Sample Category Title

EUR/USD

Current level - 10801

My outlook here remains positive above 1.0780 support area, for a break through 1.0940 and continuation of the upmove towards 1.0940 target mark. Crucial on the downside is 1.0712.

Profit-taking affects gold curbing silver and platinum

USD/JPY

Current level - 111.20

The rebound after 110.72 low should be considered corrective, preceding another leg downwards, to 109.75. Key resistance lies at 112.26.

GBP/USD

Current level - 1.2505

The uptrend has been renewed after the failure at 1.2425 support and the bias is positive, for a rise towards 1.2570 area. 

Sunrise Market Commentary

• Rates: Outcome healthcare bill vote reflection of prospects fiscal stimulus plans?
  Today's eco calendar heats up, but investors could turn to wait-and-see mode. If US President Trump manages to push through the new healthcare bill, it bodes well for pursuing his economic agenda and supports the reflation trade. Failure to do so might bring more of Tuesday's risk off scenes to markets.
• Currencies: Dollar still struggles to stay above key support levels.
  Yesterday, the dollar remained in the defensive even as the equity correction eased. EUR/USD and USD/JPY are still within reach of key technical levels. Global sentiment on risk and the first votes on the replacement of Obamacare might decide to which side the USD domino will fall. Sterling lost only temporary ground on the terrorist attack in London.

The Sunrise Headlines

• US equities ended between flat (Dow) and +0.5% (Nasdaq), recovering from Tuesday's sudden sell-off. Overnight, Asian stock markets trade mostly positive as well.
• A suspected Islamist terrorist mowed down pedestrians on a crowded bridge before crashing his car near the gates of Parliament and stabbing a policeman, leaving 4 dead in an attack that struck at the heart of British democrac
• US President Trump and House leaders pushed for votes for their plan to overhaul Obamacare and said they were making progress in their efforts to win over conservative Republicans. A vote on the bill is possible as soon as today
• The RBNZ kept its policy rate unchanged at 1.75%. Governor Wheeler said that while NZD had weakened by 4% since February, partly thanks to softer dairy prices, “further depreciation is needed to achieve more balanced growth.”
• A study to be presented at the Brookings Papers conference this week by two Federal Reserve Board economists finds that rates could hit zero as much as 40% of the time – far more often than predicted by other studies.
• Fitch downgraded Saudi Arabia by one notch to A+ (stable outlook) from AA- (negative outlook). It said that that while the leadership was strongly committed to diversifying the economy beyond oil, that intention might not be enough.
• Today's eco calendar heats up with UK retail sales, US weekly jobless claims & new home sales and EMU consumer confidence. The ECB announces the results of its final TLTRO and publishes its economic bulletin. Fed Yellen, Fed Kashkari, ECB Lautenschlaeger and ECB Nouy speak.

Currencies: Dollar Still Struggles To Stay Above Key Support Levels

USD holding near key technical levels

On Wednesday, investors tried to find out what could be next after Tuesday's risk-off correction. Risk sentiment remained fragile and core yields declined further. This weighed on the dollar, with USD/JPY (temporary) sliding below the 111 big figure. However, the decline in core bond yields and in the dollar halted as there were no sustained follow-through losses of US equities. USD/JPY closed the session at 111.16 (from 111.71). EUR/USD finished the day at 1.0797 (from 1.0811).

Overnight, Asian equities are trade slightly stronger, while the gains of both equities and the dollar are modest. Amongst others, global investors are awaiting a first vote in US house of representatives to repeal Obamacare. It is seen as a condition to pass other fiscal legislation. USD/JPY is trading in the 111.35 area. EUR/USD is trading a narrow range close to, slightly below 1.08. The Reserve Bank of New Zealand kept its policy rate unchanged at 1.75%, as expected, and maintained a neutral bias. The domestic economy performs solidly, but the bank sees many risk outside the country. The RBNZ still sees a need for a weaker kiwi dollar. NZD /USD trades currently slightly softer in the mid 0.70 area.

