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EURUSD (1.1297): The EURUSD currency pair was seen extending the declines on Tuesday. Price action closed below the support area of 1.1327 – 1.1309 before modestly pulling back. The bearish close below the support suggests further declines in store. The lower support at 1.1256 will be the most likely target to the downside. This would keep the common currency range bound within the longer term, while the decline to 1.1256 will see prices retesting the lows from mid-February this year.

The U.S. dollar posted strong gains on the day as commodities such as gold and silver continued to extend the declines.

China announced that it was targeting a GDP growth rate of 6.0-6.5% for 2019. It raised the budget deficit to 2.8% from 2.6% last year, while announcing fiscal easing measures. These included planned tax cuts and infrastructure spending.

On the economic front, the eurozone services PMI rebounded sharply in February. Services activity rose to a four-month high to 52.8 in February. This surpassed the initial flash estimates of 52.3.

The gains came with Italian and French services PMI posting results that were stronger than expected. Retail sales also remained in line with expectations, rising 1.3% following a 1.4% decline previously.

In the UK, the services sector activity rose to 51.3 after falling to 50.3 in January.

The U.S. ISM non-manufacturing PMI came in at 59.7, beating estimates of 57.4. It marked a one-year high. Meanwhile, IHS Markit's services PMI also rose to a seven-month high.

New home sales report for December showed a strong increase, rising 3.7% on the month to a seasonally adjusted 621,000. The median estimates called for a decline to 605,000. On a yearly basis, new home sales were down 2.4% compared to the same period the year before.

The European trading session is relatively quiet. The NY trading session starts off with Canada's trade balance figures and labor productivity data.

The Central Banks

Following the RBA's decision to leave interest rates unchanged yesterday, the quarterly GDP report was released this morning during the Asian trading session. The fourth quarter GDP in Australia rose by 0.2%. Economists forecast that GDP would increase by 0.5% during the quarter, up from 0.3% from the previous quarter.

The BoC will be holding its monetary policy meeting later in the day. We can expect no changes, as the BoC will keep interest rates held at 1.75%. Canada's Ivey PMI report is due following the BoC meeting.

Fed members, Williams and Saunders, are due to speak later in the evening. The speeches come ahead of the Fed meeting due later in the month.

Daily Pivots: (S1) 146.77; (P) 147.28; (R1) 147.95; More...

Intraday bias in GBP/JPY remains neutral as consolidation from 148.57 temporary top is extending. Downside of retreat should be contained by 144.84 resistance turned support to bring rise resumption. On the upside, break of 148.57 will target 149.48 resistance first. Decisive break there will target 100% projection of 131.51 to 144.84 from 141.00 at 154.33 next.

In the bigger picture, the strong rebound from 131.51 suggests that medium term fall from 156.59 (2018 high) has completed already. The corrective structure of such decline in turn argues that it's the second leg of the corrective pattern from 122.36 (2016 low). And this pattern is starting the third leg. On the upside, decisive break of 149.48 will pave the way to 156.59 resistance and above.

EURGBP returned slightly to the upside after the strong downfall on the new 21-month low of 0.8530 on February 27, violating to the downside the sideways range it had been trading in since late 2017, with an upper bound at 0.9100 and a lower bound near 0.8615.

However, the red Tenkan-sen and the blue Kijun-sen lines are flattening in the short-term, signaling a possible neutral move, while the 20- and 40-simple moving averages (SMAs) are following the decline tendency. The MACD and the RSI are marginally gaining momentum in the negative territory following the fall in oversold levels.

Further advances in the pair could encounter immediate resistance near 0.8615, with an upside break opening the door for a test of the 23.6% Fibonacci retracement level of the downleg from 0.9110 to 0.8530, near 0.8667. If the bulls pierce above this zone too, that would drive the price until the 20-SMA currently at 0.8680 before testing the 0.8725 resistance.

On the other side, if the bears retake control and push the price below the 21-month low, they could initially challenge the 0.8380 barrier, identified by the bottom on May 2017. A clear break below that territory would reinforce again the negative outlook, paving the way for sellers to meet the December 2016 trough at 0.8300.

