EUR/USD: upside momentum but only modest bullish bias - BTMU
Analysts from The Bank of Tokyo-Mitsubishi UFJ, see a limited bullish outlook for the EUR/USD pair for next week. They expect it to trade between 1.0450 and 1.0800. There are no obvious risk events to focus on in the week ahead and hence our inclination is to give the current momentum greater influence in the bias for the week ahead. We don?t really agree with selling the dollar on the back of the FOMC minutes but the softer dollar momentum might have legs given there is nothing to necessarily alter that for now certainly not from a global macro perspective. Of course, the obvious risk the other way is that French political risk escalates again and we see that drag the euro lower. Opinion polls will be key in that.The key piece of data is perhaps the flash estimate for CPI and core CPI on 28th February. The data from the euro-zone has clearly improved although the core annual CPI rate remains stuck at 0.9%. Any upside surprise there would reinforce expectations of the ECB tapering QE later this year and would help provide support for the euro. Still, upside momentum is unlikely to be strong given the scale of uncertainty lingering in Europe.

GBP/USD jumps above 1.2510, to 3-week highs
GBP/USD accelerated to the upside during the last hour and broke above the strong resistance area located around 1.2510 and jumped to 1.2560, hitting the highest level in three weeks. Then it pulled back and it was trading at 1.2530/35, 95 pips above yesterday?s closing price. The break of the mentioned key level boosted the pound across the board. EUR/GBP fell to fresh lows below 0.8450 and GBP/CHF moved back above 1.2600. The last move to the upside was triggered by an extension of the decline of the US dollar across the board. The US dollar index fell to 100.83, the weakest level in three days. The area around 1.2510/20 has now become an important short-term support for the bullish bias. If the pair holds above, the upside momentum could remain strong. To the upside, resistance levels might be seen at 1.2560 (daily high), 1.2580 (Feb 09 high) and 1.2610. On the opposite direction, support could be located at 1.2505/10 (Feb 22 high), 1.2475 (20-hour moving average) and 1.2425 (daily low).

USD/JPY: downside momentum amid risk aversion - BTMU
Analysts from The Bank of Tokyo-Mitsubishi UFJ, expect the USD/JPY pair to trade with a downside bias between 111.00 and 114.50 next week, on the back of potential risk aversion amid political uncertainty. ?The calendar is relatively light for the week ahead and there are no clear-cut obvious events that could prompt market volatility in the week ahead.??The FOMC minutes have been classed by the market as more on the dovish side and while we would question how long that conclusion will last, there is certainly scope for it to last over the relatively short period of a week when there are no major data releases or events to alter sentiment. Fed President Kaplan (voter), Bullard (non-voter), Williams (nonvoter) and Mester (non-voter) all speak over the period through to next Thursday but the key US data will probably be the PCE inflation data released on 1st March. The payrolls will not be released as usual on the first Friday due to the shorter February and hence will not be released until 10th March.? ?Event risk appears more skewed toward risk aversion if political risks intensify in Europe again and hence yen strength is our bias for the week ahead, especially when coupled with the current momentum in the wake of the FOMC minutes.?

USD/CHF drops to 1.0060, 2-day low
A decline of the US dollar across the board, pushed USD/CHF further to the downside. The pair broke below 1.0090 and accelerated the decline. It bottomed at 1.0060, the lowest level since Tuesday?s Asian session. Price holds near the lows with a prevailing bearish momentum as the greenback remains weak in the market.An interview on CNBC, with Treasury Secretary, Steven Mnuchin, triggered the decline of the US dollar earlier today. He did not bring any details of the tax reform plan. Regarding the currency market, he said that the appreciation of the US dollar shows confidence on the US economy and did not accuse China of being a currency manipulator. He expects the tax reform to be approved by Congress before the August recess. Today?s US data included, initial jobless claims that rose 244K and the Chicago Fed National Activity Index that came in at -0.05; both reports were below expectations and failed to give support to the US dollar. The DXY is trading at 3-day lows around 101.00. To the downside, support levels might be located at 1.0060 (daily low), 1.0045 (Feb 20 high) and 1.0010/15 (Feb 20 low). On the upside, potential resistance areas might be seen at 1.0075 (Feb 22 low), 1.0115 (daily high) and 1.0140 (Feb 22 high).

AUD/USD extremely ovebought near 0.7730; key 0.78 level on the table
Currently, AUD/USD is trading at 0.7733, up +0.43% or 33-pips on the day, having posted a daily high at 0.7740 and low at 0.7665.The Australian dollar vs. American dollar has been pushing higher to break above the round figure 0.77 as yesterday's FOMC minutes couldn't clock any 'sooner rather than later' narrative to favor long-dollar positions. Furthermore, the 'fairly soon' wording left market participants in the air with no clues as what to do or not. Therefore, the most logical step materialized as traders quickly adjusted their positions limiting their exposure to the greenback.On the other hand, during the Asian session, short-sellers were caught as the AU economic docket released the Private Capital Expenditure that clocked 'a worse than expected' figure at (2.1%) from (1.0%) consensus and (3.3%) previous. Evidently, such negative result prompted a short-term sell-off that yielded almost 50-pips in the process to reward bears. However, the Aussie erased those losses as the pair moved into the European trading session. Hence, the US dollar shined for a limited time and attracted some interest, but the facts are evident to keep denying the 'awful truth' - Trump's Trade might be over at least for the time being. Historical data available for traders and investors indicates during the last 8-weeks that AUD/USD pair, a commodity-linked currency, had the best trading day at +1.18% (Jan.17) or 89-pips, and the worst at -0.81% (Jan.18) or (61)-pips. Furthermore, the US 10yr treasury yields have traded from 2.41% to 2.38%, down -1.11% on the day at 2.38% or -0.0267. In terms of technical levels, upside barriers are aligned at 0.7740 (high Feb.23), then at 0.7777 (high Nov.8) and above that at 0.7834 (high April.21). While supports are aligned at 0.7617 (low Feb.14), later at 0.7512 (100-DMA) and below that at 0.7459 (50-DMA). On the other hand, Stochastic Oscillator (5,3,3) seems to head north. Therefore, there is evidence to expect further Aussie gains in the near term.

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