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NAB discusses AUD/NZD outlook and warns from a possible breach below 1.02 in the coming weeks.

"AUD/NZD has been tracking lower this year, as expected, and reached a fresh closing low mid last week below 1.03. The cross rate is in an overshooting phase relative to current economic fundamentals, based on concern that the Australian economy is on a much weaker trajectory, driven by the housing market. This is reflected in short positioning in AUD, with the market anticipating that bad news for Australia relative to NZ will continue," NAB notes. 

"At this juncture the risk is that the bottom of our suggested trading range for 1H19 (1.02) is breached. The best chance for this to happen would be the run of data continuing to be on the soft side for Australia, alongside a building political risk premium closer to the Federal election. The opposing view is that a shift in data momentum occurs – stronger Australian data imposing some doubt on RBA rate cuts and encouraging a closing of short AUD positions; or weaker NZ data fuelling RBNZ cut expectations," NAB adds. 

• EUR/USD's 2019 pattern of successively lower rebound highs eyed
• Bulls hope March low by 61.8 pct of '17-'18 rise marked a bottom
• Now by 50 pct of '19 drop @1.1373, but Feb 28 peak @1.1420 is key
• Stochs a bit o/b, gentle Fed, less Brexit risk already priced in
• FOMC may prove too steady and Brexit risk too high nL1N2170F7
• GBP under fresh Brexit pressure is a slight drag on EUR as well
• 10-DMA and March 14 pullback low by 1.1294 looks pivotal

MUFG Research discusses USD/JPY outlook and sees a scope for the falling volatility trend to be potential trigger pointing to a potential move higher in USD/JPY.

"The markets look to be very much positioned in expecting a benign FOMC outcome confirming a continued pause. Volatility in FX has plunged notably on a benign global policy outlook. The shift to the sidelines by the Fed has of course been replicated by other central banks signalling a longer delay to any future move higher in rates (ECB, RBA, RBNZ and BoC)," MUFG notes. 

"FX volatility in general is falling notably. Remarkably, 2-year USD/JPY implied volatility has plunged to just 7.46% from a year-to-date peak in January of 9.16%. The current level is the lowest since June 2007 – just prior to the onset of the financial crisis that first showed up in a freezing of money markets in the summer of 2007. If this trend of falling volatility was to continue it would be consistent with a pick-up in carry and as can be seen above, yield per unit of volatility is pointing to a potential move higher in USD/JPY," MUFG adds. 

• Clear above 10DMA and daily momentum flips to positive, first since Feb 15
• Initial resistance 0.8592, 10DMA: cloud twists way abv mkt but could attract
• 61.8% Fibo just behind at 0.8600, taken off 0.8679 to 0.7473 drop
• Test of 200WMA, 0.8392, on hold for now, risk to 10WMA 0.8673
• Monthly bear trend also showing signs of stress: Brexit cited nL1N21606R
• Break into the monthly cloud, 0.8335, off the table for now

• EUR/USD bulls look set to test the key 1.1374 Fibonacci level
• 1.1374 is a 50 percent retrace of the 1.1570 to 1.1177 2018 (EBS) slide
• Spot bullish after it registered the biggest one-week rise since Nov 2018
• We are looking to get long on dips to 1.1310
• Daily kijun line that is now at 1.1298 should underpin
• A EUR/USD close above key Fibo will unmask cloud nL1N21606K

• A patchy bullish continuation pattern on daily chart
• Topside breakout is at 1.3300 and drop below 1.3183 Mon low negates pattern
• 14-day momentum marginally negative and stochs now falling away
• Long upper wick candle Tues hints at demand fade
• However, recent action peppered with daily swings, highlights indecision
• Buying dips towards 10DMA at 1.3195 favoured for 1.3380, stop below 1.3180

• Base of AUD/USD's daily Ichimoku cloud to 0.7000 by Friday
• Traders should expected recent support near 0.7050 to diminish
• U.S. officials concerned China is pushing back in trade talks nFWN2160LF
• Markets seek dovish Fed but that's reason to eye AUD/USD down nL1N21505W
• 21-DMA @ 0.7095 capping. 100/55-DMAs 0.7060/33 may cap new mid-term range
• 21-WMA also 0.7157. Current 0.70-73 range may evolve into 0.6850-0.7150

