Sample Category Title

EUR/CHF : 1.0717



EUR/CHF: Major wave 5 trough ended at 0.8426 and correction has commenced from there for subsequent gain towards 1.1400-1.1500.
 

Although the single currency staged a strong rebound to 1.0825, as euro met renewed selling interest there and has retreated, retaining our bearish view and consolidation with downside bias is seen for weakness to 1.0650-60, however, break of support at 1.0622 is needed to confirm early erratic decline from 1.1201 (2016 high) has resumed, bring subsequent selloff to 1.0550 and possibly towards 1.0500 but oversold condition should prevent sharp fall below latter level and reckon 1.0390-00 would hold from here, risk from there has increased for a rebound later.

To recap our preferred count, the decline from 1.6828 (end wave (B)) is labeled as the beginning of wave (C) which should unfold as an impulsive move with 1: 1.5326, 2: 1.6377 and wave 3 is sub-divided into (i): 1.4300, (ii): 1.5880 and wave (iii) is still unfolding with (1): 1.4577, (2): 1.5448 and wave (3) is an extended 3rd with i: 1.5006, ii: 1.5383, wave iii: 1.3073, then wave iv ended at 1.3925 and wave v at 1.3073, wave (4) ended at 1.3925 and wave (5) has ended at 1.2765 which also marked the low of wave (iii) and wave (iv) has ended at 1.3835 and wave (v) as well as larger degree wave 3 has ended at 1.0075. The selloff from 1.2650 signals wave 4 has ended there and we are taking a view that the wave 5 could also have ended 0.8426, hence consolidation is seen with mild upside bias for rebound to 1.1000 first, then towards 1.1400.

On the upside, expect recovery to be limited to 1.0750-60 and bring another decline. Only above said resistance at 1.0825 would abort and signal low has been formed, bring a stronger rebound to 1.0850 and later towards resistance at 1.0898 which is likely to cap euro’s upside, the pair shall head back south again from there.

Recommendation: Hold short entered at 1.0750 for 1.0550 with stop above 1.0825.

 
The long-term downtrend started from 1.9626 (Apr 1985) to 1.4166 (Sep 1995) is treated as wave (A) with A:1.6285 (Dec 1987), B: 1.9342 (May 1992) and C: 1.4166, then wave (B) ended at 1.6828 with A: 1.7147 (Feb 1997), B: 1.4398 (Sep 2001), C: 1.6828 (Nov 2007), therefore, wave (C) is now in progress with the breakdown indicated as above. This wave (C) already met indicated downside target at 1.1455/60 and 1.1300, it could have ended at 0.8426, consolidation with mild upside bias is seen for gain to 1.1000 and later towards 1.2000.

AUD/USD     –  0.7581

AUD/USD – Wave 5 of C and (B) has possibly ended at 1.1081




Although aussie has recovered after finding support at 0.7491 and consolidation with initial upside bias is seen for gain to 0.7600-05, reckon upside would be limited to 0.7630-35 and bring another decline, below 0.7530-35 would bring retest of 0.7491 but break there is needed to signal top has indeed been formed at 0.7741, bring retracement of recent upmove to 0.7455-60 but reckon downside would be limited to 0.7425-30 (50% Fibonacci retracement of 0.7158-0.7696) and price should stay above 0.7360-65 (61.8% Fibonacci retracement), bring another rise later.



We are keeping our count that top has been formed at 1.1081 (wave 5 of V) and major correction (A-B-C-X-A-B-C) has commenced, indicated downside targets at 0.7945 (61.8% Fibonacci retracement of entire rise from 0.6007-1.1081) and 0.7750 had been met and downside bias is seen for further weakness to 0.6800, then 0.6700 but reckon 0.6500 would hold from here.

Our preferred count is that the rally from 0.6007 to 0.7270 (7 Jan 2009) is marked as wave A, the retreat to 0.6248 (2 Feb 2009) is wave B and the subsequent upmove is labeled as wave C with wave (iii) and wave (iv) ended at 0.8265 and 0.7700 respectively and wave (v) as well as 3 ended at 0.9407, then wave 4 ended at 0.8066 (instead of 0.8578). The wave 5 has met our indicated projection target of 1.1060 and could ended at 1.1081, this level is now treated as the peak of wave (C) as well as larger degree wave B, hence major fall in wave C has commenced, our initial downside target at psychological support at 0.7000 has just been met and further weakness to 0.6500 would be seen later.



