FOREX PRO WEEKLY, April 10 - 14, 2017

Sive Morten

Special Consultant to the FPA

(Reuters FX news) - The dollar rose to three-week highs on Friday after an influential Federal Reserve official said the U.S. central bank's plan to shrink its bond portfolio this year would not significantly delay its interest rate-hiking cycle.

The greenback initially sold off on a softer-than-expected U.S. jobs report for March, but rebounded as analysts noted the apparent weakness was caused by snowstorms.

Safe-haven buying also supported the dollar as the market focused on geopolitical events after the United States launched cruise missiles at an airbase in Syria, an ally of Russia.

New York Fed President William Dudley, an advocate of low interest rates, said on Friday that shrinking the Fed's $4.5 trillion bond portfolio would prompt only a "little pause" in the Fed's rate hike plans, providing relief to dollar bulls banking on more than one rate increase this year.

He added that interest rates are still a primary tool for monetary policy, and not a "gradual" balance sheet reduction.

"Dudley's comments added a tailwind for the dollar," said Joe Manimbo, senior market analyst at Western Union Business in Washington. "He has softened any suggestion that any reduction in balance sheet would cause a pause in interest rate hikes in a meaningful way."

The New York Fed official had said in an interview last week that trimming the balance sheet was a substitute for rate hikes, which could prompt the Fed to "pause" raising rates at that time.

Investors still expect two more rate increases in 2017, analysts said, although the probability of a June hike has declined to 61 percent FFM7 after the jobs report from more than 70 percent late on Thursday.

The dollar index rose to three-week peaks of 101.26 and last traded a up 0.5 percent at 101.16.

The dollar touched session highs against the Japanese yen following Dudley's comments, and was last up 0.3 percent at 111.16

The greenback hit a four-week high versus the euro, which fell 0.5 percent to $1.0587

The dollar's early rebound was spurred by a report showed U.S. non-farm payrolls increased by 98,000 jobs last month, the fewest since last May and far short of the increase of 180,000 jobs expected by a Reuters poll of economists.

The unemployment rate declined to 4.5 percent from 4.7 percent in February.

US healthcare reform – how worried should we be?
by Fathom Consulting

Mr Trump’s failure to reform US healthcare has raised doubts about his ability to pass pro-business legislation, including tax cuts and infrastructure investment. But we think investors have over-reacted: we still expect the corporate tax rate to be slashed and other business-friendly measures to be implemented this year. Moreover, the US economy is already in decent shape: consumer and business confidence is high, inflation is rising and the labour market is tightening rapidly. With the fed funds rate set to rise faster than investors anticipate, we think now is a good time to take long US dollar positions and short US Treasury positions.

Donald Trump’s failure to reform healthcare has raised doubts about his ability to enact the rest of his legislative agenda. Investors are particularly concerned that he may not cut taxes or increase spending on infrastructure, as hoped. The so-called Trump trade has partially unwound. Compared to a few weeks ago, equities are down, the US dollar has weakened and Treasury yields have fallen. But have investors over-reacted? We believe so.

First, by walking away from negotiations on healthcare, Donald Trump may have strengthened his hand. Obamacare is the law of the land for the foreseeable future and Mr Trump can point the finger at the Freedom Caucus. Growing pressure from the Republican Party establishment and Donald Trump’s base make the Freedom Caucus (and other potential rebels within the Republican party) more likely to support other aspects of Mr Trump’s agenda. Indeed, one member of the Freedom Caucus has already resigned over the group’s opposition to the healthcare plan.

Second, we do not expect tax cuts to be matched by spending cuts. Uncle Sam will pick up the tab! History has shown, after all, that Republicans have often loosened fiscal policy and left the Democrats to tidy up the state finances. The Laffer Curve argument – which contends that if tax cuts are properly targeted tax revenues may even rise – will probably convince sceptical Republicans to vote for tax cuts without offsetting spending cuts.

