Sample Category Title

Strong two-day rally that broke above narrowing daily cloud and closed well above daily Tenkan-sen (1.2458) has shifted near-term focus higher. Tuesday's strong bullish acceleration extended briefly in early Wednesday and pressuring psychological 1.2500 barrier and 06 Apr high at 1.2504. Break here is needed to expose next target at 1.2553 (03 Apr high) and open way towards key near-term barrier at 1.2613 (27 Mar peak). Daily MA's and Tenkan-sen/Kijun-sen lines in bullish setup are supportive for further advance, as the pair is awaiting UK jobs data for firmer signals. UK jobless claims are expected to rise in March, according to forecast at -3.0K vs -11.3K in Feb, while Unemployment rate and Average Earnings are expected to stay unchanged at 4.7% and 2.2% respectively. Broken daily Tenkan-sen/20SMA offer solid support at 1.2455 zone, which is expected to hold dips and guard lower pivot at 1.2415 (100SMA).

Res: 1.2505, 1.2518, 1.2553, 1.2594
Sup: 1.2478, 1.2455, 1.2415, 1.2374

Weekly

  

•    Last Candlesticks pattern: Shooting star 
  
•    Time of formation: 13 Mar 2017 
  
•    Trend bias: Down



Daily
  

•    Last Candlesticks pattern: Bearish engulfing pattern 
  
•    Time of formation: 16 Feb 2017 
  
•    Trend bias: Near term down





The Australian dollar did meet renewed selling interest at 85.75 (we recommended in our previous update to sell aussie at 85.70 and a short position was entered) and has dropped in line with our bearish expectation, our short position met downside target at 83.70 with 200 points profit, as this anticipated selloff has kept the pair under pressure, bearishness remains for recent decline from 88.15 top to extend further weakness to 82.00 and possibly towards support at 81.10-15, however, near term oversold condition should limit downside and reckon 80.00 psychological support would hold from here, bring rebound later.

On the upside, whilst initial recovery to 83.00-10 cannot be ruled out, reckon the Tenkan-Sen (now at 83.83) would limit upside and bring another decline to aforesaid downside targets. Only a daily close above the Kijun-Sen (now at 84.70) would abort and suggest low is formed instead, risk a stronger rebound to 85.00-10 but said resistance at 85.75 should remain intact, bring another decline later this month.  



Recommendation: Our short position entered at 85.70 met target at 83.70 with 200 points profit and would sell again at 83.65 for 81.65 with stop above 84.65.

On the weekly chart, the pair has continued heading south throughout since the beginning of last week and broke below support art 83.75, adding credence to our view that top has been formed at 88.15 and consolidation with downside bias remains for the retreat from there to extend weakness to the upper Kumo (now at 81.61), then towards support at 81.10-15, however, a weekly close below latter level is needed to retain bearishness and suggest the rise from 72.50 has ended, then further fall to 80.50 and possibly psychological support at 80.00 would follow but the lower Kumo (now at 78.65) should remain intact.

On the upside, although recovery to 83.00-10 is likely, reckon upside would be limited to 83.60-70 and bring another decline. Above 83.70 would risk a stronger rebound towards 85.05 (last week’s high and current level of the Tenkan-Sen), however, only a weekly close above resistance at 85.75 would abort and signal low is formed instead, bring further subsequent gain to 86.00 and then 86.50-60, however, price should falter below resistance at 87.50.

Asia Mid-Session Market Update: China inflation still weighed down by food prices; BOJ's Kuroda steps up jawboning of exchange rate as Yen rises to fresh 2017 highs

US Session Highlights

(US) Mar NFIB Small Business Optimism: 104.7 v 104.7e

(US) FEB JOLTS JOB OPENINGS: 5.743M V 5.65ME

(US) President Trump tweets: “I explained to the President of China that a trade deal with the U.S. will be far better for them if they solve the North Korean problem! North Korea is looking for trouble. If China decides to help, that would be great. If not, we will solve the problem without them! U.S.A.”

