Sample Category Title

Daily Pivots: (S1) 1.2377; (P) 1.2402; (R1) 1.2441; More...

Intraday bias in GBP/USD is turned neutral with current recovery. But deeper decline is still expected with 1.2505 resistance intact. As noted before, triangle pattern from 1.1946 could be finished with five waves to 1.2614. Below 1.2365 will target 1.2108 support first. Decisive break there will argue that medium term down trend is resuming. In that case, GBP/USD should take out 1.1946/1986 support zone to 61.8% projection of 1.5016 to 1.1946 from 1.2614 at 1.0717. On the upside, however, break of 1.2505 resistance will invalidate this immediately bearish case. Then, it will turn bias back to the upside for 1.2614 resistance instead.

In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. There is no sign of medium term reversal yet. Sustained trading below 61.8% projection of 2.1161 to 1.3503 from 1.7190 at 1.2457 will target 100% projection at 0.9532. Overall, break of 1.3444 resistance is needed to confirm medium term bottoming. Otherwise, outlook will remain bearish.

Daily Pivots: (S1) 1.0071; (P) 1.0089; (R1) 1.0104; More.....

A temporary top is in place at 1.0107 as USD/CHF retreats. Intraday bias is turned neutral for consolidation. Outlook is unchanged that corrective fall from 1.0342 should have finished with three waves down to 0.9812. Hence, downside of retreat should be contained by 0.9980 support and bring rally resumption. Above 1.0107 will target 1.0169 resistance. Decisive break there will confirm this bullish case and target 1.0342 key resistance next. However, below 0.9980 will dampen this bullish case and turn bias back to the downside for 0.9812 low.

In the bigger picture, we're still maintain that firm break of 1.0342 key resistance is needed to confirm underlying bullish momentum in the cross. However, the corrective nature of the fall from 1.0342 to 0.9812 is starting to give the medium term outlook a bullish favor. Hence, in stead of looking for topping signal around 1.0342, we'd now pay closer attention to upside acceleration as USD/CHF approaches this level again.

USD/CHF - 1.0080

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 : -

As the greenback has retreated after rising to 1.0108 yesterday, suggesting 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 - 1.2433

Original strategy :

Sell at 1.2475, Target: 1.2375, Stop: 1.2510

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 1.2475, Target: 1.2375, Stop: 1.2510

Position : -

Target :  -

Stop : -

Cable’s rebound after finding good support around 1.2365-66 has retained our view that further consolidation above this level would be seen and gain to 1.2445-50 cannot be ruled out, however, reckon 1.2475-80 would limit upside and bring another decline later, below said support at 1.2365-66 would extend recent decline from 1.2616 to 1.2350, then towards 1.2325-30 but oversold condition should limit downside and reckon 1.2300 would hold from here.

In view of this, would not chase this fall here and would be prudent to sell cable on further subsequent recovery as 1.2475-80 should limit upside. Only break of resistance at 1.2506 would abort and signal low is formed, bring a stronger rebound to 1.2525-30 first.

EUR/USD - 1.0613

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 continued trading defensively after recent selloff, suggesting recent decline may resume after consolidation, although corrective bounce to 1.0625-35 cannot be ruled out, however, reckon upside would be limited to 1.0667 resistance (Friday’s high) and bring another decline later, below support at 1.0570 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 but near term oversold condition should prevent sharp fall below 1.0500, risk from there is seen for a rebound later.

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.

USD/JPY - 110.43

Original strategy  :

Bought at 110.60, Target: 111.60, Stop: 110.25

Position :  - Long at 110.60

Target :  - 111.60

Stop : - 110.25

New strategy  :

Hold long entered at 110.60, Target: 111.60, Stop: 110.25

Position :  - Long at 110.60

Target :  - 111.60

Stop : - 110.25

Although dollar has remained under pressure after retreating sharp from yesterday’s high of 111.58 and marginal weakness from here cannot be ruled out, reckon 110.25-30 would contain downside and bring another rebound later, above 111.10-15 would suggest the retreat from 111.58 has ended, bring test of 111.58-59 resistance, break there would add credence to our view that further consolidation above recent low at 110.11 would be seen and signal the fall from 112.20 has ended, then a stronger rebound to 111.90-00 would follow but said resistance at 112.20 should hold and choppy trading within 110.11-112.20 would continue.

In view of this, we are holding on to our long position entered at 110.60 but one should exit on such rebound. Below 110.25-30 would risk test of said support at 110.11-13 but only break there would confirm medium term decline has resumed for further subsequent fall to 109.80-85 (1.618 times projection of 112.20-111.12 measuring from 111.59), however, price should hold above 109.50-55 (100% projection of 112.20-110.27 measuring from 111.46).

