Daily Pivots: (S1) 1.0086; (P) 1.0111; (R1) 1.0135; More.....

No change in USD/CHF's outlook as it's still staying in range of 1.0019/0342 in spite of dollar weakness elsewhere. As long as 1.0019 support holds, further rally is still mildly in favor. Firm break of 1.0342 will confirm up trend resumption. However, sustained break of 1.0019 will indicate near term reversal and could bring deeper fall bring to 0.9443/9548 support zone.

In the bigger picture, the corrective fall from 1.0327 should have completed at 0.9443 already. Rise from 0.9443 could be resuming the long term rally from 2011 low at 0.7065. But decisive break of 1.0327 is needed to confirm. In that case, next medium term upside target will be 38.2% retracement of 1.8305 to 0.7065 at 1.1359. Rejection from 1.0327 will extend the sideway pattern with another fall back to 0.9443/9548 support zone.

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Daily Pivots: (S1) 113.71; (P) 114.08; (R1) 114.55; More...

USD/JPY's fall from 118.65 extends to as low as 113.06 so far today. Intraday bias remains on the downside for 38.2% retracement of 98.97 to 118.65 at 111.13. At this point, we'd expect strong support from there to contain downside and bring rebound. Above 115.43 minor resistance will turn bias to the upside for retesting 118.65 high. However, sustained break of 111.13 will argue that whole rise from 98.97 has completed and bring deeper fall to 61.8% retracement at 106.48 and below.

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) 1.0574; (P) 1.0604 (R1) 1.0630; More.....

No change in EUR/USD's outlook. With 1.0453 minor support intact, further rise is expected for 1.0872 resistance and above. But after all, rise from 1.0339 is seen as a corrective move. Below 1.0453 will argue that it's completed and turn bias back to the downside for 1.0339 support. Break there will extend the larger down trend towards parity.

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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Daily Pivots: (S1) 1.1990; (P) 1.2037; (R1) 1.2089; More...

GBP/USD recovers after hitting as low as 1.1986. But near term outlook stays cautiously bearish as long as 1.2316 resistance holds. Decisive break of 1.1946 low will confirm larger down trend resumption. Next near term target is 61.8% projection of 1.3444 to 1.1946 from 1.2774 at 1.1848 and then 100% projection at 1.1276. However, above 1.2316 will turn focus back to 1.2432 resistance. Break there will invalidate our bearish view and extend the consolidation from 1.1946 with another rise before down trend resumption.

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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Sterling recovers mildly today but remains the weakest major currency for the week. Prime minister Theresa May's speech on Brexit is the main focus and could trigger more volatility in the pound. It's reported that May will reject the idea of "partial" EU member in return for a full control of UK's border. The trade relationship that May would like to push through is unknown. But EU leaders have already made it clear that UK cannot "cherry pick" access to the single markets. The pound could stay under pressure after May's speech. Technically, Sterling is staying bearish against Dollar, Euro and Yen in near term and we'd expect more downside ahead.

Theresa May is scheduled to speak before audience at Lancaster House, Westminster, including ambassadors from across the world, today. As the Guardian noted, May is expected to say in her speech that "we seek a new and equal partnership – between an independent, self-governing, global Britain and our friends and allies in the EU. Not partial membership of the European Union, associate membership of the European Union or anything that leaves us half-in, half-out... We do not seek to adopt a model already enjoyed by other countries. We do not seek to hold on to bits of membership as we leave. The United Kingdom is leaving the European Union. My job is to get the right deal for Britain as we do".

Separately, BoE governor Mark Carney talked down recent moves in the exchange rate and said that "value of the pound will go up and down." He acknowledged "signs of continued solid consumer momentum domestically and a stronger growth outlook globally", noting that "the tension between consumer strength on the one hand and the more pessimistic expectations of markets on the other will be resolved". However, firstly, he still expected growth to "remain below past averages for the next few years". And, "one corroborating indicator of this potential deceleration is that the UK expansion is increasingly consumption-led."

On the data front, Australia home loans rose 0.9% in November. Japan industrial production was finalized at 1.5% mom in November. UK will release CPI and PPI. Eurozone will release ZEW economic sentiment. US will release Empire state manufacturing later in US session.

