Sample Category Title

EUR/USD

Current level - 1.1350

The rebound above 1.1350 is pretty pale, so there is obviously a chance of a dip to 1.1320 and even 1.1280 before renewal of the general upmove towards 1.1570.

USD/JPY

Current level - 108.06

The break through 107.70 clearly states a positive bias, for a rise towards 108.80. Crucial on the downside is 107.60.

GBP/USD

Current level - 1.2677

My outlook is bearish on the intraday frames, for a dip to 1.2600 area.

Daily Pivots: (S1) 1.3092; (P) 1.3143; (R1) 1.3180; More...

Intraday bias in USD/CAD remains on the downside as fall from 1.3564 is in progress. Next target is 1.3052/68 cluster support. On the upside, however, break of 1.3229 resistance will indicate short term bottoming and bring stronger rebound.

In the bigger picture, medium term outlook stays neutral for now even though the case of bearish reversal is building up. Decisive break of 1.3068 cluster support (38.2% retracement of 1.2061 to 1.3664 at 1.3052) will confirm completion of up trend from 1.2061 (2017 low). Further fall should be seen to 61.8% retracement at 1.2673 next. On the upside, sustained break of 61.8% retracement of 1.4689 (2016 high) to 1.2061 at 1.3685, is needed to confirm resumption of up trend from 1.2061 (2017 low). Otherwise, risk will stay on the downside.

Daily Pivots: (S1) 0.6960; (P) 0.6977; (R1) 0.7003; More...

While the corrective rise from 0.6831 could extend higher, upside should be limited by 0.7022 resistance to bring fall resumption. On the downside, below 0.6937 minor support will turn bias to the downside for retesting 0.6831 low first. Break there will resume the decline from 0.7295 to 0.6722 low next. However, firm break of 0.7022 will indicate near term reversal and turn outlook bullish for 0.7205 resistance instead.

In the bigger picture, with 0.7393 key resistance intact, medium term outlook remains bearish. The decline from 0.8135 (2018 high) is seen as resuming long term down trend from 1.1079 (2011 high). Decisive break of 0.6826 (2016 low) will confirm this bearish view and resume the down trend to 0.6008 (2008 low). However, firm break of 0.7393 will argue that fall from 0.8135 has completed. And corrective pattern from 0.6826 has started the third leg, targeting 0.8135 again.

Daily Pivots: (S1) 1.1346; (P) 1.1369; (R1) 1.1390; More......

Intraday bias in EUR/USD remains neutral for consolidation below 1.1412. With 1.1317 minor support intact, another rise remains in favor. On the upside, break of 100% projection of 1.1107 to 1.1347 from 1.1181 at 1.1142 will pave the way to 161.8% projection at 1.1569 next. However, firm break of 1.1317 will be an early sign of completion of rise from 1.1107. Intraday bias will be turned back to the downside for 1.1181 support instead.

In the bigger picture, considering bullish convergence condition in daily and weekly MACD, a medium term bottom should be in place at 1.1107 after hitting 61.8% retracement of 1.0339 (2016 low) to 1.2555 (2018 high) at 1.1186. Further rise should be seen to 38.2% retracement of 1.2555 to 1.1107 at 1.1660. Reactions from there could indicate whether rebound from 1.1107 is a corrective rise or reversing medium term trend.

Daily Pivots: (S1) 1.2664; (P) 1.2664; (R1) 1.2709; More....

Intraday bias in GBP/USD remains neutral at this point. With 1.2642 minor support intact, corrective rebound from 1.2506 could still extend. But upside should be limited by 38.2% retracement of 1.3381 to 1.2506 at 1.2840. On the downside, break of 1.2642 minor support will turn intraday bias back to retest 1.2506 low. However, sustained break of 1.2840 will bring stronger rise to 61.8% retracement at 1.3047 next.

In the bigger picture, down trend from 1.4376 (2018 high) is still in progress. Break of 1.2391 would target a test on 1.1946 long term bottom (2016 low). For now, we don't expect a firm break there yet. Hence, focus will be on bottoming signal as it approaches 1.1946. In any case, medium term outlook will stay bearish as long as 1.3381 resistance holds, in case of strong rebound.

Daily Pivots: (S1) 106.82; (P) 107.12; (R1) 107.45; More...

USD/JPY's recovery from 106.78 extends higher today but stays below 108.80 resistance. Intraday bias remains neutral and near term outlook remains bearish for further decline. On the downside, break of 106.78 minor support will resume from 112.40 to retest 104.69 low. However, firm break of 108.80 will indicate short term bottoming and turn bias to the upside for 110.67 resistance instead.

In the bigger picture, decline from 118.65 (Dec 2016) is still in progress, with the pair staying inside long term falling channel. Break of 104.62 will target 100% projection of 118.65 to 104.62 from 114.54 at 100.51. For now, we'd expect strong support above 98.97 (2016 low) to contain downside to bring rebound.