Daily Pivots: (S1) 1.0574; (P) 1.0590 (R1) 1.0611; More....

A temporary low is in place at 1.0569 as EUR/USD recovers. Intraday bias is turned neutral first. But we'd expect upside of recovery to be limited by 1.0688 resistance and bring fall resumption. As noted before, corrective rise from 1.0339 is likely finished after being rejected by 55 week EMA. And, the larger down trend is ready to resume. Below 1.0569 will turn bias to the downside for 1.0494 support first. Break will confirm this bearish case and send EUR/USD through 1.0339 to 100% projection of 1.1298 to 1.0339 from 1.0905 at 0.9946. On the upside, however, break of 1.0688 resistance will delay the bearish case and turn focus back to 1.0905 resistance instead.

In the bigger picture, as long as 1.1298 key resistance holds, whole down trend from 1.6039 (2008 high) is still expected to continue. Break of 1.0339 low will send EUR/USD through parity to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115. However, considering bullish convergence condition in weekly MACD, break of 1.1298 will indicate term reversal. this would also be supported by sustained trading above 55 week EMA.

Euro recovers today as lifted by German investor sentiment data. Meanwhile, Dollar softens broadly after uninspiring comments from Fed chair Janet Yellen. German ZEW economic sentiment rose to 19.5 in April, up from 12.8, beat expectation of 14.8. That's also the highest level since August 2015. Current situation assessment rose to 80.1, up from 77.3, beat expectation of 80.1. ZEW President Achim Wambach said that the "German economic situation has proved fairly robust in the first quarter" And, that was highlighted by "solid figures for growth in industrial production, the construction sector and retail sales from February." Also, "consistently high labour demand has boosted private consumption." Eurozone ZEW economic sentiment rose to 26.3, up from 25.6, beat expectation of 25.0. Also from Eurozone, industrial production dropped -0.3% mom in February versus expectation of 0.1% mom rise.

Yesterday, ECB President Mario Draghi said in the central bank's annual report that 2016 "ended with the economy on its firmest footing since the crisis," even though the year began "shrouded in economic uncertainty". The report noted that the scaling back of asset purchase from EUR 80b per month to EUR 60b "reflected the success of our actions earlier in the year: growing confidence in the euro area economy and disappearing deflation risks". However, overall, the Eurozone economy's recovery is still dependent on massive support from the central bank. And the report also reiterated the calls on governments' effort on fiscal reforms.

UK CPI unchanged at 2.3% yoy

UK CPI was unchanged at 2.3% yoy in March in line with expectation. Core CPI, however, dropped to 1.8% yoy, down from 2.0% yoy and missed expectation of 1.9% yoy. RPI also slowed to 3.1% yoy, down from 3.2% yoy. Headline inflation stayed inside BoE's target rate of 2-3%. Risk to headline inflation should remain on the upside as BoE projects CPI to peak at 2.75% next year. Governor Mark Carney made himself clear that he is willing to tolerate overshooting the target as UK prepares for Brexit. But this view is not shared by all MPC members. Kristin Forbes voted for a rate hike back in March meeting. But for now, at least, inflation outlook is not worsening and Sterling softens a touch against Euro today. PPI input rose 0.4% mom, 17.9% yoy. PPI Output rose 0.4% mom, 3.6% yoy. PPI output core rose 0.3% mom, 2.5% yoy. House price index rose 5.8% yoy in February. BRC retail sales monitor dropped -1.0% yoy in March

Uninspiring comments from Fed chair Yellen

Yellen's comments yesterday were uninspiring. On the job market, the Fed chair indicated that unemployment is now "a bit below" full employment. the March employment report suggested that the unemployment rate surprisingly fell to a post-recession low of 4.5% from 4.7% in February. The participation stayed unchanged at 63%. The number of nonfarm payrolls increased 98K in March, missing expectations of 180K and the downwardly revised 219K in February. On inflation, Yellen noted that it remained "slightly below" the 2% target. With the Fed's focus now turned to sustaining economic growth, Yellen reiterated that "a gradual path of increases in short-term interest rates can get us to where we need to be, but we don't want to wait too long to have that happen".

On a separate note, St. Louis Fed president James Bullard, speaking in Australia, signaled he favored only one rate hike this year, compared with three as suggested in the Fed's median dot plot. Rather, he urged to begin balance sheet reduction this year. As the St. Louis Fed president noted, there is not "much further to go on rates and therefore the next step that would be natural would be to allow the run-off of the balance sheet".

