Sample Category Title

Daily Pivots: (S1) 1.0264; (P) 1.0301; (R1) 1.0346; More....

Intraday bias in EUR/CHF remains mildly on the upside at this point. Rebound from 0.9970 is probably correcting whole down trend from 1.1149. Next target is 38.2% retracement of 1.1149 to 0.9970 at 1.0420. On the downside, however, break of 1.0184 support will turn bias back to the downside for retesting 0.9970 low 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. Firm break there will target 100% projection at 0.9650. In any case, 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) 1.2728; (P) 1.2799; (R1) 1.2837; More...

Intraday bias in USD/CAD remains neutral as range trading continues. On the upside, break of 1.2899 will target 1.2963 resistance first. Break there will target key long term fibonacci level at 1.3022. However, break of 1.2586 will bring retest of 1.2448 support 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) 0.7165; (P) 0.7196; (R1) 0.7226; More...

Intraday bias in AUD/USD remains neutral and outlook is unchanged. Further rally will remain in favor as long as 0.7093 support holds. As noted before, larger decline from 0.8006 might have completed at 0.6966 already. Above 0.7440 will resume the rise from 0.6966 for 0.7555 resistance next. However, firm break of 0.7093 will dampen this bullish case and bring retest of 0.6966 low instead.

In the bigger picture, focus remains on 0.6991 key structural support. Sustained break there will argue that the whole up trend from 0.5506 might be finished at 0.8006, after rejection by 0.8135 long term resistance. Deeper decline would then be seen back to 61.8% retracement of 0.5506 to 0.8006 at 0.6461. Meanwhile, strong rebound from 0.6991 will retain medium term bullishness. That is, whole up trend from 0.5506 is still in progress for another rise through 0.8006 at a later stage.

Daily Pivots: (S1) 117.86; (P) 118.15; (R1) 118.59; More...

Intraday bias in USD/JPY remains neutral for consolidation below 118.44 temporary top. In case of deeper retreat, downside should be contained above 116.34 resistance turned support to bring rally resumption. On the upside, firm break of 118.65 will target 100% projection of 109.11 to 116.34 from 114.40 at 121.63.

In the bigger picture, no change in the view that rise from 102.58 is the third leg of the up trend from 101.18 (2020 low). Such rally should target a test on 118.65 (2016 high). Sustained break there will pave the way to 125.85 (2015 high) and raise the chance of long term up trend resumption. This will remain the favored case as long as 113.46 support holds.

Daily Pivots: (S1) 0.9380; (P) 0.9406; (R1) 0.9438; More....

A temporary top is in place at 0.9430 in USD/CHF with 4 hour MACD crossed below signal line. Intraday bias is turned neutral for some consolidations. But retreat should be contained above 0.9304 resistance turned support to bring another rally. On the upside, above 0.9430 will target 0.9471 resistance first. Break there will resume whole rally 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) 1.2998; (P) 1.3044; (R1) 1.3087; More...

Intraday bias in GBP/USD remains neutral for consolidation above 1.2999 temporary low. Further decline is expected as long as 1.3193 resistance holds. On the downside, below 1.2999 will target 100% projection of 1.4248 to 1.3158 from 1.3748 at 1.2658 next. However, firm break of 1.3193 will indicate short term bottoming, and 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) 1.0914; (P) 1.0967; (R1) 1.1008; More...

EUR/USD is still bounded in range of 1.0805/1120 and intraday bias remains neutral first. Further decline is still expected with 1.1120 support turned resistance intact. On the downside, firm break of 61.8% projection of 1.2265 to 1.1120 from 1.1494 at 1.0786 will pave they way to 100% projection at 1.0349 next. However, strong break of 1.1120 will confirm short term bottoming, at least, and bring stronger rebound back towards 1.1494 structural 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 extend range trading first.

Dollar is digesting some of this week's gain as markets are awaiting FOMC rate hike and economic projections. There are a lot questions to be answered given the uncertainty over inflation and the economic impact of Russia invasion of Ukraine. As for today, Aussie and Euro are the stronger ones while Dollar and Yen are soft. But the picture could flip in any direction depending on the FOMC outcome.

Technically, if Dollar is to show its muscle today, the first move should be a strong break of 118.65 long term resistance (2016 high) in USD/JPY. The second should be a decisive break of 1.0805 near term bottom in EUR/USD. We'll see if the greenback could do that to confirm it's strength.

In Asia, Nikkei closed up 1.64%. Hong Kong HSI is up 7.81%. China Shanghai SSE is up 3.41%. Singapore Strait Times is up 1.42%. Japan 10-year JGB yield is down -0.0053 at 0.205. Overnight, DOW rose 1.82%. S&P 500 rose 2.14%. NASDAQ rose 2.92%. 10-year yield rose 0.020 to 2.160.

ECB Lagarde: Russia-Ukraine war lowers and raises inflation

ECB President Christine Lagarde said in a speech that the Russia-Ukraine war would "lower growth and raise inflation through higher energy and commodity prices, the disruption of international trade and weaker confidence". But the baseline scenario is still for the economy to "grow robustly in 2022".

However, "uncertainty surrounding the outlook had increased significantly", policy makers are looking at two alternative scenarios that " growth could be dampened significantly and inflation could be considerably higher in the near term". Still, "in all scenarios, inflation is still expected to decrease progressively and settle at levels around our two per cent inflation target in 2024."

Lagarde added that if data support the expectation that medium-term inflation outlook will not weaken even after the end of net asset purchases, ECB will "conclude net purchases in the third quarter". Any adjustments to interest rates will "take place some time after the end of our net purchases and will be gradual."

