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India Central Bank again keeps policy steady and switches to neutral stange

Notes/Observations

India Central Bank (RBI) surprises market with another pause opting to wait for more clarity on inflation trends and on how a radical crackdown on "black money" was impacting economic growth.

Overnight:

Asia:

PBOC again skipped OMOs for 4th consecutive trading day. PBoC stated that overall liquidity in banking system was staying at relatively high level

BOJ Jan 31st opinions noted that it should be prudent about changing policy hastily as concerns about its ability to control yield curve could grow. CPI likely to rise as output gap tightened but would take time to accelerate and very unlikely inflation expectations would pick up significantly

Japan 2016 Current Account surplus the highest since 2007

Europe:

BOE's Forbes (hawk): UK economy might soon need a rate increase

IMF annual review of Greece that the country's debt remains "highly unsustainable," with little prospect of growth picking up again without debt relief and major overhauls to the pension and tax systems

Energy:

Weekly API Oil Inventories: Crude: +14.2M v +5.8M prior (3rd straight build and largest since Feb 2015; 2nd largest build on record)

Economic data

(JP) Japan Jan Eco Watchers Current Survey: 49.8 v 51.8e; Outlook Survey: 49.4 v 51.5e

(TH) Thailand Central Bank (BOT) left its Benchmark Interest Rate unchanged at 1.50% (as expected)

(FR) Bank of France Business Sentiment: 101 v 103e

(CZ) Czech Jan Unemployment Rate: 5.3% v 5.4%e

(IS) Iceland Central Bank (Sedabanki) left its 7-Day Term Deposit Rate unchanged at 5.00%

(IN) India Central Bank (RBI) left its Repurchase Rate unchanged at 6.25% (not expected); changed its policy stance to neutral from accommodative

Fixed Income Issuance:

(IN) India sold total INR100B vs. INR100B indicated in 3-month and 6-month Bills

(FI) Finland opened its book to sell EUR-denominated 5-year and 30-year bonds

(DK) Denmark sold total DKK2.31B in 2021 and 2027 Bonds

(SE) Sweden sold total SEK3.0B vs. SEK3.0B indicated in 2022 and 2026 bonds

(GR) Greece Debt Agency (PDMA) sold €1.138B vs. €875M indicated in 13-Week Bills; Avg Yield: 2% v 2.70% prior; Bid-to-cover: x v 1.3x prior

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Index snapshot (as of 10:00 GMT)

[Stoxx50 +0.5% at 3,251, FTSE flat at 7,184, DAX +0.3% at 11,586, CAC-40 +0.7% at 4,789, IBEX-35 +0.3% at 9,356, FTSE MIB +0.5% at 18,748, SMI +0.3% at 8,396, S&P 500 Futures +0.1%]

Market Focal Points/Key Themes: European equity indices are trading mixed after a generally positive end to the Asian session overnight; Market participants cautious over political uncertainty over France's upcoming presidential elections; Banking stocks once again trading notably lower across the board; Energy stocks also trading lower as oil trades near contract lows; shares of Vinci and Sanofi leading the gains in the Eurostoxx after releasing their respective year-end results; commodity and mining stocks trading notably higher in the FTSE 100 as copper trades sharply higher intraday.

Upcoming scheduled US earnings (pre-market) include Allergan, Alaska Air, ArcBest, Arch Coal, Axalta Coating, Brink's Company, Broadridge Financial Solutions, Carlyle Group, Cognizant Technology, Euronet Worldwide, Exelon, Goodyear Tire, Genesee & Wyoming, Humana, Jacobs Engineering Group, Louisiana-Pacific, Owens Corning, Performance Food Group, Time Warner, Voya Financial, and Walker & Dunlop.