• NZD/USD down 0.30% and down slightly against the AUD as well
• Talk of US banks buying USD across the board weighing
• Speculation USD buying based on view market Fed expectations overly dovish
• NZD/USD hardest hit, as tomorrow's NZ Q4 GDP a risk nL3N2150U1
• Pair trading around 10-day MA at 0.6832 with break targeting 0.6800/10
• Resistance formed at triple top at 0.6875

The AUD/USD is down 0.2 percent in March and today's drop suggests the bears are gaining control amid widening yield differentials.
Two-year Australian yields have fallen 17bps this month and the 10-year is off 23bps, while U.S. two- and 10-year yields have only fallen 4bps and 10bps.
Futures now price an August RBA rate cut to 1.25 percent at 98 percent versus 52 percent on March 1.
Softer-than-expected Australian GDP nL3N20T0WK and sliding house prices are undermining the outlook for consumption and growth, though the RBA still sounds relaxed nS9N1ZY01R.
The RBA's March meeting minutes showed the bank caught between falling house prices with their likely impact on consumer spending and a resilient jobs market, leaving the next rate move "evenly balanced" nRUAIEEF4V.
The sombre market mood will increase the focus on typically volatile jobs data Thursday nL3N2160GA.
The domestic macro backdrop has turned sentiment toward the AUD bearish, while hopes for a U.S.-China trade deal support nL1N21617G.
Key levels are the 0.7000 support, with 50 percent of the 2019 rebound at 0.7005 and 0.7003 the March low.
A break would initially target 0.6936, the 61.8 retracement.
A close above 0.7111/20, 38.2 percent of the February-March fall and March weekly double top, would undermine the bearish view.

• Little changed so far in Asia with both components a shade softer
• PM May deliberates nL8N2161F2 - Barnier needs a UK plan nL8N2165X4
• No deal, May's deal UK elections & a 2nd referendum remain live - chaos
• Positive momentum studies and 5 DMA; 10 & 21 DMAs fall - net negative
• Close above 0.8591 falling 21 DMA would end the downside bias
• London 0.8534 low and NY 0.8570 high is initial support/resistance

• AUD/USD veers lower, respecting trendline resistance 0.7125
• Break of 0.7054 floor will unlock potential for test of 0.7000
• 0.7054 is also base of daily Ichimoku Cloud support zone
• Close below that level also triggers Bollinger downtrend channel
• Trio of bearish technical cues will cement downside bias
• FOMC outcome may disappoint already-dovish traders; USD could jump

• Little changed early after an eighth higher daily low - sustains the bounce
• German Zew beat expectations, supporting EUR & Bund yields nL8N2162T3
• Momentum studies edge higher 5, 10 & 21 DMAs climb - a positive setup
• Targets 1.1373, 50% of the 2019 fall, then 1.1388 TL from 1.1570 2019 top
• 1.1320-35 1.2BLN and 1.1390-1.1400 2BLN strikes look safe in Asia
• NY 1.1338 low and London 1.1362 high support/resistance nL1N2161QM

• NZD/USD not reacting to improving NZ current account nAZN0001C2
• Sellers at 0.6875 continue to cap rallies with triple-top at 0.6870/75
• NZD/USD underpinned by light AUD/NZD selling as cross fell 0.25%
• Support at 0.6830/35 where the 10 and 21-day moving averages converge

Nordea Research discusses the USD tactical outlook around tomorrow's FOMC March policy meeting.

"Most focus this week will be given to the FOMC meeting on Wednesday, as the market will be looking for signs on how, when and if the quantitative tightening will end. We judge that the current consensus expects the Fed to end QT by Q4-2019. Any hints on an earlier exit from the QT programme will give our slightly positive EUR/USD view a boost," Nordea projects.

"We have the following thoughts on the three major issues ahead of the FOMC meeting:

Patience: The Fed is unlikely to change its stance from “patience” at the March FOMC meeting, with patience meaning that rates will remain on hold until it becomes clear whether the economic outlook has worsened as much as the markets seem to believe or whether it will remain relatively bright when the fog clears as the majority of FOMC members still seem to believe. Dot migration: Based on recent speeches, we believe that at least half the dots will have migrated lower, reflecting FOMC members’ reduced inclination to hike rates, with the median down to one hike this year (from two in December) and another hike in 2020 (unchanged from December). QT details: Market sentiment has brightened and the FOMC may decide to keep the announcement of QT details for a rainy day, but details could also be announced as early as next week. Our baseline remains QT tapering starting in Q3 and ending in Q4 with excess reserves around 1.000bn. It will be negative if the Fed announces that excess reserves will continue to fall after the end of QT," Nordea adds.

