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Key Highlights

• The US Dollar succeeded in holding the 112.00 support against the Japanese Yen, and moved higher.
• The USD/JPY pair is approaching a major bearish trend line with current resistance at 113.10 on the 4-hours chart.
• The 113.10, 113.50 and 113.80 levels are major upside barriers for buyers in the near term.
• The US ADP Employment Change in Dec 2017 registered an increase of 250K, more than the forecast of 190K.

USDJPY Technical Analysis

The US Dollar remained above the 112.00 support area in 2017 against the Japanese Yen. The USD/JPY pair is currently moving higher towards a major resistance zone of 113.50-114.00.

Looking at the 4-hours chart, it seems like the pair is trading in a broad range of 112.00-114.00. It found strong bids around the lower end of the range at 112.00, but at the same time struggled to break the 113.50-114.00 resistance zone.

Recently, the pair bounced from the 112.00 support and moved above the 23.6% Fib retracement level of the last drop from the 113.63 high to 112.05 low. It also succeeded in clearing the 200 (green) simple moving average and 112.50 resistance.

However, there are many barriers on the upside such as 113.10, 113.50 and 113.80. There is also a major bearish trend line with current resistance at 113.10 on the same chart. Just below the trend line, the 61.8% Fib retracement level of the last drop from the 113.63 high to 112.05 low is positioned at 113.03 to act as a key barrier for the US Dollar buyers.

Therefore, an upside break above 113.10 won't be easy. Above the mentioned 113.10 resistance, the next major hurdle for USD/JPY sits around the range highs at 113.60-113.80.

On the downside, an initial support is near 112.20 followed by the range low at 112.00. The pair may continue to trade in a range before making the next major move.

US ADP Employment Change

Recently, the US saw a major release in the form of the December 2017 ADP Employment Change. The market was looking for a change of 190K, but the actual was better. According to the data release, there was a rise of 250K jobs in December 2017, up from the last revised reading of 185K.

The market sentiment improved for the US Dollar, but USD/JPY faces many challenges on the upside.

Currency pair GBP/USD

The GBP/USD bullish trend is continuing higher in a bullish channel (blue) after a bearish retracement back to the round level of 1.35. Price could be moving towards the Fibonacci targets of waves 5, which seems to be part of a wave C (green) although the previous top could be a tough resistance point.

The GBP/USD could extend the bearish correction within wave 4 (blue) if price breaks below the channel. A break above the channel resistance could also indicate an acceleration of the bullish trend.

Currency pair EUR/USD

The EUR/USD uptrend continuation has reached the larger resistance zone (red lines) for the 2nd time. This is a particular difficult spot and a larger bearish correction could still emerge. However, a bullish breakout above 1.21 could indicate a wave 3 pattern and a continuation higher would become more likely.

The EUR/USD is in a break or bounce spot. A bearish bounce could see price challenge the Fib levels again of wave 4 (blue) whereas a bullish break above the resistance trend line (red) could see price move towards the Fib targets of wave 5.

Currency pair USD/JPY

The USD/JPY break above the 2nd resistance trend line (dotted orange) could indicate a bullish breakout towards the next top (red). Although price is still in a large range, it could be the start of a larger bullish push higher.

The USD/JPY broke above the resistance trend line (dotted orange) and could be in a wave 5 (purple) and moving towards the Fib targets.

For the 24 hours to 23:00 GMT, the AUD rose 0.42% against the USD and closed at 0.7864.

LME Copper prices rose 1.2% or $87.0/MT to $7202.5/MT. Aluminium prices declined 0.5% or $11.0/MT to $2230.0/MT.

In the Asian session, at GMT0400, the pair is trading at 0.7857, with the AUD trading 0.09% lower against the USD from yesterday's close, following downbeat Australian trade balance data.

Overnight data revealed that Australia surprisingly posted a trade deficit of A$628.0 million in November, recording the biggest deficit in more than a year, after registering a revised deficit of A$302.0 million in the previous month, thus stoking worries that trade could act as a drag on the nation's economic growth. Markets were expecting the nation to register a trade surplus of A$550.0 million.

