Daily Pivots: (S1) 1.2453; (P) 1.2488; (R1) 1.2522; More...

Intraday bias in GBP/USD remains neutral as range trading continues. Price actions from 1.1946 are viewed as a consolidation pattern, with rise from 1.1986 as the third leg. In case of another rise, we'd expect upside to be limited by 1.2774 to bring larger down trend resumption. On the downside, below 1.2346 will revive the case that such consolidation is completed at 1.2705 already. In that case, intraday bias will turn back to the downside for retesting 1.1946 low.

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.

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Daily Pivots: (S1) 0.9938; (P) 0.9996; (R1) 1.0027; More.....

Intraday bias in USD/CHF remains neutral for consolidation below 1.0118 temporary top. Near term outlook stays cautiously bullish as long as 0.9929 minor support holds. Fall from 1.0342 could have finished at 0.9860 already. Above 1.0118 will turn bias back to the upside for retesting 1.0342. However, break of 0.9929 will likely extend the decline from 1.0342 through 0.9860 low.

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.

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Daily Pivots: (S1) 112.77; (P) 113.53; (R1) 114.00; More...

Intraday bias in USD/JPY remains mildly on the downside for 111.58 low. Corrective fall from 118.65 is possibly still in progress and break of 111.58 will target 38.2% retracement of 98.97 to 118.65 at 111.13. We'd expect strong support from there to contain downside and bring rebound. On the upside, break of 114.94 resistance should now confirm completion of the correction. And in that case, USD/JPY should target a retest on 118.65 high.

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.

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Sterling comes under much selling pressure today after disappointing data. Retail sales unexpectedly dropped -0.3% mom in January versus expectation of 1.0% rise. The pound is set to end the week as the weakest major currency after a string of weak data. That includes the CPI miss released on Tuesday and wage growth miss released on Wednesday. These data dampened speculations of a BoE rate hike by year end. In addition to that, the impact of Sterling's depreciation since last year's Brexit referendum appears to be fading. And there are a lot of uncertainties ahead as prime minister Theresa May would trigger Article 50 for Brexit by the end of next month.

The Japanese Yen, on the other hand, rebounds stronger today and reversed all the week's losses. The sharp reversal in US treasury yield is seen as a factor driving Yen higher. Meanwhile, markets could be getting a bit cautious as the meeting of G20 foreign ministers carry on in Germany. There are concerns that US Secretary of State Rex Tillerson could repeat Donald Trump administration's attack on other countries regarding currency manipulation. And such comments could trigger strong reactions that would in turn stir up the markets.

While Dollar is attempting for a rebound today, it's trading mixed for the week. A string of strong economic data plus chorus of hawkish fedspeaks provided no support to the greenback. Traders are clearly dissatisfied with the lack of details on US president Donald Trump's economic policies. And the markets are still keen waiting on Trump's announcement of some "phenomenal" tax reforms. For all the uncertainties, traders are holding their bets on Fed's rate path.

Elsewhere, Eurozone current account surplus narrowed to EUR 31.0b in December. New Zealand business NZ manufacturing index dropped to 51.6 in January. Retail sales rose 0.8% yoy in Q4.

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 112.77; (P) 113.53; (R1) 114.00; More...

Intraday bias in USD/JPY remains mildly on the downside for 111.58 low. Corrective fall from 118.65 is possibly still in progress and break of 111.58 will target 38.2% retracement of 98.97 to 118.65 at 111.13. We'd expect strong support from there to contain downside and bring rebound. On the upside, break of 114.94 resistance should now confirm completion of the correction. And in that case, USD/JPY should target a retest on 118.65 high.

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.

Economic Indicators Update

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Stock markets were explosively volatile this week, with most arenas sprinting into record levels as the mixture of stabilising oil prices and improving economic data across the globe boosted risk appetite. Gains were surrendered on Friday with sellers back in action, as the return of uncertainty and rising anxiety from political risks exposed global stocks to downside losses. Asian shares concluded in the red today and the bearish domino effect has already sent European markets tumbling down like a house of cards. With risk aversion rippling across the board amid the ongoing uncertainty, Wall Street may be vulnerable to further losses. Although global stocks have repeatedly hit record highs from the "Trump effect", markets could find themselves under renewed selling pressure if the proposed fiscal stimulus and tax cuts fall below market expectations.

