Sample Category Title

EUR/USD - 1.0808

Original strategy  :

Buy at 1.0700, Target: 1.0800, Stop: 1.0665

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.0740, Target: 1.0840, Stop: 1.0705

Position : -

Target :  -

Stop : -

As the single currency has continued trading with a firm undertone after last week’s rally, suggesting recent erratic upmove from 1.0493 low is still in progress and may extend further gain towards previous chart resistance at 1.0829, however, loss of near term upward momentum should prevent sharp move beyond 1.0850-60 and price should falter well below 1.0890-00, risk from there has increased for a retreat to take place later.

In view of this, would not chase this rise here and we are looking to buy euro on subsequent pullback as 1.0706 support should limit downside and bring another rise later. Below 1.0675-80 would defer and suggest top is possibly formed, risk weakness to 1.0640 (previous resistance now support) but still reckon indicated support at 1.0600 would remain intact.

Tuesday March 21: Five things the markets are talking about

The 'mighty' buck remains on the back foot, pressured by concerns that change to U.S trade policy could hamper growth. It has slumped as much as -1.8% since last week's Fed rate hike now that policy makers did not accelerate the timeline for future tightening.

Market volatility remains low across the different asset classes as investors attempt to assess how sustainable the hopeful global economic recovery is. On the weekend, G20 members struggled to find common ground on trade, however rookie U.S Treasury Secretary Steven Mnuchin did convince finance officials to drop a denial of protectionism from their policy statement.

The group's communiqué now ensures the U.S can still use sanctions or other policy tools to punish trade partners and stop economic policies that Trump's administration deems to be unfair.

In Europe, the EUR has found support after last nights French Presidential debate. An overnight poll shows independent candidate Emmanuel Macron emerging as the most convincing of the five contenders, ahead of anti-euro candidate Marine Le Pen.

Elsewhere, Fed speakers continue to dominate the airwaves. Yesterday, Fed member Kashkari (dove, dissenting vote) indicated that the job market is showing more signs of slack and remains short on inflation. Fed's Evans (dove, voter) said that three rate hikes this year are "possible," while Fed member Harker (hawk, FOMC voter) would not rule out more than three rate hikes this year.

1. Stocks record mixed results

In Japan, the Nikkei share average fell to a two-week low overnight (-0.3%) as financial stocks continue to underperform as U.S. yields fall. The broader Topix dropped -0.2%.

In Hong Kong, equities climbed to a near 20-month high, boosted by continued inflows from Chinese investors. The benchmark Hang Seng index rose for a fourth consecutive day, adding +0.4%.

Note: The index is the world's best performing in Q1, having gained nearly +12%.

In China, stocks closed slightly higher in thin trading. Investors' risk appetite remains restrained amid growing signs of tighter liquidity in the banking system. The blue-chip CSI300 index rallied +0.5%, while the Shanghai Composite Index added +0.3%.

In Europe, equity indices are trading mixed, but generally higher across the board. Financials are supporting the Eurostoxx while commodity and mining stocks are lower in the FTSE 100.

U.S equities are set to open in the black (+0.2%).

Indices: Stoxx50 +0.2% at 3,447, FTSE -0.2% at 7,413, DAX flat at 12,050, CAC-40 +0.3% at 5,025, IBEX-35 +0.7% at 10,283, FTSE MIB +0.9% at 20,143, SMI -0.1% at 8,684, S&P 500 Futures +0.2%

2. Oil prices rise on talk that OPEC could extend supply cut

Oil prices are in the black overnight on expectations that an OPEC-led production cut to prop up the market could be extended, while strong demand would also work to slowly erode a global fuel supply overhang.

Brent crude futures is trading atop of +$51.97, up +35c, or +0.68% from Monday's close. U.S. West Texas Intermediate (WTI) crude futures are up +28c, or +0.58%, at +$48.50 a barrel.

Last November, OPEC together with other producers including Russia pledged to cut output by almost -1.8m bpd between January and June in an effort to support prices and rein in a global supply glut.

To date, the cutback has not had the desired effect as compliance has been patchy (Russia) and other producers (U.S shale) have stepped up to fill the gap, resulting in crude prices falling more than -10% this year.

The market is waiting for today's API date for price direction guidance.

In commodities, gold (-0.4% at +$1,228.61) prices have edged lower overnight, but hover near its two-week high print in yesterday's session on prospects of a less-hawkish Fed.

