Sample Category Title

EUR/JPY - 122.52

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 :

Buy at 121.80, Target: 123.80, Stop: 121.20

Position: -
Target:  -
Stop:-

As the single currency has retreated after marginal rise to 122.89, suggesting minor consolidation below this level would be seen and pullback to 122.00-05 cannot be ruled out, however, reckon downside would be limited to 121.70-80 and bring another rise later, above said resistance at 122.89 would signal the rise from 118.24 low is still in progress and may extend further gain 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.

In view of this, would not chase this rise here and would be prudent to reinstate long on pullback as 121.70-80 should limit downside and bring another rise. Below 121.30 would abort and signal top is formed instead but only break of previous resistance at 121.13 would confirm and bring further fall to 120.45-50 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).

Daily Pivots: (S1) 1.4080; (P) 1.4130; (R1) 1.4194; More...

With 1.4064 minor support intact, intraday bias in EUR/AUD remains on the upside first. We're favoring the case of medium term trend reversal defending key support level at 1.3671, on bullish convergence condition in daily MACD. Rise from 1.3624 should target 1.4289 resistance first. Sustained break there will affirm our bullish view and target 1.4721 key resistance next. On the downside, below 1.4064 minor support will turn bias neutral and bring consolidation. But downside should be contained above 1.3874 support and bring another rally.

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.

Daily Pivots: (S1) 139.20; (P) 139.87; (R1) 140.22; More...

Intraday bias in GBP/JPY remains neutral for the moment as it's bounded in choppy trading inside range of 138.53/142.79. Price actions from 148.42 are viewed as a consolidation pattern. On the downside, break of 138.53 support will bring deeper decline to 136.44 support and possibly below. However, we'd expect strong support at 50% retracement of 122.36 to 148.42 at 135.39 to bring rebound. On the upside, above 142.79 will turn bias back to the upside for 144.77 and above.

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 with a test on 122.36 low next. Though, sustained break of 150.42 will extend the rebound towards 61.8% retracement at 167.78.

AUD/USD – 0.7576

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

Original strategy :

Sold at 0.7605, stopped profit at 0.7585

Position: - Short at 0.7605
Target:  -
Stop: - 0.7585

New strategy :

Stand aside

Position: -
Target:  -
Stop:-

Despite last week’s anticipated fall to 0.7491, lack of follow through selling and the subsequent stronger-than-expected rebound dampened our bearishness and suggest a temporary low has possibly been formed there, hence consolidation with mild upside bias is seen for further gain to 0.7600-10, however, break of resistance at 0.7633 is needed to add credence to this view, bring a 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.

In view of this, would be prudent to stand aside in the meantime. Below  0.7525 minor support would revive bearishness and bring test of said support at 0.7491 but break of this last week’s low is needed to signal the fall from 0.7741 top has resumed for further fall to previous support at 0.7543 first. 

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.

Daily Pivots: (S1) 121.70; (P) 122.26; (R1) 123.03; More...

Intraday bias in EUR/JPY remains on the upside for the moment as the rebound from 118.23 should continue. As noted before, correction from 124.08 has completed at 118.23 after defending 118.45 cluster support (38.2% retracement of 109.20 to 124.08 at 118.39). More importantly, whole rise from 109.20 is likely resuming. Further rally should now be seen to 124.08 high. Break will confirm this bullish case and target 126.09 key resistance next. On the downside, below 121.88 minor support will turn bias neutral and bring retreat before staging anther rally.

In the bigger picture, current development suggests that medium term rise from 109.20 is still in progress. Focus is now 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 will extend the fall from 149.76 through 109.209 low.

Sunrise Market Commentary

• Rates: Consolidation into Fed meeting?
  Today's eco calendar is uneventful and scheduled ECB governors probably won't touch on monetary policy. We expect US Treasuries to consolidate going into Wednesday's Fed meeting, keeping US yields below key resistance levels. On European markets, the Bund sell off continued on Friday on rumours that the ECB discussed hiking rates before ending QE.
• Currencies: EUR/USD rebounds on USD softness and ECB rate hike rumours
  On Friday, solid payrolls were not enough to support further USD gains. At the same time, euro traders were spooked by rumous that some ECB members advocated an ECB rate hike ahead of QE tapering. Today, USD consolidation/softness might be on the cards ahead of the FOMC decision. Will ECB speculation continue to support the euro?

