Daily Pivots: (S1) 112.13; (P) 113.27; (R1) 113.85; More...

Breach of 112.56 suggests that corrective fall from 118.65 is resuming. Intraday bias is turned back to the downside for 38.2% retracement of 98.97 to 118.65 at 111.13. At this point, we're expect strong support from there to contain downside to complete the correction. On the upside, above 115.61 will target a test on 118.65 first. Break will resume whole rise from 98.97 and target 125.85 key resistance.

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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Daily Pivots: (S1) 1.3191; (P) 1.3263; (R1) 1.3306; More...

Intraday bias in USD/CAD is turned neutral with break of 1.3235 minor support. At this point, we're still slightly favoring the case that consolidation pattern from 1.3588 is completed with three waves down to 1.3017. Above 1.3387 will target 1.3598 resistance. Break there will extend the whole choppy rise from 1.2460 to next fibonacci level at 1.3838. However, break of 1.3017 will indicate completion of rise from 1.2460 and turn outlook bearish.

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) 0.7517; (P) 0.7552; (R1) 0.7588; More...

AUD/USD's rebound from 0.7158 extends to as high as 0.7608 so far but continues to lose upside momentum. With 0.7448 minor support intact, further rise could still be seen. But upside should be limited by 0.7777/7833 resistance zone to bring near term reversal. On the downside, below 0.7448 minor support will turn bias back to the downside for 0.7144 key support level.

In the bigger picture, AUD/USD is staying inside long term falling channel and it's likely that the down trend from 1.1079 is still in progress. Break of 0.6826 low will confirm this bearish case. We'll be looking for bottoming sign again as it approaches 0.6008 key support level. Meanwhile, sustained break of 0.7833 resistance will be a strong sign of medium term reversal.

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Dollar recovers mildly today but stays in red across the board for the week so far. The dollar index hit as low as 99.89 and is trying to defend 100 handle for the moment. Treasury yields tumbled sharply overnight with 10 year yield closing at 2.403, down -0.064. But stocks were just a touch lower with DJIA lost -0.14% to close at 19799.85, staying in familiar range. Markets continue to reaction to US president Donald Trump's initial actions. It's reported that Trump promised business leaders to reduce tax with business regulations cut by 75%, or more. Regarding corporate tax, Trump noted that his administration is going to be "cutting taxes massively for both the middle class and for companies, and get it down to We're trying to get it 15 to 20%, from 35%.

Meanwhile, he also signed an executive order yesterday to remove US from the Trans-Pacific Partnership. He is also expected to renegotiate" the North American Free Trade Agreement (NAFTA) with Canada and Mexico. It was reported that the Canadian government "will consider bilateral trade measures during renegotiation of the NAFTA a sign it could potentially move ahead at least in part without Mexico". Trump will also be meeting UK's Prime Minister Theresa May on Friday. Trade policy is expected to be a major discussion topic as May indicated her plan of a hard Brexit last week.

Japan Prime minister Shinzo Abe said today that he would continue to advocate free trade even without TPP. Government spokesman Koichi Hagiuda said that "without the U.S., it would lose the fundamental balance of benefits." Trade minister Hiroshige Seko said that Japan will "continue to explain to the U.S. about the strategic and economic merits of the TPP."

Released from Japan, PMI manufacturing rose to 52.8 in January, above expectation of 52.3. That's the highest reading in nearly three years since March 2014. IHS Markit economist noted that "manufacturing conditions improved at the strongest rate in nearly three years, helped by solid expansions in both output and new orders." And, "the rise in total incoming new orders was driven in part by a sharp increase in international demand, as new export orders rose at the quickest rate in over a year."

Looking ahead, Eurozone PMIs will be the main focus in European session. UK will release public sector net borrowing. US will release existing home sales.

AUD/USD Daily Outlook

Daily Pivots: (S1) 0.7517; (P) 0.7552; (R1) 0.7588; More...

AUD/USD's rebound from 0.7158 extends to as high as 0.7608 so far but continues to lose upside momentum. With 0.7448 minor support intact, further rise could still be seen. But upside should be limited by 0.7777/7833 resistance zone to bring near term reversal. On the downside, below 0.7448 minor support will turn bias back to the downside for 0.7144 key support level.