On the upside, whilst recovery to 0.7600-05 cannot be ruled out, reckon upside would be limited to 0.7635-40 and bring another decline. Above 0.7700 would risk retest of said resistance at 0.7741 but break there is needed to extend recent rise from 0.7158 to resistance at 0.7778. Looking ahead, only a break of this level would suggest another leg of major corrective upmove from 0.6827 low is underway for retest of 0.7835 resistance first, then 0.7900, however, psychological resistance at 0.8000 should hold from here.



Recommendation: Sell at 0.7635 for 0.7450 with stop above 0.7735


Our alternate count on the daily chart treated the top formed in 2008 at 0.9851 could be a larger degree wave I and was followed by a deep and sharp correction in wave II to 0.6007 and wave III is unfolding from there.

The long-term uptrend started from 0.4775 (2 Apr 2001) with an impulsive structure. Wave I is labeled as 0.4775 to 0.9851 (15 Jul 2008), wave II has ended at 0.6007 (Oct 2008) and wave III is still in progress which may extend further gain to 1.1265.

On the 4H chart of EURUSD we can see price undergoing a minor bearish breakdown from the 1.0714 level, where a potential top for the correction in wave 2 could have been found. Well, if that is the case, then more weakness may be in store for the pair and ideally price will break beneath the wave x around the 1.0494 region in days ahead.

EURUSD, 4H

News and Events:

Fed set to increase borrowing rates by 25bps

There is almost no doubt no that the FOMC will announce a tightening of its monetary policy this evening, especially considering the relative solid job report that was released last Friday. Yet the FOMC's confidence seem to be based more on sentiment indicators and massive rally in equity markets rather than actual economic data. While there have been bright spots, lagging inflation data and weak real wage growth suggest not everything US economic is humming. It's likely that the rhetoric from the Fed and sudden repricing of the policy path with three 25bp hike in 2017 is overdone. We suspect that growing possibility that growth will remain subdued longer than market expectations. The fact that real wage growth actually went negative indicates that fear of inflation surging is unlikely and that the recent pickup in the headline gauge was mostly driven by the recovery of commodity prices.

We are convinced that Fed members will restrain themselves from releasing a hawkish statement and forecast that would heightened market's expectations. The Fed over the last few months, the Fed has been modifying slightly its communications in favour of a more neutral ton, which gives the Fed the freedom to adjust its communication to the incoming economic data. We believe Janet Yellen will adopt a cautious ton and wording as the US economy is still in a recovery process. Therefore, the risk is mostly on the downside for the USD.

Dutch Elections - Further Uncertainty Risk

Wednesday 15th March brings a critical litmus test of the European political landscape. The Dutch general elections will provide a gauge of the populist sentiment in the Eurozone. The race between the mainstream VVD party and anti EU PVV party remains close. According to recent polls, PVV had lost ground yet events surrounding Turkey's President Erdogan, might have inflamed immigrant issues, supporting the PVV policy stance. Yet, due to the nature of the political structure of the Netherlands even a resounding PVV victory is unlikely to have immediate implications for the EU and Euro. The reason is that the mainstream parties that the PVV need to build a coalition have ruled out forming a government with Geert Wilders, suggesting that the VVD will continue to head any coalitions. Of course this is politics 2.0 and anything can happen (a strong showing by PVV entices parties to reverse alliances or PVV will become diminished by the historically liberal nation). However, regardless of the actual outcome the key result is likely to indicate a fragmented government and sustained threat to EU. For markets this is the biggest immediate risk, a Brussels frozen by uncertainty. Any gains in Euro (due primarily to shifting expectations for ECB monetary policy) will likely be tempered by the politically landmine filled event calendar. A positive outcome in the Netherlands will only lead to French and German elections and now the destabilizing potential Scottish independence referendum.

EUR/CHF remains the key FX trade to hedge an anti EU outcome. This morning, there was no clear trend across EUR crosses. The pound sterling was the best performer against the single currency as it reversed yesterday's sharp losses. EUR/GBP eased to 0.8697 after failing to break the 0.8785 resistance. The closest support can be found at 0.8591 (50dma).

Today's Key Issues (time in GMT):

