a H4 support area sitting at 1.0677-1.0665 that fuses with a H4 61.8% Fib support at 1.0669. Furthermore, this zone is located just below the current daily support area, so a bounce from here is a possibility. However, traders may want to take into account that April's opening level at 1.0659 is waiting just below this, so be prepared for a possible fakeout!

The opening and early trading will, however, likely be dependent on the outcome of the French Presidential Election. Therefore, we'd advise trading cautiously, at least until the dust settles.

Data points to consider: German IFO business climate at 9am. FOMC member Kashkari speaks at 4.30 and again at 8.30pm GMT+1.

Levels to watch/live orders:

• Buys: 1.0677-1.0665 ([waiting for a reasonably sized H4 bull candle to form before pulling the trigger is advised] stop loss: ideally beyond the candle's tail).
• Sells: 1.0777 neighborhood ([waiting for a lower-timeframe confirming signal to form is advised before pulling the trigger [see the top of this report] stop loss: dependent on where one confirms the area).

GBP/USD

Weekly gain/loss: + 285 pips

Weekly closing price: 1.2806

The weekly trendline resistance extended from the high 1.2774 was aggressively taken out last week, thus allowing weekly price to marginally close beyond resistance at 1.2789. This could, technically speaking, imply that the buyers might look to challenge supply this week at 1.3120-1.2957.

Since Tuesday, the daily candles have been consolidating between a support established from the 6th December high 1.2774 and a 61.8% Fib resistance (green line) at 1.2859 (taken from the high 1.3445). Also noteworthy here is the nearby 161.8% Fib extension at 1.2920 drawn from the low 1.2108 (brown line).

A quick recap of Friday's trading on the H4 chart shows that price dropped to a fresh low of 1.2756 going into the early hours of the US segment. Leaving the mid-level support 1.2750 unchallenged, the unit ended the week closing six pips above 1.28.

Based on this recent movement, the crosshairs are fixed on 1.2750 (green area) for an intraday bounce north today. Why here? Well, not only are mid-level numbers watched by the majority of the market, there's also a H4 AB=CD 127.2% Fib extension seen nearby at 1.2736 (drawn from the high 1.29) that unites closely with a broken Quasimodo line pegged at 1.2744.

Our suggestions: Our rationale behind looking for a bounce off 1.2736/1.2750, apart from the H4 confluence, is also the fact that this zone is planted directly beneath the current daily support. Therefore, it may perhaps be a fantastic base to help facilitate a fakeout! The only grumble, of course, is that weekly sellers could still be active from resistance mentioned above at 1.2789, hence the reason for not expecting much more than an intraday bounce from this region!

Data points to consider: FOMC member Kashkari speaks at 4.30 and again at 8.30pm GMT+1.

Levels to watch/live orders:

• Buys: 1.2736/1.2750 ([dependent on the time of day, this small zone could be stable enough to consider an intraday trade long from] stop loss: at least five pips beyond the lower edge).
• Sells: Flat (stop loss: N/A).

AUD/USD 

Weekly gain/loss: – 31 pips

Weekly closing price: 0.7543

As can be seen from the weekly chart, the bulls failed to generate much follow through after the prior week's bounce from the support area marked at 0.7524-0.7446. Should the buyers eventually regain consciousness here, however, the next upside hurdle can be seen at a trendline resistance taken from the high 0.7835, followed closely by supply at 0.7849-0.7752.

Thursday's bounce (and Friday's follow through) seen from the support area at 0.7449-0.7506 (housed within the above said weekly support area) is interesting. The reason? In the event that the bulls continue to bid price into positive territory from here, an AB=CD formation may complete (black arrows), which, as seen by the AB=CD 127.2% Fib ext. at 0.7645, ties in beautifully with supply at 0.7679-0.7640. For that reason, the bulls may still have a hand in this fight.

