Sample Category Title

Daily Pivots: (S1) 111.26; (P) 111.60; (R1) 112.27; More....

Intraday bias in USD/JPY remains on the upside as rebound 110.10 short term bottom should extend higher to 55 day EMA (now at 112.91). Sustained break there will raise the chance of near term reversal and target 115.49 resistance for confirmation. On the downside, though, below 110.99 minor support will turn bias back to the downside for 110.10 and break will extend the corrective fall from 118.65.

In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. sustained trading below 55 week EMA (now at 111.11) will indicates that such consolidation is not completed. And another fall would be seen back to 98.97 as the third leg. In that case, downside would be contained by 61.8% retracement of 75.56 to 125.95 at 94.77 to complete the correction. On the upside, above 115.49 will extend the rise from 98.97 to retest 125.85 first. Overall, up trend from 75.56 is expected to resume after the consolidation from 125.85 completes.

Daily Pivots: (S1) 0.9969; (P) 0.9990; (R1) 1.0033; More.....

Intraday bias in USD/CHF remains on the upside as rebound from 0.9812 short term bottom continues. Sustained trading above 55 day EMA (now at 1.0021) will argue that whole decline from 1.0342 has completed. Further rise should then be seen to 1.0169 resistance for confirmation. On the downside, below 0.9934 minor support will turn bias back to the downside for 0.9812 instead.

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 deeper fall, we'd expect strong support from 0.9443/9548 support zone.

Daily Pivots: (S1) 1.2405; (P) 1.2465; (R1) 1.2527; More...

Intraday bias in GBP/USD remains neutral for the moment. Break of 1.2614 will extend the rise from 1.2108. Overall, price actions from 1.1946 are viewed as a consolidation pattern pattern. Upside should be limited by 1.2705/2774 resistance zone to bring larger down trend resumption eventually. On the downside, below 1.2376 will target 1.2108 support next. Break there will be an early sign of larger down trend resumption.

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.

USD/CHF - 1.0002

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 surged again after finding renewed buying interest at 0.9948 yesterday, adding credence to our view that recent decline has ended at 0.9813 and bullishness remains for the rise from there to extend further gain to 1.0030, then towards previous support at 1.0060 (now resistance), however, near term overbought condition should limit upside and price should falter below resistance at 1.0109, risk from there is seen for a retreat 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 0.9910-15 would abort and signal top is formed instead, bring correction to 0.9880 but reckon previous resistance at 0.9869 would hold from here. 

USD/CAD has edged higher in the Friday session. Currently, the pair is trading at 1.3350. On the release front, Canada releases GDP for January, which is expected to remain unchanged at 0.3%. In the US, today's highlight is UoM Consumer Sentiment, with the estimate standing at 97.8 points.

What's next for the Bank of Canada? On Tuesday, BoC Governor Stephen Poloz hinted that the BoC would not be raising interest rates in the near future, saying that the Canadian economy had not yet recovered from the huge drop in oil prices. He added that raising interests rates back to "normal" would have a negative effect on the economy and would likely trigger a recession. The last time the BoE raised rates was in 2010, and analysts don't forecast another hike before 2018. President Trump's "America first" stance is a serious concern for Canada, which is heavily reliant on open trade. Poloz criticized Trump's protectionist agenda, saying that "protectionism does not promote growth and its costs are steep".

Since Donald Trump assumed office in January, his administration has been beset by controversy and crises. Trump has yet to provide any details of an economic policy, much to the consternation of the markets. Last week, Trump's proposed healthcare bill was dead on arrival before even being voted on, a humiliating defeat for the president. This setback has made the markets even more jittery about Trump, and the inquiry into the Trump administration's links with Russia is gathering steam, which is another cause for concern for nervous investors. Trump has said he will now focus on tax reform, but the White House will need to improve coordination with Republican lawmakers to ensure that his next attempt to pass legislation is not a repeat of the healthcare debacle.

GBP/USD - 1.2465

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Although cable has retreated after yesterday’s rise to 1.2524 in part due to cross-trading in sterling and consolidation below said resistance would be seen, break of 1.2400 is needed to revive bearishness and signal the rebound from 1.2377 has ended at 1.2524, bring retest of 1.2377 (this week’s low) first, otherwise, further choppy trading would take place and risk of another rebound remains.

In view of this, would not chase this fall here and would be prudent to stand aside in the meantime. Above 1.2500 would bring another test of 1.2524, break there would bring test of previous support at 1.2539, however, break there is needed to signal the fall from 1.2616 has ended, bring further rise to 1.2555-60 later. 

EUR/USD - 1.0692

Original strategy  :

Sell at 1.0745, Target: 1.0645, Stop: 1.0780

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 1.0745, Target: 1.0645, Stop: 1.0780

Position : -

Target :  -

Stop : -

As this week’s selloff has kept euro under pressure, adding credence to our bearish view that top has been formed at 1.0906 and bearishness remains for the decline from there to extend further weakness to 1.0660, then 1.0640, however, near term oversold condition would limit downside and reckon previous strong support at 1.0600 would hold from here, bring rebound later.

In view of this, would not chase this fall here and would be prudent to sell dollar on recovery as 1.0740-50 should limit upside. Only 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. 

Daily Pivots: (S1) 1.0727; (P) 1.0777 (R1) 1.0814; More.....

EUR/USD engages in sideway trading in early US session. But intraday bias remains on the downside for far. Current fall from 1.0905 should target 1.0494 support next. As noted before, corrective rise from 1.0339 could be completed at 1.0905. Break of 1.0494 should confirm this case and target 1.0339 low. On the upside, above 1.0798 minor resistance will turn bias back to the upside for 1.0905 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.