The pair is expected to find support at 0.7832, and a fall through could take it to the next support level of 0.7806. The pair is expected to find its first resistance at 0.7876, and a rise through could take it to the next resistance level of 0.7894.

Next week, investors would focus on Australia's AiG performance of construction index, building approvals and retail sales data.

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 EUR rose 0.48% against the USD and closed at 1.2071, as robust services sector data across the Euro-zone indicated that recovery in the common currency region continues to proceed at an accelerated pace.

On the macro front, the Euro-zone's final Markit services PMI was revised higher to a level of 56.6 in December, notching its highest level since February 2011. The preliminary figures had recorded an advance to a level of 56.5, compared to a reading of 56.2 registered in the previous month.

Separately, Germany's final Markit services PMI was confirmed at a level of 55.8 in December, remaining at a 24-month high level. In the prior month, the PMI had recorded a level of 54.3.

The US Dollar depreciated against its major peers, as optimism over upbeat US jobs report was dented by disappointing services sector data.

ADP's private sector employment in the US advanced more-than-anticipated by 250.0K in December, adding the most number of jobs since March 2017, thus painting a bright picture of the nation's labour market. The private sector employment had recorded a revised increase of 185.0K in the prior month, while markets had expected for a gain of 190.0K.

On the other hand, the nation's final Markit services PMI declined to a level of 53.7 in December, reaching a seven-month low level but coming in above the flash reading of 52.4. In the prior month, the PMI had recorded a reading of 54.5. Further, the nation's initial jobless claims recorded an unexpected rise to a level of 250.0K in the week ended 30 December, confounding market consensus for a fall to a level of 240.0K. In the previous week, initial jobless claims had recorded a revised reading of 247.0K.

In the Asian session, at GMT0400, the pair is trading at 1.2074, with the EUR trading a tad higher against the USD from yesterday's close.

The pair is expected to find support at 1.2028, and a fall through could take it to the next support level of 1.1983. The pair is expected to find its first resistance at 1.2104, and a rise through could take it to the next resistance level of 1.2135.

Going ahead, traders would keep a close watch on the Euro-zone's flash inflation figures for December along with Germany's retail sales data for November and the Markit construction PMI for December, all set to release in a few hours. Later in the day, market participants would await the release of crucial US non-farm payrolls and unemployment rate data as well as the ISM non-manufacturing PMI, all for December. Moreover, the nation's factory orders, final durable goods orders and trade balance numbers, all for November, would be on investors' radar.

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 GBP rose 0.29% against the USD and closed at 1.3551, on the heels of robust UK services sector report.

Data revealed that Britain's Markit services PMI climbed more-than-anticipated to a level of 54.2 in December, highlighting resilient strength in the dominant services sector in an economy that is beset with uncertainty about the outlook. In the prior month, the PMI had recorded a reading of 53.8, while investors had envisaged for a rise to a level of 54.0. Moreover, the nation's number of mortgage approvals for house purchases unexpectedly advanced to a level of 65.1K in November, defying market expectations for a fall to a level of 64.0K. Mortgage approvals had registered a revised reading of 64.9K in the prior month.

Other data revealed that the nation's net consumer credit grew less-than-expected by £1.4 billion in November, after recording a revised similar rise in the preceding month, while markets had anticipated for a gain of £1.5 billion. On the other hand, the nation's seasonally adjusted Nationwide house prices climbed 0.6% MoM in December, beating market expectations for a gain of 0.1% and compared to a rise of 0.1% in the previous month.

In the Asian session, at GMT0400, the pair is trading at 1.3565, with the GBP trading 0.1% higher against the USD from yesterday's close.

The pair is expected to find support at 1.3530, and a fall through could take it to the next support level of 1.3494. The pair is expected to find its first resistance at 1.3585, and a rise through could take it to the next resistance level of 1.3604.