Switching gears and moving over to the H4 chart, nevertheless, our team has noted a group of potentially troublesome resistances ahead. First in line is the mid-level resistance at 0.7550, then a supply at 0.7562-0.7552, followed with an AB=CD 127.2% Fib ext. at 0.7560 chiseled from the low 0.7491, and finally a 61.8% Fib resistance at 0.7565 drawn from the high 0.7610.

Our suggestions: We're sure you'll agree with us that going long, despite what the higher-timeframe structures suggest, would be chancy owing to the said H4 resistances. And likewise, a short, although tempting given the confluence, would be just as much of a risk. With that in mind, we'll remain on the sidelines for the time being and reassess structure around Tuesday's open.

Data points to consider: FOMC member Kashkari speaks at 4.30 and again at 8.30pm GMT+1.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).

USD/JPY

Weekly gain/loss: + 39 pips

Weekly closing price: 108.95

Looking at this market from the weekly scale, the pair clearly remains in bearish territory. Following the break of the support area at 111.44-110.10 two weeks back, the runway south still appears clear for the unit to test the support area coming in at 105.19-107.54 (holds an AB=CD 161.8% ext. at 107.14 taken from the high 118.66).

The story on the daily chart shows the demand at 108.55-109.17 to be pretty much dead and buried. We feel bids are incredibly fragile and will eventually lead to a test of the nearby support area at 107.15-107.90, which happens to also hold a 61.8% Fib support at 107.84 taken from the low 101.19.

Having put in a top just ahead of the mid-level resistance 109.50 on Thursday, the H4 candles continued to recede on Friday, eventually popping below the 109 handle into the close. There's H4 demand seen to the left of current price, but it does not really emphasize strength, mainly because of the huge tail seen marked with a green arrow on the 20th April at 108.72.

Our suggestions: Trading short beyond 109 seems to be a valid call. However, we would ideally like to see the H4 candles retest 109 as resistance beforehand and follow up with a H4 bear candle (preferably a full-bodied close). If this should come to fruition, the first take-profit target can be seen around the H4 demand at 108.32-108.45, followed closely by another H4 demand at 107.77-108.21 which sits on top of the aforementioned daily support area.

Data points to consider: FOMC member Kashkari speaks at 4.30 and again at 8.30pm GMT+1.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: 109 region ([waiting for a reasonably sized H4 bear candle to form before pulling the trigger is advised] stop loss: ideally beyond the candle's wick).

USD/CAD

Weekly gain/loss: + 170 pips

Weekly closing price: 1.3494

Weekly price has spent the best part of a month and a half teasing the underside of the 2017 yearly opening level at 1.3434. That was, of course, until the bulls came to life last week and closed above the monthly level. Despite the almost near-full-bodied candle, reinforcing this line is a well-defined double-top formation seen around the 1.3588 neighborhood (green circle). Therefore, the bears could still have a hand in this game yet!

Turning over a page to the daily timeframe, supply at 1.3494-1.3439 is seen hanging in there despite Friday's spike seen through the top edge of this zone. Even if this supply does give way, there's always a back-up supply seen just above it at 1.3598-1.3559.

The US dollar, as seen clearly on the H4 chart, made considerable ground against its Canadian counterpart on Friday following lower-than-expected inflation data. Price, however, failed to sustain gains beyond the 1.35 handle (likely due to the supply zone seen at 1.3534-1.3508) and ended the week tapping a broken Quasimodo line at 1.3490.

Our suggestions: H4 action is exceedingly restricted at the moment. Below 1.3490, there's demand sitting at 1.3458-1.3476, shadowed closely by a support area pegged at 1.3450-1.3437. To the upside, we have the 1.35 handle and the said supply to contend with. As a result, until these structures are cleared and some space is seen, we do not see much to hang our hat on in terms of a trade setup. So, for now at least, we'll hold fire and take a back seat.

Data points to consider: FOMC member Kashkari speaks at 4.30 and again at 8.30pm GMT+1.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).

