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Daily Pivots: (S1) 0.8724; (P) 0.8759; (R1) 0.8792; More...

With 0.8711 minor support intact, further rise is expected in EUR/GBP. Break of 38.2% retracement of 0.9101 to 0.8617 at 0.8802 will target 61.8% retracement at 0.8916. On the downside, break of 0.8711 will turn bias back to the downside for 0.8617/20 support instead.

In the bigger picture, EUR/GBP is seen as staying in long term range pattern started at 0.9304 (2016 high). The medium term range is set between 0.8620 and 0.9101. Downside breakout of 0.8620 will pave the way back to 0.8312 support . Break of 0.9101 will bring retest of 0.9304/5 resistance.

XAUUSD (1315.07): Gold prices consolidated after posting strong gains near the highs. Price action stalled near the highs of 1321 before easing lower. The overall increases stalled near the main resistance level area of 1321 and 1315 level. The daily chart also signals a hidden bearish divergence near these highs indicating a potential move to the downside. However, for the short term, gold prices are likely to remain range bound within the said levels. A close below 1315 is required for gold prices to break down lower to test the 1280 support.

Daily Pivots: (S1) 1.5739; (P) 1.5781; (R1) 1.5847; More....

Intraday bias in EUR/AUD remains neutral at this point. And further decline is expected with 1.6038 resistance intact. On the downside, break of 1.5721 will extend the fall from 1.6765 to 1.5346 key support. But break of 1.6038 will indicate completion of the fall and turn bias back to the upside.

In the bigger picture, the failure to sustain above 1.6587 key resistance (2015 high) argues that up trend from 1.1602 (2012 low) is not ready to resume yet. But still, as long as 1.5346 support holds, outlook will remain bullish. 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.

AUDUSD (0.7241): The AUDUSD currency attempted to test the previous highs established near the upper resistance level of 0.7292. The AUD posted a modest high near the resistance level before closing weaker. The range within 0.7292 a 0.7191 remains likely to be maintained in the near term. In the short term, the lower support at 0.7191 could be tested in the near term. A close below this support will potentially extend the declines toward 0.7022.

EURUSD (1.1453): The EURUSD currency pair drifted sideways after a brief intraday rally saw prices attempting to push higher. The euro currency closed almost flat on the day on Friday. The declines came off the highs after price action tested the long term falling trend line before giving up the gains. The price action in the EURUSD remains trading flat within the broader range of 1.1575 and 1.1218 levels of resistance and support respectively.

Daily Pivots: (S1) 1.1379; (P) 1.1396; (R1) 1.1421; More...

Intraday bias in EUR/CHF remains neutral for consolidation below 1.1429 temporary top. Downside of retreat should be contained by 1.1347 resistance turned support to bring another rally. On the upside, break of 1.1429 will extend the rise from 1.1181 to retest 1.1501 key resistance next.

In the bigger picture, price actions from 1.2004 medium term top is seen as a correction only. Downside should be contained by 1.1154/98 support zone to complete it and bring rebound. Decisive break of 1.1501 (38.2% retracement of 1.2004 to 1.1173 at 1.1490) will confirm completion of the correction, on bullish convergence condition in daily MACD, with double bottom pattern (1.1173, 1.1181) Further rise should be seen to 61.8% retracement at 1.1687 and above next.

The U.S. Dollar recovered on Friday as the economic data was broadly positive. The monthly payrolls report showed that the average hourly earnings rose at a slower pace of 0.1%. However, on a year over year basis, average hourly earnings grew 3.2%. The U.S. unemployment rate rose to 4.0% which was higher than the forecasts of 3.9%.

The economy added 304k jobs during January which beat estimates by a substantial margin. There was a net 70k downward revision for November and December.

Construction spending data showed a 0.8% increase on the month which showed an acceleration from the month before as it beat estimates of 0.2% increase.

The ISM manufacturing PMI data showed an increase to 56.6 on the index. This was higher than the month before and beat estimates of a 54.1 reading.

Earlier in the day, data from the Eurozone showed that the inflation estimates for January fell. Headline CPI increased by 1.4% on the year while core CPI posted a modest increase to 1.1% on the year.

The Eurozone's manufacturing PMI came in at 50.5 matching estimates and unchanged from the month before.