Dollar bulls exhausted

The visible fact that the Greenback was sold off this week despite the positive economic data from the U.S and hawkish Yellen comments continues to highlight how the currency has been "Trumped". Political risks and the lingering Fed uncertainty have left the Dollar vulnerable with investors thinking twice about Dollar long bets amid the escalating Trump developments. Markets are still seeking the long sought clarity on the fiscal stimulus and tax cuts while fears of protectionist policies impacting U.S growth have left participants edgy. While the improving economic fundamentals of the United States could ensure the Greenback remains buoyed in the longer term, the uncertainty gravitating around Trump may continue to limit upside gains. Technical traders will be observing how the Dollar Index reacts to the 100.50 level with weakness potentially opening a path lower towards 100.00 and 99.00 respectively.

UK retail sales unexpectedly fall

Sterling bears were granted the permission to attack the GBP/USD on Friday following the unexpected decline in January's retail sales which sparked concerns of a fall in consumer sentiment amid the Brexit developments. U.K retail sales fell 0.3% in January as the rising inflation created from the Sterling's vulnerability encouraged consumers to cut back on spending. It must be kept in mind that consumer spending is one of the major drivers of the U.K economy with today's poor sales figure likely to add another layer of uncertainty on top of the Brexit woes. Although UK inflation continues to follow a positive trajectory post vote to leaving the European Union, markets remain dissuaded over the current figures being enough to force the Bank of England to raise interest rates anytime soon.

The Sterling/Dollar was sold off following the soft retail sales report with a breakdown below 1.2400 triggering a further selloff lower towards 1.2300.

Commodity spotlight - Gold

Gold edged above $1242 during trading on Friday as the cocktail of Dollar weakness and ongoing Trump developments encouraged bullish investors to pounce. This metal remains bullish in the short term amid the rising political risks across the globe and could edge higher towards $1250 if the revived Fed uncertainty bolsters the yellow metal's attraction further. Although the strong likelihood of the Fed raising US interest rates this year may pressure Gold in the longer term, it will be the cocktail of events in Europe, Brexit woes and the Trump saga that may ensure Gold remains buoyed in the short term.

Friday February 17: Five things the markets are talking about

The dollar, sovereign yields and global equities have drifted lower as political turbulence in the U.S. pushes investors to take profits on recent gains.

A percentage of the market remains unsettled by Trump's administration's focus on controversial topics such as immigration and a lack of news on how he plans to push through promises of tax cuts and fiscal spending made during his campaign.

Stiff opposition to some of POTUS's cabinet picks and the resignation of his NSA adviser earlier this week is adding to the feeling of political uncertainty and we all know that capital markets despise uncertainty especially ahead of a long weekend stateside.

1. Stocks lose momentum after record-breaking week

Global equity markets have retreated modestly going into the weekend after solid gains for much of the week, tracking less upbeat sentiment on Wall St.

In Japan, the Nikkei closed -0.6% lower, down -0.7% for the week, while in Australian, shares fell -0.2% at the close, shrinking the week's gains to +1.5%.

Chinese shares have fared little better, slipping after earlier touching a near two-month high after the securities regulator said that, starting Friday, it will relax certain rules on stock index futures trading. The CSI 300 index has lost -0.4%.

In Hong Kong, the Hang Seng tumbled -0.9% as financial snapped their winning streak.

In Europe, equities are trading under pressure, paring their second weekly advance, led by commodity producers. The Eurostoxx is down -0.6% from the weight of energy companies, while a disappointing U.K retail sales print (see below) has the FTSE back peddling.

U.S equities are set to open in the red (-0.3%).