The Sunrise Headlines

• US equities closed the session with modest gains (S&P 0.33%) after a late session up-move that erased post-payrolls losses. Asian stocks start the week on a positive note as the dollar remains weaker.
• Oil continues its slide for the fourth consecutive session, still on fears that increased shale oil production offsets the OPEC production cut.
• Mr. Macron would get 26% of the vote in the first round of the French elections, up 2% points from a week ago, according to a BVA poll. Ms.Le Pen's support was unchanged (26%), while Francois Fillon's climbed one point to 20%.
• Contrary to bullish market reaction, the ECB didn't signal a coming change to its policy mix, because officials concluded that the outlook for inflation hadn't improved much since December, the Belgian governor Smets told the WSJ.
• ECB policy makers considered whether rates could rise before their bond-buying program comes to an end, according to people familiar with the matter.
• The Icelandic government announced that effective Tuesday it will lift almost all of the remaining capital controls, allowing its citizens, corporations and pension funds full access to the global capital markets.
• Today's calendar is uneventful, but later this week US data (retail sales and CPI) and central bank meetings (FOMC, BoE, BOJ, Norges Bank, SNB) colour trading

Currencies: EUR/USD Rebounds On USD Softness And ECB Rate Hike Rumours

EUR/USD 1.07 on USD softness and ECB rumours

On Friday, the strong US payrolls, confirming a healthy labour market, was largely discounted and unable to trigger another up-leg in yields. The dollar even fell prey to a buy-the-rumour, sell the fact reaction. At the same time, there were rumours that (some) ECB members had discussed the scenario of a rate hike before ending the bond buying programme. These rumours also supported the euro. EUR/USD finished the session at 1.0673 (from 1.0577). USD/JPY dropped back low 115 to close the day at 114.79.

Overnight, Asian equities show modest to moderate gains. The soft reaction (yields & USD) to Friday's payrolls is supportive for regional markets. The dollar is holding near the post-payrolls lows. USD/JPY trades in the 114.70/75 area. EUR/USD remains also well bid on ECB rumours (see higher). ECB's Smets in a WSJ interview said that the ECB didn't signal a change in policy stance. Even so, EUR/USD trades near1.07.

Today, speeches of ECB Liikanen, Lautenschlaeger and Draghi will address nonmonetary policy issues. Later this week, the focus is on the FOMC meeting & Dutch elections. In the Dutch parliamentary elections (Wednesday) the score of the far right PVV party of Wilders will get attention. If he scores well, it might raise fears that Le Pen might also do well in the French election. Regarding the FOMC, a rate hike is fully discounted (98%). Attention will go to the press conference and the economic and rate projections. We raised our expectation to four rate hikes this year, but we doubt this will already be seen in the median 2017 rate projections (3 hikes). It is more likely for the 2018/2019 median projection to be raised from 3 to 4 rate hikes. The payrolls were not strong enough to trigger further USD gains. At the same time, rumours on a future change in the ECB policy supported a euro rebound. Short-term, the dollar needs additional positive news to start a new up-leg (e.g. a higher Fed rate hike path/dots). As such a signal won't come before Wednesday, some USD softness might persist. The Dutch elections are in theory a negative for the euro. However, the market is currently more nervous on the ECB rate hike rumours. We maintain a USD positive bias MT/LT, but we don't feel to rush in to add EUR/USD shorts at this stage. The correction might have some further to go.

Of late USD/JPY profited most from higher core/US bond yields. The 115.62 range top, came within reach on Friday, but a real test didn't occur. Some shortterm consolidation might be on the cards. Recent gains of the dollar against the euro were less convincing. A first intermediate resistance at 1.0679 is broken. We still assume EUR/USD 1.0829/74 will be difficult to regain. A sell EUR/USD on upticks remains favoured, but the correction might have some further to go.

EUR/USD: rebounds despite soft payrolls as markets ponder rumours on ECB rate hike

EUR/GBP

EUR/GBP extends uptrend on euro strength

On Friday, the UK data were close to expectations and didn't change the assessment of the UK economy. Their impact on sterling was negligible. Sterling basically continued the trends from the previous days. EUR/GBP extended its gradually uptrend. Rumours that the ECB might consider raising rates before the end of the APP programme accelerated the EUR/GBP rebound. The pair closed the session at 0.8776 (from 0.8695). Cable hovered near the recent lows mostly in the upper half of the 1.21 big figure. The inability of the dollar to make any progress on the payrolls blocked the downside. The pair closed the session at 1.2167.

