Daily Pivots: (S1) 1.2578; (P) 1.2612; (R1) 1.2656; More...

Range trading continues in USD/CAD and intraday bias remains neutral for the moment. On the upside, break of 1.2675 will flip bias back to the upside for 1.2899 resistance instead. On the downside, below 1.2519 will bring retest of 1.2401 support.

In the bigger picture, focus stays on 38.2% retracement of 1.4667 (2020 high) to 1.2005 (2021 low) at 1.3022. Sustained break there should confirm that the down trend from 1.4667 has completed after defending 1.2061 long term cluster support. Further rise would then be seen towards 61.8% retracement at 1.3650. However, rejection by 1.3022 will maintain medium term bearishness. Break of 1.2005 will resume the down trend from 1.4667 and that carries larger bearish implications too.

Daily Pivots: (S1) 0.7347; (P) 0.7374; (R1) 0.7402; More...

Intraday bias in AUD/USD is turned neutral again as it recovered after hitting 0.7342. On the upside, break of 0.7492 minor resistance will turn bias back to the upside for 0.7660. Firm break there will resume larger rise from 0.6991 to retest 0.8006 high. On the downside, below 0.7342 will target 0.7164 support.

In the bigger picture, correction from 0.8006 could have completed at 0.6966, after drawing support from 0.6991. That is, up trend from 0.5506 (2020 low) might be ready to resume. Firm break of 0.8006 will target 61.8% projection of 0.5506 to 0.8006 from 0.6966 at 0.8511 next. This will remain the favored case as long as 0.7164 support holds.

Daily Pivots: (S1) 1.0763; (P) 1.0788 (R1) 1.0816; More...

Intraday bias in EUR/USD remains neutral for the moment, and further decline is expected with 1.0922 resistance intact. On the downside, firm break of 61.8% projection of 1.1494 to 1.0805 from 1.1184 at 1.0758 will pave the way to 100% projection at 1.0495. However, break of 1.0922 will turn bias back to the upside for stronger rebound towards 1.1184 resistance instead.

In the bigger picture, the decline from 1.2348 (2021 high) is expected to continue as long as 1.1494 resistance holds. Firm break of 1.0635 (2020 low) will raise the chance of long term down trend resumption and target a retest on 1.0339 (2017 low) next. Nevertheless, break of 1.1494 will maintain medium term neutral outlook, and extending term range trading first.

Daily Pivots: (S1) 1.2973; (P) 1.3007; (R1) 1.3033; More...

Range trading continues in GBP/USD and intraday bias remains neutral at this point. With 1.3165 resistance intact, further decline is expected. On the downside, break of 1.2971 will resume larger down trend from 1.4248. Next target is 61.8% projection of 1.3641 to 1.2999 from 1.3297 at 1.2900. On the upside, firm break of 1.3165 will confirm short term bottoming, and turn bias back to the upside for 1.3297 resistance and above.

In the bigger picture, rise from 1.1409 (2020 low) has completed at 1.4248. Decline from 1.4248 could still be a corrective move, or it could be the start of a long term down trend. In either case, deeper decline would be seen back to 61.8% retracement of 2.1161 to 1.1409 at 1.2493. In any case, break of 1.3748 resistance is needed confirm completion of the fall from 1.4248, or outlook will stay bearish.

Daily Pivots: (S1) 0.9462; (P) 0.9493; (R1) 0.9554; More....

USD/CHF's rally is still in progress and intraday bias stays on the upside. Next target is 0.9591 medium term projection level. On the downside, below 0.9432 minor support will turn intraday bias neutral first. But further rally will remain in favor as long as 0.9372 resistance turned support holds.

In the bigger picture, down trend from 1.0342 (2016 high) could have completed with three waves down to 0.8756 (2021 low) already. Rise from 0.8756 is likely a medium term up trend of its own. Next target is 61.8% projection of 0.8756 to 0.9471 from 0.9149 at 0.9591. Sustained break there will pave the way to 100% projection at 0.9864. This will now remain the favored case as long as 0.9149 support holds.

Daily Pivots: (S1) 127.58; (P) 128.28; (R1) 129.58; More...

USD/JPY retreats after hitting 129.39, but intraday bias stays on the upside with 127.76 minor support intact. Current up trend should target 130.04 long term projection level next. On the downside, break of 127.76 minor support will bring deeper pull back. But near term outlook will remain bullish as long as 125.09 resistance turned support holds.

In the bigger picture, the break of 125.85 resistance (2015 high) suggests that whole up trend from 75.56 (2011 low) is resuming. Further rise should be seen to 61.8% projection of 75.56 (2011 low) to 125.85 (2015 high) from 98.97 at 130.04. Sustained break there wave the way to 147.68 (1998 high). For now, this will remain the favored case as long as 121.27 support holds.

Japan's benchmark 10-year JGB yield is pulled above BoJ's cap of 0.25% in Asian session today. That triggered intervention by BoJ to defend the ceiling. At the same time, USD/JPY breached 129 handle but quickly retreated, on talks that BoJ could also intervene at around 130. But judging from overall price actions, the pull back in USD/JPY is probably more due to loss of momentum in Dollar.

The greenback is so far trading as the weakest one for today, followed by Swiss Franc and then Euro. Australian Dollar is leading New Zealand Dollar higher, but Canadian is weak. Sterling is mixed for now.

Technically, EUR/USD, GBP/USD and AUD/USD are all losing downside momentum as seen in 4 hours MACD. It's early to call for a near term reversal. But attention will be on 1.0922 minor resistance in EUR/USD, 1.3165 minor resistance in GBP/USD, and 0.7492 minor resistance in AUD/USD. Break of these levels could prompt more sustainable selling in the greenback.

