Sample Category Title

EUR/USD - 1.0560

Original strategy  :

Buy at 1.0515, Target: 1.0625, Stop: 1.0485

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.0515, Target: 1.0625, Stop: 1.0485

Position : -

Target :  -

Stop : -

Although the single currency has rebounded after falling to 1.0525, reckon upside would be limited to 1.0600-05 and near term downside risk remains for another decline, however, as broad outlook remains consolidative, reckon downside would be limited to 1.0510-15 and bring another rebound later. Above 1.0600-05 would suggest the fall from 1.0640 has ended, bring further gain to 1.0620, then test of said resistance at 1.0640. Only a break above 1.0640 would extend the erratic rise from 1.0493 low for retracement of early decline to 1.0660-65 (50% Fibonacci retracement of 1.0829-1.0493) and possibly towards resistance at 1.0680 but price should falter well below 1.0700-05 (61.8% Fibonacci retracement).

In view of this, we are looking to buy euro on dips. Below 1.0510 would risk retest of 1.0493 but only break there would shift risk back to the downside and signal recent decline from 1.0829 has resumed for further selloff to 1.0470 and then towards previous support at 1.0454.

News and Events:

ECB to stay quietly on the sidelines

The next week will be very busy in terms of monetary policy with two of the most important central banks holding key meetings. In the US, the Federal Reserve is widely expected to rise its benchmark interest rate next week amid a continuous increase in consumer prices and rising inflation expectations. Across the Atlantic, the ECB has finally glimpsed the results it was hoping for. Indeed, inflation has returned in the Eurozone as the headline measure jumped to 2%y/y in February. As a result, Mario Draghi is already feel the heat from ECB hawks as they push to normalise the central bank’s monetary policy. However, Draghi will most likely stand his ground as switching from dovish to hawkish would be more than counterproductive as it would give a boost to the single currency, which would eventually weigh on price pressure. In addition, the core measure, which excludes the most volatile components such as food and energy, is still stuck below the 1% mark (0.9%y/y in February). Mario Draghi will not hesitate to heavily emphasise that underlying price pressure remains weak.

All in all, Mario Draghi is not yet ready to radically change his tone, preferring instead to wait for further improvement in the Eurozone economy before starting to taper. Moreover, the ECB’s bond purchasing program is slowly reaching its limits as the lack of bonds constitutes a major issue.

Therefore, we do not believe that today's meeting will trigger any trends in EUR crosses. Save your ammo for next week’s FOMC meeting as investors scrutinise the Fed’s forecast.

SNB in a Corner

As everyone knows, the SNB has been intervening to protect the CHF from further “overvaluation". Today, the SNB released data indicating foreign exchange reserves surged 3.8% to 668.2bn CHF (Total balance sheet is over 115% of GDP). While the SNB does not generally comment on intervention, the size of the balance sheet expansion indicates that the SNB has been very active in FX markets (protecting 1.06 soft floor).

The problem is that the pace of purchases is unsustainable (printing unlimited CHF could lead to hyperinflation and credibility issues), yet demand for CHF is likely to increase (1. Rising political risk in Europe 2. EU-CH yield spread stable/narrowing 3. Swiss economic conditions are improving). The language of SNB around FX policy has softened (supported by a positive inflation outlook) adding to speculation of greater flexibility yet clearly demand for CHF has outstripped the SNB's view of smoothing.

EURCHF has become the “go to” trade to hedge European political risk, so selling pressure should increase as we head into the Dutch and French elections. Now I'm sure I don’t have to remind anyone that arguably the two biggest FX moves in the last few years have been created by the SNB (hence the concern), and their proactively addressing events/situation in Europe.

The problem is that, once again, the SNB is now “trapped” by their own policy. My concern is that the SNB's “soft” FX policy has become “hard” in the market's mind. When the SNB is forced to remove the verbiage/physical intervention (not sure which comes first), we should see EURCHF move sharply lower. The longer the situation remains, the greater likelihood of an extreme event.

