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Daily Pivots: (S1) 1.1618; (P) 1.1652 (R1) 1.1693; More...

EUR/USD recovers further in early US session but struggles to take out 4 hour 55 EMA firmly. Intraday bias remains neutral and consolidation from 1.1574 could extend. As noted before, break of 1.1879 resistance is needed to confirm completion of the decline from 1.2091. Otherwise, near term outlook will stay bearish. Below 1.1574 will target 38.2% retracement of 1.0569 to 1.2091 at 1.1510.

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 cautious on 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 will suggest that such medium term rebound is completed and could then bring retest of 1.0339 low.

Daily Pivots: (S1) 1.2966; (P) 1.3133; (R1) 1.3224; More....

GBP/USD recovers today but stays below 1.3138 minor resistance. Deeper fall remains mildly in favor. Firm break of 1.3026 support will resume whole decline from 1.3651 and target 61.8% projection of 1.3651 to 1.3026 from 1.3320 at 1.2934 first. Break will bring deeper decline to 1.2773 key support level. On the upside, above 1.3138 minor resistance will extend the consolidation from 1.3026 with another rise.

In the bigger picture, as noted before, GBP/USD hit strong resistance from the long term falling trend line. Current development is starting to favor that corrective rebound from 1.1946 low has completed at 1.3651. Decisive break of 1.2773 will confirm this bearish case and target a test on 1.1946 low next, with prospect of resuming the low term down trend. Nonetheless, break of 1.3320 resistance will restore the rise from 1.1946 for 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466 .

Daily Pivots: (S1) 0.9950; (P) 0.9991; (R1) 1.0035; More....

USD/CHF spikes lower in early US session but stays in tight range below 1.0037 temporary top. Intraday bias remains neutral for the moment. On the upside break of 1.0037 will resume whole rally from 0.9420. And with sustained trading above 61.8% retracement of 1.0342 to 0.9420 at 0.9990, USD/CHF should then target a test on 1.0342 key resistance. In case of another fall, downside should be contained above 0.9835 resistance turned support and bring rally resumption.

In the bigger picture, current development suggests that USD/CHF has defended 0.9443 (2016 low) key support level again. Rise from 0.9420 could is a medium term up move and should target a test on 1.0342 high. This represents the upper end of a long term range that started back in 2015. On the downside, break of 0.9736 support is now needed to indicate completion of the rise from 0.9420. Otherwise, further rally will remain in favor in medium term.

Daily Pivots: (S1) 113.67; (P) 113.94; (R1) 114.35; More...

USD/JPY dips notably in early US session but stays in range of 112.95/114.44. Intraday bias remains neutral first. On the upside, decisive break of 114.49 will confirm that correction pattern from 118.65 has completed at 107.31 already. And USD/JPY should then target a test on 118.65. On the downside, below 112.95 will bring deeper pull back. But strong support should be seen from 111.64 support to maintain bullishness and bring rebound.

In the bigger picture, medium term rise from 98.97 (2016 low) is not completed yet. It should resume after corrective fall from 118.65 completes. Break of 114.49 resistance will likely resume the rise to 61.8% projection of 98.97 to 118.65 from 107.31 at 119.47 first. Firm break there will pave the way to 100% projection at 126.99. This will be the key level to decide whether long term up trend is resuming.

Quick update: Dollar strengthens again after ISM services beat expectation and rose to 60.1 in October.

Dollar weakens mildly in early US session after mixed employment data. Headline job growth as shown in non-farm payrolls report was at 261k in October, below expectation of 310k. But prior months figure was revised up from -33k contraction to 18k rise, roughly makes up the miss. Unemployment rate dropped to 4.1%, below expectation of being unchanged at 4.2%. The biggest disappointment is that average hourly earnings stalled at 0.0% mom, below expectation of 0.2% mom growth. While the greenback is sold off after the report, weakness is so far limited. Also from US, trade deficit widened slightly to USD -43.5b in September.

Canadian Dollar, on the other hand, jumps on strong employment data. Job market grew 35.3k in October, nearly triple of expectation of 15.5k. Unemployment rate, though, rose 0.1% to 6.3%. Trade deficit was unchanged at CAD -3.18b.

Sterling rebounds strongly today after better than expected services data. UK services PMI rose to 55.6 in October, up from 53.6 and beat expectation of 53.3. That's also the highest level since April and the biggest one month gain since August 2016. However, Markit noted that "while an upturn in business activity growth adds some justification to the Bank of England' decision to hike interest rates ... a deeper dive into the numbers highlights the fragility of the economy." Also, as across the economy as a whole, PMI showed that job growth was weakest since March. And Markit also noted that "squeezed margins and concerns about the economic outlook had led to more cautious hiring strategies."

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 113.67; (P) 113.94; (R1) 114.35; More...

USD/JPY dips notably in early US session but stays in range of 112.95/114.44. Intraday bias remains neutral first. On the upside, decisive break of 114.49 will confirm that correction pattern from 118.65 has completed at 107.31 already. And USD/JPY should then target a test on 118.65. On the downside, below 112.95 will bring deeper pull back. But strong support should be seen from 111.64 support to maintain bullishness and bring rebound.

In the bigger picture, medium term rise from 98.97 (2016 low) is not completed yet. It should resume after corrective fall from 118.65 completes. Break of 114.49 resistance will likely resume the rise to 61.8% projection of 98.97 to 118.65 from 107.31 at 119.47 first. Firm break there will pave the way to 100% projection at 126.99. This will be the key level to decide whether long term up trend is resuming.

