Sample Category Title

EUR/USD - 1.0791

Original strategy  :

Buy at 1.0725, Target: 1.0840, Stop: 1.0690

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.0725, Target: 1.0840, Stop: 1.0690

Position : -

Target :  -

Stop : -

As the single currency has maintained a firm bias after surging again yesterday, suggesting recent erratic upmove from 1.0493 low is still in progress and may extend further gain to previous chart resistance at 1.0829, however, loss of near term upward momentum should prevent sharp move beyond 1.0850-60 and price should falter well below 1.0890-00, risk from there has increased for a retreat to take place later.

In view of this, would not chase this rise here and we are looking to buy euro on subsequent pullback as 1.0706 support should limit downside and bring another rise later. Below 1.0675-80 would defer and suggest top is possibly formed, risk weakness to 1.0640 (previous resistance now support) but still reckon indicated support at 1.0600 would remain intact.

Risk aversion sentiment spreads into Europe, Trump trade fades

Notes/Observations

Risk aversion simmering over concerns President Trump’s legislative agenda facing headwinds; health bill struggles; could jeopardize goal of big tax cuts

North Korea said to have launched missile tests towards Japan; likely failed

Safe haven flow back in spotlight; spot gold at 3-week highs; Japanese yen currency firms

Overnight:

Asia:

North Korea may have launched several missiles on Wednesday morning from its eastern area of Wonsan; launch might have failed; Type of missiles involved was unknown

Bank of Japan (BOJ) releases Jan meeting minutes: BOJ members rejected bond yield target increase; rejected suggestions the central bank should raise its 10-year government bond yield target to match expected gains in Treasury yields. Reiterated view that CPI likely to reach 2% around FY18

Bank of Japan (BOJ) Gov Kuroda: Raising rates on excess reserves or lowering monetary base would be needed to exit QQE

BOJ Member Funo: Vital for BOJ to continue with powerful easing despite market speculation for rate hikes. Now is not the time to consider a shift in BoJ easy policy nor adjustment to bond yield target

Japan Feb Trade Balance saw its surplus hit a 10-month high with exports rising at its best pace in two years

Europe:

German Foreign Min Gabriel: Germany should send new message to EU that investment is more important than austerity

UK House of Lords committee report: Upmost importance for the UK to secure a preferable Free Trade Agreement (FTA) with the European Union for non-financial services

Americas:

Fed's Kaplan (moderate, voter): 2 more hikes this year was a "reasonable" base case, as long as labor market slack continued to decline and inflation continues to rise toward the Fed's 2-percent goal.

Fed's Rosengren (moderate, non-voter): run-up in US real estate prices could potentially amplify any future economic downturn; need to consider tools beyond interest rates that could help cool the sector

Fed's Mester (hawkish, non-voter): Built in more than 3 hikes into her forecast for 2017; Would be concerned if there were less than 3 hikes this year if data hold up.

Energy:

Weekly API Oil Inventories: Crude: +4.5M v -0.5M prior (7th build in the past 9 weeks)

Economic Data

(JP) Japan Feb Nationwide Dept Sales Y/Y: -1.7% v -1.2% prior; Tokyo Dep Store Sales Y/Y: -3.1% v -1.5% prior

(ZA) South Africa Feb CPI M/M: 1.1% v 1.2%e; Y/Y: 6.3% v 6.3%e

(ZA) South Africa Feb CPI Core M/M: 1.1% v 1.2%e; Y/Y: 5.2% v 5.5%e

(ZA) South Africa Q4 Current Account (ZAR): -76B v -147Be; Current Account to GDP Ratio: -1.7% v -3.2%e

(EU) Euro Zone Jan Current Account (Seasonally Adj): €24.1B v €31.0B prior; Current Account NSA (unadj): €2.5B v €47.0B prior

Fixed Income Issuance:

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

(ZA) South Africa sold total ZAR2.35B vs. ZAR2.35B indicated in 2037, 2041 and 2044 bonds