Today's Key Issues (time in GMT):

• Feb Bank of France Bus. Sentiment, exp 102, last 101, rev 102 EUR / 07:30
• Jan House transactions YoY, last 6,80% EUR / 08:00
• Feb Average House Prices, last 2.916m, rev 2.994m SEK / 08:30
• Schaeuble, Dombret Speak on Challenges for G-20 States, Berlin EUR / 08:30
• Feb Money Supply M2 YoY, exp 11,40%, last 11,30% CNY / 09:00
• Feb Money Supply M1 YoY, exp 16,60%, last 14,50% CNY / 09:00
• Feb Money Supply M0 YoY, exp 15,00%, last 19,40% CNY / 09:00
• Feb New Yuan Loans CNY, exp 950.0b, last 2030.0b CNY / 09:00
• Feb Aggregate Financing CNY, exp 1450.0b, last 3740.0b, rev 3737.7b CNY / 09:00
• Bank of Italy Publishes Monthly Report `Money and Banks' EUR / 10:00
• Mar IGP-M Inflation 1st Preview, exp 0,05%, last 0,10% BRL / 11:00
• mars.03 Foreigners Net Bond Invest, last $258m TRY / 11:30
• mars.03 Foreigners Net Stock Invest, last $51m TRY / 11:30
• Feb Challenger Job Cuts YoY, last -38,80% USD / 12:30
• mars.09 ECB Main Refinancing Rate, exp 0,00%, last 0,00% EUR / 12:45
• mars.09 ECB Marginal Lending Facility, exp 0,25%, last 0,25% EUR / 12:45
• mars.09 ECB Deposit Facility Rate, exp -0,40%, last -0,40% EUR / 12:45
• Mar ECB Asset Purchase Target, exp EU80b, last EU80b EUR / 12:45
• mars.03 Gold and Forex Reserve, last 393.0b RUB / 13:00
• mars.06 CPI WoW, last 0,00% RUB / 13:00
• mars.06 CPI Weekly YTD, last 0,80% RUB / 13:00
• ECB President Draghi Holds Press Conference in Frankfurt EUR / 13:30
• 4Q Capacity Utilization Rate, exp 82,50%, last 81,90% CAD / 13:30
• Jan New Housing Price Index MoM, exp 0,10%, last 0,10% CAD / 13:30
• Feb Import Price Index MoM, exp 0,10%, last 0,40% USD / 13:30
• Jan New Housing Price Index YoY, last 3,00% CAD / 13:30
• Feb Import Price Index ex Petroleum MoM, exp 0,10%, last 0,00% USD / 13:30
• Feb Import Price Index YoY, exp 4,40%, last 3,70% USD / 13:30
• mars.04 Initial Jobless Claims, exp 238k, last 223k USD / 13:30
• Feb 25 Continuing Claims, exp 2062k, last 2066k USD / 13:30
• mars.05 Bloomberg Consumer Comfort, last 49,8 USD / 14:45
• 4Q Household Change in Net Worth, last $1593b USD / 17:00
• Feb Card Spending Retail MoM, exp -0,40%, last 2,70% NZD / 21:45
• Feb Card Spending Total MoM, last 2,50% NZD / 21:45
• Feb Foreign Direct Investment YoY CNY, exp -4,20%, last -9,20% CNY / 23:00

The Risk Today:

EUR/USD is moving lower. Hourly resistance is given at 1.0679 (16/02/2017 high) while hourly support at 1.0521 (15/02/2017 low) has been broken. The technical structure suggests deeper consolidation towards 1.0500. 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 broken support given at 1.2254 (19/01/2017 low). The road is wide-open for further decline. Hourly resistance is given at 1.2214 (intraday 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 showing limited short-terms buying interest after reversing off base lows. Key resistance is given at 115.62 (19/01/2016 high). The technical structure suggests further renewed bearish pressures towards 112.00. 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 continues to improves after testing 1.0021 support. Hourly resistance is implied by upper bound of the uptrend channel. Key resistance is given at a distance at 1.0344 (15/12/2016 high). Expected to see further strengthening. 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.

USD/JPY - 114.77

Original strategy  :

Buy at 114.20, Target: 115.20, Stop: 113.85

Position :  -

Target :  -

Stop : -

New strategy  :

Buy at 114.20, Target: 115.20, Stop: 113.85

Position :  -

Target :  -

Stop : -

Yesterday’s rally after finding renewed buying interest at 113.61 signals the rise from 111.69 is still in progress and may extend further gain to previous chart resistance at 114.96, however, break there is needed to signal early erratic rise from 111.59 low has resumed and extend gain towards another previous resistance at 115.38 but price should falter below previous resistance at 115.62, bring retreat later.

