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Platinum: ⬆️ Buy

• Platinum reversed from support zone
• Likely to rise to resistance level 2030.0

Platinum recently reversed up from the support zone between the round support level 1800.00 (low of wave A from February), lower daily Bollinger Band and the 61.8% Fibonacci correction of the upward impulse from May.

The upward reversal from this support zone created the daily hammer, which stopped the previous ABC correction (2) from the end of January.

Given the clear daily uptrend, Platinum can be expected to rise toward the next resistance level 2030.0 (former support from February and March).

USDCAD: ⬆️ Buy

• USDCAD broke resistance area
• Likely to rise to resistance level 1.3900

USDCAD currency pair recently broke the resistance area between the resistance level 1.3725 (top of the previous wave A from the end of February) and 50% Fibonacci correction of the downward impulse 5 from January.

The breakout of this resistance zone accelerated the C-wave of the active ABC correction (2).

USDCAD currency pair can be expected to rise toward the next resistance level 1.3900 (target price for the completion of the active C-wave).

EURUSD: ⬇️ Sell

• EURUSD reversed from resistance zone
• Likely to fall to support level 1.1450

EURUSD currency pair recently reversed from the resistance area between the resistance level 1.1635 (former support from January), resistance trendline of the daily down channel from January and 38.2% Fibonacci correction of the downward impulse from January.

The downward reversal from this resistance zone stopped the previous long-term ABC correction 4.

EURUSD currency pair can be expected to fall toward the next support level 1.1450 (which has been reversing the price from last year).

Markets

ECB president Lagarde at the ECB Watchers Conference went into more detail on the central bank’s potential response to the energy shock. The strategy is based on three key principles. The first is to assess the nature, size and persistence of the shock before taking decisions on policy. The ECB must identify when higher energy costs risk spilling over into broad-based inflation – be it through indirect effects or through second-round effects via wages and inflation expectations. Lagarde admitted 2026 isn’t 2022 but its legacy lingers in the minds of consumers and businesses and this may prompt quicker pass-through effects. Yesterday’s PMIs are case in point. Secondly, the ECB focuses on risks – which may get non-linear – and not only the baseline. That translates into the third principle: having a set of options for how to respond, which depend on the intensity and duration of the shock and how it propagates. Lagarde then went on to point to three broad cases which, reading between the lines, basically correspond with the ECB’s baseline (A), adverse (B) and severe (C) scenario published last week. An energy shock limited in size and short-lived (A) would be looked through. In case of a shock leading to a large though not too-persistent overshoot of the 2% inflation target (B), some measured adjustment of policy could be warranted, also from a communication & signaling point of view. If inflation is expected to deviate significantly and persistently from target (C), the response must be appropriately forceful or persistent to prevent self-reinforcing mechanisms to kick in and risk a de-anchoring of inflation expectations. It is too soon to determine which scenario is prevailing, Lagarde noted. But in an echo to BoE’s Pill “fog of uncertainty cannot be an excuse for inaction” yesterday, the ECB president sounded resolute: “But we will not be paralyzed by hesitation: our commitment to delivering 2% inflation over the medium term is unconditional.”

Lagarde’s speech came against the backdrop of the US having ramped up diplomatic efforts to end the war with a 15-point proposal and a one-month ceasefire. Iran, however, already rejected the proposal. It has 5 conditions to begin talking about the end of the war, with “international recognition and guarantees of Iran’s sovereign authority over the Strait of Hormuz” probably not landing well in the US. Markets nevertheless take the optimistic view with stocks rebounding around 1.3% in Europe and 0.7-1.3% in the US. Brent oil fell towards the $100 barrier, down from $104.5 yesterday but up from intraday lows. European yields fell 6 bps across the curve at the open before entering a sideways trading range afterwards. Gilts hugely outperform with net daily changes varying between 8-12 bps despite above-consensus and -target February inflation numbers even before the Iran war erupted early March. The US curve bull flattens, showing declines up to 2.4 bps. Currency markets trade calm with a small US dollar bias. EUR/USD eases to sub 1.16, DXY moves higher towards 99.34. USD/JPY hovers around the recent highs just south of 160 (158.9 currently). Sterling treads water around EUR/GBP 0.865.