Indices: Stoxx50 -0.6% at 3289, FTSE -0.2% at 7266, DAX -0.5% at 11702, CAC-40 -0.9% at 4855, IBEX-35 -0.7% at 9484, FTSE MIB -1.0% at 18896, SMI -0.3% at 8444, S&P 500 Futures -0.3%

2. Oil prices slip, gold trades atop of three-month highs

Oil prices remain confined to a tight range ahead of the U.S open. On one hand, growing global stocks are pressuring crude prices, while expectations that an output cut by OPEC might eventually balance the market is helping to support prices.

Brent crude futures are trading at +$55.57 per barrel, -8c below yesterday's close, while U.S. West Texas Intermediate (WTI) crude futures are down -4c at +$53.32 per barrel.

Note: OPEC has agreed to cut output by almost -1.8m bpd during the first half of 2017, with industry data showing that most producers are sticking to the deal (+93% compliance).

Despite this, inventories remain bloated and supplies high, especially in the U.S. This week's EIA report showed that crude and gasoline inventories soared to record highs last week as refineries cut output and gasoline demand softened.

Crude inventories rose +9.5m barrels, while gasoline stocks rose by +2.8m barrels.

Note: Both Brent and WTI crude has traded within a +$5 per barrel price range so far this year.

Gold prices are holding firm (+0.2% to +$1,241.56 an ounce) and is and is set for its seventh weekly gain as the dollar hovers near its one-week lows amid political uncertainties in the U.S. and Europe.

Note: The yellow metal up +0.3% so far for the week, and has risen about +7.5% so far this year. The prospects of a stronger dollar and U.S yields pushed gold to +$1,216.41 on Wednesday, its lowest since Feb. 3.

3. Bund/French spreads widen on political worries

France's election campaign took another twist this morning. The Socialist Party presidential candidate Hamon said he's holding further talks with far-left candidate Melenchon about a potential single candidacy. A merger could bring about a showdown with Le Pen's anti-euro National Front. Recent polls suggest the two candidates would make it to the second round of elections in May.

French 10-year yields climbed +3bps to +1.05%, widening the spread over 10-year Bunds (+0.31%) by +6bps.

Elsewhere, the yield on the U.S 10-year note is little changed at +2.46%. It dropped -5bps yesterday after increasing +16bps in the previous five-days.

Down under, Aussie 10-year yields were higher for a sixth day, adding just under +1bps to +2.80%.

4. Dollar clueless in confined range

The FX majors (€1.0645, £1.2403, ¥112.86) are confined to tight trading ranges in the absence of meaningful data; with the USD index trading atop of its one-week lows. Already this week, U.S yields have brushed off most of the recent upbeat data and a "hawkish" Fed, which is capping the USD uptrend.

Investors can expect the upcoming elections in Europe (Netherlands and France) to continue to drive currency volatility over the coming months, while uncertainty over Trump's domestic policies are expected to cap the 'big' dollar's advance for the time being.

The overnight exceptions was the pound, GBP (£1.2397) saw a sharp break lower after a disappointing monthly sales print (see below), but remains contained within its recent ranges. Sterling bears are eyeing the key support level of £1.2350 for direction.

5. U.K retail sales disappoint again

U.K. retail sales fell last month for the third consecutive month, a sign that rising prices from a weakened pound (£1.2406) are beginning to weigh on consumer spending.

Note: Decembers data posted the fastest monthly decline in over five years, which suggests that rising prices are squeezing Britons' wallets in the wake of the last June's Brexit vote.

Retail sales declined -0.3% m/m, with higher prices for both food and fuel were "significant factors" in the drop. This is further proof for the Bank of England (BoE) that the U.K economy is set to slow this year as quickening inflation squeezes household budgets.

Note: The December print was also revised down to -2.1%. The annual pace of growth in January stood at +1.5%, the lowest pace of expansion in over three-years.

• Trump tax rally fizzles out after a week of daily record highs;
• Safe havens remained bid throughout the rally which may be a concern;
• Pound tumbles as retail sales suggest consumer is feeling Brexit pinch.

