GOLD: The commodity closed lower the past week but it looks to trigger corrective recovery. On the downside, support comes in at the 1,200.00 level where a break will turn attention to the 1,190.00 level. Further down, a cut through here will open the door for a move lower towards the 1,180.00 level. Below here if seen could trigger further downside pressure targeting the 1,170.00 level. Conversely, resistance resides at the 1,220.00 level where a break will aim at the 1,230.00 level. A turn above there will expose the 1,240.00 level. Further out, resistance stands at the 1,250.00 level. All in all, GOLD looks to weaken further.

EURUSD: The pair faces further recovery pressure following its past week higher close. On the upside, resistance comes in at 1.0700 level with a cut through here opening the door for more upside towards the 1.0750 level. Further up, resistance lies at the 1.0800 level where a break will expose the 1.0850 level. Its weekly RSI is bullish and pointing higher suggesting further strength. Conversely, support lies at the 1.0600 level where a violation will aim at the 1.0550 level. A break of here will aim at the 1.0500 level. All in all, EURUSD faces further upside pressure.

EURGBP- The cross closed higher for second week in a row leaving risk of price bull continuation on the cards in the new week. Support lies at the 0.8700 level where a violation will turn focus to the 0.8650 level. A break will expose the 0.8600 level. Resistance resides at the 0.8800 level where a violation if seen will turn risk towards the 0.8850 level. Further up, resistance resides at 0.8900 level followed by the 0.8950 level. Its weekly RSI is bullish and pointing higher suggesting further upside pressure is likely. All in all, EURGBP remains biased to the upside short term.

The set of strong non-farm payroll data from US should have finalized the case for Fed to hike interest rate this week. Dollar was indeed given a boost over last week and ended strongly. Nonetheless, the greenback was firstly overwhelmed by strength in Euro, and secondly retreated on profit taking. Overall, Euro ended the week as the strongest major currency as supported by upbeat comments from ECB president Mario Draghi as well as rate speculations. Dollar followed as the second. At the other end, Sterling was troubled by worries over the fading impact it depreciation last year on the economy, uncertainties over Brexit terms, and uninspired by UK budget. The pound ended as the second weakest major currency next to Kiwi.

ECB Draghi deliver upbeat press conference

ECB left monetary policies unchanged as widely expected. Latest staff economic projections showed slight upgrade in the forecast for both growth and inflation in 2017 and 2018. More importantly, Draghi sound relatively upbeat in the post meeting press conference and noted that "there was a general recognition that the balance of risk has improved, certainly as far as growth is concerned". More in Cautiously Optimistic Draghi Sees No Urgency to Add Stimulus, Risks Less Pronounced.

Euro lifted further by rate speculations...

In addition, there were news reports on Friday saying that the ECB governing council members have discussed the possibility of raising interest rate before the asset purchase program ends by the end of the year. It's noted that some members were clearly unhappy with the adverse impacts of negative interest rates and would like to at least move them back to positive territory as soon as possible. Some analysts are predicting ECB to hike rates around the turn of 2017/18 with some forecasting a hike as early as this September.

...focus temporarily away from politics

The above developments sent the common currency broadly higher last week. Traders are temporarily shifting their attention away from the political uncertainties in Eurozone. And of course, based on recent economic data, the outlook for Eurozone has brightened up a bit, but that's only on provision that the political risks don't materialize. While technically developments support further upside in Euro in near term, the road would likely stay bumpy.

More upside in Euro technically

Talking about technicals, EUR/USD's break of 1.0630 resistance confirms near term reversal and further rise should be seen to 1.0828 and above. EUR/JPY is likely resuming larger rise from 109.20 and should target 124.80 resistance and above. EUR/GBP is resuming the rebound from 0.8303 for 0.8851 and above. EUR/AUD also staged a near term reversal and should target a test on 1.4721 resistance.

NFP seal the deal for Fed hike

While Friday's solid NFP report should seal the deal for Fed to hike interest next week, it wasn't strong enough to push speculations of more than three rate hikes this year. Fed fund futures are pricing in 88.6% chance of interest at 75-100bps after March meeting. There is 53% of fed funds rates hitting 100-125bps after June meeting, and 62.1% of hitting 125-150bps by the end of the year. Fed's new economic projections to be released this week will be the key to guide market expectations.

Yields hesitated for breakout

Treasury yields staged a strong rally last week but the close was not too convincing yet. 30 year yield reached as high as 3.201 and breached 3.197 resistance. But it pared some gains to close at 3.169. 10 year yield reached as high as 2.615 but failed to take out 2.621 resistance and closed at 2.582. 2.545 support and 2.621 resistance are the two levels to watch in TNX this week, in particular on Wednesday with FOMC announcement. That would be the make or break levels for Dollar in near term.

Dollar index pulled back

Dollar index failed to extend the rebound from 99.23 last week and closed sharply lower on Friday at 101.25. Further rise is still in favor as long as 100.66 support holds. But the structure of the rise from 99.23 is unconvincing, with a corrective look. Indeed, a break of 100.66 will indicate that the rebound is finished and would turn near term outlook bearish for 99.23 and below. When Dollar index does resume the rise again, we'll be cautious on topping around 103.82 high if we don't see any upside acceleration.