Equities (as of 09:50 GMT)

Consumer Discretionary: [Air France AF.FR +4.3% (Jan metrics), Carlsberg CARLB.DK -2.7% (FY16 results), Hermes RMS.FR -1.5% (Q4 sales), Redrow RDW.UK +4.0% (H1 results), Schibsted SCH.NO -0.4% (Q4 results), Tomtom TOM2.NL -8.0% (Q4 results)]

Energy: [Gas Natural GAS.ES -0.6% (FY16 results), Tullow Oil TLW.UK -5.0% (FY16 results), Vestas VWS.DK +3.2% (FY16 results, share buyback)]

Financials: [Sampo SAMAS.FI +1.3% (Q4 results)]

Healthcare: [Lundbeck LUN.DK -2.2% (FY16 results), Sanofi SAN.FR +2.6% (Q4 results)]

Industrials: [ABB Ltd ABBN.CH -2.2% (Q4 results), Konecranes KCR1V.FI -7.3% (Q4 results), Maersk MAERSKB.DK -4.0% (FY16 results), Syngenta SYNN.CH +1.4% (FY16 results), Vinci DG.FR +3.7% (FY16 results)]

Materials: [Kemira KRA1V.FI +1.1% (Q4 results), Rio Tinto RIO.UK +1.1% (FY16 results)]

Technology: [OSRAM Licht OSR.DE flat (Q1 results), Sophos SOPH.UK +5.6% (To acquire the commercial software products business of Invincea; Q3 results)]

Telecom: [Swisscom SCMN.CH +1.4% (FY16 results)]

Speakers

BOE agents summary: Consumer spending has been resilient but expected to slow

German DIHK Chambers of Commerce raised Germany 2017 GDP growth forecast from 1.2% to 1.6%with Export growth forecast raised from 2.0% to 3.0%

Thailand Central Bank policy statement noted that today's decision to keep policy steady was again unanimous. Reiterated that current rate remained accommodative for economy and that inflationary pressure remained low. Domestic economic recovery was doing better than expected (exports were clearly recovering) but recent THB currency (Baht) was not good. Economy may grow at a faster pace in 2017 but faces many uncertainties

India Central Bank (RBI) Statement changed its policy stance to neutral from accommodative. It remained committed to bring inflation closer to 4.0% in calibrated manner on a durable basis. Forecasted inflation between 4.0-4.5% range in Apr-Sept 2017 period and between 4.5-5.0% range in Oct '17 thru Mar '18 period

India Central Bank (RBI) Gov Patel post rate decision press conference reiterated MPC commitment to achieving the 4% inflation target while keeping growth in mind

RBI Dep Gov Acharya stated that change in policy stance premised on global inflation risks that are picking up

RBI Dep Gov Gandhi stated that govt remove limits on cash withdrawals from savings accounts in two stages with withdrawals to be increased to INR50K later in Feb and no limits after Mar 13th

Currencies

Recent commentary from Fed officials that the March FOMC meeting could be ‘live' has continue to provide the USD with support. Some dealers noting that there was the potential for Yellen to surprise hawkish next week at her semi-annual testimony to Congress

EUR/USD was softer by 0.4% to test under 1.0650 level. Dealers were looking for more technical breakdown in the pair and cited the 50Day moving average at 1.0605 as key support for the time being.

The GBP/USD was consolidating its recent gains after BOE's Forbes on Tuesday noted that the UK economy might soon need a rate hike. GBP/USD hovered around the 1.25 level. UK House of Commons expected to vote on Article 50 Bill later day (expected in evening local time).

EUR/CHF cross dipped below the 1.0640 level for a 7-Month low as risk aversion lent support as political risks continued to be a concern

Fixed Income:

Bund futures trade at 163.73 up 35 ticks taking out yesterday high as futures post another 3 week high. Continued upside targets 164.28 then 164.45. Support remains at 162.92 followed by 162.44 then 161.63.

Gilt futures trade at 125.52 up 29 tracking Bunds higher but off session highs. BoE agents summary did note that Gilt and Corporate Bond plans remain unchanged. Analysts see support moving to 124.378 then 124.38 followed by 123.81 , 123.17. Resistance lies just above highs at 125.73 followed by 126.00. Short Sterling futures trade flat to 1bp higher with Jun17Jun18 remaining steady at 18/19bp.

Wednesday's liquidity report showed Tuesday's excess liquidity rose to €1.319T up €2B from €1.317T prior. Use of the marginal lending facility rose to €245M from €106M prior.

