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Daily Pivots: (S1) 0.9752; (P) 0.9768; (R1) 0.9796; More...

USD/CHF's recovery from 0.9695 extends higher today but stays below 0.9854 support turned resistance. Intraday bias stays neutral and outlook remains bearish for another decline. On the downside, break of 0.9695 will resume the fall from 1.0237 to 0.9587 fibonacci level. Nevertheless, break of 0.9854 will indicate short term bottoming and target 1.0014 resistance instead.

In the bigger picture, current development confirms that up trend from 0.9186 (2018 low) has completed at 1.0237 already. With 38.2% retracement of 0.9186 to 1.0237 at 0.9836 taken out, deeper fall should be seen to 61.8% retracement at 0.9587 and below. We'd pay attention to bottoming signal below 0.9587.

Asian markets trade broadly higher on increasing "optimism" regarding US-China trade war. Some form of agreement is anticipated out of the Trump-Xi summit on Saturday to avoid further tariff escalation. Yen and Swiss France are trading as the weakest one for more, followed by Euro. Australian and New Zealand Dollar are the strongest one, followed by Dollar. Canadian Dollar jumped overnight following surge in oil prices. There is prospect of more strengthen in Loonie ahead.

Technically, there is no change in the outlook in Dollar yet, despite current recovery. The greenback might at least need to wait until tomorrow's PCE inflation before taking the next move. 1.1317 support in EUR/USD, 1.2642 support in GBP/USD, 0.9854 in USD/CHF and 108.80 resistance in USD/JPY have to be taken out to confirm that Dollar is reversing. Otherwise, risks will stay on the downside for the greenback.

In Asia, currently, Nikkei is up 0.93%. Hong Kong HSI is up 1.00%. China Shanghai SSE is up 0.76%. Singapore Strait Times is up 0.63%. Japan 10-year JGB yield is up 0.0055 at -0.141. Overnight, DOW dropped -0.04%. S&P 500 dropped -0.12%. NASDAQ rose 0.32%. 10-year yield rose 0.0055 to 2.49, well above 2.0 handle

Trump-Xi meeting confirmed at 0230GMT on Sat

The Trump-Xi meeting on sideline of G20 in Japan is confirmed to be held at 0230 GMT on Saturday. The South China Morning Post in Hong Kong reported that conditions on stopping further escalation in tariffs are already agreed upon. And the agreement will be laid out after the meeting in form of coordinated press releases, rather than joint statement.

Public comments regarding 25% tariffs on USD 300B of Chinese imports, essentially all untaxed, would end on July 2. Trump could formally make a decision to start imposing the tariffs very soon, should trade negotiations collapse once again. Trump also made himself very clear yesterday and said "I would do additional tariffs, very substantial additional tariffs, if that doesn't work, if we don't make a deal."

Fed Daly uncomfortable on inflation direction, but needs more data to call for rate cut

San Francisco Fed President Mary Daly said yesterday that she is uncomfortable with current direction of inflation. And, "headwinds, slowing growth could strengthen argument for rate cut." And that could help "bring the economy back to potential growth, support return of inflation to target"

However, she emphasized that it's a "challenging time" and "risk management is on my mind". wants to "see another US jobs report to see if last report was noise or a more meaningful sign." Also, the next several weeks will be key to showing how much of an argument there is for a rate cut.

BoJ Wakatabe: Monetary policy won't be normalized until economy and prices are back to normal

BoJ Deputy Governor Masazumi Wakatabe said told business leaders in Aomori that "the ultimate objective of monetary policy is the sound development of the economy. In other words, monetary policy won't be normalized until the economy and prices are in a normal state." And he pledged "the BoJ will guide policy to ensure Japan never falls into deflation again."

Meanwhile, Wakatabe urged " increased attention to heightening risks to the BoJ's scenario". In particular, prolonged US-China trade tensions would not just hit the global economy through higher tariffs. Sentiments would be dampened and businesses could be discouraged from investing.

