Sample Category Title

Daily Pivots: (S1) 0.8292; (P) 0.8333; (R1) 0.8358; More...

Intraday bias in EUR/GBP remains on the downside for retesting 0.8201 low. Break there will resume larger down trend. On the upside, firm break of 0.8476 structural resistance will carry larger bullish implication and target 0.8598 resistance next.

In the bigger picture, the down trend from 0.9499 is expected to continue as long as 0.8476 resistance holds. Sustained trading below 0.8276 support will argue that the whole up trend from 0.6935 (2015 low) has reversed. Deeper fall should be seen to 61.8% retracement of 0.6935 to 0.9499 at 0.7917 next. However, firm break of 0.8476 will indicate medium term bottoming at least. Focus will be back on 55 week EMA (now at 0.8523) for more evidence of bullish reversal.

Daily Pivots: (S1) 1.4717; (P) 1.4813; (R1) 1.4860; More...

Intraday bias in EUR/AUD remains on the downside, as fall from 1.5327 is in progress to retest 1.4561 low. Firm break there will resume larger down trend from 1.9799. On the upside, however, break of 1.4986 minor resistance will turn bias back to the upside, and extend the pattern from 1.4561 will another rising leg.

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) 1.0270; (P) 1.0285; (R1) 1.0306; More....

Intraday bias in EUR/CHF remains neutral and outlook is unchanged. On the upside, break of 1.0400 would resume the rebound from 0.9970 to 1.0610 key structural resistance. However, break of 1.0184 minor support will argue that the rebound is finished, ahead of 38.2% retracement of 1.1149 to 0.9970 at 1.0420. In this case, intraday bias will be turned 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.

Daily Pivots: (S1) 132.13; (P) 132.73; (R1) 133.87; More....

Intraday bias in EUR/JPY remains on the upside for 134.11 high. Sustains break there will confirm resumption of larger up trend next target will be 136.53 medium term projection level. On the downside, though, break of 131.36 minor support will delay the bullish case and turn bias neutral first.

In the bigger picture, current development suggests that corrective pattern from 134.11 has completed at 124.37 already. Firm break of 134.11 will resume the up trend from 114.42 (2020 low). Next target is 61.8% projection of 114.42 to 134.11 from 124.37 at 136.53, and then 137.49 (2018 high). This will now remain the favored case as long as 124.37 support holds.

Daily Pivots: (S1) 158.25; (P) 159.24; (R1) 161.22; More...

Intraday bias in GBP/JPY remains on the upside at this point. Up trend form 123.94 has just resumed. Next target is 61.8% projection of 136.96 to 158.19 from 150.95 at 164.07. On the downside, below 159.25 minor support will turn intraday bias neutral and bring consolidations first, before staging another rally.

In the bigger picture, up trend from 123.94 (2020 low) should still be 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 148.94 support holds.

There is no change in the overall theme in the forex markets. Yen's decline continues and there is no sign of slowing yet. Hawkish comments from Fed officials pushed treasury yields further up. Fed Chair Jerome Powell will speak again today and he's expected to reinforce the message that more aggressive tightening lies ahead. Euro and Swiss Franc are currently the next weakest for the week. Sterling is surprisingly the strongest for the week, thanks to buying against Euro and Franc. But Australian and New Zealand Dollar are not too far away. Dollar and Canadian are stuck in the middle for now.

Technically, Gold is worth a watch for the rest of the week as it should be about time for a range breakout. The rejections by 4 hour 55 EMA keeps more decline in favor. Break of 1894.77 will resume the fall from 2070.60 towards 1780.10/1853.70 support zone next. However, break of 1949.55 resistance will extend the rebound from 1894.77 towards 2070.06 high. The next move in Gold might also come with corresponding breakout in EUR/USD.

In Asia, at the time of writing, Nikkei is up 2.80%. Hong Kong HSI is up 1.75%. China Shanghai SSE is down -0.12%. Singapore Strait Times is up 0.47%. Japan 10-year JGB yield is up 0.0066 at 0.226. Overnight, DOW rose 0.74%. S&P 500 rose 1.13%. NASDAQ rose 1.95%. 0.058 to 2.373.

Fed Mester expects some 50bps hikes this year

Cleveland Fed President Loretta Mester said in a speech yesterday, "in my view, inflation, which is at a 40-year high, is the number one challenge for the U.S. economy at this time."

"Given the underlying strength in the economy and the current very low level of the funds rate, I find it appealing to front-load some of the needed increases earlier rather than later in the process because it puts policy in a better position to adjust if the economy evolves differently than expected," she said.

Mester expects interest rate to be at around 2.50% by the end of 2022. That would require some 50bps hikes at the upcoming meetings.