Corporate issuance saw $3.15B come to market via 3 issuers headlined by by Citigroup $750M offering. Week to date issuance stands at $9.35B with Feb issuance at $20.85B

Looking Ahead

(UK) House of Commons votes on Article 50 Bill (expected in UK evening)

05:30 (DE) Germany to sell €3.0B in 0.25% 2027 Bunds

05:30 (PT) Portugal Debt Agency (IGCP) to sell €1.25B in 5-year and 7-year bonds

06:00 (PT) Portugal Q4 Unemployment Rate: No est v 10.5% prior

06:00 (BR) Brazil Jan IBGE Inflation IPCA M/M: 0.4%e v 0.3% prior; Y/Y: 5.4%e v 6.3% prior

06:00 (CL) Chile Jan CPI M/M: +0.2%e v -0.20% prior; Y/Y: 2.5%e v 2.7% prior, CPI Ex Food and Energy M/M: 0.2%e v 0.1% prior

06:00 (PL) Poland Central Bank (NBP) Interest Rate Decision: Expected to leave Base Rate unchanged at 1.50%

06:00 (RU) Russia to sell combined RUB40B in 2022 and 2031 OFZ Bonds

06:00 (CZ) Czech Republic to sell Bond

06:30 (CL) Chile Central Bank's Traders Survey

06:45 (US) Daily Libor Fixing

07:00 (US) MBA Mortgage Applications w/e Feb 3rd: No est v -3.2% prior

07:00 (UK) PM May weekly question time in House of Commons

08:00 (HU) Hungary Central Bank (NBH) Jan Minutes

08:15 (CA) Canada Jan Annualized Housing Starts: 200.0Ke v 207.0K prior

10:00 (PL) Poland Central Bank Gov Glapinski post rate decision press conference

10:00 (PT) Portugal PM at Debate in Parliament

10:30 (US) Weekly DOE Crude Oil Inventories

12:00 (CA) Canada to sell 30-Year Real Return Bonds

13:00 (US) Treasury to sell $23B in 10-Year Notes

15:00 (NZ) New Zealand Central Bank (RBNZ) Interest Rate Decision: Expected to leave Official Cash Rate unchanged at 1.75%

News and Events:

Swiss people to draw their economic future

Next Sunday, the Swiss will vote on a key matter that could redefine Switzerland’s economic landscape. Back in September 2016, the Socialist Party, the Swiss Trade Union Federation and the Green Party successfully collected the 50,000 signatures required to put this game changing corporate tax reform to a nationwide vote. The voting results will be published on Sunday February 12th throughout the afternoon.

In a nutshell, the Corporate Tax Reform Act III (RIE III in French) is aimed at normalising the Swiss corporate tax system that is currently offering important benefits to foreign companies. Indeed, the current system allows holding companies and companies that make most of their revenue abroad to pay little or no income tax at both the canton and municipal levels. This system has been creating strong incentives for foreign companies to relocate their head office to Switzerland but at the same it has led to a growing number of discontent countries, mostly from the European Union, which accuse the country of depriving them of up to CHF 36.5bn in tax revenue each year. Over the last few years, Brussels has placed increasing pressure on the Swiss government to abolish these special tax regimes, threatening to re-establish trade-tariff and put the country on the tax haven blacklist.

Sunday’s vote is extremely polarised as the referendum committee - mostly left-wing parties - argue that the adoption of the new system would drive down tax revenue by CHF 2.7bn each year, which would pass on the tax burden to citizens. On the other hand, central and right wing parties believe that this is the only solution to save the 150,000 jobs directly related to those companies which benefit from these preferential tax rates. There has been harsh confrontation between the two camps and the results of the voting will likely be a coin toss. The stakes are high for the 8.5mio inhabitants as a substantial part of Switzerland’s success is due to these special tax regimes.

Looking at the persistent strength of the Swiss franc over the last few weeks, it seems that the market is widely underestimating the negative effects of a “no” vote to this Corporate Tax Reform Act. EUR/CHF is once again challenging the 1.06 support area this morning, keeping the SNB on its toes.

