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For the 24 hours to 23:00 GMT, the EUR rose 0.14% against the USD and closed at 1.1952.

In economic news, industrial production in France retreated 0.5% on a monthly basis in November, meeting market expectations and compared to a revised rise of 1.7% in the previous month.

The greenback declined against a basket of major currencies, on reports that China, the biggest buyer of US sovereign bonds, was ready to slow or halt its purchases of US Treasuries.

Macroeconomic data revealed that mortgage applications in the US rebounded 8.3% in the week ended 05 January, compared to a revised fall of 1.6% in the prior week.

Moreover, the nation's import price index registered a less-than-expected rise of 0.1% on a monthly basis in December, compared to a revised gain of 0.8% in the prior month. On the contrary, the nation's export price index unexpectedly eased 0.1% on a monthly basis in December. In the previous month, the index had climbed 0.5%.

In the Asian session, at GMT0400, the pair is trading at 1.1952, with the EUR trading flat against the USD from yesterday's close.

The pair is expected to find support at 1.1911, and a fall through could take it to the next support level of 1.1869. The pair is expected to find its first resistance at 1.2006, and a rise through could take it to the next resistance level of 1.2059.

Moving ahead, traders would be paying close attention to the minutes of the European Central Bank's (ECB) December meeting, along with the Euro-zone's industrial production data for November, both due to release in a few hours. Further, the US initial jobless claims, producer price index and monthly budget statement, slated to release later in the day, will garner a lot of market attention.

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

Daily Pivots: (S1) 132.62; (P) 133.58; (R1) 134.10; More....

EUR/JPY's decline from 136.63 is still in progress and intraday bias remains on the downside for 132.04 support. Decisive break there will confirm medium term trend reversal. On the upside, above 134.03 minor resistance will turn intraday bias neutral first. But risk will stay on the downside as long as 136.63 holds.

In the bigger picture, medium term rise from 109.03 (2016 low) is seen as at the same degree as the down trend from 149.76 (2014 high) to 109.03 (2016 low). It should now be targeting 141.04/149.76 resistance zone. On the downside, break of 132.04 support is needed to indicate medium term reversal. Otherwise, outlook will stay bullish in case of deep pull back.

For the 24 hours to 23:00 GMT, the GBP declined 0.24% against the USD and closed at 1.3507, after Britain's total trade deficit unexpectedly widened in November.

Data showed that UK's total trade deficit widened to £2.8 billion in November, marking the largest deficit since June 2017, thus suggesting that trade may crimp the nation's fourth quarter economic growth. The nation had registered a revised total trade deficit of £2.23 billion in the prior month, while investors had anticipated the deficit to narrow to £1.5 billion.

Meanwhile, the nation's construction output rebounded 0.4% MoM in November, undershooting market expectations for a rise of 0.8%. Construction output had registered a revised drop of 1.1% in the previous month.

On the other hand, the nation's manufacturing production grew 0.4% on a monthly basis in November, exceeding market consensus for an advance of 0.3%, highlighting that the sector remained buoyant in the final months of 2017. In the prior month, manufacturing production had registered a revised advance of 0.3%. Also, the nation's industrial production climbed 0.4% on a monthly basis in November, meeting market estimates and after recording a revised gain of 0.2% in the previous month.

In other economic news, leading think tanker, NIESR estimated that Britain's gross domestic product (GDP) climbed more-than-expected by 0.6% in the three months to December 2017, compared to a revised similar rise in the September-November period.

In the Asian session, at GMT0400, the pair is trading at 1.3505, with the GBP trading slightly lower against the USD from yesterday's close.

The pair is expected to find support at 1.3471, and a fall through could take it to the next support level of 1.3436. The pair is expected to find its first resistance at 1.3551, and a rise through could take it to the next resistance level of 1.3596.

Going ahead, traders would await the Bank of England's credit conditions survey report, scheduled to release in a few hours.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 1.11% against the JPY and closed at 111.39.