(DK) Denmark sold total DKK1.11B in 2027 and 2039 Bonds

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Index snapshot (as of 09:30 GMT)

Indices [Stoxx50 -0.7% at 3,402, FTSE -0.9% at 7,309, DAX -0.8% at 11,866, CAC-40 -0.9% at 4,957, IBEX-35 -0.9% at 10,119, FTSE MIB -1.0% at 19,719, SMI -0.9% at 8,534, S&P 500 Futures -0.2%]

Market Focal Points/Key Themes: European equity indices are trading sharply lower as the Health Care bill faces stiff opposition ahead of Thursday House vote; Market participants also jittery on political developments in France ahead of the highly-anticipated presidential election scheduled next month; Banking stocks generally lower across Europe with losses in the Eurostoxx led by shares of ING Groep after reports circulated that the company is under investigation by Dutch authorities for money laundering, international corruption; shares of Kingfisher leading the losses seen in the FTSE 100 after releasing FY16 results; Energy, commodity and mining stocks trading notably lower as oil and copper prices trade lower intraday.

Upcoming scheduled US earnings (pre-market) include Actuant, Amaya, EVINE Live, Acushnet, Perry Ellis, PetroChina, and Winnebago Industries.

Equities (as of 09:25 GMT)

Consumer Discretionary: [Kingfisher KGF.UK -5.2% (FY16 results, Chairman to step down), Hermes RMS.FR -1.2% (FY16 results)]

Financials: [ING Groep INGA.NL -5.0% (reportedly under investigation by Dutch authorities for money laundering, international corruption), Savills SVS.UK -1.8% (FY16 results)]

Healthcare: [Novartis NOVN.CH -1.8% (Phase III RELAX-AHF-2 study did not meet primary endpoints)]

Industrials: [Clarkson CKN.NL -4.5% (confirms secondary placing at £27.50/shr), Groupe Gorge GOE.FR -1.0% (FY16 results), Jenoptik JEN.DE -2.8% (outlook, raises div), Kuka KU2.DE -2.9% (final FY16 results), Lenzing LNZ.AT +0.3% (FY16 results), Meyer Burger MBTN.CH -2.4% (FY16 results)]

Materials: [Akzo Nobel AKZA.NL -3.3% (Rejects second proposal from PPG)]

Technology: [Gemalto GTO.NL -21.2% (cuts outlook), Suess MicroTec SMHN.DE +1.1% (Q1 outlook)]

Speakers

ECB’s Villeroy (France) stated that ECB was clearly progressing towards its inflation target and confident that headline and core inflation would converge and be close to target in 2019. Reiterated ECB view that accommodative policy was still needed; not the time to stop stimulating the economy; debate was not predetermined

Sweden Central Bank (Riksbank) reiterated that expansionary monetary policy was having the intended effect; domestic economy was developing well. Inflation had risen to be close to target and long-term inflation expectations are back around 2%

BOE Q1 Agents Summary of Business Conditions: Reiterates inflation is edging higher due to weaker GBP currency(Pound Sterling)

BOJ Gov Kuroda was in his Parliament and informed G20 that BOJ would continue with its powerful easing in order to achieve its 2% inflation target

Bank of Korea (BOK) Suh Bong-gook: Many factors that support a strong USD. Talks on currency manipulation might lead to won appreciation, but KRW currency (won) movement was mostly affected by the level of dollar

Currencies

Risk aversion provided another headwind for the USD as US Treasury yields moved sharply lower over the past day thus eroding the greenback's interest rate allure. safe-havens flows (yen and gold) were the main beneficiaries

USD/JPY was lower for the 6th straight session and near 4-month lows over concerns President Trump would struggle to deliver promised tax cuts that propelled the the greenback since his Nov victory. North Korea said to have launched missile tests towards Japan in a failed test that added to the cautious sentiment. Pair probing the lower end of the 111 handle

EUR/USD softer as the yen component was the driver in price action. Pair at 1.0780, lower by approx 0.2% just ahead of the NY morning.