The calendar is better filled today, but still misses a real market mover. In EMU, several confidence data will be published. They are a precursor for tomorrow's more important PMI confidence. In the US, the initial claims are expected little changed at 240K and New Home sales are expected up 1.8% M/M in February. Given the recent easing of sales and the low inventory of existing homes for sale, we expect sales to have increased in February. Fed Yellen and Kaskhari speak but on non-policy issues (community development & education). ECB Lautenschlaeger, a hawk, speaks too, but she often shies away from the policy outlook. Markets will keep a close eye whether a replacement for Obamacare can pass Parliament. In case of a an agreement, sentiment on risk might again improve, which might help to put a floor for the dollar. With only second tier eco data on the agenda, sentiment on risk and the political developments in the US (healthcare bill) will set the tone for USD trading. The jury is still out, but yesterday's price action was not too bad as there were no follow-through losses on Tuesday's equity correction. However, a clear signal of an USD bottoming out process is needed. Especially USD/JPY remains vulnerable as the pair still struggles not to fall below the 111.36/60 support.

The picture for EUR/USD remains slightly different. Of late, the narrowing of the US-German 2- and 10-year yield spread weighed on the dollar, but this narrowing halted yesterday and capped the topside of EUR/USD. The jury is still out whether or not interest rate differentials will narrow further, but for now, the 1.0829/74 resistance remains intact. A test of the 1.0829/74 resistance is very well possible, but the EUR/USD rebound might further slow. Even so, it is still too early to row against the USD downtrend/ EUR/USD rebound. In a longer term perspective, we don't change our USD-constructive bias based on the eco fundamentals. However, this doesn't tell anything on the short-term momentum dynamics

EUR/USD holding near the key 1.0829/74 resistance

EUR/GBP

UK retail sales in focus for sterling trading

Yesterday, no data or other high profile UK specific news events was scheduled. Sterling tried to establish some follow-through gains on Tuesday's post-CPI rally. However, the focus was on the global factors. EUR/USD and cable broadly followed a similar trading pattern till the headlines on the London terrorist attack hit the screens. This triggered some temporary sterling selling with EUR/GBP jumping to the 0.87 barrier. EUR/GBP closed the session at 0.8649 (from 0.8663). Cable finished the session also marginally stronger at 1.2485.

Today, the UK calendar is better filled with both the February retail sales and the CBI March distributive sales. Official retail sales are expected to have rebounded (0.4% M/M and 2.6% Y/Y) after a setback December and January. After last week's BoE statement, price data have again become more important for sterling trading rather than activity data. Even so, a positive surprise might make markets pondering the probability of a BoE rate hike further down the road. At the same time, the euro also remains well bid, slowing any potential decline of EUR/GBP. Last week, the sterling decline took a breather. Some time ago, EUR/GBP cleared 0.8592 resistance, improving the MT technical picture. However, this week's (substantially) higher than expected UK inflation probably put a decent floor for sterling short-term. We changed our short-term bias on EUR/GBP from positive to neutral. Some further consolidation in the 0.85/0.88 area might be on the cards. Longer term, Brexit complications remain a potential negative for sterling, but this issue isn't in the spotlights right now.

EUR/GBP: sterling remains well bid after higher UK inflation earlier this week

Download entire Sunrise Market Commentary

Daily Pivots: (S1) 0.8631; (P) 0.8679; (R1) 0.8708; More...

EUR/GBP's pull back from 0.8786 extends lower today and breached 38.2% retracement of 0.8402 to 0.8786 at 0.8639. There is no sign of bottoming yet. Sustained trading below 0.8639 will target 61.8% retracement 0.8549 and possibly below. On the upside, above 0.8699 minor resistance will turn bias back to the upside for 0.8786 resistance. Break will extend the rise from 0.8402 to 0.8851. Overall, price actions from 0.8303 are seen as the second leg of the corrective pattern from 0.9304. Fall from 0.9304 should resume later.