French elections becomes a referendum on EU membership

The French presidential election narrative has quickly shifted from a debate over domestic policy to a clear referendum on EU membership. By re-defining the vote as a question of EU participation, Marine Le Pen has deftly tilted the advantage in her favor. Le Pen has forced the French population to look away from some of her more controversial ideology to weigh only the headline agenda. One that has had growing popularity and the ability to skillfully address many of the core issues French civilians are concerned with (such as security and national identity). While the left struggles to find a scandal-free candidate (Macron forced to deny an extramarital affair and Fillion faces abuse of public funds charges), the National Front will focus on hammering home the benefits of a “return to monetary sovereignty.” The evolution of a French EU referendum has significantly increased the political risk and will weigh on the euro. We remain constructive on EURUSD but see upside contained by the French election outlook and possible “Frexit.”

Japan: Best current account surplus in nine years

The Japanese current account surplus released this morning for December marks the biggest surplus since 2007. Today’s data is also the 30th positive surplus in a row. The data shows an increase of 20.65 trillion yen (around $183 billion). Last year, lower energy prices as well as a stronger yen drove down import prices. Looking deeper into the 2016 account surplus, the lion’s share seems to stem from direct investment account.

On the political front, Donald Trump has made his position very clear and will fight against such massive trade surpluses from Japan and China. Foreign exchange rates will be a key topic when Trump meets his Japanese counterpart Shinzo Abe, in a few days time. In our view, Trump's decision to weaken the greenback was a tactical shot at Japan as it continues to battle with its constantly appreciating currency.

The currency war is only gearing up. The BoJ has decided to defend the flat rate on 10-year JGBs despite rising US rates. We reaffirm our bearish position on USDJPY.

Today's Key Issues (time in GMT):

• Dec Household Consumption (MoM), last 0,30%, rev 0,50% SEK / 08:30
• Dec Household Consumption (YoY), last 3,30% SEK / 08:30
• Feb 8 RBI Repurchase Rate, exp 6,00%, last 6,25% INR / 09:00
• Feb 8 RBI Reverse Repo Rate, exp 5,50%, last 5,75% INR / 09:00
• Feb 8 RBI Cash Reserve Ratio, exp 4,00%, last 4,00% INR / 09:00
• Jan Light Vehicle Car Sales YoY, exp 0%, last -1% RUB / 09:23
• Feb 7 FGV CPI IPC-S, exp 0,65%, last 0,69% BRL / 10:00
• Jan IBGE Inflation IPCA MoM, exp 0,42%, last 0,30% BRL / 11:00
• Jan IBGE Inflation IPCA YoY, exp 5,40%, last 6,29% BRL / 11:00
• Feb 3 MBA Mortgage Applications, last -3,20% USD / 12:00
• Feb 6 CPI WoW, last 0,10% RUB / 13:00
• Feb 6 CPI Weekly YTD, last 0,60% RUB / 13:00
• BOE Deputy Governor Jon Cunliffe speaks in Birmingham GBP / 13:00
• Jan Housing Starts, exp 197.3k, last 207.0k CAD / 13:15
• Currency Flows Weekly BRL / 14:30
• Feb 3 DOE U.S. Crude Oil Inventories, exp 2500k, last 6466k USD / 15:30
• Feb 3 DOE Cushing OK Crude Inventory, exp -500k, last -1245k USD / 15:30
• Feb 9 RBNZ Official Cash Rate, exp 1,75%, last 1,75% NZD / 20:00
• RBNZ's Wheeler news conference on policy statement NZD / 21:00
• Dec Building Permits MoM, last -9,20% NZD / 21:45
• Jan Foreign Direct Investment YoY CNY, exp 1,40%, last 5,70% CNY / 23:00

The Risk Today:

EUR/USD's selling pressures have increased. It seems that strong hourly resistance area is given around 1.0800. The road is wide-open towards hoourly support at 1.0581 (16/01/2016 low) and 1.0454 (11/01/2017 low). Expected to see continued consolidation. 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 resistance given at 1.2771 (05/10/2016 high). The technical structure suggests that the pair should keep bouncing 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 is slowly pushing lower towards support at 111.36 (28/11/2016 low). Hourly resistance is given at 115.62 (19/01/2016 high). The break of hourly support given at 112.57 (17/01/2017 low) has confirmed bearish pressures. 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 momentum is still bearish despite ongoing increase. Key resistance is given at a distance at 1.0344 (15/12/2016 high). We believe that the road is clearly wide-open for further decline if the pair fails to break and to hold 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.

