Sample Category Title

Daily Pivots: (S1) 0.9303; (P) 0.9328; (R1) 0.9362; More....

Intraday bias in USD/CHF remains neutral for the moment. On the downside, below 0.9293 will extend the pull back from 0.9459 to 5 day EMA (now at 0.9252). On the upside, above 0.9381 minor resistance will flip bias back to the upside. Firm break of 0.9471 will resume the rise from 0.8756 to 61.8% projection of 0.8756 to 0.9471 from 0.9090 at 0.9532.

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) 1.0995; (P) 1.1032; (R1) 1.1055; More...

Intraday bias in EUR/USD remains neutral and outlook is unchanged. On the downside, below 1.0899 minor support will turn bias back to the downside for 61.8% projection of 1.2265 to 1.1120 from 1.1494 at 1.0786. However, firm break of 1.1120 will confirm short term bottoming at 1.0805. Bias will be back on the upside for 55 day EMA (now at 1.1198) and above.

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) 1.3127; (P) 1.3169; (R1) 1.3210; More...

GBP/USD's break of 1.3210 minor resistance confirms short term bottoming at 1.2999. Intraday bias is back on the upside for rebound to 55 day EMA (now at 1.3361). On the downside, break of 1.3119 minor support will turn intraday bias back to the downside for retesting 1.2999. Firm break there will resume larger down trend from 1.4248.

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.

The selloff in Yen remains the major theme in the market today, but both Dollar and Euro are also now under some pressure. For now, New Zealand Dollar is winning the race, followed by Aussie and Sterling. Swiss Franc and Canadian Dollar are mixed. In other markets, major European indexes are trading slightly in black, so are US futures. Europe and US benchmark treasury yields are extending rally.

Technically, Sterling is displaying some strength today. EUR/GBP's break of 0.8358 minor support suggests completion of rebound from 0.8201. Deeper fall would be seen back to retest this low. GBP/USD's break of 1.3210 minor resistance suggest resumption of rebound from 1.2999, for 55 day EMA at 1.3361. GBP/JPY also break through 158.19 resistance decisively to resume medium term up trend.

In Europe, at the time of writing, FTSE is up 0.51%. DAX is up 0.78%. CAC is up 0.75%. Germany 10-year yield is up 0.055 at 0.525. Earlier in Asia, Nikkei rose 1.48%. Hong Kong HSI rose 3.15%. China Shanghai SSE rose 0.19%. Singapore Strait Times dropped -0.16%. Japan 10-year JGB yield rose 0.0111 to 0.219.

CAD/JPY marches higher, targeting 96.87 next

CAD/JPY's rally accelerates again today and hits as high as 95.68. Further rise is expected as long as 94.34 minor support holds. Next near term target is 161.8% projection of 87.42 to 92.16 from 89.21 at 96.87 next. Below 93.34 minor support will bring consolidations, but retreat should be contained above 92.16 resistances turned support to bring up trend resumption.

Also, noted that the up trend from 73.80 could either be a leg inside the pattern from 68.38, or the start of a long term up trend. Hence, 106.48 high is the next medium term target.

ECB de Guindos: No stagflation, inflation expectations not deanchored

ECB Vice President Luis de Guindos said today, "we can so far dismiss the possibility of stagflation because even in the weakest scenario we are looking at growth of around 2% in 2022."

De Guindos also said higher energy prices are pushing inflation to record high. However, There is no indication that inflation expectations are becoming "deanchored".

ECB Villeroy: We should not overreact to short-term volatility in energy prices

ECB Governing Council member Villeroy de Galhau said today, "it is indeed time to take our foot off the accelerator, as decided during our last governing council."

"That said, we should not overreact to short-term volatility in energy prices, and instead focus more on underlying inflation and on the medium term," he added.

BoJ Kuroda: We need to patiently maintain our powerful monetary easing

BoJ Governor Haruhiko Kuroda reiterated to the parliament today that it's still premature to discuss details on stimulus exit. "Given recent price developments, we need to patiently maintain our powerful monetary easing," he said.

Kuroda said consumer prices are likely to rise. However, he warned that "instead of leading to higher wages and corporate profits, such cost-push inflation will weigh on the economy in the long run by hurting corporate profits and households' real income."

New Zealand Westpac consumer confidence dropped to 92.1, lowest since 2008

New Zealand Westpac consumer confidence dropped from 99.1 to 92.1 in Q1, hitting the lowest level since the global financial crisis in 2008. Present conditions index dropped from 94.8 to 90.1. Expected conditions index dropped from 101.9 to 93.5. One-year economic outlook dropped from -11.2 to -22.8. Five-year economic outlook dropped from 10.0 to 0.8.

