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Daily Pivots: (S1) 0.8780; (P) 0.8817; (R1) 0.8842; More...

No change in EUR/GBP's outlook as it's staying in range of 0.8732/9032. Intraday bias remains neutral and outlook stays bearish with 0.9032 resistance intact. That is, fall from 0.9305 is expected to resume later. Break of 0.8732 will target 0.8303 key support level. Nonetheless, decisive break of 0.9032 will confirm completion of the decline from 0.9305. In such case, intraday bias will be turned back to the upside for retesting 0.9305 key resistance.

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) 1.5507; (P) 1.5568; (R1) 1.5656; More....

EUR/AUD rebounds further today but it's staying below 1.5770 resistance. Intraday bias remains neutral first. Overall, price actions from 1.5770 is seen as a consolidation pattern. In case of another fall, we'd expect strong support above 1.5226 key support to bring rebound. Medium term rally is still expected to resume later and break of 1.5770 will target 61.8% projection of 1.3624 to 1.5226 from 1.4949 at 1.5939 first.

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).

Daily Pivots: (S1) 1.1655; (P) 1.1678; (R1) 1.1697; More...

Intraday bias in EUR/CHF remains neutral at this point. Near term outlook is unchanged. As noted before, persistent bearish divergence condition in 4 hour MACD and rising wedge like structure suggests that the cross is near to forming a top, if not formed. Hence, even in case of another rise, we'd expect limited upside potential. On the downside, sustained break of 1.1584 support will be 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 1.1195 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 1.1195 is firmly taken out.

The euro continues to move lower against the U.S dollar, with price-action now closing below the pairs key 100-day moving average. The EURUSD pairs decline accelerated, after a marginally better ADP jobs report from the United States, showing that 190,000 private sector jobs had been created during November. Downside pressure remains, with the pair creating further bearish lower swing price-highs on the charts. Traders now look to third quarter Gross Domestic Product figures from the Eurozone.

The EURUSD pair is strongly bearish while trading below the 1.1808 level, further downside towards the 1.1879 and 1.1765 levels seems likely.

Should EURUSD price-action move above the 1.1808 level, buyers may target towards the 1.1828 and 1.1845 resistance levels.

The U.S dollar is starting to regain upside momentum against the Japanese yen, as sellers failed to hold price-action below the 11.20 technical level. The USDJPY pair currently trades around the 112.60 level, although the rally started late on Wednesday, following better than expected ADP job figures yesterday. The USDJPY is also being pulled higher by gains in the Japanese stock market, with the Nikkei225 erasing weekly trading losses, and moving higher by 1.5 percent. Traders now look to third fiscal quarter GDP figures coming from the Japanese economy later today.

Should price action continue to trade above the 112.20 technical level, further upside towards the 112.80 and 113.10 levels appears likely.

If the USDJPY pair move back below the 112.20 level, further losses toward the 111.90 and 111.58 levels seems possible.

Economic data will very much remain the focus on Thursday, as investors await the all-important US nonfarm payrolls report in the final session of the week. Still, the Thursday session features several noteworthy releases from both sides of the Atlantic.

Action begins at 06:45 GMT with a Swiss government report on unemployment. The nation’s jobless rate is forecast to hold steady at 3.1% for the month of November.

Shifting gears to Germany, the government is scheduled to report on industrial production at 07:00 GMT. Output in Europe’s largest economy is expected to rise 1.1% in October, which translates into year-over-year growth of 4.3%.

Later in the morning, France will issue its latest trade figures for the month of October. Paris’ deficit is expected to narrow slightly to €4.6 billion from €4.669 billion the month before.

At 10:00 GMT, the European Commission’s statistics agency will report revised GDP numbers for the third quarter. Gross domestic product (GDP) is forecast to expand 0.6% quarter-on-quarter, unchanged from the previous estimate. That should translate into an annualized growth rate of 0.6%.

Over in North America, the US Department of Labor will report on initial jobless claims at 13:30 GMT. The number of Americans filing for first-time unemployment benefits is expected to edge up slightly to 240,000 from 238,000.

Later in the day, the Federal Reserve will release the latest consumer credit change report for October.

North of the border, the Canadian government will report on building permits at 13:30 GMT.

On the monetary policy front, European Central Bank (ECB) President Mario Draghi will deliver a speech at 16:00 GMT. Draghi’s remarks will pique the interest of investors now that the ECB is embarking on a path of policy normalization.