(US) Fed's Williams (moderate, non-voter): we need to bring rates back to normal this year and next year; Reiterates there could be three or four rate hikes this year - press interview

US markets on close: Dow flat, S&P500 -0.1%, Nasdaq -0.2%

Best Sector in S&P500: Real Estate

Worst Sector in S&P500: Technology

Biggest gainers: AAL +3.8%; STX +3.1%; JWN +2.6%

Biggest losers: ADS -3.8%; SWN -3.1%; RCL -2.7%

At the close: VIX 15.1 (+1.0pts); Treasuries: 2-yr 1.24% (-2bps), 10-yr 2.30% (-6bps), 30-yr 2.93% (-6bps)

US movers afterhours

NBIX: FDA approves INGREZZA (valbenazine) capsules as the first and only approved treatment for adults with tardive dyskinesia (TD); +19.3% afterhours

DRYS: Declares dividend of $2.5 million (1% of market cap); dividend per share amount to be paid by the Company to be determined later; +6.9% afterhours

TSCO: Guides Q1 $0.45-0.46 v $0.53e, R$1.56B v $1.58Be; SSS -2.2%; -3.5% afterhours

ONVO: Announces CEO transition; -6.6% afterhours

NS: Agrees to acquire Navigator Energy Services, LLC for $1.48B; -6.8% afterhours

Politics

(US) President Trump: US sending a very powerful armada to North Korea - Fox interview

(US) House Fin Services Chairman Hensarling (R-TX): will unveil Dodd-Frank overhaul bill by the end of the month

(US) John Sullivan nominated by Pres Trump as Deputy State Secretary - press

Key economic data

(CN) CHINA MAR CPI M/M: -0.3% (2nd straight decline) v -0.2% PRIOR; Y/Y: 0.9% V 1.0%E

(CN) CHINA MAR PPI Y/Y: 7.6% V 7.5%E; 7th consecutive increase

(AU) AUSTRALIA APR WESTPAC CONSUMER CONFIDENCE INDEX: 99.0 V 99.7 PRIOR, M/M: -0.7% (first decline in 4 months) V +0.1% PRIOR

(JP) JAPAN FEB CORE MACHINE ORDERS M/M: 1.5% V +3.6%E; Y/Y: 5.6% V +2.5%E

(JP) JAPAN MAR PPI (CGPI) M/M: 0.2% V 0.3%E; Y/Y: 1.4% V 1.4%E

(KR) South Korea Mar Unemployment Rate: 3.7% v 3.8%e; 466K new jobs created, biggest gain since Dec 2015

Asia Session Notable Observations, Speakers and Press

Safehaven flows remain the prevalent theme in Asian trade as geopolitical risks related to conflicts in Syria and saber-rattling by North Korea are not abating. Ahead of his arrival in Moscow, US State Sec Tillerson is calling on Putin to denounce his support for Syria's Assad, just as Kremlin continues to hint that chemical attacks were actually done by the rebels to garner international sympathy. US President Trump has also tweeted that "North Korea is looking for trouble" and added today that US is "sending a powerful armada", while Pyongyang warned of a nuclear attack on the US at any sign of American aggression. Vix has spiked up to a 2-week high, US benchmark Treasury yield is testing a key long-term support of 2.30%, and Nikkei225 is the worst performing major index on Yen strength (both Nikkei and USD/JPY are at lowest levels since mid-Nov). Gold prices have also extended their gains on safehaven demand, while Dalian Iron Ore price decline is weighing on the high-beta Aussie Dollar currency. AUD/USD has fallen back below $0.75 near its 2 1/2 month lows going into tomorrow's critical Australia employment data.

China consumer inflation remained underwhelming in March, as m/m CPI fell for the 2nd straight month and y/y was near its 2-year lows below 1%. Food CPI component fell again by over 4%, while non-food rose slightly by 2.3% v 2.2% prior. Recall China has a formal 2017 CPI target of 3%. Conversely, rising input costs have continued to prop up wholesale inflation, with PPI up for the 7th straight month at +7.6% - close to consensus.