3. Yields on the move

The spread between French and German 10-year bond yields have tightened after last nights live French Presidential debate eases political fears. Current polls indicate that centrist candidate Macron emerged as the winner. The OAT-bund spread has tightened to +65.8 bps from +70 bps yesterday.

In the U.K, yields on 10-year Gilts have backed up more than +3 bps to +1.294% this morning after CPI data rose more than expected last month (see below). The higher-than-expected inflation print (+2.3% vs. +2.1%) should increase expectations of a "hawkish" drift by the BoE, especially with a dissenter voting for a rate rise.

In the U.S, 10-year yields rose above +2.6% earlier this month and reached a two-year high as investors anticipated the Fed would raise short-term interest rates. They did last week, but its signal of a "gradual" path of tightening policy has debt product better bid. U.S 10's are trading at +2.49% after losing -4 bps in each of the previous two sessions.

4. EUR on the move

The "mighty" dollar remains under pressure as the pace of pushing President Trump's domestic agenda maybe obstructed due to the FBI 's investigation into possible administration links with Russia.

The EUR (€1.0800) trades atop a six-week high aided by last nights French Presidential debate, which saw Macron, put in a strong performance. The single unit seems to be little impacted by the current phase of the Greece bailout review – country and lenders remain divided, expect bailout talks to intensify with the real deadline looming a few months down the road.

GBP/USD (£1.2465) has jumped to a three-week high following stronger than expected inflation data. Against the EUR, the pound has rallied to €0.8661, up +0.25% ahead of the U.S open.

5. U.K inflation hits three-year high

Data in the U.K shows that the annual rate of inflation in the U.K. rose to +2.3% in Feb. from +1.8% in Jan., reaching its highest level since Sep. 2013. It's moved above the BoE's +2% target for the first time in four years. The market was expecting an uptick to +2.1%.

Higher energy prices have been blamed for the pick up in inflation across developed nations. However, the pickup in the U.K has also been supported by the pound's depreciation since the Brexit vote in June 2016.

The BoE's Governor Carney has already indicated that he will tolerate a "modest" overshoot of its target for a limited period of time. The BoE expects higher inflation to slow consumer spending and growth, helping bring price rises back to target over the medium term.

USD/JPY - 112.45

Original strategy  :

Bought at 112.55, Target: 113.55, Stop: 112.20

Position :  - Long at 112.55

Target :  - 113.55

Stop : - 112.20

New strategy  :

Hold long entered at 112.55, Target: 113.55, Stop: 112.20

Position :  - Long at 112.55

Target :  - 113.55

Stop : - 112.20

Although the greenback fell briefly to 112.26, the subsequent rebound suggests consolidation above this level would be seen and as long as 112.26 holds, mild upside bias is seen for gain to 113.00-05 is likely, above there would suggests low is possibly formed, bring a stronger rebound to 113.35-40 (38.2% Fibonacci retracement of 115.20-112.26), however, break of resistance at 113.54 is needed to provide confirmation, bring further subsequent gain to 113.70-75 (50% Fibonacci retracement).

In view of this, we are holding on to our long position entered at 112.55 but one must exit on such rebound. Below said support at 112.26 would risk one more fall to 112.10-15 (61.8% projection of 115.20-112.90 measuring from 113.54) but loss of downward momentum should prevent sharp fall below previous support at 111.69, risk remains for a rebound to take place later.

UK inflation moves above BOE target for 1st time in over three years

Notes/Observations

US Trump administration's reform agenda appearing sidetracked by current FBI investigation

France presidential debate soothes the nerves that populism gaining momentum (Macron the perceived winner in showing; Far right Le Pen in 3rd)

UK Feb CPI data moves above BOE 2% inflation target for 1st time in over three years

Overnight:

Asia:

RBA Mar Minutes reiterated that keeping rates steady policy consistent with growth and inflation targets. Rising AUD currency would complicate economic transition. Wage growth, underlying inflation were expected to rise gradually

China Premier Li Keqiang: Will further open up its services, manufacturing and mining sectors to the outside world

Japan Chief Cabinet Sec Suga noted that G20 reaffirmed excessive and disorderly FX moves hurt economy and financial markets

Europe:

ECB's Weidmann (Germany) reiterated view that current circumstances mean maintaining expansionary monetary policy was appropriate

Eurogroup Chief Dijsselbloem: No promise deal between lenders and Greece will be completed by next Eurogroup meeting on April 7th. Reiterated that some key issues still remain for Greek review

