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For the 24 hours to 23:00 GMT, the USD marginally rose against the CHF and closed at 0.9374.

In economic news, Switzerland’s total sight deposits inched up to a level of CHF575.0 billion in the week ended 26 January, compared to a level of CHF574.7 billion in the previous week.

In the Asian session, at GMT0400, the pair is trading at 0.9375, with the USD trading slightly higher against the CHF from yesterday’s close.

The pair is expected to find support at 0.9345, and a fall through could take it to the next support level of 0.9314. The pair is expected to find its first resistance at 0.9400, and a rise through could take it to the next resistance level of 0.9424.

Ahead in the day, traders would keep a close watch on Switzerland’s trade balance figures for December and the KOF leading indicator for January.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the USD traded flat against the CAD and closed at 1.2340.

In the Asian session, at GMT0400, the pair is trading at 1.2347, with the USD trading 0.06% higher against the CAD from yesterday’s close.

The pair is expected to find support at 1.2323, and a fall through could take it to the next support level of 1.2299. The pair is expected to find its first resistance at 1.2366, and a rise through could take it to the next resistance level of 1.2385.

With no macroeconomic releases in Canada today, investor sentiment would be determined by global macroeconomic factors.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

Daily Pivots: (S1) 0.8073; (P) 0.8095; (R1) 0.8118; More...

While AUD/USD continues to lose upside momentum as seen in 4 hour MACD, there is no sign of reversal yet. As long as 0.8003 support holds, further rally is expected. Sustained break of 0.8124 resistance will resume whole medium term rebound from 0.6826 and target key fibonacci level at 0.8451. However, on the downside, break of 0.8003 support will indicate short term topping, likely with bearish divergence condition in 4 hour MACD. And in such case, intraday bias will be turned back to the downside for 55 day EMA (now at 0.7836).

In the bigger picture, current development suggests that medium term rebound from 0.6826 is still in progress and could be resuming. Such rise could target 38.2% retracement of 1.1079 (2011 high) to 0.6826 (2016 low) at 0.8451. As such rise is seen as a corrective move, we'd expect strong resistance from 0.8451 to limit upside and bring reversal.

Daily Pivots: (S1) 1.2310; (P) 1.2335; (R1) 1.2363; More...

USD/CAD's consolidation from 1.2281 temporary low is still unfolding and intraday bias remains neutral. As long as 1.2490 resistance holds, near term outlook stays bearish and deeper decline is expected. On the downside, break of 1.2281 will extend the decline from 1.2919 and target a test on 1.2061 low. However, considering bullish convergence condition in 4 hour MACD, break of 1.2490 will indicate short term bottoming and bring stronger rebound.

In the bigger picture, rebound from 1.2061 is likely completed completed at 1.2919, rejected by 55 week EMA and kept below 38.2% retracement of 1.4689 to 1.2061 at 1.3065. The development also suggests that long term fall from 1.4689 is not completed yet. Decisive break of 1.2061 low will target 61.8% retracement of 0.9406 to 1.4689 at 1.1424. This will now be the favored case as long as 1.2919 resistance holds.

Daily Pivots: (S1) 108.57; (P) 108.88; (R1) 109.27; More...

Intraday bias in USD/JPY remains neutral for consolidation above 108.27 temporary low. As long as 110.18 resistance holds, deeper decline is expected. On the downside, break of 108.27 will extend recent fall through 107.31 support to next fibonacci support at 106.48. Nonetheless, break of 110.18 will be the first sign of near term reversal and will turn bias back to the upside for 111.47 resistance.

In the bigger picture, current development argues that the corrective pattern from 118.65 is extending. There is risk of dropping further to 61.8% retracement of 98.97 to 118.65 at 106.48. But this level should provide strong support to contain downside and bring resumption of rise from 98.97. However, sustained break of 106.48 will now likely send USD/JPY through 98.97 to resume the corrective fall from 125.85 (2015 high).

Daily Pivots: (S1) 0.9335; (P) 0.9361; (R1) 0.9401; More...

Intraday bias in USD/CHF remains neutral as consolidation from 0.9288 is extending. Near term outlook will remain bearish as long as 0.9536 support turned resistance holds. Break of 0.9288 will resume the larger down trend and target next key fibonacci level at 0.9115.