Ahead of tomorrow's employment data, Australia Westpac Consumer Confidence index registered its first decline in 4 months to 99.0 from 99.7 - implying contracting conditions. Westpac economist still remarked that confidence is holding up well media attention over housing affordability and growing geopolitical tensions globally.

China

(CN) China Banking Regulatory Commission (CBRC) urges banks to reduce exposure

(CN) China Insurance Regulatory Commission (CIRC) vice chairman Chen Wenhui: Insurance industry exposed to solvency, liquidity, corporate governance, and external risks - press

Japan

(JP) BOJ Gov Kuroda: BOJ easing not aimed at FX level; Further weakening in Yen would help to meet CPI target sooner

(JP) Japan Fin Min Aso: Drafting free trade rules is a key goal for US-Japan dialogue

(JP) US said to be planning to talk about trade deficit with Japan - Nikkei

Australia/New Zealand

(NZ) New Zealand's Aon Hewitt: 1-year inflation expectations unchanged at 1.7%; 4-year unchanged at 2.0%

Korea

(US) President Trump: US sending a very powerful armada to North Korea - Fox interview

(KR) South Korea presidential frontrunner Jae-In Moon: to draft extra budget immediately if getting elected

(KR) Japan Foreign Ministry issues short-term alert on South Korea travel due to North Korea nuclear tests

Asian Equity Indices/Futures (23:30ET)

Nikkei -1.2%, Hang Seng -0.1%, Shanghai Composite -0.3%, ASX200 flat, Kospi +0.1%

Equity Futures: S&P500 -0.2%; Nasdaq -0.2%, Dax -0.2%, FTSE100 -0.3%

FX ranges/Commodities/Fixed Income (23:30ET)

EUR 1.0595-1.0615; JPY 109.25-109.75; AUD 0.7485-0.7510; NZD 0.6930-0.6960

June Gold +0.2% at 1,277/oz; May Crude Oil +0.3% at $53.54/brl; May Copper -0.3% at $2.60/lb

(US) Weekly API Oil Inventories: Crude: -1.3M v -1.8M prior; second straight draw

SPDR Gold Trust ETF daily holdings rise 4.1 tonnes to 842.4 tonnes; highest since Mar 2nd

iShares Silver Trust ETF daily holdings rise to 10,208 tonnes from 9,862 tonnes prior; First rise since Mar 20th

(CN) PBOC SETS YUAN MID POINT AT 6.8940 V 6.8957 PRIOR; 2nd straight firmer fix

(CN) PBoC skips open market operations for 13th straight session; drains net CNY40B

(CN) China MoF sells 5-yr Govt bonds at 3.1264% v 3.12%e; bid-to-cover 1.62x

(AU) Australia MoF (AOFM) sells A$800M in 1.75% 2020 Bonds; avg yield: 1.8675%; bid-to-cover: 3.74x

(JP) BOJ announces amounts to buy in upcoming QE operation: cuts 3-5yr to ¥350B (prior ¥380B)

Asia equities / Notables / movers

Australia

NST.AU Northern Star +2.1%, SAR.AU Saracen +4.9%, RSG.AU Resolute Mining +1.8% (gold price gains)

SPK.NZ Spark NZ +2.6% (offer to buy TeamTalk has lapsed)

TLS.AU Telstra -6.8% (TPG plans rival Australian mobile network)

SFR.AU Sandfire Resources -2.4% (Morgans Financial downgrade)

Japan

8028.JP FamilyMart Uny -4.5% (annual result)

6502.JP Toshiba Corporation -1.5% (may need govt support, 9-month result)

7752.JP Ricoh Co +1.6% (to shrink camera business)

6796.JP Clarion Co -6.4- (annual result speculation)

6146.JP Disco Corp -3.4% (annual result speculation)

2726.JP Pal Co +5.4% (annual result)