Republicans bought into this argument during Ronald Reagan’s presidency even though the budget deficit rose after the first round of Reagan’s tax cuts. More recently, following the botched healthcare reform, the leader of the Freedom Caucus has said that he would support a tax plan that is not revenue neutral.

Third, the economy is already in decent shape and the outlook is not completely dependent on tax cuts. Consumer and business confidence is high, inflation is rising and the labour market is tightening rapidly – all of these suggest that the economy is gaining momentum and points to a quicker pace of interest rate hikes than that implied by fed funds futures, fiscal stimulus or no fiscal stimulus.


Moreover, House Speaker Paul Ryan’s tax proposal includes a number of measures that would increase incentives for businesses to invest, such as subsidising research and development expenditures and allowing firms to immediately expense investment (Current depreciation rules mean that firms recover the cost of investment over many years. Immediately writing-off (or “expensing”) investment would represent a zero percent marginal effective tax on new investment.). These measures should receive unanimous backing by Republicans (and possibly even some Democrats).


Admittedly, some aspects of Paul Ryan’s tax plan are complicated, controversial and unlikely to gain unanimous endorsement by the Republican Party. The most contentious issue is likely to be the so-called border adjustment tax that would subsidise US exporters and tax US imports. This measure would raise revenues as long as the US runs a current account deficit, but would probably fall foul of World Trade Organisation (WTO) laws and, if adopted, spark retaliation by US trading partners. This could tip the world into recession.


Finding a compromise on the complicated issue of tax reform is likely to take several months. In our view, the most likely outcome is that a watered-down version of Paul Ryan’s bill (which includes no border tax but large cuts to corporate tax and other incentives to boost investment) will be approved by Congress and passed into law in Q4 this year.

Admittedly, if tax reform is not passed until next year, business and investor confidence may suffer a setback, potentially knocking growth. But for now, we still expect US GDP growth to exceed 2.5% in 2017 and 3.0% in 2018. Uncertainty over fiscal policy could end the honeymoon period of Mr Trump’s presidency, but we do not envision a protracted downturn. In fact, the economic fundamentals warrant a faster pace of rate increases than investors currently anticipate. This, in our view, will put further upward pressure on the US dollar and US Treasury yields before long. As such, we think that now may be a good time to accumulate long positions in the US dollar and short positions in US Treasuries.



COT Report
Recent CFTC data shows that last week long positions partially were closed as net speculative short position has increased slightly while open interest contracted. At the same time on a way up, while EUR was rising and speculative net short position was contracting - we do not see feasible increase in open interest. We even could recognize opposite action - in the middle of March when EUR has turned to retracement down - open interest has increased, while when upside action continues - it has dropped. This dynamic suggests very important issue that current upward action mostly should be treated as upside retracement within long-term bear trend.



Situation has changed significantly since our last discussion. Mostly it makes impact on additional USD demand rather than on EUR directly, but anyway this has pushed EUR/USD down. In comments above we've mentioned already all major factors - clarification on Fed balance off-loading, NFP report and recent geopolitcal tensions. Sentiment analysis also doesn't look supportive for EUR. Recent Fathom consulting report concerning debates in Congress on Obamacare shed more light on mess around Trump's trade, tax programme, Fed policy etc.

From technical point of view we have untouched long-term targets around parity and some time it should be met, but somehow I think that it should happen on a background of surprising tightening policy from the Fed, which has more chances to happen only in 2018. So, in perspectives of 1-2 years EUR looks weaker than USD. In coming years EU will meet hard restructural political process that could change the structure of the Union, role of different members and financial relations. Also it is a question what will be with newbie members in Eastern Europe.

In short-term perspective EUR mostly has completed AB-CD retracement on weekly chart when it has reached 1.0930 area two weeks ago. On monthly chart it looks like third unsuccessful challenge of YPP. In fact, the third failure to pass through YPP looks as sign fo weakness and could lead to downward action at least to previous lows around 1.03 or even lower. It is too difficult make any long-term forecasts with precise numbers, as there too much imputs that stand under control, mostly political ones...