Greece Fin Min Tsakalotos stated that it had made progress in Greek talks; most of outstanding issues had been resolved

BOE's Haldane (chief economist): pivot toward structural measures and less reliance on monetary policy is desirable

France Presidential debate

Elabe poll: Macron was most convincing in presidential debate; Melenchon 2nd; Le Pen and Fillon tied for 3rd

Americas:

Sec of State Tillerson plans to skip an April 5-6 meeting of NATO foreign ministers for a US visit by the Chinese president and will travel to Russia later in the month

Energy:

OPEC support for continuing supply cut agreement into second half of year said to be growing; to require non-OPEC participation to extend agreement

Economic Data

(CH) Swiss Feb Trade Balance (CHF): 3.1B v 4.8B prior; Real Exports M/M: -2.2% v -3.6%prior; Real Imports M/M: +2.9% v -3.9% prior

(HK) Hong Kong Feb CPI Composite Y/Y: -0.1% v +0.7%e

(UK) Feb CPI (beat) M/M: 0.7% v 0.5%e; Y/Y: 2.3% v 2.1%e; CPI Core Y/Y: 2.0% v 1.7%e

(UK) Feb RPI M/M: 1.1% v 0.8%e; Y/Y: 3.2% v 2.9%e; RPI Ex Mort Interest Payments (RPIX) Y/Y: 3.5% v 3.1%e

(UK) Feb PPI Input M/M: -0.4% v +0.1%e; Y/Y: 19.1% v 20.1%e

(UK) Feb PPI Output M/M: 0.2% v 0.3%e; Y/Y: 3.7% v 3.7%e

(UK) Feb PPI Output Core M/M: 0.0% v 0.2%e ; Y/Y: 2.4% v 2.5%e

(UK) Feb Public Finances (PSNCR): +£12.9B v -£26.5B prior; Public Sector Net Borrowing: £1.1B v £2.2Be

Fixed Income Issuance:

(ID) Indonesia sold total IDR7.87T in 2-year,4-year, 7-year and 15-Year Project based Sukuk (PBS)

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Index snapshot (as of 09:40 GMT)

Indices [Stoxx50 +0.2% at 3,447, FTSE -0.2% at 7,413, DAX flat at 12,050, CAC-40 +0.3% at 5,025, IBEX-35 +0.7% at 10,283, FTSE MIB +0.9% at 20,143, SMI -0.1% at 8,684, S&P 500 Futures +0.2%]

Market Focal Points/Key Themes: European equity indices are trading mixed but generally higher across the board; Gains led by banking stocks despite shares of Deutsche Bank trading notably lower in the Eurostoxx; Italian FTSE MIB the outperformer as a result as the heavily weighted peripheral lenders trade higher; Commodity and mining stocks lower in the FTSE 100 as copper prices trade lower; China markets ending higher overnight despite Japan's Nikkei lower.

Upcoming scheduled US earnings (pre-market) include Coca-Cola European Partners, Cheetah Mobile, Canadian Solar, Francenca's Holdings, General Mills, Lands' End, and Lennar Corp.

Equities (as of 09:30 GMT)

Consumer Discretionary: [888 Holdings 888.UK +7.7% (FY16 results), Deutsche Wohnen DWN.DE -1.5% (FY16 results, analyst downgrade), ScS Group SCS.UK +1.2% (H1 results)]

Financials: [Bellway BWY.UK +2.2% (H1 results), Grand City Properties GYR.DE +1.6% (FY16 results), Partners Group PGHN.CH +3.9% (FY16 results)]

Industrials: [BMW BMW.DE +1.9% (outlook, CFO comments), Komax KOMN.CH -4.1% (final FY16 results)]

Materials: [Akzo Nobel AKZA.NL +3.3% (PPG said to prepare renewed takeover bid)]

Technology: [Fingerprint Cards FINGB.SE -29.3% (negative outlook, withdraws dividend)]

Telecom: [Altice ATC.NL +1.9% (acquisition of Teads for €285M cash)]

Speakers

(EU) Various Euro-Area Finance Ministers (EcoFin) comment ahead of meeting in Brussels EU's Dombrovskis: EU to stay committed to international trade Luxembourg Fin Min Gramegna: Pleased about progress on Greece; an agreement on 2nd bailout review was very close. Europe worried about globalization being questioned; need to evaluate steps of Trump administration

