For the 24 hours to 23:00 GMT, the USD declined 0.53% against the JPY and closed at 113.73.

In the Asian session, at GMT0400, the pair is trading at 113.52, with the USD trading 0.18% lower from yesterday's close.

The Japanese Yen gained ground against the USD, after the Bank of Japan (BoJ), in its latest monetary policy meeting, raised Japan's growth forecast for 2017 and 2018.

Earlier today, the BoJ held the benchmark interest rate steady at -0.1%, as widely anticipated. The central bank also pledged to continue with its yield curve control programme for “as long as it is necessary” to achieve its inflation target of 2.0% in a stable manner. Further, policymakers also boosted their growth-outlook for fiscal year 2016 to 1.4% from a prior estimate of 1.0% made in October, while fiscal 2017 growth was also upwardly revised to 1.5% from 1.3% in October. For fiscal 2018, it raised its forecast to 1.1%, from 0.9%. However, the central bank left its forecasts for core consumer price inflation unchanged.

In other economic news, data showed that Japan's unemployment rate remained steady at 3.1% in December, meeting market expectations. Additionally, the nation's preliminary industrial production advanced 0.5% on a monthly basis in December, more than market expectations for an advance of 0.3% and following a rise of 1.5% in the prior month. On the other hand, the nation's small business confidence eased to a level of 48.3 in January, from a level of 48.8 in the previous month.

The pair is expected to find support at 112.84, and a fall through could take it to the next support level of 112.17. The pair is expected to find its first resistance at 114.56, and a rise through could take it to the next resistance level of 115.61.

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

For the 24 hours to 23:00 GMT, the USD declined 0.18% against the CHF and closed at 0.9948.

On the data front, Switzerland’s KOF economic barometer unexpectedly dropped to a level of 101.7 in January, defying market expectations for a rise to a level of 102.9 and compared to a revised level of 102.1 in the prior month. Also, the nation’s total sight deposits inched up to a level of CHF532.8 billion in the week ended 27 January, from CHF532.3 billion in the previous week.

In the Asian session, at GMT0400, the pair is trading at 0.9948, with the USD trading flat against the CHF from yesterday’s close.

The pair is expected to find support at 0.9903, and a fall through could take it to the next support level of 0.9859. The pair is expected to find its first resistance at 1.0018, and a rise through could take it to the next resistance level of 1.0089.

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

For the 24 hours to 23:00 GMT, the USD declined 0.1% against the CAD and closed at 1.3112.

In the Asian session, at GMT0400, the pair is trading at 1.3094, with the USD trading 0.14% lower against the CAD from yesterday's close.

The pair is expected to find support at 1.3056, and a fall through could take it to the next support level of 1.3017. The pair is expected to find its first resistance at 1.3151, and a rise through could take it to the next resistance level of 1.3207.

Ahead in the day, Canada's GDP for December and RBC manufacturing PMI for January, will be on investor's radar.

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

Daily Pivots: (S1) 1.3072; (P) 1.3120; (R1) 1.3165; More...

USD/CAD is still staying in range of 1.3017/3598 and intraday bias remains neutral. We'd favoring the case that consolidation from 1.3588 has completed at 1.3017. On the upside, above 1.3387 minor resistance will target 1.3598. Break there will extend the whole choppy rise from 1.2460 to next fibonacci level at 1.3838 and possibly above. Meanwhile, sustained break of 1.3017 will invalidate our view and indicate that rise from 1.2460 has completed and turn outlook bearish for 1.2460.

In the bigger picture, price actions from 1.4689 medium term top are seen as a correction pattern. The first leg has completed at 1.2460. The second leg is still in progress and could target 61.8% retracement of 1.4689 to 1.2460 at 1.3838. As rise from 1.2460 is seen as a corrective move, we'd look for reversal signal above 1.3838. Meanwhile, break of 1.3017 will likely start the third leg to 1.2460 and below.

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Daily Pivots: (S1) 1.0630; (P) 1.0685 (R1) 1.0751; More.....