In the bigger picture, the strong break of 0.9420 support suggests that fall from 1.0342 is developing into a medium term down trend. Deeper fall should be seen to 100% projection of 1.0342 to 0.9420 from 1.0037 at 0.9115. Break will target 161.8% projection at 08545. In any case, break of 0.9640 resistance is needed to be the first sign of medium term bottoming. Otherwise, outlook will stay bearish even in case of strong rebound.

Daily Pivots: (S1) 1.2335; (P) 1.2383 (R1) 1.2431; More....

EUR/USD's consolidation from 1.2537 is still in progress and intraday bias remains neutral. As long as 1.2222 support holds, near term outlook remains bullish. On the upside, sustained break of 1.2494/2516 resistance zone will extend recent rally to 100% projection of 1.0569 to 1.2091 from 1.1553 at 1.3075 next. However, break of 1.2222 will indicate rejection from 1.2494/2516, on bearish divergence condition in 4 hour MACD, and turn near term outlook bearish for 1.1915 support first.

In the bigger picture, rise from 1.0339 medium term bottom is still seen as a corrective move for the moment. But key fibonacci level at 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516 is looking vulnerable. Sustained break of 1.2516 will carry larger bullish implication and target 61.8% retracement of 1.6039 to 1.0339 at 1.3862. Nonetheless, rejection from 1.2516 will maintain long term bearish outlook and keep the case for retesting 1.0039 alive.

Key Highlights

• The Aussie Dollar moved higher this past week and broke the 0.8000 resistance against the US Dollar.
• There is a crucial ascending channel forming with current support at 0.8060 on the 4-hours chart of AUD/USD.
• The pair may continue to rise as long as it is above the 0.8000 support level.
• The US Personal Income rose 0.4% in Dec 2017, more than the forecast of +0.3%.

AUD/USD Technical Analysis

The Aussie Dollar made a nice upside move during the past few days and settled above 0.8000 against the US Dollar. The AUD/USD pair is now in a solid uptrend with supports at 0.8060 and 0.8000.

The 4-hours chart of AUD/USD clearly points to a major uptrend from the 0.7600 swing low. The pair climbed higher and broke many resistances such as 0.7800, 0.7880, 0.7900 and 0.8000.

The upside move was very strong as buyers were able to push the pair above the 0.8100 level. A new year high was formed at 0.8135 from where a downside correction was initiated. It broke the 23.6% Fib retracement level of the last wave from the 0.8004 low to 0.8135 high.

Looking at the chart, it seems like there is a crucial ascending channel forming with current support at 0.8060. On the downside, an initial support is around the 50% Fib retracement level of the last wave from the 0.8004 low to 0.8135 high at 0.8070.

Therefore, a strong support is forming around 0.8060-0.8070. Below the mentioned 0.8060, the pair may test the 0.8000 handle, which is the most important support and a buy zone.

On the upside, an initial hurdle for buyers is at 0.8135-40. Above 0.8140, the pair may accelerate towards the 0.8200 level. The overall price structure is bullish as long as AUD/USD is above 0.8000.

In general, the recent rise in AUD/USD is linked to the US Dollar weakness. Other major pairs such as EUR/USD and GBP/USD also gained heavily. However, there are now signs of trend exhaustion and traders need to be careful chasing this rally going forward.

Daily Pivots: (S1) 1.4015; (P) 1.4086; (R1) 1.4148; More.....

GBP/USD dips to as low as 1.4024 so far as retreat from 1.4345 extends. Intraday bias remains neutral as corrective trading would extend. But downside should be contained by 1.3915 support to bring rally resumption. On the upside, break of 1.4345 will resume medium term up trend to 100% projection of 1.2108 to 1.3651 from 1.3038 at 1.4581 next. However, break of 1.3915 will argue that, at least, deeper pull back in underway to 1.3651 resistance turned support.

In the bigger picture, sustained break of 1.3835 key resistance level indicates that rebound from 1.1946 is at least correcting the long term down from from 2007 high at 2.1161. Further rise should now be seen back to 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466. Medium term outlook will stay bullish as long as 1.3038 support holds, in case of pull back.

