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Daily Pivots: (S1) 1.0639; (P) 1.0669; (R1) 1.0724; More...

Intraday bias in EUR/USD remains neutral at this point, and risk stays on the downside as long as 1.0803 resistance holds. Below 1.0610 will resume the corrective fall from 1.1032 and 38.2% retracement of 0.9534 to 1.1032 at 1.0463. Strong support should be seen around there to bring rebound, at least on first attempt.

In the bigger picture, the rally from 0.9534 low (2022 low) is a medium term up trend rather than a correction. Further rise is in favor to 61.8% retracement of 1.2348 (2021 high) to 0.9534 at 1.1273 next. This will remain the favored case as long as 1.0482 support holds.

Daily Pivots: (S1) 1.1955; (P) 1.2002; (R1) 1.2089; More...

Intraday bias in GBP/USD remains neutral for the moment. Risk stays on the downside as long as 1.2269 resistance holds. Break of 1.1914 will resume the fall from 1.2446, as the third leg of the corrective pattern from 1.2445, to 1.1840 support and possibly below.

In the bigger picture, rise from 1.0351 medium term bottom is at least correcting whole down trend from 1.4248 (2021 high). Further rise is expected as long as 1.1644 resistance turned support holds. Next target is 61.8% retracement of 1.4248 to 1.0351 at 1.2759. Sustained break there will pave the way back to 1.4248.

Daily Pivots: (S1) 0.9210; (P) 0.9271; (R1) 0.9302; More...

Intraday bias in USD/CHF remains neutral for the moment. On the upside, break of 0.9331 will resume the rebound from 0.9058 to 38.2% retracement of 1.0146 to 0.9058 at 0.9474. However, break of 0.9135 will indicate that the rebound has completed and bring retest of 0.9058 low.

In the bigger picture, decline from 1.0146 is seen as part of a long term sideway pattern. As long as 38.2% retracement of 1.0146 to 0.9058 at 0.9474 holds, another fall is in favor through 0.9058. However, sustained trading above 0.9474 will indicate that the medium term trend has reversed, and open up further rally to 1.0146 again.

Daily Pivots: (S1) 133.69; (P) 134.40; (R1) 134.85; More...

Intraday bias in USD/JPY remains neutral for the moment. On the upside, break of 135.09 will resume the rise from 127.20 to 38.2% retracement of 151.93 to 127.20 at 136.64. Strong resistance could be seen there to complete the corrective rebound. On the downside, break of 132.89 will bring deeper fall to 129.79 support.

In the bigger picture, prior break of 55 week EMA (now at 131.47) raises the chance of medium term bearish reversal, but that's not confirmed yet. Strong rebound from current level, followed by sustained break of 38.2% retracement of 151.93 to 127.20 at 136.64 will argue that price actions from 151.93 is merely a corrective pattern. However, rejection by 136.64 will solidify medium term bearishness for 61.8% retracement of 102.58 to 151.93 at 121.43 and 38.2% retracement of 75.56 to 151.93 at 122.75.

Australian Dollar is leading other commodity currencies higher, in otherwise quiet markets today. US and Canada will be on holiday while European calendar is near empty. Trading should remain relatively subdued. RBNZ rate hike is a major focus this week while PMIs will also catch much attention. Yet, the key is whether risk markets could break out of consolidations and resume near term rally. Such development could dictate the movements in the currency markets, in particular Dollar.

Technically, GBP/CAD is worth a note. So far, price actions from 1.6075 are more likely a consolidation pattern. That is, falls from 1.6690 and that from 1.6846, are not completed that. Break of 1.6075 will target 100% projection of 1.6846 to 1.6099 from 1.6690 at 1.5943. However, firm break of 1.6296 resistance will argue that whole three wave decline from 1.6846 has finished and bring stronger rise back to 1.6690. The next move could depend much on whether Canadian CPI (Tue) would agree to BoC's pause.

In Asia, Nikkei rose 0.07%. Hong Kong HSI is up 1.15%. China Shanghai SSE is up 1.92%. Singapore Strait Times is down -0.39%. Japan 10-year JGB yield is up 0.0030 at 0.506.

