Sample Category Title

USD/CHF - 1.0027

Original strategy :

Buy at 0.9950, Target: 1.0050, Stop: 0.9915

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 0.9950, Target: 1.0050, Stop: 0.9915

Position : -

Target :  -

Stop : -

As the greenback has maintained a firm undertone after last week’s rally above 1.0003 resistance, suggesting recent rise from last week’s low at 0.9813 is still in progress and bullishness remains for this move to extend gain to previous support at 1.0060 (now resistance), however, loss of upward momentum should prevent sharp move beyond resistance at 1.0109, 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 pullback as said support at 0.9948 should limit downside. Below 0.9931 (50% Fibonacci retracement of 0.9831-1.0031) would abort and signal top is formed instead, bring correction to 0.9905-10 (61.8% Fibonacci retracement) but reckon previous resistance at 0.9869 would hold from here. 

GBP/USD - 1.2457

Original strategy :

Sold at 1.2465, Target: 1.2365, Stop: 1.2500

Position : - Short at 1.2465

Target :  - 1.2365

Stop : - 1.2500

New strategy  :

Hold short entered at 1.2465, Target: 1.2365, Stop: 1.2500

Position : - Short at 1.2465

Target :  - 1.2365

Stop : - 1.2500

Although cable has rebounded after finding support at 1.2419 and minor consolidation above this level would be seen, reckon the Kijun-Sen (now at 1.2475) would limit upside and bring another decline later, below said support at 1.2419 would extend weakness to 1.2400, break there would add credence to our view that the rebound from 1.2377 has ended at 1.2559, bring further fall towards support at 1.2377. Looking ahead, only a drop below 1.2377 would confirm the fall from 1.2616 is still in progress for subsequent decline towards key support at 1.2335.

In view of this, we are holding on to our short position entered at 1.2465 but one should exit on such decline. Only break of said resistance at 1.2496 would abort and suggest an intra-day low is formed instead, risk a stronger rebound to 1.2525-30.

The European Central Bank president Draghi will make a speech at 15:30 BST today, it will likely affect the Euro and Euro crosses.

EUR/GBP has rebounded since yesterday, after hitting a 5-week low of 0.8485.

The bulls attempted to test the near-term major resistance level at 0.8600 in early morning, where the 10-day SMA converges (on the daily chart).

The bulls still have momentum, however, be aware that the selling pressure at this level is heavier. The bullish momentum is likely to be restrained here, prior to the next rally.

The 4-hourly Stochastic Oscillator reading is around 70, suggesting a retracement.

The resistance level is at 0.8565, followed by 0.8580 and 0.8600.

The support line is at 0.8550, followed by 0.8535 and 0.8520.

EUR/USD - 1.0651

Original strategy  :

Sell at 1.0730, Target: 1.0610, Stop: 1.0765

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 1.0730, Target: 1.0610, Stop: 1.0765

Position : -

Target :  -

Stop : -

As the single currency has remained under pressure after falling to 1.0642 yesterday, adding credence to our bearish view that the decline from 1.0906 top is still in progress and bearishness remains for this fall to extend further weakness to 1.0620-25, then test of previous chart support at 1.0600, however, a sustained breach below the latter level is needed to retain downside bias for subsequent selloff to 1.0570-75 first, otherwise, 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 recovery as 1.0730-40 should limit upside. Only a firm break above resistance at 1.0773 would suggest low is formed instead, bring a stronger rebound to 1.0800 but resistance at 1.0827 should remain intact. 

