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Daily Pivots: (S1) 1.1794; (P) 1.1821 (R1) 1.1866; More....

Intraday bias in EUR/USD remains neutral for the moment despite current recovery. On the upside, above 1.1862 will revive near term bullishness. In such case, intraday bias will be turned back to the upside for 1.1960 resistance first. However, decisive break of 1.1712 cluster support (61.8% retracement of 1.1553 to 1.1960 at 1.1708) should confirm completion of rebound from 1.1553 at 1.1960. And in that case, deeper fall should be seen through 1.1553 to extend the medium term decline from 1.2091.

In the bigger picture, rise from 1.0339 medium term bottom is seen as a corrective move for the moment. Therefore, in case of another rally, we'd be expect 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516 to limit upside and bring reversal. Meanwhile, sustained trading below 55 week EMA (now at 1.1435) will suggest that such medium term rebound is completed and could then bring retest of 1.0339 low.

Daily Pivots: (S1) 1.3341; (P) 1.3372; (R1) 1.3414; More.....

GBP/USD is staying in the correction from 1.3549 and intraday bias stays neutral for the moment. As long as 1.3220 support holds, we'd favor another rise. Break of 1.3549 will target 1.3651 high next. Break there will resume medium term rally from 1.1946. However, firm break of 1.3220 will turn near term outlook bearish for 1.3038 key support level.

In the bigger picture, while the medium term rebound from 1.1946 low was strong, it's limited below 1.3835 key support turned resistance. As long as 1.3835 holds, we'd view such rebound as a correction. That is, we'd expect another leg in the long term down trend through 1.1946 low. However, sustained break of 1.3835 should at least send GBP/USD to 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466.

Daily Pivots: (S1) 0.9829; (P) 0.9853; (R1) 0.9873; More....

Intraday bias in USD/CHF is mildly on the downside for 0.9734 and possibly below. But we'd expect strong support from 61.8% retracement of 0.9420 to 0.1.0037 at 0.9656 to complete the correction from 1.0037 and bring rebound. On the upside, break of 0.9977 will resume the rebound from 0.9734 for 1.0037 resistance.

In the bigger picture, range trading continues between 0.9420/1.0342. At this point, 0.9420 appears to be a strong support level. Therefore, in case of decline attempt, we don't expect a firm break of this level. Nonetheless, strong break of 1.0342 is also needed to confirm upside momentum. Otherwise, medium term outlook will stay neutral.

Daily Pivots: (S1) 112.56; (P) 112.82; (R1) 113.13; More.....

USD/JPY's rebound from 112.02 extended higher. Break of 112.87 minor resistance suggests that pull back from 113.74 has completed already. Intraday bias is turned back to the upside for 113.74 first. Break will resume the rise from 110.83 to retest 114.73 key resistance. For now, near term outlook will remain bullish as long as 112.02 support holds, in case of retreat.

In the bigger picture, we're holding on to the view that correction from 118.65 is completed at 107.31. And medium term rise from 98.97 (2016 low) is going to resume soon. Sustained break of 114.73 should affirm our view and send USD/JPY through 118.65. However, break of 107.31 will dampen this view and extend the medium term fall back to 98.97 low.

Daily Pivots: (S1) 150.54; (P) 150.90; (R1) 151.44; More...

GBP/JPY formed a temporary low at 149.40 and intraday bias is turned neutral first. Fall from 153.39 is seen as a correction. In case of another fall, we'd look for strong support from 146.96 to bring rebound. On the upside, above 151.85 minor resistance will indicate that the pull back is finished. And intraday bias will be turned back to the upside for 153.39.

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.

Daily Pivots: (S1) 132.84; (P) 133.37; (R1) 134.19; More....

EUR/JPY is still bounded in range below 134.48 and intraday bias remains neutral. As long as 131.16 support holds, further rise is mildly in favor. Decisive break of 134.48 will resume medium term rise from 114.84 and target 141.04 resistance next. However, sustained break of 131.16 support will now indicate near term trend reversal and turn outlook bearish for 127.55 key support.

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). Sustained break of 61.8% retracement of 149.76 to 109.03 at 134.20 will pave the way to key long term resistance zone at 141.04/149.76. However, break of 127.55 support will suggest medium term topping and will turn outlook bearish for deeper fall back to 114.84/124.08 support zone at least.

Daily Pivots: (S1) 0.8806; (P) 0.8836; (R1) 0.8874; More...

Intraday bias in EUR/GBP remains neutral for the moment. Another fall is mildly in favor as long as 0.8866 holds. Below 0.8760 minor support will turn bias to the downside for 0.8688 first. Break will resume whole decline from 0.9305. However, firm break of 0.8866 resistance will indicate near term reversal and turn bias back to the upside for 0.8981 resistance and above.

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.

Daily Pivots: (S1) 1.5386; (P) 1.5426; (R1) 1.5492; More....

EUR/AUD drew support from 55 day EMA and recovered mildly. Intraday bias is turned neutral first. Correction from 1.5770 could still extend lower. But we'd expect strong support from 1.5226 to contain downside to bring up trend resumption. On the upside, above 1.5482 minor resistance will bring retest of 1.5770 first. However, sustained break of 1.5226 will carry larger bearish implications and turn outlook bearish.