Right now on monthly chart there are more chances on reaching parity but it is difficult to judge on timing of this process. As usual, dealing with step-by-step action on daily/weekly chart, based on some patterns should help us:


Bullish perspectives are also exist, but we could speak on them only when downward action to parity will end. Right now it seems that some bullish reversal pattern could be formed around it:


Picture shows classical action. Take a look that since 1999 - EUR was forming upside reversal swing that lasts till Dec 2007. Now market stands in deep retracement - this is typical action as new upside reversal swing has been formed. Based on this picture EUR is approaching to area where this retracement should over and it could get chance to starts extension leg of bull trend that could lead EUR as far as to 1.76-1.82 area. Also you could recognize here some signs of reverse H&S pattern. That's why on big weekly picture we also have made a suggestion on big H&S pattern with head around parity....


Theoretically trend by MACD is still bullish, market is not at oversold. But overall situation has changed drastically. As we've briefly mentioned previously - last week EUR has formed bearish reversal candle. This is strong signal, that upside action is over, at least in short-term perspective. As we've seen above - this mostly has happened due changing in financial background and global politics shifts.

At the same time, weekly chart mostly has completed normal upside reaction on reaching 100% extension of our large bearish AB=CD pattern. This reaction has taken the shape of AB=CD pattern and stopped at weekly K-resistance and YPP.

This action could mean two things. First is upside retracement is over. Second - EUR is turning to extension mode of action with existed long-term bear trend. Next major target here is parity, but it is too extended and we will focus on closer ones - previous 1.03 lows first of all. We choose this target because it stands in logical relation with patterns that are failed on daily chart:


This time frame shows major background for our analysis and understading some details of situation that we get here.

We've announced correct doubts when EUR suddenly has turned to retracement after upside gap and breakout neckline of our H&S pattern. According to our view - small retracement "yes", deep retracement - "no", i.e. it will destroy all bullish context. And this has happened. As soon as EUR has broken K-support on 4-hour chart around 1.08 area - price action has turned to "irrational" that doesn't match to driving patterns, which is H&S.

Finally, speaking on last week action - EUR was not able even to show minor bounce from strong K-support area. This just shows how market week is. Also this fact significantly diminishes chances on survival of other support levels. If K-support was not able to hold price and even trigger minor upside reaction -what chances that weaker levels will.

This leads us to important conclusion in estimating short term targets. Major conclusion if failure of H&S pattern and inability of market to jump up thorugh neckline. If even we hesitate with H&S shape, but will treat it as triangle - anyway, EUR has failed to break it up for three times.

It means that opposite extreme points should be broken. And they are - right shoulder around 1.05 and next one is head around 1.03...

Right now EUR stands at trend line support. In fact this is lower border of triangle that I've mentioned above. Slightly below stands major 5/8 Fib support, but as we said - they have small chances to keep this drop.

Here we do not have clear patterns, except may be flag consolidaiton that has been formed at our K-support. Using classical approach to target estimation, we could use mast of flag here and count it down. This will lead us to MPS1 area:

That's being said - major conclusion here is downward action should continue not because we have drop here, but because this drop breaks bullish context and destroy bullish pattern that are failing right now. This is important difference.


Here, guys, we do not have any clear pattern, but we know that market stands at support on daily chart. As market shows signs of weakness and it is not at oversold - our major idea suggests that downward action should continue.

But to control this process we need intraday chart. When market breaks K-area without any respect, it very often happens that market after breakout re-tests it from other side. It means that minor retracement here still is possible.

That's why on 4-hour chart we need keep an eye on upside bounce and watch how strong this retracement will be. To match perfectly to bearish scenario price should not exceed 1.0650-1.0665 area by two reasons. First is - WPR1, it should hold upside retracement during bearish trend. Second - breaking up 1.0670 will push price back in flag consolidation again, and this is not good for short-term bearish trend.


