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Daily Pivots: (S1) 1.0693; (P) 1.0709; (R1) 1.0731; More...

EUR/CHF is staying in range above 1.0668 and intraday bias remains neutral. With 1.0734 minor resistance intact, deeper decline is in favor. Below 1.0668 will target 1.0620/29 key support zone. Decisive break there will resume the larger fall from 1.1198. Nonetheless, break of 1.0734 will turn bias back to the upside for 1.0823 resistance instead.

In the bigger picture, the decline from 1.1198 is seen as a corrective move. Current development suggests that it's not completed yet. sustained trading below 38.2% retracement of 0.9771 to 1.1198 at 1.0653 will target 50% retracement at 1.0485. In any case, break of 1.0823 resistance is needed to be the first indication of reversal. Otherwise, deeper fall is still expected even in case of recovery.

Daily Pivots: (S1) 0.7525; (P) 0.7551; (R1) 0.7569; More...

AUD/USD drops to as low as 0.7516 so far today and intraday bias remains on the downside for 0.7490 support. Decisive break of 0.7490 will confirm completion of rise from 0.7158. In such case, near term outlook will be turned bearish for 0.7158 support. On the upside, above 0.7586 minor resistance will turn bias neutral first. And, break of 0.7678 minor resistance will turn bias back to the upside and could extend the rise fro 0.7158 through 0.7748 resistance.

In the bigger picture, we're still treating price actions from 0.6826 low as a correction. And, as long as 38.2% retracement of 0.9504 to 0.6826 at 0.7849 holds, long term down trend from 1.1079 is expected to resume sooner or later. Break of 0.6826 low will target 0.6008 key support level. However, firm break of 0.7849 will indicate that rise from 0.6826 is developing into a medium term rebound, rather than a sideway pattern. In such case, stronger rise should be seen to 55 month EMA (now at 0.8165) and above.

Daily Pivots: (S1) 1.3390; (P) 1.3420; (R1) 1.3442; More....

With 1.3373 minor support intact, further rise is mildly in favor in USD/CAD. Break of 1.3534 resistance will extend whole rise from 1.2698 to 1.3598 resistance. On the downside, below 1.3373 minor support will turn bias back to the downside and could extend the correction from 1.3534 with another fall. But we'd expect strong support from 1.3211 cluster level (61.8% retracement of 1.3008 to 1.3534 at 1.3209) to contain downside and bring rebound. Overall, medium term rebound form 1.2460 is still expected to extend through 1.3598.

In the bigger picture, price actions from 1.4689 medium term top are seen as a correction pattern. The first leg has completed at 1.2460. The second leg from 1.2460 is likely still in progress and could target 61.8% retracement of 1.4689 to 1.2460 at 1.3838. We'd look for reversal signal there to start the third leg. Break of 1.2968 will argue that the third leg has already started and should at least bring at retest of 1.2460 low. However, sustained trading above 1.3838 would pave the way to retest 1.4689 high.

Daily Pivots: (S1) 1.0619; (P) 1.0652 (R1) 1.0675; More....

EUR/USD is staying above 1.0628 temporary low and intraday bias remains neutral for the moment. Another recovery cannot be ruled out. But upside should be limited by 1.0772 resistance and bring fall resumption. As noted before, corrective rise from 1.0339 is completed at 1.0905. And more importantly, larger down trend is probably resuming. Below 1.0635 will turn bias back to the downside for 1.0494. Break will confirm this bearish case and target 1.0339 low. However, above 1.0772 will delay this bearish case and bring another rise back to 1.0905 first.

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.

Daily Pivots: (S1) 1.2444; (P) 1.2474; (R1) 1.2499; More...

GBP/USD is still stuck in tight range inside 1.2376/2614 and intraday bias remains neutral at this point. Overall outlook is unchanged that price actions from 1.1946 are viewed as a consolidation pattern pattern. On the downside, break of 1.2376 will turn bias to the downside for 1.2108 support. Decisive break there will be an early sign of larger down trend resumption. On the upside, break of 1.2614 will extend the rise from 1.2108. But upside should be limited by 1.2705/2774 resistance zone to bring larger down trend resumption eventually.

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) 1.0028; (P) 1.0047; (R1) 1.0069; More.....

With 1.0007 minor support intact, intraday bias in USD/CHF stays on the upside for further rally. We mentioned before that corrective decline fall from 1.0342 should have finished with three waves down to 0.9812 already. Rise from 0.9812 is expected to taken 1.0169 resistance next. Break of 1.0169 should confirm this bullish case and target a test on 1.0342 high. On the downside, below 1.0007 minor support will turn bias neutral and bring retreat before staging another rally.