In the bigger picture, AUD/USD is staying inside long term falling channel and it's likely that the down trend from 1.1079 is still in progress. Break of 0.6826 low will confirm this bearish case. We'll be looking for bottoming sign again as it approaches 0.6008 key support level. Meanwhile, sustained break of 0.7833 resistance will be a strong sign of medium term reversal.

Economic Indicators Update

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Although we entered a long position in euro last week at 1.0640, in view of the strength of the retreat from 1.0719, we exited the position with small profit and the pair slipped to as low as 1.0589 before staging the anticipated rally. A short position was entered in Swissy at 1.0070 and we also exited the position with small profit at 1.0060 and price bounced to as high as 1.0122 before resuming recent decline.

On the other hand, we got whipped in USD/JPY, the first short position entered at 114.30 was stopped at 114.65 as the rebound from 112.57 was stronger than expected, the subsequent long position entered over the weekend at 113.70 was stopped at 113.35 as dollar ran into renewed selling interest at 115.62 and dropped sharply.

In short, 4 positions were entered among all 4 currency pairs with total loss of 45 points and the positions are listed below:

19 Jan : USD/JPY - Short at 114.30, exited at 114.65 (- 35 points)
19 Jan : EUR/USD - Long at 1.0640, exited at 1.0655 (+ 15 points)
19 Jan : USD/CHF - Short at 1.0070, exited at 1.0060 (+ 10 points)
23 Jan : USD/JPY - Long at 113.70, exited at 113.35 (- 35 points)

| JPY EUR CHF GBP

Jan + 187 - 55 - 20 + 65
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Y-T-D

We sold euro against yen at 121.65, however, the rebound from 120.54 turned out to be stronger than expected, the position was stopped at 122.25 and price rose to as high as 122.95 before retreating. We then entered a long position at 121.85 and the position is still holding at the moment.

A short position was entered in USD/CAD at 1.3190 but we under-estimated the strength of the rebound from last week's low of 1.3019, the position was stopped at 1.3250 and the pair rose to 1.3388 before easing.

In short, 3 positions were entered last week with total loss of 120 points and the positions are listed below.

19 Jan : EUR/JPY - Short at 121.65, exited at 122.25 (- 60 points)
19 Jan : USD/CAD - Short at 1.3190, exited at 1.3250 (- 60 points)
23 Jan : EUR/JPY - Long ast 121.85,

| AUD EUR/JPY EUR/GBP CAD
Jan + 5 -155 - 40 -60
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Y-T-D

Daily Pivots: (S1) 0.9986; (P) 1.0040; (R1) 1.0066; More.....

Intraday bias in USD/CHF remains on the downside for the moment. As noted before, rise from 0.9443 has completed at 1.0342 already, after failing to sustain above 1.0327 key resistance. Fall from there would now target 61.8% retracement of 0.9443 to 1.0342 at 0.9786 and below. On the upside, break of 1.0121 resistance is needed to indicate short term bottoming. Otherwise, near term outlook will stay bearish in case of recovery.

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 expect 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) 114.04; (P) 114.71; (R1) 115.22; More...

Intraday bias in USD/JPY remains neutral for the moment. Below 112.56 will extend the corrective fall from 118.65. In that case, we'd expect strong support from 38.2% retracement of 98.97 to 118.65 at 111.13 to contain downside and bring rebound. On the upside, above 115.61 will target a test on 118.65 first. Break will resume whole rise from 98.97 and target 125.85 key resistance.

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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Daily Pivots: (S1) 1.2295; (P) 1.2337; (R1) 1.2415; More...

Intraday bias in GBP/USD remains mildly on the upside as rebound from 1.1986 continues. But still, such rise is seen as the third leg of the consolidation pattern from 1.1946. Thus, we'd expect strong resistance at 1.2774 to limit upside and bring down trend resumption eventually. On the downside, below 1.2188 minor support will turn bias to the downside for retesting 1.1946 low.

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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Daily Pivots: (S1) 1.0646; (P) 1.0677 (R1) 1.0731; More.....

Intraday bias in EUR/USD remains on the upside as choppy rise from 1.0339 continues. At this point, rise from 1.0339 is seen as a corrective move and should be limited by 1.0872 resistance. On the downside, below 1.0588 minor support will argue that it's completed and turn bias back to the downside for 1.0339 support.

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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