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For the 24 hours to 23:00 GMT, the AUD rose 0.34% against the USD and closed at 0.7861.

LME Copper prices rose 0.1% or $6.0/MT to $6453.0/MT. Aluminium prices rose 1.2% or $25.0/MT to $2139.5/MT.

In the Asian session, at GMT0300, the pair is trading at 0.7832, with the AUD trading 0.37% lower against the USD from yesterday's close, following downbeat Australian retail sales data.

Overnight data indicated that Australia's seasonally adjusted retail sales unexpectedly dipped 0.6% on a monthly basis in August, declining by the most in more than four years, offering further signs of a slowdown in the nation's consumer spending. Markets had expected for an advance of 0.3%, after recording a revised drop of 0.2% in the prior month.

On the other hand, the nation's trade surplus widened more-than-anticipated to A$989.0 million in August, following a revised surplus of A$808.0 million in the previous month, while markets had expected for the nation's trade surplus to widen to A$850.0 million.

The pair is expected to find support at 0.7812, and a fall through could take it to the next support level of 0.7793. The pair is expected to find its first resistance at 0.7863, and a rise through could take it to the next resistance level of 0.7895.

Going ahead, traders will eye the release of Australia's AiG performance of construction index for September, slated overnight.

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

For the 24 hours to 23:00 GMT, the EUR rose 0.15% against the USD and closed at 1.1760, after the Euro-zone's final Markit services PMI was surprisingly revised up to a level of 55.8 in September, while the preliminary print had indicated an advance to a level of 55.6, suggesting that manufacturing sector will remain a key pillar of growth in the common currency region. In the prior month, the PMI had registered a level of 54.7.

On the contrary, the region's seasonally adjusted retail sales recorded an unexpected drop of 0.5% on a monthly basis in August, declining for the second straight month and confounding market consensus for a gain of 0.3%. In the prior month, retail sales had dropped 0.3%.

Separately, Germany's final Markit services PMI climbed to a level of 55.6 in September, confirming the flash estimate. The PMI had registered a reading of 53.5 in the previous month.

The US Dollar recouped some of its earlier losses against a basket of major currencies, following an upbeat report on the US services sector.

Data showed that the US ISM non-manufacturing activity index jumped more-than-anticipated to a level of 59.8 in September, accelerating at its fastest clip in 12 years, thus indicating that the sector has shown strong resilience to last month's hurricane disruptions. The PMI had recorded a level of 55.3 in the prior month, while market participants had envisaged for a rise to a level of 55.5.

Other data showed that ADP's private sector employment in the US climbed by 135.0K in September, at par with market expectations. However, it was the weakest reading in thirteen months as distortions caused by a pair of hurricanes weighed on the nation's job market. The private sector employment had registered a revised increase of 228.0K in the prior month. Further, the nation's final Markit services PMI eased more than initially estimated to a level of 55.3 in September, compared to a drop to a level of 55.1 recorded in the preliminary figures. In the previous month, the PMI had recorded a level of 56.0. Also, the nation's mortgage applications eased 0.4% in the week ended 29 September, after recording a fall of 0.5% in the prior week.

In the Asian session, at GMT0300, the pair is trading at 1.1758, with the EUR trading a tad lower against the USD from yesterday's close.

The pair is expected to find support at 1.1741, and a fall through could take it to the next support level of 1.1723. The pair is expected to find its first resistance at 1.1782, and a rise through could take it to the next resistance level of 1.1805.

Looking forward, investors will keep a close watch on the minutes of the European Central Bank's September policy meeting, due to release later in the day. Moreover, the US initial jobless claims data followed by the nation's trade balance, factory orders and final durable goods orders, all for August, set to release later today, will keep investors on their toes.

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 slightly rose against the USD and closed at 1.3242.

Macroeconomic data revealed that Britain's Markit services PMI surprisingly advanced to a level of 53.6 in September, soothing worries about a Brexit-induced economic slowdown. Markets were anticipating the PMI to remain steady at a level of 53.2 recorded in the prior month.

In the Asian session, at GMT0300, the pair is trading at 1.3239, with the GBP trading marginally lower against the USD from yesterday's close.

The pair is expected to find support at 1.3215, and a fall through could take it to the next support level of 1.319. The pair is expected to find its first resistance at 1.3278, and a rise through could take it to the next resistance level of 1.3316.

In absence of any macroeconomic releases in the UK today, investor sentiment would be governed by global macroeconomic events.

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

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For the 24 hours to 23:00 GMT, the USD marginally declined against the JPY and closed at 112.77.

In the Asian session, at GMT0300, the pair is trading at 112.75, with the USD trading a tad lower against the JPY from yesterday’s close.

The pair is expected to find support at 112.40, and a fall through could take it to the next support level of 112.05. The pair is expected to find its first resistance at 113.02, and a rise through could take it to the next resistance level of 113.29.

