Sample Category Title

Daily Pivots: (S1) 1.0464; (P) 1.0507; (R1) 1.0531; More....

EUR/CHF's recovery was very brief and range trading continues. Intraday bias remains neutral first. On the upside, sustained break of 38.2% retracement of 1.1149 to 1.0298 at 1.0623 will add to the case of bullish trend reversal. On the downside, however, firm break of 1.0439 should confirm rejection by 1.0623 fibonacci resistance, and bring retest of 1.0298 low instead.

In the bigger picture, a medium term bottom was formed at 1.0298 on bullish convergence condition in daily MACD. Rebound from there is still tentatively viewed part of a corrective pattern. That is, larger down trend from 1.2004 (2018) could still extend through 1.0298 to 61.8% projection of 1.2004 to 1.0505 to 1.1149 at 1.0223. However, sustained trading above 55 week EMA (now at 1.0673) will argue that the down trend is over, and bring stronger rise back to 1.1149 next.

Daily Pivots: (S1) 1.1347; (P) 1.1372; (R1) 1.1398; More...

Range trading continues in EUR/USD and intraday bias stays neutral first. With 1.1265 minor support intact, further rally will remain mildly in favor. On the upside break of 1.1482 will target 38.2% retracement of 1.2348 to 1.1120 at 1.1589 next. Sustained break there will argue that whole fall from 1.2348 has completed too and target 61.8% retracement at 1.1879. On the downside, however, break of 1.1265 support will dampen this bullish view and bring retest of 1.1120 low instead.

In the bigger picture, the decline from 1.2348 (2021 high) is seen as a leg inside the range pattern from 1.2555 (2018 high). Sustained trading above 55 week EMA (now at 1.1613) will argue that it has completed and stronger rise would be seen back towards top of the range between 1.2348 and 1.2555. However, 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.

Daily Pivots: (S1) 1.3544; (P) 1.3572; (R1) 1.3613; More...

Intraday bias in GBP/USD remains neutral and outlook is unchanged. On the upside, break of 1.3642 will resume the rebound from 1.3356 to 1.3748 resistance. Firm break there will revive the bullish case that correction from 1.4248 has completed with three waves down to 1.3158. Further rally should then be seen to retest 1.4248 high. On the downside, however, break of 1.3356 will bring retest of 1.3158 low.

In the bigger picture, as long as 38.2% retracement of 1.1409 to 1.4248 at 1.3164 holds, up trend from 1.1409 (2020 low) is still in progress. On resumption, next target will be 38.2% retracement of 2.1161 to 1.1409 at 1.5134. Nevertheless sustained break of 1.3164 will argue that whole rise from 1.1409 has completed and bring deeper fall to 61.8% retracement at 1.2493.

Daily Pivots: (S1) 0.9199; (P) 0.9230; (R1) 0.9253; More....

Outlook in USD/CHF is unchanged as range trading continues. Intraday bias stays neutral first. Overall, further rally is mildly in favor as long as 0.9090 support holds. On the upside, break of 0.9372 will resume the choppy rally from 0.8925 to 0.9471 high. However, break of 0.9090 will turn bias back to the downside for 0.8925 support 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 the trend has already reversed and rebound the rally from 0.8756 with another impulsive move.

Daily Pivots: (S1) 115.28; (P) 115.53; (R1) 115.71; More...

Intraday bias in USD/JPY remains neutral for the moment. On the downside, below 115.00 will extend the fall from 116.33, as the third leg of the corrective pattern from 116.34. Deeper fall would be seen to 114.14 support, and then 113.46. On the upside, firm break of 116.34 will resume larger up trend from 102.58. Next target is 118.65 long term resistance.

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 120.85 (2015 high) and raise the chance of long term up trend resumption. This will remain the favored case as long as 55 week EMA (now at 111.21) holds.

Daily Pivots: (S1) 1.2661; (P) 1.2693; (R1) 1.2723; More...

Range trading continues in USD/CAD and intraday bias remains neutral for the moment. Further rally is mildly in favor with 1.2634 support intact. On the upside, break of 1.2795 will resume the rally from 1.2448 to 1.2963 resistance next. However, break of 1.2634 support will turn bias back to the downside for 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) 0.7158; (P) 0.7182; (R1) 0.7219; More...

AUD/USD is still staying in range below 0.7247 and intraday bias remains neutral for the moment. Further rise would remain mildly in favor as long as 0.7050 support holds. Above 0.7247 will target 0.7313 resistance. Decisive break there argue that correction from 0.8006 has completed at 0.6966, after hitting 0.6991 key support. Outlook will be turned bullish for 0.7555 resistance next. On the downside, however, break of 0.7050 support will 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.

Australian Dollar rises mildly in Asian session, together with New Zealand Dollar. But both were hammed down after a Russian media reported that Ukraine forces opened fire on four settlements of the LPR. Overall market sentiment remains rather fragile and ultra-sentiment. Dollar and Yen are both picking up some buying while European majors are mixed.

Technically, Gold's retreat from 1879.24 was rather shallow and contained well above rising 4 hour 55 EMA so far. This keeps near term bullish bias intact. Focus could soon be back on 1879.24 temporary top. Break there will resume recent rally to 1916.30 resistance. If happens, that could also come with another down leg in Dollar.