Dollar recovered overnight with the help of surging treasury yields. 10 year yield hit as high as 2.725 before paring gains to close at 2.696, up 0.034. That's also the highest level since April 2014. Nonetheless, the lift to the greenback would likely be temporary as Dollar and yields would likely go back to the "decoupled" relationship fairly quickly. British pound is trading as the weakest for the week. Renewed Brexit uncertainty is seen as a factor weighing on Sterling. But it's actually more about returning to reality after last week's utopic rally. For today, New Zealand Dollar is trading mildly higher after trade balance data.

Technically, weekly MACD suggests that 10 year yield is picking up momentum. TNX is on course for 61.8% projection of 1.336 to 2.621 from 2.034 at 2.827. The key resistance level, nonetheless, lies in 2013 high at 3.036.

Australia: Perplexing gap between business conditions and confidence narrowed

Australia NAB business conditions rose to 13 in December, up from 12 but missed expectation of 15. Nonetheless, that' still way above long run average of 5. Business confidence rose to 11, up from 7 but also missed expectation of 12. That's the highest reading since July. The strong bounce in confidence reading "helped to narrow the perplexing gap between business conditions and confidence evident over the past couple of years, and is an encouraging signal for investment," noted NAB group chief economist Alan Oster.

However, retail remained pressured at negative conditions at -2. Oster noted that "final retail prices also weakened sharply in December into negative territory, and are running at a slower rate than labour costs and purchases costs, pointing to margin compression." And the fall in prices is seen as a downside risk to Q4 CPI report due tomorrow.

New Zealand imports and exports hit records in 2017

New Zealand trade balance came in at strong surplus at NZD 640m in December, versus expectation of NZD -125m deficit. Exports surged 26% yoy to NZD 5.55b in the month while imports rose 11% to NZD 4.91b. Over the year, total exports hit NZD 53.7b in 2017, up 11% on 2016 and hit a new record. Imports also rose to NZD 56.5b, up 9.4% on 2016, and hit a record too. Exports to China jumped a strong 27% in 2017, hitting close to NZD 12b. Exports to Australia, however, grew a mere 6.5% to NZD 8.8b.

Abe's advisor Hamada: BoJ Governor should follow Abenomics

In Japan, an economic adviser to Prime Minister Shinzo Abe said the BoJ should stick with so called "Abenomics" no matter who the next Governor is. Koichi Hamada, an emeritus professor of economics at Yale University said that the next BoJ Governor should have "boldness and experience". He emphasized that "Abenomics is managed excellently by the BOJ policy. If you are winning in a sport, you don't change the strategy." For the moment, there is no decision on whether Haruhiko Kuroda would be given another term. Hamada commented that "there are many excellent people working at the BOJ and their morale will be reduced if someone outside of the central bank becomes governor so often, though I don't know if a BOJ official will become next governor this time."

Released from Japan, retails ales rose 3.6% yoy in December, household spending dropped -0.1% yoy. Unemployment rate rose to 2.8%.

Looking ahead

Eurozone GDP is a key focus in European session while confidence indicators will also be featured. Germany CPI is another data to watch. Swiss will release trade balance, KOF. UK will release mortgage approvals and M4. Later in the day, focus will be on US consumer confidence.

GBP/USD Daily Outlook

Daily Pivots: (S1) 1.4015; (P) 1.4086; (R1) 1.4148; More.....

GBP/USD dips to as low as 1.4024 so far as retreat from 1.4345 extends. Intraday bias remains neutral as corrective trading would extend. But downside should be contained by 1.3915 support to bring rally resumption. On the upside, break of 1.4345 will resume medium term up trend to 100% projection of 1.2108 to 1.3651 from 1.3038 at 1.4581 next. However, break of 1.3915 will argue that, at least, deeper pull back in underway to 1.3651 resistance turned support.

In the bigger picture, sustained break of 1.3835 key resistance level indicates that rebound from 1.1946 is at least correcting the long term down from from 2007 high at 2.1161. Further rise should now be seen back to 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466. Medium term outlook will stay bullish as long as 1.3038 support holds, in case of pull back.

Economic Indicators Update