In the Asian session, at GMT0400, the pair is trading at 111.73, with the USD trading 0.31% higher against the JPY from yesterday's close.

Early morning data indicated that Japan's preliminary leading economic index climbed to a level of 108.6 in November, at par with market expectations and following a reading of 106.5 in the previous month. Also, the nation's flash coincident index registered a rise to a level of 118.1 in November, beating market anticipation for an advance to a level of 117.9 and compared to a reading of 116.4 in the prior month.

The pair is expected to find support at 111.21, and a fall through could take it to the next support level of 110.68. The pair is expected to find its first resistance at 112.32, and a rise through could take it to the next resistance level of 112.90.

Going ahead, traders would focus on Japan's trade balance (BOP Basis) for November, followed by the Eco-Watchers survey for December, set to release tomorrow.

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

Daily Pivots: (S1) 149.70; (P) 151.14; (R1) 151.94; More...

The sharp fall from 153.66 is now taken as an early sign of trend reversal in GBP/JPY. Intraday bias is now on the downside for 149.40 support first. Break will target 146.96 key support next. On the upside, above 151.74 minor resistance will turn intraday bias neutral.

In the bigger picture, considering bearish divergence condition in daily MACD, the steep fall from 153.66 is now seen as first sign of trend reversal. Focus will turn to 146.96 support. Firm break there will at later confirm medium term topping and target 139.39 support next.

For the 24 hours to 23:00 GMT, the USD declined 0.55% against the CHF and closed at 0.9780.

In the Asian session, at GMT0400, the pair is trading at 0.9788, with the USD trading 0.08% higher against the CHF from yesterday’s close.

The pair is expected to find support at 0.9747, and a fall through could take it to the next support level of 0.9705. The pair is expected to find its first resistance at 0.9838, and a rise through could take it to the next resistance level of 0.9887.

Amid no macroeconomic releases in Switzerland today, investor sentiment would be governed by global macroeconomic events.

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

For the 24 hours to 23:00 GMT, the USD rose 0.7% against the CAD and closed at 1.2549.

The Canadian Dollar plunged against the USD, following media reports that the US President, Donald Trump, would withdraw the United States from the North American Free Trade Agreement (NAFTA).

On the macro front, Canada's building permits declined more-than-expected by 7.7% on a monthly basis in November, hitting its lowest level in 18 months. In the previous month, building permits had recorded a revised rise of 4.4%, while investors had envisaged for a fall of 1.0%.

In the Asian session, at GMT0400, the pair is trading at 1.2548, with the USD trading slightly lower against the USD from yesterday's close.

The pair is expected to find support at 1.2456, and a fall through could take it to the next support level of 1.2365. The pair is expected to find its first resistance at 1.2611, and a rise through could take it to the next resistance level of 1.2675.

Ahead in the day, market participants would focus on Canada's new house price index for November.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

Daily Pivots: (S1) 0.8813; (P) 0.8843; (R1) 0.8873; More...

EUR/GBP recovers after hitting 0.8808. Intraday bias is turned neutral first. Rebound form 0.8688 should have completed at 0.8923. Below 0.8808 will turn bias back to the downside for retesting 0.8688. Break will resume whole decline from 0.9305 and target 0.8303 key support around. This will be the favored case as long as 0.8923 resistance holds.

In the bigger picture, there are various ways to interpret price actions from 0.9304 high. But after all, firm break of 0.9304/5 is needed to confirm up trend resumption. Otherwise, range trading will continue with risk of deeper fall. And in that case, EUR/GBP could have a retest on 0.8303. But we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside.