USD/CHF

Weekly gain/loss: – 89 pips

Weekly closing price: 0.9957

The USD/CHF clocked lower prices last week following an earlier test of weekly supply seen at 1.0170-1.0095. Consequent to this, the 2016 yearly opening level at 1.0029 was cleared, leaving downside relatively open until we reach weekly support at 0.9861.

The daily support area at 1.0001-0.9957 held ground on both Wednesday and Thursday last week, but, as you can see, failed miserably on Friday. The minor close seen beyond this area, coupled with weekly flow pointing to further selling, could be enough to convince investors that bids are weakening. The next area beyond this zone falls in at 0.9842-0.9884: another support area that houses the said weekly support level within.

Looking over at Friday's action on the H4 chart, the Swissy came within touching distance of connecting with parity (1.0000) during the London morning session. Bids eventually weakened here and saw price topple down to the mid-level support at 0.9950 into the closing bell. Although the higher timeframes indicate that the bears may be in the driving seat at the moment, selling into 0.9950 would not be something we'd advise. Under usual circumstances, we'd wait for this level to be taken out and attempt to trade the retest, but given nearby demand at 0.9913-0.9927, it's challenging.

Our suggestions: Unless one is willing to enter long from 0.9950 against possible weekly/daily sellers, we do not see much on offer. For us personally, we'll remain flat and reassess going into tomorrow's open.

Data points to consider: FOMC member Kashkari speaks at 4.30 and again at 8.30pm GMT+1.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).

DOW 30:  

Weekly gain/loss: + 93 points

Weekly closing price: 20563

(Trade update: Short taken from 20586 ended up as a breakeven trade).

As far as we can see, weekly action, despite gaining last week, still looks poised to extend the pullback seen from record highs of 21170 down to 19675-19964: a demand area that's bolstered by the 2017 yearly opening level at 19769.

Daily movement is currently seen retesting the resistance area at 20527-20626. Should the bears manage to defend this zone, the next downside target from this angle sits at 20258: an AB=CD 127.2 Fib ext. taken from the high 21022.

H4 supply, as expected, continued to hold ground on Friday, consequently forcing price to test the lower edge of a support area seen at 20546-20513. In order for our desk to become sellers here, we'd really like to see the current support area taken out. From that point, one can either choose to enter on the break, or conservatively wait for price to retest the broken barrier as resistance. We choose the latter.

Our suggestions: As highlighted above, we're looking for a H4 close to be seen below the current H4 support area. This, followed up with a retest and a H4 bear candle (preferably a full-bodied close), would, in our opinion, be enough to justify a short in this market, targeting the H4 demand picked at 20381-20425 as an initial take-profit target.

Data points to consider: FOMC member Kashkari speaks at 4.30 and again at 8.30pm GMT+1.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Watch for H4 price to engulf the H4 support area at 20546-20513 and then look to trade any retest seen thereafter. Following the retest, a H4 bearish candle would be ideal. Stop loss: beyond the candle's wick).

GOLD

Weekly gain/loss: – $3

Weekly closing price: 1284.2

Breaking a five-week bullish phase, the weekly bears elbowed their way into the market last week from within the walls of two Fibonacci extensions 161.8/127.2% at 1313.7/1285.2 taken from the low 1188.1 (green zone). Although there is a possibility that price may pop north to test nearby resistance at 1306.0, we feel the support at 1263.7 is likely to be challenged sometime soon.

Filtering down to the daily chart, the candles are seen loitering mid-range between a Quasimodo resistance at 1307.8 and a support area penciled in at 1265.2-1252.1. Of particular interest here is the weekly support mentioned above is located within the upper limits of this daily zone, and the daily Quasimodo resistance is sited directly above the said weekly resistance.

Wednesday's bounce seen from the H4 demand base at 1271.8-1275.2, more specifically the H4 AB=CD 127.2% ext. at 1274.2, saw the yellow metal gravitate to a high of 1288.1 by the week's end. With the US dollar now seen testing a minor H4 demand (99.65-99.83 – see the US dollar index), coupled with the position of price on the weekly chart (see above), this could point to a selloff in the gold market.

