Sample Category Title

Daily Pivots: (S1) 1.0565; (P) 1.0600; (R1) 1.0649; More...

Intraday bias in EUR/USD stays neutral for the moment. On the upside, break of 1.0759 resistance will argue that corrective fall from 1.1032 has completed at 1.0515, ahead of 38.2% retracement of 0.9534 to 1.1032 at 1.0258. Intraday bias will be turned back to the upside for retesting 1.1032 high. Nevertheless, sustained break of 1.0258 will complete a head and shoulder top (ls: 1.0733, h: 1.1032, rs: 1.0759). Outlook will be turned bearish fro 61.8% retracement at 1.0106.

In the bigger picture, as long as 1.0482 support holds, rise from 0.9534 (2022 low) should continue to 61.8% retracement of 1.2348 (2021 high) to 0.9534 at 1.1273. However, sustained break of 1.0482 will bring deeper fall to 61.8% retracement of 0.9534 to 1.1032 at 1.0106, with risk of breaking through 0.9534 eventually.

Daily Pivots: (S1) 1.2051; (P) 1.2089; (R1) 1.2151; More...

Intraday bias in GBP/USD stays neutral and outlook is unchanged. Corrective pattern from 1.2445 could have completed with three waves to 1.1801 already. On the upside, above 1.2203 will resume the rally from 1.2445/6 resistance zone next. However, decisive break of 4 hour 55 EMA (now at 1.2055) will argue that the pattern from 1.2445 is extending with another falling leg, and turn bias to the downside for 1.1801 again.

In the bigger picture, price action from 1.2445 are seen as a corrective pattern to rise from 1.0351 medium term bottom (2022 low). Resumption is expected as a later stage and firm break of 1.2446 will target 61.8% retracement of 1.4248 (2021 high) to 1.0351 at 1.2759. This will remain the favored case as long as 38.2% retracement of 1.0351 to 1.2445 at 1.1645 holds.

Daily Pivots: (S1) 0.9234; (P) 0.9289; (R1) 0.9347; More...

Intraday bias in USD/CHF stays neutral and outlook is unchanged. Corrective pattern from 0.9058 is still extending. Above 0.9339 will target 0.9439 resistance and possibly above. But overall, outlook will stay bearish as long as 0.9474 fibonacci level holds, and another decline through 0.9058 is expected at a later stage.

In the bigger picture, fall from 1.1046 (2022 high) should still be in progress with 38.2% retracement of 1.0146 to 0.9058 at 0.9474 intact. Rejection by 55 week EMA was a medium term bearish sign. Break of 0.9058 will resume such decline towards 0.8756 support (2021 low). But overall, such fall is still as a leg in the long term range pattern from 1.0342 (2016 high). So, downside should be contained by 0.8756 to bring reversal.

Daily Pivots: (S1) 132.38; (P) 133.10; (R1) 134.49; More...

No change in USD/JPY's outlook as further decline is expected with 135.10 resistance intact. Firm break of 61.8% retracement of 127.20 to 137.90 at 131.28 will pave the way to retest 127.20 low. However, break of 135.10 will argue that fall from 137.90 is completed and turn bias back to the upside for retesting this high.

In the bigger picture, rebound from 127.20 should have completed at 137.90 as a corrective move, with strong break of 55 day EMA. The down trend from 151.93 (2022 high) is not over yet. Break of 127.20 will resume this down trend and target 61.8% projection of 151.93 to 127.20 from 137.90 at 122.61. This will now be the favored case as long as 137.90 resistance holds.

Market sentiment seems to have taken another hit as Silicon Valley Bank filed for Chapter 11 bankruptcy today. Bank shares in the US are in sharp decline, dragging down the broader market. Yen surges again, bolstered by falling treasury yields too. Dollar, Euro, and Swiss Franc emerged as the weakest performers for the day, with renewed weakness also appearing in commodity currencies. It appears that the markets are not quite ready to settle down as we approach the final trading session of the week.

In Europe, at the time of writing, FTSE is down -0.70%. DAX is down -0.90%. CAC is down -1.05%. Germany 10-year yield is down -0.1279 at 2.161. Earlier in Asia, Nikkei rose 1.20%. Hong Kong HSI rose 1.64%. China Shanghai SSE rose 0.73%. Singapore Strait Times rose 0.88%. Japan 10-year JGB yield dropped -0.0240 o 0.273.