Economic Indicators Update

USDJPY: The pair retains its upside leaving risk of more strength on the cards. On the downside, support comes in at the 113.50 level where a break if seen will aim at the 113.00 level. A cut through here will turn focus to the 112.50 level and possibly lower towards the 112.00 level. On the upside, resistance resides at the 114.50 level. Further out, we envisage a possible move towards the 115.00 level. Further out, resistance resides at the 115.50 level with a turn above here aiming at the 116.00 level. Its daily RSI is bearish and pointing higher suggesting further upside pressure. On the whole, USDJPY faces upside threats.

The British pound continues to trade towards the bottom end of its one-month range against the U.S dollar, despite better than expected UK Services PMI data earlier. The GBPUSD pair currently trades around the 1.3080 level, managing only a muted reaction to much better UK data. Sterling traders now awaits the release of the NFP jobs report, with expectations for the headline jobs figure skewed to the upside.

The GBPUSD pair is strongly bearish while trading below the 1.3130 level. Further declines towards the 1.3040 and 1.2980 levels remains likely.

Should price-action move back above the 1.3130 level for a sustained period, further upside towards the 1.3200 and 1.3307 levels remains possible.

The euro remains strongly bearish against the U.S dollar, heading into today's October U.S jobs report. The EURUSD pair has repeatedly struggled to gain upside traction above the 1.1670 level this week, with numerous technical rejections. Price-action currently trades around the 1.1640 region, as traders await the release of the NFP jobs report, with expectations of a solid 300,000 new U.S jobs added in the previous month.

The EURUSD pair is likely to remain under heavy selling pressure while trading below the key 1.1670 level. Further selling towards 1.1610 and 1.1580 should be expected, extended resistance is found at the 1.1510 level.

Should price-action move back above the 1.1670 for a sustained period, further upside towards the 1.1713 and 1.1771 levels remains likely.

The Canadian dollar has ticked higher in the Friday session. Currently, USD/CAD is trading at 1.2828, up 0.15% on the day. In economic news, the spotlight is on employment indicators on both sides of the border, so we could see some movement from the pair in the North American session. US releases Average Hourly Earnings, Nonfarm Payrolls and the unemployment rate. The markets are expecting NFP to rebound to 311 thousand, but Average Hourly Earnings is forecast to slow to 0.2 percent. No change is expected in the unemployment rate, with an estimate of a sizzling 4.2 percent. As well, the US releases ISM Non-Manufacturing PMI, which is expected to drop to 58.5 points. Canada releases Employment Change, with a forecast of 15.3 thousand. The unemployment rate is forecast to hold at 6.2%, and we'll also get a look at Trade Balance.

October was a rough month for the Canadian dollar, as the currency slipped 3.4 percent. Bank of Canada Governor Stephen Poloz didn't help matters, as he spoke in sober terms about the economy in his testimony before a parliamentary committee. Poloz said that the economy is at a "crucial" spot in the economic cycle, noting concern over soft inflation and wage growth, and high household debt. Poloz said that the BoC will be cautious before raising interest rates. The markets are not expecting any moves before 2018, with the likelihood of a rate hike in December at just 21 percent. Canadian GDP declined in August, disappointing the markets. The decline of 0.1% was the first drop since October 2016. With the Federal Reserve expected to raise rates at its December meeting, the loonie's slide could continue if the BoC does not match the Fed and raise rates next month.

On Thursday, US President Trump nominated Federal Reserve Governor Jerome Powell to head the Federal Reserve. Powell will take over in February 2018 when Yellen's term expires. Powell is expected to hold the course with monetary policy, which has been marked by incremental and small rate hikes since December 2015. It's all but a given that the Fed will raise interest rates in December, but the forecast for 2018 is less clear. If the US economy continues to grow at current levels, we could see up to three rate hikes next year. Powell will also be tasked with continuing to trim the Fed's huge balance sheet of $4.2 billion. Last month, the Fed has started trimming the balance sheet by $10 billion/mth, but these cuts are expected to increase in size next year.

The DAX has posted gains in the Friday session. Currently, the DAX is at 13,481.00, up 0.30% since the close on Thursday. There are no eurozone indicators on Friday. The US releases key employment numbers, led by nonfarm payrolls. The indicator is expected to soar to 311 thousand in October, after a decline a month earlier. However, wage growth could be in trouble, as Average Hourly Earnings is forecast to slow to 0.2 percent. No change is expected in the unemployment rate, with an estimate of a sizzling 4.2 percent. As well, the US releases ISM Non-Manufacturing PMI, which is expected to drop to 58.5 points.

The DAX posted strong gains this week, in response to the release of positive corporate earnings. Automobile sector posted strong gains, led by BMW, Daimler and Volkswagen. The DAX has set another record high on Friday, and the index has jumped 9.6 percent since early September. The robust German economy has helped boost German stock markets, and with the economy expected to record a strong fourth quarter, the DAX rally could continue.

German numbers looked sharp this week, as the largest economy in the eurozone continues to perform well in 2017. Manufacturing PMI remained steady at 60.6, its highest level since April 2011. The German labor market continues to impress, as unemployment rolls declined for a third straight month in October. Unemployment has now dropped in all but two readings since June 2015.

After an excellent GDP report last week, the US economy faces another report card on Friday. The US releases nonfarm payrolls and wage growth, and the readings could affect global stock markets. Nonfarm Payrolls posted a rare decline in September, a result of the hurricanes which battered the US. The markets are expecting job growth to surge in October, with an estimate of 311 thousand. However, wage growth could weigh on the markets, as Average Hourly Earnings is forecast to slow to 0.2 percent.