Released from Japan, retail sales rose 1.2% yoy in May, matched expectations.

New Zealand ANZ business confidence dropped to -38.1

New Zealand ANZ Business Confidence dropped to -38.1 in June, down from -32.0. Agriculture scored worse at -54.5, followed by construction at -42.3 and manufacturing at -41.4. Activity Outlook also dropped from 8.5 to 8.0.

ANZ noted: "The outlook for the economy is murky. As things stand, there is no reason for the economy to fall into a deep hole. Commodity prices are good, interest rates are at record lows, and the labour market is tight. But the economy is facing credit and cost headwinds and the global outlook is deteriorating. On the latter, for all that our commodity prices have been resilient, the risks are looking decidedly one-sided. Upside risks to growth appear few and far between and with the inflation outlook not consistent with the target midpoint we expect two more OCR cuts this year."

Looking ahead

Eurozone will release confidence indicators today, followed by Germany CPI flash. US will release Q1 GDP final, jobless claims and pending home sales.

USD/CHF Daily Outlook

Daily Pivots: (S1) 0.9752; (P) 0.9768; (R1) 0.9796; More...

USD/CHF's recovery from 0.9695 extends higher today but stays below 0.9854 support turned resistance. Intraday bias stays neutral and outlook remains bearish for another decline. On the downside, break of 0.9695 will resume the fall from 1.0237 to 0.9587 fibonacci level. Nevertheless, break of 0.9854 will indicate short term bottoming and target 1.0014 resistance instead.

In the bigger picture, current development confirms that up trend from 0.9186 (2018 low) has completed at 1.0237 already. With 38.2% retracement of 0.9186 to 1.0237 at 0.9836 taken out, deeper fall should be seen to 61.8% retracement at 0.9587 and below. We'd pay attention to bottoming signal below 0.9587.

Economic Indicators Update

For the 24 hours to 23:00 GMT, the EUR marginally rose against the USD and closed at 1.1373.

On the data front, Germany's GfK consumer confidence index dropped to a level of 9.8 in July, compared to a reading of 10.1 in the previous month. Market participants had anticipated the index to ease to 10.0.

In the US, data showed that advance goods trade deficit widened to $74.5 billion in May, surpassing market expectations of a deficit of $71.8 billion. The nation had recorded a deficit of $72.1 billion in the prior month. Moreover, the US preliminary durable goods orders declined 1.3% on a monthly basis in May, compared to a fall of 2.1% in the previous month. Markets had envisaged durable goods orders register a slid of 0.3%. Meanwhile, the nation's MBA mortgage applications rose to its highest level since September 2016 by 1.3% in the week ended 21 June 2019, following a decrease of 3.4% in the previous week.

In the Asian session, at GMT0300, the pair is trading at 1.1363, with the EUR trading 0.09% lower against the USD from yesterday's close.

The pair is expected to find support at 1.1344, and a fall through could take it to the next support level of 1.1324. The pair is expected to find its first resistance at 1.1387, and a rise through could take it to the next resistance level of 1.1410.

Moving ahead, traders would await the Euro-zone's economic confidence, industrial confidence and consumer confidence, all for June along with Germany's consumer price index for June, slated to release in a few hours. Later in the day, the US annualised gross domestic product for the first quarter, pending home sales for May followed by initial jobless claims, will pique significant amount of investors' attention.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the GBP slightly rose against the USD and closed at 1.2694.

On the macro front, UK's BBA mortgage approvals eased to a level of 42.4K in May, more than market expectations for a drop to a level of 41.0K. In the prior month, BBA mortgage approvals had registered a revised level of 42.9K.

The Bank of England's Governor, Mark Carney, stated that he would be in support of stimulus package for recovering the economy in case of no-deal Brexit in October. Moreover, the central bank would monitor the impacts on demand, supply and on the exchange rate prior to their response over no-deal Brexit.

In the Asian session, at GMT0300, the pair is trading at 1.2686, with the GBP trading 0.06% lower against the USD from yesterday's close.