• Feb PPI MoM, last -0,50% DKK / 08:00
• Feb PPI YoY, last 4,10% DKK / 08:00
• Feb Central Gov't Budget Balance, last 11.43b TRY / 08:00
• Feb Producer & Import Prices MoM, exp 0,40%, last 0,40% CHF / 08:15
• Feb Producer & Import Prices YoY, exp 1,80%, last 0,80% CHF / 08:15
• Riksbank's Ingves Speaks in Frankfurt SEK / 08:30
• Jan Retail Sales MoM, exp 0,20%, last -0,50% EUR / 09:00
• Jan Retail Sales YoY, exp 0,80%, last -0,20% EUR / 09:00
• Feb Claimant Count Rate, last 2,10%, rev 2,20% GBP / 09:30
• Feb Jobless Claims Change, last -42.4k, rev -41.4k GBP / 09:30
• Jan Average Weekly Earnings 3M/YoY, exp 2,40%, last 2,60% GBP / 09:30
• Jan Weekly Earnings ex Bonus 3M/YoY, exp 2,50%, last 2,60% GBP / 09:30
• Jan ILO Unemployment Rate 3Mths, exp 4,80%, last 4,80% GBP / 09:30
• Jan Employment Change 3M/3M, exp 87k, last 37k GBP / 09:30
• Jan General Government Debt, last 2217.7b EUR / 09:30
• ECB's Praet speaks in Frankfurt EUR / 09:30
• 4Q Employment QoQ, last 0,20% EUR / 10:00
• 4Q Employment YoY, last 1,20% EUR / 10:00
• 1Q BER Business Confidence, last 38 ZAR / 10:00
• Feb CPI FOI Index Ex Tobacco, last 100,6 EUR / 10:00
• Feb F CPI EU Harmonized YoY, exp 1,60%, last 1,60% EUR / 10:00
• Mar FGV Inflation IGP-10 MoM, exp 0,20%, last 0,14% BRL / 11:00
• Jan Retail Sales Constant YoY, exp 1,10%, last 0,90% ZAR / 11:00
• Jan Retail Sales MoM, exp 0,20%, last -2,30% ZAR / 11:00
• mars.10 MBA Mortgage Applications, last 3,30% USD / 11:00
• Mar Empire Manufacturing, exp 15, last 18,7 USD / 12:30
• Feb CPI MoM, exp 0,00%, last 0,60% USD / 12:30
• Feb CPI Ex Food and Energy MoM, exp 0,20%, last 0,30% USD / 12:30
• Feb CPI YoY, exp 2,70%, last 2,50% USD / 12:30
• Feb CPI Ex Food and Energy YoY, exp 2,20%, last 2,30% USD / 12:30
• Feb CPI Core Index SA, exp 251,155, last 250,783 USD / 12:30
• Feb CPI Index NSA, exp 243,416, last 242,839 USD / 12:30
• Feb Real Avg Weekly Earnings YoY, last -0,60%, rev -0,50% USD / 12:30
• Feb Real Avg Hourly Earning YoY, last 0,00%, rev 0,10% USD / 12:30
• Feb Retail Sales Advance MoM, exp 0,10%, last 0,40% USD / 12:30
• Feb Retail Sales Ex Auto MoM, exp 0,10%, last 0,80% USD / 12:30
• Feb Retail Sales Ex Auto and Gas, exp 0,20%, last 0,70% USD / 12:30
• Feb Retail Sales Control Group, exp 0,20%, last 0,40% USD / 12:30
• mars.13 CPI WoW, last 0,00% RUB / 13:00
• mars.13 CPI Weekly YTD, last 0,90% RUB / 13:00
• Feb Existing Home Sales MoM, last -1,30% CAD / 13:00
• Bank of Italy Governor Visco Speaks at Milan Event EUR / 13:45
• Mar NAHB Housing Market Index, exp 65, last 65 USD / 14:00
• Jan Business Inventories, exp 0,30%, last 0,40% USD / 14:00
• mars.10 DOE U.S. Crude Oil Inventories, exp 3133k, last 8209k USD / 14:30
• mars.10 DOE Cushing OK Crude Inventory, exp 500k, last 867k USD / 14:30
• mars.15 FOMC Rate Decision (Upper Bound), exp 1,00%, last 0,75% USD / 18:00
• mars.15 FOMC Rate Decision (Lower Bound), exp 0,75%, last 0,50% USD / 18:00
• Federal Reserve Board Chairwoman Janet Yellen holds a news... USD / 18:30
• Jan Net Long-term TIC Flows, last -$12.9b USD / 20:00
• 4Q GDP SA QoQ, exp 0,70%, last 1,10% NZD / 21:45
• 4Q GDP YoY, exp 3,20%, last 3,50% NZD / 21:45
• Feb Foreign Direct Investment YoY CNY, exp -4,20%, last -9,20% CNY / 23:00

The Risk Today:

EUR/USD continues to strengthen despite ongoing bearish consolidation. Hourly resistance given at 1.0679 (16/02/2017 high) has been broken while hourly support at 1.0493 (22/02/2017 low). The technical structure suggests deeper increase towards resistance at 1.0874 (08/12/2017 high). 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 continues to edge lower despite ongoing consolidation since the pair has broken support given at 1.2254 (19/01/2017 low). The road is wide-open for further decline. Hourly resistance is now given at 1.2300 (05/03/2017 high). 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 is pushing higher towards key resistance given at 115.62 (19/01/2016 high). Hourly support can be found at 113.56 (06/03/2017 low). Expected to push higher. We favor a long-term bearish bias. Support is now given at 96.57 (10/08/2013 low). A gradual rise towards the major resistance at 135.15 (01/02/2002 high) seems absolutely unlikely. Expected to decline further support at 93.79 (13/06/2013 low).