Fixed Income:

Bund futures trade at 160.17 up 61 ticks continuing its rebound higher on risk aversion flows on weaker European Equity trade. Resistance moves to 160.45 followed by 160.66. Support moves to 159.41 followed by 159.12 then contract low of 158.73.

Gilt futures trade at 126.55 up 55 ticks reversing yesterdays Inflation inspired losses, on steep losses in US and Asian Stocks overnight. Support moves to 125.80 followed by 125.24. Resistance moves to 126.75, 126.87 followed by 127.35. Short Sterling futures trade flat to up 1bp with Jun17Jun18 spread flattening to 20/21Bp flattening some 3bp from yesterday's peak.

Wednesday's liquidity report showed Tuesday's excess liquidity fell to €1.322T a fall of €15B from €1.337T prior. Use of the marginal lending facility fell to €117M from €176M prior.

Corporate issuance saw $10.95B come to market via 9 issuers headlined by ING $4B 3 part offering and Medtronic $2B 3 part offering. Issuance for the week now stands at $16.6B.

Looking Ahead

(IL) Israel Feb Leading 'S' Indicator M/M: No est v 0.2% prior

05:50 (EU) ECB allotment in 7-day USD Liquidity Tender

06:00 (EU) Daily Euribor Fixing

06:30 (UK) DMO to sell £2.0B in 1.5% 2047 Gilts

06:30 (DE) Germany to sell €3.0B in 0.25% Feb 2027 Bunds

06:30 (FR) ECB’s Villeroy (France)

07:00 (US) MBA Mortgage Applications w/e Mar 17th: No est v 3.1% prior

07:00 (IE) Ireland Feb PPI M/M: No est v 0.2% prior; Y/Y: No est v 1.6% prior

07:00 (RU) Russia to sell combined RUB40B in 2019 and 2026 OFZ bonds

07:00 (CZ) Czech Republic to sell 2020 and 2027 bonds

07:30 (CL) Chile Central Bank's Traders Survey

07:30 (EU) ECB's Lautenschlaeger (Germany)

07:45 (US) Daily Libor Fixing

08:00 (BR) Brazil Mid-Mar IBGE Inflation IPCA-15 M/M: 0.2%e v 0.5% prior; Y/Y: 4.7%e v 5.0% prior

08:00 (UK) PM May weekly question time in House of Commons

09:00 (US) Jan FHFA House Price Index M/M: 0.4%e v 0.4% prior

09:15 (UK) Baltic Dry Bulk Index

10:00 (US) Feb Existing Home Sales: 5.56Me v 5.69M prior

10:30 (US) Weekly DOE Crude Oil Inventories

11:00 (CA) Bank of Canada (BOC) Dep Gov Schembri speech

16:00 (NZ) New Zealand Central Bank (RBNZ) Interest Rate Decision: Expected to leave Official Cash Rate unchanged at 1.75%

USD/JPY - 111.25

New strategy  :

Stand aside

Position :  -

Target :  -

Stop : -

Although the greenback has remained under pressure after yesterday’s selloff and near term downside risk remains for recent decline from 115.51 to extend further weakness to 111.00, loss of near term downward momentum should prevent sharp fall below 110.85 (61.8% projection of 115.51-112.26 measuring from 112.87) and reckon 110.50 would hold from here, risk from there is seen for a rebound to take place later. 

In view of this, would not chase this fall here and would be prudent to stand aside in the meantime. Above 111.70-75 would bring test of the Kijun-Sen (now at 111.96) but a break of previous support at 112.26 is needed to signal low is formed instead.

EUR/CAD – 1.4451

 

EUR/CAD: Wave 4 ended at 1.4380 and wave 5 as well as circle wave C has possibly ended at 1.2129, major (A)-(B)-(C) correction has commenced and indicated target at 1.6000 had been met.

As the single currency has rebounded again after finding support at 1.4242, suggesting a retest of recent high at 1.4418 would be seen, break there would add credence to our view that recent fall from 1.5282 has ended, bring at least a strong retracement of this decline to 1.4530-35 (50% Fibonacci retracement of 1.5282-1.3784), however, near term overbought condition should limit upside to 1.4600-10 and price should falter well below 1.4710 (61.8% Fibonacci retracement), risk from there is seen for a retreat later.

