Action Insight Mid-Day Report 3-5-19

Sterling Suffers Fresh Selling on Irish Backstop Deadlock, Dollar Still Attempting to Rally

Action Insight Mid-Day Report 3-5-19 Sterling Suffers Fresh Selling on Irish Backstop Deadlock, Dollar Still Attempting to Rally Sterling trades broadly lower today and suffers fresh selling in early US session. Some attributes the decline to reports that UK Attorney General Geoffrey Cox and Brexit Minister Stephen Barclay won't get any breakthrough on Irish backstop in Brussels today. But it is actually hardly any news. UK government is seeking some legally binded assurances on the temporary nature of the backstop. Meanwhile, EU showed no indication on back down from the principle of avoiding hard Irish border. Pound's could be partly due to weak PMI data. Or, it's just reversing the rally on fading risks of no-deal Brexit. There is just no fresh development for Sterling bulls to cheer for. Meanwhile, Dollar is the strongest one for today as treasury yield regains strength. USD/CAD breached 1.3340 resistance but there is again no follow through buying. The greenback also fails to break through near term resistance against Euro, Aussie and Swiss. Dollar might look into Boston Fed Eric Rosengren's speech provides little inspiration. And the greenback might look into ISM services. Meanwhile, Euro is the second strongest one, followed by Swiss Franc. Data from Eurozone continue to paint a picture that the worst is behind. The common currency is also helped by rebound in German treasury yields. Technically, GBP/USD's breach of 1.3109 minor support suggests near term topping and deeper pull back could be seen. 1.1316 support in EUR/USD, 1.0024 resistance in USD/CHF, 0.7054 support in AUD/USD and 1.3440 in USD/CAD will be watched in US session. In Europe, currently, FTSE is up 0.66%. DAX is down -0.15%. CAC is down -0.15%. German 10-year yield is up 0.0121 at 0.174. Earlier in Asia:, Nikkei dropped -0.44%. Hong Kong HSI rose 0.01%. China Shanghai SSE rose 0.88%. Singapore Strait Times dropped -0.52%. Japan 10-year JGB yield rose 0.008 to 0.009. Full Report Here Into US session: Sterling suffers fresh selling, Dollar strongest Fed Rosengren: May take several FOMC meetings to see how much... BoE: UK financial system can withstand worst case disorderly Brexit ECB and BOE activate currency swap arrangements UK PMI services rose to 51.3, suggest just 0.1% GDP growth... Eurozone PMI composite finalized at 51.9, easing of one-off dampening factors UK Hunt: EU gives positive signal on Irish backstop changes Italy PMI services rose to 50.4, but not much sign of... India Wadhawan: Relative limited impact as US ends preferential trade treatment Asian update: Dollar strongest as RBA and China shrugged. Stocks mixed China, facing tough struggle, lowers 2019 growth target to 6-6.5% China CBIRC Guo: Can absolutely open financial market access to US Trump to end preferential trade treatment to India and Turkey RBA kept cash rate at 1.50%, central scenarios of growth, inflation,... Top Movers | HeatMap | Pivot Points | Pivot Meters | Action Bias | Vol BOC Preview – Risk on Growth is to the Downside Treasury Yield Surged on Abating Global Risks and Bets on Bottoming... China's February PMI Sent Mixed Message. Update on PBOC's New Tool... Central Bank Views | China Watch | Oil N' Gold | Special Topics GBP/USD Mid-Day Outlook Daily Pivots: (S1) 1.3146; (P) 1.3201; (R1) 1.3237; More.... GBP/USD's fall from 1.3350 extends to as low as 1.3097 so far today. The breach of 1.3109 support now raises chance of near term reversal. Intraday bias is mildly on the downside for trend line support (now at 1.2944). Break will target 1.2774 support to confirm completion of rebound from 1.2391. Nevertheless, rebound from current level, followed by break of 1.3350, will resume rise from 1.2391 to 61.8% retracement of 1.4376 to 1.2391 at 1.3618 next. Full Report Here EURUSD | USDJPY | GBPUSD | USDCHF | AUDUSD | USDCAD EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY Recommended Readings U.S Dollar In Demand Loonie Declines Ahead Of Rate Decision, BoC Expected To Be Dovish Again DAX: Short-Covering Underpins Stocks After Drop Anxiety Around The US And China Growth Provoked A Wave Correction The Giant Moves China Growth Target Figures EUR/JPY Targeting The ATR Projection High RBA Remains On Hold And The AUD Gets A Small Boost Dollar Rally In Full Throttle, But Mind The Speed Bumps GBPUSD Weakens Below 7-Month Highs, Trend Remains On The Upside Are Equity Bulls Running Out Of Steam? WTI Oil Futures Hold In Narrow Range, Bullish Bias In Near Term Fundamental Analysis | Technical Analysis In-depth Reports RBA Board Keeps Rates on Hold; Slightly More Positive Assessment of the Economy Two Thine Own Inflation Target Be True? Fed Policy Review Part 1 Canadian 'Solo' Recession Risk: Rhetoric vs Reality China's February PMI Sent Mixed Message. Update on PBOC's New Tool... China's Monetary Easing to Continue after End of Trade War Delaying Brexit might prolong UK Economy's Suffering Economic Calendar GMT Ccy Events Actual Forecast Previous Revised 21:30 AUD AiG Performance of Service Index Feb 44.5 44.3 0:00 NZD ANZ Commodity Price Feb 2.80% 2.10% 2.00% 0:01 GBP BRC Retail Sales Monitor Y/Y Feb -0.10% 0.10% 1.80% 0:30 AUD Current Account (AUD) Q4 -7.2B -9.1B -10.7B -10.8B 1:45 CNY Caixin China PMI Services Feb 51.1 53.5 53.6 3:30 AUD RBA Rate Decision 1.50% 1.50% 1.50% 7:30 CHF CPI M/M Feb 0.40% 0.40% -0.30% 7:30 CHF CPI Y/Y Feb 0.60% 0.60% 0.60% 8:45 EUR Italy Services PMI Feb 50.4 49.5 49.7 8:50 EUR France Services PMI Feb F 50.2 49.8 49.8 8:55 EUR Germany Services PMI Feb F 55.3 55.1 55.1 9:00 EUR Eurozone Services PMI Feb F 52.8 52.3 52.3 9:30 GBP Services PMI Feb 51.3 50 50.1 10:00 EUR Eurozone Retail Sales M/M Jan 1.30% 1.30% -1.60% -1.40% 14:45 USD Services PMI Feb F 56.2 56.2 15:00 USD ISM Non-Manufacturing/Services Composite Feb 57.3 56.7 15:00 USD New Home Sales Dec 590K 657K

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