Notes/Observations

Quiet session; focus on key end-of-week events: US payroll data and President Trump/China President Xi meeting in Florida

Spain's Net Unemployment registers its biggest ever decline for the month of March (-48.8K v -40.9K)

Overnight:

Asia:

RBA keeps Cash Rate Target unchanged at 1.50% (as expected). Says view consistent with sustainable growth in the economy and achieving the inflation target over time. Reiterated view that domestic inflation remained quite low but was expected to pick up over the course of 2017

BOJ Gov Kuroda reiterated view that was too early to discuss an exit from current monetary policy. Exit strategy to vary depending on economy and markets. BOJ ETF purchases are not distorting market function

South Korea Mar CPI registered its highest annual pace since June 2012 (2.2% v 2.1%e)

Europe:

UK House of Commons Brexit committee noted that PM May had been urged by to carry out a full economic and legal assessment of the implications for Britain if it failed to sure a trade deal with the EU. Must publish cost reaching no deal in Brexit talks

Americas:

Fed's Harker (hawk, FOMC voter): reiterated three hikes in 2017 would be appropriate; US inflation was moving slowly but surely upward

Senate Judiciary Committee approved Gorsuch nomination to Supreme Court; sent nomination to full Senate floor. Senate Democrats now have 41 votes against cloture, sufficient to filibuster nomination of Neil Gorsuch to the Supreme Court

Economic Data

(ES) Spain Mar Net Unemployment M/M: -48.8K v 0.9Ke (Biggest decline ever for month of March)

(IT) Italy Q4 YTD Budget Deficit to GDP: 2.4% v 2.5% prior

(BR) Brazil Mar FIPE CPI (Sao Paulo) M/M: 0.1% v 0.1%e

(UK) Mar Construction PMI: 52.2 v 52.5e (7th month of expansion)

(EU) Euro Zone Feb Retail Sales M/M: 0.7% v 0.5%e; Y/Y: 1.8% v 1.0%e

Fixed Income Issuance:

(EU) EFSF opened book to sell 2024 and 2045 bonds via syndicate

(ES) Spain Debt Agency (Tesoro) sold total €4.63B vs. €4.0-5.0B indicated range in 6-month and 12-month Bills

(ID) Indonesia sold total IDR4.46 in 2-year, 4-year, 7-year and 15-year Project based Sukuk (PBS)

(AT) Austria Debt Agency (AFFA) sold total €1.32B vs. €1.32B indicated in 2023 and 2027 RAGB bonds

(ZA) South Africa sold total ZAR2.35B vs. ZAR2.35B indicated in 2026, 2036 and 2048 bonds

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Index snapshot (as of 10:00 GMT)

Indices [Stoxx50 -0.1% at 3,470, FTSE +0.4% at 7,314, DAX -0.1% at 12,241, CAC-40 flat at 5,086, IBEX-35 +0.1% at 10,337, FTSE MIB -0.2% at 20,193, SMI +0.1% at 8,643, S&P 500 Futures -0.2%]

Equities

Consumer discretionary [ASOS ASC.UK -6.2% (H1 results), Topps Tiles TPT.UK -6.9% (H1 update), Bunzl BNZL.UK +1.8% (2 acquisitions)]

Consumer Staples [Suedzucker SZU.DE -9.5% (Analyst downgrade), ITE Group ITE.UK +4.3% (Trading update), Carl Zeiss AFX.DE +1.3% (prelim H1)]

Materials: [Nanoco NANO.UK -18% (H1 results, lowers outlook)]

Financials: [Grenkeleasing GLJ.DE +3.5% (Q1 update)]

Technology: [Sophos Grp SOPH.UK +11.4% (Raised outlook, resolves patent dispute)]

Energy: [Seadrill SDRL.NO -41% (Amendments to Secured Credit Facilities), Polarcus PLCS.NO -3.5% (Vessel utilization)]

Speakers

BOE Financial Policy Committee (FPC) Mar 22nd Minutes: Concerned rapid growth in unsecured lending to British consumers; could principally represent a risk to lenders if accompanied by weaker lending standards

Sweden Central Bank (Riksbank) Dep Gov Floden: PMI data was a sign for growth but it remained to be seen what growth meant for inflation

RBA Gov Lowe: More home loan curbs would be considered if needed. Reiterates need to see improvement in job market to know economy is strengthening