In Asia, at the time of writing, Nikkei is up 0.91%. Hong Kong HSI is up 0.82%. China Shanghai SSE is down -0.21%. Singapore Strait Times is up 0.70%. Japan 10-year JGB yield is up 0.0069 at 0.255. Overnight, DOW rose 1.45%. S&P 500 rose 1.61%. NASDAQ rose 2.15%. 10-year yield rose 0.051 to 2.913.

Fed Evans expects interest rate at 2.25-2.50% by year end

Chicago Fed President Charles Evans said yesterday that he expected interest rate to be above neutral at 2.25-2.50% by the end of the year.

"That's my expectation, when I see that, taking out special factors, I'm still left with 3 to 3.5% inflation" by the end of 2022, he said. "That's not what we want. If we're at a 2.5% inflation rate, I think we have more things to ponder there."

"By December, we're going to get more data on the micro aspects of the high inflation, price increases, how much is it broadening out," Evans said. "By that time, we're at neutral, and to the extent we don't see it coming down, we're going beyond neutral, absolutely."

Fed Bostic: Really important to get to neutral in expeditious way

Atlanta Fed President Raphael Bostic told CNBC yesterday, "I think it's really important that we get to neutral and do that in an expeditious way."

"I really have us looking at one and three-quarters by the end of the year, but it could be slower depending on how the economy evolves and we do see greater weakening than I'm seeing in my baseline model," he said.

"This is one reason why I'm reluctant to really declare that we want to go a long way beyond our neutral place, because that may be more hikes than are warranted given sort of the economic environment."

Australia Westpac leading index rose to 1.71, highest since last May

Australia Westpac-MI leading index rose from 1.02% to 1.71% in March. That's the fastest growth rate since May 2021. The data are consistent with Westpac's expectation of around 5.5% GDP growth in 2022, with more than 70% of that being concentrated in Q2 and Q3.

Westpac expects RBA to be on hold at May 3 meeting, but be prepared to move interest rate at June 7 meeting. It expects a hike of 15bps in June, with 25bps hikes at most subsequent meetings to reach 1.25% at the end of 2022. In 2023, it expects three further 25bps hikes with interest rate peaking at 2% in June.

Japan exports rose 14.7% yoy in Mar, imports surged 31.2% yoy

Japan exports rose 14.7% yoy to JPY 8461B in March. That's the 13th straight month of rise,  reflecting robust demand for semiconductor manufacturing devices in Taiwan and steel product shipments to Vietnam. Imports rose 31.2% yoy to JPY 8873B. Petroleum imports jumped 69.7% yoy, the 12th straight month of rise. Trade deficit came in as JPY -412B, the 8th straight month of deficit, longest streak since 2015.

In seasonally adjusted term, exports rose 1.7% mom to JPY 7570B. Imports dropped -0.5% mom to JPY 8470B. Trade deficit came in at JPY -900B.

Looking ahead

Germany PPI, Italy trade balance, Eurozone trade balance and industrial production will be released in European session. Later in the day, Canada CPI will take the spotlight. US will release existing home sales and Fed's Beige book report.

USD/JPY Daily Outlook

Daily Pivots: (S1) 127.58; (P) 128.28; (R1) 129.58; More...

USD/JPY retreats after hitting 129.39, but intraday bias stays on the upside with 127.76 minor support intact. Current up trend should target 130.04 long term projection level next. On the downside, break of 127.76 minor support will bring deeper pull back. But near term outlook will remain bullish as long as 125.09 resistance turned support holds.

In the bigger picture, the break of 125.85 resistance (2015 high) suggests that whole up trend from 75.56 (2011 low) is resuming. Further rise should be seen to 61.8% projection of 75.56 (2011 low) to 125.85 (2015 high) from 98.97 at 130.04. Sustained break there wave the way to 147.68 (1998 high). For now, this will remain the favored case as long as 121.27 support holds.

Economic Indicators Update

Japan exports rose 14.7% yoy to JPY 8461B in March. That's the 13th straight month of rise, reflecting robust demand for semiconductor manufacturing devices in Taiwan and steel product shipments to Vietnam. Imports rose 31.2% yoy to JPY 8873B. Petroleum imports jumped 69.7% yoy, the 12th straight month of rise. Trade deficit came in as JPY -412B, the 8th straight month of deficit, longest streak since 2015.

In seasonally adjusted term, exports rose 1.7% mom to JPY 7570B. Imports dropped -0.5% mom to JPY 8470B. Trade deficit came in at JPY -900B.

Australia Westpac-MI leading index rose from 1.02% to 1.71% in March. That's the fastest growth rate since May 2021. The data are consistent with Westpac's expectation of around 5.5% GDP growth in 2022, with more than 70% of that being concentrated in Q2 and Q3.

Westpac expects RBA to be on hold at May 3 meeting, but be prepared to move interest rate at June 7 meeting. It expects a hike of 15bps in June, with 25bps hikes at most subsequent meetings to reach 1.25% at the end of 2022. In 2023, it expects three further 25bps hikes with interest rate peaking at 2% in June.

Full release here.

Atlanta Fed President Raphael Bostic told CNBC yesterday, "I think it's really important that we get to neutral and do that in an expeditious way."

"I really have us looking at one and three-quarters by the end of the year, but it could be slower depending on how the economy evolves and we do see greater weakening than I'm seeing in my baseline model," he said.

"This is one reason why I'm reluctant to really declare that we want to go a long way beyond our neutral place, because that may be more hikes than are warranted given sort of the economic environment."