In the bigger picture, USD/CHF is staying in medium term sideway pattern between 0.9443/1.0342. In any case, decisive break of 1.0342 resistance is needed to confirm underlying strength. Otherwise, we'll stay neutral in the pair first. In case of another fall, we'd expect strong support from 0.9443/9548 support zone.

Daily Pivots: (S1) 110.34; (P) 110.74; (R1) 111.19; More....

USD/JPY dips notably in Asian session but stays above 110.10 support so far. Intraday bias remains neutral and more consolidations cannot be ruled out. But still, break of 112.19 resistance is needed to indicate short term reversal. Otherwise, outlook will stay bearish for another fall. Break of 110.10 will extend the whole decline from m 118.65 and target 50% retracement of 98.97 to 118.65 at 108.81. On the upside, however, break of 112.19 resistance will indicate short term reversal and turn bias back to the upside for 115.49 resistance.

In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. The impulsive structure of the rise from 98.97 suggests that the correction is completed and larger up trend is resuming. Decisive break of 125.85 will confirm and target 61.8% projection of 75.56 to 125.85 from 98.97 at 130.04 and then 135.20 long term resistance. Nonetheless, sustained trading below 55 week EMA (now at 111.16) will extend the consolidation from 125.85 with another fall through 98.97 before completion.

Risk aversion comes back to drive the market as US President Donald Trump, while he was meeting with China President Xi Jinping, ordered air strike on Syria. That was in response to Syrian government's use of chemical weapons on civilians. Nikkei reversed earlier gains and is trading in red at the time of writing while Hong Kong HSI is trading down -1%. Most Asian indices are generally in red. Gold soars through 1270 to as high as 1271.5 and takes out resistance at 1264.9 firmly. WTI crude oil surges to as high as 52.94, comparing to yesterday's close at 51.70. In the currency market, renewed buying is seen in the Japanese yen and Swiss Franc. Canadian Dollar decouples with Aussie and Kiwi thanks to oil prices.

Trump told reporters that he "ordered a targeted military strike on the airfield in Syria from where the chemical attack was launched." And he emphasized that the strike was in the "vital national security interest of the United States" as more than 70 civilians were killed by chemical weapons. Trump's act is seen by some analysts as a reversal of his stance during his election campaign last year. At the time Trump repeatedly criticized former President Barrack Obama for acting in Syria without approval of the Congress.

Meanwhile, the focus will stay on Trump as he meets Chinese President Xi Jinping with topics like North Korea and trade at the top of the agenda.

Non-farm payroll expected to be a solid one

US job report will be another major focus of the day. Markets expect non-farm payroll to show 177k growth in March. Unemployment rate is expected to be unchanged at 4.7%. Average hour earnings are expected to rise 0.3% mom. Taking a look at other employment data, the ADP report showed solid growth of 263k in private sector jobs. Four week moving average of initial jobless claims rose 6k to 250k but stayed low.

Employment component of ISM manufacturing index jumped to 58.9, up from 54.2 and hit the highest level since June 2011. However, employment component of ISM non-manufacturing tumbled to 51.5, down from 55.2, and hit the lowest level since last August. Conference Board consumer confidence, on the other hand, jumped to 125.6, up from 116.1, and hit the highest level since December 2000.

So overall, other employment data suggest that today's NFP will be a solid one. The greenback could have a positive reaction, in particular if wage growth maintained pace. But the impact could be temporary as Fed policy makers will still need something more to convince them to adapt a faster tightening path.

Elsewhere...

Japan labor cash earnings rose 0.4% yoy in February. Swiss will release unemployment rate and foreign currency reserves in European session. UK will release productions and trade balance. Germany will also release production and trade balance. In US session, in addition to NFP, Canada will also release employment data and Ivey PMI.

USD/JPY Daily Outlook

Daily Pivots: (S1) 110.34; (P) 110.74; (R1) 111.19; More....

USD/JPY dips notably in Asian session but stays above 110.10 support so far. Intraday bias remains neutral and more consolidations cannot be ruled out. But still, break of 112.19 resistance is needed to indicate short term reversal. Otherwise, outlook will stay bearish for another fall. Break of 110.10 will extend the whole decline from m 118.65 and target 50% retracement of 98.97 to 118.65 at 108.81. On the upside, however, break of 112.19 resistance will indicate short term reversal and turn bias back to the upside for 115.49 resistance.

In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. The impulsive structure of the rise from 98.97 suggests that the correction is completed and larger up trend is resuming. Decisive break of 125.85 will confirm and target 61.8% projection of 75.56 to 125.85 from 98.97 at 130.04 and then 135.20 long term resistance. Nonetheless, sustained trading below 55 week EMA (now at 111.16) will extend the consolidation from 125.85 with another fall through 98.97 before completion.