Moving ahead, Japan’s flash leading economic and coincident indices, both for August, due to release tomorrow, will be on investors’ radar.

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

For the 24 hours to 23:00 GMT, the USD rose 0.18% against the CHF and closed at 0.9752.

In the Asian session, at GMT0300, the pair is trading at 0.9748, with the USD trading slightly lower against the CHF from yesterday's close.

The pair is expected to find support at 0.9719, and a fall through could take it to the next support level of 0.9691. The pair is expected to find its first resistance at 0.9769, and a rise through could take it to the next resistance level of 0.9791.

Looking ahead, market participants will focus on Switzerland's inflation numbers for September, scheduled to release in a few hours.

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

For the 24 hours to 23:00 GMT, the USD declined 0.11% against the CAD and closed at 1.2477.

In the Asian session, at GMT0300, the pair is trading at 1.2479, with the USD trading a tad higher against the CAD from yesterday’s close.

The pair is expected to find support at 1.2453, and a fall through could take it to the next support level of 1.2426. The pair is expected to find its first resistance at 1.2502, and a rise through could take it to the next resistance level of 1.2524.

Ahead in the day, market participants will focus on Canada’s international merchandise trade balance for August.

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

EURUSD Short Term Elliott Wave structure suggests the decline from 9/8 peak is in progress as an expanded Flat Elliott Wave structure. From 9/8 high (1.2094), pair declined to 1.837 and ended Intermediate wave (A). Pair then bounced to 1.2034 and ended Intermediate wave (B). At present, Intermediate wave (C) remains in progress as 5 waves impulse. Minor wave 1 of (C) ended at 1.186 and Minor wave 2 of (C) ended at 1.2. Decline to 1.1716 ended Minor wave 3 of (C), and Minor wave 4 of (C) bounce ended at 1.1832.

While near term bounce stays below 1.18329, pair can extend lower in Minor wave 5 of (C) and reach as low as 1.16207. This move lower will also end cycle from 9/8 peak and complete Primary wave ((W)). Pair should then bounce in Primary wave ((X)) to correct cycle from 9/8 peak in 3, 7, or 11 swing at least. If pair breaks above 1.1832 from here, it could be in Minor wave 4 as a flat before turning lower again in Minor wave 5. As the minimum target and swing have been met, pair may have also ended Primary wave ((W)) already if it breaks above 1.1832 from here without making a new low.

EURUSD 1 Hour Elliott Wave Chart

Expanded Flat is a 3 waves corrective pattern, and the inner subdivision is labeled as A,B,C with 3,3,5 structure. That means waves A and B are always corrective structures i.e. could be WXY, WXYXZ, Zigzag or any 3 waves corrective pattern. Wave C is either 5 waves impulse or ending diagonal pattern. In the graphic below, we can see what Expanded Flat structure looks like. Inner structure has ABC labeling, where wave B can complete below or above the starting point of wave A. Wave C should complete below the end point of wave A (usually at 1.236-1.618 fibonacci extension A related to B).

The Dollar Was Little Changed Below the Recent 11-Week High. The U.S. Dollar Index was down 0.18% after U.S. economic data did little to change views on the timing or pace for monetary tightening and investors awaited fresh triggers for trading. There was a change in sentiment for the greenback during theAsian session as investors saw bets strengthen on Jerome Powell to become the next Fed Chair in February, a well renown dovish board member of the central bank. Yellen is still in the running and did not comment on monetary policy today in St. Louis. Investors focus their attention to upcoming unemployment claims and trade balance figures this evening out of the United States.

The Kiwi Remains Largely Flat Against the Greenback. The New Zealand Dollar opened this morning at 0.7160 after having some positive movements during the American session, reaching a high of 0.7204. The Kiwi initially lost ground against its counterpart when US non-manufacturing PMI numbers outperformed. This was then counter-balanced by increased speculation on Trumps next choice for Federal Chair with the significance being that the resulting decision will influence monetary policy going forward.

Australian Dollar Hits Weekly High. The Australian dollar edged upward on Wednesday pushing back through 0.7830 and testing intraday highs at 0.7875. With little domestic data on hand to drive direction the AUD found support in wider USD weakness as investors reacted to a proposed short list of candidates to replace Janet Yellen as Fed and FOMC Chair.

Canadian Dollar Awaits for Trade Balance Release. The USD/CAD lost 0.192 percent on Wednesday. The currency is trading at 1.2482 with the loonie regaining some ground after the USD got a temporary boost from purchasing managers in the service sector. In a day with few economic data releases the Canadian trade balance will impact the USD/CAD but could end up being eclipsed by FOMC member comments.

Gold Pares Gains as Dollar Comes Off Data Low. Gold was little changed at $1,275.39 an ounce as the US dollar came off its lows on strong data from the US service sector index. Having touched its lowest since mid-August on Tuesday, spot gold was up 0.2 per cent at $US1,274.41 per ounce on Thursday. Earlier on Wednesday, it reached a high of $US1,282 per ounce.