Eurogroup Chief Dijsselbloem reiterated he had no intention to step down as Eurogroup chief; looking to speak in EU Parliament

EU Official: Greece talks in Brussels today could be an important stepping stone. Greek hurdles were political and not technical. Talks moving beyond July payments would be detrimental

Russia govt said not to be planning any measures to counter gains in RUB currency (ruble). It saw the Ruble currency weakening in H2 due to oil and rate cuts

Moody's on South Africa: Will not be issuing any decision on sovereign rating on Friday, Apr 7th. To issue decision after concluding downgrade review that could take 1-3 months from now

Turkey Fin Min Agbal: Inflation might be back to single digits by Dec; upward trajectory to continue

Currencies

US Treasury yields at 5-week low helping to push the USD/JPY pair below 110.50 in the session. Some dealers also noting that BoJ and government advisors had been floating the idea of how to move away from yield curve control. Nonetheless BoJ's Kuroda did reiterated his dovish stance that it was premature to discuss an exit strategy from the central bank's aggressive easing policy.

EUR/USD hovered in the mid-1.06 area as price action continued the repricing of ECB rate outlook as various officials noted . ECB chief economist Praet continues, after yesterday ' s push back of rate hikes from Praet

RBA kept its policy steady with a dovish tilt and this helped the AUD/USD hit a 3-week low below 0.7560 area.

Spot gold at 1-month highs aided by geopolitical worries with the metal at $1,258/oz

Fixed Income:

Bund futures trade at 162.35 up a further 26 ticks trading at new one month highs with further momentum higher targeting 162.65 followed by 162.98 then Feb contract high at 163.12. Analysts eye support at 161.63 followed by 161.34 then 161.06.

Gilt futures trade at 128.40 up 13 ticks aided by a slight miss in UK construction PMI data. Resistance moves to 128.96 followed by 129.24. Support moves to 127.75 then 127.34 followed by 127.05. Short Sterling futures curve continues to flatten with futures trading flat to up 2bp along the curve. Jun17Jun18 spread falls to 13.5/14bp down 2.5bp from yesterday.

Tuesday's liquidity report showed Monday's excess liquidity fell to €1.444T a fall of €68B from €1.512T prior. Use of the marginal lending facility fell to €212M from €285M prior.

Corporate issuance saw $2.75B come to market via 5 issuers in a slow start to the quarter, headlined by Progressive Corp $850M 30 year offering, and Cimarex Energy $750M 10 year offering. Issuance for the week is expected to be around $25B.

Looking Ahead

(RU) Russia Mar Sovereign Wealth Fund Balances: Reserve Fund: No est v $16.1B prior; Wellbeing Fund: No est v $72.6B prior

(BR) Brazil Mat CNI Consumer Confidence: No est v 104.4 prior

05.30 (UK) Weekly John Lewis LFL sales data - 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender

05:30 (HU) Hungary Debt Agency (AKK) to sell 3-month Bills

05:30 (DE) Germany to sell €1.0B in 0.1% Apr 2026 Indexed-bonds

05:30 (BE) Belgium to sell €1.3-1.7B in 3-Month and 6-Month Bills

06:00 (IE) Ireland Mar Unemployment Rate: No est v 6.6% prior

06:00 (TR) Turkey to sell Zero 2018 Bonds; Yield: % v 11.67% prior; bid-to-cover: x v 6.86x prior

06:45 (US) Daily Libor Fixing

07:30 (TR) Turkey Mar Real Effective Exchange Rate (REER): No est v 88.83 prior

07:45 (US) Weekly Goldman Economist Chain Store Sales

08:00 (BR) Brazil Feb Industrial Production M/M: +0.7%e v -0.1% prior; Y/Y: 0.4%e v 1.4% prior

08:00 (NO) Norway Central Bank (Norges) Gov Olsen speaks in Oslo

08:00 (RU) Russia announces weekly OFZ bond auction - 08:15 (UK) Baltic Dry Bulk Index