Economic Indicators Update

EUR/USD

The EUR/USD pair continued trading uneventfully for a fourth consecutive day, settling around 1.0650 this Thursday, where it spent all of the week. The common currency came under moderate pressure early Europe, extending its weekly slide by a few pips, to 1.0628, following a press conference offered by ECB's Draghi, who dampened expectations of a tighter monetary policy, as he said, referring to policy makers, "we still need to build sufficient confidence that inflation will indeed converge to our aim over a medium-term horizon, and will remain there even in less supportive monetary policy conditions."

In the macroeconomic front, Germany released February factory orders, which rose by 3.4% in February, slightly below the 3.5% expected and better than a previously revised -6.8%. In the US, weekly unemployment claims for the week ending March 31st accounted 234K, better than the 250K expected, giving support to the greenback and Wall Street, ahead of the release of the US Nonfarm Payroll report this Friday. As usual lately, the market is heading into the report with high expectations, fueled by the ADP survey.

From a technical point of view, the pair maintains it’s the neutral-to-bearish stance, having traded within 60 pips ever since the week started. The 4 hours chart shows that the price settled below the 20 and 200 SMAs, both converging in the 1.0670 region, whilst the Momentum heads nowhere around its 100 level, and the RSI heading lower around 35. The immediate support comes at 1.0620, with a break below it on a strong Payroll exposing 1.0590 and 1.0565 later, whilst 1.0710 is the key resistance to surpass to see the common currency advancing further.

Support levels: 1.0620 1.0590 1.0565

Resistance levels: 1.0675 1.0710 1.0745

USD/JPY

The USD/JPY pair recovered the ground lost post-Fed, rallying up to a daily high of 111.13, to settle around the 111.00. Nevertheless, the yen remains strong heading into the US Nonfarm Payroll report, amid softer US Treasury yields and the poor performance of equities during the Asian and European sessions. Japanese consumer confidence released during the past Asian session surged to its highest since September 2013, printing 43.9 from previous 43.1, also beating expectations of 43.5, although the news failed to affect the yen. Much of the upcoming direction of the pair depends on the outcome of the US employment report, as the safe-haven currency tends to be the most sensitive to US data. From a technical perspective, the upward potential remains limited according to the 4 hours chart, as the price remains below a bearish 100 SMA, currently around 111.50, whilst indicators in the mentioned time frame barely stand in positive territory with limited upward strength. The pair has a major Fibonacci resistance at 112.00, the 38.2% retracement of the late 2016 monthly rally, with an extension above it favoring additional gains for the following sessions.

Support levels: 110.95 110.50 110.10

Resistance levels: 111.60 112.00 112.50

GBP/USD

The GBP/USD pair is marginally lower at the end of the day, still contained by selling interest around 1.2500. The pair peaked at 1.2505, but retreated to current 1.2460 region, having hovered around it for the last three days. There were no macroeconomic releases in the UK, but on Friday, the kingdom will release multiple fundamental readings, including manufacturing and industrial production, the goods trade balance, and the Halifax house prices index. Although none of them is considered first-tier data, the reports may offer a clear picture of the health of the local economy. Soft readings, now that the Brexit has been officially triggered, could weigh further in the Pound. The pair bottomed at 1.2450 this Thursday, now the immediate support, although a more relevant one comes at 1.2410, and only below this last the pair can gain bearish momentum. Technical readings in the 4 hours chart present a neutral-to-bearish stance, as the price is holding around a modestly bearish 20 SMA, whilst technical indicators have turned lower around their mid-lines, with not enough directional strength to suggest the next move.

Support levels: 1.2450 1.2410 1.2370

Resistance levels: 1.2490 1.2540 1.2585

GOLD

Spot gold closed the day marginally lower at $1,251.90 a troy ounce, as market's mood improved during the past American session, with stocks and the greenback higher. Softer physical demand in Asia affected prices at the beginning of the day, although the intraday decline was limited, amid the absence of strong clues. The price holds near its recent highs, but technical readings in the daily chart indicate that the upward potential keeps fading, given that technical indicators have extended their declines within positive territory. Still the price is holding above its 20 and 200 SMAs, with the shortest crossing above the largest for the first time this year, both around 1,242.30 and providing a strong dynamic support. In the 4 hours chart, the price is below a bullish 20 SMA, whilst technical indicators are entering negative territory with limited bearish slopes, not enough to confirm a bearish extension, but clearly indicating diminishing buying interest.