USD/CHF is still riding within uptrend channel and is on its way to monitor support implied by lower bound of the uptrend channel. Key resistance is given at a distance at 1.0344 (15/12/2016 high). Hourly support is given at 1.0075 (13/03/2017 low). 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.

EUR/JPY - 121.85

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

Original strategy:

Bought at 121.80, Target: 123.80, Stop: 121.20

Position: - Long at 121.80
Target: - 123.80
Stop: - 121.20

New strategy :

Exit long entered at 121.80,

Position: - Long at 121.80
Target:  -
Stop:-

Although euro recovered after finding support at 121.63, the retreat from 122.89 suggests near term downside risk remains for this move to bring retracement of recent upmove to 121.45-50, however, break of previous resistance at 121.13-19 is needed to signal top has been formed at 122.89, bring further weakness to 120.50-60 first.

In view of this, would be prudent to exit long entered at 121.80 and stand aside for now. Above 122.14 (previous support now resistance) would bring rebound to 122.64 resistance but break there is needed to revive bullishness and signal the pullback from 122.89 has ended, bring retest of this level, break there would extend recent rise from 118.24 to 123.30-35. Looking ahead, a sustained breach above this level is needed to retain bullishness and signal early erratic fall from 124.10 top has ended at 118.24, bring further rise to 123.85-90 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).

AUD/USD – 0.7584

Recent wave: Wave 5 ended at 1.1081 and major correction has commenced for fall to 0.7000 and then towards 0.6500-10

Trend: Near term up

New strategy :

Stand aside

Position: -
Target:  -
Stop:-

As aussie has rebounded again after finding support at 0.7540 yesterday, retaining our view that further consolidation above indicated support at 0.7491 would be seen and recovery to 0.7610-15 cannot be ruled out, however, a sustained breach above resistance at 0.7633 is needed to confirm a temporary low has been formed at 0.7491, bring stronger rebound to 0.7665-70, above there would suggest the fall from 0.7741 top has ended, then gain to 0.7700 would follow.

On the downside, below support at 0.7530-40 would suggest the rebound from 0.7491 has ended, bring retest of this level, break there would signal recent decline from 0.7741 has resumed and extend weakness to previous support at 0.7543 which is likely to hold on first testing.

On the 4-hour chart, the move from 0.8066 is the wave 5 with i: 0.8860, ii: 0.8315, wave iii is an extended move ended at 1.0183, iv: 0.9706 and wave v has ended at 1.1081 (also the top of entire wave 5). The subsequent selloff is the major correction which is unfolding as ABC-X-ABC and 2nd A leg has ended at 0.8848, followed by a-b-c wave B which ended at 0.9758, hence, 2nd C wave is now in progress and indicated downside target at 0.7000 and 0.6950 had been met, so further fall to 0.6710-20 cannot be ruled out.

EUR/USD

Current level - 10627

The slide from 1.0712 is complete and the intraday bias is slightly positive above 1.0600, with a risk of a tight test at 1.0660 resistance. My outlook on the senior frames is bearish below 1.0660, for a break through 1.0600, towards 1.0450. Crucial on the upside is 1.0712 high.

Profit-taking affects gold curbing silver and platinum

USD/JPY

Current level - 114.72

My outlook here is bullish above 114.50, for an upswing towards 115.70. Crucial on the downside is 114.10 area.

GBP/USD

Current level - 1.2219

The recent reversal at 1.2107 signals a positive bias, for a violation of 1.2250, towards 1.2300 area. Key intraday support lies at 1.2170.

Weekly

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

Daily

• Last Candlesticks pattern: Shooting star
• Time of formation: 8 Sep 2016
• Trend bias: Down
  


Although aussie slipped again last week and fell to as low as 0.7491, as the pair found good support there and has rebounded, retaining our bullishness and consolidation with upside bias is seen for further gain to the Kijun-Sen (now at 0.7616), then test of resistance at 0.7633, however, a daily close above latter level is needed to signal low is formed, bring a stronger rebound to 0.7665-70. Looking ahead, only above 0.7700 would signal the pullback from 0.7741 has ended, bring retest of this level, break there would confirm recent upmove has resumed and extend gain to previous chart resistance at 0.7778, above there would retain bullishness and confirm early erratic upmove from 0.6827 (2016 low) has resumed for retest of 0.7835 (2016 high) first.