Eurozone CPI finalized at 8.5% yoy, core CPI at 5.6% yoy

In February, Eurozone CPI was finalized at 8.5% yoy, a marginal drop from January's 8.6% yoy. Meanwhile, core CPI, which excludes volatile components like energy, food, alcohol, and tobacco, was finalized at 5.6% yoy, up from the previous month's 5.3% yoy. The primary drivers of the annual Eurozone inflation rate were food, alcohol, and tobacco, contributing 3.10%, followed by services at 2.02%, non-energy industrial goods with 1.74%, and energy at 1.64%.

EU's overall CPI for February was finalized at 9.9% yoy, slightly lower than January's 10.0% yoy. Among member states, Luxembourg, Belgium, and Spain registered the lowest annual rates at 4.8%, 5.4%, and 6.0%, respectively. In contrast, Hungary, Latvia, and Czechia experienced the highest annual rates at 25.8%, 20.1%, and 18.4%, respectively. Notably, annual inflation fell in fifteen member states, remained unchanged in two, and rose in ten.

ECB Kazimir: We are not yet at the finish line

ECB Governing Council member Peter Kazimir has asserted that the recent events in financial markets have not altered his stance on the necessity of continuing with monetary tightening. The Slovak central bank governor acknowledged the delicate nature of the current situation but emphasized that the end goal has not yet been reached.

Kazimir said, "even the current events on the financial markets do not change my view that we need to continue," with monetary tightening.

"I am very well aware of the delicacy of the situation ... but we are not yet at the finish line," he added.

He said underlying inflation is "stubbornly sticky". "There are risks to inflation on both sides, but in my view, upward risks are much greater."

Nevertheless, he also noted it was useless to speculate what ECB could do at next meeting on May 4. ECB raised interest rate by 50bps yesterday, but omitted tightening reference in the accompanying statement.

ECB Villeroy: We sent a signal of confidence

ECB Governing Council member Francois Villeroy de Galhau told BFM Business radio that yesterday's 50bps sent a "signal of confidence that is strong and dual" to the public.

"It reflects both confidence in our anti-inflation strategy and confidence in the solidity of European and French banks," he said.

Regarding recent banking crisis, Villeroy, also the Bank of France Governor, noted that "French and European banks are very solid," and they are "not in the same situation as US banks".

ECB had the "tools to ensure the liquidity of banks", but according to him, it's unlikely that they have to be used.

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 132.38; (P) 133.10; (R1) 134.49; More...

No change in USD/JPY's outlook as further decline is expected with 135.10 resistance intact. Firm break of 61.8% retracement of 127.20 to 137.90 at 131.28 will pave the way to retest 127.20 low. However, break of 135.10 will argue that fall from 137.90 is completed and turn bias back to the upside for retesting this high.

In the bigger picture, rebound from 127.20 should have completed at 137.90 as a corrective move, with strong break of 55 day EMA. The down trend from 151.93 (2022 high) is not over yet. Break of 127.20 will resume this down trend and target 61.8% projection of 151.93 to 127.20 from 137.90 at 122.61. This will now be the favored case as long as 137.90 resistance holds.

Economic Indicators Update

The Japanese yen is in positive territory on Friday, trading at 133.02, up 0.56%. USD/JPY touched a one-month low on Thursday, falling as low as 131.72.

How will BoJ react to the new wage agreement?

The Kazuo Ueda era has begun at the Bank of Japan. Former Governor Kuroda has departed after 10 years at the helm and the markets are on alert as Ueda takes over. In his confirmation hearings, Ueda toed the line, stating that the current policy was appropriate. The markets aren’t so sure, as the Bank’s yield control curve (YCC) policy has distorted the bond markets and is in need of change. Kuroda didn’t make any moves at his final meeting earlier this month, which may have put more pressure on Ueda to tweak YCC, which would likely have a significant impact on the markets and the yen.

Meanwhile, the annual Japanese rite of collective wage talks has ended, with employees getting the last laugh. Major Japanese companies, including automakers, agreed to fork over the largest pay increases since 1997, with an average wage increase of around 3%. Japan’s inflation rate of around 4% is much lower than in other major economies but is at a 42-year high and this put pressure on employers to provide hefty wage hikes.

How will the BoJ react to the wage agreement? Former Governor Kuroda insisted that current inflation was due to external factors such as high commodity prices and said that the BoJ would not consider tightening unless there was evidence that inflation was sustainable and being driven by wage growth. The new wage agreement could provide the BoJ with an excuse to tighten policy and even raise interest rates. Governor Ueda’s first meeting on April 28^th promises to be interesting.