08:30 (US) Feb Trade Balance: -$44.6Be v -$48.5B prior

08:30 (CA) Canada Feb Int'l Merchandise Trade: C$0.6Be v C$0.8B prior

08:30 (SI) Slovenia Debt Agency to sell 12-month and 18-month Bills

08:30 (NZ) Fonterra Global Dairy Trade Auction

08:55 (US) Weekly Redbook Sales

09:00 (EU) Weekly ECB Forex Reserves

09:00 (MX) Mexico Feb Leading Indicators M/M: No est v -0.20 prior

09:30 (EU) ECB's Draghi speaks in Frankfurt

09:30 (EU) ECB announces Covered-Bond Purchases

10:00 (US) Feb Factory Orders: 1.0%e v 1.2% prior; Factory Orders Ex-Transportation: No est v 0.3% prior

10:00 (US) Feb Final Durable Goods Orders: 1.7%e v 1.7% prelim; Durables Ex-Transportation : No est v 0.4% prelim; Capital Goods Orders (Non-defense ex aircraft): No est v -0.1% prelim, Capital Goods Shipments (Non-defense/ex-aircraft): No est v +1.0%prelim; Durables Ex-Defense: No est v 2.1% prelim

10:00 (DK) Denmark Mar Foreign Reserves (DKK): 470.8Be v 466.6 prior

11:00 (BR) Brazil to sell I/L 2022, 2026, 2035 and 2055 Bonds - 11:30 (US) Treasury to sell 4-Week Bills

15:00 (CO) Colombia Mar Total PPI M/M: No est v -0.6% prior; Domestic PPI M/M: No est v -0.2% prior

16:30 (US) Weekly API Oil Inventories

USD/JPY - 110.45

Original strategy  :

Sell at 110.95, Target: 109.95, Stop: 111.30

Position :  -

Target :  -

Stop : -

New strategy  :

Sell at 110.95, Target: 109.95, Stop: 111.30

Position :  -

Target :  -

Stop : -

As the greenback has dropped again after meeting renewed selling interest at 111.59 yesterday, adding credence to our view that top ha been formed at 112.20 and bearishness remains for the selloff from there to extend weakness to 110.11 support, however, break there is needed to retain downside bias and 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) which is likely to hold on first testing.

In view of this, would not chase this fall here and would be prudent to sell dollar on recovery as 110.90-95 should limit upside. Above previous support at 111.12 (now resistance) would defer but only break of resistance at 111.59 would abort and signal the fall from 112.20 has ended instead.

WTI oil extends pullback from recovery highs at $50.82, following repeated upside rejection of recovery rally that was capped by daily Kijun-sen line. The price is in red for the second day and fresh extension lower cracked psychological $50.00 support on Tuesday. The move is so far seen as correction on strongly overbought slow stochastic on daily chart, which is attempting to generate stronger bearish signal on reversal. Correction could extend to $49.39 (Fibo 38.2% of $47.07/$50.82 upleg), before fresh attempts higher. Technicals studies are in mixed mode and without clear direction, however, recent break above $50.00 pivot was positive signal for further recovery. Limited dips are required to keep bullish scenario in play for fresh attempts towards next targets at $51.03/20 (50% of $55.01/$47.06/100SMA). Alternatively, increased downside pressure could be expected on loss of $49.39 support, while extension below $48.95 (daily Tenkan-sen) would signal reversal.

Res: 50.33, 50.73, 50.83, 51.03
Sup: 48.87, 49.39, 48.95, 48.50

GBP/USD – 1.2460

 
GBP/USD – Wave 4 is unfolding as an (A)-(B)-(C) and could have ended at 1.7192

 
As cable met resistance at 1.2559 and has slipped again, retaining our view that further consolidation below last month’s high of 1.2616 would be seen and initial downside risk remains for test of 1.2377 support, however, reckon downside would be limited to previous support at 1.2335 and bring another rise later. A daily close above resistance at 1.2559 would signal the retreat from 1.2616 has ended, bring retest of this level, break there would extend the rebound from 1.2109 to previous resistance at 1.2706 but break there is needed to signal another leg of corrective upmove from 1.1986 low is underway for further gain to 1.2800 and then 1.2900, having said that, psychological resistance at 1.3000 would remain intact. 