On the downside, expect pullback to be limited to 0.7540 and bring such a rebound. Below said support at 0.7491 would extend the fall from 0.7741 top for retracement of recent upmove towards the lower Kumo (now at 0.7427). Only a daily close below the lower Kumo would shift risk to the downside and signal recent rise has ended, bring weakness to 0.7390-00 and possibly towards 0.7350 but reckon 0.7300-10 would remain intact, bring rebound later.



Recommendation: Hold long entered at 0.7515 for 0.7715 with stop below 0.7490.



On the weekly chart, although aussie’s retreat from 0.7741 has kept price under near term pressure and further consolidation below said resistance would be seen, reckon downside would be limited to last week’s low at 0.7491 and bring rebound later, above 0.7630-35 would bring test of 0.7700 but break of said resistance at 0.7741 is needed to extend the rebound from 0.7158 towards resistance at 0.7778, however, as broad outlook remains consolidative, reckon upside would be limited and price should falter below 2016 high at 0.7835. Looking ahead, only above this level would suggest an upside break of recent established broad range has occurred, bring further subsequent rise towards 0.7900.

On the downside, assize’s downside is likely to be limited to the upper Kumo (now at 0.7540) and bring another rebound. Below said support at 0.7491 would risk test of the Kijun-Sen (now at 0.7468) but break there is needed to signal top is formed, bring weakness to 0.7400, break there would add credence to this view, bring subsequent fall to the lower Kumo (now at 0.7331), a drop below 0.7285-90 support would indicate the rebound from 0.7158 has ended and bring further decline to 0.7200-10, then towards strong support area at 0.7145-58.

'[The fact that confidence] only shows a slight upward movement is a reflection of the current uncertainty surrounding future economic development. With regard to the economic situation in Germany, no clear conclusion can be drawn from the most recent economic signals'. - Achim Wambach, ZEW

Investor sentiment in the Euro zone's largest economy, Germany, improved markedly in March but less than analysts expected, a report released on Tuesday showed. The Mannheim-based Centre for European Economic Research (ZEW) said its German Economic Sentiment Index came in at 12.8 points for March, slightly up from the preceding month's 10.4. However, market analysts anticipated a bigger increase to 13.2 during the reported period. Data also showed the Current Conditions Index climbed to 77.3 from 76.4 points seen in February, falling behind analysts' expectations for a rise to 78.0. The ZEW President Professor Archim Wambach highlighted that risks surrounding the upcoming federal elections and the future of US foreign policy remained high, and, therefore, it was not possible to provide a clear view on the current state of the German economy. In the meantime, the Euro zone ZEW Indicator of Economic Sentiment advanced to 25.6 points in March from the prior month's 17.1, surpassing forecasts for a reading of 19.3. Furthermore, the indicator for the current economic situation in the region came in at 7.4 in March, up from February's 2.8. Any reading above the 0.0-point level reflects general investor optimism. The Euro fell against other major currencies shortly after the release.

'New Zealand earned $2.0 billion from investment overseas, $129 million more than in the September quarter. A large portion of this extra income was reinvested back into the overseas subsidiaries, instead of being paid out as dividends'. - Daria Kwon, Statistics New Zealand

New Zealand's current account deficit dropped markedly during the last quarter of 2016 amid stronger tourism and higher reinsurance flows into New Zealand, following the November earthquake, official figures revealed on Tuesday. Statistics New Zealand reported the country's current account deficit fell to NZ$2.34 billion in the Q4 of 2016, surpassing analysts' expectations for a NZ$2.43 billion deficit. Meanwhile, the preceding quarter's gap of NZ$4.89 billion was revised up to NZ$5.03 billion. On an annual basis, the country's deficit came in at NZ$7.112, accounting for 2.7% of GDP, following 3% in the Q3 of 2016. Analysts expected the deficit to account for 2.8% of GDP. Data also showed that the number of tourists coming to New Zealand and the amount of money they spend rose markedly. Thus, service spending climbed to a $1.2 billion surplus, $174 million up from the prior quarter. Moreover, Statistics New Zealand said that overseas reinsurance claims, submitted after the November 7.8 magnitude earthquake hit the town of Kaikoura, also boosted fund flows in the country. Analysts suggest that the better-than-expected current account deficit would be highly welcomed by the Reserve Bank of New Zealand that holds a meeting next week. However, markets do not expect the Central bank to raise its key interest rate at the upcoming meeting.