In view of this, we are looking to buy dollar on pullback as the Kijun-Sen (now at 114.19) should limit downside and bring another rise later. Below 113.95 support would signal an intra-day top is formed instead, risk weakness towards said strong support at 113.56-61 which is likely to hold from here.

EUR/GBP         –  0.8693

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

As the single currency has surged again after recent strong rebound from 0.8403 and broke above resistance at 0.8646, signaling the fell from 0.8857 has ended at 0.8403 and consolidation with mild upside bias remains for further gain to 0.8750-60, however, reckon upside would be limited to 0.8800 and price should falter well below said resistance at 0.8857.

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

On the downside, whilst pullback to 0.8645-50 cannot be ruled out, reckon downside would be limited to 0.8600 and bring another rise later. Below 0.8545-50 would defer and suggest top is formed instead, and risk weakness to 0.8500-10 but break there is needed to provide confirmation and suggest the rebound from 0.8403 has ended.
 
Recommendation: Buy at 0.8600 for 0.8750 with stop below 0.8500.

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

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

EUR/USD Continued weakness.

EUR/USD is moving lower. Hourly resistance is given at 1.0679 (16/02/2017 high) while hourly support at 1.0521 (15/02/2017 low) has been broken. The technical structure suggests deeper consolidation towards 1.0500.

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 Pushing lower.

GBP/USD has broken support given at 1.2254 (19/01/2017 low). The road is wide-open for further decline. Hourly resistance is given at 1.2214 (intraday 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 Stalling below 115.00.

USD/JPY is showing limited short-terms buying interest after reversing off base lows. Key resistance is given at 115.62 (19/01/2016 high). The technical structure suggests further renewed bearish pressures towards 112.00.

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 Continued increase.

USD/CHF continues to improves after testing 1.0021 support. Hourly resistance is implied by upper bound of the uptrend channel. Key resistance is given at a distance at 1.0344 (15/12/2016 high). Expected to see further strengthening.

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.

USD/CAD Surging towards 1.3500.

USD/CAD's bullish pressures are definitely on after breaking key resistance at 1.3353 (20/01/2017 high). Yet, as long as this resistance was not broken (20/01/2017 high), bullishness was limited. Expected to see further upside potential for the pair.

In the longer term, there is a golden cross with the 50 dma crossing the 200 dma indicating further upside pressures. Strong resistance is given at 1.4690 (22/01/2016 high). Long-term support can be found at 1.2461 (16/03/2015 low).

AUD/USD Wide-open for further weakness.

AUD/USD keeps on declining since its exit from uptrend channel. The road is wide-open for further weakness. Key resistance is given at 0.7778 (08/11/2016 high).

In the long-term, we are waiting for further signs that the current downtrend is ending. Key supports stand at 0.6009 (31/10/2008 low) . A break of the key resistance at 0.8295 (15/01/2015 high) is needed to invalidate our long-term bearish view.

EUR/CHF Renewed bearish pressures.

EUR/CHF's bullish pressures have increased sharply. Strong resistance given at 1.0762 (27/12/2016 high) seems nonetheless far. Anyway, 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). Temporary surges seem the new normal for the CHF.

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 Trading sideways.

EUR/JPY's demand has slowed down after reaching 121.00. Hourly resistance can be located at 121.34 (10/02/2017 high). Strong resistance is given at a distance at 123.31 (27/01/2017 high). Expected to show further consolidation.

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 Monitoring resistance at 0.8707.

EUR/GBP is pushing higher towards strong resistance at 0.8707 (18/01/2017 high). Since key resistance at 0.8645 has been broken, we rule out further weakness towards supports given at 0.8450 (03/01/2016 low) and at 0.8304 (05/12/2016). Expected to pause below resistance at 0.8707.

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.

USD/CAD – 1.3507

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

As the greenback has surged again after brief pullback, suggesting early retreat from 1.3599 top has ended at 1.2969 back in Jan and bullishness remains for the rise from there to extend further gain towards said resistance, break there would confirm the erratic rise from 1.2461 low has resumed for a stronger correction of early decline from 1.4690 (2016 high) to 1.3700 and later towards 1.3790-00, however, reckon upside would be limited to 1.3835-40 (61.8% Fibonacci retracement of 1.4690-1.2461) and bring retreat later.