Swiss SECO March 2017 Economic Forecasts cut its 2017 GDP growth forecast from 1.8% to 1.6% while maintaining 2018 GDP at 1.9%. Raised 2017 inflation from 0.0% to 0.5% and 2018 CPI from +0.2% to 0.3%

BOJ Dep Gov Iwata reiterated that central bank was far from achieving its 2% inflation target and not using FX to achieve price target

China Premier Li Keqiang reiterated view that China must ensure State assets held overseas retain value and were operated safely

China PBoC said to inject hundred billions of yuan in liquidity after interbank payments on borrowings missed

Currencies

USD remained under pressure as the pace of pushing President Trump's domestic agenda seemed impacted due to FBI ‘s investigation into possible administration links with Russia

EUR/USD was approaching the 1.08 level aided by the French Presidential debate after candidate Macron put in a strong performance. The Euro was little impacted by the current phase of the Greece bailout review as the country and lenders remained divided, bailout talks to intensify with the real deadline looming a few months down the road.

GBP/USD moved above the 1.24 level ahead of the Feb CPI data. The data later confirmed thatUK inflation moved above BOE target for 1st time in over three years (as noted by the recent BOE Mar minutes). The GBP/USD higher by over 0.7% just ahead of the NY morning at 1.2450

Fixed Income:

Bund futures trade at 159.37 down 41 ticks aided by favourable reaction from last night French Election debate. Support remains at 159.06 initially before testing contract low at 158.73 followed by 158.40. Resistance moves to 159.96 then 160.16 followed by 160.45.

Gilt futures trade at 125.53 down 74 ticks gaining momentum downwards after stronger UK inflation readings, with headline CPI above 2% for the first time since Dec 2013. Support moves to 125.24 with resistance remaining at 126.44 then 126.75, 126.87 followed by 127.35. Short Sterling futures has seen a further bout of steepening with Futures down 1 to 5bp across the strip with Jun17Jun18 spread steepening to 23bp.

Tuesday's liquidity report showed Monday's excess liquidity fell to €1.337B a fall of €18B from €1.355T prior. Use of the marginal lending facility fell slightly to €176M from €178M prior.

Corporate issuance saw $4.63B come to market via 4 deals headlined by Heineken $1.75B 2 part offering and Caterpillar 2 part $900M offering. This pushes monthly issuance above the $90B mark.

Looking Ahead

(UR) Ukraine Q4 Final GDP Q/Q: No est v 1.7% prelim; Y/Y: 4.7%e v 4.7% prior

(NG) Nigeria Central Bank Interest Rate Decision: Expected to leave Interest Rates unchanged at 14.00%

(PT) Portugal Jan Current Account: No est v -€0.2B prior

06:00 (HU) Hungary Parliament elects new MPC members for central bank

06:00 (EU) Daily Euribor Fixing

06:00 (ZA) South Africa to sell combined ZAR2.35B in 2037, 2041 and 2044 bonds

06:15 (CH) Switzerland to sell 3-month Bills

06.30 (UK) Weekly John Lewis LFL sales data

06:35 (US) Fed's Dudley with BOE Gov Carney in London

06:30 (EU) ECB allotment in 7-Day Main Refinancing Tender

06:30 (HU) Hungary Debt Agency (AKK) to sell 3-month Bills

07:00 (UK) Mar CBI Industrial Trends Total Orders: 5e v 8 prior, Selling Prices: 32e v 32 prior

07:00 (IL) Israel Jan Manufacturing Production: No est v -0.5% prior

07:00 (TR) Turkey to sell Zero 2018 Bonds

07:30 (EU) ESM to sell €1.5B in 6-month Bills

07:45 (US) Daily Libor Fixing

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

08:30 (US) Q4 Current Account: -$129.0Be v -$113.0B prior

08:30 (CA) Canada Jan Retail Sales M/M: +1.5%e v -0.5% prior; Retail Sales Ex Auto M/M: +1.3%e v -0.3% prior

08:55 (US) Weekly Redbook Sales

09:00 (CN) China Feb Conference Board Leading Economic Index: No est v 1.1% prior

09:00 (RU) Russia announces weekly OFZ bond auction

09:15 (UK) Baltic Dry Bulk Index - 09:30 (NZ) Fonterra Global Dairy Trade Auction