In brief, the picture looks significantly negative, with a break back above the 61.8% Fibonacci mark needed to change the outlook to neutral.

Daily Pivots: (S1) 126.26; (P) 126.61; (R1) 126.86; More....

EUR/JPY is staying in consolidation from 127.50 temporary top and intraday bias remains neutral. In case of deeper retreat, downside should be contained by 124.23/125.95 support zone to bring rise resumption. On the upside, break of 127.50 will resume the rally from 118.62 towards 61.8% retracement of 137.49 to 118.62 at 130.28 next.

In the bigger picture, current development argues that medium term decline from 137.49 (2018 high) has completed with three waves down to 118.62 already. Decisive break of 133.12 resistance will confirm this bullish case. And whole up trend from 109.03 (2016 low) might resume through 137.49 in that case. On the downside, break of 124.23 support will invalidate this case and turn focus back to 118.62 instead.

The euro has come under further selling pressure against the US dollar, with the pair moving to a fresh monthly trading low below the 1.1300 level. If sellers can break the 1.1275 level, the next major support zone to watch is the key 1.1230 technical area. Traders should note that the MACD and RSI indicators on the four-hour time frame are starting to approach oversold territory.

The EURUSD pair is heavily bearish while trading below the 1.1300 level, key support is found at the 1.1275 and 1.1230 levels.

If the EURUSD pair trades above the 1.1337 level, key technical resistance is found at the 1.1370 and 1.1390 levels.

Litecoin has moved sharply higher on Wednesday, with the fifth largest cryptocurrency moving to its highest trading level since November last year. If bulls can break above the $54.00 resistance level, the LTCUSD pair could rally towards the $65.00 region. Traders should note that a large inverted head and shoulders pattern is building on the four-hour time frame.

The LTCUSD pair is bullish while trading above the $39.50 level, key technical resistance is now found at the $54.00 and $65.00 levels.

If the LTCUSD pair trades below the $39.50 level, key support is found at the $36.00 and $33.00 levels.

The British pound is attempting to move higher against the US dollar in early Wednesday trade after finding strong dip-buying demand from the 1.3100 support level. The GBPUSD pair may move back towards the top-end of its recent trading range if bulls continue to defend the 1.3100 level. Traders should note that the bullish inverted head and shoulders pattern still remains valid on the four-hour time frame.

The GBPUSD pair is bearish while trading below the 1.3155 level, key technical support is found at the 1.3100 and 1.3050 levels

If the GBPUSD pair trades above the 1.3155 level, buyers may test towards the 1.3200 and 1.3260 resistance levels.

Daily Pivots: (S1) 0.8556; (P) 0.8601; (R1) 0.8626; More...

Intraday bias in EUR/GBP remains neutral as consolidation from 0.8529 temporary low is extending. In case of further recovery, upside should be limited well below 0.8840 resistance to bring fall resumption. On the downside, break of 0.8529 will target long term projection target at 0.8416 next.

In the bigger picture, EUR/GBP is seen as staying in long term range pattern started at 0.9304 (2016 high). Current fall from 0.9305 (2017 high), is seen a a falling leg inside the pattern. Such decline is now targeting 100% projection of 0.9305 to 0.8620 from 0.9101 at 0.8416 and possibly below. But for now, we'd expect strong support around 0.8312 support to contain downside and bring rebound.

Daily Pivots: (S1) 1.5926; (P) 1.5983; (R1) 1.6017; More....

EUR/AUD drew support from 4 hour 55 EMA and rebounded strongly. Focus is back on 1.6072 resistance. Firm break will confirm completion of decline from 1.6765. Further rally should then be seen to retest 1.6765 high. On the downside, though, break of 1.5743 support will resume the decline from 1.6765.

In the bigger picture, as long as 1.5346 support holds, outlook will remain bullish. Uptrend from 1.1602 (2012 low) is expected to resume sooner or later. Break of 1.6765 will target 61.8% retracement of 2.1127 (2008 high) to 1.1602 at 1.7488 next. However, firm break of 1.5346 key support will indicate trend reversal, with bearish divergence condition in weekly MACD, and turn outlook bearish.