As we head into the bank holiday weekend, it would appear risk appetite is waning, most likely reflecting some profit taking following a great run over the last week or so. The Trump rally has been in full flow since last week when the President claimed that phenomenal tax reforms would be announced in the coming weeks, reigniting the rally that had fizzled out since the start of the year. With US equity markets up more than 2% since Trump made the announcement last week and today looking much quieter, it seems investors are happy to reduce their risk exposure, with the long bank holiday weekend also likely being a key factor.

Even throughout the rally over the last week, caution has remained very evident in the markets, possibly reflecting the increasingly risky political environment. Rarely do we see Gold so resilient at a time when equities and the US dollar are on the rise and yet here it is trading around its highest level in three months. The yen - another traditional safe haven - has also proved quite resilient throughout this and is on the rise again today to trade near to its own 11-week highs against the dollar and euro. Investors may be bullish on equities but they're hardly giving up on the safe havens which doesn't suggest there's much faith in the markets at the moment.

The pound has taken quite a hit this morning as the latest retail sales data indicated that the UK consumer is starting to feel the pinch of post-Brexit Britain. Retail sales fell 0.3.% in January which is well short of expectations and follows a very disappointing December, which turned out to be worse than we thought. While this decline was inevitable, it seems to have happened very suddenly and could be indicative of further pain to come for the consumer.

It is worth noting that higher prices have been compounded by higher fuel prices unrelated to the pound's post Brexit decline, but this is still quite clearly a major factor and if anything has increased prices at the pump even more. For the last six months there's been a lot of talk about how resilient the economy has been since the referendum but it would appear we're now going to see how true that is. Prices are rising and the early signs are that the consumer is not impressed. The economic fallout of this will show in the coming quarters at which point we'll find out just how resilient the economy truly is.

The Japanese yen has posted losses on Friday, continuing the upward movement which marked the Thursday session. Currently, USD/JPY is trading at 112.80. The week wraps up on a quiet note. There are no Japanese events on Friday, and the sole US indicator is CB Leading Index, with an estimate of 0.5%.

Federal Reserve Chair Janet Yellen is in the enviable position of having to decide how the Fed should respond to a strong US economy. Earlier this week, she made her semi-annual appearance before Congress. In her testimony, Yellen was upbeat about the economy. She noted that inflation is moving towards the Fed’s 2 percent target, the labor market remains red-hot and consumer spending is strong. A rate hike appears to be just a question of time, as Yellen warned that “waiting too long to remove accommodation would be unwise”. If the US economy stays on track in 2017, analysts expect two or three small rate hikes. At the same time, the Fed needs to take into account the economic stance of the new administration, which remains unclear. President Trump has promised to outline a tax reform plan in a few weeks, but has left the Fed and the markets in the dark regarding economic policy. Barring an unexpected tailspin from the economy, the Fed is likely to raise rates in the first half of 2017.

The Japanese economy is showing improvement, with real GDP expanding one percent in 2016. The economy has recorded four consecutive quarters of growth and inflation continues to point upwards, although it remains well below the BoJ target of two percent. At the same time, the new Trump administration could pose a serious challenge for Japan. Trump has paraded the motto of “America first” and withdrew the US from the Trans-Pacific Partnership, a trade agreement in which Japan is a major partner. Trump has charged that Japan is manipulating its currency to gain an unfair trade advantage, and this disputed threatened to sour the recent meeting between Prime Minister Shinzo Abe and Trump in Washington. However, the potential crisis was quickly defused, as the two leaders agreed that their finance ministers would conduct bilateral talks to discuss currency policy. Abe has dodged a bullet for now, but if USD/JPY pushes above the 120 level, the war of words over exchange rates could be renewed. As well, Trump remains concerned about the huge US trade imbalance with Japan and will want to make changes in the US-Japan trade relationship. Japan is heavily dependent on its export sector, and any protectionist moves by the US, such as import taxes, could hurt the Japanese economy.

