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Dankse Research discusses its latest views on EUR/CHF and EUR/USD. Danske is neutral on EUR/CHF and bearish on EUR/USD in the near-term.

"The Swiss National Bank (SNB) kept all policy measures and signals unchanged yesterday as expected. The stance and another downward revision to inflation forecasts reflect a central bank that sees little relief in getting back to target. With the ECB sidelined, the SNB will have to remain patient for longer with little ability to shift into genuine ‘normalisation’ mode. EUR/CHF saw a delayed drop after the announcement and is a good example of the perceived asymmetry in reaction functions that haunt FX markets," Danske notes.

"What about the ECB? Near term, we think FX markets will test its willingness to shift into easing mode again. This hints at a higher EUR easing risk premium on a 3M horizon, which leaves downside risks to EUR/USD intact in our view," Danske adds. 

• USD/JPY technical fade trade from Thur doing well nL1N2180D7
• Short in play 110.90 with stop now at entry after props broken
• Broke 23.6% of 2019's range and 55-DMA, now at 110.23-24
• The 109.20 target is above the 38.2% Fibo at 109.07
• 109.95 daily cloud top breached, base is at 108.91
• Weekly Cloud base and Kijun at 109.65/33 are interim supports

AUD/USD extended its slide from yesterday's peak, its highest in nearly three weeks, as weak euro zone PMI nL1N2190CH increased concerns about slowing global growth, but the poor U.S. economic outlook will limit its fall.
While AUD/USD dipped below the converging 10- and 21-DMAs today's U.S. PMI downside surprise nL1N2190JH validated Fed caution.
The softening jobs component of PMI suggests the downside miss to February non-farm payrolls might not be an aberration.
As a result U.S. Treasury yields traded to new 2019 lows while Eurodollar and fed funds increased chances of late 2019 or early 2020 Fed cuts.
The sharp fall in U.S. rates mirrors Australian rates.
Australia's 10-year yield dived below 1.8 percent while aussie 3-month bank bill futures expect an early-2020 RBA cut.
Rates markets for both economies suggest the RBA and Fed rate paths will converge which could result in AUD/USD trading in a range.
As it stands now AUD/USD is locked in a 0.7000/0.7300 range after recovering from January's flash crash.
That range should hold until growth and rate paths diverge.
Should U.S. data deteriorate rapidly Fed rate cuts could come sooner than expected and send the greenback sharply lower.
AUD/USD might then attempt a break of resistance near 0.7300.

Societe Generale Research discusses the USD outlook and argues that as relative economic performance is now in the driver seat in the FX market, the Fed's strong dovish pivot this week has failed to trigger significant USD weakness.

"In a different world, the FOMC's dovish pivot would have triggered both significant dollar weakness and a further sustained bout of yield-hunting. As it is, the FX market response has been relatively muted, certainly more so than in bond markets. Relative economic performance is currently a more important driver of currency moves than usual and that's not making life easy for dollar bears," SocGen notes. 

"In 2016, a dovish pivot by the Fed helped prevent an economic soft patch turn into anything more serious. The dollar fell but recovered to make a new high at the start of 2017. The combination of a turn in the profit cycle, the after-effects of President Trump's fiscal sugar rush and the downturn in global trade and growth, all suggest this downturn will be more sustained, but we won't know for months. A significant dollar fall is unlikely in the near term. Meanwhile, hopes of better data from Europe, Japan, Canada or Australia are just that - hopes. The euro, in particular, is anchored by very soft growth and very low rates/yields. NOK and SEK look like the pick of the G10 currencies for now," SocGen adds. 