Fed, BoJ, SNB, BoE to feature a busy week

The coming week will be very busy with a lot of key events. Fed, BoJ, SNB and BoE will meet with main focus on FOMC. Other three central banks will stand pat. Also, focus will also be on German ZEW, UK employment. US CPI and retail sales, Australia employment and New Zealand GDP.

Hold EUR/AUD long

Regarding trading strategies, as suggested in last week's weekly report, we bought EUR/AUD at 1.3900 last week as the cross pulled back to 1.3874. Our stop at 1.3800 wasn't hit. And subsequent rise to as high as 1.4178 affirmed our bullish view. We're tentatively treating EUR/AUD as reversing medium trend. And this view is support by the cross defending 1.3671 key support level and bullish convergence condition in daily MACD. Hence, for the moment, we'll raise the stop to 1.4000, slightly below 1.4014 resistance turned support, to give the position a bit of room to run. The key level is channel resistance at around 1.4469. We'd decide whether to take profit around that level later, based on momentum.

Buy USD/JPY with tight stop

In addition to holding long in EUR/AUD, we'd like to consider buying USD/JPY this week. The pair's break of 114.94 resistance indicates near term reversal. That is, corrective pull back from 118.65 has completed at 111.58 already, on double bottom pattern (111.58/111.68). The view is clouded by the pull back in Dollar after NFP. Also, yields failed to sustain above recent highs for up trend resumption. Nonetheless, the recovery in stocks on Friday indicates stabilization. And the pull back in DJIA, S&P 500 and NASDAQ could be over. It's an opportunity to try to bet on hawkish FOMC projections, but only with a tight stop. Hence, we'll buy USD/JPY on dip to 114.00, with a stop at 113.50, just below 113.60 support.

EUR/USD Weekly Outlook

EUR/USD rebounded strongly last week and hit as high as 1.0698. The strong break of 1.0630 resistance indicates completion of corrective pull back from 1.0828. More importantly, whole rise from 1.0339 is possibly resuming. But still, such rise is still seen as a correction and the larger down trend should resume after it completes.

Initial bias in EUR/USD remains on the upside this week for 1.0828. Break there will target 100% projection of 1.0339 to 1.0828 from 1.0494 at 1.0983. But upside should be limited there to completion the corrective rise and bring reversal. Meanwhile, on the downside, break of prior resistance at 1.0630 will turn bias back to the downside for retesting 1.0494 low.

In the bigger picture, as long as 1.1298 key resistance holds, whole down trend from 1.6039 (2008 high) is still expected to continue. Break of 1.0339 low will send EUR/USD through parity to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115.

In the long term picture, the down trend from 1.6039 (2008 high) is still in progress and there is no clear sign of completion. We'd expect more downside towards 0.8223 (2000 low) as long as 1.1298 resistance holds. However, firm break of 1.1298 should now confirm long term reversal.

EUR/USD rebounded strongly last week and hit as high as 1.0698. The strong break of 1.0630 resistance indicates completion of corrective pull back from 1.0828. More importantly, whole rise from 1.0339 is possibly resuming. But still, such rise is still seen as a correction and the larger down trend should resume after it completes.

Initial bias in EUR/USD remains on the upside this week for 1.0828. Break there will target 100% projection of 1.0339 to 1.0828 from 1.0494 at 1.0983. But upside should be limited there to completion the corrective rise and bring reversal. Meanwhile, on the downside, break of prior resistance at 1.0630 will turn bias back to the downside for retesting 1.0494 low.

In the bigger picture, as long as 1.1298 key resistance holds, whole down trend from 1.6039 (2008 high) is still expected to continue. Break of 1.0339 low will send EUR/USD through parity to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115.

In the long term picture, the down trend from 1.6039 (2008 high) is still in progress and there is no clear sign of completion. We'd expect more downside towards 0.8223 (2000 low) as long as 1.1298 resistance holds. However, firm break of 1.1298 should now confirm long term reversal.

USD/JPY jumped to as high as 115.49 last week but formed a temporary top there and retreated. The break of 114.94 resistance indicates completion of corrective fall from 118.65, with a double bottom pattern (111.58, 111.68). Hence, while some consolidation could be seen this week. Another rise is expected later to retest 118.65 high.

Initial bias in USD/JPY is neutral this week for consolidations. Downside of retreat should be contained by 113.60 support and bring another rally. Above 115.49 will turn bias to the upside to target a test on 118.65. decisive break there will extend whole rise from 98.97 and target 125.85 high next. However, break of 113.60 will invalidate our view and turn bias back to the downside for 111.58/68 support zone instead.

In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. The impulsive structure of the rise from 98.97 suggests that the correction is completed and larger up trend is resuming. Decisive break of 125.85 will confirm and target 61.8% projection of 75.56 to 125.85 from 98.97 at 130.04 and then 135.20 long term resistance. Rejection from 125.85 and below will extend the consolidation with another falling leg before up trend resumption.