Our suggestions: Should our analysis be correct and gold does indeed turn bearish, we would not be willing to sell until price shakes hands with the H4 supply seen at 1292.5-1289.2. Still, since there's a chance that bullion could stretch north to test weekly resistance/daily Quasimodo resistance, we'd strongly recommend waiting for a H4 bear candle to form (preferably with a full-bodied close) and enter based on this momentum with stops positioned above the wick.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: 1292.5-1289.2 ([waiting for a reasonably sized H4 bear candle to form before pulling the trigger is advised] stop loss: ideally beyond the candle's wick).

Daily Pivots: (S1) 0.8352; (P) 0.8369; (R1) 0.8387; More...

EUR/GBP rebounds strongly today following broad based strength in Euro. But upside is limited below 0.8511 resistance so far. Intraday bias remains neutral and further fall is still expected. Break of 0.8303 will extend the corrective fall from 0.9304 to 0.8116/20 key cluster support. We'd expect strong support there to completion the correction and bring rebound. Meanwhile, on the upside, break of 0.8511 will turn bias back to the upside for 0.8786 resistance instead.

In the bigger picture, price actions from 0.9304 are viewed as a medium term corrective pattern. Such decline is possibly ready to resume and should make a new low below 0.8303. At this point, we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside. Rise from 0.6935 (2015 low) will resume at a later stage to 0.9799 (2008 high). However, sustained break of 0.8116 could bring deeper decline to next key support level at 0.7564 before the correction completes.

Daily Pivots: (S1) 1.4165; (P) 1.4213; (R1) 1.4259; More...

EUR/AUD's rally resumed by surging through 1.4334 to as high as 1.4437 so far. Intraday bias is back on the upside for 1.4721 key resistance. As noted before, we're holding on to the case off trend reversal after defending 1.3671 key support. Decisive break of 1.4721 should confirm. On the downside, break of 1.4166 support is needed to indicate short term topping. Otherwise, outlook will remain bullish in case of retreat.

In the bigger picture, price actions from 1.6587 medium term top are viewed as a corrective pattern. Such correction could be completed after defending 1.3671 key support. Break of 1.4721 cluster resistance (38.2% retracement of 1.6587 to 1.3624 at 1.4756) should confirm this case and target 61.8% retracement at 1.5455 and above. Overall, we'd expect the up trend from 1.1602 to resume later. However, sustained break of 1.3671 will invalidate our bullish view and would turn extend the fall from 1.6587 towards 1.1602 long term bottom.

Daily Pivots: (S1) 1.0662; (P) 1.0686; (R1) 1.0701; More...

EUR/CHF surges sharply to as high as 1.0815 and the development argues that whole rise from 1.0629 is resuming. Intraday bias is back on the upside for 1.0823 resistance first. Decisive break there will carry larger bullish implications and will target 1.0897 resistance next. On the downside, break of 1.0718 support is needed to indicate short term reversal. Otherwise, outlook will remain bullish in case of retreat.

In the bigger picture, the price actions from 1.1198 are seen as a corrective move. Current strong rebound is raising the chance that it's completed after defending 38.2% retracement of 0.9771 to 1.1198 at 1.0653. Decisive break of 1.0823 resistance will affirm this bullish case. Further break of 1.0999 will target a test on 1.1198 high. For now, this will be the preferred case as long as 1.0652 support holds.

Daily Pivots: (S1) 139.17; (P) 139.66; (R1) 140.13; More....

GBP/JPY rises to as high as 141.88 so far today. The strong break of 140.08 resistance should affirm our bullish view. That is, consolidation pattern from 148.42 has completed with three waves down to 135.58, after hitting 135.39 fibonacci level. Intraday bias is back on the upside and current rise should extend to 144.77 resistance next. On the downside, break of 139.19 support is needed to indicate short term topping. Otherwise, outlook will remain bullish in case of retreat.