Market fears that the Fed has acted too late to avert global economic weakness will boost the safe-haven yen, and especially versus Brexit-beleaguered sterling. Though seesawing hard Brexit risks have tossed the pound around this year, the bulk of its recoveries versus the dollar and yen stemmed from the global recovery in risk-taking after the Fed veered away from tightening.
Cable rallied 7.8 percent from January's flash-crash low to the March 13 high.
The more risk-reactive GBP/JPY surged 12.5 percent to this month's peak. Both pairs have fallen back this week on doubts about a near-term Brexit deal and worries that the Fed fell behind the curve on global economic weakening, highlighted by miserable euro zone and U.S. PMI data nL8N2191YA nL1N2190CL nN9N1ZZ011.
These fears may increase if the U.S. fails to reach a trade deal with China and if President Trump takes a hard line with Europe on trade.
GBP/JPY rallies the past four weeks have all failed above the weekly cloud top and below the downtrend line off of the highs since last May.
If today's homes sales data also underwhelm, GBP/JPY may break below last week's low and the 200-DMA at 143.70/60, with 141 the next target.

MUFG Research discusses GBP outlook in light of the latest Brexit developments.

"European leaders yesterday agreed to postpone the Brexit deadline for two weeks – to April 12- which saw the pound recover much of its losses from the day and trade around 1.3150 at the start of today’s European trading session. This postponement is unconditional and has been extended as a lifeline in the event that the House of Commons fails to ratify her deal before the 29th of March. In addition to this if her deal does pass next week the EU have agreed to provide a technical extension to the 22nd of May," MUFG notes. 

"This has pushed back the risk of the UK crashing out of the EU in a “No Deal” Brexit by next Friday and given some much needed breathing room to the UK government just as matters were coming to a fever pitch...If PM May’s deal fails again next week she will be faced with three remaining options: i) the choice of having the UK crash out on the 12th of April, ii) seeking a longer extension and field candidates for the European elections, and iii) as a nuclear option consider revoking Article 50 to cancel Brexit....We expect UK MPs to vote to change the Article 50 deadline to the 12th April next week," MUFG adds.

• The 55DMA firmly shuts the door on the recent sharp bull run
• The average bang on the Thurs 0.8722 high and at 0.8717 today
• Price slips below the 30DMA as German data adds to the EUR's pain
• 50% Fibo retrace off the recent 0.8473 to 0.8722 run comes in at 0.8595
• 21DMA at 0.8592 below and seen pivotal for the Friday session
• Still see upside scope but below the 21DMA and bulls may throw in the towel

• Half-cent+ cable drop to 1.3097 intra-day low fuelled by EUR/USD dive
• EUR/USD losses spurred by big German manufacturing PMI miss nL1N21905X
• Simultaneous EUR/GBP drop to 0.8614 (0.8671 was early Europe high)
• 0.8614 is low for cross since Thursday's one-month high of 0.8722
• That high was notched before EU gave Britain a two-week Brexit reprieve
• See: nL8N2181V3. 1.3156 was early Europe GBP/USD high nL1N219055

• USD/JPY bias remains on the downside while the 30-DMA, now at 111.08, weighs
• Interim supply at 111.00 Fibo, 50% of 111.70 to 110.30 (Wed-Thur) EBS drop
• This region should stem near-term recovery attempts
• We remain short at 110.90 for an eventual break below the 110.23 Fibo
• The 110.23 Fibo is 23.6% retrace of the 104.10 to 112.13 (2019) rise
• Previous bullets nL1N21805B, nL1N218049

• EUR/USD likely underpinned by more short covering or tech inspired longs
• Big swings since Fed but managed bullish closes over 55/100-DMAs 1.1365/67
• Close over daily cloud top @ 1.1402 needed to stoke bullish hopes
• Where specs may buy others will definitely sell nL1N218043 nL1N21804A
• Corp and option hedging set to weigh, added to flows tied int/rates
• Hedging for EUR 5.9bln expiries 1.1350-1.1420 may dominate ahead 15GMT cut

• USD/JPY trades 110.66/110.89 range in Asia, dips on USD selling @ Tokyo fix
• Large option expiries both sides of the market dampen activity nL1N219026
• Soft data weighs on the Nikkei, especially financials nL3N219054
• Support seen at 55 DMA and Thurs low at 110.24/30, break below bearish
• Also weekly support at 110.71/110.84 could be key on NY close nL1N21901I
• Strong resistance at 10, 21 DMAs at 111.20/28, close above negates downside