Support levels: 1,249.45 1.242.30 0 1,230.00

Resistance levels: 1,258.30 1,263.80 1,272.80

WTI CRUDE

Crude oil prices resumed their advance this Wednesday, with West Texas Intermediate crude futures settling at $51.70 a barrel, not far from the near 1-month high reached this week at 51.88. There was no certain catalyst for the recovery, although expectations of strengthening demand in Asia and hopes the OPEC may extend its output cut deal, may have helped. Concerns over US increasing production, however, are still high and may affect the commodity in any sentiment swing. Technical readings in the daily chart indicate that futures may advance further, as technical indicators accelerated above their mid-lines now at fresh monthly highs, whilst the 20 DMA gained upward strength far below the current level. The 100 DMA still offers an intermediate resistance at 52.20. Shorter term, and according to the 4 hours chart, the price stands above all of its moving averages, with the 20 SMA extending above the largest ones and maintaining it bullish slope, whilst technical indicators have pared their advance near overbought readings, but are far from changing course, overall favoring a new leg higher on an advance beyond the mentioned 52.20.

Support levels: 51.30 50.80 50.30

Resistance levels: 52.20 52.90 53.60

DJIA

US indexes managed to post some modest daily gains this Thursday, with the Dow Jones Industrial Average adding 14 points to 20,662.95, while the S&P added 0.19%, to 2,357.49. The Nasdaq Composite gained 14 points and closed at 5,878.95. Stocks were on pause, ahead of the US Nonfarm Payroll report, and with President Trump going into a two-day meeting with his Chinese counterpart, Xi Jinping. Retailers led the advance, but within the DJIA, Caterpillar was the best performer, adding 1.62%, and followed by Exxon Mobil that gained 0.60%. Procter & Gamble led decliners, shedding 0.66%. The daily chart for the Dow shows that, once again, the index met selling interest on an advance towards a modestly bearish 20 DMA, currently at 20,720, although technical indicators have turned modestly higher, still holding within neutral territory and lacking enough strength to confirm a new leg higher. In the shorter term, and according to the 4 hours chart, the index maintains a neutral stance, standing below the 100 and 200 SMAs, but stuck around a horizontal 20 SMA, and with technical indicators heading nowhere around their mid-lines. The index will likely respond to the release of the US Nonfarm Payroll report better than the greenback, as a positive number will likely build confidence among stocks' traders.

Support levels: 20,616 20,562 20,515

Resistance levels: 20,720 20,754 20,790

FTSE 100

The FTSE 100 lost 28 points or 0.39%, and closed at 7,303.20, as FOMC Minutes dented market's sentiment, by indicating their will to shrink the balance sheet later this year. Risk aversion dominated the first half of the day, with the banking sector suffering the most across the region. Within the Footsie, EasyJet was the best performer, adding 4.23%, followed by British Land that gained 2.25% and Persimmon, up 2.14%. Shire led declines, shedding 1.91%, while Pearson lost 1.77% after going ex-dividend. The daily chart for the index shows that the risk remains towards the downside as its settled a lower low and a lower high daily basis, remaining below its 20 DMA and with indicators heading marginally lower within negative territory. In the 4 hours chart, the index is a few points below its 200 SMA, whilst a bearish 20 SMA capped the upside at the beginning of the day, and technical indicators hold below their mid-lines, with no directional strength.

Support levels: 7,254 7,210 7,173

Resistance levels: 7,349 7,387 7,415

DAX

European major indexes closed mixed, as a dovish Draghi added to an already sour sentiment. The German DAX, however, managed to advance 13 points, to 12,230.89, despite ECB's head indicated that it's too early to consider tightening the monetary policy. Utilities and real estate stocks led the way higher in the region, and within the DAX, RWE AG was the best performer, ending 1.56% higher followed by Adidas that gained 1.14%. Commerzbank led decliners, shedding 0.84%, followed by Heidelberg Cement that closed 0.40% lower. The index posted a lower low for a fourth consecutive session, but bounced sharply from a bullish 20 DMA, whilst technical indicators also managed to recover from their mid-lines, limiting the downside. In the 4 hours chart, the index settled below a horizontal 20 SMA, whilst technical indicators present a soft tone within negative territory, indicating that in the short term, the benchmark may fall further. A recovery above 12,245, the daily high, would on the contrary favor a recovery, particularly if market's sentiment improves during the upcoming sessions.

Support levels: 12,195 12,137 12,096

Resistance levels: 12,245 12,290 12,341

STOCKS

News of US missile strike on Syria Airbase has possibly kept the Japanese stocks down today. Nikkei (18588.87, -0.04%) is trading low today, making a fresh 4-mnth low of 18517. As mentioned yesterday, in case the index breaks and sustains below 18600, we could possible see a gradual fall towards 18300-18200 levels in the medium term.