7649.JP Sugi Holdings % (annual result)

9948.JP Arcs Co -3.7% (annual result)

2670.JP ABC-MART -5.5% (annual result)

Hong Kong

2009.HK BBMG Corp +0.2% (guidance)

6837.HK Haitong Securities -0.9% (Mar result)

6030.HK CITIC Securities -0.6% (Mar result)

1888.HK Kingboard Laminates Holdings -5.3% (shareholder placement)

China

000507.CN 600185.CN Gree Real Estate +10.0% (SMBC upgrade)

600340.CN China Fortune Land Development +2.2% (Xiongan new district)

Weekly
    •    Last Candlesticks pattern: Shooting doji
    •    Time of formation: 20 Feb 2017
    •    Trend bias: Sideways

Daily
    •    Last Candlesticks pattern: Bearish engulfing pattern
    •    Time of formation: 21 Mar 2017
    •    Trend bias: Near term down



Aussie has dropped quite sharply last week and broke below indicated support at 0.7491, dampening our bullishness and suggesting top has been formed at 0.7750 last month, hence consolidation with downside bias is seen for this fall from 0.7750 to bring at least a strong retracement of the rise from 0.7158 and further decline to 0.7450-55 (50% Fibonacci retracement of 0.7158-0.7750), then towards 0.7380-85 (61.8% Fibonacci retracement), however, reckon downside would be limited to 0.7300-10 and bring rebound later.

On the upside, whilst initial recovery to 0.7540-50 cannot be ruled out, reckon the Tenkan-Sen (now at 0.7569) would limit upside and bring another decline later. Only a daily close above the Kijun-Sen (now at 0.7612) would abort and signal first leg of decline from 0.7750 has ended, bring a stronger rebound to 0,7640-50 but resistance at 0.7680 should cap upside, price should falter below 0.7700-10, bring another decline later. 



Recommendation: Sell at 0.7570 for 0.7390 with stop above 0.7670.



On the weekly chart, last week’s selloff below support at 0.7491 formed a black candlestick with price closing near the week’s low, signaling top has been formed at 0.7750 and consolidation with downside bias is seen, a weekly close below the Kijun-Sen (now at 0.7468) would add credence our view that the rebound from 0.7158 has ended at 0.7750, then further choppy trading below previous resistance at 0.7778 would take place with mild downside bias for further fall towards 0.7380-85 (61.8% Fibonacci retracement of 0.7158-0.7750), however, reckon downside would be limited to 0.7290-00, bring recovery later.

On the upside, expect recovery to be limited to 0.7565-70 and the Tenkan-Sen (now at 0.7612) should hold, bring another decline later. Above last week’s high at 0.7641 would risk test of resistance at 0.7680 but only a sustained breach above this level would signal the retreat from 0.7750 has ended instead, bring another bounce towards this level. Looking ahead, only break of 0.7778 resistance would suggest a possible upside break of early established broad range, bring further rise to 2016 high at 0.7835, above there would confirm and encourage for headway to 0.7900 and later towards psychological level at 0.8000.

The Euro remains at the front foot on Wednesday and probes again above daily cloud top (1.0613) for renewed attack at next significant barrier at 1.0622 (100SMA), following Wednesday's spike to 1.0628.

Strong upside rejection on Wednesday that left daily candle with long upper shadow is expected to weigh on near-term action, as daily studies remain in bearish setup.

The pair faces a cluster of barriers between 1.0613 and 1.0635 (cloud top/100SMA and daily Tenkan-sen in steep descend) which is seen as strong obstacle for the euro to extend near-term recovery leg from 1.0570 low.

Also, growing fears about the outcome of French elections keeps traders cautious and may limit recovery attempts.

Near-term action is also pressured by falling thick 4-hr Ichimoku cloud (spanned between 1.0664/1.0769), base of which should cap extended upticks.