In Asia, at the time of writing, Nikkei is down -0.14%. Hong Kong HSI is up 0.30%. China Shanghai SSE is up 0.35%. Singapore Strait Times is up 0.40%. Japan 10-year JGB yield is up 0.0014 at 0.223. Overnight, DOW dropped -0.16%. S&P 500 rose 0.09%. NASDAQ dropped -0.11%. 10-year yield rose 0.002 to 2.047.

FOMC minutes: Officials to update their assessments at each meeting

The minutes of the January FOMC meeting contained little surprises. Fed acknowledged that " recent inflation readings had continued to significantly exceed the Committee's longer-run goal and elevated inflation was persisting longer than they had anticipated." And, " elevated inflation was a burden on U.S. households, particularly those who were least able to pay higher prices for essential goods and services."

Most participants noted, "if inflation does not move down as they expect, it would be appropriate for the Committee to remove policy accommodation at a faster pace than they currently anticipate." But, "the appropriate path of policy would depend on economic and financial developments and their implications for the outlook and the risks around the outlook."

Fed officials "will be updating their assessments of the appropriate setting for the policy stance at each meeting."

Meanwhile, " in light of the current high level of the Federal Reserve's securities holdings, a significant reduction in the size of the balance sheet would likely be appropriate."

Fed Kashkari: Let's not overdo policy normalization

Minneapolis Fed President Neel Kashkari said yesterday that it's "appropriate" to start normalizing policy. However, he cautioned "let's not overdo it". "If we raise rates really aggressively, we run the risk of slamming the brakes on the economy, putting the economy into recession, which would then -- we'd be crashing back down into this low inflation environment," he warned.

Kashkari also revealed that he and his family had COVID earlier this year, and "a lot of families are experiencing what we just experienced." He added "this will be a while" before people can be comfortably living with the coronavirus.

Japan monthly trade deficit at 8-yr high in Jan, as imports surged to record

Japan exports rose 9.6% yoy to JPY 6332B in January. Imports surged 39.6% yoy to record JPY 8523B. Trade balance came in as JPY -2191B deficit, largest single month deficit since January 2014.

Exports to China dropped -5.4% yoy, first contraction in 19 months. Imports from China rose 23.7% yoy, highest in four months. Exports to US rose 11.5% yoy.

In seasonally adjusted term, exports rose 0.1% mom to JPY 7355B. Imports rose 4.9% mom to JPY 8287B. Trade balance was at JPY -933B deficit.

Australia employment grew 12.9k driven by part-time jobs, hours worked fell

Australia employment grew 12.9k in January, better than expectation of 0k. Full-time jobs dropped -17k but part-time jobs rose 30k.

Unemployment rate was unchanged at 4.2%, but participation rate rose 0.1% to 66.2%. Monthly hours worked, however, dropped -8.8% mom.

Bjorn Jarvis, head of labour statistics at the ABS, "While we again saw higher than usual numbers of people taking annual leave – even more so than last year – the 8.8 per cent fall in hours worked in January 2022 also reflected much higher than usual numbers of people on sick leave."

"As with earlier rapid changes in the labour market during the pandemic, hours continue to be much more affected than employment. This reflects people working reduced or no hours, without necessarily losing their jobs."

Looking ahead

Swiss trade balance will be released in European session. ECB will publish monthly economic bulletin. Later in the day, US will release jobless claims, housing starts and building permits, and Philly Fed survey.

AUD/USD Daily Report

Daily Pivots: (S1) 0.7158; (P) 0.7182; (R1) 0.7219; More...

AUD/USD is still staying in range below 0.7247 and intraday bias remains neutral for the moment. Further rise would remain mildly in favor as long as 0.7050 support holds. Above 0.7247 will target 0.7313 resistance. Decisive break there argue that correction from 0.8006 has completed at 0.6966, after hitting 0.6991 key support. Outlook will be turned bullish for 0.7555 resistance next. On the downside, however, break of 0.7050 support will 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.

Economic Indicators Update

Australia employment grew 12.9k in January, better than expectation of 0k. Full-time jobs dropped -17k but part-time jobs rose 30k.

Unemployment rate was unchanged at 4.2%, but participation rate rose 0.1% to 66.2%. Monthly hours worked, however, dropped -8.8% mom.

Bjorn Jarvis, head of labour statistics at the ABS, "While we again saw higher than usual numbers of people taking annual leave – even more so than last year – the 8.8 per cent fall in hours worked in January 2022 also reflected much higher than usual numbers of people on sick leave."

"As with earlier rapid changes in the labour market during the pandemic, hours continue to be much more affected than employment. This reflects people working reduced or no hours, without necessarily losing their jobs."

Full release here.

Japan exports rose 9.6% yoy to JPY 6332B in January. Imports surged 39.6% yoy to record JPY 8523B. Trade balance came in as JPY -2191B deficit, largest single month deficit since January 2014.

Exports to China dropped -5.4% yoy, first contraction in 19 months. Imports from China rose 23.7% yoy, highest in four months. Exports to US rose 11.5% yoy.

In seasonally adjusted term, exports rose 0.1% mom to JPY 7355B. Imports rose 4.9% mom to JPY 8287B. Trade balance was at JPY -933B deficit.