General Trend:

• Chinese financials outperform as PBoC announces bill swap operation
• China President Xi said to plan to meet Japan PM Abe later today ahead of upcoming G20 (press article from June 12th)

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened flat
• (NZ) New Zealand Jun ANZ Business Confidence: -38.1 v -32.0 prior; Activity Outlook: 8.0 v 8.5 prior
• (NZ) New Zealand 11-month Budget Surplus NZ$6.96B, NZ$2.5B more than forecasted
• (NZ) New Zealand SSC releases investigation into Treasury Secretary Makhlouf: Makhlouf failed to take responsibility for budget breach
• GBT.AU Confirms Bravura raised offer of A$3.00/shr (prior A$2.72/shr); does not intend to revise offer beyond A$3.00/shr
• BUB.AU JV enters channel partnership with Kidswant China

Japan

• Nikkei 225 opened +0.3%
• (JP) Bank of Japan (BOJ) Dep Gov Wakatabe: Japan economy is no longer in deflation
• 6740.JP Apple reportedly to infuse ¥10.7B/$100M into Japan Display and increase their orders from the co - Japanese press
• (JP) Japan May Dept. Store, Supermarket Sales: -0.5% v 0.2%e
• (JP) Bank of Japan Q1 Flow of Funds Report: Japan household total assets ¥1,835T, +0.3% y/y
• 7201.JP CEO Saikawa re-appointed by shareholders with 78% of vote - AGM
• (JP) Japan MoF sells ¥2.0T v ¥2.0T indicated in 0.10% 2-year JGBs, avg yield: -0.216% v -0.169% prior, bid to cover 4.39x v 5.44x prior

Korea

• Kospi opened -0.1%
• 003490.KR Analysts note that Delta's KRW100B investment could slowdown restructuring by giving more power to the Cho family owners against activist funds pushing for change - Nikkei
• (KR) South Korea President Moon: US has proposed working level talks with North Korea
• (KR) North Korea KCNA: Reiterates end of year deadline on talks with the US; talks with US are not South Korea's issue
• (KR) South Korea May companies' bond and share offerings -29.5% y/y
• (KR) Pres Trump: no plan to meet with North Korea's Kim while in Asia for the G20 meeting, planning another method of communication

China/Hong Kong

• Hang Seng opened +0.5%; Shanghai Composite opened +0.2%
• (CN) China President Xi said to have requested a delay on any new China tariffs by the US as a condition to meeting with President Trump on the sidelines of G20 on Saturday - SCMP
• (CN) CHINA MAY INDUSTRIAL PROFITS Y/Y: +1.1% V -3.7% PRIOR; YTD Y/Y: -2.3% V -3.4% PRIOR
• (CN) CHINA PBOC TO CONDUCT CNY2.5B IN 1-YEAR CENTRAL BANK BILL SWAP (CBS)
• (CN) China PBoC Open Market Operation (OMO): Skips for the 4th consecutive session
• (CN) China PBOC sets yuan reference rate: 6.8778 v 6.8701 prior
• (CN) China expected to increase incentives to increase pork supplies - Chinese Press
• (CN) China Pres Xi and US Pres Trump to meet at 11:30 local time (02:30 GMT) on Saturday, in addition to 8 other meetings with world leaders
• (CN) China State Council cut the real financing interest rates for small and micro firms - Chinese press
• (CN) China Jun Swift Global Payments CNY: 1.95% v 1.88% prior
• (CN) Head of China auditing authority finds that China funding for small firms not improved despite policies to encourage lending - financial press
• (CN) China PBoC reportedly asked banks not to lower mortgage rates any further

Other Asia

• (SG) Singapore Central Bank (MAS) Gov Menon: Sees CPI near mid-point of 1-2%;GDP growth likely to be weaker than 1.5-2.5% seen due to US/China trade war impact on tech sector
• (IN) US Pres Trump: Look forward to speaking to India PM Modi; India has had high tariffs against US for years and has just recently increased the tariffs even further. This is unacceptable and tariffs must be withdrawn

North America

• (US) President Trump: it is possible we can reach the deal at G20 with China President Xi and avoid additional tariffs - Fox Business interview
• KBH Reports Q2 $0.51 v $0.39e, Rev $1.02B v $935Me
• BA Confirms and agrees with the FAA's decision and request, and is working on the required software to address the FAA's request – filing
• RAD Reports Q1 -$0.14 v +$0.02 y/y, Rev $5.37B v $5.39B y/y

Europe

• (IR) China said to be buying crude oil from Iran despite sanctions – press
• (UK) BOE Gov Carney: BoE forecasts do no include No-deal Brexit risk which is priced into market interest rate forecasts - Treasury Select Committee