USD/CNH extending rebound towards 6.9559 fibonacci level

Chinese Yuan weakened notably last week as the dispute with US over "spy balloons" continued. The meeting between US Secretary of State Antony Blinken and China's top diplomat Wang Yi in Munich yielded no results.

In a separate statement, China warned "If the U.S. insists on taking advantage of the (spy balloon) issue, escalating the hype, and expanding the situation, China will follow through to the end, and the U.S. will bear all the consequences."

In an interview with NBC, Blinken said "there was no apology" from China. "I told him quite simply that that was unacceptable and can never happen again," he said.

USD/CNH's down leg from 7.3745 should have completed at 6.6971. Further rebound should be seen to 38.2% retracement of 7.3745 to 6.6971 at 6.9559. Reaction from there would reveal whether USD/CNH is heading for another down leg through 6.6971, or stronger rise to 61.8% retracement at 7.1157.

A look at AUD/NZD, NZD/USD ahead of this week's RBNZ

New Zealand Dollar is trading with a soft tone in Asian session today. While a rate hike is expected from RBNZ this week, there are chatters of the possibility of smaller hike, or even a pause, in response to the damage done by cyclone Gabrielle. There are also some speculations of a slight dovish twist which might signal a lower terminal rate. But traders will still need to wait for RBNZ Governor Adrian Orr's statement before making adjustment on their bets.

For now, AUD/NZD is extending the rally from 1.0469 despite loss of upside momentum. Further rise is expected as long as 1.0961 support holds. Sustained trading above 61.8% projection of 1.0469 to 1.0935 from 1.0735 at 1.1023 could prompt upside re-acceleration to 100% projection at 1.1201.

As for NZD/USD, it's still extending the fall from 0.6537, which is seen as the third leg of the consolidation pattern from 0.6512. Deeper decline is expected as long as 0.6308 minor resistance holds, for 38.2% retracement of 0.5511 to 0.6512 at 0.6130. But strong support should be seen there to bring rebound. However, sustained break of 0.6130 will raise the change of near term reversal and target 61.8% retracement at 0.5893.

RBNZ to hike 50bps; PMIs in focus

RBNZ is expected to slow the pace of tightening this week, and raise the OCR by 50bps to 4.75%. With inflation remaining strong, RBNZ should maintain the stance that more rate hikes are underway. There are some expectations that OCR would rise further to 5.25% this year before peaking. In other central bank activities, RBA and Fed will publish monetary policy meeting minutes.

On the data front, flash PMIs would be the major focuses of the week, along with Germany ZEW and Ifo, Canada CPI and retail sales, as well as US PCE inflation. Here are some highlights for the week:

• Monday: UK Rightmove house price, Eurozone consumer confidence.
• Tuesday: New Zealand PPI; Australia PMIs, RBA minutes; Japan PMI manufacturing; Swiss Trade balance; Eurozone PMIs; Germany ZEW; UK PMIs; Canada CPI, retail sales; US PMIs, existing homes sales.
• Wednesday: New Zealand trade balance; Japan corporate services prices; Australia wage price index, construction work done; RBNZ rate decision; Germany CPI final, Ifo business climate; Swiss Credit Suisse economic expectations; Canada house price index; FOMC minutes.
• Thursday: Australia private capital expenditure; Eurozone CPI final; US GDP revision, jobless claims.
• Friday: Japan CPI; Germany GDP final, Gfk consumer climate; UK Gfk consumer confidence; US personal income and spending with PCE inflation, new home sales.

AUD/USD Daily Report

Daily Pivots: (S1) 0.6833; (P) 0.6858; (R1) 0.6905; More...

Intraday bias in AUD is turned neutral as recovery from 1.6810 extends. Risk will stay mildly on the downside as long as 0.7028 resistance holds. Below 0.6180 will resume the corrective fall from 0.7156, and target 100% projection of 0.6854 to 0.7028 from 0.6854 at 0.6736, which is close to 0.6721 key structural support. Strong support is expected there to bring rebound.

