Sample Category Title

Daily Pivots: (S1) 1.3352; (P) 1.3383; (R1) 1.3413; More....

Prior breach of 1.3408 minor resistance argues that rebound from 1.3263 is resuming. Intraday bias is mildly on the upside for 1.3534 resistance. Break will target 1.3598 key resistance next. On the downside, below 1.3320 minor support will turn bias to the downside to extend the fall from 1.3534. 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, rise from 1.2968 is expected to resume later to extend through the whole medium term rise from 1.2460 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 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 wold 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) 110.47; (P) 110.84; (R1) 111.49; More...

Intraday bias in USD/JPY remains neutral as consolidation from 110.10 temporary low continues. As long as 111.57 resistance holds, deeper decline is in favor. Below 110.10 will extend the current fall from 118.65 to 100% projection of 118.65 to 111.58 from 115.49 at 108.42 and possibly below. Meanwhile, firm break of 111.57 will indicate short term bottoming and bring rebound back to 55 day EMA (now at 112.96).

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) 0.9858; (P) 0.9897; (R1) 0.9962; More.....

USD/CHF rebounded strongly but stays below 0.9959 minor resistance so far. Intraday bias is staying neutral first. With 0.9959 minor resistance intact, another decline is in favor. Below 0.9812 will extend the decline from 1.0342 to 100% projection of 1.0342 to 0.9860 from 1.0169 at 0.9687. However, considering bullish convergence condition in 4 hour MACD, break of 0.9959 will indicate short term bottoming and turn bias back to the upside for 55 day EMA (now at 1.0025).

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) 1.0784; (P) 1.0828 (R1) 1.0858; More.....

Intraday bias in EUR/USD remains neutral for the moment as consolidation from 1.0905 temporary top continues. Another rise is expected with 1.0760 minor support intact. Above 1.0905 will turn bias to the upside for 100% projection of 1.0339 to 1.0828 from 1.0494 at 1.0983. At this point, we're still treating rise from 1.0339 as a correction. Hence, we'd expect strong resistance from 1.0983 to limit upside and bring near term reversal. On the downside, break of 1.0760 support will turn bias back to the downside for 1.0494 support. However, firm break of 1.0983 will dampen our view and put focus on 1.1298 key resistance.

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.

Currency pair GBP/USD

The United Kingdom (UK) is set to trigger Article 50 today, which formally announces its exit out of the European Union (EU). There is a two year window for negotiations to take place and to sort out all of the details regarding the Brexit process.

The formal announcement of the British government triggering Article 50 is officially expected to happen at 1:30pm (11:30am GMT) in Brussels when the UK's representative to the EU delivers a letter of notification to the European Council President Donald Tusk.

The GBP/USD failed to continue the bullish momentum above 1.26 and broke below the support trend line (dotted blue). Price could now be retracing back towards the Fibonacci levels of wave X vs W and could bounce at one of these supports levels. The wave WXY (blue) could complete a larger wave E (green) triangle.

The GBP/USD failed to break the previous top which has been labelled as a wave B (pink). The bearish breakout saw price complete 5 bearish waves (purple), which could complete wave C (pink) of wave W (orange). The Fibonacci levels of wave X vs W (orange) could now be potential resistance, which could build WXY (orange) waves within wave X (blue).

Currency pair EUR/USD

The EUR/USD did not manage to break above the resistance trend line (orange) and made a bearish turn which completed wave C (green) of wave Y (blue). A larger bullish correction within wave Y (brown) is possible if price stays above support (green/blue lines).

In the meantime the bearish price action on the EUR/USD could be seen as an ABC (green) or as a bearish 5 wave (red). A bearish bounce at the Fibonacci levels of wave 4 vs 3 could be part of wave 4 (red) but a break above the 61.8% Fib makes an ABC (green) more likely.

Currency pair USD/JPY

The USD/JPY indeed made a bullish bounce and broke above the resistance trend line (dotted orange). is probably building a larger bearish ABC zigzag (brown), which could take price down to the 50% Fibonacci retracement support level of wave 4 vs 3 (purple).

The USD/JPY has divergence between the bottom of wave 3 (purple) and wave 5 (purple) which could trigger a retracement such as an ABC (orange) zigzag. A break below the 100% Fibonacci of wave B vs A invalidates the ABC pattern.