Levels as of 1:20 ET

• Nikkei 225, +0.9%, ASX 200 +0.2%, Hang Seng +1.2%; Shanghai Composite +1%; Kospi +0.8%
• Equity Futures: S&P500 +0.3%; Nasdaq100 +0.3%, Dax +0.4%; FTSE100 +0.1%
• EUR 1.1377-1.1355 ; JPY 108.13-107.64 ; AUD 0.7000-0.6983 ;NZD 0.6688-0.6673
• Gold -0.5% at $1,408/oz; Crude Oil -0.5% at $59.08/brl; Copper +0.3% at $2.721/lb

Market movers today

In the euro area, we get a first hint of where inflation is headed in June with the German and Spanish HICP figures out already today. It will be interesting to see if they point to the rise in core inflation we expect to see in tomorrow's euro area figures. The EC's economic confidence indicator for June will also be on the agenda, providing the last piece to the puzzle of how consumer and business sentiment has fared in Q2.

On an otherwise light day on the data front, markets will continue to look out for clues ahead of tomorrow's G20 meeting in Japan. Tensions are high ahead of the meeting, with Trump warning of additional tariffs if there is lack of progress after G20, while it was also suggested that the US and China have agreed on a tentative truce, according to scmp .

Norwegian retail sales figures for May and Swedish trade balance figures are due out.

Selected market news

Since the start of the week, global inflation expectations (measured by the 5y5y inflation swap) have declined gradually. Global central banks are now facing a situation where they need to deliver. In the case of the euro area, inflation expectations have gradually erased around half of the jump we saw last week after the Sintra conference. An ECB sources story yesterday suggested that the ECB is looking into the technical details of a potential restart of QE. The question is what, how and when the ECB would announce new policy measures and if this could bring growth and inflation higher. The global cyclical momentum will be conditioned on the result of the ongoing trade war (where the Trump-Xi meeting this weekend is focal) and the size of the stimuli of global central banks, such as the Fed and ECB. As we discussed in Danske Daily yesterday, some FOMC members suggested a 50bp cut would be overdone, which took its toll on markets yesterday. For the Fed, market pricing currently points to -72bp lower central bank pricing by the end of the year, while EONIA pricing (ECB) is -15bp lower by year-end.

The weekly US oil report showed a drop in the stock piles, which led to oil touching a four-week high. However, it fell back slightly after US President Trump warned of additional tariffs if there is lack of progress after this weekend's expected Trump-Xi meeting at the G20 summit. According to the White House, the Trump-Xi meeting will take place on Saturday at 11:30 local time (3:30 CEST). Trump is also set to meet Russia's Putin (Friday at 14:00 local time~6:00 CEST).

The Norwegian LFS-unemployment rate fell to 3.2 % in April, which was stronger than expected, but the details paint a broadly unchanged employment picture than the headline number suggests. The drop in the unemployment rate masks that employment was more or less unchanged, which leads us to conclude that the drop is more noise than a new trend. That said, we favour the less volatile NAV unemployment figure to gauge the labour market (which we expect to come in at 2.2%).

The AUD/USD bullish price action will soon run into resistance trend lines (red) and the previous top (orange box), which is a confluence of resistance where price is expected to bounce. The bearish bounce could turn into a larger bearish reversal and restart the larger downtrend. The targets are indicated by the Fibonacci levels of wave 5 vs 1+3 but price needs to break the previous bottoms first.

The AUD/USD seems to be completing a bullish wave 5 (orange) pattern within a larger bullish ABC (green) zigzag pattern. If that is true, price should show a bearish bounce soon around the 50% Fibonacci retracement level. The confirmation of a bearish reversal takes place if price is able to break below the support trend line (blue).

Short term Elliott Wave view on GBPUSD suggests the rally from June 18 low (1.2505) unfolded as an impulse Elliott Wave structure. Up from 1.2505, wave ((i)) ended at 1.257 and wave ((ii)) pullback ended at 1.254. Pair then rallied higher again in wave ((iii)) towards 1.2727, wave ((iv)) pullback ended at 1.2641, and wave ((v)) ended at 1.2784. The 5 waves move higher ended wave A of higher degree. This suggests that the rally from June 18 low is unfolding as a zigzag in a higher degree. A zigzag has an ABC label and it is a 5-3-5 structure where wave A and C subdivide in 5 waves.

We have an impulsive 5 waves move from June 18 low which ended wave A of this zigzag. Wave B pullback is now unfolding as a zigzag Elliott Wave structure where wave ((a)) ended at 1.2661. Expect pair to bounce in wave ((b)) then do another leg lower in wave ((c)) to complete wave B correction. Afterwards, pair should resume the rally higher in wave C. We don’t like selling the pair. As far as pivot at 1.2505 stays intact, expect dips to find support in 3, 7, or 11 swing for further upside.

GBPUSD 1 Hour Elliott Wave Chart