Today, there are no important UK data. The focus will again be on Brexit, as the debate on the Brexit bill returns to the House of Commons. It will debate on the amendments of the House of lords. There is still some uncertainty whether PM will have enough backing from her own conservative Party to overrule the amendments of the Lords. The internal rift in the Conservative party is a slightly negative for sterling. However, main scenario remains that Article 50 will be triggered before the end of March. Sterling sentiment softened of late. The euro was in better shape helping EUR/GBP to break the 0.8592 resistance, which improved the technical short-term EUR/GBP picture. We don't expect a sustained EUR/USD rebound , but a combination of temporary euro consolidation and ongoing sterling softness might trigger some more ST EUR/GBP gains. The break north of 0.8645 reinforced the ST positive momentum. The 0.8854 correction top is the next key resistance.

EUR/GBP uptrend continues. 0.8854 Jan. top is next key resistance

Download entire Sunrise Market Commentary

Weekly

• Last Candlesticks pattern: Shooting star 
• Time of formation: 03 May 2016
• Trend bias: Down

Daily

• Last Candlesticks pattern: Shooting star
• Time of formation: 3 May 2016
• Trend bias: Sideways

EUR/USD – 1.0698

Although the single currency retreated after meeting resistance at 1.0640, as euro found renewed buying interest at 1.0525 and has staged another strong rebound, retaining our bullish view that further consolidation above support at 1.0493 would be seen with mild upside bias for further gain to resistance at 1.0714 but a daily close above is needed to signal the pullback from 1.0829 top has ended at 1.0493 earlier, bring subsequent rise to 1.0745-50 and then 1.0780-90 but price should falter well below said resistance at 1.0829.

On the downside, whilst initial pullback to 1.0650-60 cannot be ruled out, reckon 1.0595-00 would contain downside and bring another rise. Below 1.0560 would risk another test of said support at 1.0525 but break there is needed to abort and signal the erratic rise from 1.0493 low has ended, bring another fall towards this level. Only a drop below support at 1.0493 would signal the fall from 1.0829 top is still in progress for further weakness to support at 1.0454 but a sustained breach below there is needed to signal the rebound from 1.0340 (Jan low) has ended, bring further fall to 1.0400 and later retest of said support which is likely to hold from here.

Recommendation: Hold long entered at 1.0580 for 1.0780 with stop below 1.0560.

On the weekly chart, euro found good support at 1.0525 last week and has rebounded again, a white candlestick with a relatively long lower shadow was formed, retaining our bullish view that further consolidation above 1.0493 would be seen and mild upside bias remains for another bounce to 1.0770-80, however, only a break of resistance at 1.0829 would suggest another leg of rise from 1.0340 low is underway, bring retracement of early decline to previous resistance at 1.0873 and later 1.0930-35 (61.8% Fibonacci retracement of 1.1300-1.0340) but reckon 1.1000 would limit upside and price should falter below 1.1050-60.

On the downside, although pullback to 1.0650-60 is likely, reckon 1.0595-00 would hold and bring another rebound. Below said support at 1.0525 would abort and risk retest of said support at 1.0493-96, a drop below 1.0493-96 would extend the retreat from 1.0829 towards key support at 1.0454 but a sustained breach below this level is needed to signal the rebound from 1.0340 has ended, then further fall to 1.0390-00 and later retest of this January low would follow.

Asia Mid-Session Market Update: Kospi outperforms as impeached but defiant Park vacates Blue House; Japan wholesale inflation accelerates; Western Australia elects Labor candidate

Friday US markets on close: Dow +0.2%, S&P500 +0.3%, Nasdaq +0.4%

Best Sector in S&P500: Utilities

Worst Sector in S&P500: Real Estate

Biggest gainers: ULTA +4.6%; EL +3.5%; ENDP +2.8%

Biggest losers: TDG -4.3%; SLG -2.0%; HES -2.0%

At the close: VIX 11.7 (-0.6pts); Treasuries: 2-yr 1.36% (flat), 10-yr 2.58% (-2bps), 30-yr 3.17% (-1bp)

Politics

(FR) France IFOP daily presidential poll for March 10th: Second round poll: Macron 25.5% v 25% prior , Le Pen 26.0% v 26.0% prior; Fillon 19.5% v 19.0% prior

(AU) Opposition Labor party's Mark McGowan wins Western Australia premier elections - press

Key economic data:

(JP) JAPAN JAN CORE MACHINE ORDERS M/M: -3.2% V -0.1%E; Y/Y: -8.2% (biggest decline in 8 months) V -3.7%E