Strong bearish reversal 2 weeks ago could mean that EUR steps back on a way of long-term bearish trend, as situation in global politics, domestic US finances has changed.

On daily chart we will watch for gradual breakout of 1.05 and 1.03 areas as EUR has put a background under final failure of daily bullish patterns.

The technical portion of Sive's analysis owes a great deal to Joe DiNapoli's methods, and uses a number of Joe's proprietary indicators. Please note that Sive's analysis is his own view of the market and is not endorsed by Joe DiNapoli or any related companies.
Based on this picture EUR is approaching to area where this retracement should over and it could get chance to starts extension leg of bull trend that could lead EUR as far as to 1.76-1.82 area

Is this a typo??? should it be 1.0760 - 1.0820?
Is this a typo??? should it be 1.0760 - 1.0820?
No. Just look at very big picture. AB-CD extension up on monthly chart.
Still, this perspective is too far and too blur, thus do not pay too much attention to this...
Good morning,

(Reuters) - The dollar fell in Asian trading on Tuesday, as concerns over tensions with North Korea and Syria weighed on U.S. Treasury yields and offset expectations of U.S. interest rate hikes.

The dollar index, which gauges the U.S. currency against a basket of six major peers, edged down 0.1 percent to 101.950 .

The dollar dropped 0.2 percent to 110.68 Japanese yen, moving away from its overnight high of 111.57. It remained solidly in the 110.11-112.19 range in which it has traded since late March.

China and South Korea agreed on Monday to impose tougher sanctions on North Korea if it carries out nuclear or long-range missile tests, a senior official in Seoul said, as a U.S. Navy strike group headed to the region in a show of force.

The possibility of U.S. military action against North Korea in response to such tests gained traction following last week's U.S. strikes against Syria.

The benchmark 10-year yield fell to 2.353 percent in Asian trading, from its U.S. close of 2.361 percent on Monday.

"U.S. interest rate increases and the Fed's balance sheet reduction remain key factors on which people are taking dollar positions," said Mitsuo Imaizumi, Tokyo-based chief foreign-exchange strategist for Daiwa Securities.

"But there is position-squaring whenever risk aversion rises," he said. "Whenever there is any news about terrorism, or Syria, or North Korea, there is some adjustment of positions."

The Federal Reserve's plans to raise U.S. interest rates gradually are aimed at sustaining full employment and near-2-percent inflation without letting the economy overheat, Fed Chair Janet Yellen said on Monday, reinforcing the central bank's message and offering no fresh clues on the policy outlook.

The euro was steady on the day at to $1.0599 after plumbing $1.0568 overnight, its lowest level since March 9, amid uncertainty ahead of France's upcoming presidential election.

Opinion polls indicate far-right candidate Marine Le Pen and centrist Emmanuel Macron will come out ahead in the April 23 first round and make it to the May 7 run-off, with Macron winning. But leftist firebrand Jean-Luc Melenchon has seen his ratings surge and conservative Francois Fillon, damaged by a nepotism scandal, has also regained some lost ground.

Le Pen drew protests from her election rivals and the Israeli government on Monday by denying the French state's responsibility for a mass arrest of Jews in Paris during the second World War.

