Daily Pivots: (S1) 1.0697; (P) 1.0727; (R1) 1.0745; More...

EUR/CHF is staying in consolidation above 1.0677 and intraday bias remains neutral. Above 1.0762 will extend the corrective rise from 1.0677. But overall, outlook will stay bearish as long as 1.0897 resistance holds. Corrective pattern from 1.1198 is still in progress and another fall is expected. Below 1.0677 will target key support level at 1.0620 next. Though, decisive break of 1.0897 resistance will suggest reversal and turn near term outlook bullish.

In the bigger picture, the decline from 1.1198 is seen as a corrective move. Such correction is still in progress and retest of 38.2% retracement of 0.9771 to 1.1198 at 1.0653 could be seen. Sustained trading below 1.0653 will target 50% retracement at 1.0485. Meanwhile, break of 1.0897 resistance is needed to be the sign of completion of the correction. Otherwise, risk will stay on the downside in case of recovery.

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USD/JPY - 117.97

Most recent candlesticks pattern : N/A

Trend : Up

Tenkan-Sen level : 117.63

Kijun-Sen level : 117.42

Ichimoku cloud top : 116.84

Ichimoku cloud bottom : 116.62

New strategy :

Stop : -

As the greenback has surged again after brief pullback to 117.21, suggesting the rally from 116.04 (last week's low) is still in progress and may extend gain towards resistance at 118.25, however, a break above there is needed to signal the pullback from 118.66 has ended, bring retest of this level later.

In view of this, we are looking to buy dollar on pullback as the Kijun-Sen (now at 117.43) should limit downside and support at 117.21 should remain intact. Only a firm break below said support at 117.21 would defer and risk correction to 116.80-85 before prospect of another upmove.

Daily Pivots: (S1) 1.0449; (P) 1.0551 (R1) 1.0620; More.....

EUR/USD is staying in range above 1.0351 and intraday bias remains neutral for consolidation. We'd expect upside to be limited by 1.0669 resistance and bring down trend resumption. Decisive break of 1.0351 would pave the way to parity first. However, firm break of 1.0669 will argue that stronger recovery is underway back to 1.0872 resistance instead.

In the bigger picture, break of 1.0461 key support indicates that consolidation from there has completed as a triangle at 1.1298. And, the down trend from 1.6039 (2008 high) is resuming. Current downtrend is now expected to target 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) 1.2262; (P) 1.2324; (R1) 1.2405; More...

Intraday bias in GBP/USD remains neutral for consolidation above 1.2200. Overall outlook is unchanged. That is, corrective rise from 1.1946 has completed at 1.2774. Recovery from 1.2200 should be limited 1.2509 resistance and bring fall resumption. Below 1.2200 will target a test on 1.1946 low. Decisive break there will confirm larger 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) 1.0078; (P) 1.0155; (R1) 1.0255; More.....

USD/CHF is staying in range below 1.0342 and intraday bias remains neutral. Consolidation from there could extend. But still, as long as 1.0019 support holds, near term outlook remains bullish for further rally. Sustained break of 1.0327 key resistance will confirm up trend resumption and target 61.8% projection of 0.9548 to 1.0190 from 1.0019 at 1.0416 and then 100% projection at 1.0661. However, break of 1.0019 should confirm rejection from 1.0327 and turn near term outlook bearish.

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 0.9443/9540 support zone.

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Daily Pivots: (S1) 116.28; (P) 116.73; (R1) 117.44; More...

USD/JPY strengthens mildly today but is staying in range below 118.65. Intraday bias remains neutral as consolidation could extend. In case of another fall, downside of retreat should be contained by 114.76 minor support and bring another rise. Above 118.65 will extend the current rally from 98.97 to test 125.854 high. We'd be cautious on topping at 125.85 on first attempt.

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 corrective 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.

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Daily Pivots: (S1) 1.3390; (P) 1.3448; (R1) 1.3496; More...

Intraday bias in USD/CAD remains on the downside for the moment. Rebound from 1.3080 could have completed at 1.3598 after failing to sustain above 1.3588 resistance. Deeper fall would be seen to retest 1.3080. Price actions from 1.2460 low are still viewed as a corrective move. Decisive break of 1.3080 will indicate that it's completed and turn outlook bearish for retesting 1.2460 low. On the upside, sustained break of 1.3588, though, will target next fibonacci level at 1.3838.

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 possibly finished at 1.3588 too after hitting 50% retracement of 1.4689 to 1.2460 at 1.3575. Break of 1.3005 would likely resume the fall from 1.4689 through 1.2460 to 50% retracement of 0.9406 to 1.4689 at 1.2048. We'd start to look for reversal signal below 1.2460 to complete the correction. In case of another rise, we'll look for topping sign at 61.8% retracement of 1.4689 to 1.2460 at 1.3838.

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Daily Pivots: (S1) 0.7182; (P) 0.7214; (R1) 0.7233; More...

