Sample Category Title

Daily Pivots: (S1) 1.0375; (P) 1.0391; (R1) 1.0405; More....

No change in EUR/CHF's outlook as consolidation from 1.0298 is still extending. Intraday bias stays neutral first. In case of stronger recovery, upside should be limited well below 1.0510 resistance. On the downside, break of 1.0298 will extend the down trend from 1.1149 to 161.8% projection of 1.1149 to 1.0694 from 1.0936 at 1.0200 next. However, firm break of 1.0510 will suggests medium term bottoming and bring stronger rebound towards 1.0694 support turned resistance.

In the bigger picture, long term down trend from 1.2004 (2018 high) is still in progress. Next target is 61.8% projection of 1.2004 to 1.0505 to 1.1149 at 1.0223. On the upside, firm break of 1.0505 support turned resistance is needed to be the first sign of medium term bottoming. Otherwise, outlook will remain bearish even in case of rebound.

Daily Pivots: (S1) 129.12; (P) 129.30; (R1) 129.54; More....

Intraday bias in EUR/JPY remains neutral as consolidation from 128.23 is still extending. Outlook is unchanged that corrective pattern from 134.11 is extending with another falling leg. Further decline is expected as long as 129.76 resistance holds. Below 128.23 will target 127.36, and possibly further to 126.58 fibonacci level. On the upside, above 129.76 minor resistance will dampen this view and turn bias back to the upside to 131.59 resistance instead.

In the bigger picture, price actions from 134.11 are currently seen as a consolidation pattern only. As long as 38.2% retracement of 114.42 (2020 low) to 134.11 at 126.58 holds, up trend from 114.42 is still in favor to continue. Break of 134.11 will target long term resistance at 137.49 (2018 high). However, sustained break of 126.58 will raise the chance of bearish reversal. In this case, deeper decline would be seen to 61.8% retracement at 121.94, and possibly below.

The short-term Elliott wave view in AUDUSD suggests that the decline from January 13, 2022 high unfolded in 5 wave impulse sequence & showing a bearish sequence favoring further downside in the pair. While the decline to $0.6962 low has ended wave 1 in a 5 wave impulse sequence. Currently, the pair is correcting the cycle from 1/13/2022 high in wave 2 bounce. And expected to extend higher for another leg higher. The internals of that bounce is unfolding as Elliott wave zigzag correction.

Whereas, the initial bounce to $0.7008 high ended wave (i). Wave (ii) ended at $0.6972 low. Then wave (iii) ended at $0.7076 high in a lesser degree 5 waves & wave (iv) ended at $0.7030 low. Up from there, wave (v) ended at $0.7159 high in another lesser degree 5 waves thus completing wave ((a)) of a zigzag correction. Below from there, the pair is doing a short-term pullback in wave ((b)) and expected to reach $0.7104- $0.7077 area lower. Near-term, as far as the pivot from $0.6962 low stays intact then the pair is expected to start the ((c)) leg higher. Before it gets ready to turn lower again or does a 3 wave pullback at least.

AUDUSD 1 Hour Elliott Wave Chart

DXY:

On the H4 timeframe, prices are on bullish momentum and abiding to a daily ascending trendline. We would expect potentially a bounce from our 1st support at 95.583 in line with 61.8% Fibonacci retracement and 78.6% Fibonacci extension towards our 1st resistance at 96.654 in line with 61.8% Fibonacci retracement. RSI are close to oversold extremes, further supporting our bullish bias.

Areas of consideration:

• H4 time frame, 1st resistance at 96.654
• H4 time frame, 1st support at 95.583

XAU/USD (GOLD):

On the H4 chart, prices are on bullish momentum and abiding to an ascending trendline. We see a potential for a bounce from our 1st support at 1805.545 in line with 38.2% Fibonacci retracement and ascending trendline towards our 1st resistance at 1816.745 which is a graphical overlap and in line with 78.6% Fibonacci extension. RSI is portraying bullish momentum.

Areas of consideration:

• 4h 1st support at 1805.545
• 4h 1st resistance at 1816.745

GBP/USD

On the H4 chart chart, price is near 1st resistance level of 1.35771 which is also 50% Fibonacci retracement and 61.8% Fibonacci projection. Price can potentially dip to the 1st support level of 1.34552 which is also 61.8% Fibonacci retracement and 78.6% Fibonacci projection. Our bearish bias is supported by the stochastic indicator as it is near resistance level.

Areas of consideration:

• H4 1st support at 1.34552
• H4 1st resistance at 1.35771

USD/CHF:

On the H4 timeframe,price is abiding to the daily ascending channel signifying an overall bullish momentum. We can expect the price to bounce from 1st Support in line with 78.6% Fibonacci projection and 61.8% fibonacci retracement towards 1st Resistance in line with 61.8% Fibonacci projection and previous swing high. Our bullish bias is further supported by the RSI indicator where it is at the support level.