Dow (20662.95, +0.07%) was almost stable yesterday. A break above 20780 is needed to take it further towards 20980; else we could possible see a trade in the 20780-20410 zone in the near term.

Dax (12230.89, +0.11%) has moved up from levels near 12120 and is trading just above immediate support near 12200. Some more movement below 12400 is possible before moving up further in the medium term.

Shanghai (3282.50, +0.05%) continues to move up. Immediate resistance is visible just above current levels on the daily charts but in case that breaks on the upside, the potential rise towards 3400 would come into focus as indicated in the 3-day and weekly charts.

Nifty (9261.95, -0.03%) was almost stable yesterday and may remain stable today also. No major movement expected today. A test of 9280-9300 is possible in the near term.

COMMODITIES

The Resistance at 1237 mentioned in the morning has held well and Gold (1265) has indeed rose above 1260 and has chances of rising further towards 1289.

Silver (18.42) also continues to move up and close to our 18.75 target. We have to see if that Resistance breaks or holds. In case the Silver rises past 18.75, it can move up to 19.05 levels also.

Copper (2.66) is trading within a range of 2.57-2.70. Only above 2.70, higher resistances of 2.80 can come into consideration. In the medium term 2.55-57 are going to be a strong support now but a close below that could open up 2.55 and 2.49 levels respectively.

WTI (52.65) has broken the resistance of 52.50 sooner than expected and has opened the higher target/resistance of 54. Immediate support comes at 52.50 and 51. Brent (55.80) has also bounced from its monthly trend line support and trading within the range of 55-57 levels, though a strong resistance is poised at 56.20 levels.The bias will remain bullish in near term while WTI and Brent are trading above 51 and 53.5 levels respectively.

FOREX

The risk appetite is a bit lower after the first military strike of the Trump-era took place in Syria but till now, the markets haven’t moved much and the risk appetite may recover by the early part of the next week.

Dollar Index (100.64) has risen a bit but the 5-day long consolidation phase is yet to be over, which is expected to resolve to the higher side for 101.00-35 in the coming days. Bullish momentum may intensify on a break above 101.00.

The major downtrend in Euro (1.0643) remains intact but lacking downside momentum as the currency gradually declines towards our target of 1.0600-1.0580. The only relief for Euro can come from EURJPY (117.55) which is trading just above a major support of 117.30 which may hold in the near term.

On the other hand, a bounce in EURJPY will imply underperformance of Yen, which is already evident in Dollar Yen (110.44), as the pair has managed to hold our support of 110.10-109.90 despite the increased risk appetite after the US strike in Syria. As discussed yesterday, the signals are conflicting and the true picture may take a couple of sessions more to emerge. Till then, we prefer to wait and watch.

Pound (1.2469) keeps forming a Triangle pattern as discussed in this space yesterday. Repeat – it implies a major expansion of volatility coming by the end of the next week. But for a significant trending move, a breakout from the range of 1.2350-1.2600 is required.

Aussie (0.7527) has been testing our support zone 0.7530-00 repeatedly but the expected bounce is yet to materialize but till 0.7500 holds, the chances of a bounce to 0.7650-80 can’t be ruled out.

With a sharp crash in Dollar-Rupee (64.51) after the RBI meet yesterday, all our targets till 64.50 are achieved and 64.40, even 64.20 may be seen in a day or two. It remains to be seen if the very important support of 64.30-20 holds or not as a huge bout of capitulation goes on.

INTEREST RATES

The US yields are testing immediate support levels and could see a short bounce in the coming sessions. The 5yr 91.83%), 10Yr (2.31%) and the 30yr (2.96%) are down from 1.86%, 2.35% and 3.01% respectively.

The German yields are falling sharply. Some more fall may be expected in the near term. The 5yr (-0.45%), 10Yr (0.262%) and the 30yr (1.04%) have risen slightly yesterday by 1bps but could see some more downside before bouncing back sharply.

The Japan yields have come off from resistance as expected. The 5yr (-0.14%) may test levels near -0.15% while the 10YR (0.06%) and the 30Yr (0.84%) may come down towards 0.04% and 0.78% respectively.

Keep a close watch on the US-Japan 10YR (2.25%). If this breaks below current support levels, it could indicate fresh strength in Yen and a fall in Nikkei in the near term.

The 10YR GOI (7.0362 %) rose in line with our expectation yesterday. A rise to 7.10-7.15% is possible before a short dip from there.