GBP/USD Daily Outlook

Daily Pivots: (S1) 1.1990; (P) 1.2037; (R1) 1.2089; More...

GBP/USD recovers after hitting as low as 1.1986. But near term outlook stays cautiously bearish as long as 1.2316 resistance holds. Decisive break of 1.1946 low will confirm larger down trend resumption. Next near term target is 61.8% projection of 1.3444 to 1.1946 from 1.2774 at 1.1848 and then 100% projection at 1.1276. However, above 1.2316 will turn focus back to 1.2432 resistance. Break there will invalidate our bearish view and extend the consolidation from 1.1946 with another rise before down trend resumption.

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.

Economic Indicators Update

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Although the single currency rebounded to 123.73 early last week, the subsequent selloff from there dampened our bullish view, our long position entered at 122.50 was stopped at 121.90 and price even fell below 121.00 level today.

In short, only 1 position was entered last week with total loss of 60 points and the position is stated below.

10 Jan : EUR/JPY - Long at 122.50, exited at 121.90 (- 60 points)

| AUD EUR/JPY EUR/GBP CAD
Jan + 5 -95 - 40
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Y-T-D

After seeing the selloff from 116.87, we suggested to sell dollar against yen at115.30 and a short position was entered, the greenback did meet renewed selling interest at 115.45 and dropped in line with our bearish expectation, our downside target at 113.90 was met (with 140 points profit) as price fell to as low as 113.63 earlier today before recovering.

We entered at short position in euro after seeing the selloff to 1.0454, however, the subsequent much stronger-than-expected rebound tripped our stop at 1.0555 and the single currency rallied to as high as 1.0685 last week before easing.

We turned long in cable after seeing the strong rebound from 1.2038 to 1.2317, however, sterling met heavy offers there and dropped sharply, the long position entered at 1.2205 was stopped at 1.2170, the pound then opened sharply lower today and broke below 1.2000 level.

In short, 3 positions were entered among all 4 currency pairs with total profit of 70 points and the positions are listed below:

12 Jan : EUR/USD - Short at 1.0520, exited at 1.0555 (- 35 points)
13 Jan : USD/JPY - Short at 115.30, exited at 113.90 (+ 140 points)
13 Jan : GBPUSD - Long at 1.2205, exited at 1.2170 (- 35 points)

| JPY EUR CHF GBP

Jan + 257 - 70 - 30 + 65
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Y-T-D

Daily Pivots: (S1) 1.2131; (P) 1.2182; (R1) 1.2243; More...

GBP/USD's fall from 1.2774 resumed again by taking out 1.2036 and reaches as low as 1.1986 so far. Intraday bias is back on the downside for 1.1946 support. Decisive break there will confirm larger down trend resumption. Next near term target is 61.8% projection of 1.3444 to 1.1946 from 1.2774 at 1.1848 and then 100% projection at 1.1276. On the upside, break of 1.2342 resistance will invalidate our bearish view and extend the consolidation from 1.1946 with another rise before down trend resumption.

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) 1.0600; (P) 1.0635 (R1) 1.0675; More.....

With 1.0453 minor support intact, further rise is expected in EUR/USD for 1.0872 resistance and above. But after all, rise from 1.0339 is seen as a corrective move. Below 1.0453 will argue that it's completed and turn bias back to the downside for 1.0339 support. Break there will extend the larger down trend towards parity.

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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Daily Pivots: (S1) 1.0042; (P) 1.0082; (R1) 1.0124; More.....

Intraday bias in USD/CHF remains neutral as it's staying in range of 1.0019/0342. As long as 1.0019 support holds, further rally is still mildly in favor. Firm break of 1.0342 will confirm up trend resumption. However, sustained break of 1.0019 will indicate near term reversal and could bring deeper fall bring to 0.9443/9548 support zone.

In the bigger picture, the corrective fall from 1.0327 should have completed at 0.9443 already. Rise from 0.9443 could be resuming the long term rally from 2011 low at 0.7065. But decisive break of 1.0327 is needed to confirm. In that case, next medium term upside target will be 38.2% retracement of 1.8305 to 0.7065 at 1.1359. Rejection from 1.0327 will extend the sideway pattern with another fall back to 0.9443/9548 support zone.

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