In the bigger picture, price actions from 0.9304 are viewed as a medium term corrective pattern. Deeper fall cannot be ruled out yet. But we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside. Overall, the corrective pattern would take some time to complete before long term up trend resumes at a later stage. Break of 0.9304 will pave the way to 0.9799 (2008 high).

Daily Pivots: (S1) 1.3929; (P) 1.3999; (R1) 1.4123; More...

EUR/AUD rebounded further today but it's limited below 1.4183 resistance so far. Intraday bias stays neutral first. Overall, with 1.3874 minor support intact, we're still favoring the case of trend reversal after defending key support level at 1.3671. This is supported by bullish convergence condition in daily MACD. On the upside, above 1.4183 will turn bias to the upside for 1.4289 resistance next. Break will affirm our view and target next key resistance level at 1.4721. However, break of 1.3874 minor support will invalidate our view and turn bias back to the downside for retesting 1.3624 low.

In the bigger picture, price actions from 1.6587 medium term top are viewed as a corrective pattern. We'd expect strong support from 1.3671 key level to contain downside and bring rebound. Up trend from 1.1602 should not be finished and will resume later. Break of 1.4721 resistance will indicate completion of such correction and turn outlook bullish for retesting 1.6587 high. However, sustained break of 1.3671 will invalidate our bullish view and would turn focus back to 1.1602 long term bottom.

EUR/GBP         –  0.8661

EUR/GBP – The major (A)(B)(C)-(X)-(A)(B)(C) correction from 0.9805 is unfolding and 2nd (A) has possibly ended at 0.6936.

As the single currency has retreated after meeting resistance at 0.8788 earlier this month, retaining our view that minor consolidation below this level would be seen and pullback to 0.8630-35 cannot be ruled out, however, reckon downside would be limited to 0.8595-00 and renewed buying interest should emerge around there, bring another rise later. Above said resistance at 0.8788 would extend the rebound from 0.8403 towards indicated resistance at 0.8857 which is likely to hold from here.

Our latest preferred count is that the wave V of a 5-wave series from 0.5682 ended at 0.9805 earlier and major from there has possibly ended at 0.8067 as A-B-C-X-A-B-C. We are keeping our view that the entire correction from 0.9805 has possibly ended at 0.7756 and as labeled as the attached daily chart and impulsive move from 0.9084 has ended at 0.7756 as a 5-waver which marked either the (C) wave or the A leg of (C), a daily close above resistance at 0.8831 would suggest (C) leg has ended and headway towards 0.9084.

On the downside, whilst pullback to 0.8630-35 cannot be ruled out, reckon downside would be limited to 0.8595-00 and bring another rise later. Below 0.8545-50 would defer and suggest top is formed instead, and risk weakness to 0.8500-10 but break there is needed to provide confirmation and suggest the rebound from 0.8403 has ended.
 
Recommendation: Buy at 0.8600 for 0.8750 with stop below 0.8500.

Euro's long term uptrend started in Feb 1981 at 0.5039 and is unfolding as a (A)-(B)-(C) move with (A): 0.8433 (Feb 1993), (B): 0.5682 (May 2000) and impulsive wave (C) should have ended at 0.9805 with wave III ended at 0.7254 (May 2003), triangle wave IV at 0.6536 (23 Jan 2007) and wave V as well as wave (C) has ended at 0.9805.

We are keeping an alternate count that only wave III ended at 0.9805 and the correction from there is the wave IV and may extend weakness to 0.7700, however, it is necessary to see a daily close above resistance at 0.9143 would change this to be the preferred count.

Daily Pivots: (S1) 137.84; (P) 138.66; (R1) 139.59; More...

GBP/JPY breached 138.53 support but quickly recovered. Current development suggests that deeper fall is underway back to 136.44 support at possibly below. Overall, price actions from 148.42 are viewed as a consolidation pattern. We'd expect 50% retracement of 122.36 to 148.42 at 135.39 to contain downside and bring rebound. On the upside, break of 140.60 resistance will turn bias to the upside and send GBP/JPY through 144.77 resistance.