EUR/USD is still staying in consolidation inside range of 1.0588/0774. Intraday bias remains neutral for the moment. Choppy rise from 1.0339 is seen as a corrective move. Break of 1.0588 will indicate that such rise is completed and turn bias to the downside for retesting 1.0339 low. In case of extension, upside should be limited by 1.0872 resistance.

In the bigger picture, whole down trend from 1.6039 (2008 high) is in progress. Such down trend is expected to extend to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115. On the upside, break of 1.1298 resistance is needed to confirm medium term bottoming. Otherwise, outlook will stay bearish in case of rebound.

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GBP/USD Daily Outlook

Daily Pivots: (S1) 1.2435; (P) 1.2517; (R1) 1.2570; More...

At this point, GBP/USD is staying in range of 1.2414/2673 and intraday bias remains neutral. Rise from 1.1986 is seen as the third leg of the consolidation pattern from 1.1946. Break of 1.2414 minor support will argue that it's completed and turn bias to the downside for 1.1946 low. In case of another rise, we'd expect strong resistance at 1.2774 to limit upside and bring down trend resumption eventually.

In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. There is no sign of medium term bottoming yet. Sustained trading below 61.8% projection of 2.1161 to 1.3503 from 1.7190 at 1.2457 will target 100% projection at 0.9532. Overall, break of 1.3444 resistance is needed to confirm medium term bottoming. Otherwise, outlook will remain bearish.

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USD/CHF Daily Outlook

Daily Pivots: (S1) 0.9907; (P) 0.9975; (R1) 1.0018; More.....

USD/CHF's fall from 1.0342 resumed after breaking 0.9958 temporary low. Intraday bias is back on the downside for deeper decline. Fall from 1.0342 is seen as the third leg of the pattern from 1.0327. Next target will be 61.8% retracement of 0.9443 to 1.0342 at 0.9786 and below. On the upside, however, break of 1.0043 will indicate short term bottoming and turn bias back to the upside.

In the bigger picture, rejection from 1.0327 resistance suggests that consolidation pattern from there is still in progress. Fall from 1.0342 is seen as the third leg and retest of 0.9443/9548 support zone could be seen. But we'd expect strong support from there to contain downside. At this point, we're still expecting the larger rally to resume later to 38.2% retracement of 1.8305 to 0.7065 at 1.1359.

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Daily Pivots: (S1) 114.50; (P) 114.94; (R1) 115.48; More...

USD/JPY's recovery was limited well below 115.61 minor resistance and reversed. Nonetheless, it's staying inside range of 112.51/115.61 and intraday bias remains neutral. The choppy decline from 118.65 is seen as a correction. Break of 115.61 resistance will suggest that the correction is finished and turn bias to the upside for 118.65. Break will resume whole rise from 98.97 and target 125.85 key resistance. On the downside, below 112.51 will extend such decline but downside should be contained by 38.2% retracement of 98.97 to 118.65 at 111.13 and bring rebound.

In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. The impulsive structure of the rise from 98.97 suggests that the correction is completed and larger up trend is resuming. Decisive break of 125.85 will confirm and target 61.8% projection of 75.56 to 125.85 from 98.97 at 130.04 and then 135.20 long term resistance. Rejection from 125.85 and below will extend the consolidation with another falling leg before up trend resumption.

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• Risk aversion remains as Trump follows through on less market friendly promises;
• Yen higher on safe haven appeal, aided by higher BoJ growth forecasts;
• ECB President Draghi speaks in Frankfurt as eurozone CPI data signals higher prices.

European equity markets are positioned to open a little higher on Tuesday but traders appear to still be operating with caution as Donald Trump’s actions draw focus to the less market friendly aspects of his campaign that investors until now have overlooked.

Trump noted on Monday just how well the markets have performed since his election victory back in November but in that time, there has been a strong focus on his promises of fiscal stimulus, deregulation and tax cuts, all of which are supportive for markets. His actions over the last few days is another reminder that there were two sides to his campaign and Trump is just as adamant to follow through on those measures that will likely weigh on market sentiment in the coming months.

While we may be expecting a small bounce in European markets this morning, there appears to still be a sense of risk aversion carrying over from the US and Asian sessions, with the safe haven yen once again trading higher and Gold trading back above $1,200 having come off its recent highs over the last week.