Westpac said:"Households have reported that their financial position has deteriorated as the economy has been buffeted by a multitude of headwinds. That includes rising consumer prices and higher mortgage rates, both of which are squeezing households' disposable incomes. The rapid spread of Omicron is also likely to have dampened confidence in recent weeks.

GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.3127; (P) 1.3169; (R1) 1.3210; More...

GBP/USD's break of 1.3210 minor resistance confirms short term bottoming at 1.2999. Intraday bias is back on the upside for rebound to 55 day EMA (now at 1.3361). On the downside, break of 1.3119 minor support will turn intraday bias back to the downside for retesting 1.2999. Firm break there will resume larger down trend from 1.4248.

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.

Economic Indicators Update

ECB Governing Council member Villeroy de Galhau said today, "it is indeed time to take our foot off the accelerator, as decided during our last governing council."

"That said, we should not overreact to short-term volatility in energy prices, and instead focus more on underlying inflation and on the medium term," he added.

The US yields are still on the rise so we see USD strong, but not that much vs commodity currencies. Looking at the 10 year US notes bearish pattern, we see room for more weakness which may allow DXY to retest the 100 mark still. If you are playing any USD longs, then we think best choice can still be the EURUSD.

EURUSD is coming down, trying to break below the channels support line which is another indication for an ongoing downtrend, especially as recovery from March 07 unfolded with a corrective look. As such, be aware of more weaknes in the sessions ahead.

EUR/USD 1h Elliott Wave analysis

The Australian dollar resumes higher on Tuesday after bulls paused on Monday, on headwinds from pivotal Fibo barrier at 0.7416 (76.4% retracement of 0.7555/0.6967).

Today’s break through this barrier, generated fresh signal of continuation of recovery leg from 0.70 zone, where attempts to break lower failed twice (Dec 2021 / Jan 2022), forming a double-bottom pattern.

Risk-sensitive Aussie benefited from gains of Asian stock and was also underpinned by strong gains in AUDJPY, as yen was hit by signals that the BOJ will keep its interest rates unchanged, while Fed and BoE already started tightening their policies.

Close above 0.7416 Fibo level would confirm positive signal for advance through initial barrier at 0.7441 (Mar 7 spike high) that would expose targets at 0.7506 (Fibo 123.6% projection of the upleg from 0.7165), 0.7546 (Fibo 138.2%) and 0.7555 (Oct 28 peak).

Bullish setup of daily MA and strong positive momentum support the action, with initial supports at 0.7365/50 zone) and broken Fibo 6.8% (0.7331) expected to contain potential dips and keep bulls in play.

Res: 0.7441; 0.7506; 0.7546; 0.7558.
Sup: 0.7416; 0.7375; 0.7350; 0.7331.

EURJPY has powered past the 131.90 mid-February high, a barrier which previously managed to pause the two-week aggressive rally that launched from a 15-month low of 124.38. The mostly horizontal simple moving averages (SMAs) continue to mirror the relatively neutral trend, which has governed the pair over the last six-months or so.

The short-term oscillators suggest sturdy positive momentum is intact. The MACD is strengthening far above the zero threshold and its red trigger line, while the RSI is eyeing the 70 overbought level. The stochastic lines are in overbought territory and the %K has not revealed any signs of waning in positive forces.

In the positive scenario, heavy resistance overshadows advances due to congested barriers. Currently, buyers are facing the 132.91-133.47 resistance band that is linked to the October 2021 and the February 2022 highs. Not too far overhead is the 133.67-134.12 resistance section that extends back to May of 2021. If buyers manage to overrun these obstacles and buying interest persists, the bulls may then meet the 134.83 border before pursuing the 135.83 high, identified in February 2018.

If upward pressures abate from the 132.91-133.47 boundary, preliminary support could occur at the 131.90 level ahead of the 131.37 low. If the price pulls below this low, downside constraints may then emanate from the 130.29-130.76 zone. Likewise, the negative price path is also crowded, as slightly lower, the region between the 130.00 handle and the 100-day SMA at 129.57 may prove tough to dive past. Should this fortified zone, which contains the SMAs, fail to provide buyers with a footing, the bears may then challenge the 128.77-129.24 support boundary, which encapsulates the lower Bollinger band.