• Flat in Asia - 1.1361/1.1380 range - 113.50-60 1.2BLN, 1.1400 2.3BLN strikes
• Trades back around the middle of the 2019 1.1170/1.1570 range
• Dovish Fed turn and a minor improvement in EU data supports
• Neutral momentum studies, 5, 10 & 21 DMA climb - net positive setup
• Positive Tenkan Kijun cross - close above 1.1402 cloud top would be bullish
• UST/Bund yield differentials and data likely to drive - EZ PMIs coming up

EUR/USD: Neutral (since 21 Aug 18, 1.1485): Vastly improved momentum suggests EUR could attempt to move to 1.1515.

EUR failed to build on the solid gains made on Wednesday (20 Mar) as it dropped back sharply to an overnight low of 1.1340. The low is not far above our 1.1330 ‘key support’. While the price action has dented the upward momentum, only a break of the ‘key support’ would indicate that EUR is not ready to move towards 1.1515 (our current view as highlighted yesterday, 21 Mar). Overall, in order to maintain the current momentum, EUR could not afford to ‘dither’ as it would greatly decrease the prospect for further EUR strength

GBP/USD: Neutral (since 21 Aug 18, spot at 1.2795): Prospect for a revisit of the 1.3000 is quite high.

GBP plunged to a low of 1.3004 before rebounding quickly to end the day at 1.3110, lower by -0.61%. The Brexit headlines driven price action took out the 1.3130 ‘key support’ and indicates that our recent view for GBP to “trade with a positive bias” is wrong. While the outsized drop has shifted the immediate risk to the downside, it is unclear at this stage if any weakness can be sustained. That said, the prospect for a revisit of the 1.3000 level appears to be quite high (the next support below this level is at the month-to-date low of 1.2945). All in, for the next several days, GBP is likely to remain under pressure unless it can reclaim 1.3230. Looking further out, the outlook for GBP is unclear and is largely dependent on Brexit.

AUD/USD: Neutral (since 13 Sep 18, spot at 0.7170): AUD is expected to advance further but 0.7200/20 zone is expected to offer solid resistance. No change in view from yesterday, see reproduced update below.

After trading in a relatively quiet manner for several days, AUD was jolted awake and surged to a high of 0.7150. While upward momentum has picked up strongly, there are several strong resistance levels and for now, it is not clear whether AUD can surmount these formidable levels. All in, we expect AUD to advance further in the coming days but expect 0.7200/0.7220 zone to offer solid resistance. If AUD can break through this zone, it would greatly increase the odds for a move to the year-to-date high near 0.7295. To put it another way, we hold ‘positive’ view in AUD now and only a break of the 0.7070 ‘key support’ would indicate the current upward pressure has eased.

NZD/USD: Neutral (since 07 Dec 18, 0.6880): NZD to strengthen further, break of 0.6942 would shift focus to 0.6970.

NZD touched a high of 0.6938 yesterday, just a few pips below the February’s peak of 0.6942. As highlighted yesterday (21 Mar, 0.6915), we are anticipating NZD to move above 0.6942 and a break of this level would shift the focus to 0.6970. That said, the subsequent rapid retreat from the 0.6938 high was not exactly expected as NZD closed lower by end of the day (-0.10%, 0.6876). While the price action is not ‘ideal’ for our view, only a break of the 0.6845 ‘key support’ would indicate that our expectation is incorrect.

USD/JPY: Neutral (since 09 Oct 18, 113.10): USD to stay on the defensive but expect solid support at 110.00. No change in view from yesterday, see reproduced update below.

Our expectation that “the bias for USD is tilted to the upside” is proven wrong as it plummeted overnight and cracked the 110.80 ‘key support’. While the impulsive drop has shifted the immediate risk to the downside, it is premature to expect a sustained decline. That said, we expect USD to stay on the defensive but any weakness is expected to encounter solid support at 110.00 (minor support at 110.30). On the upside, a break of ‘key resistance’ at 111.35 would indicate the current weakness has stabilized.