In the bigger picture, price actions from 122.36 medium term bottom are still seen as a corrective pattern. Main focus is on 38.2% retracement of 195.86 to 122.36 at 150.42. Rejection from there will turn the cross into medium term sideway pattern. Or, sustained break of 50% retracement of 122.36 to 148.42 at 135.39 will turn outlook bearish for a test on 122.36 low. Though, sustained break of 150.42 will extend the rebound towards 61.8% retracement of 195.86 to 122.36 at 167.78.

USD/CAD – 1.3348

USD/CAD – Wave v ended at 0.9407 and a-b-c correction may extend gain to 1.4700

As the greenback’s retreat from 1.3535 turned out to be deeper than expected, dampening our bullishness and suggesting a temporary top has been formed there, hence consolidation with mild downside bias would be seen and another test of 1.3264 support cannot be ruled out, break there would add credence to this view, bring correction of recent upmove to previous resistance at 1.3210-12 (now support). Only below this level would suggest the rebound from 1.2969 has ended and prolong choppy trading, bring weakness to 1.3100 but downside should be limited to 1.3056 support, bring rebound later.

We are keeping our view that the wave b from 1.0657 (a leg top) has possibly ended at 0.9633 with (a): 0.9800, wave (b): 1.0447 and wave c at 0.9633, the subsequent rise from there is now treated as wave c exceeded indicated upside target at 1.3770-80 and 1.4000 and wave (3) has possibly ended at 1.4690 and wave (4) correction has commenced for retracement back to 1.2832 support, then 1.2410-20.

On the daily chart, our latest preferred count remains that the A of (B) rally from 0.9059 low (7 Nov 2007) unfolded into an impulsive wave with i: 0.9059-1.0380, ii ended at 0.9819, iii at 1.3019 followed by triangle wave iv at 1.2026 , then wave v formed a top at 1.3066 and also ended the wave A. The wave B is unfolding as an double three a-b-c-x-a-b-c and is sub-divided as a: 1.2192, b: 1.2716 and wave c at 1.0784, followed by wave x at 1.1725, another set of a-b-c unfolded with 2nd a at 0.9931, 2nd b at 1.0674. the 2nd c has possibly ended at 0.9407, therefore, consolidation with upside bias is seen for major correction, indicated target at 1.3900 had been met and gain to 1.4700 would follow.

On the upside, expect recovery to be limited to 1.3400 and bring another decline. Above 1.3425-30 would suggest the retreat from 1.3535 has possibly ended, bring a stronger rebound to 1.3500, then retest of 1.3535. A break of this resistance would revive bullishness and signal the rise from 1.2969 is still in progress for retest of 1.3599 top, once this level is penetrated, this would confirm the erratic rise from 1.2461 low has resumed for a stronger correction of early decline from 1.4690 (2016 high) to 1.3700 and later towards 1.3790-00, however, reckon upside would be limited to 1.3835-40 (61.8% Fibonacci retracement of 1.4690-1.2461) and bring retreat later.

Recommendation: Stand aside for this week.

Longer term - The selloff from 1.6194 (21 Jan 2002) to 0.9059 (07 Nov 2007) is viewed as (A) wave which is a 5-waver as labeled on the monthly chart as below, the subsequently rally is labeled as (B) with impulsive A leg of (B) ended at 1.3066, wave B of (B) is unfolding which has either ended at 0.9407 or would extend one more fall but downside should be limited to 0.9200 and 0.9000 should hold.

Daily Pivots: (S1) 119.53; (P) 120.18; (R1) 120.69; More...

EUR/JPY's fall from 122.88 is still in progress and intraday bias stays on the downside for the moment. With a break of 120.01 minor support, the cross should now target 118.39/45 key cluster level again (38.2% retracement of 109.20 to 124.08 at 118.39). However, as such decline is viewed as part of the consolidation pattern from 124.08, we'd expect strong support from 118.39/45 to contain downside and bring rebound. On the upside, above 120.81 minor resistance will turn bias back to the upside for 122.88 and then 124.08.