Areas of consideration:

• Watch 1st Support at 0.91750
• Watch 1st Resistance at 0.93175

EUR/USD :

On the H4 chart, price has recently broken out of the descending trendline and is between 1st resistance of 1.13662 which is also 100% Fibonacci projection, 61.8% Fibonacci retracement and 1st support of 1.12663 which is also 23.6% Fibonacci retracement. Price can potentially continue its upward trend to the 1st resistance level. Our bullish bias is supported by the ichimoku cloud indicator as it is trading above the clouds.

Areas of consideration :

• H4 1st support at 1.12663
• H4 1st resistance at 1.13662

USD/JPY:

On the H4 chart, price is trading in an ascending channel signifying an overall bullish momentum. We can expect price to bounce from 1st Support in line with 78.6% Fibonacci retracement and 100% Fibonacci projection towards 1st Resistance in line with 78.6% FIbonacci projection and previous swing high. Our bullish bias is further supported by the stochastic indicator where the %K line is at the support level.

Areas of consideration:

• H4 1st support at 114.025
• H4 1st resistance at 115.598

AUD/USD:

On the H4 timeframe, price is abiding to the descending channel, signifying an overall bearish momentum. We can expect price to drop from 1st Resistance in line with 50% Fibonacci retracement towards 1st Support in line with previous swing low and 78.6% Fibonacci projection. Our bearish bias is further supported by the stochastic indicator where the %K line is at the resistance level.

Areas of consideration:

• H4 1st Support level 0.69865
• H4 1st resistance level 0.71217

NZD/USD:

On the H4, prices are on bearish momentum and abiding to our bearish trendline. We see the potential for a dip from our 1st resistance at 0.66629 in line with 38.2% Fibonacci retracement and 78.6% Fibonacci extension towards our 1st support at 0.65756 in line with 161.8% Fibonacci projection. RSI is at a level where dips occurred previously and prices are trading below our ichimoku cloud resistance, further supporting our bearish bias.

Areas of consideration:

• H4 time frame, 1st resistance at 0.66629
• H4 time frame, 1st support at 0.65756

USD/CAD:

On the H4, with prices moving above the ichimoku cloud, we see the potential for a bounce from our 1st support at 1.26490 in line with horizontal swing low support and 61.8% Fibonacci retracement towards our 1st resistance at 1.27966 in line with horizontal swing high resistance and 61.8% Fibonacci retracement. Alternatively, price may break 1st support structure and head for 2nd support at 1.25771, in line with 61.8% Fibonacci retracement and horizontal swing low support.

Areas of consideration:

• H4 time frame, 1st support at 1.26490
• H4 time frame, 1st resistance at 1.27966

OIL:

On the H4, with price moving above the ichimoku cloud, signifying an overall bullish momentum. We can expect price to rise to our 1st resistance at 91.37 in line horizontal graphical swing high resistance and 127.2% Fibonacci extension from our 1st support in line with horizontal overlap support and 78.6% Fibonacci retracement level at 88.13. Alternatively, price may break 1st support structure and head for 2nd support, which coincides with 78.6% Fibonacci retracement level at 86.06.

Areas of consideration:

• H4 time frame, 1st resistance of 91.37
• H4 time frame, 1st support of 88.13

Dow Jones Industrial Average:

On the H4, with price expected to reverse off the stochastics indicator, signifying an overall bearish momentum. We can expect price to drop from our 1st resistance at 35728 in line horizontal graphical overlap and 78.6% Fibonacci retracement towards 1st support in line with horizontal overlap support ,23.6% Fibonacci retracement level at 35028. Alternatively, price may break 1st resistance structure and head for 2nd resistance, which coincides with the horizontal swing high resistance at 36444. Traders should wait for prices to swing higher or lower before entering.

Areas of consideration:

• H4 time frame, 1st resistance of 35728
• H4 time frame, 1st support of 35028

Daily Pivots: (S1) 154.95; (P) 155.19; (R1) 155.57; More...

GBP/JPY is staying in consolidation from 152.88 and intraday bias remains neutral. Further fall is still in favor with 155.38 minor resistance intact. Break of 152.88 will resume the decline from 157.74, as the third leg of the corrective pattern from 158.19, to 148.93 support next. However, sustained break of 155.38 will dampen this view and flip bias back to the upside for 157.74/158.19 resistance zone instead.

In the bigger picture, price actions from 158.19 are currently seen as developing into a consolidation pattern to up trend from 123.94 (2020 low). Downside should be contained by 123.94 to 158.19 at 145.10 to bring rebound. Firm break of 158.19 will resume the up trend to long term fibonacci level at 167.93. However, sustained break of 145.10 will raise the chance of trend reversal and target 61.8% retracement at 137.02.