• Disparate components in Asia, NZD gently bid +0.2% and AUD -0.2% offered
• No data or significant comments to drive the moves - so flow driven
• AUD/NZD has been falling since Jan, RBNZ on hold and RBA cut expectations
• Bearish tech cross setup with 5, 10 & 21 DMAS heading south
• Break of 1.0294 March trend low would target 1.0243, 76.4% Jan bounce
• RBNZ rate decision leads a light data schedule next week - RBNZ's tone key

• AUD/USD trades slightly lower in Asia, despite upbeat risk appetite
• MSCI AXJ trades 0.25% higher after the rally on Wall St Thursday
• AUD/USD weighed down by soft AU yields, widening gap with UST nL1N2181UN
• Techs still supportive with s/t MAs and momentum studies heading north
• A close back below 10 & 21 DNAs at 0.7093/95 would confirm rally is over
• Market persistently bearish AUD, needs a clear reason to change nL1N218167

• No deal Brexit gained traction yesterday, and GBP fell 0.6% nL8N2181V3
• EU's Tusk says all Brexit options still open until Apr 12 nB5N1ZW004
• Down to a final vote on May's deal or accepting EU electionsnL8N2181V3
• Other options are available if PM May changes her mind on a longer extension
• GBP is up 0.1% on the news, though May's deal does not have the numbers yet
• Earlier 1.3103 low and 1.3172 NY high support/resistance - no deal looms

• Closed -0.3% - GBP led USD higher on no deal Brexit fears nL8N2181V3
• EU announced a Brexit delay to May 22 if deal passed by parliament next week
• If not, April 12th end date and no deal Brexit or EU elections nB5N1ZL039
• Inside day despite dip - neutral momentum studies; 5, 10 & 21 DMAs climb
• Close below 1.1328 21 DMA & 1.1312, 50% March bounce would end positive bias
• 113.50-60 1.2BLN and 1.1400 2.3BLN strikes likely contain in Asia

MUFG Research discusses USD/JPY tactical outlook and adopts a slightly bearish bias for the week ahead.

"There is strong uncertainty about what lies ahead. USD/JPY could easily come under downward pressure. But the lower bound for USD/JPY is firm, given the shrinking trade surplus and Japanese investor’s strong JPY selling flows.

All in all, we expect a slight downward USDJPY bearish bias," MUFG notes. 

AUD/USD will probably revert to gains even though its retreat from three-week highs hit after the surprisingly dovish Fed projections [nL1N2171MY] and unexpectedly strong Australian unemployment will disappoint bulls in the short term. The daily cloud top capped the rally and the ensuing slide nL1N2180UU, aided by Brexit uncertainties driving GBP/USD toward 1.30, has the pair threatening to trade below the 21-DMA.
But, the market's view of the monetary policy backdrop favors AUD/USD bulls and a test of the 200-DMA and January high. U.S.
interest rate futures rallied sharply after the Fed, with March 2020 Eurodollar prices rising above trend-line resistance from 2016's high.
The U.S. short-term interest rate market contradicts the Fed's view of no 2019 hike and one hike in 2020.
Eurodollars and fed funds pricing now suggest Fed rate cuts are due in either Q1 or Q2 of 2020.
Those expectations should keep the U.S. dollar on the defensive, especially since positioning remains long the greenback.
The market also remains net-short aussie.
The combination of potential Fed cuts and position adjustments should limit AUD/USD's downside.
As long as key support near 0.7000 holds buying AUD/USD dips might be preferred going forward.

• Cable tests 1.3005 (March 12 low) after extending south from 1.3226
• 1.3226 was early Europe high, as continent digested dovish Fed steer
• GBP is suffering due to heightened fears of a "no-deal" Brexit
• It is expected that MPs will reject May's Brexit deal via "MV3" next week
• JP Morgan sees UK general election more likely than approval for May's deal
• See: nL1N2180Q4. GBP will take a fresh hit if a snap election is called