Euro trade into profit taking mode and last was down around $1.1160 level

Good Morning,

- Euro trade into profit taking mode and last was down around $1.1160 level, after hitting a nine-week high of $1.1289 on Friday.

- Asian stocks bounced off lows on Monday and after weak China factory activity reinforced views that Beijing will act with fresh support measures soon.

- Negotiations between Greece and its international lenders over reforms to unlock remaining bailout aid have made headway and an agreement could be closer this month, a government official said on Sunday. PM Alexis Tsipras's is under growing pressure at home and abroad to reach an agreement with European and IMF lenders over reforms to avert a national bankruptcy. Talks have been painfully slow as the leftist-led government is resisting cuts in pensions and labour reforms that would clash with its campaign pledges to end austerity. "There were very important steps made at the Brussels Group (talks) which bring an agreement nearer," the official said. "All sides aim for an agreement at a Brussels Group level within May." The talks between technical teams from Athens and EU/IMF/ECB lenders are expected to resume on Monday, the official said after the country's chief negotiators met with PM Tsipras.

- Goldman Sachs on EUR/USD: The pair has broken higher from its triangle as the pair has gone past 1.10-1.1050 resistance, which held the top of the March/April triangle formation, notes GS. "It should already have started a corrective process which translates to a period of messy/counter-trend price action," GS argues. The first big signal suggestive of a turn, according to GS, was given on Tuesday’s close above the 55-dma which has held the entire downtrend since the May 8 th high. "The final break above it should have been a big warning sign that the low may already be in place. Further confirmation was given above 1.1052-1.1099 (prior high and low from Jan. 26th/Mar. 26th)," GS adds. "The next big pivot is 1.1295-1.1296, this includes 23.6% retrace of the May/March decline and the 100-dma. So far, it seems to be holding well, forming a tired candle on stretched momentum. Support is down at 1.1099-1.1049," GS projects. "If this is truly a correction, there should be potential to go higher over time. The downtrend from Jul. ‘14 comes in at 1.1654.and 38.2% of the May/March decline is all the way up at 1.18," GS adds. "Put simply, from a pure techs perspective and in Elliott wave terms, this has potential to be a very big turning point," GS concludes.

- Growth of the Spanish manufacturing sector was maintained in April as improving client demand led to sharp expansions in output and new orders. Signs of capacity pressures led firms to increase employment again during the month. Meanwhile, the recent weakness of the euro against the US dollar led to an accelerated rate of cost inflation.

- Australia’s Job advertisements rose in April, rebounding after declining for the first time in almost a year in the previouse month, according to the latest survey by ANZ. The ANZ job advertisements series showed advertisements rose 2.3 per cent in April after falling for the first time in ten months in March. The data may give the Reserve Bank of Australia pause to consider if another rate cut is the best way forward at tomorrow's monthly board meeting.

- South Korea’s top currency official fired a warning to Japan: his nation has stepped up scrutiny of the yen’s tumble against the won after damage to exporter earnings. “Korean companies face bigger difficulties this year than last,” said Song In Chang, the ministry’s director general in charge of foreign exchange market policies. “What’s different is that we have been paying attention to the won-yen rate since last year, whereas the won-dollar was our main focus before that.”

- Watch today: EU confidence, US factory orders.