DAX Short Term Elliott Wave view suggests that Intermediate wave (X) ended at 12731.46. Rally from there is unfolding as a 5 waves impulsive Elliott Wave structure where Minutte wave (i) ended at 12943, Minutte wave (ii) ended at 12881.5, Minutte wave (iii) ended at 13408.5, Minutte wave (iv) ended at 13328.5, and Minutte wave (v) of ((a)) is proposed complete at 13421.5. Index is correcting cycle from 1/2/2018 low within Minute wave ((b)) in 3, 7, or 11 swing before the rally resumes.

Internal of Minute wave ((b)) is unfolding as a zigzag Elliott Wave Structure where Minute wave (a) is proposed complete at 13219. While Minute wave (b) bounce fails below 13421.5, Index has scope to extend lower in Minute wave (c) of ((b)) to finish the zigzag correction. Afterwards, expect Index to resume higher as far as pivot at 1/2 low (12731.46) stays intact. We don’t like selling the Index and expect buyers to appear for more upside in 3, 7, or 11 swing, provided pivot at 1/2 low stays intact.

DAX 1 Hour Elliott Wave Chart

Headlines/Economic Data

General Trend: Asian equities trade generally lower

China Premier Li confirms that 2017 GDP growth expected to exceed official target

USD/JPY trades marginally higher as China FX Regulator responded to market speculation about the country’s US Treasury holdings; US Long Bond Futures +0.4%

Australia Nov Retail Sales rise at the fastest pace in over 3 years

Japan

Nikkei 225 opened -0.6%; closed -0.3%

Toyota -1%, Honda -2% (outperformed during prior session)

Fast Retailing -0.5% (expected to report Q1 earnings after close)

(JP) Japan govt projections show primary surplus delayed by 2 years – Nikkei

(JP) Japan Credit Bureau (JCB) developing a technology that connects separate blockchains to share their excess capacity, resolving issuesthat arise from heavy traffic on a single ledger – Nikkei

(JP) Bank of Japan (BOJ) quarterly public opinion of household sentiment: households see inflation at 3% in 1-yr, 2% in 5-yrs

USD/JPY FT looks at recent yen gains, being attributed to market's growing confidence that G10 central banks will implement synchronous policy tightening

Korea

Kospi opened -0.1%

Steelmakers trade lower: Hyundai Steel -2%, Posco -2.3%

Samsung Electronics -0.7% ( shares remain weaker after release of prelim Q4 results on Tuesday)

(KR) South Korea President Moon's zeal on North Korea is leaving its allies worried that inter-Korean talks could blow a hole in international sanctions and threaten efforts to denuclearize – Nikkei

(KR) South Korea Justice Ministry to prepare a crypto exchange shutdown bill; South Korea cryptocurrency exchanges raided by police, Bitcoin falls over 9% on the news

(KR) South Korea Finance Min Kim: Reiterates closely monitoring property market; home price 'spike' in Gangham driven by speculative demand

China/Hong Kong

Hang Seng opened flat, Shanghai Composite -0.2%

Hang Seng Information Tech Index -1.6%

(CN) China Premier Li: Sees China 2017 GDP at ~6.9% - Xinhua

(CN) China PBoC OMO: Injects CNY60B v CNY120B prior in combined 7, 14-day reverse repos; Net drains CNY30B v CNY0B prior

USD/CNY (CN) China PBoC sets yuan reference rate at 6.5147 v 6.5207 prior

(CN) China Commerce Ministry (MOFCOM): Protectionist sentiment is rising in the US

(CN) CHINA FX REGULATOR SAFE: REPORT THAT CHINA IS CONSIDERING REDUCING OR STOPPING PURCHASES OF US TREASURIES COULD BE BASED ON WRONG INFORMATION - financial press

Looking Ahead: China Dec Banking Data (including money supply, New Yuan loans) may be released during European session; China Dec Trade Balance tentatively scheduled for Friday