A note on lower timeframe confirming price action...

Waiting for lower timeframe confirmation is our main tool to confirm strength within higher timeframe zones, and has really been the key to our trading success. It takes a little time to understand the subtle nuances, however, as each trade is never the same, but once you master the rhythm so to speak, you will be saved from countless unnecessary losing trades. The following is a list of what we look for:

• A break/retest of supply or demand dependent on which way you're trading.
• A trendline break/retest.
• Buying/selling tails ... essentially we look for a cluster of very obvious spikes off of lower timeframe support and resistance levels within the higher timeframe zone.
• Candlestick patterns. We tend to only stick with pin bars and engulfing bars as these have proven to be the most effective.

EUR/USD

The US consumer confidence survey came in above expectations yesterday, thus sending the EUR lower. H4 price munched through a support area coming in at 1.0828-1.0814, and ended the day shaking hands with February's opening level at 1.0801.

With H4 action now seen retesting the underside of the recently broken support area as resistance, what's the most likely scenario in this market today? Well, in view of the current weekly candle selling off from the 2016 yearly opening line at 1.0873 and edging back below resistance at 1.0819, this timeframe certainly reflects somewhat of a bearish tone at present. On the other side of the field, however, the daily chart shows demand sits nearby at 1.0760-1.0796.

Our suggestions: Based on this market's structure, neither a long nor short seems attractive at this time. A long would place one against both weekly and H4 flow, whereas a sell may have trouble breaking beyond both the H4 monthly level and daily demand! With that in mind, remaining on the sidelines seems to be the better path to take today.

Data points to consider: FOMC member Evans speaks at 2.20pm, US pending home sales at 3pm GMT.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).

GBP/USD

The GBP came under pressure yesterday, forcing H4 price to chomp through both the mid-way point at 1.2550 and the 1.25 handle, with price ending the session challenging the mid-way point at 1.2450. The move, in our opinion, was fueled by a strong performance from the US dollar (helped by the better-than-expected US consumer confidence survey report), coupled with Scotland's First Minister calling for a new independence referendum in late 2018/2019.

Through the simple lens of a technical trader, 1.2450 looks vulnerable to the downside today. Not only is weekly price seen trading within the walls of a supply at 1.2569-1.2404, but there is also scope seen for the bears to stretch their legs on the daily chart down to demand penciled in at 1.2334-1.2379.

Our suggestions: Watch for the H4 candles to close beyond 1.2450. In the event that this comes to fruition, we'd then require a retest of this number followed by a lower-timeframe sell signal (see the top of this report) to confirm a short. The first take-profit target can be seen at 1.24, shadowed closely by March's opening level at 1.2378 (positioned within the upper limits of the aforementioned daily demand).

Data points to consider: FOMC member Evans speaks at 2.20pm, US pending home sales at 3pm GMT.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Watch for price to engulf 1.2450 and look to trade any retest seen thereafter ([waiting for a lower-timeframe signal to form following the retest is advised] stop loss: dependent on where one confirms the line).

AUD/USD

The Aussie bulls went on the offensive yesterday after momentarily breaking through the 0.76 number and tapping the H4 61.8% Fib support level at 0.7589. The advance from here, as you can see, lifted the pair up to March's opening level at 0.7642/H4 mid-way point 0.7650. A H4 close above these levels could see the unit attempt an approach to the H4 supply at 0.7684-0.7674, whilst a rejection may bring price back down to the 0.76 neighborhood.

Unfortunately, the market remains without bigger-picture direction. Weekly price is seen loitering between supply at 0.7849-0.7752 and a support area at 0.7524-0.7446. Daily action on the other hand, does not show resistance until we reach 0.7734 (a Quasimodo level) or support until 0.7540-0.7570 (a demand zone).

Our suggestions: Due to the lack of room seen above 0.7650 and the fact that there's no higher-timeframe support in play right now, we have absolutely no interest in buying this market. As for shorts, another H4 rejection candle off March's opening level/H4 mid-way point could, as mentioned above, encourage sellers to bring prices back down to the 0.76 area. Taking into account that there is less than 40 pips to play with between these levels, and the fact that there's also no higher-timeframe convergence here, we will be passing on any short signals as well.

Data points to consider: FOMC member Evans speaks at 2.20pm, US pending home sales at 3pm GMT.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).