Amid no crucial macroeconomic releases in the UK today, investors would look forward to Britain's industrial as well as manufacturing production data coupled with the nation's total trade balance and NIESR GDP estimate report, all slated to release next week.

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

For the 24 hours to 23:00 GMT, the USD rose 0.2% against the JPY and closed at 112.78.

In the Asian session, at GMT0400, the pair is trading at 112.84, with the USD trading marginally higher against the JPY from yesterday's close.

Data released overnight indicated that Japan's Markit services PMI inched down to a level of 51.1 in December, hitting a three-month low level and compared to a reading of 51.2 in the previous month.

The pair is expected to find support at 112.60, and a fall through could take it to the next support level of 112.36. The pair is expected to find its first resistance at 112.97, and a rise through could take it to the next resistance level of 113.10.

Looking forward, Japan's consumer confidence for December, BOP basis trade balance and Eco-Watchers survey data, all scheduled to release next week, would be eyed by investors.

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

For the 24 hours to 23:00 GMT, the USD declined 0.28% against the CHF and closed at 0.9746.

In the Asian session, at GMT0400, the pair is trading at 0.9745, with the USD trading marginally lower against the CHF from yesterday’s close.

The pair is expected to find support at 0.9728, and a fall through could take it to the next support level of 0.9712. The pair is expected to find its first resistance at 0.9770, and a rise through could take it to the next resistance level of 0.9796.

Moving ahead, traders would closely monitor Switzerland’s inflation, unemployment rate and real retail sales data, all scheduled to release next week.

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 declined 0.4% against the CAD and closed at 1.2491.

In the Asian session, at GMT0400, the pair is trading at 1.2487, with the USD trading a tad lower against the CAD from yesterday's close.

The pair is expected to find support at 1.2466, and a fall through could take it to the next support level of 1.2444. The pair is expected to find its first resistance at 1.2527, and a rise through could take it to the next resistance level of 1.2566.

This afternoon would bring a crucial Canadian release, namely the unemployment rate data for December.

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

Short Term Nasdaq Elliott Wave view suggests that the rally from 12/5 low unfolded as a double three Elliott Wave structure where Minor wave W ended at 6545.75 and Minor wave X ended at 6383.25. This week, the Index made a new high above Minor wave W at 6545.75, suggesting the next leg higher has started. Internal of Minor wave W unfolded as a double three Elliott Wave structure where Minute wave ((w)) ended at 6427.75, Minute wave ((x)) ended at 6383, and Minute wave ((y)) of W ended at 6545.75.

Internal of Minor wave X pullback unfolded as a triple three Elliott Wave structure where Minute wave ((w)) ended at 6463.25, Minute wave ((x)) ended at 6520.75, Minute wave ((y)) ended at 6432.25, and second Minute wave ((x)) of X ended at 6382.44. Near term, rally from 12/30 low (6383.25) is unfolding as an impulse Elliott Wave structure and could see more upside to end 5 waves up in Minute wave ((a)). Afterwards, the Index should pullback in Minute wave ((b)) in 3, 7, or 11 swing to correct cycle from 12/30 low (6382.44) before the rally resumes. We don’t like selling the Index and while Minute wave ((b)) dips stay above 6382.44, expect Index to extend higher.

Nasdaq 1 Hour Elliott Wave Chart

Daily Pivots: (S1) 152.16; (P) 152.56; (R1) 153.17; More...

GBP/JPY's rise rebound is still in progress for 153.39 resistance. Decisive break there will resume medium term rally On the downside, below 151.74 minor support will extend the corrective pattern with another fall through 149.40 before completion.

In the bigger picture, outlook is mixed up a bit with last week's sharp decline. But still, as long as 146.96 key support holds, medium term outlook remains bullish. Rise from 122.36 is in favor to extend to 61.8% retracement of 195.86 to 122.36 at 167.78. However, break of 146.96 support will indicate trend reversal. And the corrective structure of rebound from 122.36 will argue that larger down trend is resuming for a new low below 122.26.