Australia business conditions improved, confidence dropped

Australia NAB business confidence rose 5 pts to 14 in March, hitting the highest level since the global financial crisis. But business confidence dropped 1 pt to 6. NAB noted that "the bounce in business conditions this month came as a bit of a surprise, especially the big improvement in Queensland in light of the likely disruptions from Cyclone Debbie in late March." And, "one possibility is that 'Debbie' is having the unexpected effect of overstating conditions in March given that the cyclone coincided with a lower response rate from firms in Northern Queensland.". But overall, "conditions have improved almost across the board to levels that suggest a strong economy in the near term."

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.0574; (P) 1.0590 (R1) 1.0611; More....

A temporary low is in place at 1.0569 as EUR/USD recovers. Intraday bias is turned neutral first. But we'd expect upside of recovery to be limited by 1.0688 resistance and bring fall resumption. As noted before, corrective rise from 1.0339 is likely finished after being rejected by 55 week EMA. And, the larger down trend is ready to resume. Below 1.0569 will turn bias to the downside for 1.0494 support first. Break will confirm this bearish case and send EUR/USD through 1.0339 to 100% projection of 1.1298 to 1.0339 from 1.0905 at 0.9946. On the upside, however, break of 1.0688 resistance will delay the bearish case and turn focus back to 1.0905 resistance instead.

In the bigger picture, as long as 1.1298 key resistance holds, whole down trend from 1.6039 (2008 high) is still expected to continue. Break of 1.0339 low will send EUR/USD through parity to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115. However, considering bullish convergence condition in weekly MACD, break of 1.1298 will indicate term reversal. this would also be supported by sustained trading above 55 week EMA.

Economic Indicators Update

GBPUSD: With the pair retaining its downside pressure, more weakness is likely. This view remains valid despite its price hesitation. Support lies at the 1.2350 level where a break will turn attention to the 1.2300 level. Further down, support lies at the 1.2250 level. Below here will set the stage for more weakness towards the 1.2200 level. Conversely, resistance stands at the 1.2450 levels with a turn above here allowing more strength to build up towards the 1.2500 level. Further out, resistance resides at the 1.2550 level followed by the 1.2600 level. On the whole, GBPUSD continues to face downside pressure short term.

Sterling was volatile on Tuesday, with prices oscillating between losses and gains after markets digested the UK's steady 2.3% inflation figure for March, which was the highest level since September 2013. The ongoing currency weakness created by Brexit, coupled with rising oil prices has elevated inflation above the Bank of England's 2% target, with speculation mounting over CPI following its positive trajectory this quarter. Although the immediate market reaction to March's headline CPI reading was noticeably bullish, gains may be relinquished when participants start to re-evaluate the impact it may have on the UK economy. With inflation still above average earning there is a threat of consumer spending taking a hit, which could spark concerns over the longevity of the UK's consumer-fuelled economic growth.

Focusing on the technical outlook, Sterling remains gripped by Brexit woes, with prices pressured on the daily charts. The candlesticks are trading below the daily 20 Simple Moving Averages, while the MACD is in the early stages of crossing to the downside. Weakness below 1.2400 could be the first signs of a steeper decline, with a breakdown below 1.2370 opening a path towards 1.2300.

Euro pressured by political uncertainty

The growing unease and anxiety ahead of the French presidential elections in a few weeks have exposed the Euro to downside risks. Recent polls showing a four-way battle in claiming the French presidency, with Emmanuel Macron and Marine Le Pen on track to winning the first round, have created jitters. With the growing threat of Eurosceptic parties destabilizing the Eurozone's unity weighing heavily on sentiment, the Euro may be in store for further punishment. From a technical standpoint, the EURUSD is bearish on the daily charts. Prices are trading below the daily 20 SMA, while the MACD has crossed to the downside. Weakness below 1.0600 could encourage a further decline lower towards 1.0500.

Global stocks subdued by geopolitical tensions

The horrible combination of geopolitical risks and political uncertainty has soured appetite for riskier assets, with investors sprinting to safe-haven investments. Global stocks were vulnerable to losses during trading on Tuesday amid the heightened geopolitical tensions, with the lack of appetite for riskier assets pressuring Asian and European markets. The bearish contagion from Europe could contaminate Wall Street this afternoon, consequently limiting gains as investors turn to Gold for safety.

Commodity spotlight - WTI Oil

WTI Crude was elevated to a fresh five-week high at $53.20 during trading on Tuesday, after the shutdown at Libya's largest oilfield over the weekend eased some oversupply fears. The geopolitical uncertainty in Syria sparked further speculations of a threat to supply complimented the upsurge in oil prices. Although the incredible rebound in oil has somewhat turned prices bullish on the daily charts, the lingering oversupply concerns may cap upside gains in the medium to longer term. From a technical standpoint, for the upside to continue towards $55, a solid breakout and daily close above $53 will be needed.