Sample Category Title

Daily Pivots: (S1) 1.0140; (P) 1.0159; (R1) 1.0180; More....

Intraday bias in EUR/CHF remains neutral for some consolidations above 1.0129 temporary low. But further decline is expected as long as 1.0242 minor resistance holds. Rebound from 0.9970 could have completed at 1.0400 already. Below 1.0129 will turn bias to the downside for retesting 0.9970. On the upside, however, break of 1.0242 will turn bias back to the upside for 1.0400 resistance instead.

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) 1.2552; (P) 1.2585; (R1) 1.2606; More...

Intraday bias in USD/CAD remains neutral for the moment. On the upside, break of 1.2617 will resume the rebound from 1.2401 to 1.2899 resistance. On the downside, break of 1.2401 will revive near term bearishness and target 1.2005 low.

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) 0.7427; (P) 0.7460; (R1) 0.7493; More...

Intraday bias in AUD/USD remains on the downside at this point. Pull back from 0.7660 short term top is in progress for 55 day EMA (now at 0.7346). 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) 0.9321; (P) 0.9348; (R1) 0.9368; More....

Intraday bias in USD/CHF remains neutral at this point. 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.

Daily Pivots: (S1) 1.2986; (P) 1.3033; (R1) 1.3084; More...

Intraday bias in GBP/USD remains on the downside for the moment. Current down trend from 1.4248 is in progress. Next target is 61.8% projection of 1.3641 to 1.2999 from 1.3297 at 1.2900. On the upside, break of 1.3165 resistance is needed to indicate short term bottoming. Otherwise, outlook will remain bearish in case of recovery.

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) 1.0845; (P) 1.0868 (R1) 1.0900; More...

Intraday bias in EUR/USD is turned neutral first with current recovery. But further fall is expected with 1.0987 resistance intact. On the downside, decisive break of 1.0805 low will resume larger down trend. Next target is 61.8% projection of 1.1494 to 1.0805 from 1.1184 at 1.0758, and then 100% projection at 1.0495. On the upside, above 1.0987 minor resistance will turn bias back to the upside for 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.

UK GDP grew 0.1% mom only in February, below expectation of 0.3% mom. Services was the main contributor to growth, up 0.2% mom. But that was offset by -0.6% mom contraction in production, and -0.1% mom in construction.

Overall monthly GDP was 1.5% above its pre-coronavirus level in February 2020. Services was 2.1% above that level while construction was 1.1% above. However, production was -1.9% below.

Full release here.

Also published, manufacturing production came in at -0.4% mom, 3.6% yoy, versus expectation of 0.4% mom, 2.5% yoy. Industrial production came in at -0.6% mom, 1.6% yoy, versus expectation of 0.4% mom, 1.4% yoy. Goods trade deficit narrowed to GBP -20.6B, larger than expectation of GBP -16.8B.

Daily Pivots: (S1) 123.74; (P) 124.21; (R1) 124.75; More...

Focus is now on 125.09 resistance in USD/JPY. Firm break there will resume larger up trend from 102.58. Further break of 125.85 long term resistance will pave the way to 130.04 long term projection level. Consolidation from 125.09 could still extend with another falling leg. But overall outlook will remain bullish as long as 121.17 support holds.

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.

Yen is trading broadly lower in Asian session today. But commodity currencies are also soft on mild risk-off sentiment. On the other hand, Euro and Dollar are the stronger ones, while Sterling and Swiss Franc follow. UK data will be the main focus in European session while US calendar is empty. Nevertheless, more volatility is guaranteed ahead with three major central banks featured, including RBNZ, BoC and ECB, plus lots of important data.

Technically, immediate focus is on 125.09 resistance in USD/JPY. Firm break there will resume larger up trend to 125.85 long term resistance (2015 high). The question is whether that would help take EUR/JPY through 137.50 resistance, or push EUR/USD through 1.0805 support.

In Asia, at the time of writing, Nikkei is down -0.77%. Hong Kong HSI is down -2.65%. China Shanghai SSE is down -1.89%. Singapore Strait Times is down -0.42%. Japan 10-year JGB yield is up 0.0122 at 0.243.

BoJ Kuroda: Economy to continue to recover despite rising commodity prices

BoJ Governor Haruhiko Kuroda said in the quarterly branch manager meeting, "Japan's economy has picked up as a trend, although some weakness has been seen in part, mainly due to the impact of COVID-19."