In the bigger picture, price actions from 122.36 medium term bottom are still seen as a corrective pattern. As long as 50% retracement of 122.36 to 148.42 at 135.39 holds, another rising leg would be seen to 38.2% retracement of 195.86 to 122.36 at 150.42 and possibly above. However, firm break of 135.39 will bring retest of 122.36, with prospect of resuming the larger down trend from 195.86.

Daily Pivots: (S1) 116.52; (P) 116.91; (R1) 117.37; More...

EUR/JPY surges sharply to as high as 120.53 today. The strong break of 118.23 support turned resistance indicates that fall from 124.08 has completed at 114.84 already. Note that firstly, such decline has a three wave corrective structure. And it's contained just by 61.8% retracement of 109.20 to 124.08 at 114.88. Hence, fall from 124.08 to 114.84 is seen as a corrective move. That in turn indicates that rebound from 109.20 is not finished. Intraday bias is turned back to the upside for 122.88 resistance first. Break will extend the whole rise from 109.20 to 126.09 key resistance next. On the downside, though, 117.81 minor support will turn focus back to 114.84 low instead.

In the bigger picture, price actions from 109.20 is still seen as a corrective move for the moment. But current development suggests that the first leg is finished at 109.20, second leg at 114.84. And rise from 114.84 is possibly developing into the third leg. Further rise will now be mildly in favor through 124.08 resistance. Strong break of 126.09 support turned resistance will confirm completion of whole fall from 149.76 at 109.20. In such case, rise fro 109.20 is developing into a medium term move for 141.04 and above.

Euro soars across the broad today as markets are happy with the results of the first round of French presidential election. With 97% of the vote counted, centrist Emmanuel Macron and far-right Marine Le Pen secured 23.9% and 21.4% support respectively. And as generally expected, they will enter the second and final round of the French election, scheduled on May 7. Higher support for Macron is also seen as a sign of solid support for staying with Euro. Meanwhile, after accepting defeat conservative Francois Fillon and leftist Benoit Hamon called their supports to choose Macron over Le Pen. According to recent polls by Ifop, Ipsos and Elabe, Macron would easily beat Le Pen in a head-to-head run-off, by a wide margin.

More in French Election: Macron And Le Pen Enter Final, Euro Soars Across The Board

BoJ to keep policies unchanged this week

BoJ is widely expected to keep monetary policies unchanged this week. Governor Haruhiko Kuroda said last week that it's "premature to discuss in an exact way about exit strategy." Meanwhile, Kuroda also talked down the question of scarcity of assets to purchase. Kuroda noted that "I don't think our monetary policy is constrained by the fact that we have acquired 40 percent of JGBs already, or our balance sheet is about 80 percent of GDP, which is certainly large compared with other central banks." Regarding inflation, he said that it's still around zero percent in Japan and it's a "long way to go" to hit the 2% target.

BoJ will also released the updated quarterly Outlook for Economic Activity and Prices report after the meeting. There are some speculations that BoJ would lower inflation projection for fiscal 2017. In January forecast, BoJ projected core CPI to hit 1.5% yoy in this fiscal year. But core CPI is currently standing at 0.2% yoy in February with weak momentum for price growth. Eyes will also be on whether BoJ would change the inflation forecast for 2018 and 2019, which were projected at 1.7% and 2.0% in January report.

ECB also expected to stand pat

ECB is also widely expected to keep monetary policies unchanged this week. President Mario Draghi warned last week that risks remain tilted to the downside. And "very substantial" accommodation is still needed. Nonetheless, he sounded a bit more relieved that there are "signs" of broadening recovery "across countries and sectors", with a "somewhat brighter global recovery and increasing global trade". Chief economist Peter Praet also noted that time for stimulus exit is yet to come.

Separately, governing council member Ewald Nowotny said that the policy path for 2017 is "decided". And ECB will "continuing bond purchases at a reduced level and leaving the interest-rate structures as they are." Another member Francois Villeroy de Galhau said that current policies were "fully appropriate" and recovery is "still fragile.