EUR/USD has recorded slight losses in the Friday session, as the pair trades at 1.0650. The week wraps up with two minor events. Eurozone Current Account dropped to EUR 30.1 billion, compared to EUR 36.1 billion. Still, this figure beat the estimate of EUR 28.7 billion. Over in the US, CB Leading Index improved to 0.5% in December, its best level since April. The estimate for January remains at 0.5%.

The US economy continues to perform well, as underscored by sharp economic data on Thursday. Unemployment claims were slightly higher at 239 thousand, but beat the forecast of 245 thousand. On the manufacturing front, the Philly Fed Manufacturing Index soared to 43.3 points, crushing the estimate of 18.5 points. This marked its highest level since 2011. Earlier in the week, the Empire State Manufacturing Index also climbed sharply, with a reading of 18.7, compared to the forecast of 7.2 points. The surprisingly strong data is welcome news from the manufacturing sector, which like other industrialized countries, has been battered by globalization. President Trump has promised to bring manufacturing jobs back to the US and invigorate the struggling sector. There was more good news from the inflation front, as PPI and CPI posted respectable gains of 0.6% in January, above their estimates.

Federal Reserve Chair Janet Yellen is in the enviable position of having to decide how the Fed should respond to a strong US economy. Earlier this week, as she made her semi-annual appearance before Congress. In her testimony, Yellen was upbeat about the economy. She noted that inflation is moving towards the Fed’s 2 percent target, the labor market remains red-hot and consumer spending is strong. A rate hike appears to be just a question of time, as Yellen warned that “waiting too long to remove accommodation would be unwise”. If the US economy stays on track in 2017, analysts expect two or three small rate hikes. At the same time, the Fed needs to take into account the economic stance of the new administration, which remains unclear. President Trump has promised to outline a tax reform plan in a few weeks, but has left the Fed and the markets in the dark regarding economic policy. Barring an unexpected tailspin from the economy, the Fed is likely to raise rates in the first half of 2017.

With the eurozone economy showing signs of recovery in recent months, ECB President Mario Draghi can sleep easier. The economy is expanding at a moderate rate and inflation is pointing higher. This is good news for the ECB, which can now focus on whether to tighten monetary policy. If the ECB feels that the economic numbers will continue to point in the right direction, the central bank could taper its asset-purchase program or raise interest rates, which are currently at zero. ECB head Mario Draghi will likely remain cautious, with Brexit negotiations looming and elections in France and Germany coming up. Still, if the eurozone economy continues to grow and inflation levels move higher, we could see the ECB change its monetary stance later in the year. The ECB hold its next policy meeting on March 9, but is not expected to make any moves. Still, any hints towards a tighter monetary stance would likely boost the euro.

News and Events:

Risk rally on hold ahead of the weekend

After rallying strongly during the first couple of weeks of February, the US dollar suffered a substantial sell-off as investors ended the week on the back foot. The reflation trade that has been fuelled by Donald Trump’s announcement regarding a “phenomenal” tax plan is now running out of steam as investors lose faith amid a serious lack of details. Indeed, President Trump has been back-pedaling on many of his campaign promises and/or early announcements as president. There are therefore growing concerns among investors that he will significantly under-deliver.

After losing 1% against the single currency, the greenback stabilised above 1.06 ahead of the weekend. The dollar index rose 0.20% as the GBP and the EUR slid 0.24% and 0.27% respectively. Only the Japanese yen was able to hold ground - rising 0.28% - as investors seek safe haven assets. Gold was also gaining ground, climbing 0.15% to 1,240.

On the equity side, shares across the globe fell sharply on Friday. The Nikkei slid 0.58%, while the broader Topix Index was down 0.42%. In Europe, the Euro Stoxx 600 was down 0.40%. US futures were also blinking red on the screen. Treasury yields are moving south as investors rushed into bonds. There is little hope for this dynamic to reverse during the day as the economic calendar is really light and no press conference is expected on either the political or monetary policy fronts.

