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The British pound is softening towards key weekly support against the US dollar ahead of the release of GDP data from the UK economy this morning. A worse than expected GDP number could see the GBPUSD pair break the 1.2660 support level and test towards at least the 1.2610 area. If bulls can hold support the GBPUSD pair could start to edge back towards the 1.2710 resistance level.

The GBPUSD pair is only bullish while trading above the 1.2710 level, key resistance is found at the 1.2775 and 1.2810 levels.

If the GBPUSD pair trades below the 1.2660 level, key support is found at the 1.2610 and 1.2550 levels.

The euro currency remains trapped in a tight range against the US dollar as traders scale back positioning ahead of the start of the G20 Summit. The four-hour time frame is showing that the EURUSD pair is currently trading within a neutral pattern. The pattern is highlighting that a twenty-five pip breakout move is likely once the EURUSD pair picks a directional bias.

If the EURUSD pair trades above the 1.1380 level, key technical resistance is found at the 1.1410 and 1.1440 levels.

If the EURUSD pair trades below the 1.1347 level, key support is found at the 1.1320 and 1.1290 levels.

The Japanese yen rose slightly against the USD after the country released its industrial production data. In May, industrial production in the country rose by 2.3%, which was higher than the consensus estimate of 0.7%. In April, the production had risen by just 0.6%. Meanwhile, the country’s unemployment rate remained unchanged at 2.4%. In Tokyo, the biggest city in the country, the CPI rose by an annual rate of 1.1%, which was lower than the expected 1.3%. The core CPI rose by 0.9%, which was lower than the expected 1.0%. The BOJ released its summary of options, which showed that the members had discussed more easing measures.

Asian stocks and global futures were relatively unmoved in the morning session. This is as traders waited for the outcome of the meeting between Donald Trump and Xi Jinping over the weekend at Osaka, Japan. In a report by Wall Street Journal yesterday, the Chinese had set preconditions regarding tariff relief and the reversal of the Huawei ban. The US said that Trump had no preconditions for the talks. Many analysts expect the talks to end without a concrete deal but with a commitment to continue talking.

While most of the focus among investors will be at the Osaka, investors will also receive some key market data. The UK will release the final reading of the first quarter GDP. The GDP is expected to have grown by an annualized rate of 1.8%. On a QoQ basis, the economy is expected to have grown at 0.5%. In the European Union, the CPI is expected to have remained unchanged at 1.2%. In the United States, in May, personal income is expected to have grown by 0.3% while personal spending is expected to have grown by 0.3%. In Canada, the final reading of the Q1 GDP is expected to show that the economy grew by 1.5%.

EUR/USD

The EUR/USD pair was unchanged and is currently trading at the 1.1365 level. On the hourly chart, this price is slightly above the important support of 1.1343 and slightly lower than the weekly high of 1.1412. On the chart, the price is along the short and medium-term moving averages. With the pair in this consolidation mode, it will likely break-out in either direction.

USD/JPY

The USD/JPY pair dropped slightly after important data from Japan. The pair is now trading at the 107.65 level, which is lower than yesterday’s high of 108.15. On the hourly chart below, this price is between the 38.2% and 50% Fibonacci Retracement level and between the middle and lower lines of the Bollinger Bands. The RSI has dropped from the overbought level of 75 to the current 43. The pair will likely move lower to test the important support of 107.50.

USD/CAD

The USD/CAD continued to decline ahead of important GDP data. The pair is now trading at 1.3085, which is the lowest level since January this year. On the four-hour chart, this price is below the 14-day and 28-day moving averages. The RSI has remained along the oversold level of 30 while the momentum indicator is below the 100 level. The pair will likely continue moving lower to test the important support of 1.3050.

Pivot (invalidation): 59.50

Our preference Short positions below 59.50 with targets at 58.60 & 58.20 in extension.

Alternative scenario Above 59.50 look for further upside with 59.90 & 60.30 as targets.

Comment The RSI is mixed to bearish.

Pivot (invalidation): 15.2100

Our preference Long positions above 15.2100 with targets at 15.3500 & 15.4600 in extension.

Alternative scenario Below 15.2100 look for further downside with 15.1400 & 15.0700 as targets.

Comment The RSI is bullish and calls for further advance.

Pivot (invalidation): 1409.50

Our preference Long positions above 1409.50 with targets at 1425.00 & 1439.00 in extension.

Alternative scenario Below 1409.50 look for further downside with 1398.50 & 1390.00 as targets.

Comment The RSI is bullish and calls for further upside.

Pivot (invalidation): 2912.00

Our preference Long positions above 2912.00 with targets at 2935.00 & 2948.00 in extension.

Alternative scenario Below 2912.00 look for further downside with 2895.00 & 2875.00 as targets.

Comment The RSI calls for a new upleg.

Pivot (invalidation): 12230.00

Our preference Long positions above 12230.00 with targets at 12370.00 & 12440.00 in extension.

Alternative scenario Below 12230.00 look for further downside with 12160.00 & 12110.00 as targets.

Comment The RSI lacks momentum.

Pivot (invalidation): 5.7870

Our preference Short positions below 5.7870 with targets at 5.7610 & 5.7480 in extension.

Alternative scenario Above 5.7870 look for further upside with 5.8000 & 5.8130 as targets.

Comment A break below 5.7610 would trigger a drop towards 5.7480

Pivot (invalidation): 0.6995

Our preference Long positions above 0.6995 with targets at 0.7030 & 0.7045 in extension.

Alternative scenario Below 0.6995 look for further downside with 0.6985 & 0.6970 as targets.

Comment The RSI lacks downward momentum.