"As downward pressure on service consumption and the impact of supply shortages diminish, a pickup in overseas demand, accommodative monetary policy, and the government's economic stimulus will likely help the Japanese economy recover despite being affected by rising commodity prices," he added.

Kuroda also cautioned that "extremely high uncertainties" remain over how the crisis in Ukraine will impact commodity prices and the Japanese economy. But he also indicated that commodity inflation is unlikely to trigger a change in the central bank's ultra-loose policy, because it wouldn't last long.

China PPI slowed to 8.3% yoy, CPI rose to 1.5% yoy in Mar

China PPI slowed from 8.8% yoy to 8.3% yoy, but still beat expectation of 7.9% yoy. However, the monthly rise of 1.1% mom in PPI was the fastest in five months, driven by surges in oil prices and non-ferrous metals.

CPI accelerated from 0.9% yoy to 1.5% yoy in March, above expectation of 1.2% yoy. Core CPI, excluding food and energy, rose 1.1% yoy, unchanged from February's reading. Prices of some food like flour, vegetable oil, fresh vegetables and eggs rose and were "affected by the rise in international prices of wheat, corn and soybeans and the domestic [coronavirus] outbreaks", noted senior NBS statistician Dong Lijuan.

RBNZ, BoC, ECB, UK GDP, US CPI...

Three central banks will meet this week. RBNZ will come first and it's expected to raise the Official Cash Rate by another 25bps to 1.25%. A 50bps hike cannot be totally ruled out, but RBNZ would more likely wait for the May Monetary Policy Statement to make the case for a bigger move, if needed.

BoC is expected to raise the Overnight Rate for the second straight month, and by a larger amount of 50bps to 1.00%. The central bank should also indicate that more tightening ahead, to "forcefully" press inflation back to target. A question is on when BoC would start quantitative tightening, and shrink the balance sheet. Some indications, or even actions, on the balance sheet could move the markets.

ECB is not expected to announce any change to monetary policy this week. But in light of recent developments in inflation, the central bank is expected to announce a firm end to the asset purchases after June. The statement would maintain that adjustment in interest rate would come "some time" after that. President Christine Lagarde will reiterate the importance of graduality, flexibility and optionality. There are some speculations that tightening cycle would come in September, followed by another hike before the end of the year. But Lagarde will certainly remain non-committal to any future decisions.

The economic calendar is also extremely busy on data releases in a holiday shortened week. US CPI and retail sales will catch much attention. A wave of UK data, including GDP, employment and inflation is equally important. Germany ZEW economic sentiment, Australia employment will also be closely watched.

Here are some highlights for the week:

• Monday: China CPI, PPI; UK GDP, productions, trade balance, NIESR GDP estimate.
• Tuesday: Australia NAB business confidence; Japan PPI; UK employment; Germany CPI final, ZEW economic sentiment; France trade balance; US CPI.
• Wednesday: Japan machine orders; China trade balance; Australia Westpac consumer sentiment; RBNZ rate decision; UK CPI, PPI; US PPI, BoC rate decision.
• Thursday: New Zealand Business NZ manufacturing; Australia employment; Swiss PPI; ECB rate decision; Canada manufacturing sales, wholesale sales; US jobless claims, retail sales, import prices, U of Michigan sentiment, business inventories.
• Friday: US Empire state manufacturing, industrial production.

USD/JPY Daily Outlook

Daily Pivots: (S1) 123.74; (P) 124.21; (R1) 124.75; More...

Focus is now on 125.09 resistance in USD/JPY. Firm break there will resume larger up trend from 102.58. Further break of 125.85 long term resistance will pave the way to 130.04 long term projection level. Consolidation from 125.09 could still extend with another falling leg. But overall outlook will remain bullish as long as 121.17 support holds.

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.

Economic Indicators Update

China PPI slowed from 8.8% yoy to 8.3% yoy, but still beat expectation of 7.9% yoy. However, the monthly rise of 1.1% mom in PPI was the fastest in five months, driven by surges in oil prices and non-ferrous metals.

CPI accelerated from 0.9% yoy to 1.5% yoy in March, above expectation of 1.2% yoy. Core CPI, excluding food and energy, rose 1.1% yoy, unchanged from February's reading. Prices of some food like flour, vegetable oil, fresh vegetables and eggs rose and were "affected by the rise in international prices of wheat, corn and soybeans and the domestic [coronavirus] outbreaks", noted senior NBS statistician Dong Lijuan.