USD/JPY Technical

• 136.06 is under pressure in support. 13502 is next
• 136.86 and 1.37.90 are the next resistance lines

AUDJPY came under buying interest yesterday from near the 87.25 zone, which offered support on December 20 and January 3, as well as back on May 12. In the bigger picture, the pair seems to be trading in a trendless mode, establishing a new sideways range between that area and the 93.00 hurdle.

The moving averages are lying above the current price, but in a sideways action it may be more prudent to rely on momentum studies, like the RSI and the MACD. The former rebounded from its 30 line, while the latter, although negative, shows signs of bottoming. Both indicators suggest that there is room for some further recovery within the aforementioned range.

The confirmation could come upon a break above the 90.25 level, marked by the inside swing lows of February 3 and 10. Such a move could see scope for advances towards the upper bound of the range, at around 93.00. That said, the move signaling that the bulls are in full control may be a clear breach of that hurdle.

On the downside, a dip below 87.25 could turn the picture back to bearish as it would confirm a lower low, not only on the daily chart, but on the bigger timeframes as well. The bears could then get encouraged to dive all the way down to the 84.60 territory, defined as support by the low of March 15, 2022.

To recap, AUDJPY rebounded strongly from near the 87.25 territory yesterday, but the broader outlook suggests a new sideways range between that support area and the 93.00 zone. The next directional bias may be determined by the pair’s escape outside those bounds.

In February, Eurozone CPI was finalized at 8.5% yoy, a marginal drop from January's 8.6% yoy. Meanwhile, core CPI, which excludes volatile components like energy, food, alcohol, and tobacco, was finalized at 5.6% yoy, up from the previous month's 5.3% yoy. The primary drivers of the annual Eurozone inflation rate were food, alcohol, and tobacco, contributing 3.10%, followed by services at 2.02%, non-energy industrial goods with 1.74%, and energy at 1.64%.

EU's overall CPI for February was finalized at 9.9% yoy, slightly lower than January's 10.0% yoy. Among member states, Luxembourg, Belgium, and Spain registered the lowest annual rates at 4.8%, 5.4%, and 6.0%, respectively. In contrast, Hungary, Latvia, and Czechia experienced the highest annual rates at 25.8%, 20.1%, and 18.4%, respectively. Notably, annual inflation fell in fifteen member states, remained unchanged in two, and rose in ten.

Full release here.

GBPJPY bounced back into the upward-sloping channel to close with moderate gains following the freefall to a one-month low of 158.54 on Thursday.

The 38.2% Fibonacci retracement of the 172.10-155.34 downleg resumed its resistance role, curtaining the bullish momentum around 161.75. While the price keeps testing that level today, the technical indicators are dampening hopes for a meaningful rally; the MACD is gradually easing below its red signal line; the RSI has inched back below its 50 neutral mark, while the Stochastic oscillator is preparing for a downside reversal.

The 162.75-163.70 area, which encapsulates the resistance trendline drawn from October’s six-year high of 172.10, the 20- and 200-day simple moving averages (SMAs), and the 50% Fibonacci level, could also cease price increases within a short distance. If not, then the bulls could pick up steam towards the channel’s upper boundary seen at 165.60. A decisive close higher could clear the way towards the 61.8% Fibonacci of 166.75 and the 167.00 mark.

Should the 161.75 resistance hold firm, the pair could suffer a bearish channel breakout below 160.80. As a result, the bears could push again towards the 23.6% Fibonacci of 159.30, a break of which is expected to squeeze the price into the 157.45-156.70 region.

In brief, GBPJPY has not entirely allayed downside risks in the short-term picture despite returning to the bullish channel. For that to happen, the pair will need to advance above 163.70. 

ECB Governing Council member Peter Kazimir has asserted that the recent events in financial markets have not altered his stance on the necessity of continuing with monetary tightening. The Slovak central bank governor acknowledged the delicate nature of the current situation but emphasized that the end goal has not yet been reached.

Kazimir said, "even the current events on the financial markets do not change my view that we need to continue," with monetary tightening.

"I am very well aware of the delicacy of the situation ... but we are not yet at the finish line," he added.

He said underlying inflation is "stubbornly sticky". "There are risks to inflation on both sides, but in my view, upward risks are much greater."

Nevertheless, he also noted it was useless to speculate what ECB could do at next meeting on May 4. ECB raised interest rate by 50bps yesterday, but omitted tightening reference in the accompanying statement.