Our latest preferred count is that larger degree wave [C] from 1.3289 as well as circle wave B ended at 1.7509 in Dec 2008 with (A): 1.6325, (B): 1.4719 followed by wave (C) at 1.7509, hence circle wave C is unfolding with wave 1 ended at 1.5186 (diagonal wave 1), wave 2 at 1.6096, impulsive wave 3 has ended at 1.2451, followed by wave 4 at 1.4380, in view of recent strong rebound, we are now treating the wave 5 as well as larger degree circle wave C has ended at 1.2129, hence (A)-(B)-(C) correction has commenced from there with impulsive wave (C) now unfolding and indicated initial upside target at 1.6000 had been met and reckon 1.6500 would hold.

On the downside, expect pullback to be limited to 1.4300-10 and said support at 1.4242 should hold, bring another rise later. A daily close below said support at 1.4242 would defer and risk correction to 1.4200 and possibly towards 1.4155-60 but reckon downside would be limited to 1.4100, the single currency may stage another rally from there probably in Q2.

Recommendation: Buy at 1.4300 for 1.4500 with stop below 1.4200.

 

 
On the bigger picture, our long-term count on the monthly chart is that a big sideways consolidation from 2000 low of 1.2557 has possibly ended at 1.7509 as circle wave B with [A]: 1.6976 ( (A): 1.4513, (B): 1.2612, (C): 1.6976), wave [B]: 1.3289 is a double three with 1st a-b-c: 1.5384, x: 1.6709 and 2nd a-b-c: 1.3289. As indicated above, the wave [C] has ended at 1.7509. The selloff from there is now unfolding which itself should be labeled as an impulsive wave with wave 1: 1.5186 (diagonal wave 1), followed by wave 2: 1.6096 and wave 3: 1.2451, wave 4: 1.4380, wave 5 as well as larger degree circle wave C has possibly ended at 1.2129 and major correction has possibly commenced for retracement of recent decline towards 1.4000, then 1.4180-90 (38.2% Fibonacci retracement of 1.7509-1.2129). Below said support at 1.2129 would risk weakness to psychological support at 1.2000 and then 1.1851 (50% projection of 1.7509-1.2451 measuring from 1.4380) but reckon 1.1500 would remain intact, bring reversal later.

AUD/USD     –  0.7660

 




AUD/USD – Wave 5 of C and (B) has possibly ended at 1.1081


 



Aussie found decent demand at 0.7491 and has rallied above indicated resistance at 0.7741, suggesting recent rise from 0.7158 is still in progress and may bring retest of previous chart resistance at 0.7778 but break there is needed to retain bullishness and signal another leg of major corrective upmove from 0.6827 low is underway for headway to 0.7835 resistance first, then 0.7900, however, psychological resistance at 0.8000 should hold from here.



We are keeping our count that top has been formed at 1.1081 (wave 5 of V) and major correction (A-B-C-X-A-B-C) has commenced, indicated downside targets at 0.7945 (61.8% Fibonacci retracement of entire rise from 0.6007-1.1081) and 0.7750 had been met and downside bias is seen for further weakness to 0.6800, then 0.6700 but reckon 0.6500 would hold from here.



 

Our preferred count is that the rally from 0.6007 to 0.7270 (7 Jan 2009) is marked as wave A, the retreat to 0.6248 (2 Feb 2009) is wave B and the subsequent upmove is labeled as wave C with wave (iii) and wave (iv) ended at 0.8265 and 0.7700 respectively and wave (v) as well as 3 ended at 0.9407, then wave 4 ended at 0.8066 (instead of 0.8578). The wave 5 has met our indicated projection target of 1.1060 and could ended at 1.1081, this level is now treated as the peak of wave (C) as well as larger degree wave B, hence major fall in wave C has commenced, our initial downside target at psychological support at 0.7000 has just been met and further weakness to 0.6500 would be seen later.