In the long term picture, the rise from 75.56 long term bottom to 125.85 medium term top is viewed as an impulsive move. Price actions from 125.85 are seen as a corrective move which could still extend. But, up trend from 75.56 is expected to resume at a later stage for above 135.20/147.68 resistance zone.

GBP/USD dropped further to as low as 1.2133 last week but lost some downside momentum. Mild bullish convergence condition is seen in 4 hour MACD. Some consolidations could be seen this week first but overall outlook is unchanged. That is consolidation pattern from 1.1946 is completed at 1.2705 and fall from there would break through 1.1946 low eventually to resume the larger down trend.

Initial bias in GBP/USD is neutral this week first for consolidations. Upside of recovery should be limited by 1.2346 support turned resistance and bring fall resumption. Below 1.2133 will turn bias to the downside for retesting 1.1946/86 support zone. Break of 1.1946 will confirm our bearish view and resume the larger down trend.

In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. There is no sign of medium term bottoming yet. Sustained trading below 61.8% projection of 2.1161 to 1.3503 from 1.7190 at 1.2457 will target 100% projection at 0.9532. Overall, break of 1.3444 resistance is needed to confirm medium term bottoming. Otherwise, outlook will remain bearish.

In the longer term picture, no change in the view that down trend from 2.1161 is still in progress. Current momentum suggests that the down trend will go deeper than originally expected to 100% projection of 2.1161 to 1.3503 from 1.7190 at 0.9532.

USD/CHF's edged higher to 1.0169 last week but continued to lose upside moment. Bearish divergence is seen in 4 hour MACD. But retreat was contained well above 1.0008 support so far. The development is so far consistent with our view that while rise from 0.9860 might extend, there is no evidence to support breaking 1.0342 high.

Initial bias in USD/CHF remains neutral this week for. Further rise is expected with 1.0008 intact. Above 1.0169 will turn bias to the upside to extend rise from 0.9860. However, based on neutral medium term outlook, we'd be cautious on topping below 1.0342. On the downside, break of 1.0008, however, will indicate completion of the rebound from 0.9860. And intraday bias will be turned back to the downside for 0.9860.

In the bigger picture, prior rejection from 1.0327 resistance argues that USD/CHF is staying in a medium term sideway pattern. In any case, decisive break of 1.0342 resistance is needed to confirm underlying strength. Otherwise, we'll stay neutral in the pair first. In case of another fall, we'd expect strong support from 0.9443/9548 support zone.

Meanwhile firm break of 1.0342 will target 38.2% retracement of 1.8305 to 0.7065 at 1.1359.

AUD/USD dropped to as low as 0.7490 last week but formed a temporary low there and recovered. The close below 55 day EMA is consistent with our preferred case that whole rise from 0.7150 has completed at 0.7740. While some consolidations could be seen initially this week, deeper decline is expected ahead to target 0.7158 support level.

Initial bias is neutral this week for consolidations. Upside of recovery should be limited by 0.7531 resistance and bring another decline. Below 0.7490 will extend the fall from 0.7740 to target 0.7144/7158 support zone. However, break of 0.7631 resistance will dampen our bearish view and turn bias back to the upside for 0.7740 instead.

In the bigger picture, we're still treating price actions from 0.6826 low as a correction. And, as long as 38.2% retracement of 0.9504 to 0.6826 at 0.7849 holds, long term down trend from 1.1079 is expected to resume sooner or later. Break of 0.6826 low will target 0.6008 key support level. However, firm break of 0.7849 will indicate that rise from 0.6826 is developing into a medium term rebound, rather than a sideway pattern. In such case, stronger rise should be seek to 55 month EMA (now at 0.8185) and above.

In the longer term picture, while the down trend from 1.1079 might extend lower, we're not anticipating a break of 0.6008 (2008 low) yet. We'll look for bottoming above there to reverse the medium term trend.

USD/CAD's rise from 1.2968 extended last week to high as 1.3534. Subsequent pull back and bearish divergence condition suggests that a short term top could be formed ahead of 1.3598 resistance. Some consolidations could be seen first but another rise is expected later to push USD/CAD through 1.3598 to extend the medium term rise from 1.2460.

Initial bias is neutral this week for some consolidations first. Downside of pull back should be contained well above 1.3211 cluster support (61.8% retracement of 1.3008 to 1.3534 at 1.3209) and bring rise resumption. Above 1.3534 will turn bias back to the upside for 1.3598 high. Break there will extend the medium term rise from 1.2460 to next fibonacci level at 1.3838.

In the bigger picture, price actions from 1.4689 medium term top are seen as a correction pattern. The first leg has completed at 1.2460. The second leg is likely still in progress and could target 61.8% retracement of 1.4689 to 1.2460 at 1.3838. We'd look for reversal signal there to start the third leg. Break of 1.2968 wold at least bring at retest of 1.2460 low. However, sustained trading above 1.3838 would pave the way to retest 1.4689 high.

In the longer term picture, rise from 0.9056 (2007 low) is viewed as a long term up trend. It's taking a breath after hitting 1.4689. But such rise expected to resume later to test 1.6196 down the road.