(JP) JAPAN FEB PPI (CGPI) M/M: 0.2% (4-month low) V 0.2%E; Y/Y: 1.0% (2-year high) V 1.0%E

(NZ) New Zealand REINZ Feb House Sales Y/Y: -14.2% v -14.7% prior

Asia Session Notable Observations, Speakers and Press

Asian equity markets are tracking the optimism on Wall St on Friday, where a robust NFP print was solid enough to confirm healthy labor market and solidify expectations of a Fed hike this week but not too great that would magnify the case for more than 3 hikes this year. Korea's Kospi is leading the charge as impeached Pres Park has vacated presidential palace, but struck a defiant tone that "the truth will come out" about the controversial allegations of corruption against her office. Australia's ASX200 is underperforming, as mining and energy shares slump on lower commodity prices.

In FX, USD/JPY has retreated in line with US Treasury yields after NFP did not produce the blowout seen in the AFP report earlier. EUR/USD however has maintained its momentum toward 1-month high of 1.07 in the wake of more hawkish ECB sentiment last week. GBP traded with a softer tone after press reports that PM May could trigger Article 50 as soon as Tues, March 14th, but also that UK is drawing up contingency plans for the unlikely event it has to walk away from talks with the European Union without a deal.

Economic docket was largely limited to 2nd tier data from Japan, where rising regional wholesale inflation has sent PPI to a 2-year high on annualized basis.

China

(CN) China equities raised to Overweight at Goldman Sachs on reflation

(CN) China Commerce Min Zhong Shan: Trade war between China and US would harm both economies; vows stronger oversight of companies investing overseas

(CN) PBoC Deputy Gov Gongsheng: China should prevent household leverage from rising - Chinese press

(CN) China Banking Regulatory Commission (CBRC) ofifcial Yu Xuejun: China could consider a reduction to the Reserve Requirement Ratio (RRR) to ensure that liquidity does not drop when the PBoC's medium-term lending facility and pledged supplementary lending instruments expire

(CN) China National Development and Reform Commission (NDRC) Vice Chairman Ning Jizhe: survey-based unemployment rate in 31 major cities was about 5% in Jan-Feb - press

Japan

(JP) Japan Cabinet approval rating -5pts to 50% - Mainichi

(JP) BoJ data shows that at the end of Jan, Japan bank holdings of JGBs fell to ¥79.59T, the first time below ¥80T since 2003 - Nikkei

Australia

(AU) Australia Treasurer Morrison: Macroprudential measures have had a positive effect; working to ease pressure on rising house prices

(AU) Opposition Labor party's Mark McGowan wins Western Australia premier elections - press

(AU) Westpac: Labor's victory in Western Australia elections slightly increases the risks of a downgrade for state's AA+/negative rating

(NZ) New Zealand Institute of Economic Research (NZIER) Survey: Raises FY16/17 CPI forecasts to 1.7% from 1.4%; Lowers FY17/18 inflation 1.7% from 1.8%

Korea

(KR) According to a survey by Korea International Trade Association (KITA), 56.2% of businesses say deployment of THAAD has hurt business - Korean press

(KR) South Korea Customs Service: Exports in the first 10 days of March rose 19.3% y/y - Korean press

(KR) South Korea's impeached President Park has vacated the presidential palace on Sat, two days after court ruling - press

Asian Equity Indices/Futures (00:00ET)

Nikkei +0.2%, Hang Seng +0.9%, Shanghai Composite +0.4%, ASX200 -0.4%, Kospi +1.2%

Equity Futures: S&P500 -0.1%; Nasdaq -0.1%, Dax -0.1%, FTSE100 flat

FX ranges/Commodities/Fixed Income (00:00ET)

EUR 1.0675-1.0700; JPY 114.65-114.90; AUD 0.7535-0.7575; NZD 0.6915-0.6940; GBP 1.2155-1.2180

Apr Gold +0.4% at 1,207/oz; Apr Crude Oil -0.8% at $48.09/brl; May Copper +0.5% at $2.62/lb

SPDR Gold Trust ETF daily holdings fall 8.9 tonnes to 825.2 tonnes; lowest since Feb 6th; 4th straight decline

iShares Silver Trust ETF daily holdings fall to 10,268 tonnes from 10,303 tonnes prior; 11-month low

(CN) PBOC SETS YUAN MID POINT AT 6.8988 V 6.9123 PRIOR (2nd consecutive firmer setting and strongest since March 7th)

(CN) PBOC to inject combined CNY30B v zero prior (1st injection, after 2 consecutive skips)