'At the moment markets are not driven just by pure economics and fundamentals but also by geopolitical risks, which are currently underpriced.' – Eddie Cheung, Standard Chartered Plc (based on Bloomberg)

Pair's Outlook

The common European currency's fall against the US Dollar was paused in the first hours of Wednesday's trading session, as the currency exchange rate made more attempts to pass the support cluster located below it. The support cluster consists of the weekly S1 at 1.0659 and the monthly PP at 1.0850. It is most likely that the support cluster will be passed, and the currency exchange rate will continue to move lower to the next support level, as the 55-day SMA is located at 1.0621.

Traders' Sentiment

SWFX traders have not changed their open positions, as 52% of traders remain bearish on the pair. In the meantime, 66% of trader setup orders are set up to sell the Euro.

'Sterling is stuck in a range. It's very cheap on most measures, but then real yields are very low and the current account deficit is very big.' – Societe Generale (based on PoundSterlingLive)

Pair's Outlook

The British currency surprised with its performance on Tuesday, having fully recovered from its intraday low of 1.2350 and closed above the 1.25 mark. However, the Cable was still unable to climb over the immediate resistance, namely the weekly PP, which continues to provide resistance today. The Pound still remains on the back foot, risking to edge lower once more. The tough demand area around 1.2440 is expected to prevent the GBP/USD pair from sustaining sharper losses, mainly the 100-day SMA, as it has done so on several occasions.

Traders' Sentiment

Bulls keep gaining numbers, as today 62% of traders are long the Pound and the remaining 38% are short. As for the pending orders, the share of sell ones edged lower from 57 to 54%.

'Until we have answers to some of the big (policy) questions I can't see any free space for dollar bulls to run into. They are fearful of what the administration is prepared to do to actually keep a lid on the dollar.' – Neil Mellor, Bank of New York Mellon (based on Reuters)

Pair's Outlook

A technical correction has been registered yesterday, causing the USD/JPY to almost completely erase Monday's losses. The pair, however, still remains in a bearish trend, where it traded for more than two months now. Further bullish developments could last until the 113.00/50 area is reached, as that is where the exchange rate could retest the bearish trend-line. Nevertheless, technical indicators suggest the US Dollar is to weaken against the Yen today, as they are now giving bearish signals. In this case, the area around 111.50, represented by the Bollinger band and the weekly S1 is likely to provide sufficient support if reached.

Traders' Sentiment

Today 65% of all open positions are long, up from 59% on Tuesday. At the same time, the portion of buy orders remained unchanged at 62%.

'Given the absence of significant data this week, the market's attention may be squarely on politics.' – HSBC (based on Reuters)

Pair's Outlook

On Wednesday morning the yellow metal fluctuated below the weekly R1, which is located at 1,233.81. The fluctuations are very similar to what occurred during Tuesday's trading session. However, there are differences, which give clues regarding the pair's future movements. First of all, the bullion's price was less volatile to the downside, which indicates that there is a minor support level prepping it up. Although, the resistance cluster above the commodity price is now being reinforced by the upper Bollinger band. These factors combined formulate a forecast of a flat session for the metal.

Traders' Sentiment

Traders remain neutral regarding the bullion, as 50% of open positions are long. Meanwhile, 57% of trader set up orders are to buy the metal.

"U.K. house prices continue to be supported by an ongoing shortage of property for sale, low levels of house building, and exceptionally low interest rates". - Martin Ellis, Halifax

House prices in the United Kingdom dropped unexpectedly last month, official figures revealed on Tuesday. Halifax reported its House Price Index, the longest running monthly house price measure, plunged 0.6% in January, following the preceding month's downwardly revised increase of 1.6%, while market analysts expected house prices to grow at a 0.2% pace in the reported month. The January figure marked the first monthly decline since the Brexit vote. On an annual basis, prices climbed 5.7% last month, down from December's 6.5% and below economists' forecasts. In a report, Halifax said that a lack of properties for sale, low interest rates and slow building activity would push house prices higher in the upcoming months. However, it also stated that subdued economic growth and rising pressure on consumer spending could probably weaken house price growth. In January, the average house price was 220,260 pounds. Last week, the British mortgage lender Nationwide said the average house price rose 0.2% on a monthly basis in January, following the previous month's 0.8% increase. Year-over-year, house prices grew at a 4.3% pace last month, the weakest since November 2015, compared to the December increase of 4.3%. According to Nationwide, the housing market would lose some momentum going forward.