Strong US data supports stock rally

The Philly Fed manufacturing index failed to significantly correct as many analysts predicted after a strong November. Instead, it rose to a new post financial crisis high. The business confidence index surged to 43.3 against an expected 18. The employment portion of the index was softer than one would have expected give the topline read, especially regional manufacturing labor. However, the overall tone of the labor market was solid. Today's report reinforces our view of a modest improvement in the health of the US economy. We retain our expectations of two 25bp hikes beginning in June but cannot rule out a proactive hike in March (Fed Fund market pricing in 30% probability). The strong growth expectation also supports higher US equity prices despite tailing P/E above historical average. Lower interest rates and global volatility combined with stronger EPS estimates and fundamental data suggest new highers are justified. However, the rally will need Trump to provide promised tax reform in order to trade higher. And on this fact we are concerned. As expressed yesterday we have yet to view Trump as a successful statesman rather than just a bully, indicating that all policy will be challenged (even policy with bi partisan support). Our expectations for a sustained USD rally remain weak and we see USD buying as an opportunity to reload USD shorts (especially in select EM currencies).

Today's Key Issues (time in GMT):

• Feb 10 Money Supply Narrow Def, last 8.67t RUB / 08:00
• Jan CPI MoM, exp -0,70%, last 0,50% SEK / 08:30
• Jan CPI YoY, exp 1,50%, last 1,70% SEK / 08:30
• Jan CPI CPIF MoM, exp -0,70%, last 0,50% SEK / 08:30
• Jan CPI CPIF YoY, exp 1,70%, last 1,90% SEK / 08:30
• Jan CPI Level, exp 317,54, last 319,68 SEK / 08:30
• Dec ECB Current Account SA, last 36.1b, rev 36.4b EUR / 09:00
• Dec Current Account NSA, last 40.5b, rev 40.8b EUR / 09:00
• Dec Current Account Balance, last 4640m EUR / 09:06
• Jan Retail Sales Ex Auto Fuel MoM, exp 0,70%, last -2,00%, rev -2,20% GBP / 09:30
• Jan Retail Sales Ex Auto Fuel YoY, exp 3,90%, last 4,90%, rev 4,70% GBP / 09:30
• Jan Retail Sales Inc Auto Fuel MoM, exp 1,00%, last -1,90%, rev -2,10% GBP / 09:30
• Jan Retail Sales Inc Auto Fuel YoY, exp 3,40%, last 4,30%, rev 4,10% GBP / 09:30
• Feb IGP-M Inflation 2nd Preview, exp 0,13%, last 0,76% BRL / 10:00
• Jan Current Account Balance, exp -$5350m, last -$5881m BRL / 12:30
• Jan Foreign Direct Investment, exp $9500m, last $15409m BRL / 12:30
• Dec Int'l Securities Transactions, last 7.24b CAD / 13:30
• Jan Leading Index, exp 0,50%, last 0,50% USD / 15:00
• Jan PPI MoM, exp 0,80%, last 0,60% RUB / 23:00
• Jan PPI YoY, exp 9,10%, last 7,40%, rev 7,40% RUB / 23:00
• Jan Tax Collections, exp 136850m, last 127607m BRL / 23:00
• SURVEY: Private Capital Expenditure 2017-18 A$84.8b AUD / 23:00

The Risk Today:

EUR/USD's buying pressures since the pair failed to hold below former hourly support given at 1.0581 (16/01/2016 low). Hourly resistance is given at 1.0679 (16/02/2017 high). Expected to see further strengthening. 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 is still trading below strong resistance given at 1.2771 (05/10/2016 high). The technical structure suggests that the pair should bounce lower towards support given at 1.2254 (19/01/2016 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's demand is fading after its increase from support given at 111.36 (28/11/2016 low). Bearish pressures arise around hourly resistance given at 115.62 (19/01/2016 high). The technical structure suggests further weakness. 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's short-term bullish momentum is pausing after the breakout of the downtrend channel. Key resistance is given at a distance at 1.0344 (15/12/2016 high). Nonetheless, we believe that the pair is likely to strengthen again above parity. 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.