The forex markets are generally steady in Asian session, as traders await ECB and BoE rate decisions. Dollar is staying as the weakest for the week one after yesterday's selloff, followed by Yen. Aussie and Euro are the strongest ones. There is upside prospect for Euro even if ECB delivers just a slight hawkish tilt. But that's far from being certain. Meanwhile, the greenback will continue to look into the developments in overall market sentiments, as well as ISM services today and non-farm payroll report tomorrow.

Technically, it should be about time for Gold to complete the recovery from 1780.10, as it touches 4 hour 55 EMA while 4 hour MACD is approaching trend line. Break of 1794.31 minor support will suggest that fall from 1853.70 is ready to resume through 1780.10 to 1753.32 low. However, firm break of 1816.71 minor resistance will put 1853.70 back into focus. The move in Gold will again be used to confirm the underlying momentum in Dollar's next move.

In Asia, at the time of writing, Nikkei is down -0.98%. Japan 10-year JGB yield is up 0.0073 at 0.186. Hong Kong and China are still on holiday. Overnight, DOW rose 0.63%. S&P 500 rose 0.94%. NASDAQ rose 0.50%. 10-year yield dropped -0.034 to 1.766.

BoC Macklem: It will be a series of increases, not a single increase

BoC Governor Tiff Macklem told the Senate banking committee yesterday that inflation could stay "uncomfortably high" around 5% over the first half of 2022, and then "coming down fairly quickly in the second half."

However, "there is some uncertainty about how quickly inflation will come down because we've never experienced a pandemic like this before."

"It's clear that interest rates need to be on a rising path," Macklem said. "The slope of that path is going to depend on economic developments, and if consumers spend more, the slope of that path, likely, has to be steeper."

"It will be a series of increases, not a single increase," he said.

BoJ Wakatabe: Definitely too early to start tightening

BoJ Deputy Governor Masazumi Wakatabe said in a speech, "given the current situation where Japan's economy has finally started to pick up from the pandemic, it is definitely too early for the Bank to start tightening monetary policy when the target has not yet been achieved as this could hinder the economic recovery."

He reiterated the current policy as to continue with QQE with yield curve control, "as long as it is necessary" to maintain 2% inflation target in a "stable manner". That is, CPI should remain at 2% while medium- to long-term inflation expectations are "anchored".

Australia NAB business confidence rose to 18 in Q4

Australia NAB business confidence jumped from -2 to 18 in Q4. Current business conditions was unchanged at 12. Conditions for the next 3 months rose from 8 to 30. Conditions for the next 12 months also rose from 26 to 34. Capex plans rose from 26 to 34.

"The economy was showing considerable strength prior to the spread of the Omicron variant, and that translated into a positive outlook for the coming months,"Alan Oster, NAB Group Chief Economist. "We now know that Omicron has dampened that recovery somewhat but, fundamentally, we expect that positive trajectory to continue when the current virus outbreak recedes."

Also released, goods and services export rose 1% mom to AUD 45.32B in December. Goods and services imports rose 5% mom to AUD 36.96B. Trade surplus narrowed to AUD 8.36B, below expectation of AUD 9.80B. AiG Performance of Construction index dropped from 57 to 45.9 in December. Building permits rose 8.2% mom in December.

BoE and ECB previews, a look at EUR/GBP

Two central banks will announce monetary policy decisions today. BoE is generally expected to deliver a back-to-back rate hike and raise Bank Rate by 25bps to 0.50%. The central bank would also reveal the approach to wind down the GBP 895B asset purchases. Looking ahead, more tightening is expected ahead to bring the Bank Rate to 1.00% level by the end of the year. That should be reflected in the new economic projections in the Monetary Policy Summary.

On the other hand, ECB is expected to stand pat and maintain a cautious tone even though inflation surged to another record in January. Markets are seeing the first rate hike, at 10bps, by July. But President Christine Lagarde would likely talk down such expectations.

Here are some previews on ECB and BoE:

• EU CPI Blows Away Estimates. Will it Affect ECB Decision?
• ECB Policy Meeting: Dovish Tune with Hawkish Beats
• ECB Meeting Preview: Don't Expect a Hawkish Shift Yet!
• ECB Preview – Inflation Uncertainty and Data Dependency
• BoE Preview: Another Rate Hike and Passive QT
• BoE Preview: BoE Set for Two Consecutive Hikes?
• U.K.: Slower Growth, Faster Inflation, Gradual Tightening

EUR/GBP is a pair to watch today. It should be noted that it's now very close to a key long term support level at 0.8276, with bullish convergence condition in daily MACD. The conditions are there for a trend reversal. Break of 0.8421 resistance will complete a small double bottom pattern (0.8304, 0.8304), and bring stronger rebound. Further break of 0.8598 resistance should confirm medium term bottoming and turn outlook bullish.