'We may be now seeing a return of the ‘twin deficits' that we saw in the 1980s and the 2000s'. - Jeffrey Frankel, Harvard University

The US trade deficit dropped more than expected in December after two straight months of increases amid higher exports. The Commerce Department reported the country's trade gap narrowed 3.2% to $44.3 billion in the reported month, following November's upwardly revised deficit of 45.7 billion, while market analysts held expectations for a decrease to $45.0 billion. The December improvement was driven by stronger exports that posted a 2.7% monthly increase to $190.7 billion, the highest level since April 2015. Advanced technology goods were the main contributor to export growth. However, US exports remained under pressure from the strong Dollar, which rose 4.4% against other major currencies in 2016. The data showed shipments to the EU climbed 10.1%, with exports to Germany advancing 12.4%. The US President Donald Trump accused the EU's largest economy of using the weak Euro to exploit the US. Meanwhile, imports of goods and services jumped 1.5% to $235.0 billion in December, the highest since March 2015. The key drivers of import growth were attributable to higher oil prices and stronger domestic demand. Separately, the JOLTS monthly report released on Tuesday showed job opening in the US totaled 5.50 million in December, slightly down from November's revised 5.51 million and below a 5.56 million market forecast.

EUR/USD as edged lower in the Wednesday session, as the pair continues to head lower this week. Currently, EUR/USD is trading at 1.0650. In economic news, it's an unusually quiet schedule, with only three minor events. The US will release Crude Oil Inventories, with the markets expecting another strong surplus. The estimate stands at 2.7 million barrels. On Thursday, unemployment claims is expected to rise to 249 thousand.

Early on in 2017, Mario Draghi & Co. can sleep easier, as Eurozone growth and inflation numbers have been moving higher. Inflation, which has been at low levels for years, has climbed in recent months, buoyed by higher oil prices. This is positive news for the ECB, which has long tried to raise inflation with an ultra-loose monetary policy. Still, inflation levels remain well below the ECB's target of 2 percent. On Monday, ECB President Mario Draghi poured cold water on hopes of a change in monetary policy due to the improved economic climate. Draghi said that the Eurozone economy was not yet strong enough to withdraw the bank's stimulus program. Draghi's comments sent the euro lower, as EUR/USD is down 1.2 percent this week. There are also market jitters over the French presidential elections in April. Marie Le Penn, the far-right candidate in the ring, is not only a strong supporter of Donald Trump, but is hoping to pull off a Trump-style upset win. Le Pen has promised a referendum on taking France out of the European Union, which has put further pressure on the euro.

President Donald Trump continues to create controversies on a daily basis, and his brash and undiplomatic style has not endeared him to the markets. Moreover, the lack of an economic policy from the new administration is a major source of concern and the the post-election euphoria which sent the markets higher has dissipated. The Federal Reserve, which had trumpeted that it was planning a series of hikes in 2017, was more cautious in its recent rate statement and is expected to adopt a wait-and-see attitude in the coming months. If the economy continues to grow, there is a strong likelihood of another rate hike in the first half of 2017, which is bullish for the dollar. On the other hand, if Trump makes good on his promises to “make America first” and implement protectionist policies, the greenback could lose ground.

Pullback from fresh highs at 0.7694 found footstep at 0.7600 support zone, where rising 10SMA contained pullback for now.

Correction should ideally end here to keep intact larger bull-channel from 0.7163 (02 Jan low), for fresh extension higher.

However, slow stochastic that reversed from overbought territory shows more room at the downside.

Extended correction would face rising 20SMA (currently at 0.7570) that offers significant support and guards lower breakpoints at 0.7510/89 zone (former consolidation floor / 100/200 SMA’s / Fibo 38.2% of 0.7159/0.7694 ascend.

Weak near-term studies keep the downside at risk, with stronger bounce above 0.7660, needed to sideline n/t bears and re-focus initial barriers at 0.7694.

Res: 0.7640, 0.7660, 0.7694, 0.7730
Sup: 0.7604, 0.7570, 0.7510, 0.7489