10:00 (MX) Mexico Q4 Aggregate Supply and Demand Y/Y: 2.2%e v 1.6% prior

10:00 (EU) Weekly ECB Forex Reserves: No est v €281.9B prior

11:00 (BR) Brazil to sell I/L 2022, 2026, 2035 and 2055 Bonds

11:30 (US) Treasury to sell 4-Week Bills

12:00 (UR) Ukraine to sell Bonds

15:00 (AR) Argentina Q4 GDP Q/Q: No est v -0.2% prior; Y/Y: -1.9%e v -3.8% prior

15:00 (MX) Mexico CitiBanamex Survey of Economists

16:30 (US) Weekly API Oil Inventories

Weekly

    •    Last Candlesticks pattern: Shooting star
    •    Time of formation: 5 Sep 2016
    •    Trend bias: Down

Daily

    •    Last Candlesticks pattern: Long black candlestick
    •    Time of formation: 24 Jun 2016
    •    Trend bias: Down

GBP/USD – 1.2472

Although the British pound fell to as low as 1.2109 early last week, cable found decent demand there and staged a much stronger-than-expected rebound, dampening our bearishness and suggesting the fall from 1.2706 has ended there, hence consolidation with upside bias is seen for this rise from 1.2109 to extend further gain to 1.2500, then test of resistance at 1.2570, however, as broad outlook remains consolidative, reckon upside would be limited to 1.2600-10 and price should falter well below said resistance at 1.2706, bring retreat later.

On the downside, whilst initial pullback to 1.2400 cannot be ruled out, reckon support at 1.2335 would limit downside and bring such a rise later. Only a daily close below the Tenkan-Sen (now at 1.2292) would abort and suggest the rebound from 1.2109 has ended instead, risk weakness to 1.2240-45 and possibly towards 1.2200 but price should stay well above said support at 1.2109 (this month’s low), bring rebound later.

Recommendation: Buy at 1.2335 for 1.2535 with stop below 1.2235. 

On the weekly chart, although cable slipped early last week to 1.2109, the subsequent strong rebound formed a white candlestick, suggesting the fall from 1.2706 has ended there and consolidation with mild upside bias is seen for further gain to 1.2570 resistance, however, as broad outlook remains consolidative, reckon upside would be limited to 1.2650 and said resistance at 1.2706 would hold from here. Only a break of this resistance would shift risk to upside and signal another leg of corrective rise from 1.1986 low is underway for retracement of early downtrend to previous resistance at 1.2775 and later 1.2850-60 but price should falter below psychological resistance at 1.3000.

On the downside, expect pullback to be limited to 1.2400 and renewed buying interest should emerge around 1.2335 and bring another rise to aforesaid upside targets. Below 1.2240-50 would suggest the rebound from 1.2109 has ended instead, risk weakness to 1.2190-00 but downside should be limited to 1.2140-50 and said support at 1.2109 should remain intact. Only a drop below 1.2109 support would revive bearishness and extend weakness to 1.2050 but price should stay well above support at 1.1986.

The DAX Index has edged higher in the Tuesday session, as the DAX continues to have an uneventful week. Currently, the DAX is at 12,062.40. On the release front, it’s another quiet day in the eurozone, with no economic indicators on the schedule. The sole event is a meeting of EU finance ministers.

The recent Dutch election results were cheered by EU backers across the continent and boosted the euro. Next stop on the election train is France, which holds presidential elections next month. Polls have far rightist Marine Le Pen and centrist Emmanuel Macron running neck and neck in the first round of the presidential election on April 23. Still, Macron is expected to win in the second-round vote in May. In a highly-anticipated television debate on Monday, Macron and Le Pen had a chance to hawk their wears, and a survey found that Macron won the debate. Le Pen, a far right candidate and euro-sceptic, has pledged to take France out of the euro and hold a referendum on EU membership. Macron’s strong showing in the debate has improved market sentiment and helped boost the euro on Tuesday. France boasts the number two economy in the eurozone, so we can expect more volatility from the euro as we get closer to Election Day.

With the Fed’s quarter-rate point behind us, what’s next for Janet Yellen & Co.? The CME Group has priced a rate hike in May at just 6%, while a June move is priced at 54%. With a dearth of key fundamentals in the US this week, the markets are left to monitoring comments from FOMC members who will be speaking this week, including Fed Chair Janet Yellen. On Monday, Chicago Fed President Charles Evans said he expects the Fed to raise rates two more times this year. This echoes the Fed’s projection in its rate statement. Although three rate hikes in 2017 appears impressive, market players want four hikes, and have reacted with disappointment to the Fed’s more cautious approach. This has sent the US dollar lower, and the euro has improved to 5-week highs, briefly punching past the 1.08 line on Tuesday.