Fed Daly: It's time to tighten policy in the US

San Francisco Fed President Mary Daly said in a virtual event yesterday, "even though we have these uncertainties around Ukraine, and we have the uncertainties around the pandemic, it's still time to tighten policy in the United States."

"Inflation has persisted for long enough that people are starting to wonder how long it will persist," she said. "I'm already focused on let's make sure this doesn't get embedded and we see those longer-term inflation expectations drift up."

"In addition to pushing up wage inflation, which could ultimately push up price inflation, putting us in sort of a vicious cycle," she said, "it's just not a very sustainable way to manage the economy."

AUD/JPY and NZD/JPY extends up trend, break long term resistance

Both AUD/JPY and NZD/JPY ride on broad based weakness in Yen and surge strongly this week. More important, both have breached key long term resistance levels.

As for AUD/JPY, there might be some initial rejection by 90.29 resistance. But near term outlook will stay bullish as long as 85.78 resistance turned support holds. Next medium term target is 61.8% projection of 59.85 to 85.78 from 78.77 at 94.79.

More importantly, AUD/JPY's rise from 59.85 should be reversing the whole down trend from 105.42 (2013 high), which has completed in a three wave structure. Firm break of 94.79 would set the stage for 100% projection at 104.70, which is close the top of a two decade range at 105.42/107.88.

Similarly, NZD/JPY also breaks 83.90 resistance. Near term outlook will stay bullish as long as 80.17 resistance turned support holds. Next medium term target is 61.8% projection of 59.49 to 80.17 from 75.22 at 88.00.

Sustained break of 88.00 will pave the way to 100% projection at 95.90, which is also at the top of two decade range at 94.01/87.74.

Looking ahead

UK CPI and PPI are the main focus today. US will release new home sales while Eurozone will release consumer confidence.

GBP/JPY Daily Outlook

Daily Pivots: (S1) 158.25; (P) 159.24; (R1) 161.22; More...

Intraday bias in GBP/JPY remains on the upside at this point. Up trend form 123.94 has just resumed. Next target is 61.8% projection of 136.96 to 158.19 from 150.95 at 164.07. On the downside, below 159.25 minor support will turn intraday bias neutral and bring consolidations first, before staging another rally.

In the bigger picture, up trend from 123.94 (2020 low) should still be 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 148.94 support holds.

Economic Indicators Update

DXY:

On the H4 timeframe, prices are on bearish momentum. We see the potential for a dip from our 1st resistance at 98.638 in line with 50% Fibonacci retracement towards our 1st support at 98.157 in line with 61.8% Fibonacci retracement. Prices are trading below our ichimoku cloud resistance, further supporting our bearish bias.

Areas of consideration:

• H4 time frame, 1st resistance at 98.638
• H4 time frame, 1st support at 98.157

XAU/USD (GOLD):

On the H4, prices are on bearish momentum and have recently broken out of our graphical overlap. We see the potential for a dip from our 1st resistance at 1918.7 in line with 23.6% Fibonacci retracement towards our 1st support at 1904.910 in line with 161.8% Fibonacci Projection and 127.2% Fibonacci extension and also graphical swing low.. RSI is on bearish momentum, further supporting our bearish bias.

Areas of consideration:

• 4h 1st support at 1904.910
• 4h 1st resistance at 1918.7

GBP/USD:

On the H4, prices are on bullish momentum and consolidating in an inverse head-and-shoulders pattern. Breaking the key graphical overlap will call for further bullish continuation from our 1st support at 1.32727 in line with 61.8% Fibonacci Retracement towards our 1st resistance at 1.33192 in line with 78.6% Fibonacci Retracement. Ichimoku clouds are forecasting the bullish clouds, further supporting our bias.

Areas of consideration:

• H4 1st resistance at 1.33192
• H4 1st support at 1.32727

USD/CHF:

On the H4, with price moving above the ichimoku cloud, we have a bias that price will rise to our 1st resistance at 0.93968 in line with the 61.8% Fibonacci retracement from our 1st support at 0.93239 in line with the horizontal pullback support and 61.8% Fibonacci retracement. Alternatively, price may break 1st support structure and head for 2nd support at 0.92951 in line with the 78.6% Fibonacci retracement

Areas of consideration

• 1st support level 0.93239
• 1st resistance 0.93968

EUR/USD :

On the H4, price is near 1st support level of 1.10283 in line with 78.6% Fibonacci projection. Price can move towards the 1st resistance level of 1.11249 which is in line with 50% Fibonacci retracement and 78.6% Fibonacci projection. Our bullish bias is supported by price trading above the Ichimoku cloud indicator.