In the bigger picture, we're holding on to the view that medium term rise from 109.20 is still in progress. Focus is on 126.09 key resistance level. Sustained break will confirm completion of the whole decline from 149.76. And rise from 109.20 is of the same degree as the fall from 149.76. In such case, further rally would be seen to 104.04 resistance and possibly above before topping. Meanwhile, rejection from 126.09, or firm break of 118.45 cluster support, will likely extend the fall from 149.76 through 109.20 low.

Currency pair GBP/USD

The GBP/USD is in an uptrend channel indicated by the support (green) and resistance (red) trend lines. Price seems to be breaking above the 61.8% Fibonacci level which means that price could test the next Fib at 78.6%.

The GBP/USD is trying to build a bullish breakout above resistance (dotted red).

Currency pair EUR/USD

The EUR/USD is building a rising wedge chart pattern (red/green) trend lines. A break below the wedge could send the EUR/USD to test the next support (blue). A break above it could see price invalidates wave 2 (purple) at the horizontal line (red) and see a potential breakout within wave 5 (purple).

The EUR/USD could have completed an ABC correction (grey) within wave 4 (purple). The support and resistance trend lines are key. A break below the blue line invalidates the 5 wave pattern (purple).

Currency pair USD/JPY

The USD/JPY broke below the bottom (dotted blue) and made a pullback to the broken bottom which has now become resistance (dotted red). The retracement could be part of a wave 4 (purple) unless price breaks above the 61.8% Fib of wave 4 vs 3.

The USD/JPY could be building a 4 wave (purple/orange) within a larger wave 5 (orange).

EUR/JPY - 120.05

Recent wave: wave v of (C) ended at 94.12 and major correction in wave A has ended at 149.79

Trend: Near term up

New strategy :

Stand aside

Position: -
Target:  -
Stop:-

As the single currency has remained under pressure after meeting renewed selling interest at 121.84 earlier this week, adding credence to our view that recent rise from 118.24 has ended at 122.89 last week, hence downside risk remains for this fall from 122,89 top to extend further weakness to 119.65-70 and then 119.35-40, however, near term oversold condition should limit downside to 119.00 and support at 118.67 should hold from here,

In view of this, would not chase this fall here and would be prudent to stand aside in the meantime. On the upside, whilst recovery to 120.60-70 cannot be ruled out, reckon upside would be limited to 121.15-20 and bring another decline later. Only break of said resistance at 121.84 would revive bullishness and suggest low is formed instead, bring test of indicated resistance at 122.26 first.

Our latest preferred count is that wave (ii) is ABC-X-ABC which ended at 123.33 and wave (iii) is unfolding with wave iii ended at 100.77, followed by wave iv at 111.57 and wave v as well as the wave (iii) has ended at 97.04, followed by wave (iv) at 111.43 and wave (v) has ended at 94.12 which is also the end of the larger degree v, this also implied the major wave (C) has also ended there, hence major correction has commenced from there with (A) leg unfolding in its lower degree wave c which has possibly ended at 145.69. Under this count, A-B-C wave (B) has commenced with A leg ended at 136.23, wave B at 143.79 and wave C has possibly ended at 149.79.

Our larger degree count is that the decline from 139.26 is wave (C) and is sub-divided into a diagonal triangle i-ii-iii-iv-v with wave i - 105.44, wave ii- 123.33, wave iii - 97.03, wave iv - 111.43, followed by the final wave v as well as the end of wave (C) at 94.12, this also mark the bottom of larger degree wave B. Under this count, major rise in wave C has commenced as an impulsive wave with minor wave III ended at 145.69, wave V is still in progress for further gain to 150.00. Having said that, this so-called wave V could well be the first leg of larger degree 5-waver wave C and this wave C should bring at least a retest of wave A top at 169.97 (July 2008).