News & Views

In speech on purchasing power and the real cost of living in New Zealand, Reserve Bank of New Zealand Paul Conway observes that New Zealand is an expensive country, with prices for many products well above the OECD average. Since the pandemic, prices overall have risen by 26%, with prices for some essentials increasing by much more. Income per person has increased by slightly more, suggesting little change in purchasing power. Before 2020, purchasing power of wages grew faster than the OECD average, supported by strong employment growth and favourable terms of trade. Currently wage purchasing power is around the OECD average, but about 20% below the average of the more advanced economies. Monetary policy can anchor prices but can’t make New Zealand more affordable on its own. Sustained gains in purchasing power require higher productivity. Indicators suggest that the quality of structural policies in parts of New Zealand’s framework lag behind OECD best practice. On the current monetary policy stance, Conway indicated that he still sees excess capacity in the economy. At the April 8 meeting, the RBNZ will assess how much it has to lean against the wind in terms of potential rate hikes going forward. Markets see the RBNZ starting rate hikes in summer (May only 30% discounted), which might accelerate later with OCR near 3% discounted around year end. The Kiwi dollar underperformed the Aussie dollar already before and after the conflict in the Middle East started. NZD/USD eased from a peak just below 0.61 end January to currently 0.582.

BoE policymaker Megan Greene signaled that while inflation risks are rising, there is no immediate case for further tightening. At an even today, she said she “wasn’t tempted to hike” at the latest meeting, noting that higher inflation expectations increase risks but do not necessarily imply a sustained inflation cycle.

Greene emphasized that second-round effects remain uncertain. With the labor market weaker than during the 2022 inflation surge, the likelihood of strong wage-driven inflation appears lower. She also pointed to recent PMI data showing rising input costs, but cautioned that these indicators signal risk rather than a guaranteed outcome.

Despite this, Greene underscored that her primary concern is inflation rather than growth. She warned that energy prices are unlikely to fall back quickly due to damage to Gulf infrastructure, while food prices are expected to stay elevated.

Daily Pivots: (S1) 1.1567; (P) 1.1597; (R1) 1.1638; More….

Intraday bias in EUR/USD remains neutral as consolidations continue above 1.1408. With 1.1666 cluster resistance (38.2% retracement of 1.2081 to 1.1408 at 1.1665) intact, further decline is in favor. On the downside, below 1.1408 will resume the fall from 1.2081 to 38.2% retracement of 1.0176 to 1.2081 at 1.1353. However, decisive break of 1.1666 will argue that the fall from 1.2081 has completed, and turn bias back to the upside for 61.8% retracement of 1.2081 to 1.1408 at 1.1824.

In the bigger picture, prior break of 55 W EMA (now at 1.1501) should confirm rejection by 1.2 key cluster resistance level. The whole up trend from 0.9534 (2022 low) might have completed as a three wave corrective rise too. Deeper fall is expected to long term channel support (now at 1.0528). Meanwhile, risk will stay on the downside as long as 1.2081 holds, even in case of strong rebound.

Daily Pivots: (S1) 1.3300; (P) 1.3389; (R1) 1.3522; More...

Intraday bias in GBP/USD remains neutral as range trading continues. With 1.3482 resistance intact, further decline is in favor. On the downside, below 1.3216 will resume the fall from 1.3867 to 1.3008 structural support. However, decisive break of 1.3482 will argue that the fall from 1.3867 has completed, and turn bias back to the upside for 61.8% retracement of 1.3867 to 1.3216 at 1.3618.

In the bigger picture, considering bearish divergence condition in both D and W MACD, a medium term top should be in place at 1.3867. Firm break of 1.3008 support will argue that fall from 1.3867 is at least correcting the rise from 1.0351 (2022 low) with risk of bearish reversal. That would open up further decline to 38.2% retracement of 1.0351 to 1.3867 at 1.2524. For now, medium term outlook will be neutral at best as long as 1.3867 resistance holds, or until further development.

Daily Pivots: (S1) 158.23; (P) 158.71; (R1) 159.19; More...

Intraday bias in USD/JPY stays neutral as consolidations continue below 159.88. In case of another dip, downside should be contained by 38.2% retracement of 152.25 to 159.88 at 156.96 to bring rebound. On the upside, break of 159.88 will target a test on 161.94 high.

In the bigger picture, outlook is unchanged that corrective pattern from 161.94 (2024 high) should have completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94. This will remain the favored case as long as 55 W EMA (now at 152.70) holds. Firm break of 161.94 will pave the way to 61.8% projection of 102.58 to 161.94 from 139.87 at 176.75.

Daily Pivots: (S1) 0.7853; (P) 0.7889; (R1) 0.7919; More….

USD/CHF is still bounded in consolidations below 0.7957 and intraday bias stays neutral. As noted before, rise from 0.7603 should be correcting whole decline from 0.9200. Above 0.7957 will target 38.2% retracement of 0.9200 to 0.7603 at 0.8213. This will remain the favored case as long as 0.7746 support holds.

In the bigger picture, a medium term bottom should be in place at 0.7603 on bullish convergence condition in D MACD. Rebound from there is seen as correcting the fall from 0.9200 only. However, decisive break of 55 W EMA (now at 0.8085) will suggest that it's probably correcting the larger scale down trend from 1.0146 (2022 high). On the other hand, rejection by the 55 W EMA will setup down trend resumption to 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382 at a later stage.