There were some speculations that ECB could lift interest before end of asset purchase. In particular, some members seemed to be concerned with the unknown impact of negative deposit rate. But such talks quickly were quickly cooled by comments from ECB officials in recent weeks.

Other highlights of the week

Elsewhere, there are a number of key economic data to watch. The list includes Australia CPI, US GDP, UK GDP and Japan CPI. Here are some highlights for the week ahead

• Monday: German Ifo business climate; Canada wholesale sales
• Tuesday: UK public sector net borrowing; US house price indices, consumer confidence, new home sales
• Wednesday: Australia CPI; Swiss UBS consumption indicator; Canada retail sales
• Thursday: BoJ rate decision; Swiss trade balance; German Gfk consumer sentiment, CPI, ECB rate decision; US durable goods orders, trade balance, wholesale inventories, pending home sales
• Friday: New Zealand building permits, trade balance; Japan CPI, unemployment rate, industrial production retail sales, household spending; Australia PPI; German retail sales, import prices, Eurozone M3, CPI; Swiss KOF; UK GDP, Canada GDP, IPPI and RMPI; US GDP, Chicago PMI

EUR/JPY Daily Outlook

Daily Pivots: (S1) 116.52; (P) 116.91; (R1) 117.37; More...

EUR/JPY surges sharply to as high as 120.53 today. The strong break of 118.23 support turned resistance indicates that fall from 124.08 has completed at 114.84 already. Note that firstly, such decline has a three wave corrective structure. And it's contained just by 61.8% retracement of 109.20 to 124.08 at 114.88. Hence, fall from 124.08 to 114.84 is seen as a corrective move. That in turn indicates that rebound from 109.20 is not finished. Intraday bias is turned back to the upside for 122.88 resistance first. Break will extend the whole rise from 109.20 to 126.09 key resistance next. On the downside, though, 117.81 minor support will turn focus back to 114.84 low instead.

In the bigger picture, price actions from 109.20 is still seen as a corrective move for the moment. But current development suggests that the first leg is finished at 109.20, second leg at 114.84. And rise from 114.84 is possibly developing into the third leg. Further rise will now be mildly in favor through 124.08 resistance. Strong break of 126.09 support turned resistance will confirm completion of whole fall from 149.76 at 109.20. In such case, rise fro 109.20 is developing into a medium term move for 141.04 and above.

Economic Indicators Update

STOCKS

Dow (20547.76, -0.15%) has immediate weekly support near 20370-20350 levels which could be possibly tested in the coming sessions. Thereafter a rise back towards 20600-20700 is possible in the longer run.

Dax (12048.57, +0.18%) is trading higher while support near 11930 holds. It could either start moving up from current levels towards 12200 or re-test lower levels of 11930 in which case there could be some sideways consolidation for the coming sessions.

Shanghai (3122.63, -1.59%) could test 3100 or a little lower before bouncing back from there in the near term. Immediate trend is bearish.

Nikkei (18870.24, -1.34%) opened with sharp gap up above levels of 18600 re-entering into the broad sideways channel of 18600-19700. In case it holds, we could possibly see a rise towards 19200 before coming off from there.

Nifty (9119.40, -0.19%) is trading within the immediate daily channel and while support near 9100 holds, we could see some movement along the daily trend support in the 9250-9100 region. A break below 9100, if seen could take it lower towards 9000-8900 in the longer run.

COMMODITIES

We were expecting 1260-65 levels for Gold (1274.79) due to its near-term overbought condition, and today it is trading at 1275. We have been expecting 1260 to hold for some time as buyers are taking every dip as a further opportunity for buying. 1301 could be a level where the price action has to be checked to assess the chances of further bounce to 1328 to 1350 levels. only a close below 1260 could negate the bullish sentiment.