 

On the downside, whilst pullback to 0.7665-70 cannot be ruled out, reckon downside would be limited to 0.7630-40 and bring another rise later to aforesaid upside targets. Below previous resistance at 0.7592 would defer and suggest top is formed instead, risk weakness to 0.7540-50 but said support at 0.7491 should remain intact, bring rebound later. 



Recommendation: Buy at 0.7600 for 0.7800 with stop below 0.7500



Our alternate count on the daily chart treated the top formed in 2008 at 0.9851 could be a larger degree wave I and was followed by a deep and sharp correction in wave II to 0.6007 and wave III is unfolding from there.
The long-term uptrend started from 0.4775 (2 Apr 2001) with an impulsive structure. Wave I is labeled as 0.4775 to 0.9851 (15 Jul 2008), wave II has ended at 0.6007 (Oct 2008) and wave III is still in progress which may extend further gain to 1.1265.

EUR/USD

Current level - 10803

The overall bias remains positive above 1.0780, for a break through 1.0828, towards 1.0940 area. Crucial on the downside is 1.0712 support. 

Profit-taking affects gold curbing silver and platinum

Resistance		Support
intraday	intraweek	intraday	intraweek
1.0828	1.0870	1.0712	1.0600
1.0870	1.0945	1.0600	1.0490

USD/JPY

Current level - 111.35

The downtrend is intact, heading towards 109.75 support area. Key resistance lies at 112.26.

Resistance		Support
intraday	intraweek	intraday	intraweek
112.26	113.50	111.00	109.75
112.90	115.65	109.75	107.80

GBP/USD

Current level - 1.2476

The outlook is positive above 1.2425 support, for a rise towards 1.2570 area. Crucial on the downside is 1.2335 low.

Resistance		Support
intraday	intraweek	intraday	intraweek
1.2500	1.2570	1.2425	1.2107
1.2570	1.2705	1.2335	1.1984

Spot Gold extends bull-leg from $1195 trough into sixth straight day on Wednesday and hit fresh three week high at $1249, after meeting Fibo 76.4% target at $1247.

Gold benefits from weaker dollar and renewed safe-haven demand on doubts about pro-growth economic agenda of US President Trump.

Daily studies are strong bullish mode and supportive for final push towards targets at $1260 (200SMA) and $1263(27 Feb top).

However, strongly overbought slow stochastic signals that bulls might be delayed, but no firmer bearish signal being generated so far.

Broken Fibo 61.8% at $1237 offers solid support, ahead of 20SMA / broken 50% retracement at $1229, which is expected to contain extended dips.

Res: 1249, 1258, 1260, 1263
Sup: 1243, 1237, 1229, 1226

EUR/JPY - 120.10

Recent wave: wave v of (C) ended at 94.12 and major correction in wave A has ended at 149.79

Trend: Near term up

Original strategy:

Bought at 121.30, stopped at 120.80

Position: - Long at 121.30
Target: -
Stop: - 120.80

New strategy :

Stand aside

Position: -
Target:  -
Stop:-

Although the single currency staged a brief bounce to 121.84, renewed selling interest quickly emerged there and euro has dropped sharply since, dampening our bullishness and signaling recent rise from 118.24 has ended at 122.89 earlier, hence downside risk remains for this fall from 122,89 top to extend further weakness to 119.70-75 and then 119.40-50, however, near term oversold condition should limit downside to 119.00 and support at 118.67 should hold from here,

In view of this, would not chase this fall here and would be prudent to stand aside in the meantime. On the upside, whilst recovery to 120.60-70 cannot be ruled out, reckon upside would be limited to 121.15-20 and bring another decline later. Only break of said resistance at 121.84 would revive bullishness and suggest low is formed instead, bring test of indicated resistance at 122.26 first.