USD/JPY

In view of weekly bulls defending the support area at 111.44-110.10, further upside may be seen this week. While this may be true, it might be worth noting that the daily candles are now seen trading within reaching distance of a resistance area coming in at 111.35-112.37.

Swinging over to the H4 chart, we can see that price recently breached the 111 handle and is seen trading nearby a 161.8% Fib ext. at 111.25 (taken from the low 110.11). Since early March, momentum has been firmly on the side of the bears. Therefore, the 161.8% ext., the aforementioned daily resistance area and the mid-way level at 111.50 forms a rather interesting base of resistance. Despite this confluence, there are two cautionary points to consider:

The weekly demand currently in play.

The nearby 111 handle and the daily broken Quasimodo line seen just below it at 110.58.

Our suggestions: Although we believe the bears will eventually break beyond 111, selling below here is just too risky for our liking. Weekly bulls could kick back into action at any minute, and being on the wrong side of this would not do your account any favors! Therefore, it's back to sitting on our hands for the time being.

Data points to consider: FOMC member Evans speaks at 2.20pm, US pending home sales at 3pm GMT.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).

USD/CAD

Despite price ranging 60 pips yesterday, USD/CAD structure is little changed this morning. As you can see, the 1.34 handle continues to cap upside in this market. However, the bulls do seem to have the upper hand here at the moment, which could force price to challenge the 1.3434/1.3419 region (November, December and January's opening levels marked in green). It might also be worth noting that directly above here is a possible H4 fakeout area painted in yellow at 1.3452/1.3434 (the top edge denotes a 127.2% Fib ext. taken from the low 1.3263), which happens to register nicely with the lower limits of a daily supply at 1.3494-1.3439.

Looking over to the bigger picture, weekly action is seen trading within shouting distance of the 2017 yearly opening base line at 1.3434. Daily flow, nonetheless, still offers very little in terms of direction at the moment. The unit is seen meandering mid-range between the aforementioned supply and a support area at 1.3212-1.3169.

Our suggestions: We still have a keen interest in The H4 1.3434/1.3419 region for shorts. Here's why:

Of note is the 1.34 handle. Psychological levels are prone to fakeouts, and with 1.3434/1.3419 lurking just above 1.34, we feel it'd be a fantastic barrier to help facilitate a fakeout.

When these monthly levels converge, we typically find that they hold firm the majority of the time offering at least a bounce.

In that these monthly levels form a rather small zone, however, and with a somewhat attractive H4 fakeout zone seen above it (attractive due to it being located within daily supply) there is also a chance that price could whipsaw through the monthly levels before turning lower.

To short, we are looking for a H4 bearish selling wick to form that pierces into our pre-determined H4 yellow zone discussed above. With this, a sell from here would be a valid call, in our opinion. From this point, 1.34 could be a potentially troublesome level, so we'd be looking for this base to be consumed, which would in turn be our cue to reduce risk to breakeven.

Data points to consider: FOMC member Evans speaks at 2.20pm, US pending home sales at 3pm. Crude oil inventories at 3.30pm GMT.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: 1.3452/1.3419 ([watch for a H4 bearish selling wick to form within this range before considering a short] stop loss: ideally beyond the candle's wick).

USD/CHF

In recent sessions, the USD/CHF aggressively advanced north. February's opening level at 0.9890 and the 0.99 handle were both consumed during this assault, with price ending the day touching a high of 0.9935. This bull run, however, could be tested today! Over on the weekly scale, price is trading within close proximity to the underside of a recently broken trendline support, which could very well offer resistance. Building on this, there's a daily supply seen overhead at 1.0001-0.9957 that intersects with the above noted weekly trendline.

Our suggestions: Ideally, we're looking for the H4 candles to test the supply zone drawn from 0.9959-0.9944, which overlaps with a broken Quasimodo line at 0.9951. The reason for why is because this area is glued to the underside of the aforementioned daily resistance zone. As a result, we would, depending on the time of day, consider selling from here with stops placed a few pips above the supply.

Data points to consider: FOMC member Evans speaks at 2.20pm, US pending home sales at 3pm GMT.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: 0.9959-0.9944 (stop loss: 0.9962).