Japan imports surged 34% yoy in Feb on Yen depreciation and higher energy prices

Japan exports rose 19.1% yoy to JPY 7190B in February. That's the 12th straight month of growth. Auto exports increased 8.3% yoy, rebounding from January's -1.0% yoy decline. Exports to the US rose 16.0% yoy to JPY 1.3T. Exports to China rose 25.8% yoy to JPY 1.5T.

Imports rose 34.0% yoy to 7858B. That's the 13th consecutive month of growth. Crude oil imports surged a massive 93.2% yoy to JPY 08.6B, up for the 11th straight months, on the back of Yen's depreciation and higher oil prices. Trade deficit came in at JPY -668B.

In seasonally adjusted terms, exports dropped -0.5% mom to JPY 7432B. Imports rose 2.7% mom to JPY 8463B. Trade deficit widened to JPY -1031B.

Australia Westpac leading index improved slightly in Feb

Australia Westpac-MI leading index improved slightly from -0.50% to -0.25% in February. But Westpac is expecting "strong above trend growth in 2022", largely due to the aftermath of the extraordinary emergency policy measures from both the fiscal and monetary authorities during 2020 and 2021.

Westpac expects RBA to stand pat in April meeting with its "patience" stance. But after Q1 inflation data and further progress on wages growth, RBA would moving to a tightening bias over June and July, prior to raising the cash rate in August.

FOMC rate hike and projections awaited, 10-year yield pressing key resistance

Fed is widely expected to raise interest rate for the first time since 2018, lifting the federal funds rate target by just 25bps to 0.25-0.50%. It's nonetheless the start of a tightening cycle to combat persistently high inflation.

The new economic projections would be the main market moving factor. Given the development since December, it's likely that FOMC members are now penciling more than just three 25bps rate hike this year. There are three questions to answer. Firstly, where would interest be by the end of the year? Secondly, is FOMC going to "front-load" some of the rate hikes? And thirdly, will the estimated longer run federal funds rate be lifted from the current 2.50%?

US 10-year yield is extending recent up trend this week, and it's now pressing a important long term resistance zone at 2.159/2.187 (61.8% retracement of 3.248 to 0.398 at 2.159, 61.8% projection of 0.398 to 1.765 to 1.343 at 2.187). This level is expected to hold for a while.

Nevertheless, a strong break there could clear the way to 100% projection at 2.710, probably with some medium term up side acceleration. That, if happens, would be very supportive to USD/JPY and set up further rally back to 125, the level reached only back in 2015.

Next target is cluster resistance level at 2.159/2.187 (61.8% retracement of 3.248 to 0.398 at 2.159, 61.8% projection of 0.398 to 1.765 to 1.343 at 2.187). Current upside momentum doesn't warrant a strong break of this cluster level yet. This, strong resistance will likely be seen there to set the top of the range of a medium term consolidation.

However, strong break of 2.159/2.187 will suggest some dramatic underlying development. In such case, coupled with extending risk aversion, the greenback could be given a strong, sustainable boost.

On the data front

Canada CPI and wholesale sales will be released. US retail sales import price, business inventories, NAHB housing index will also be featured.

EUR/USD Daily Outlook

Daily Pivots: (S1) 1.0914; (P) 1.0967; (R1) 1.1008; More...

EUR/USD is still bounded in range of 1.0805/1120 and intraday bias remains neutral first. Further decline is still expected with 1.1120 support turned resistance intact. On the downside, firm break of 61.8% projection of 1.2265 to 1.1120 from 1.1494 at 1.0786 will pave they way to 100% projection at 1.0349 next. However, strong break of 1.1120 will confirm short term bottoming, at least, and bring stronger rebound back towards 1.1494 structural 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 extend range trading first.

Economic Indicators Update

Fed is widely expected to raise interest rate for the first time since 2018, lifting the federal funds rate target by just 25bps to 0.25-0.50%. It's nonetheless the start of a tightening cycle to combat persistently high inflation.

The new economic projections would be the main market moving factor. Given the development since December, it's likely that FOMC members are now penciling more than just three 25bps rate hike this year. There are three questions to answer. Firstly, where would interest be by the end of the year? Secondly, is FOMC going to "front-load" some of the rate hikes? And thirdly, will the estimated longer run federal funds rate be lifted from the current 2.50%?

US 10-year yield is extending recent up trend this week, and it's now pressing a important long term resistance zone at 2.159/2.187 (61.8% retracement of 3.248 to 0.398 at 2.159, 61.8% projection of 0.398 to 1.765 to 1.343 at 2.187). This level is expected to hold for a while.

Nevertheless, a strong break there could clear the way to 100% projection at 2.710, probably with some medium term up side acceleration. That, if happens, would be very supportive to USD/JPY and set up further rally back to 125, the level reached only back in 2015.

Japan exports rose 19.1% yoy to JPY 7190B in February. That's the 12th straight month of growth. Auto exports increased 8.3% yoy, rebounding from January's -1.0% yoy decline. Exports to the US rose 16.0% yoy to JPY 1.3T. Exports to China rose 25.8% yoy to JPY 1.5T.

Imports rose 34.0% yoy to 7858B. That's the 13th consecutive month of growth. Crude oil imports surged a massive 93.2% yoy to JPY 08.6B, up for the 11th straight months, on the back of Yen's depreciation and higher oil prices. Trade deficit came in at JPY -668B.

In seasonally adjusted terms, exports dropped -0.5% mom to JPY 7432B. Imports rose 2.7% mom to JPY 8463B. Trade deficit widened to JPY -1031B.