Sample Category Title

Inflation in Spain came at a spitting distance to the 10% mark, and inflation in Germany shot up to 7.3% in March, compared to 6.3% expected by analysts and 5.15 printed a month earlier. Not only that the expectations were strong, but they have also been strongly beaten, showing how fast the price stability is getting out of control in Europe amid the Ukrainian war.

And it comes as no surprise given the skyrocketing energy prices that add to the supply chain disruptions.

The EURUSD extended gains to 1.1160 as the jaw-dropping inflation data from the Eurozone countries revived the European Central Bank (ECB) hawks, but the chief Christine Lagarde said that the ECB will only ‘move gradually to normalize policy in the face of raging inflation’, and that the ‘first rate hike wouldn’t come before the end of the ECB’s net purchases’. But the bond buying program is not scheduled to end before the Q3.

As such, the ECB is certainly making the same mistake than the Fed, and may pay a high price for not having been responsive enough. And the lack of response is in the phase of becoming a major risk to the European economies.

As per the euro, the risks are tilted to the upside, but the upside is capped by a surprisingly dovish ECB response to the growing threat to European price stability.

Oil down, appetite up

US crude tanked to $101 per barrel this morning on news that the United States is considering the release of up to 180 million barrels from its strategic petroleum reserve over several months to calm soaring crude prices.

That’s good, because OPEC and Russia are likely to stick to their existing deal to gradually increase oil production, which is expected to increase from 400’000 to 432’000 per day… and the extra 32’000 barrels will certainly not ease the tension at the pump.

Despite falling oil prices this morning, the medium-term outlook remains positive on the back of a tight supply and rising demand. The price pullbacks are still seen as interesting dip buying opportunities to strengthen long positions, and the major support to the actual positive trend stands at the 50-DMA, which is a touch below the $100 psychological support.

On the data front, the latest jobs report showed that the US added 455000 new private jobs in March, in line with expectations. The Q4 growth has been revised slightly lower to 6.9%. Due today, the PCE index, which is another gauge of inflation will certainly confirm the rising pressures in February and keep the Fed hawks on alert.

Yet, US and European futures are in the green this morning, as cheaper oil tempers the inflation worries.

Daily Pivots: (S1) 1.1104; (P) 1.1137 (R1) 1.1192; More...

Intraday bias in EUR/USD remains on the upside at this point. Rise from 1.0805 is at least corrective the decline from 1.2265. Further rise would be seen to 38.2% retracement of 1.2265 to 1.0805 at 1.1363. For now, further rise will remain in favor as long as 1.0943 support holds, in case of retreat.

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) 1.3085; (P) 1.3134; (R1) 1.3185; More...

Intraday bias in GBP?USD remains neutral as consolidation from 1.2999 is extending. Outlook remains bearish with 1.3297 resistance intact, and further decline is expected. On the downside, break of 1.2999 low will resume larger down trend from 1.4248. However, firm break of 1.3297 will turn bias back to the upside for stronger rebound.

In the bigger picture, current development suggests that the up trend 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 to indicate medium term bottoming, or outlook will stay bearish.

Daily Pivots: (S1) 0.9195; (P) 0.9258; (R1) 0.9295; More....

Intraday bias in USD/CHF remains mildly on the downside. Current fall from 0.9459 would target 0.9149 support next. Firm break there will turn near term outlook bearish for 0.9090 support and below. On the upside, above 0.9380 resistance will flip bias back to the upside for 0.9459 resistance instead.

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) 121.03; (P) 122.12; (R1) 122.92; More...

Intraday bias in USD/JPY remains neutral and outlook is unchanged. Further rise is still in favor with 121.17 minor support intact. On the upside, above 125.09 will target 161.8% projection of 109.11 to 116.34 from 114.40 at 126.09, which is close to 125.85 long term resistance. However, break of 121.17 will indicate short term topping, and bring deeper pull back.

In the bigger picture, up trend from 98.97 (2016 low) in 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) 0.7497; (P) 0.7517; (R1) 0.7531; More...

AUD/USD is staying in consolidation from 0.7539 and intraday bias remains neutral. Further rally is expected as long as 0.7372 minor support holds. On the upside, decisive break of 0.7555 should confirm that whole corrective decline from 0.8006 has completed at 0.6966. Further rise should then be seen back to retest 0.8005. However, break of 0.7372 will dampen this bullish view and turn bias back to the downside for 0.7164 support instead.

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) 1.2440; (P) 1.2474; (R1) 1.2519; More...

USD/CAD recovered after dipping to 1.2428 and intraday bias is turned neutral again first. Further decline is expected as long as 1.2591 resistance holds. Corrective pattern from 1.2005 could have completed already. Firm break of 1.2448 support should confirm this bearish case and bring retest of 1.2005. On the upside, nevertheless, break of 1.2591 resistance will turn 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) 158.92; (P) 160.15; (R1) 161.25; More...

GBP/JPY is staying in consolidation from 164.61 and intraday bias remains neutral first. Outlook stays bullish with 158.04 resistance turned support intact, and further rally is expected. On the upside, break of 164.61 will resume larger up trend to long term fibonacci level at 167.93. However, firm break of 158.19 will turn bias to the downside and bring deeper pull back.

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) 135.00; (P) 135.84; (R1) 136.78; More....

Intraday bias in EUR/JPY remains neutral as consolidation from 137.50 is extending. Overall, further rally is expected with 133.70 minor 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 indicate short term topping, and 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) 1.0284; (P) 1.0309; (R1) 1.0329; More....

Intraday bias in EUR/CHF remains neutral and outlook is unchanged. On the upside, break of 1.0400 will resume the rebound from 0.9977 to 1.0610 key structural resistance next. On the downside, however, break of 1.0184 will turn bias back to the downside for retesting 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 is needed to be the first sign of medium term bottoming. Otherwise, outlook will remain bearish.