Res: 1.0622, 1.0635, 1.0650, 1.0664
Sup: 1.0593, 1.0577, 1.0568, 1.0524

EUR/USD

Current level - 10612

The intraday bias is slightly positive after 1.0567 low and initial resistance lies at 1.0640. Crucial on the downside is 1.0580 support and a break through that low will challenge 1.0490 area. 

Profit-taking affects gold curbing silver and platinum

USD/JPY

Current level - 109.52

Yesterday's break through 110.10 lows signals a completion of the prolonged consolidation pattern and the bias is bearish, for a slide towards 108.50 area. Major resistance lies at 110.10.

GBP/USD

Current level - 1.2487

The intraday bias is positive after the break through 1.2450, as the pair is currently testing 1.2500 resistance area. A violation of the latter will challenge 1.2500 and 1.2620.

USD/CHF - 1.0072

Most recent candlesticks pattern : N/A

Trend                                    : Near term up

Tenkan-Sen level                  : 1.0071

Kijun-Sen level                    : 1.0074

Ichimoku cloud top                 : 1.0088

Ichimoku cloud bottom              : 1.0067

Original strategy :

Buy at 1.0000, Target: 1.0100, Stop: 0.9965

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.0000, Target: 1.0100, Stop: 0.9965

Position : -

Target :  -

Stop : -

Dollar’s retreat after rising to 1.0108 on Monday has retained our view that consolidation below this level would be seen and initial downside risk is for pullback to 1.0050, then towards support at 1.0026, however, reckon 0.9995 support would contain weakness and bring another rise later, above indicated resistance at 1.0108-09 would extend recent upmove from 0.9813 towards 1.0140-45 but loss of upward momentum should prevent sharp move beyond another previous resistance at 1.0171, risk from there has increased for a retreat to take place later. 

In view of this, would not chase this rise here and would be prudent to buy dollar on subsequent pullback as support at 0.9995 should limit downside. Below 0.9970 (50% Fibonacci retracement of 0.9831-1.0108) would abort and signal top is formed instead, bring correction to support at 0.9948. 

GBP/USD - 1.2487

Most recent candlesticks pattern   : N/A

Trend                                 : Near term down

Tenkan-Sen level                 : 1.2488

Kijun-Sen level                    : 1.2449

Ichimoku cloud top              : 1.2422

Ichimoku cloud bottom        : 1.2415

Original strategy :

Exit short entered at 1.2475,

Position : - Short at 1.2475

Target :  -

Stop : -

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

As cable has maintained a firm undertone after yesterday’s rally, suggesting low has been formed at 1.2365 on Monday and near term upside risk remains for the rebound from there to extend gain to resistance at 1.2506, however, break there is needed to add credence to this view and bring further rise to 1.2525-30 but near term overbought condition should prevent sharp move beyond previous chart resistance at 1.2559, bring retreat later.

In view of this, would not chase this rise here and would be prudent to stand aside for now. Below 1.2445-50 would suggest an intra-day top is possibly formed, bring weakness to 1.2420, break there would confirm and bring further fall to 1.12400-05 which is likely to hold on first testing.

Sunrise Market Commentary

• Rates: Risk aversion erases payrolls
  Two days of risk aversion – Monday in Europe on Mélenchon's rise in French presidential election polls and Tuesday in the US on the administration tough stance against North Korea & Syria –erased all of Friday's payrolls-induced losses on US Treasuries. The US 5- and 10-yr yields are testing key support levels again. Will risk sentiment improve and avoid a ST break?
• Currencies: USD/JPY drops below 110 psychological support
  Geopolitical tensions dominated yesterday's FX trading with the yen the mighty winner. USD/JPY dropped below 110 support. EUR/USD remained nearly unchanged as narrowing rate differentials were no help for the euro. Lingering geopolitical concerns still affect Asian trading overnight, but FX moves peter out. Sentiment-driven trading today?