Our preferred count on the daily chart is that cable's rebound from 1.3500 (wave (A) trough) is unfolding as a wave (B) with A ended at 1.7043, followed by triangle wave B and wave C as well as wave (B) has possibly ended at 1.7192, below support at 1.4232 would add credence to this count, then further fall to 1.4000 level would follow but reckon downside would be limited to 1.3655 support and price should stay above previous support at 1.3500.

On the downside, whilst initial pullback to 1.2400-05 cannot be ruled out, reckon downside would be limited to 1.2335 support and bring another rise later. A daily close below support at 1.2335 would dampen this bullish view and bring weakness to 1.2290-00 but reckon 1.2240-50 would hold, bring another rebound. A drop below 1.2240-50 would suggest the rebound from 1.2109 has ended instead, bring further fall to 1.2200 and then 1.2150-60 but said support at 1.2109 should remain intact.
 
Recommendation: Buy at 1.2340 for 1.2600 with stop above 1.2240.

 
Longer term - Cable's rise from 1.0520 (Feb 1985) to 2.0100 (September 1992) is seen as [A], the decline to 1.3682 is labeled as (B) and (C) wave rally has ended at 2.1162 (9 Nov, 2007) which is also the top of larger degree wave B with circle. The selloff from there is a 5-waver with wave (A) ended at 1.3500 (23 Jan 2009), wave (B) itself is labeled as A: 1.6733, triangle wave B: 1.4813 and wave C as well as top of wave (B) ended at 1.7192 (2014), hence the selloff from there is an impulsive wave (C) with wave I : 1.4566, wave II 1.5930, an extended wave III is unfolding and already exceeded our downside target at 1.3500 and 1.3000, hence weakness to 1.2500 and possibly 1.2000 cannot be ruled out, however, price should stay well above psychological level at 1.0000.

News and Events:

USD extends gain versus G10, JPY resists

After a quiet start into the week, the USD was back in full force on Tuesday as it extended gains against most of its pairs. The Japanese Yen was the only G10 currency able to offer resistance as it rose 0.36% with USD/JPY sliding to 110.40. The market is currently switching slowly into risk-averse mode, with the Yen and Gold seeing good inflow, amid rising global uncertainty.

Investors will soon however ever get some fresh data to get their teeth into. In the US, February factory orders (+1% m/m exp.,1.2% prev.) and durable goods orders (first est. 1.7% m/m) are due this afternoon.

Tomorrow, the publication of the FOMC will get special attention from investors who will try to read between the lines, looking for hidden hints about the pace of the rate normalisation process.

Finally, March’s job report will be Friday’s major event. The US economy is expected to have created 175k private jobs last month, compared to 235k in February. As explained a month ago, we believe that the market is less and less focused on job gains but instead monitoring wage development closely. Looking at the headline figures, the momentum seems solid as average hourly earnings were up 2.8% y/y. Nevertheless, the sustained rise in consumer prices, which has been mostly driven by rising commodity prices, has eroded the purchasing power of the average American as real average weekly earnings dipped in negative territory during the first two months of the year.

Emerging market and commodity currencies took the bigger hit this morning as market participants shied away from risky positions. We do not think this is the time for further Dollar debasement as the global uncertainty favours long USD position, especially ahead of the French and German election. Similarly, the setback of commodity currencies will also prove temporary in our opinion as high returns are still a rare breed.

French Elections: Candidates return to debate

Today 11 candidates will debate for the French Presidency. At the last debate, contrary to what is said now about him being a frontrunner, Emmanuel Macron had not been successful. So this debate may see a turnaround in this presidential election, as Francois Fillon has improved lately in the polls despite the accusations that engulfed him.