However, sustained break of 0.8276 would argue that fall from 0.9499 is developing into a long term down trend rather than a correction. Deeper decline would then be seen for the rest of the year towards 61.8% retracement of 0.6935 to 0.9499 at 0.7917, and possibly below.

EUR/GBP is now at a juncture.

Looking ahead

Eurozone will release PMI services final and PPI. UK will release PMI services final. Main focuses will be on BoE and ECB rate decisions.

Later in the day, US will release jobless claims, non-farm productivity, ISM services and factory orders.

GBP/JPY Daily Outlook

Daily Pivots: (S1) 154.95; (P) 155.19; (R1) 155.57; More...

GBP/JPY is staying in consolidation from 152.88 and intraday bias remains neutral. Further fall is still in favor with 155.38 minor resistance intact. Break of 152.88 will resume the decline from 157.74, as the third leg of the corrective pattern from 158.19, to 148.93 support next. However, sustained break of 155.38 will dampen this view and flip bias back to the upside for 157.74/158.19 resistance zone instead.

In the bigger picture, price actions from 158.19 are currently seen as developing into a consolidation pattern to up trend from 123.94 (2020 low). Downside should be contained by 123.94 to 158.19 at 145.10 to bring rebound. Firm break of 158.19 will resume the up trend to long term fibonacci level at 167.93. However, sustained break of 145.10 will raise the chance of trend reversal and target 61.8% retracement at 137.02.

Economic Indicators Update

Two central banks will announce monetary policy decisions today. BoE is generally expected to deliver a back-to-back rate hike and raise Bank Rate by 25bps to 0.50%. The central bank would also reveal the approach to wind down the GBP 895B asset purchases. Looking ahead, more tightening is expected ahead to bring the Bank Rate to 1.00% level by the end of the year. That should be reflected in the new economic projections in the Monetary Policy Summary.

On the other hand, ECB is expected to stand pat and maintain a cautious tone even though inflation surged to another record in January. Markets are seeing the first rate hike, at 10bps, by July. But President Christine Lagarde would likely talk down such expectations.

Here are some previews on ECB and BoE:

• EU CPI Blows Away Estimates. Will it Affect ECB Decision?
• ECB Policy Meeting: Dovish Tune with Hawkish Beats
• ECB Meeting Preview: Don't Expect a Hawkish Shift Yet!
• ECB Preview – Inflation Uncertainty and Data Dependency
• BoE Preview: Another Rate Hike and Passive QT
• BoE Preview: BoE Set for Two Consecutive Hikes?
• U.K.: Slower Growth, Faster Inflation, Gradual Tightening

EUR/GBP is a pair to watch today. It should be noted that it's now very close to a key long term support level at 0.8276, with bullish convergence condition in daily MACD. The conditions are there for a trend reversal. Break of 0.8421 resistance will complete a small double bottom pattern (0.8304, 0.8304), and bring stronger rebound. Further break of 0.8598 resistance should confirm medium term bottoming and turn outlook bullish.

However, sustained break of 0.8276 would argue that fall from 0.9499 is developing into a long term down trend rather than a correction. Deeper decline would then be seen for the rest of the year towards 61.8% retracement of 0.6935 to 0.9499 at 0.7917, and possibly below.

EUR/GBP is now at a juncture.

Australia NAB business confidence jumped from -2 to 18 in Q4. Current business conditions was unchanged at 12. Conditions for the next 3 months rose from 8 to 30. Conditions for the next 12 months also rose from 26 to 34. Capex plans rose from 26 to 34.

"The economy was showing considerable strength prior to the spread of the Omicron variant, and that translated into a positive outlook for the coming months,"Alan Oster, NAB Group Chief Economist. "We now know that Omicron has dampened that recovery somewhat but, fundamentally, we expect that positive trajectory to continue when the current virus outbreak recedes."

Full release here.

BoJ Deputy Governor Masazumi Wakatabe said in a speech, "given the current situation where Japan's economy has finally started to pick up from the pandemic, it is definitely too early for the Bank to start tightening monetary policy when the target has not yet been achieved as this could hinder the economic recovery."

He reiterated the current policy as to continue with QQE with yield curve control, "as long as it is necessary" to maintain 2% inflation target in a "stable manner". That is, CPI should remain at 2% while medium- to long-term inflation expectations are "anchored".

Full speech here.

BoC Governor Tiff Macklem told the Senate banking committee yesterday that inflation could stay "uncomfortably high" around 5% over the first half of 2022, and then "coming down fairly quickly in the second half."

However, "there is some uncertainty about how quickly inflation will come down because we've never experienced a pandemic like this before."

"It's clear that interest rates need to be on a rising path," Macklem said. "The slope of that path is going to depend on economic developments, and if consumers spend more, the slope of that path, likely, has to be steeper."

"It will be a series of increases, not a single increase," he said.