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

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

On the downside, whilst pullback to 1.3450 cannot be ruled out, reckon downside would be limited to 1.3375-80 and bring another upmove to aforesaid upside targets. Below 1.3290-00 would defer and suggest a temporary top is formed, bring correction to 1.3275-80  and then test of previous resistance at 1.3210-12 (now support). Only below this level would suggest the rebound from 1.2969 has ended and prolong choppy trading, bring weakness to 1.3100 but downside should be limited to 1.3056 support, bring rebound later. 
 
Recommendation: Buy at 1.3380 for 1.3580 with stop below 1.3280.

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

'Unseasonably mild winter weather undoubtedly played a role. But near-record-high job openings and record-low layoffs underpin the entire job market.' - Mark Zandi, Moody's Analytics

The US private sector created more than expected jobs last month, surprising markets. The ADP National Employment Report released on Wednesday showed companies added 298,000 new jobs to the economy in February, while analysts expected a gain of 184,000 jobs. The report also showed that January's initially reported gain of 246,000 jobs was revised up to 261,000. Wednesday's stronger-than-expected ADP figures provided support to the US Dollar on hopes that Friday's NFP would surprise on the upside. After the release, the EUR/USD pair fell to 102.00, while the US Dollar Index advanced to 101.80. Markets expect Friday's NFP data to show a rise of 185,000 for February, compared to the preceding month's gain of 227,000. If the actual data comes in higher than economists' estimates, it would provide additional support for Fed officials to raise rates at their meeting next week. According to market consensus, the unemployment rate slowed down to 4.7% in February from the previous month's 4.8%. Other data release on Wednesday showed US crude oil inventories rose 8.2 million in the week ended March 3, compared to the prior week's gain of 1.5 million barrels, while market analysts anticipated a climb of 1.1 million barrels during the reported week.

'As we start our negotiations to exit the European Union, this Budget takes forward our plan to prepare Britain for a brighter future '. - Philip Hammond

The UK Finance Minister Philip Hammond presented his annual budget statement for the 2017-18 fiscal year on Wednesday. According to the latest projections, the British economy is likely to expand 2% in 2017, compared to a previous estimate of 1.4%. Nevertheless, during the next year economic growth is expected to fall to 1.6% and then climb to 1.7% and 1.9% in 2019 and 2020, respectively. Hammond also said that a return to a 2% growth rate is expected in 2021. Meanwhile, inflation is seen hitting 2.4% in 2017, before slowing to 2.3% in 2018. Inflation is expected to return to the Bank of England's target rate of 2% in 2019. Net borrowing in the public sector is predicted to drop to 2.6% in 2016-2017, compared with 3.8% in 2015-2016, and rebound to 2.9% in 2017-2018. However, Hammond highlighted that it would probably decline to 1.9% in 2018-2019 and hit 0.7% in 2021-2022. He also said that the personal allowance would increase to 11,500 pounds, as well as the higher rate of income tax threshold would rise to 45,000 pounds. For small businesses the tax-free dividend allowance would decline to 2,000 pounds. Furthermore, the government would give a 1,000 pound discount on business rate bills for all pubs with rateable value up to 100,000 pounds in 2017.

E-mini S&P500 found some support in the last 24 hours, likely it's turning up for a new three wave bounce as we see a completed five wave decline down from 2400 high. As such, price may see more upside in the near-term, up to around 2375 or even 2383 resistance before downtrend may resume.

S&P500, 1H

The NZD/USD has been dropping consistently within the Equidistant channel versus its counterpart USD mainly due to expectations the Federal Reserve will raise interest rates next week while the Reserve Bank of New Zealand keeps its rate low.Additionally, the dairy prices fell in the overnight auction, adding to overall NZD weakness. The POC zone is 0.6935-50 (H4, DPP, equidistant channel top, ATR top) and we might expect new rejection if the price gets within the zone. 1h momentum or 4h close below 0.6890 marks the continuation towards 0.6858 and 0.6840. The ATR has been low but consistent so the NZD could be also suitable for traders who are afraid to trade volatile pairs.