Oil Prices Fall for Third Session to Lowest Settlement in Over Two Weeks. Oil prices eased on Wednesday for a third-straight session, settling at their lowest level in more than two weeks. U.S. government report released Wednesday showed a much bigger-than-expected weekly drop in crude supplies along with a rise in gasoline stockpiles. WTI crude dropped 0.9% to $49.98 a barrel, Brent crude futures were down 0.4 percent, at $55.78 a barrel.

Watch Out Today for:

11:30 am GMT: EUR ECB Monetary Policy Meeting Accounts

Currency pair EUR/USD

The EUR/USD bounce at the 23.6% Fibonacci support level of wave 4 (blue) has not managed to break above the resistance at 1.18. A break above the resistance trend line (red) could start a bullish breakout whereas a third attempt to break below the 23.6% Fib could start a larger bearish correction towards the 38.2% Fib.

The EUR/USD is moving sideways in a channel (red/green lines). A break below the channel could still face support from the wave 2 (green) Fibonacci levels.

Currency pair GBP/USD

The GBP/USD is again retesting the support trend line (blue) and the 50% Fibonacci level of the wave 4 (blue), which is a bounce or break spot.

The GBP/USD break below the support trend line (dotted green) but could be bouncing at the previous bottom. A bullish bounce could see price retest the resistance levels (red).

Currency pair USD/JPY

The USD/JPY is in a triangle pattern, which is indicated by the support (blue) and resistance (red) trend lines. A bearish break could indicate the completion of wave A or 1 (green) at the recent high.

The USD/JPY could be in a wave 2 (purple) retracement.

STOCKS

Dow (22661.64, +0.09%) is trading higher. 22750 is the immediate target for the next few sessions.

Need to keep a close watch if Dax (12970.52, +0.53%) faces any rejection at 13000 or breaks higher to make fresh highs targeting 13250 in the near term. Looking at the upward momentum, the index looks bullish.

Shanghai (3348.94, +0.28%) could attempt a rise towards 3360-3375 in the near term. Overall the index may trade within 3375-3330 this week.

Nikkei (20629.02, +0.01%) could pause near 20700-20750 just now unless the Dollar Yen and the US-Japan 10Yr differential surges sharply to force Nikkei to rise towards crucial resistance of 21000. A rejection from 20750 is preferred in the coming sessions to levels near 20500-20400 levels. But in case the index breaks above 20750, the next target on the upside would be 21000.

Nifty (9914.90, +0.56%) could come off today to levels near 9800. Note immediate resistance near 9970-9950 levels may hold just now, pushing the index back towards 9800 or even lower.

COMMODITIES

Gold (1274.28) could be stuck in the 1260-1280 region this week and some consolidative phase is possible over the early sessions of next week too. Thereafter the price may start to rise above 1280 while decent support near 1260 holds.

Silver (16.59) attempted a rise towards 17 yesterday but came off sharply to close lower. 16.75 could possibly hold on the upside and push the index below 16.50 in the near term.

Brent (55.91) could try to rise towards 56.65 in the next few sessions before again resuming the fall towards 55 later on. WTI (49.99) on the other hand has some scope of falling towards 49.50 or even lower in the near term.

Copper (2.9650) is almost stable in the 2.90-3.00 region as mentioned yesterday. A break on either side is needed to get some clarity on further course of direction.

FOREX

Sideways consolidation in Dollar-Yen (112.75) below 113.00-50 over the last couple of days. Need to see if it tops out below 113 now over the next few days or breaks past it. The Euro-Yen (132.56) continues to look bullish overall with Support at 132.00.

Understandable consolidation happening in Euro (1.1758) as well, caught between short-term bearishness towards 1.16 and longer term bullishness while above 1.16. Note, though, that 1.16 is a super-crucial Support, dividing the bullish/ bearish regions. This corresponds with Resistance near 94.50 on the Dollar Index.

Slight dip in the Pound (1.3237) within current bearishness that targets 1.3200-3150 at least. The Aussie (0.7830) has also dipped a bit but has Support at 0.7800-7780, as mentioned yesterday.

Dollar-Rupee fell to 65.01 after the RBI policy yesterday and might dip to 64.90-80 today. That said, we also note that the market is a little Oversold in the near term.

INTEREST RATES

RBI kept the Repo Rate (6%) and CRR (4%) unchanged yesterday while lowering SLR from 20% to 19.5%. The 10Yr GOI yield rose from 6.65% to 6.70%, a sharp surge after the RBI policy rate yesterday. The yield could move up to test 6.75% in the near term before coming off in the longer run.

The RBI has also suggested that lending rates, especially to retail customers, should be tied to some external benchmark, in order to better transmit interest rate changes to the market.

The US yields are almost stable and are vulnerable to a slight fall in the coming sessions.

Also keep a close watch at the US-Japanand the German-US 10YR differentials which could provide some important cues for Euro and Dollar Yen movements in the near term.