Tonight’s debate will mostly be on jobs, security, and the candidates' vision for the future of France. It is clear that the European Union will be at the centre of the debate and we should see “small” candidates trying to make a difference with their views on this.

It is expected that François Asselineau, the Frexit candidate, will largely attack Macron and Fillon on this specific topic, as will Marine Le Pen. But a possible referendum if she gets elected remains somewhat unclear.

For now, markets are still not pricing a Le Pen victory. In terms of currency, the Euro is consolidating against the USD between 1.06 and 1.07 and we believe that there is more room for further downside in the short-term.

Bullish on AUD after RBA kept rates unchanged

As expected the RBA held its cash rate at 1.50%. Despite this, the AUDUSD quickly fell to 0.7557 on market disappointment that rate expectation should be paired back and also due to lower risk appetite and lower iron ore prices.

The accompanying statement was marginally more optimistic regarding the domestic and global economic outlook. They mentioned the improvement in trade and higher commodity prices (on-going large trade surplus) would support domestic conditions. The RBA indicated that “on-going moderate growth” will support forward indicators and backstop softening labor markets.

The RBA also highlighted risks in the housing market. They took particular care in discussing retail credit growth and risk of rising mortgage rates on outstanding loans, adding that lenders must watch serviceability analytics. Additionally, the RBA introduced a new paragraph on macro-prudent measures stating “a reduced reliance on interest-only housing loans in the Australian market would also be a positive development”.

On inflation the statement was unchanged with headline CPI expected to break 2% in 2017, with a limited upside as wage growth is subdued.

All in, it is unlikely the RBA will rise rates unless the housing market continues to accelerate and even then it is likely to use micro-adjustment tools prior to monetary policy hikes. However, we can expect the RBA to shift from dovish to neutral as growth gradually breaches the bank’s forecasted range.

Given the positive global conditions of risk taking (despite the current bout of uncertainty) we are constructive on AUDUSD, as 0.7563 should provide support for a recovery rally to 0.7633 resistance.

Today's Key Issues (time in GMT):

• Mar Unemployment MoM Net ('000s), exp -40,9, last -9,4 EUR / 07:00
• 4Q Deficit to GDP YTD, last 2,30%, rev 2,50% EUR / 08:00
• Mar FIPE CPI - Monthly, exp 0,12%, last -0,08% BRL / 08:00
• Mar Markit/CIPS UK Construction PMI, exp 52,5, last 52,5 GBP / 08:30
• Feb Retail Sales MoM, exp 0,50%, last -0,10%, rev 0,10% EUR / 09:00
• Feb Retail Sales YoY, exp 1,00%, last 1,20%, rev 1,50% EUR / 09:00
• Lowe Gives Remarks at RBA Board Dinner, Melbourne AUD / 09:15
• Mar Effective Exchange Rate, last 88,83 TRY / 11:30
• Feb Industrial Production MoM, exp 0,70%, last -0,10% BRL / 12:00
• Feb Industrial Production YoY, exp 0,30%, last 1,40% BRL / 12:00
• Feb Trade Balance, exp -$44.6b, last -$48.5b USD / 12:30
• Feb Int'l Merchandise Trade, exp 0.60b, last 0.81b CAD / 12:30
• ECB President Draghi speaks in Frankfurt EUR / 13:30
• Mar Foreign Reserves, exp 470,8, last 466,6 DKK / 14:00
• Mar Change in Currency Reserves, last 8.8b DKK / 14:00
• Feb Factory Orders, exp 1,00%, last 1,20% USD / 14:00
• Feb Factory Orders Ex Trans, last 0,30% USD / 14:00
• Feb F Durable Goods Orders, exp 1,70%, last 1,70% USD / 14:00
• Feb F Durables Ex Transportation, last 0,40% USD / 14:00
• Feb F Cap Goods Orders Nondef Ex Air, last -0,10% USD / 14:00
• Feb F Cap Goods Ship Nondef Ex Air, last 1,00% USD / 14:00
• Mar QV House Prices YoY, last 13,50% NZD / 17:00
• Fed's Tarullo speaks at Princeton University USD / 20:30
• Mar Foreign Reserves, last $373.91b KRW / 21:00