DOW 30

US equities settled around the underside of a H4 161.8% ext. at 20703 (drawn from the low 20410) yesterday, following a rather aggressive continuation move north. Supporting the above noted Fib level is a daily resistance area coming in at 20714-20821. Selling from this region may be inviting due to the H4/daily confluence, but we still remain wary. The reason? Weekly action is in the process of printing a nice-looking buying tail. It takes a lot of money (professional money) to create such a pattern on this scale!

Our suggestions: Before traders look to commit around the current H4 Fib level, we would strongly recommend waiting for a reasonably sized H4 bearish candle to form. Of course, this will not guarantee a winning trade, but what it will do is show seller intent within a relatively strong area of resistance.

Data points to consider: FOMC member Evans speaks at 2.20pm, US pending home sales at 3pm GMT.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: 20703 reigon ([waiting for a reasonably sized H4 bearish candle to take shape is advised before pulling the trigger] stop loss: ideally beyond the trigger candle).

GOLD

Recent dollar gains saw the price of gold weaken amid trading yesterday. On the H4 chart, this downside move brought price down to within shouting distance of March's opening level at 1245.9. Further bolstering this level is a 161.8% Fib ext. at 1245.3 taken from the high 1260.9 and a 78.6% retracement penciled in from the low 1240.8 at 1245.0.

While we do expect a bounce to be seen from this neighborhood, let's not forget to be mindful of the bigger picture here. Weekly movement shows that price is trading above a weekly Quasimodo resistance line at 1244.5. Nevertheless, our desk has noted that until the high of this formation is broken (1263.7), the weekly line will remain valid. In other words, all the while the daily supply area at 1265.2-1252.1 is in play, the bears have the upper hand.

Our suggestions: Based on the confluence seen surrounding the 1245.9 zone, we might look to trade this level for a scalp this morning (still, we would prefer it if this level is confirmed by the lower timeframes beforehand [see the top of this report]). Aiming to trade this level for anything more than a small bounce is risky given the higher-timeframe structures in motion right now.

Levels to watch/live orders:

• Buys: 1245.9 region ([waiting for a lower-timeframe confirming signal to form is advised before pulling the trigger [stop loss: dependent on where one confirms this area).
• Sells: Flat (stop loss: N/A).

• Speculation likely to continue as meaningful talks could take months to begin
• GBPUSD off more than 1.5% in 24 hours as sterling shows continued sensitivity to Brexit
• Sterling to remain volatile as May appears before parliament around midday
• Scottish referendum may also be addressed after Edinburgh voted in favour on Tuesday

More than nine months after the UK voted to leave the EU and end its 44 year membership of the block, PM Theresa May will finally today deliver a letter officially triggering article 50 and beginning at least two years of tough negotiations.

There has been endless amounts of speculation over the last nine months about how the negotiations are going to proceed and what will and will not be discussed, something that is unfortunately likely to continue for a while yet. And while the triggering of article 50 officially begins two years of negotiations, we could actually be waiting months before any meaningful talks get underway.

The pound has been very sensitive to this speculation since last June and we saw more evidence of this overnight after pictures emerged of May signing the letter invoking article 50 to be delivered to EU President Donald Tusk later today. Sterling had already gradually lost ground against the dollar throughout the session, having traded close to 1.26 in early European trade, but another bout of selling in illiquid trade took it below 1.24 shortly after the photos emerged.

The pound is likely to remain quite volatile throughout today’s session, particularly around May’s appearance at PMQs just after midday. May will appear in parliament to discuss the triggering of article 50 just as the letter is being delivered to Brussels and what she says today will likely play a big role in how the pound trades, with the FTSE and UK bonds also being sensitive to her comments. The FTSE has tended to benefit from the pounds fall, as we saw yesterday and are likely to see shortly after the open. Given the selling that we’ve seen over the last 24 hours, it is worth being prepared for a possible case of traders selling the news and buying the fact today. Of course, that will heavily depend on May’s comments this afternoon.

May could also address the Scottish parliaments vote on Tuesday to hold a second referendum, which came just one day before the UK triggered its own departure from the EU. May has not been very receptive to the idea previously and I would expect more of the same talk today. While again expected, this was likely another contributor to the pounds decline yesterday and it could be sensitive to it again today.