In the bigger picture, we're holding on to the view that corrective decline from 1.6587 medium term top (2015 high) has completed at 1.3624. Rise from 1.3624 is expected to extend to retest 1.6587. We'll hold on to this bullish view as long as 1.5226 resistance turned support holds. Firm break of 1.6587 will resume long term rise from 1.1602 (2012 low). However, sustained break of 1.5226 will indicate trend reversal and target 1.3624 again.

Daily Pivots: (S1) 1.1619; (P) 1.1648; (R1) 1.1689; More...

EUR/CHF recovered ahead of 1.1597 support but is still stuck in range below 1.1736. Intraday bias remains neutral at this point. We continue to believe that the cross is close to topping, if not formed. This is under persistent bearish divergence condition in 4 hour MACD, and rising wedge like structure since 1.1709. On the downside, decisive break of 1.1597 support will a strong sign of trend reversal and should turn outlook bearish for 38.2% retracement of 1.0629 to 1.1736 at 1.1313.

In the bigger picture, while a medium term top could be around the corner, there is no change in the larger outlook. That is, long term rise from SNB spike low back in 2015 is still in progress and would extend. As long as 1.1198 resistance turned support holds, we'll hold on to this bullish view and expect another to prior SNB imposed floor at 1.2000. Though, we'll reassess the outlook if 1.1198 is firmly taken out.

Euro is trading as the strongest currency this week as boosted by a surge in German yields. Meanwhile, Dollar is holding a soft tone after House passed the tax bill and then came back with a hiccup. Nonetheless, the Chambers will probably pass the unified version on Wednesday, giving it enough time for President Donald Trump to sign it before Christmas. Elsewhere in the currency markets, Kiwi tumbles broadly today after much worse than expected trade deficit. Yen followed closely as pressured by surging global yields.

House to vote on tax bill again (after passing) Wednesday

The House passed Republican's tax bill yesterday with 227-203 votes. However, as the Senate's parliamentarian said that the so called Byrd Rule was violated by three provisions of the bill, House will have to vote again on a Senate amended plan. Senate is planned to vote on it Tuesday evening in the US, within hours from the time of writing.

10 year yield surged with 2.475 in sight

While Dollar has shown no positive reactions to news on the tax bill, 10 year yield took a strong rally overnight. While the surge in TNX could be seen as attributed to jump in German yield too, the impact of tax cut should be clear. Closing at 2.463, TNX will now have 2.475 near term resistance in sight. Break there will extend the rebound from 2.034 to key resistance level at 2.621. That would likely take USD/JPY back to 113.74 and 114.73 respectively.

Dallas Fed Kaplan not too worried about recession

Dallas Fed President Robert Kaplan said he is expecting three more rate hikes in 2018. He sounded not too concerned with flattening yield curve. He said that "the history of inversions is such that it has tended to be a pretty reliable forward indicator of recession. Now, this time may be different, but I wouldn't count on it." Nonetheless, he pointed out that "it limits the Fed's operating flexibility, in my judgment, in terms of how fast and how much we can raise rates."

Germany to sell more 30 year bunds in 2018, yields surged

Germany said yesterday that it's going to sell EUR 16b of 30 year bunds in 2018, up from around EUR 11b this year. More importantly, it's the only part in the spectrum that supply is expected be increased. 30 year bund yield rose 8 points to 1.19 and 10 year bund yield jumped 7 pt to 0.37. That's seen as a major factor in pushing Euro higher. It's also another factor that pressed down Yen and lifted US yields. Euro is so far trading as the strongest one in dull markets this week. But we'll stay skeptical on its strength. EUR/CHF and EUR/JPY are not out of the woods yet and are stuck in recent ranges.

Kiwi tumbles on wide trade deficit

New Zealand Dollar dips notably after data showed larger than expected trade gap in November. Trade deficit widened to NZD -1193m, from NZD -843m. That's also more than double of expectation of NZD -550m. It's the first monthly deficit at more than NZD -1b for November since 2005. Exports jumped 20% yoy to NZD 4.6b with milk, powder, butter and cheese leading the gain. Exports to China, its largest market also jumped 43%. On the other hand, imports jumped 27% to record of NZD 5.8b. Stats NZ noted that the huge deficit was affected by large value imports like aircraft. But taking that away, deficit was still at NZD -930m.

Also from New Zealand, current account deficit narrowed to NZD -4.68b in Q3. From Australia, Westpac leading index rose 0.1% mom in November.

Looking ahead

Germany will release PPI in European session while Eurozone will release current account. UK will release CBI reported sales. US will release existing home sales later in the day.

EUR/CHF Daily Outlook

Daily Pivots: (S1) 1.1619; (P) 1.1648; (R1) 1.1689; More...

EUR/CHF recovered ahead of 1.1597 support but is still stuck in range below 1.1736. Intraday bias remains neutral at this point. We continue to believe that the cross is close to topping, if not formed. This is under persistent bearish divergence condition in 4 hour MACD, and rising wedge like structure since 1.1709. On the downside, decisive break of 1.1597 support will a strong sign of trend reversal and should turn outlook bearish for 38.2% retracement of 1.0629 to 1.1736 at 1.1313.

In the bigger picture, while a medium term top could be around the corner, there is no change in the larger outlook. That is, long term rise from SNB spike low back in 2015 is still in progress and would extend. As long as 1.1198 resistance turned support holds, we'll hold on to this bullish view and expect another to prior SNB imposed floor at 1.2000. Though, we'll reassess the outlook if 1.1198 is firmly taken out.

Economic Indicators Update