The Sunrise Headlines

• US equities limited its losses to 0.14% (S&P) after a weak opening dominated by geopolitical concerns. Asian equities are modestly down with Japan underperforming (-1.25%) on yen strength.
• 'We are not going into Syria,' President Trump said. His comments may dilute Rex Tillerson's message in Moscow for Russia to drop its support for Assad. However, he kept up his jawboning against North Korea, saying the US is sending a 'very powerful' armada to deliver a message to Kim Jong Un's regime.
• The yen, gold and Treasuries rose as haven assets extended gains amid lingering concern about the geopolitical tensions. US equity- futures slipped along with Asian equities. Moves are small though and won't necessarily be followed in Europe and US later today
• Saudi Arabia will probably support extending supply cuts for 6 months when OPEC meets. The decision depends on the stance of Iraq, Iran and Russia. In the US, API data showed a decline in inventories. Brent moves up to $56.45/barrel.
• Global reflation got a status check. Chinese PPI slowed to a 7.6% Y/Y advance in March from 7.8% Y/Y in February. Japan's PPI increase accelerated to 1.4% Y/Y in March, from a revised 1.1% Y/Y in February.
• Italy has moved to avoid punishment from Brussels over its public finances as the centre-left government led by Paolo Gentiloni approved €3.4B in extra budget deficit cuts in an effort to meet EU demands.
• Today's market calendar remains very light with only the UK labour data, auctions in US, Germany, Ireland and Italy and a Bank of Canada policy meeting

Currencies: USD/JPY Drops Below 110 Psychological Support

Dollar loses ground, especially versus yen

On Tuesday, the dollar traded with a marginal negative bias going into the US session, but geopolitical tensions (Tough US comments addressed to Russia/Syria & N-Korea) flared up, pushing US yields and equities down. The yen played its traditional safe haven role. USD/JPY approached the psychological 110 level for the third time. Without hesitation, traders pushed the pair this time through the level which accelerated the downfall of the pair, but a pause intervened shortly afterwards simultaneous with US Treasuries peaking and equities bottoming. USD/JPY hovered sideways with a negative bias towards a 109.62 close, ignoring the intraday recovery of US equities.

The price action in EUR/USD was far less spectacular. The euro struggled higher from about 1.0580 to 1.0620 at European noon and stabilized at that level during early US dealings. It only slightly followed later on the steep rise of US Treasuries (narrowing yield spreads), the fall of equities/yen, reaching an 1.0630 intraday high when these other markets peaked/bottomed. It could not even hold on to these slim gains and dropped back to about 1.0605 where it closed. Barely up from the previous 1.0596 finish. So, the euro couldn't profit from dollar weakness and a sharp narrowing of the yield differentials. It was one of the weakest G-10 currencies versus the dollar. We suspect that political risks inside the euro area (France/Italy?) keep the euro weak which matched dollar weakness. The EUR/USD decline in the previous week was stopped this week, but there is no signal yet that the euro could really fight back and conquer the lost ground. Overnight: Dollar stabilizes in calm trading

The overall dollar stabilized near yesterday's lows. There is still a lingering safe haven bid on geopolitical concerns as US Treasuries, gold and yen are, albeit insignificantly, lower (see headline for latest geopolitical news). Oil continues to rise. Chinese PPI slowed in March to a still high 7.6% Y/Y, while Japanese PPI rose to 1.4% Y/Y from 1.1% Y/Y in February. EUR/USD is near yesterday's 1.0605 close having traded in a 1.0595 to 1.0615 range overnight. USD/JPY set a new MT low at 1.0935, but trades currently at 109.55 on lingering geopolitical concerns.

Calendar uneventful, FX trading too?

The market calendar is uneventful (see rates). FX trading will be dominated by risk sentiment and technicals. Will the break in USD/JPY below 110 be confirmed? For EUR/USD we are in no-man's land. The dollar rally petered out, but there are no signs yet of a euro counterattack. The eco calendar heats up tomorrow and the US earnings season starts for real. That may bring more animus, but market closures on Good Friday and thinly staffed desk tomorrow may keep the dollar in a bind till after Easter.