(JP) BoJ data shows that at the end of Jan, Japan bank holdings of JGBs fell to ¥79.59T, the first time below ¥80T since 2003 - Nikkei

(KR) South Korea sells 5-yr Govt bonds at 1.99%

Asia equities/Notables/movers

Australia

Evolution Mining EVN +6.3%, Northern Star NST +4.8%, Newcrest Mining NCM +5.2% (gold price rises)

BWP Trust BWP -2.7% (cut at UBS)

Oil Seach OSH -3.2% (oil price extends decline)

Japan

Toshiba 6502.JP +3.8% (speculation over Tec stake sale)

Pioneer 6773.JP +4.7% (raised at MS)

Toyota 7203.JP flat (annual wage talks with unions)

Hong Kong

China Lilang Ltd 1234.HK -2.1% (FY16 result)

ICBC 1398.HK +2.2% (raised at Goldman)

HSBC 5.hk +2.2% (AIA's Mark Tucker to be new chairman, replacing Douglas Flint; effective Oct 1st); AIA 1299.HK -2.8%

China Aoyuan Property Group Limited 3883.HK +5.1% (FY16 result)

China Resources Cement Holdings Limited 1313.HK +8.5% (FY16 result)

Daily Pivots: (S1) 1.0726; (P) 1.0762; (R1) 1.0825; More...

EUR/CHF's rally continues today and reaches as high as 1.0823 so far. Intraday bias remains on the upside for the moment. As noted before, a short term bottom was formed at 1.0629, ahead of 1.0620 key support, on bullish convergence condition in 4 hour MACD and daily MACD. More importantly, it's seen as an early sign of trend reversal after defending 1.0620 key support level. That is, correction from 1.1198 could have completed. Further rise should be seen to 1.0897 resistance next. On the downside, below 1.0776 minor support will turn bias neutral and bring consolidations first, before staging another rally.

In the bigger picture, the decline from 1.1198 is seen as a corrective move. Decisive break of 1.0897 resistance should confirm that it's completed. And in that case, larger up trend is resuming for another high above 1.1198. Meanwhile, sustained trading below 38.2% retracement of 0.9771 to 1.1198 at 1.0653 will target 50% retracement at 1.0485.

Weekly

• Last Candlesticks pattern: Hanging man
• Time of formation: 22 May 2016
• Trend bias: Down

Daily

• Last Candlesticks pattern: Shooting star
• Time of formation: 15 Feb 2017
• Trend bias: Down

USD/JPY – 114.70

As dollar has retreated after rising to 115.51, suggesting consolidation below this level would be seen and pullback to 114.20-25 and then 114.00-05 (38.2% Fibonacci retracement of 111.69-115.51) is likely, however, reckon support at 113.56-61 would limit downside and bring another rise later, only break of said resistance at 115.51 would retain bullishness and signal the erratic rise from 111.59 is still in progress for further gain to 116.00, then 116.85-90 but upside should be limited to 117.50-55, bring another retreat later.

On the downside, whilst initial pullback to 114.00-05 is likely, reckon downside would be limited to 113.56-60 (previous support and 50% Fibonacci retracement of 111.69-115.51) and bring another rise later. Only below 113.15 (61,8% Fibonacci retracement) would abort and signal top is formed instead, bring further fall to 112.75-85 but downside should be limited to 112.00 and price should stay above strong support at 111.59-69.

Recommendation : Buy at 113.75 for 115.75 with stop below 112.75

On the weekly chart, dollar’s rebound after holding above previous support at 111.59 has retained our view that further consolidation above this level would be seen and mild upside bias remains for gain to 115.51-62 resistance area but a weekly close above there is needed to suggest the pullback from 118.66 top has ended at 111.59, bring further gain to 116.40-50, break there would signal early upmove has resumed for headway to 116.40-50, then test of 116.87 resistance first.

On the downside, expect pullback to be limited to 113.56-61 support (also current level of the Tenkan-Sen), bring another rebound later. Below 113.10-15 would abort and suggest the rebound from 111.69 has ended instead, risk further fall to 112.50-60, then towards 112.00 but said support at 111.59-69 should hold from here, bring another rebound. Looking ahead, only a drop below there signal the retreat from 118.66 top is still in progress for retracement of recent upmove to support at 111.36, then towards 110.90-95 (50% Fibonacci retracement of 101.19-118.66), however, reckon downside would be limited to 110.00 and the Kijun-Sen (now at 109.38) should hold, bring another rebound later.