Sample Category Title

Rallies by the euro and sterling pushed the US dollar lower overnight as markets in New York continued to price in peak inflation expectations and assume that all the Fed tightening was now priced into US markets. The dollar index fell sharply by 0.46% to 99.85 after touching my initial target of 100.50 earlier in the day. The selloff has continued in Asia with euro and sterling leading the way, with the yen also rallying after some official noise from Tokyo around exchange movements. The dollar index has fallen by 0.24% to 99.60.

The dollar index is now approaching support around 99.45, and there appears to be some pre-holiday long covering in the market as investors reduce long US dollar exposure and book profits. Several tightening moves by central banks this week, as well as hawkish risk around the ECB, are also prompting a rebalancing. Failure of 99.45 could see losses extend to 97.70 next week, but the US dollar remains in an uptrend if longer-term support at 96.50 holds.

EUR/USD jumped 0.60% overnight to 1.0890, adding another 0.23% to 1.0915 in Asian trading. A widening lead in the election polls by France’s President Macron lifted euro sentiment, and investors bought back shorts ahead of the ECB policy meeting today. Given the hawkish moves by central banks over the last week, that is a sensible strategy ahead of the Easter holiday, despite Ukraine risks. A hawkish tilt by the ECB could set off a large, short squeeze that could extend to the 1.1200 to 1.1300 region where the longer-term resistance line comes in. On the downside, the 1.0800 region is crucial longer-term support. The support line extends back to 2017 and then, if your charts are long enough, all the way back to 1985. A time when I was putting my Air Force application in and had pastel coloured tee-shirts and a flat-top haircut. A daily and weekly close below 1.0800 will be a major bearish signal for EUR/USD.

Sterling jumped by 0.90% to 1.3117 overnight as UK inflation climbed to 30-year highs. That saw tightening by the Bank of England quickly priced into the UK yield curve, starting with 0.25% next month. GBP/USD has climbed another 0.20% in Asia to 1.3140 as shorts are unwound ahead of Easter. A hawkish ECB today should allow sterling to coattail the expected euro rally and could extend gains to 1.3250.

With US yields edging lower overnight, USD/JPY remained steady once again at 125.40 before easing to 125.30 in Asia. USD/JPY is just below its multi-year highs at 125.80 and despite some more official noise from Tokyo today, it still looks likely to test higher next week. The cross remains entirely at the mercy of the US/Japan rate differential, and if US yields fall once again tonight, a short-term below 125.00 is entirely possible. Any drop to 124.00 and 123.50 should find plenty of keen dip buyers. Only a very sharp fall by US yields changes the bullish outlook.

Asian currencies held steady overnight once again, with lower US yields and a weaker US dollar versus the majors being offset by higher oil prices and ongoing China concerns. Asian currencies booked only minor gains overnight and remain steady in Asia today. The only mover of note has been USD/SGD, which has fallen by 0.75% to 1.3520 after the MAS tightened monetary policy via the S$NEER today and maintained a hawkish outlook. USD/CNY and USD/CNH are almost unchanged overnight as any US dollar weakness is offset by Euro strength in the CFETs basket and the expectation of an imminent RRR rate cut. Both USD/CNY and USD/CNH are approaching one-year trendline resistance levels at 6.3770 and 6.3950 respectively. Daily closes above would signal another leg of yuan weakness and limit gains versus the greenback by other Asian currencies.

Daily Pivots: (S1) 163.58; (P) 164.21; (R1) 165.46; More...

GBP/JPY's breach of 164.61 resistance indicates resumption of larger up trend. Intraday bias is back on the upside. Further rise should be seen to long term fibonacci level at 167.93 next. On the downside, below 162.72 minor support will turn intraday bias neutral again first. But overall outlook will stay bullish as long as 159.02 support holds.

In the bigger picture, up trend from 123.94 (2020 low) is still in progress, and notable support from 55 week EMA affirms medium term bullishness. Next target is 61.8% retracement of 195.86 (2015 high) to 122.75 (2016 low) at 167.93. Sustained break there will be a long term bullish signal. This will now remain the favored case as long as 150.95 support holds.

Daily Pivots: (S1) 136.08; (P) 136.48; (R1) 137.26; More....

Range trading continues in EUR/JPY and intraday bias remains neutral. Further rise is expected with 133.70 support intact. On the upside, sustained break of 137.49 resistance will resume larger up trend for 144.06 projection level next. However, firm break of 133.70 will turn bias back to the downside for deeper pull back.

In the bigger picture, up trend from 114.42 (2020 low) is in progress. Sustained break of 137.49 (2018 high) will resume larger pattern from 109.30 (2016 low). Next target will be 100% projection of 114.42 to 134.11 from 124.37 at 144.06. In any case, outlook will now remain bullish as long as 124.37 support holds, in case of deep pull back.