Technicals: USD/JPY picture deteriorates

From a technical point of view, USD/JPY broke through the 110 key support, extending its decline to 109.35, after having failed to regain the 111.36/60 previous range bottom. We downgrade our USD/JPY assessment to bearish, as long as the pair does not break and sustain above 112.20 (neckline ST double bottom). It becomes tactically a sell on upticks environment. USD/JPY has intermediate support at 109.38 (reached today, 50% retracement 100.09/118.66) and 107.18, 62% retracement). EUR/USD extensively tested the topside of the MT range (1.0874/1.0906 area) two weeks ago, but the test was rejected. EUR/USD returned lower in the 1.0875/1.05 trading range with the odds for a test of the downside of the range, but the dollar's advance stopped in past two days, suggesting the dollar rally is a bit tired.

EUR/USD: Dollar cannot prolong its rally and stabilizes ahead of obvious 1.05 support. Too difficult or simply a pause?

EUR/GBP

Sterling: Strong performance versus EUR and USD

At their previous policy meeting, the BoE (MPC) showed they saw little room to let inflation move much higher without tightening policy. However, their concerns proved premature as inflation behaved well in March. There was a knee-jerk reaction pushing sterling stronger versus euro and dollar. However, the absence of follow through sterling buying caught the eye and gains were in no time erased. It looked like it would become a session to forget fast. However, all changed in late European trading. Sterling started to climb against both euro and dollar. It did coincide with the risk-off move in US treasuries, yen and gold. Sterling yields fell less than US ones, which might be an explanation for the cable gains, but that wasn't the case versus German yields. Admittedly, the FTSE 100 outperformed European and US indices. Nevertheless, the advance is difficult to explainan by the fundamentals. There is Brexit and a current account in deficit, which is not the environment to receive safe haven inflows. Whatever, EUR/GBP dropped from about 0.8530 without interruption to a 0.8490 close, which is technically not yet significant with 0.8484 intermediate support before the 0.8409/00 key support. Overnight sterling traded volatile but in a narrow range.

The UK labour market data will be key today. February's labour market figures should highlight that while the jobs market remains tight, wage growth is still subdued. A strong report would help sterling eke out more gains, but did the market front-run yesterday? We have a neutral short-term bias on EUR/GBP. The EUR/GBP 0.88/0.84 range should guide trading for now. Last week, the sterling rally/short-squeeze ran into resistance, but yesterday there was again some fire in sterling. We see no trigger though for a real change in sentiment yet. Longer term, Brexit-complications remain a potential negative for sterling. The BoE won't raise rates anytime soon.

EUR/GBP sterling gained ground yesterday, but without an obvious driver. Anticipation on today's labour market report?

Download entire Sunrise Market Commentary

EUR/USD - 1.0615

Most recent candlesticks pattern   : N/A

Trend                      : Near term down

Tenkan-Sen level              : 1.0607

Kijun-Sen level                  : 1.0604

Ichimoku cloud top             : 1.0619

Ichimoku cloud bottom      : 1.0590

Original strategy  :

Sell at 1.0665, Target: 1.0565, Stop: 1.0700

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 1.0665, Target: 1.0565, Stop: 1.0700

Position : -

Target :  -

Stop : -

As the single currency has recovered again after finding support at 1.0595 earlier today, retaining our view that further consolidation would be seen and initial upside risk remains for the rebound from 1.0570 low to extend gain to 1.0630, then 1.0650, however, reckon upside would be limited to 1.0667 resistance (Friday’s high) and bring another decline later, below said support at 1.0595 would bring retest of Monday’s low at 1.0570, break there would extend the decline from 1.0906 to 1.0550-55 (50% projection of 1.0906-1.0635 measuring from 1.0689), then 1.0525-30.

In view of this, would not chase this fall here and would be prudent to sell dollar on further recovery as 1.0667 resistance should limit upside. Only a firm break above said resistance at 1.0667 would abort and suggest low is formed instead, risk a stronger rebound to 1.0689, then 1.0702.