We were also expecting Silver (17.85) to be corrected till 17.70 since last 4-5 days and today silver is trading close to those levels. We think that the corrective phase could be restricted till 17.60-70 levels due to near term oversold condition. Only a close below 17.60 could bring further lower levels of 17.43 levels into consideration.

Nothing new to add as Copper (2.565) has been stuck in the range of 2.50-2.66. A close below 2.50 could open up 2.48 and 2.45 levels respectively. Gradual buying at 2.45-48 levels can't be ruled out due to near term oversold condition. Only above 2.66, higher resistances of 2.72 -80 can come into consideration.

We were bearish on WTI (49.85) and we had mentioned that "Brent may consolidate within these levels (52.20-53.60)for few more sessions though the possibility of a decline towards supports can't be ruled out, but a close below 50.30 could drag WTI towards 48.36 levels'. We will remain bearish while Brent (52.22) and WTI are trading below 53.60 and 50.30 levels respectively.

FOREX

Euro has zoomed on the back of a re-ignited risk appetite following the first round of the French Presidential Election. However, it may turn out to be more of a relief rally rather than genuine strength for Euro. On the other hand, the chances of Euro making a significant top and Dollar creating a significant bottom today can't be ruled out.

Dollar Index (99.30) is at a very crucial juncture now as it has tested our downside target/support of 99.20-10 and shows the initial possibility of a larger degree correction coming to an end, though pending confirmation. The current sharp bounce is in line with expectations and the recovery may well take Dollar to 100.20-50 in the next few sessions.

Euro (1.0829) has overshot our upside target of 1.0820 by a huge margin to register a high at 1.0920 today but the rise may be over for now and a gradual decline to 1.0700 or even lower may be seen in the near term.

Pound (1.2787) is trading quietly in the narrow range of 1.2750-1.2900 as expected but it may test the major support of 1.2600 in the near term.

Dollar-Yen (110.07) is currently testing the resistance of 110.10 which is the make or break level in the near term. A successful break above 110.10 may push the pair up to 111.50-112.00 but a failure at the current levels can keep it in the range of 108.00-110.00. Prefer to wait and watch with slightly bullish bias.

Aussie (0.7555) remains in a horizontal mode in the range of 0.7450-0.7600 which may continue for another week.

Dollar-Rupee (64.62) looks potentially bullish towards 65.00/20 but could trade within the 64.30-64.80 region for a few more sessions before that. Resistance near 64.70/80 could be re-tested a couple of times before finally breaking on the upside.

INTEREST RATES

The US yields are trading higher and could move up slightly in the coming sessions before pausing. The 5Yr (1.84%), 10Yr (2.31%) and the 30yr (2.96%) are trading higher from previous levels of 1.77%, 2.25% and 2.91% respectively. The 30Yr could test 3% while the 10yr could face some rejection from levels near 2.35%.

The US-Japan 10Yr (2.29%) rose back above 2.25% resistance and while that holds, a rise towards 2.33% is possible which could indicate that Nikkei and Dollar-Yen could move up in the next 2-3 sessions.

The UK-US 10yr (-1.28%) has fallen sharply from levels below the long term channel resistance and could indicate that the upside for Pound could be limited in the near term.

The German-US 2Yr (-2.05%) and the 10Yr (-2.06%) have fallen sharply from resistance levels and could come off this week bringing down Euro with itself.

Macron's win sees investors and traders returning to risk assets.

PRECIOUS METALS

Asia's open saw gold drop $20 on safe haven liquidation, following Macron's win in the 1st round French presidential voting. Gold traded as low as 1265.50 from a 1284 close in New York before rallying back to the 1272 level.

With geopolitical uncertainty now subsiding globally at a rate of knots, for now, the way lies clear for a possible deeper correction in gold after multiple failures in the 1285/1295 region. Barring a massive surprise from Ms Le Pen in the 2nd round, the intricacies of the French presidency and legislature elections will fade from meaningfully affecting the price of precious metals going forward.