Today, guys, we will take a look at GBP again as we've got new inputs on our setup. Just to remind you, now we're following to tactical bullish setup that is based on weekly bullish grabber and CFTC data showing cable positions are strongly overextended on bearish side. They need some relief... Now this relief stands under way. Although our minimal target stands above 1.27 top, market keeps chances to reach 1.28-1.2850 area

On daily chart you could recognize three patterns. Large H&S, butterfly and small H&S inside right shoulde rof big one. Based on these patterns we have extensions that coinside in one area - 1.28-1.2850. This is also Important Fib resistance level:

When we've estimated this setup, our next qestion was - how deep current retracement will be. And now we have new inputs on this question. Actually we could get "222" Buy pattern on 4-hour chart. It means that retracement should be over somewhere around 1.23-1.2330 area:

As you can see this will be rather solid support cluster that includes AB=CD target and major Fib support (which create an Agreement, right?), butterfly destination point and WPS1. Overall construction also takes the shape of big "222" pattern. If cable still has some bullishness - this retracement should be enough and we should get upside reversal here. Let's see what we will get in reality.
Good resistance at 0.96-0.93 zone at yearly chart

Market not rejecting from bottom end of consolidation on monthly; early warning of break out to lower..

Market taking stops at weekly


Daily trend is down. 1.0615 and 1.0640 agreement+confluence zones are good spots to fade 4hr buy against daily trend .

Daily op at 1.0418 clustering with monthly op 1.0420 looks good spot to take proft.


Stops can be placed around 1.0670..
Good morning,

(Reuters) - The dollar languished at a five-month low versus the yen early on Wednesday, as simmering geopolitical tensions checked risk appetite and put the safe-haven Japanese currency in favour.

The dollar was at 109.745 yen after touching 109.535 earlier in the session, its lowest since Nov. 17.

The U.S. currency had slid more than 1 percent the previous day from highs of 110.920, dragged down by a sharp drop in U.S. Treasury yields.

"There was a lot of bids and option barriers lined up around 110 yen, so a breach of this level shows how widespread the latest dollar selling was," said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo.

"The yen's gains against the euro also bears watching, with uncertainty towards the French presidential elections clearly the driving factor."

The euro, which sank more than 1 percent overnight, extended losses and touched a five-month low of 116.160 yen .

Investors' flight-to-safety underpinned traditional safe-havens like the yen and Treasuries amid fresh concerns about the French presidential election and possible U.S. military action against Syria and North Korea.

On Tuesday, North Korean state media warned of a nuclear attack on the United States at any sign of American aggression, as a U.S. Navy strike group steamed toward the western Pacific - a force U.S. President Donald Trump described as an "armada".

And in a new twist to the French elections, a far-left veteran who had been written off as a long shot has now surged into the top four, pushing some pollsters to calculate the most extreme runoff scenarios.

While the euro sagged against the yen, it fared better versus the struggling dollar. The common currency was up 0.1 percent at $1.0610, adding to modest overnight gains.

It was a similar story for the pound, which retreated to a near five-month low of 136.85 yen but edged up against the dollar. Sterling was steady at $1.2490 after gaining about 0.6 percent overnight.

The Australian dollar, sensitive to shifts in broader risk appetite, was up slightly at $0.7503 after dropping to a near three-month trough of $0.7475 the previous day.

Today we will take a look at EUR, although we have to mention big political events around North Korea that makes significant impact on financial markets. We already see rally on gold market and JPY, demand on US Treasuries and drop of USD across the board... As a result we haven't got downward continuation on GBP. Although this is not very important issue as we have major direction up there, but geopolitical factors significantly skew technical conclusions... By the way, our setup on JPY is mostly completed (watch today's video)...

So, on EUR our suggestion mostly was correct. Market takes the pause around trend line, but no significant upside retracement has happened. Take a look, that EUR shows smallest upside reaction on USD weakness, compares to JPY, GBP and other markets. It means that it stands under pressure of its own driving factors and one of them is coming elections in France on 23rd of April. Thus, our daily scenario still stands the same - we expect that market will continue action down and our next destination point stands around MPS1 - 1.0460:

Also we would like to get gradual, slow retracement and EUR shows precisely this kind of action right now. Here we do not see any signs of acceleration. If price will remain below WPR1 - this is acceptable level for us:

On hourly chart we have upward channel and inner AB-CD. First target has been reached. So, if EUR will hold inside the channel, next extension stands aprecisely around 1.0640, which is lower border of previous consolidation and Fib level. For bearish prespective it would be nice if retracement will stop there:
Good morning,

(Reuters) - The dollar slumped broadly on Thursday, falling to a five-month low against the yen, after U.S. President Donald Trump helped accelerate its recent decline by saying the currency was too strong.

