JPY is strengthening due to unwinding of carry trades

ASIA ROUNDUP:

• Despite falling below estimates of 2.8%, Tokyo Core CPI has grown the fastest pace since 1992 coming in at 2.7% vs 1% last month.

• JPY is strengthening due to unwinding of carry trades and flow into safe havens before the weekend due to Ukraine Tensions

• AUD and NZD retreated sheepishly from their recent losses, more likely fueled by profit taking than fresh buying

UP NEXT:

Retail and housing data for UK released simultaneously today should see some life in GBP pairs.

• GBP Retail sales is forecast lower at -0.4% - this is a volatile release which should be positive for GBP if it comes in above expectations, particularly 0.1% or above

• GBP mortgage approvals is within a strong uptrend but last month’s release was the 1st decline 4 months. However today's forecast of 48.9k is above last month's, so a bad number could cause fears of a larger pending downturn in mortgage approvals.

• US Services PMI and Consumer Sentiment finish the week off with any numbers below expectations could help the near-term USD bearish bias

Markets to Monitor: DXY, USDJPY, USDCHF, EURUSD, NZDUSD, DAX, GBPJPY, GOLD

TECHNICAL ANALYSIS:

EURUSD: Above 1.3825 targets 1.3855-62

Whilst the price action is messy the bullish bias today is mainly driven by the bearish reversal candles below 80 on DXY (which is 57% weighted to EUR).

1.38225 is a good confluence of support as it comprises of weekly/daily Pivots and the horizontal level itself of 1.3825

A break below here would favour bearish signals below the daily pivot,

BRENT: Onwards and upwards - Targeting $110.90

Yesterday's analysis played out very well although it did fall just short of our $110.80 target. This has now been raised slightly after the daily pivot points have been recalculated.

The bullish bias remains the same but hopefully we will see a retracement towards the daily pivot at $110 before the next leg up.

Due to the bullish momentum of yesterday's move it strongly favours a continuation over a deeper retracement (or reversal). A break below $110 will call for different trading (preferably lower timeframes on the bearish side) as we will then be back within the messy correction, so expect some whipsaws below here.