Global Markets:

• Asian stock markets: Nikkei down 0.05 %, Shanghai Composite gained 0.10 %, Hang Seng rose 0.30 %, ASX 200 rallied 0.90 %
• Commodities: Gold at $1248 (-0.65 %), Silver at $18.06 (-1.05 %), WTI Oil at $48.60 (+0.40 %), Brent Oil at $51.60 (+0.35 %)
• Rates: US 10-year yield at 2.43, UK 10-year yield at 1.19, German 10-year yield at 0.40

News & Data:

• Japan Retail Sales (YoY) Feb: 0.1% (est 0.5% prev 1.0%)
• Japan Retail Sales (MoM) Feb: 0.2% (est 0.3% rev prev 0.2%)
• PBoC fixes USDCNY Reference Rate At 6.8915 (prev fix 6.8782 prev close 6.8820)
• Asia stocks up with dollar, sterling suffers on Brexit day – RTRS
• Consumer confidence hits 16-year high in boost to economy – RTRS
• Dollar bounces on Fed talk, sterling wobbles on Brexit anxiety – RTRS

Markets Update:

The British Pound declined sharply overnight. UK Prime Minister May signed the Article 50 letter which will take the country formally out of the European Union. This was no surprise at all, but the market reacted negatively anyway. GBP/USD fell from 1.26 to 1.2440 yesterday, and extended losses to 1.2370 in Asia. Strong support is noted at 1.2340, followed by 1.2300.

The Dollar recovered against most major currencies yesterday. Resistance at 1.09 proved to be too tough for EUR/USD and the pair fell briefly below 1.08 in yesterday’s late NY session. However, short-term techs remain positive as long as it is trading above 1.07.

USD/JPY managed to bounce ahead of 110 once again. The pair rallied to 113.30 in Asia and key resistance is seen around 111.50. Should it break above it, USD/JPY could rally further to at least 112.30.

Upcoming Events:

• 15:00 GMT – US Pending Home Sales
• 15:30 GMT – US Crude Oil Inventories

Key Points:

• Price action trading within a constricting wedge.
• RSI oscillator trending higher.
• EURGBP likely to retrace to top of current range.

The Euro-Pound pair has been trappedby a tightening wedge over the past few weeks as it has largely traded between 0.8395 and 0.8800. However, the past few days has seen the pair steadily breaking above the current cloud formation which suggests that we are about to see a breakout in the coming days.

A cursory review of the technical indicators also seems to support the view that there is likely to be a bullish move coming in the short term. In particular, the stochastic oscillator (daily time frame) has recently returned to trending higher, after a consolidative pullback, and still remains within neutral territory which means that there is plenty of room to move on the upside. In addition, price action has now moved above the 20, 60, and 100 day EMA’s as price has converged towards the top of the wedge pattern. Subsequently, there is plenty of scope for a retracement given the building pressure within the various indicators, as well as from the increasing wedge.

From a fundamental perspective, there are also some key economic events which are coming in the remainder of the week with the UK finally about to trigger the Article 50 provisions. This is likely to bring about a change to the pair’s equilibrium price following a bout of sharp volatility. Regardless, the current constricting wedge pattern, and requisite price level, is unlikely to hold given the current economic uncertainty around the Brexit. However, it’s not all bad news for the Pound given that some economic analysts are now predicting that an exit from the Eurozone is likely to bring about some gains for the UK economy as EU regulation falls away.

Ultimately, given the technical and fundamental indicators, with a particular focus of the risk of a Brexit, the Euro is probable to rally against the Pound within the current range structure. However, before considering any long entry, look for a strong bullish candle to pierce some key support at the top of the wedge around the 0.8785 mark.In addition, consider your Euro exposure on Friday (09:00 GMT) given that the EU Flash CPI Estimate figures are due out. Given the focus on interest rates lately, this is likely to be a key fundamental driver of the near term trend

Daily Pivots: (S1) 1.2395; (P) 1.2496; (R1) 1.2551; More...

GBP/USD's sharp decline and strong break of 1.2468 minor support suggests that rebound from 1.2108 is completed at 1.2614 already. Intraday bias is turned back to the downside for 1.2108 support next. Overall, price actions from 1.1946 are viewed as a consolidation pattern pattern. Break of 1.2108 support will be the first sign of larger down trend resumption and would target 1.1946 low for confirmation. On the upside, above 1.2614 will bring another rise. In that case, we'd expect upside to be limited by 1.2705/2774 to bring 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.