EUR/USD

The euro was in freefall Thursday morning, as the US dollar gained ground on a basket of world currencies. The EUR/USD exchange rate briefly fell below 1.1800 Thursday before recovering those levels later in the session. The pair was last down 0.8% at 1.1805. The EUR/USD is barely hanging on to support near 1.1800, and further downside could expose the 55-day SMA near 1.1712.

USD/CAD

The North American cross was trading steadily at 1.2800 on Thursday following a sharp up-move during the previous session. The Canadian dollar lost momentum on Wednesday after the Bank of Canada (BOC) appeared hesitant over future rate hikes. Economic data will drive the pair in the final two sessions of the week.

USD/JPY

The US dollar edged slightly higher against the yen on Thursday, although trading activity remained relatively calm ahead of key economic data. USD/JPY was last seen trading at 112.40 for a gain of 0.1%. The pair faces immediate support at 112.00. On the other side of the ledger, resistance is likely seen at 112.60.

Sunrise Market Commentary

• Rates: Testing times for German 10-yr yield
  The German 10-yr yield closed just above key support in the 0.3% area yesterday. A break lower would suggest a return to the downside of this year's sideways trading channel (0.2%). Rumours about increased focus on long tenors (30y and even 50y) in next year's German funding plan could avert a break.
• Currencies: USD extends cautious rebound
  The dollar held up well yesterday even as risk sentiment was negative for most of the day. The trade weighted dollar even extends an, albeit very gradual, comeback. The jury is still out, but at least the USD downside looks better protected. Tomorrow's US payrolls hold the key on a next directional move. Or will US politics spoil the game.

The Sunrise Headlines

• US stock markets murmured around opening levels to close mixed between -0.2% (Dow) and 0.2% (Nasdaq). Asian equity indices trade mixed overnight with a significant outperformance of Japan.
• The BoC kept policy rates on hold yesterday at its last interest rate decision of 2017 and reiterated it will be “cautious” with future moves, indicating it's in no rush to cool an economy that is very close to capacity.
• A European Parliament resolution drafted on Monday shows British PM May has secured agreement from Brussels that British citizens in the EU will be able to live freely in any member state after Brexit, according to Reuters.
• BoJ Governor Kuroda stressed the need to look at the impact monetary policy has on the banking system and said changes in the economy could trigger a hike in the bank's yield targets, offering the strongest signal to date it may edge away from its crisis-mode stimulus programme.
• China should prioritise financial stability above development goals, as pursuit of regional growth targets and helping firms avoid heavy job losses had led to a surge in debt, particularly at local government level, the IMF said.
• Policymakers at the Brazilian central bank cut the benchmark Selic rate by 50 bps to a historic low of 7% as inflation continues to drop while the economy inches forward from a brutal recession.
• Today's eco calendar contains the final Q3 EMU GDP number and US weekly jobless claims. ECB Draghi speaks in his capacity as chair of the GHOS. Spain and France supply the EMU bond market

Currencies: USD Extends Cautious Rebound

Dollar maintains cautious gains

Asian markets were captured by a global risk-off correction yesterday. However, the spill-overs to the interest rate and FX markets were modest. The dollar held up well despite the decline in core/US yields. Risk sentiment improved slightly in US trading and lifted USD/JPY a bit further off the intraday lows. The pair closed at 112.29 (from 112.60). EUR/US finished at 1.1796 (from 1.1826).

Asian equities still show a diffuse picture overnight. Japan outperforms with gains of 1% +. China and Korea underperform. The profit taking move of the previous sessions slows, but there is no big story to start a clear directional move/rebound. USD/JPY trades in the mid 112 area. The pair lost only limited ground in yesterday's risk-off correction. BoJ governor Kuroda in a speech said that the shape of the yield curve could change depending on the economy, inflation or factors in the financial system. There was no market reaction. EUR/USD stabilizes in the 1.18 area. At 93.60, the trade-weighted dollar (DXY) holds near the highest level in 2 weeks. The Aussie dollar lost further ground as the trade surplus narrowed much more than expected in October. AUD/USD reversed its recent rebound and trades again in the mid 0.75 area.

There are only second tier eco data in the EMU and the US today. The details of the final EMU Q3 GDP are interesting but outdated and no market movers. This also applies for production data from EMU countries. US jobless claims are expected to stabilize at 240k. Markets will count down to tomorrow's payrolls. Investors will also keep an eye on the US tax bill debate and look out whether the US can avoid a partial government shut-down. Markets are not really worried on this issue.