News and Events:

UK inflation accelerate faster than BoE expected

UK inflation accelerated substantially in February as the headline gauge rose 2.3%y/y versus 2.1% expected. More importantly, the core gauge, which excludes the most volatile components, climbed to 2%y/y (1.7% median forecast), adding pressure on the BoE. The pound sterling jumped sharply after the release as investors speculated about potential tightening measures from the central bank. GBP/USD was up 0.75% to 1.2450 this morning, while the pound rose 0.20% against the single currency with EUR/GBP hitting 0.8660.

Despite the fact that inflation accelerated faster than projected by the BoE at its February MPC meeting, we remain doubtful that the institution would take the risk to tighten its monetary policy at such an inappropriate time. Indeed, the government is about to trigger Article 50 and no one knows what is on the other side. In such a situation, the BoE cannot afford to reduce its support to the economy and will just have to sit tight and wait for inflation to decelerate. The committee projected that growth would slow over 2017 as households adjust their spending to lower real income growth, mostly due to the sharp depreciation of the sterling over the last few years.

In the short term, we are not ruling out further GBP strength with GBP/USD testing the 1.26 threshold.

Swiss watch exports fall...again

There is little respite for the Swiss watch industry despite broader improvements in global demand. Data released today showed that annual Swiss watch exports fell -10% to $1.50bn in February, further extending the sector's rapid decline witnessed since 2010. The negative data zapped growing optimism generated by year-end bounce and communication from leading watch exporters reporting solid demand. Swiss watch exports fell -26 to USA, -12 to Hong Kong, and 23 to UAE. However, China posted a 6.7% gain, a positive sign for the industry and China's domestic economic stability driver. Cleary the overvalued, uncompetitive Swiss CHF is having a significant effect on demand. However, changes in consumer behaviour must also be factored in. EURCHF remains the barometer for European political risk. With the result of the first French presidential debate and snap opinion polls suggesting a Macron victory, EURCHF rallied on fading political risk.

First French debate reveals clear two-horse race

The first of the French election televised debates kicked off last night with the six leading candidates taking to the podium on core election issues such as immigration, national security and economy.

Though relatively heated, with Macron and Le Pen in particular trading barbs, the debate did not reveal anything we did not already know. The debates agenda also lacked any focus on broader European issues and the current fragility of the EU. We would have been keen to gain further insight on how each potential president plans to engage with this issue. In particular, it would have been interesting to ascertain more concrete details from Le Pen’s concerning her Frexit plans as laid out in the National Front’s election manifesto.

Today, the single currency is enjoying a boost against the dollar with markets pricing in a stronger likelihood of a victory from Euro-centric candidate, Emmanuel Macron. At this stage, the election is rather looking like a three-horse race (Le Pen, Macron and Fillon) as o candidates such as Benoit Hamon and Jean-Luc Melenchon seem to be fading into the background. Hamon was the clear and outright loser of this debate. It is worth recalling that the socialist candidate, who was the victor of the left primary has now lost the support of Manuel Valls because of "diverging views”.debate. It is worth recalling that the socialist candidate, who was the victor of the left primary has now lost the support of Manuel Valls because of "diverging views”.

Today's Key Issues (time in GMT):