The greenback took a heavy hit after Trump told the Wall Street Journal that the dollar "is getting too strong" and that he would prefer the Federal Reserve to keep interest rates low.

The comments were a fresh reminder of the president's protectionist trade rhetoric, which has been a source of concern for dollar bulls.

"Trump's comments came at a time when some had begun to think that perhaps the president was not as supportive of a weak dollar as initially perceived," said Shin Kadota, senior strategist at Barclays in Tokyo.

"But he reiterated his view that a strong currency hurts U.S. competitiveness, adding fresh downward pressure on the dollar."

The U.S. currency was 0.3 percent lower at 108.805 yen after stooping to a five-month low of 108.730. In a bearish technical signal, the pair broke below its 200-day moving average of 108.75.

The dollar has shed 2 percent against the yen so far this week, with the safe-haven Japanese currency already on a bullish footing because of a rise in geopolitical tensions.

There are fresh concerns about the French presidential election and possible U.S. military action against Syria and North Korea. With investors viewing South Korea's sovereign notes as a riskier bet on the rising tensions, the premium for the country's credit default swap debt insurance has risen to a nine-month high.

That Trump seemed unmoved by the significant weakening of the dollar against the yen already in place increased nervousness toward the U.S. Treasury's semi-annual currency report due Friday, and next week's U.S.-Japan bilateral dialogue.

"It appears that the Trump administration is trying to make up for its internal policy shortcomings with a show of force in external policy, leading to a confrontational stance with trade partners," said Daisuke Karakama, market economist at Mizuho Bank.

"Currencies rates and trade balance inevitably become themes to confront others countries with. So if you are in the forex market it requires a lot of courage to buy the dollar right now."

The euro rose 0.1 percent to $1.0669 not far from a six-day high of $1.0675 reached overnight.

The dollar lost significant ground against the pound and Swiss franc as well, and as a result the dollar index versus a basket of major currencies lost about 0.7 percent to a two-week low of 100.040 .

The Australian dollar was given some breathing room as the greenback slumped. Stronger-than-expected domestic employment data also lifted the currency.

It was up 0.5 percent at $0.7567, pulling away from a three-month low of $0.7473 plumbed the previous day when wide-spread risk aversion amid simmering geopolitical concerns took its toll on the Aussie.

The dollar was on track for its third straight day of losses against China's yuan, after rising to a one-month high at the start of the week.

The yield on the benchmark U.S. 10-year Treasury note was at 2.234 percent after touching 2.221 percent, its lowest in nearly five months.

Just we've talked on growing role of political factors in markets' driving, Mr. Trump has taken the word and push USD down. This has changed short-term technical picture. As a result JPY has completed our monthly setup, EUR has turned to deep upside retracement that we haven't counted on, while GBP accelerates higher...

Trump's comments have helped our GBP scenario. On daily chart, as price returns back to 0.618 targets means, that price is turning to new extension stage and should continue action higher. Our minimal target here is 1.27 top:

On intraday charts now we also see multiple bullish signs. Price stands above MPP and passed through WPR1, which is suggest existing of bullish trend. OUr K-support area still survive, although from time to time it was seemed that GBP should drop to 1.23. As a result we've got nice hidden bullish MACD divergence right at K-area. The same pattern we've traded on Gold market and not gold stands above the top.

On 4-hour chart market could form butterfly that could help price to complete weekly grabber target. But probably major action will happen next week as tomorrow we have a Good Friday...