Our latest preferred count is that wave (ii) is ABC-X-ABC which ended at 123.33 and wave (iii) is unfolding with wave iii ended at 100.77, followed by wave iv at 111.57 and wave v as well as the wave (iii) has ended at 97.04, followed by wave (iv) at 111.43 and wave (v) has ended at 94.12 which is also the end of the larger degree v, this also implied the major wave (C) has also ended there, hence major correction has commenced from there with (A) leg unfolding in its lower degree wave c which has possibly ended at 145.69. Under this count, A-B-C wave (B) has commenced with A leg ended at 136.23, wave B at 143.79 and wave C has possibly ended at 149.79.

Our larger degree count is that the decline from 139.26 is wave (C) and is sub-divided into a diagonal triangle i-ii-iii-iv-v with wave i - 105.44, wave ii- 123.33, wave iii - 97.03, wave iv - 111.43, followed by the final wave v as well as the end of wave (C) at 94.12, this also mark the bottom of larger degree wave B. Under this count, major rise in wave C has commenced as an impulsive wave with minor wave III ended at 145.69, wave V is still in progress for further gain to 150.00. Having said that, this so-called wave V could well be the first leg of larger degree 5-waver wave C and this wave C should bring at least a retest of wave A top at 169.97 (July 2008).

'If the economy continues to hold up well as we expect, interest rates could be rising rather sooner than the markets have been anticipating.' - Ruth Gregory, Capital Economics

British inflation surpassed the Bank of England's target of 2% last month, official figures released on Tuesday showed. The Office for National Statistics reported that consumer prices advanced 2.3% in February, following the preceding month's 1.8% increase and surpassing analysts' expectations for a 2.1% climb. Soaring inflation and the weak British Pound may force the Central bank to raise interest rates in the upcoming months. Last week, Kristin Forbes, an external member of the BoE's MPC, was the only one to vote for a rate hike at the March policy meeting. However, other members signaled they could step on the path of rate increases anytime soon if consumer prices continue rising and the economy maintains a strong foothold. Back in February, the annual rate of inflation in the UK rose above the BoE's target for the first time in more than three years, but the Governor Mark Carney claimed that it was important not to overreact to just one data point. Meanwhile, the core annual inflation rate came in at 2.0% in February, compared to January's 1.6% gain, while analysts anticipated an increase of 1.7%. The rise in both headline and core inflation was driven by the weak Pound, which also provided significant support to British manufacturers, making them more competitive in overseas markets.

AUD/USD – 0.7654

Recent wave: Wave 5 ended at 1.1081 and major correction has commenced for fall to 0.7000 and then towards 0.6500-10

Trend: Near term up

Original strategy :

Bought at 0.7645, Target: 0.7800, Stop: 0.7585

Position: - Long at 0.7645
Target:  - 0.7800
Stop: - 0.7585

New strategy :

Hold long entered at 0.7645, Target: 0.7800, Stop: 0.7585

Position: - Long at 0.7645
Target:  - 0.7800
Stop:- 0.7585

Although aussie has retreated sharply after marginal rise to 0.7750 yesterday and marginal weakness from here cannot be ruled out, reckon downside would be limited and as long as 0.7592 (previous resistance) holds, mild upside bias remains for another rise, above said resistance would extend gain to 0.7778 (last year’s high), however, break there is needed to retain bullishness and extend headway to 0.7840-50 but price should falter below 0.7900.

In view of this, we are holding on to our long position entered at 0.7645. Only below previous resistance at 0.7592 would abort and signal top is formed instead, then further choppy trading would take place and risk is seen for pullback to 0.7530-40 but indicated support at 0.7491 should remain intact.

On the 4-hour chart, the move from 0.8066 is the wave 5 with i: 0.8860, ii: 0.8315, wave iii is an extended move ended at 1.0183, iv: 0.9706 and wave v has ended at 1.1081 (also the top of entire wave 5). The subsequent selloff is the major correction which is unfolding as ABC-X-ABC and 2nd A leg has ended at 0.8848, followed by a-b-c wave B which ended at 0.9758, hence, 2nd C wave is now in progress and indicated downside target at 0.7000 and 0.6950 had been met, so further fall to 0.6710-20 cannot be ruled out.