Summarizing, EURJPY’s bullish bias remains robust and if the price manages to propel beyond the 40-month high of 134.12, upside impetus is likely to juice up significantly. Yet, a price retracement below 128.00 is needed to spark concerns about growing negative pressures.

The USDJPY resumed its steep ascend on Tuesday, advancing nearly 1% in Asian/early European trading.

Fresh bullish acceleration broke through pivotal barriers at 119.50 (Fibo 76.4% of 125.84/98.99) and psychological 120 level, generating strong bullish signal.

The dollar received fresh boost from comments of Fed’s chief Powell, who pointed to the central bank’s readiness to become more aggressive to restore the price stability, while news of no progress in Russia-Ukraine peace talks and growing uncertainty sparked fresh safe-haven demand.

Signs of further divergence between the monetary policies of Fed and a Bank of Japan, as Japanese central bank shows no signs of tightening in the near future, further deflate yen.

Break above 120 opens way for further advance, with Jan 2016 high (121.67) being in focus and guarding 123.74 (Nov 2015 high).

Strongly overbought daily studies suggest some corrective action in the coming sessions, with shallow dips (to be ideally contained at 119.50 zone) expected to offer better opportunities to re-join firmly bullish market.

Res: 121.00; 121.67; 122.00; 123.00.
Sup: 120.00; 119.50; 119.28; 119.00.

Asian stocks traded higher this morning while European shares rose after Fed Chair Jerome Powell struck a more hawkish tone on monetary policy. In the currency arena, king dollar received fresh inspiration amid new rate hike bets as the selloff in bond markets deepened with 10-year Treasury yields hitting 2.34% this morning. Oil prices extended gains on Tuesday as EU countries considered banning Russian oil imports in response to the escalating tensions with Ukraine, while gold has displayed resilience against a strong dollar and rising yields, slipping towards $1930 as of writing.

Investors certainly have a lot on their plate as heightened geopolitical tensions, surging commodity prices, inflation fears and global growth concerns sap confidence. The week ahead promises to be eventful with speeches from various policymakers in focus. Overnight, RBA Governor Philip Lowe said Australia’s economy looks “pretty good” from where he’s standing when questioned by a journalist. It is worth keeping in mind that annual inflation in Australia rose to 3.5% in Q4, which is above the central bank's 2-3% target band. ECB President Lagarde and New York Fed President John William are scheduled to speak later today.

Dollar buoyed by hawkish Powell

It looks like the dollar bulls have been injected with renewed inspiration as the greenback flexes its muscles across the FX space this morning. Fed Powell said that the central bank is prepared to raise interest rates by 50bps at its next meeting if needed. This statement bolstered expectations over the Fed adopting a more aggressive approach towards monetary policy in the face of soaring inflation.

King dollar is likely to extend gains, especially if Treasury yields push higher amid rising inflation. The major risk event for the dollar could be on Thursday as Joe Biden attends an emergency NATO Summit on Ukraine, as well as a G7 meeting. The conflict between Ukraine and Russia continues to sap investor confidence and fuel concerns over the global economy. There is a thick smog of uncertainty created by the military conflict with fears of further escalation leaving investors on edge.

If tensions escalate, this could send shockwaves across global financial markets sending investors rushing towards safe haven assets like the dollar. Should the emergency NATO meeting conclude on a positive note and revive optimism about peace talks between Russia and Ukraine, this could drag the dollar lower as “risk-on” returns.

Oil prices rally as EU considers Russian ban

Oil benchmarks appreciated this morning with both WTI and Crude gaining over 2% as the European Union debated banning oil imports from Russia. The global commodity remains highly sensitive to geopolitical risks and concerns about a supply crunch, especially following the latest development with the EU. Should the bloc join the Russian oil embargo, this could propel oil prices higher as supply fears mount. Looking at the technical picture, WTI crude could challenge $120 and beyond if a daily close above $115 is achieved. The spike high from earlier in the month sits at $138.

Gold waiting for a fresh catalyst?

Gold remains pushed and pulled and by conflicting forces. Renewed Fed rate hike expectations, an appreciating dollar, and rising Treasury yields are nothing but trouble for zero-yielding gold. However, the uncertainty emanating from the heightened geopolitical tensions continues to foster a sense of unease stimulating appetite for safe-haven assets like gold.

This could be a big week for the precious metal due to speeches from Fed officials and the emergency Nato summit on Thursday. Whatever the outcome, it may set the tone and mood for the rest of the second quarter.

Regarding the technical picture, gold is back in a range with support at $1900 and resistance around $1950. The longer prices track sideways, the bigger the breakout could be, when it eventually comes.