Thus, if any retracement will happen, it should not be too deep, as deep retracement already has happened and market right now stands in extension mode. Thus, we should focus on two nearest levels - 1.2515 and K-area around 1.25:
Good morning,

(Reuters) - The dollar nursed losses on Friday, on track for a losing week as continuing tensions in North Korea underpinned the perceived safe-haven Japanese currency.

The dollar index, which tracks the U.S. unit against a basket of six rival currencies, steadied at 100.590, slightly higher on the day but down 0.6 percent for the week.

U.S. President Donald Trump said on Thursday that North Korea is a problem that "will be taken care of," as China urged caution and speculation rose that Pyongyang might be on the verge of a sixth nuclear test. The Pentagon declined to comment on an NBC report about possible pre-emptive action against the rogue state.

In another part of the world, the U.S. military said on Thursday that it dropped "the mother of all bombs," the largest non-nuclear device it has ever unleashed in combat, on a network of caves and tunnels used by Islamic State in eastern Afghanistan.

"The 'mother of all bombs' was intended to show the power of U.S. forces to North Korea," said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo.

"But maybe we won't see big market moves today, because the short-term players already have put on short-dollar positions, and now everyone is just waiting for the next trigger," he said.

The dollar edged up 0.1 percent on the day to 109.15 yen, but was down 1.7 percent for the week.

Market liquidity was thinner than usual because of this week's Passover and Good Friday holiday observances around the world. The market for U.S. Treasuries finished trading early on Thursday, and will be closed Friday.

The benchmark U.S. Treasury yield skidded to its lowest levels since November on Thursday, after Trump said in a Wall Street Journal interview published late Wednesday that he favoured low interest rates. He also said the dollar was "getting too strong" and would eventually hurt the U.S. economy.

Yields declined, and we're seeing a softening of the dollar," said Bill Northey, chief investment officer at the private client group of U.S. Bank in Helena, Montana.

"It's unique to see that level of focus coming from the White House on economic topics that haven't usually been the purview of the administration," he said, explaining why markets continued to focus on Trump's remarks.

Trump also said his administration will not label China a currency manipulator in the Treasury Department's semi-annual report on currency practices of major trading partners which is due out on Friday, backing away from a campaign promise.

The move was seen as a possible quid pro quo, suggesting it might make Beijing more inclined to help resolve the escalating row with North Korea.

"We have some U.S. economic data later in the day, which ordinarily would likely have some affect on U.S. yields and the dollar, but with U.S. bond markets closed, it might not have much impact," said Ayako Sera, senior market economist at Sumitomo Mitsui Trust.

U.S. retail sales for March are expected to come in at a seven-month low of zero after edging up just 0.1 percent in February.

The euro was steady on the day at $1.0611. It was up 0.2 percent for the week, though concerns about the outcome of the April 23 first round of France's presidential election continued to limit its upside.

Against the yen, the euro slumped as low as 115.72 on Thursday, its lowest level since November, and was poised to drop 1.5 percent for the week. It last stood at 115.85 yen, up 0.1 percent.

Today we will take a look on EUR again, as JPY has completed target and monthly setup, GBP turns to retracement that we've discussed yesterday.

On EUR we've suggested upside bounce asn price stands at trendline support, but we need minor retracement. Deep retracement doesn't correspond to overall bearish scenario that we have. Right now EUR keeps it well, as upside action is reversed down rather fast. Now market is going back to trendline:

Intraday chart shows that upside action was a bit higher compares to what we've suggested, but still price has not broken up former consolidation and stuck around K-resistance area and WPR1. This is mostly corresponds to what we expected to see:

Today hardly we will get any solid action, only if D.Trump will launch some missiles on some direction or drop the bomb somewhere, as markets are closed on Good Friday. On EUR our task is relatively simple. We should watch for this widen triangle. Downward breakout will mean daily trendline breakout as well. In this case next destination point will be daily Fib support around 1.05-1.0550 area. EUR could take the shape of butterfly in this case.

Upward breakout will not break overall bearish setup yet, but postone downside continuation...