Looking ahead, the economic data on the day will see the release of the U.S. factory orders report. Economists forecast a modest pick up of 0.3% on the month after factory orders fell 2.1% in the month before.

The Eurozone's sentix investor confidence will be coming out with forecasts showing a modest improvement on the index to -1.1.

Daily Pivots: (S1) 1.1431; (P) 1.1460; (R1) 1.1485; More.....

Intraday bias in EUR/USD remains neutral at this point. Another rise is mildly in favor with 1.1407 minor support intact. Rise from 1.1289 is seen as another rising leg in the correction pattern from 1.1215. Above 1.1514 will target 1.1569 resistance and above. On the downside, break of 1.1407 minor support will turn bias back to the downside for 1.1289 support instead.

In the bigger picture, as long as 1.1814 resistance holds, down trend down trend from 1.2555 medium term top is still in progress and should target 61.8% retracement of 1.0339 (2017 low) to 1.2555 at 1.1186 next. Sustained break there will pave the way to retest 1.0339. However, break of 1.1814 will confirm completion of such down trend and turn medium term outlook bullish.

The U.S. Federal Reserve's sharp U-turn last week has been welcomed by equity markets. The adjustment to guidance between December and January was enormous. After raising interest rates in December and hinting towards further gradual increases in interest rates while reducing the balance sheet on autopilot mode, the doves seem to have taken control. The two rate hikes for 2019 are no longer on the table, and the balance sheet may be adjusted at any time.

The Fed justified the changes to guidance mainly because of external conditions. Among them were trade tensions, a weakening global economy, and risk of a hard Brexit. These are not the main factors the Fed has historically based its decisions upon. The central bank's key objective is to foster economic conditions that promote stable prices and maximize sustainable employment.

Looking at Friday's economic data, the U.S. economy still seems to be in good shape. Job growth in January blew expectations, with NFP surging by more than 300K. Although December's figure was knocked lower, the three-month average is still significant at 241,000. These facts may indicate that the Fed has somewhat surrendered to market pressure and Trump's criticism.

If the U.S. economy continues to perform well, the Fed has no choice but to return to gradual tightening, which may again lead to volatile markets. However, one set of data may not be enough to judge upon.

It will be interesting to listen to Fed speakers this week including Fed Chair Jerome Powell, St Louis Fed President James Bullard, and Cleveland Fed President Loretta Mester. If they arenot overwhelmed by recent data releases and remain aligned totheir dovish stance, this may provide a further boost to equities.

The Bank of England is meeting on Thursday and will deliver its quarterly inflation report. We do not expect any changes to policy but may see slight changes to inflation and growth forecasts. The Pound is unlikely to move on changes to economic forecasts, as most traders remain focused on whether Prime Minister Theresa May will be successful in squeezing any compromises out of the EU regarding the Irish backstop.

The earning season remains in full swing this week with more than 100 S&P 500 firms due to release results. Despite 70% of S&P 500 companies so far managing to beat on the bottom line, more companies are issuing negative guidance than positive. According to FactSet, the S&P 500 is now projected to report a year-on-year decline in earnings for 2019. This will undoubtedly upset equity bulls.

Daily Pivots: (S1) 1.3046; (P) 1.3081; (R1) 1.3118; More....

Intraday bias in GBP/USD remains neutral and outlook is unchanged. On the downside, break of 1.3012 minor support will suggest rejection by 1.3174 key resistance, and turn bias to the downside for 1.2814 support. On the upside, sustained break of 1.3174 key resistance will argue that whole decline from 1.4376 has completed at 1.2391. In such case, further rise should then be seen to 61.8% retracement of 1.4376 to 1.2391 at 1.3618.

In the bigger picture, rise from 1.1946 (2016 low) to 1.4376 (2018 high) is seen as a corrective move. Similarly, fall from 1.4376 to 1.2391 also displace a corrective structure. Current development suggests that rise from 1.2391 is the third leg of the corrective pattern from 1.1946 and could extend beyond 1.4376 high. Firm break of 61.8% retracement of 1.4376 to 1.2391 at 1.3618 will affirm this case. On the downside, break of 55 day EMA (now at 1.2865) will turn focus back to 1.2391 low instead.