Daily Pivots: (S1) 0.8289; (P) 0.8316; (R1) 0.8331; More...

Intraday bias in EUR/GBP remains neutral for the moment. On the downside, break of 0.8294 will argue that rebound from 0.8201 has completed at 0.8511, and revive near term bearishness. Intraday bias will be back on the downside for retesting 0.8201 low. On the upside, however, above 0.8379 minor resistance will turn bias back to the upside. Further break of 0.8511 will reaffirm that 0.8201 is a medium term bottom, and target 0.8697 medium term fibonacci level next.

In the bigger picture, a medium term bottom should be in place at 0.8201, on bullish convergence condition in daily and weekly MACD. Rise from there could either be a correction to the down trend from 0.9499 (2020 high), or a medium term up trend itself. In either case, further rise should be seen to 38.2% retracement of 0.9499 to 0.8201 at 0.8697. Sustained break there will target 61.8% retracement at 0.9003. This will remain the favored case as long as 0.8294 support holds.

Daily Pivots: (S1) 1.4522; (P) 1.4583; (R1) 1.4673; More...

Intraday bias in EUR/AUD remains neutral as sideway trading continues. Outlook also stays bearish with 1.4940 resistance intact. On the downside, break of 1.4318 will resume larger down trend to 1.3624 long term support next. On the upside, however, firm break of 1.4940 will indicate short term bottoming and turn bias back to the upside for 1.5327 resistance instead.

In the bigger picture, fall from 1.9799 is seen as a long term impulsive move. Next target is 61.8% projection of 1.9799 to 1.5250 from 1.6434 at 1.3623, which is close to 1.3624 long term support (2017 low). Some support could be seen there to bring interim rebound. But overall, break of 1.5354 support turned resistance is needed to be the first sign of medium term bottoming. Otherwise, outlook will stay bearish in case of recovery.

Daily Pivots: (S1) 1.0118; (P) 1.0151; (R1) 1.0213; More....

Intraday bias in EUR/CHF is turned neutral with current recovery. On the upside, break of 1.0204 minor resistance will argue that pull back form 1.0400 has completed already. Intraday bias will be back on the upside for 1.0400 first. Break will resume whole rebound from 0.9970 towards 1.0610 resistance. On the downside, though, below 1.0086 will resume the fall towards 0.9970 low.

In the bigger picture, long term down trend from 1.2004 (2018 high) is still in progress. Next target is 100% projection of 1.2004 to 1.0505 to 1.1149 at 0.9650. In any case, sustained break of 1.0505 support turned resistance (2020 low) is needed to be the first sign of medium term bottoming. Otherwise, outlook will remain bearish.

Daily Pivots: (S1) 1.2520; (P) 1.2598; (R1) 1.2641; More...

Break of 1.2561 minor support argues that rebound from 1.2401 has completed at 1.2675. Intraday bias is back on the downside for 1.2401 support again. ON the upside, break of 1.2675 will flip bias back to the upside for 1.2899 resistance instead.

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) 0.7406; (P) 0.7440; (R1) 0.7489; More...

AUD/USD recovered again after dipping to 0.7390 and intraday bias remains neutral. On the downside, below 0.7390 will resume the fall from 0.7660. On the upside, above 0.7518 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.

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) 125.23; (P) 125.78; (R1) 126.20; More...

Intraday bias in USD/JPY is turned neutral again as it retreat after failing to sustain above 125.85 long term resistance. Focus stays on 125.85 and sustained break there will carry larger bullish implication and target 130.04 long term projection level next. On the downside, break of 124.75 minor support will turn bias to the downside for pull back to 4 hour 55 EMA (now at 124.28) and possibly below.

In the bigger picture, up trend from 98.97 (2016 low) is in progress for retesting 125.85 (2015 high). Sustained break there will confirm long term up trend resumption. Next target will be 61.8% projection of 75.56 (2011 low) to 125.85 (2015 high) from 98.97 at 130.04. This will now remain the favored case as long as 116.34 resistance turned support holds.

Daily Pivots: (S1) 0.9322; (P) 0.9340; (R1) 0.9365; More....

Intraday bias in USD/CHF remains neutral for the moment. On the upside, firm break of 0.9380 should confirm that fall from 0.9459 has completed with three wave down to 0.9193. Such development will revive near term bullishness and turn bias back to the upside for 0.9459 and then 0.9471 resistance. On the downside, below 0.9280 minor support will turn bias to the downside for 0.9193 support next.

In the bigger picture, medium term outlook will be neutral at best as long as 0.9471 resistance holds. Larger down trend could still extend through 0.8756 (2021 low). However, firm break of 0.9471 will argue that whole down trend form 1.0342 (2016 high), has completed with waves down to 0.8756. A medium term up trend should be set up to target 1.0237/0342 resistance zone.