Earlier this week, there were tentative signs that the dollar was receiving support from the protracted rise in ST US yields (2-y US yield rising above 1.8%). Markets are gradually moving in the direction of the Fed guidance (dotplot). For now, it didn't help the dollar that much, but maybe it helped to provide a floor for the US currency as USD shorts are becoming expensive. This process might be aborted if global markets fall prey to an outright risk-off correction or if tomorrow's payrolls would disappoint. Even so, we have the impression that the topside in EUR/USD is becoming tougher. EUR/USD might stay below the 1.1961/1.20 area ahead of next week's Fed meeting, unless there comes high profile negative news from the US.

The day-to-day USD momentum is not too bad. Of late USD/JPY was quite sensitive to interest rates/differentials rather than to the gyrations in equity markets. Even so, the pair remains more vulnerable in case of risk-off.

From a technical point of view: EUR/USD set a post-ECB low mid-November, but the dollar momentum wasn't strong enough. EUR/USD settled in a directionless sideways consolidation pattern in the 1.18/19 area. A return below 1.1713 would signal that the rebound in EUR/USD is aborted. For now, there is no clear technical signal. USD/JPY's momentum deteriorated early November, dropping below the 111.65 neckline. No aggressive follow-through selling occurred though. Last week the pair succeeded a nice rebound, calling off the downside alert. The pair hovers again in the 110.84/114.73 consolidation range. We amended our ST bias from negative to neutral.

EUR/USD: drifting sideways as USD momentum improves

EUR/GBP

Binary Brexit risk paralyses sterling trading

There were again plenty of headlines on Brexit and on UK politics yesterday. They brought little evidence that a deal could be reached anytime soon. However, the impact on sterling trading was modest. EUR/GBP settled north of 0.88, but no important technical level was broken. The pair closed the session at 0.8808 (from 0.8797). Cable declined back below the 1.34 barrier, but part of this move was due to cable mirroring the intraday decline of EUR/USD. The pair closed at 1.3393. So, sterling held up quite well, suggesting that markets still see a decent change of a last minute solution ahead of next week's EU summit

The UK eco calendar only contains the Halifax house prices today, but this is no market mover. Brexit headlines/rumours will continue to drive GBP trading. UK PM May is said to prepare a new proposal on the issue of the Irish boarder. However, it is far from sure than a solution acceptable for all parties will be found today. So, more directionless trading in the major sterling cross rates might be on the cards. Investors will probably abstain from setting up new directional bets as long as the binary Brexit risk isn't out of the way.

MT view/technical picture: A BoE driven sterling rebound ran into resistance early last month. Sterling declined again as markets anticipated that the rate cycle would be very gradual and limited. EUR/GBP trades in a 0.8733/0.9033 consolidation range. Brexit headlines cause day-to-day gyrations. We changed our ST bias on EUR/GBP from positive to neutral mid-November. The 0.9015/33 area might be tough to break short-term. In case of more positive news on Brexit, return action to the 0.8733 (or below) level is possible ST.

EUR/GBP going nowhere as markets await a clear sign from the Brexit debate

Download entire Sunrise Market Commentary

XAUUSD (1263.08): Gold prices were muted yesterday with price briefly rising on an intraday high before giving up the gains. Price remains steady near the support level of 1262 region. The Stochastics oscillator shows a bullish divergence that is forming. This suggests a near term correction towards the 1274 level of resistance. However, gold prices are expected to remain trading flat in the medium term within the support and resistance levels mentioned.

USDJPY (112.41): The USDJPY closed bearish yesterday with price action on the daily session suggesting a bearish engulfing bar. On the intraday charts the U.S. dollar was seen posting a strong bounce off the support level at 112.04. We expect to see the near term gains limited to the resistance level at 112.65. USDJPY is expected to maintain the sideways range into tomorrow's payrolls report. A breakout from this range will suggest further direction in the currency pair. For the moment, the declines coincide with the retest of the support level and filling last Friday's gap.

EURUSD (1.1803): The euro currency closed on a bearish note yesterday extending declines for two consecutive days. With the currency closing below the 1.1843 - 1.1822 level of support/resistance, we expect to see further declines. Any gains are likely to be limited to the resistance level mentioned. To the downside, the declines could be seen pushing the euro towards the 1.1710 level of support. In the event that EURUSD manages to close back above the resistance level, we could expect to see the bullish bias taking over. The euro could be seen attempting to post gains towards the 1.1920 level of resistance