Gold's present level is 1274 with 1272 nearby a daily support and an intraday pivot. Resistance lies at 1284 with support at 1260 below and then 1255, the 200-day moving average.

Silver suffered much the same fate as gold. Dropping from a 17.9300 close to as low as 17.6250 this morning. However, its rebound has been much more constructive, trading at 17.8500 as we speak. This may have been due to silver's price action being more negative late last week when compared to golds, and thus long positioning had been reduced more than gold already.

Silver has support at today's low at 17.6250 and then 17.3600 the 100-day moving average.

Resistance sits at 17.9300 and the 18.0000, the 200-day moving average.

CRUDE OIL

WTI spot has rallied at 0.5% this morning, partially unwinding Friday's 2% sell-off in both it and Brent. A Macron victory in France has reduced uncertainty, but an OPEC/non-OPEC working group recommending an extension to the production cut deal has probably had the greater influence.

The reality is though that the world is awash in oil, and the Baker-Hugh's Rig Count's mandatory rise on Friday for the 14th consecutive week shows that U.S. shale isn't going away at these levels. Barring supply disruptions or geopolitical events, and with shale producers still heavy futures sellers on any rally, sustained rallies could be difficult ahead of late May's OPEC/Non-OPEC meeting.

Today WTI spot trades at 49.50 with resistance at 50.00 and support at 48.50, its 200-day moving average.

Brent spot trades at 52.20 with resistance at 53.00 and support at 50.80, its 200-day moving average.

With 97% of the vote counted, Emmanuel Macron and Marine Le Pen would enter the second and final round of the French election, scheduled on May 7. The election result of the first round came in largely as projected in opinion polls. Yet, the market was thrilled with the EURUSD soaring to the highest level in 5 months, rallying as much as +2% at one point. Indeed, the strength in the single currency was broadly based. EURJPY jumped more than +3% before retreat while both EURGBP and EURCHF have risen over +1%.DJIA futures also soared, reflecting improving sentiment.

Markets relieved as Macron Shone

The market was relieved as Macron is believed to have higher chance to win eventually and thus a Frexit referendum could be avoided. Besides, the market reaction also reflected how tight the race was. The market refrained from relying on opinion polls as the supports for major candidates were close and the percentage of undecided voters was high. Meanwhile, the predictive power of opinion polls has be doubtful after the surprising results of Brexit referendum and US presidential election

Melenchon failed despite recent surge

Securing 23.9% and 21.4% of the votes respectively, independent centrist Macron and far-right populist Le Pen are confirmed to enter the runoff early next month to fight for presidency. They were followed by scandal-hit Francois Fillon who got 19.9%. Despite a late surge in polls, Jean-Luc Melenchon failed to excel further with 19.6%. As we mentioned previously, he would not be able to draw much more votes from his closest political rival, Benoit Hamon, who got 6.3% of votes (we forecast "around 6%"). Total votes for the leftist camp also fell within our projection of 25-30%. Turnout for this year is 78.3%, slightly lower than 79.48% in 2012.

Macron called for "rally against nationalist"

Speaking to his supporters after the election, Macron suggested that "the face of French political life" has been changed in a year. He pledged to bring together the French people and called for the "rally against nationalist". Le Pen described the outcome as "an act of French pride, that of a people who are raising up their heads, that of a people sure of their values and confident of the future". Le Pen affirmed herself as "the candidate for the people" with the "survival of France" at stake.

Fillon and Hamon support Macron after defeat

Accepting failure, Fillon called for his supporters to choose Macron over Le Pen. Hamon made the same request in Tweeter, noting "J'appelle à battre le plus fortement possible le Front national en votant pour Emmanuel Macron, même s'il n'appartient pas à la gauche". Their rationale is to prevent a far-right extreme party from taking control of the government. Recent polls by Ifop, Ipsos and Elabe signaled that Macron would beat Le Pen in the runoff with over 60% of vote. Yet, we advise to act cautiously and expect high volatility in the financial markets from now through to the election day.