Areas of consideration :

• H4 1st resistance at 1.11249
• H4 1st support at 1.10033

USD/JPY:

On the H4 timeframe, prices have approached pivot and swing high. We see the potential for a short pullback from our 1st resistance at 121.112 in line with 23.6% Fibonacci retracement towards our 1st support at 120.380 in line with 38.2% Fibonacci retracement and 161.8% Fibonacci Projection. Divergence is spotted on RSI, further supporting our bearish bias.

Areas of consideration:

• H4 time frame, 1st resistance at 121.112
• H4 time frame, 1st support at 120.380

AUD/USD:

On the H4, price is near 1st resistance level of 0.74766 in line with 161.8% Fibonacci extension. Price can dip towards the 1st support level of 0.73682 which is in line with 38.2% Fibonacci retracement.Our bearish bias is supported by the stochastic indicator as it is at the resistance level

Areas of consideration

• H4 1st resistance at 0.74766
• H4 1st support at 0.73682

NZD/USD:

On the H4, price is near 1st resistance level of 0.69735 in line with 161.8% Fibonacci extension and 78.6% Fibonacci projection. Price can dip towards the 1st support level of 0.68704 which is in line with 38.2% Fibonacci retracement and 61.8% Fibonacci projection.Our bearish bias is supported by stochastic indicator as it is at resistance level..

Areas of consideration :

• H4 1st resistance at 0.69735
• H4 1st support at 0.68704

USD/CAD:

On the H4, with mixed indications and no clear direction of where price is going, we have a bias that price will continue to move within our 1st resistance of 1.26247 in line with the horizontal overlap resistance and 23.6% Fibonacci retracement and 1st support at 1.25598 in line with the horizontal swing low support.

Areas of consideration:

• H4 time frame, 1st support at 1.25598
• H4 time frame, 1st resistance at 1.26247

OIL:

On the H4, with price moving above the ichimoku cloud, we have a bias that price will rise to our 1st resistance at 130.46 in line with the 78.6% Fibonacci retracement from our 1st support at 113.66 in line with the horizontal overlap support and 23.6% Fibonacci retracement. Alternatively, price may break 1st support structure and head for 2nd support at 102.53 in line with the horizontaL overlap support and 78.6% Fibonacci retracement.

Areas of consideration:

• H4 time frame, 1st resistance of 130.46
• H4 time frame, 1st support of 113.66

Dow Jones Industrial Average:

On the H4, with price expected to reverse off the stochastics level, we have a bias that price will drop from 1st resistance at 35011 in line with the horizontal overlap resistance and 161.8% Fibonacci extension to 1st support at 34073 in line with the pullback support .Alternatively, price may break 1st resistance and head for 2nd resistance at 35808 in line with the 161.8% Fibonacci extension.

Areas of consideration :

• H4 1st support at 34073
• H4 1st resistance at 35011

Both AUD/JPY and NZD/JPY ride on broad based weakness in Yen and surge strongly this week. More important, both have breached key long term resistance levels.

As for AUD/JPY, there might be some initial rejection by 90.29 resistance. But near term outlook will stay bullish as long as 85.78 resistance turned support holds. Next medium term target is 61.8% projection of 59.85 to 85.78 from 78.77 at 94.79.

More importantly, AUD/JPY's rise from 59.85 should be reversing the whole down trend from 105.42 (2013 high), which has completed in a three wave structure. Firm break of 94.79 would set the stage for 100% projection at 104.70, which is close the top of a two decade range at 105.42/107.88.

Similarly, NZD/JPY also breaks 83.90 resistance. Near term outlook will stay bullish as long as 80.17 resistance turned support holds. Next medium term target is 61.8% projection of 59.49 to 80.17 from 75.22 at 88.00.

Sustained break of 88.00 will pave the way to 100% projection at 95.90, which is also at the top of two decade range at 94.01/87.74.

Cleveland Fed President Loretta Mester said in a speech yesterday, "in my view, inflation, which is at a 40-year high, is the number one challenge for the U.S. economy at this time."

"Given the underlying strength in the economy and the current very low level of the funds rate, I find it appealing to front-load some of the needed increases earlier rather than later in the process because it puts policy in a better position to adjust if the economy evolves differently than expected," she said.

Mester expects interest rate to be at around 2.50% by the end of 2022. That would require some 50bps hikes at the upcoming meetings.

San Francisco Fed President Mary Daly said in a virtual event yesterday, "even though we have these uncertainties around Ukraine, and we have the uncertainties around the pandemic, it's still time to tighten policy in the United States."

"Inflation has persisted for long enough that people are starting to wonder how long it will persist," she said. "I'm already focused on let's make sure this doesn't get embedded and we see those longer-term inflation expectations drift up."

"In addition to pushing up wage inflation, which could ultimately push up price inflation, putting us in sort of a vicious cycle," she said, "it's just not a very sustainable way to manage the economy."