USD/JPY - 111.65

Original strategy  :

Buy at 111.50, Target: 112.50, Stop: 111.15

Position :  -

Target :  -

Stop : -

New strategy  :

Buy at 111.30, Target: 112.30, Stop: 110.95

Position :  -

Target :  -

Stop : -

As the greenback has eased after intra-day initial rise too 112.20, suggesting minor consolidation below this level would be seen and test of the Kijun-Sen (now at 111.60) is likely, however, reckon previous resistance at 111.32 would contain downside and bring another rise later, above indicated resistance at 112.20-26 would extend the upmove from 110.11 low to 112.50-55 but price should falter below previous resistance at 112.87-90, bring retreat.

In view of this, would not chase this rise here and would be prudent to buy dollar on pullback as 111.25-30 should limit downside. Below the upper Kumo (now at 111.11) would defer and risk test of 110.90-95, break there would abort and signal top is formed instead, bring weakness to support at 110.72, break there would suggest the rebound from 110.11 (this week’s low) has ended, then further fall to 110.45-50 would follow. 

Trading is relatively subdued in the forex markets today as the quarter is heading for close. Euro turned into sideway trading but is set to end the week as the weakest major currency. In spite of more Brexit news, Sterling is just mixed for the week, up against Dollar, Europeans and Yen. Canadian dollar continues to be supported by firmness in oil price as WTI crude oil is holding on to 50 handle after brief retreat. Aussie follows as risk appetite returned to the markets. In other markets, European indices are mixed while US futures point to a flat open. Gold lost steam as Dollar rebounds and is heading back to 1240.

EC Tusk lays out four issues for Brexit negotiation

European Council President Donald Tusk set out the guidelines for Brexit negotiation with UK. Tusk said that EU doesn't want to punish UK as "Brexit is punitive enough". But the foremost principle is that talks on trade relationship would only start after the enough progress is made on separation. And a final agreement on trade would not be concluded before Brexit. This is in the opposite to UK Prime Minister Theresa May's parallel approach.

Meanwhile, Tusk also mentioned four issues for the first phase of the negotiation. Those include protecting rights of EU citizens in UK and UK citizens in EU; the bill for Brexit based on financial commitments and liabilities; clear legal framework to avoid uncertainties for businesses and institutions; how to maintain a "soft" border between Ireland and Northern Ireland. Tusk also said that EU would "firmly stand by" the proposals while "the talks which are about to start will be difficult, complex and sometimes even confrontational."

Released from UK, Q4 GDP was revised down to 0.6% qoq, finalized. Total business investment dropped -0.9% qoq. Index of services rose 0.7% 3mo3m in January. Current account deficit narrowed to GBP -12.1b in Q4. Nationwide house price dropped -0.3% mom in March. Gfk consumer sentiment was unchanged at -6 in March.

Eurozone CPI dropped sharply to 1.5% yoy

Eurozone CPI slowed sharply to 1.5% yoy in March, down from 2.0% yoy and missed expectation of 1.8% yoy. Core CPI also slowed to 0.7% yoy, down from 0.9% yoy and missed expectation of 0.8% yoy. The data is inline with recent report that ECB would be cautious to any adjustment in its language as markets misinterpreted March's. Unless there is a resurgence in inflationary pressure, it's unlikely for ECB to change course this year on monetary policy. Nonetheless, as scheduled, ECB will reduce bond buying by EUR 20b to EUR 60b starting April, and run till at least the end of the year. Also from Eurozone, German retail sales rose 1.8% mom in February. German unemployment dropped -30k in March while unemployment rate dropped to 5.8%.

US core PCE unchanged at 1.8% yoy

From US, personal income rose 0.4% in February while spending rose 0.1%. Headline PCE rose to 2.1% yoy while core PCE was unchanged at 1.8% yoy. From Canada, GDP rose 0.6% mom in January. New York Fed President William Dudley said yesterday that federal funds rate remains "unusually low". And, "it seems appropriate to scale back monetary policy accommodation gradually" Also, economic outlook abroad has "brightened" with risks "significantly lower than they were a year ago." He said two more rate hikes this year "seems reasonable". Dallas Fed President Robert Kaplan said three rate hike this year is still his "base case".

Japan national CPI rose but Tokyo CPI worsened

In Japan, national CPI core rose 0.2% yoy in February, meeting expectations. This is also the first back to back increase in CPI since late 2015. However, it should be noted that Tokyo CPI dropped -0.4% yoy in March, worse than February's -0.3% yoy and missed expectation of -0.2% yoy. Unemployment rate dropped to 2.8% in February, lowest since 1994. Household spending dropped -3.8% yoy in February,below expectation of -1.6% yoy. Industrial production rose 2.0% mom in February, above expectation of 1.2% mom. Housing starts dropped -2.6% yoy. All in all, the set of data from Japan is not too encouraging.

Elsewhere, New Zealand building permits rose 14.0% mom in February. NBNZ business confidence dropped to 11.3 in March. China PMI manufacturing rose 0.2 to 51.8 in March while non-manufacturing PMI rose to 55.1. UK Gfk consumer sentiment was unchanged at -6 in March, nationwide house prices dropped -0.3% mom in March. Germany retail sales rose 1.8% mom in February.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.0727; (P) 1.0777 (R1) 1.0814; More.....

EUR/USD engages in sideway trading in early US session. But intraday bias remains on the downside for far. Current fall from 1.0905 should target 1.0494 support next. As noted before, corrective rise from 1.0339 could be completed at 1.0905. Break of 1.0494 should confirm this case and target 1.0339 low. On the upside, above 1.0798 minor resistance will turn bias back to the upside for 1.0905 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