In the bigger picture, corrective decline from 0.8006 (2021 high) should have completed with three waves down to 0.6169 (2022 low). Further rally should be seen to 61.8% retracement of 0.8006 to 0.6169 at 0.7304. Sustained break there will pave the way to retest 0.8006. This will now remain the favored case as long as 0.6721 support holds.

Economic Indicators Update

Daily Pivots: (S1) 0.6833; (P) 0.6858; (R1) 0.6905; More...

Intraday bias in AUD is turned neutral as recovery from 1.6810 extends. Risk will stay mildly on the downside as long as 0.7028 resistance holds. Below 0.6180 will resume the corrective fall from 0.7156, and target 100% projection of 0.6854 to 0.7028 from 0.6854 at 0.6736, which is close to 0.6721 key structural support. Strong support is expected there to bring rebound.

In the bigger picture, corrective decline from 0.8006 (2021 high) should have completed with three waves down to 0.6169 (2022 low). Further rally should be seen to 61.8% retracement of 0.8006 to 0.6169 at 0.7304. Sustained break there will pave the way to retest 0.8006. This will now remain the favored case as long as 0.6721 support holds.

Daily Pivots: (S1) 1..3437; (P) 1.3487; (R1) 1.3525; More....

Intraday bias in USD/CAD remains on the upside for the moment. Corrective pattern from 1.3976 should have completed at 1.3261. Further rise should be seen to 1.3684 resistance. Firm break there will bring retest 1.3976 high. Nevertheless, break of 1.3421 minor support will dampen this bullish case and turn intraday bias neutral again.

In the bigger picture, as long as 1.3222 cluster support (38.2% retracement of 1.2005 to 1.3976 at 1.3223) holds, larger up trend from 1.2005 (2021 low) is still expected to resume through 1.3976 high at a later stage. However, firm break of 1.3222/3 will indicate that the trend might have reversed. Deeper fall would be seen to next cluster support at 1.2726 (61.8% retracement at 1.2758).

Daily Pivots: (S1) 160.81; (P) 161.23; (R1) 161.96; More...

Intraday bias in GBP/JPY remains neutral at this point. On the upside, decisive break of 161.80 will argue that whole correction from 172.11 has completed at 55.33. Further rally should be seen back to 169.26/172.11 resistance zone. On the downside, break of 155.33 low will resume the fall from 172.11 to 153.70 fibonacci level next.

In the bigger picture, as long as 163.02 support turned resistance holds, decline from 172.11 medium term top is expected to continue to 38.2% retracement of 123.94 to 172.11 at 153.70. Sustained break there will raise the change of trend reversal and target 61.8% retracement at 142.34. Nevertheless, break of 163.02 support turned resistance will argue that the decline has completed, and retain medium term bullishness.

Daily Pivots: (S1) 143.04; (P) 143.36; (R1) 143.79; More....

Intraday bias in EUR/JPY stays on the upside despite some loss of momentum. Corrective fall from 148.38 should have completed at 137.37. Further rally should be seen to 146.71 resistance. On the downside, though, below 142.33 minor support will dampen this bullish view, and turn intraday bias neutral again.

In the bigger picture, as long as 55 week EMA (now at 139.03) holds, larger up trend from 114.42 (2020 low) is still in progress for 149.76 long term resistance. However, firm break of 55 week EMA will bring deeper fall to 38.2% retracement of 114.42 to 148.38 at 135.40. Sustained break there will raise the chance of trend reversal, and target 61.8% retracement at 127.39.

Daily Pivots: (S1) 0.8860; (P) 0.8895; (R1) 0.8916; More...

Intraday bias in EUR/GBP remains neutral for the moment. Further rally is expected as long as 0.8802 support holds. Above 0.8927 will target 0.8977 resistance. Firm break there will confirm resumption of whole rally from 0.8545. However, break of 0.8802 will now be a sign of reversal and turn bias back to 0.8720 support instead.

In the bigger picture, the notable support from 55 day EMA (now at 0.8804) retains near term bullishness. Break of 0.8977 should target 0.9267 (2022 high) and possibly above, to resume whole up trend from 0.8201 (2022 low). However, sustained trading below 55 day EMA will set the stage for 0.8545 and below.