The yen gains may have been slightly aided by the Bank of Japan’s more optimistic forecasts for growth following its meeting overnight. The central bank raised its outlook for growth and reiterated its belief that inflation will reach its 2% target around March 2019, while warning that risks to both are skewed to the downside. Governor Haruhiko Kuroda will likely be quizzed on one of those risks, Trump, when he appears for his press conference shortly.

We’ll also hear from ECB President Mario Draghi this morning when he appears in Frankfurt. Draghi’s appearance will come just ahead of the latest flash inflation figures for the eurozone which are likely to show overall prices rising by 1.5% but importantly core prices remaining unchanged at 0.9%. The pressure for the ECB to further reduce asset purchases has increased over the last month or so as German inflation has moved back to target and euro area inflation has increased but it’s important that the central bank doesn’t respond to temporary price movements and risk choking the recovery, particularly in the vulnerable periphery.

Yen gains broadly on risk aversion as the drama of US president Donald Trump's immigration ban continued. DJIA closed down -122.65 pts, or -0.61%, at 19971.13 overnight, below 20000 handle. S&P 500 lost -13.79 pts, or -0.6%, to close at 2280.90. NASDAQ dropped -47.07 pts, or -0.83%, to end at 5613.71. Nikkei follows and is trading down -1.7% at the time of writing. Treasury yields, on the other hand, was steady, with 10 year yield closed at 2.482, up 0.002. Dollar struggled to find a clear direction but weakened mildly, except versus Sterling. The dollar index hit as high as 101.02 yesterday but failed to sustain above 55 day EMA, and is now back at 100.35. In other markets, WTI crude oil stays in recent range and hovers around 52.50. Gold is trying to regain 1200 as consolidation extends.

BoJ left monetary policies unchanged as widely expected. Short term interest rates was held at -0.10%. The target of annual asset purchase was kept at JPY 80T under the yield curve control framework. The central bank warned in the quarterly forecast report that "risks to both economic activity and prices are skewed to the downside". While it noted that "The momentum for achieving our 2 percent inflation target is maintained", BoJ also sounded cautious and said it "lacks strength". BoJ expects inflation to hit 2% target by around March 2019, unchanged from November projections.

A bunch of data is also released from Japan today. Household spending dropped -0.3% mom in December, above expectation of -0.8% yoy. Industrial production rose 0.5% mom in December, above expectation of 0.3% mom. Unemployment rate was unchanged at 3.1% in December. Housing starts rose 3.9% yoy in December, below expectation of 7.4% yoy. Also from Asia Pacific, Australia NAB business confidence was unchanged at 6 in December.

Elsewhere, UK Gfk consumer confidence rose to -5 in January. French GDP rose 0.4% in Q4, in line with consensus. Germany will release retail sales and unemployment in European session. Eurozone will release unemployment rate, GDP and CPI flash. UK will release mortgage approvals and M4. Later in the day, Canada will release GDP, IPPI and RMPI. US will release employment cost index, S&P Case-Shiller house price, Chicago PMI and consumer confidence.

USD/JPY Daily Outlook

Daily Pivots: (S1) 114.50; (P) 114.94; (R1) 115.48; More...

USD/JPY's recovery was limited well below 115.61 minor resistance and reversed. Nonetheless, it's staying inside range of 112.51/115.61 and intraday bias remains neutral. The choppy decline from 118.65 is seen as a correction. Break of 115.61 resistance will suggest that the correction is finished and turn bias to the upside for 118.65. Break will resume whole rise from 98.97 and target 125.85 key resistance. On the downside, below 112.51 will extend such decline but downside should be contained by 38.2% retracement of 98.97 to 118.65 at 111.13 and bring rebound.

In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. The impulsive structure of the rise from 98.97 suggests that the correction is completed and larger up trend is resuming. Decisive break of 125.85 will confirm and target 61.8% projection of 75.56 to 125.85 from 98.97 at 130.04 and then 135.20 long term resistance. Rejection from 125.85 and below will extend the consolidation with another falling leg before up trend resumption.

Economic Indicators Update

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