Australia/New Zealand

ASX 200 opened flat: closed -0.5%

ASX 200 Utilities Index -0.7%, REIT -0.7%, Energy -0.6%, Financials -0.5%

Australian Dollar and bond yields rise after better than expected retail sales

(AU) AUSTRALIA NOV RETAIL SALES M/M: 1.2% V 0.4%E

Other Asia

(SG) DBS CEO Gupta: Expect interest rates in Singapore to remain high; staying long S$ is a good idea

North America

US equity markets ended mostly lower: Dow -0.1%, S&P500 -0.1% Nasdaq -0.1%, Russell 2000 flat

S&P 500 Real Estate Sector -1.5%, Utilities -1.1%: Financials +0.8%

Xerox (XRX): Said to be in talks with Japan's Fujifilm on a range of possible deals; Fujifilm not expected to acquire all of Xerox

(US) Leading Republicans said to consider not passing a ‘GOP’ budget this year amid concerns that it would not pass Senate – Politico; - As an alternative plan, GOP leaders are said to have discussed 'deeming' top-line spending numbers, which is only setting total spending numbers without passing a budget.

NAFTA in focus on Wednesday’s Session:

(CA) Canada officials reportedly increasingly convinced Pres Trump will soon announce a withdrawal from NAFTA – press

(US) White House official: There has been no change in Pres Trump's position on NAFTA

(MX) Mexico Central Bank Gov Del Leon: If Trump triggers NAFTA withdrawal there will likely be an impact on Peso; would make inflation more complex

USD/MXN Trades +0.25% on report that Mexico to leave NAFTA talks if Trump triggers 6-month process to withdraw

Fed Speak:

(US) Fed's Bullard (non-voter, dove): short of a formal shift in Fed framework, policymakers could lean toward allowing inflation float above target to make up for past shortfalls; Should not hike rates into the teeth of an inverse yield curve; the Fed should strive not to cause a yield curve inversion

(US) Fed's Kashkari (dove, non-voter): I think the markets are pricing in a lower long-term interest rate environment, which is not actually under the control of the Fed. To me, that explains some of where asset prices are today

(US) Fed’s Kaplan (non-voter, moderate): three rate hikes is still good base case for 2018; We'll have to see what happens with regards to China and US Treasuries

(US) Fed’s Evans (non-voter, dove): US economy has been stronger than expected; sees 2.5% GDP growth for both 2018 and 2019; Sees tax cuts adding 0.5% to GDP growth this year, total of 0.8% over two years; sees little long-run economic boost from tax cuts, sees 1.75% long-run growth; Pausing on rate hikes until midyear is a modest proposal

Energy: (US) DOE CRUDE: -4.9M V -2.5ME

(IR) US govt is said to be preparing new sanctions against Iran over cybersecurity and human rights violations - press

Looking Ahead: US Dec PPI expected to be released, along with comments from Fed's Dudley (seen during NY afternoon)

Europe

(UK) Chancellor of Exchequer Hammond (Fin Min): UK goals for Brexit are affected by EU's approach; EU needs to spell out what it wants post-Brexit

(FR) ECB's Villeroy (France): Bank of France will raise France Q4 growth target to 0.6% (from 0.5%); Sees France 2017 GDP growth at 1.9% (from 1.8%)

(DE) Potential coalition parties in Germany said to favor avoiding ban on diesel – German Press

Looking Ahead: Germany 2017 annual GDP to be released, along with the ECB Account of Monetary Policy Meeting (Dec Minutes)

Levels as of 01:00ET

Nikkei225 -0.3%, Hang Seng +0.1%; Shanghai Composite -0.1%; ASX200 -0.5%, Kospi -0.3%

Equity Futures: S&P500 +0.1%; Nasdaq100 +0.0%, Dax +0.2%; FTSE100 +0.1%

EUR 1.1970-1.1941; JPY 111.82-111.32; AUD 0.7886-0.7838;NZD 0.7214-0.7183

Feb Gold -0.1% at $1,318/oz; Feb Crude Oil -0.1% at $63.51/brl; Mar Copper +0.3% at $3.24/lb\