The pair is expected to find support at 1.2664, and a fall through could take it to the next support level of 1.2641. The pair is expected to find its first resistance at 1.2708, and a rise through could take it to the next resistance level of 1.2729.

Going forward, trades would closely monitor UK's Nationwide house price index and Lloyds business barometer, both for June, set to release overnight.

The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the USD rose 0.53% against the JPY and closed at 107.74.

In the Asian session, at GMT0300, the pair is trading at 107.99, with the USD trading 0.23% higher against the JPY from yesterday’s close.

Overnight data indicated that Japan’s retail trade rose 1.2% on a yearly basis in May, in line with market expectations and rising at its quickest pace in 6-months. In the prior month, retail trade had recoded an advance of 0.5%. Meanwhile, the nation’s large retailer’s sales unexpectedly eased 0.5% on a monthly basis in May, defying market consensus for a gain of 0.2%. In the prior month, large retailer’s sales had recorded a drop of 1.8%.

The pair is expected to find support at 107.55, and a fall through could take it to the next support level of 107.12. The pair is expected to find its first resistance at 108.23, and a rise through could take it to the next resistance level of 108.48.

Looking forward, traders would keep an eye on Japan’s jobless rate and industrial production for May, scheduled to release overnight.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD rose 0.27% against the CHF and closed at 0.9775.

In the Asian session, at GMT0300, the pair is trading at 0.9794, with the USD trading 0.19% higher against the CHF from yesterday’s close.

The pair is expected to find support at 0.9760, and a fall through could take it to the next support level of 0.9726. The pair is expected to find its first resistance at 0.9812, and a rise through could take it to the next resistance level of 0.9830.

With no macroeconomic releases in Switzerland today, investors would look forward to global macroeconomic releases for further direction.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.39% against the CAD and closed at 1.3124.

In the Asian session, at GMT0300, the pair is trading at 1.3127, with the USD trading marginally higher against the CAD from yesterday’s close.

The pair is expected to find support at 1.3093, and a fall through could take it to the next support level of 1.3060. The pair is expected to find its first resistance at 1.3174, and a rise through could take it to the next resistance level of 1.3222.

Trading trend in the Loonie today is expected to be determined by Canada’s CFIB business barometer for June, scheduled to release later in the day.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the AUD rose 0.36% against the USD and closed at 0.6986.

LME Copper prices rose 0.3% or $20.5/MT to $6006.0/MT. Aluminium prices rose 1.5% or $26.5/MT to $1803.0/MT.

In the Asian session, at GMT0300, the pair is trading at 0.6995, with the AUD trading 0.13% higher against the USD from yesterday’s close.

Overnight data showed that China’s industrial profits advanced 1.1% on an annual basis in May, following a decline of 3.7% in the prior month.

The pair is expected to find support at 0.6970, and a fall through could take it to the next support level of 0.6944. The pair is expected to find its first resistance at 0.7010, and a rise through could take it to the next resistance level of 0.7024.

Moving forward, investors would await Australia’s private sector credit for May, slated to release overnight.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, Gold declined 0.84% against the USD and closed at USD1411.60 per ounce.

In the Asian session, at GMT0300, the pair is trading at 1411.70, with gold trading a tad higher against the USD from yesterday’s close.

The pair is expected to find support at 1404.83, and a fall through could take it to the next support level of 1397.97. The pair is expected to find its first resistance at 1418.73, and a rise through could take it to the next resistance level of 1425.77.

The yellow metal is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

For the 24 hours to 23:00 GMT, Silver declined 0.62% against the USD and closed at USD15.32 per ounce, tracking losses in gold prices.

In the Asian session, at GMT0300, the pair is trading at 15.32, with silver trading marginally higher against the USD from yesterday’s close.

The pair is expected to find support at 15.24, and a fall through could take it to the next support level of 15.15. The pair is expected to find its first resistance at 15.41, and a rise through could take it to the next resistance level of 15.49.

The white metal is trading below its 20 Hr and 50 Hr moving averages.