• Jan Trade Balance, last -2447m EUR / 08:00
• Feb Money Supply M3 YoY, last 2,90% CHF / 08:00
• Fed's Dudley Speaks on Reforming Bank Culture at Closed Event USD / 08:20
• Feb CPIH YoY, exp 2,20%, last 1,90% GBP / 09:30
• Feb CPI MoM, exp 0,50%, last -0,50% GBP / 09:30
• Feb CPI YoY, exp 2,10%, last 1,80% GBP / 09:30
• Feb CPI Core YoY, exp 1,70%, last 1,60% GBP / 09:30
• Feb Retail Price Index, exp 267,5, last 265,5 GBP / 09:30
• Feb RPI MoM, exp 0,80%, last -0,60% GBP / 09:30
• Feb RPI YoY, exp 2,90%, last 2,60% GBP / 09:30
• Feb RPI Ex Mort Int.Payments (YoY), exp 3,10%, last 2,90% GBP / 09:30
• Feb PPI Input NSA MoM, exp 0,10%, last 1,70%, rev 1,60% GBP / 09:30
• Feb PPI Input NSA YoY, exp 20,10%, last 20,50%, rev 20,10% GBP / 09:30
• Feb PPI Output NSA MoM, exp 0,30%, last 0,60% GBP / 09:30
• Feb PPI Output NSA YoY, exp 3,70%, last 3,50%, rev 3,60% GBP / 09:30
• Feb PPI Output Core NSA MoM, exp 0,20%, last 0,50% GBP / 09:30
• Feb PPI Output Core NSA YoY, exp 2,50%, last 2,40%, rev 2,50% GBP / 09:30
• Jan House Price Index YoY, exp 6,40%, last 7,20%, rev 5,70% GBP / 09:30
• Feb Public Finances (PSNCR), last -26.5b, rev -22.7b GBP / 09:30
• Feb Central Government NCR, last -27.8b GBP / 09:30
• Feb Public Sector Net Borrowing, exp 2.8b, last -9.8b, rev -11.7b GBP / 09:30
• Feb PSNB ex Banking Groups, exp 3.2b, last -9.4b, rev -11.0b GBP / 09:30
• Fed's Dudley, BOE's Carney Speak at Bank Ethics London Event USD / 10:35
• Mar CBI Trends Total Orders, exp 5, last 8 GBP / 11:00
• Mar CBI Trends Selling Prices, exp 32, last 32 GBP / 11:00
• Jan Retail Sales MoM, exp 1,50%, last -0,50% CAD / 12:30
• 4Q Current Account Balance, exp -$129.0b, last -$113.0b USD / 12:30
• Jan Retail Sales Ex Auto MoM, exp 1,30%, last -0,30% CAD / 12:30
• Conference Board China February Leading Economic Index CNY / 13:00
• Fed's George Speaks in Washington on U.S. Economy and the Fed USD / 16:00
• Bank of Canada Deputy Governor Lawrence Schembri Speech CAD / 19:45
• Fed's Mester Speaks at University of Richmond USD / 22:00
• 4Q BoP Current Account Balance, exp -$12.00b, last -$3.40b INR / 22:00
• Feb Tax Collections, exp 93000m, last 137392m BRL / 23:00

The Risk Today:

EUR/USD is challenging the resistance implied by its rising trendline (around 1.0795). A break of upside would signal persistent buying pressures. Key resistance is still given at a distance 1.0874 (08/12/2017 high). Strong support can be found at 1.0493 (22/02/2017 low). The technical structure suggests deeper increase towards resistance at 1.0874. 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 has successfully tested the support at 1.2110 and continues to bounce higher. A break of key resistance (at 1.2429) is needed to open the way for further strength. Yet, the pair remains in a clear downtrend suggesting short term correction. Key resistance can be located at 1.2570 (24/02/2017 high). Hourly support is at 1.2324 (03/17/2017 low). 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 has failed to break key resistance given at 115.62 (19/01/2016 high) confirming persistent selling pressure. The pair remains stuck in sideways trading pattern between 111.36 and 115.62. Hourly support given at 112.27 (intraday low). Hourly resistance can be located at 113.57 (16/03/2017 high). 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 has paused after sharp exit from uptrend channel. Hourly support is given at 0.9862 (31/01/2017 low) has been broken. Key resistance can be found at a distance at 1.0344 (15/12/2016 high). Expected to consolidate. 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.

Gold Consolidating around 1235.

Gold has risen sharply, nearly invalidating the bearish short-term outlook. The momentum seems back to bullish. Key resistance is located at 1263 (27/02/2017 high). Hourly support can be found at 1224.10 (16/03/2017 low).

In the long-term, the technical structure suggests that there is a growing upside momentum. A break of 1392 (17/03/2014) is necessary ton confirm it, A major support can be found at 1045 (05/02/2010 low).

Silver Consolidating after Friday gains..

Silver rose sharply Friday, invalidating the bearish outlook linked to the previous bearish pause. Correct pullback has failed to find seller indicating test of 17.56 resistance (16/03/2017 high). Strong support is given at 16.84 (27/01/2016 low).

In the long-term, the death cross indicates that further downsides are very likely. Resistance is located at 25.11 (28/08/2013 high). Strong support can be found at 11.75 (20/04/2009).

Crude oil Pausing above 48.00.

Crude oil's bearish pressures continues despite correct bounce due to a short-squeeze. The commodity had been unable to mount a serious challenge to resistance at 49.61 (08/12/2017 low) hourly support given at 47.09 (016/03/2017 low) Expected to see deeper selling pressures.