AUD/USD recovered ahead of 0.7158 temporary low and intraday bias stays neutral. More consolidations would be seen. In case of another recovery, upside should be limited by 0.7310 support turned resistance and bring fall resumption. As noted before, the whole corrective pattern from 0.6826 bottom should have finished. Break of 0.7144 support will likely extend the larger down trend through 0.6826.

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 and target 61.8% projection of 0.9504 to 0.6826 from 0.7777 at 0.6122 next. 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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Happy New Year to our readers!

Aussie and Kiwi open the year mildly higher as lifted by China data. The Caixin PMI manufacturing for China rose to 51.9 in December, much better than expectation of being unchanged at 50.9. That's the best reading in three years since January 2013. Caixin noted that "a further rise in production at Chinese manufacturers supported the higher PMI reading in December. Notably, the rate of output growth accelerated to a 71-month high, with a number of panelists commenting on stronger underlying demand and new client wins." And, "data indicated that improved domestic demand was the key driver of new business growth, however, as new export sales were unchanged in December." Nonetheless, released earlier in the week, the official PMI manufacturing dropped to 51.4, down from 51.7 and below expectation of 51.6. Technically, AUD/USD just defended 0.7158 temporary low and more sideway trading would be seen above this level in near term.

Canadian Dollar is also firm today as WTI crude oil attempts to break recent resistance at 54.51. Nonetheless, WTI is losing some momentum after hitting 54.2. Strong rally in oil price was seen last year since November, driven by announcements of production cut by OPEC and non-OPEC producers. OPEC decided to cut its crude production by 1.2 million barrels, effective January, 2017, while non-OPEC producers, including Russia but not the US, would reduce output by around 0.6M bpd. While execution of OPEC/non-OPEC cuts remains highly uncertain, the Paris-based International Energy Agency (IEA) forecasts global oil surplus would start disappear in 1H17. The agency suggested that "OPEC, Russia, and other producers are looking to speed up the process" of rebalancing this year, adding that "the market is likely to move into deficit in the first half of 2017 by an estimated 600K barrels a day" if all the parties comply to the agreement.

Meanwhile, whether the post election strength in Dollar could sustain depends on incoming data as well as Donald Trump's policies. Currently, markets are pricing around 64% chance of another rate hike by Fed by June. FOMC members projected three rate hikes this year as seen in latest projections. However rally in Dollar, yields and stocks lost steam just before end of 2016. The string of data to be released this week will be closely watched, starting from ISM manufacturing index today, ISM services on Tuesday and non-farm payroll on Friday. FOMC minutes to be released tomorrow will also catch much attention.

AUD/USD Daily Outlook

Daily Pivots: (S1) 0.7182; (P) 0.7214; (R1) 0.7233; More...

AUD/USD recovered ahead of 0.7158 temporary low and intraday bias stays neutral. More consolidations would be seen. In case of another recovery, upside should be limited by 0.7310 support turned resistance and bring fall resumption. As noted before, the whole corrective pattern from 0.6826 bottom should have finished. Break of 0.7144 support will likely extend the larger down trend through 0.6826.

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 and target 61.8% projection of 0.9504 to 0.6826 from 0.7777 at 0.6122 next. 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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The British pound finally resumed indicated major downtrend from 1.7192 and broke below previous support at 1.3504 in mid-2016, indicated downside targets at 1.3500 and 1.3000 had been met, however, as cable found good support at 1.1476 and staged a rebound, suggesting initial consolidation above this level would be seen and recovery to 1.2500 and possibly 1.2775-80 cannot be ruled out but reckon upside would be limited to 1.3000 and resistance at 1.3445 should hold, bring another decline later. Below 1.2000 would bring weakness to 1.1700, then retest of 1.1476. Our preferred count remains that the rise from 1.0520 (Feb 1985) to 2.0100 (September 1992) is treated as wave (A), the decline to 1.3682 is labeled as (B) and (C) wave rally has ended at 2.1162 (9 Nov, 2007) which is also the top of larger degree circle wave B. The selloff from there is either a 5-waver with wave 3 ended 1.3504 and wave 4 has ended at 1.7192 or is another A-B-C decline (i.e. (A)-1.3500, (B)-1.7192, followed by a wave C selloff). In either case, bearishness remains for further fall, a break of 1.1476 support would extend weakness to 1.1200, then 1.1000 but reckon downside would be limited to 1.0500 and price should stay well above psychological support at 1.0000.

On the upside, whilst initial upside bias is seen for the rebound from 1.1476 to bring retracement to 1.2500 and then 1.2775-80, reckon upside would be limited to 1.3000 and resistance at 1.3445 should hold, bring another decline. Only above previous support at 1.3836 would abort and suggest a temporary low is formed instead, bring a stronger rebound to 1.4000 and later towards 1.44-45 level but price should falter well below resistance at 1.5018, bring another selloff in late 2017.