The Risk Today:

EUR/USD is getting lower despite ongoing consolidation. The pair is heading lower since the pair failed to hold above former resistance given at 1.0874 (08/12/2017 high). Hourly support can be found at 1.0643 (03/04/2017 low). Stronger support can be found at 1.0493 (22/02/2017 low). The short-term technical structure indicates further weakness.. In the longer term, the death cross late October indicated a further bearish bias. The pair has broken key support given at 1.0458 (16/03/2015 low). Key resistance holds at 1.1714 (24/08/2015 high). Expected to head towards parity.

GBP/USD's bullish pressures have faded abruptly. Hourly resistance is located at 1.2615 (27/03/2017 high) while hourly support can be found at 1.2324 (03/17/2017 low). Expected to show continued strengthening towards resistance at 1.2775 (06/12/2016 high) if support area around 1.24 stands. The long-term technical pattern is even more negative since the Brexit vote has paved the way for further decline. Long-term support given at 1.0520 (01/03/85) represents a decent target. Long-term resistance is given at 1.5018 (24/06/2015) and would indicate a long-term reversal in the negative trend. Yet, it is very unlikely at the moment.

USD/JPY's bearish pressures are fading. Hourly resistance is given at 112.20 (31/03/2017 high). Stronger resistance can be located at 113.57 (16/03/2017 high) while support is given at 110.11 (27/03/2017 low). We favor a long-term bearish bias. Support is now given at 96.57 (10/08/2013 low). A gradual rise towards the major resistance at 135.15 (01/02/2002 high) seems absolutely unlikely. Expected to decline further support at 93.79 (13/06/2013 low).

USD/CHF is strengthening. Hourly support is given at 0.9814 (27/03/2017 low). Key resistance can be found at a distance at 1.0344 (15/12/2016 high). Expected to show further consolidating. In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours nonetheless a long term bullish bias since the unpeg in January 2015.

GBP/JPY – 137.65


 

GBP/JPY – Wave 5 as well as wave (III) has possibly ended at 116.85


 

As sterling has fallen again after faltering below resistance at 140.60, dampening our near term bullishness and near term downside risk remains for the fall from 144.75 to bring a stronger retracement of early upmove from 120.50 to 136.45-50, break there would add credence to this view and extend fall to 135.90-00, then towards 134.45-50 (50% Fibonacci retracement of 120.50-148.45) which is likely to hold on first testing, risk from there is seen for a rebound to take place later.



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



On the upside, whilst recovery to 138.35-40 cannot be ruled out, reckon upside would be limited to 139.00-10 and resistance at 140.10 (last week’s high) should hold, bring another decline later. Only break of indicated resistance at 140.60 would revive bullishness and suggest low is formed, bring a stronger rebound to 142.00-05 but only break of resistance at 142.80 would signal the fall from 144.75 has ended, bring further gain to 143.40-50 first.

 


Recommendation: Stand aside for this week.

 

The long-term downtrend from 570.99 (29 Feb 1980) is labeled as an impulsive wave with III with circle ended at 129.77 (20 Apr 1995) and the corrective rebound to 251.12 (20 Jul 2007) is treated as wave IV with circle and the wave V with circle selloff from 251.12 has possibly ended at 116.80 (almost reached our indicated target at 116.00) and major correction has commenced from there and indicated upside target at 183.90-00 (50% Fibonacci retracement of 251.10-116.85) had been met, reckon upside would be limited to 199.80-90 (61.8% Fibonacci retracement) and bring wave (V) decline in later part of 2017.