In the long-term, crude oil has recovered after its sharp decline last year. However, we consider that further weakness are very likely. Strong support lies at 24.82 (13/11/2002) while resistance can now be found at 55.24 (03/01/2017 high).

Weekly
    •    Last Candlesticks pattern: Doji
    •    Time of formation: 26 Sep 2016
    •    Trend bias: Sideways

Daily
    •    Last Candlesticks pattern: Shooting star
    •    Time of formation: 25 Oct 2016
    •    Trend bias: Near term up

USD/CHF – 0.9963

The greenback dropped again last week and has remained under pressure, adding credence to our bearish view that top has possibly been formed at 1.0171 earlier this month and consolidation with mild downside bias remains for test of 0.9930-35, however, a daily close below there is needed to confirm early rebound from 0.9861 has ended at 1.0171, bring further fall to said support at 0.9861. A drop below this level would revive bearishness and extend erratic decline from 1.0344 top for retracement of early upmove to 0.9850-55 (61.8% Fibonacci retracement of 0.9550-1.0344) and possibly towards 0.9800.

On the upside, whilst initial recovery to 1.0000-10 cannot be ruled out, reckon the Tenkan-Sen (now at 1.0052) would limit upside and bring another decline later. A break of the upper Kumo (now at 1.0103) would abort and prolong choppy trading within recent established broad range, however, said resistance at 1.0171 should remain intact. Only above 1.0171 would signal the erratic rise from 0.9861 (Jan’s low) is still in progress and may extend further gain to 1.0195-00, having said that, reckon key resistance at 1.0248 would cap upside and bring retreat later. 

Recommendation: Sell at 1.0010 for 0.9810 with stop above 1.0110.

On the weekly chart, last week’s selloff adds credence to the indicated shooting star bearish candlestick pattern, justifying our view that the rebound from 0.9861 low has ended there and consolidation with downside bias remains for weakness to 0.9930-35, however, a weekly close below there is needed to confirm and signal the fall from 1.0344 top has resumed for retracement of early upmove to 0.9850-55 (61.8% Fibonacci retracement) and possibly towards the Ichimoku cloud bottom (now at 0.9722) but reckon downside would be limited to 0.9690-00 and price should stay well above support at 0.9550.

On the upside, expect recovery to be limited to the Tenkan-Sen (now at 1.0016) and price should falter below 1.0075-80, bring another decline. Only break of said resistance at 1.0171 would extend the rebound from 0.9861 to 1.0195-00 but price should falter below key resistance at 1.0248, bring further choppy trading. A sustained breach above this level would signal the retreat from 1.0344 has ended, bring further gain to 1.0335-44 resistance area but break there is needed to signal early upmove has resumed for headway to 1.0400-10 and later 1.0500.

EUR/CHF Buying pressures increase.

EUR/CHF's bullish pressures increase. The medium-term pattern suggests us to see continued bearish pressures towards key support that can be found at 1.0623 (24/06/2016 low). Yet, the pair is facing stronger short-term bullish pressures.

In the longer term, the technical structure is mixed. Resistance can be found at 1.1200 (04/02/2015 high). Yet,the ECB's QE programme is likely to cause persistent selling pressures on the euro, which should weigh on EUR/CHF. Supports can be found at 1.0184 (28/01/2015 low) and 1.0082 (27/01/2015 low).

EUR/JPY Temporary surge.

EUR/JPY rejection at 122.88 has triggered a correction. Yet, the pair is very volatile. Supports stand at 120.55 (17/01/2017 low) and 120.02 (08/03/2017 low). Resistance stands at 122.88 (13/03/0217 high).

In the longer term, the technical structure validates a medium-term succession of lower highs and lower lows. As a result, the resistance at 149.78 (08/12/2014 high) has likely marked the end of the rise that started in July 2012. Strong support at 94.12 (24/07/2012 low) looks nonetheless far away.

EUR/GBP Bullish flag pattern.

EUR/GBP is correcting lower yet formation of bullish flag suggest reversal of current weakness targeting 0.9000. Key resistance is given at 0.8854 (15/01/2017 high). Support is located at 0.864505/02/2017).

In the long-term, the pair has largely recovered from recent lows in 2015. The technical structure suggests a growing upside momentum. The pair is trading above from its 200 DMA. Strong resistance can be found at 0.9500 psychological level.