• Tighter It-DE & DE-US spreads help lift pair early-on nL1N2160CY
• Limited action at first but some sharp moves seen in a tight range
• Barnier Brexit comments lead to a sharp dip nB5N1ZL02W nL1N2160TY
• Dip is short lived and pair nears 55-DMA again on late US$ sales
• Fed is now in focus, EUR/USD bulls look for a cautious tone nL1N2160LN

• BBG reports a US official said seeing China walking back trade offers
• Risk sentiment shifts down; stocks, commodities & yields sink
• Emerging market ccys slide, USD/CNH spikes high, AUD/USD falls
• AUD/USD falls to test support in the 0.7085/90 zone
• March 18 low, 10-DMA daily cloud base & 0.7040 area are supports
• Break below 0.7040 puts key support near 0.7000 in play

NAB discusses NZD/USD technical outlook and flags a possible bullish trigger with a scope for a move towards 0.6900 in 1-month and 0.7050 in 3-month.

"NZD/USD completed a bullish three week reversal pattern last week. This is somewhat marginalized by the fact that it did not occur at the bottom of a trend. It did however produce a weekly close above the 50-week MA (now 0.6797) and compliment the positive MT momentum triggers already in play," NAB notes. 

"Price remains within a well-defined consolidation pattern, however recent triggers in terms of price and momentum justify our bullish one and three-month targets at 0.6900 and 0.7050. Pressure to break the top of the consolidation and thus confirm a renewed MT uptrend in time remains evident," NAB adds. 

The Japanese yen rose on Tuesday, benefiting from a U.S. dollar hit by concern over the U.S. economy and expectations that the Federal Reserve will prove accommodative at a meeting this week nL8N2161RV.
Dollar speculative accounts generally seem poorly positioned going into the Fed nL1N21505D, exacerbating the downside risk.
For the week ending March 12, the futures market USD/JPY net long was an equivalent cash position of $6.6 billion -- the largest since the week ending Jan.
8, though EBS flow data since Mar.
12 shows that some of those USD/JPY longs may have been trimmed.
Nonetheless, USD/JPY longs suffered a setback on Monday when the pair registered a daily close below the 200-DMA, which is at 111.45, meaning the downside risk has grown.
There is talk of large sell stops clustered below 110.80/111.00, which are becoming increasingly vulnerable to an attack.
Even after the Fed meeting on Wednesday, month-end may see USD/JPY bulls stampede for the exit nL1N21606O.

Societe Generale Research discusses EUR/USD outlook and notes the pair is still on track for the smallest quarterly range  since the single currency was created.

"Current levels are almost exactly in the middle of the year-to-date range. No wonder EUR/USD vol is drifting steadily lower - a trend that we suspect will persist because there is limited downside for the euro here, but upside is only on offer when growth prospects improve and Bund yields rise. But maybe, as the spot rate converges on the 50-day (1.1360) and 100-day (1.1367) averages, a small break higher will create a tiny amount of excitement," SocGen notes. 

"The outlook for the euro has as much, and probably a lot more, to do with European issues (political, economic and policy) as it has to do with what's going on the US. Perhaps it's not surprising then, that with major fiscal policy easing not under consideration (despite being the obvious cure for the current economic weakness,) with Brexit uncertainty continuing and with the ECB hamstrung, the euro can't get much joy from lower US bond yields and the danger of weaker US growth. The euro's cheap and staying cheap until something changes in Europe," SocGen adds. 

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

"The pound has recovered most of its losses from yesterday after the Speaker of the House of Commons, John Bercow, torpedoed PM May’s plans for submitting her deal for a third vote to parliament as early as today. Speaker Bercow said in particular that PM May could not put her Brexit deal to another vote, short of major revisions," MUFG notes. 

"After the initial knee-jerk reaction to this news sent cable down below 1.32, the market appears to settle on the view that even if the vote does not go ahead today, the next logical step would simply be for PM May to request an extension to Article 50.

If this market view holds, it should be positive for the pound and likely take it back higher in the 1.33-1.35 range against the dollar. Under these circumstances, the longer the extension the more positive it would initially be for the pound," MUFG adds.