Sample Category Title

Daily Pivots: (S1) 0.8359; (P) 0.8380; (R1) 0.8408; More...

Intraday bias in EUR/GBP is turned neutral with current recovery. On the downside, below 0.8344 minor support will bring retest of 0.8282 low. . Sustained break of 0.8276 key long term support will carry larger bearish implication. On the upside, above 0.8411 minor resistance will turn bias back to the upside for 0.8476 resistance. Break there will resume the rebound from 0.8282.

In the bigger picture, price actions from 0.9499 (2020 high) are still seen a corrective pattern that should be contained by 0.8276 long term support (2019 low). Bullish convergence condition in daily MACD and break of 55 day EMA raises the chance that it might be completed. Sustained trading above 38.2% retracement of 0.9499 to 0.8282 at 0.8747 will affirm this bullish case. However, sustained break of 0.8276 will argue that the long term trend has reversed.

Daily Pivots: (S1) 1.5840; (P) 1.5886; (R1) 1.5927; More...

Intraday bias in EUR/AUD remains neutral and outlook is unchanged. As long as 1.5776 support holds, further rise remains mildly in favor. Above 1.6002 will turn bias to the upside for 1.6223 resistance first. However, on the downside, break of 1.5776 will turn bias back to the downside for 1.5559 support instead.

In the bigger picture, rise from 1.5354 is seen as the third leg of the corrective pattern from 1.5250 low. Further rise cannot be ruled out, but even in that case, strong resistance should be seen at 38.2% retracement of 1.9799 to 1.5250 at 1.6988. Larger down trend from 1.9799 is in favor to extend through 1.5250 at a later stage.

Daily Pivots: (S1) 1.0460; (P) 1.0496; (R1) 1.0545; More....

EUR/CHF recovered stronger after hitting 1.0349 support but stays below 1.0527 minor resistance. Intraday bias remains neutral first. On the upside, break of 1.0527 will bring retest of 38.2% retracement of 1.1149 to 1.0298 at 1.0623. Sustained break there will add to the case of bullish trend reversal. On the downside,l 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) 1.2687; (P) 1.2730; (R1) 1.2760; More...

USD/CAD is still bounded in range of 1.2634/2795 and intraday bias remains neutral. 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) 0.7118; (P) 0.7137; (R1) 0.7173; More...

Consolidative trading continues in AUD/USD and intraday bias remains neutral. 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.

Daily Pivots: (S1) 115.29; (P) 115.58; (R1) 115.89; More...

Intraday bias in USD/JPY remains neutral first. 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) 0.9228; (P) 0.9251; (R1) 0.9275; More....

Intraday bias in USD/CHF stays neutral at this point as range trading continues. 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) 1.3498; (P) 1.3532; (R1) 1.3578; More...

No change in GBP/USD's outlook as range trading continues. Intraday bias remains neutral for the moment. 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) 1.1318; (P) 1.1343; (R1) 1.1384; More...

Intraday bias in EUR/USD remains neutral at this point. 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.

Asian markets are cautiously optimistic as worries over Russia-Ukraine situation eased. While there are reports of cyber attacks by Russia on Ukraine's defence ministry and banks, investors are still calm. If the risks of war do vanish, hopefully, focuses will be turned back to Fed's tightening pace, which might be shed some lights on by FOMC minutes to be published today.

In the currency markets, major pairs are crosses are largely staying inside last week's range. Euro had recovered some ground, together with Aussie. The common currency is also supported from mildly hawkish comments from ECB officials. Yen and Swiss Franc had turned weaker. Dollar is mixed for the moment, awaiting guidance from US data and Fed minutes.

Technically, with Canada CPI also featured, attention will be on USD/CAD today. For now, further rise is expected with 1.2634 support intact. Break of 1.2795 will resume the rally from 1.2448 to retest 1.2963 resistance. But break of 1.2634 will turn focus back to 1.2448 support instead.

In Asia, at the time of writing, Nikkei is up 2.13%. Hong Kong HSI is up 1.31%. China Shanghai SSE is up 0.71%. Singapore Strait Times is up 0.18%. Overnight, DOW rose 1.22%. S&P 500 rose 1.58%, NASDAQ rose 2.53%. 10-year yield rose 0.049 to 2.045.

ECB Schnabel: We should start thinking about gradual normalization of policy

ECB Executive Board member Isabel Schnabel said in an interview, "it has become increasingly likely that inflation is going to stabilise around our 2 per cent target over the medium term." There, "we should start thinking about a gradual normalization of our policy."

"With the most recent data, however, the risk of acting too late has increased and therefore we need a careful reassessment of the inflation outlook," she added.

Schnabel also pointed to a "demand component" in inflation in rising wages, in addition to energy prices and supply chain bottlenecks. She added, "we cannot simply look through everything, especially if inflation now becomes more broad-based and more persistent than we originally thought."

ECB Villeroy: Any speculation about calendar of rate lift-off is premature

ECB Governing Council member Francois Villeroy de Galhau, useful to have some transition between" the end of emergency PEPP purchases and the regular APP purchases. However, "this reduction could follow a bi-monthly or monthly pace instead of a quarterly one, and APP purchases could therefore end in the third quarter, at some point to be discussed,"

Villeroy also noted current guidance indicated interest rate hikes would come "shortly" after ending asset purchases. But the central bank would have "more scope for fine-tuning" by removing the word "shortly."

"This would be a possibility to break the quasi-automatic temporal link between the two instruments whilst retaining the sequencing," he said. "Optionality would mean that the lift-off could possibly take more time, if warranted."

"We could give ourselves more time and consider the latest inflation outlook before deciding about the calendar of rate hikes - a decision that anyway we don't need to make before our June meeting," Villeroy said. "Any speculation about this calendar of future lift-off is at this stage premature."

Australia Westpac leading index turned positive, signalling above trend growth

Australia Westpac-Melbourne Institute leading index rose from -0.1% to 0.4% in December. That's the first positive, above trend, read on the since Since Delta outbreak last August. The index signalled that growth outlook has improved with above trend growth over the next three to nine months.

Westpac expects contraction in spending in January due to Omicron, and zero growth in GDP in Q1. But the economy is expected to bounce back strongly over the rest of 2022, with a solid 5.5% growth for the year overall.

Westpac also continues to expect interest rate hike by RBA before August meeting.

Looking ahead

UK PPI and CPI will be the main focus in European session. Eurozone will release industrial production. Later in the day, Canada will release CPI, manufacturing sales and wholesale sales. US will release retail sales, import price, industrial production, business inventories and NAHB housing index. Fed will also publish FOMC minutes.

EUR/USD Daily Outlook

Daily Pivots: (S1) 1.1318; (P) 1.1343; (R1) 1.1384; More...

Intraday bias in EUR/USD remains neutral at this point. 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.

Economic Indicators Update