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Daily Pivots: (S1) 1.5797; (P) 1.5842; (R1) 1.5908; More....

Despite dipping to 1.5774, EUR/AUD quickly recovered. Intraday bias is neutral fir now. As long as 1.6154 minor resistance holds, further decline is still expected. Below 1.5774 will target 1.5346 key support. However, break of 1.6154 will turn intraday bias back to the upside for retesting 1.6765 instead.

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.

Daily Pivots: (S1) 1.1297; (P) 1.1317; (R1) 1.1334; More...

Intraday bias in EUR/CHF remains neutral first, with focus on 1.1340/8 resistance zone. We're slightly favoring the case the choppy decline from 1.1501 has completed at 1.1181 already. On the upside, break of 1.1348 will confirm this bullish case and turn bias to the upside for retesting 1.1501 next. On the downside, in case of another fall, we'd expect strong support from 1.1154/98 support zone to contain downside to bring rebound.

In the bigger picture, price actions from 1.2004 medium term top is seen as a correction only. Downside should be contained by support zone of 1.1198 (2016 high) and 61.8% retracement of 1.0629 to 1.2004 at 1.1154 to complete it and bring rebound. A break of 1.2 key resistance is still expected in the medium term long term. However, sustained break of the mentioned support zone will mark reversal of the long term trend. In that case, 1.0629 key support will be back into focus.

Daily Pivots: (S1) 1.1340; (P) 1.1376; (R1) 1.1400; More.....

Despite dipping to 1.1353, EUR/USD quickly recovered and intraday bias is turned neutral first. Further decline is expected as long as 1.1450 minor resistance holds. We're holding on to the case that corrective rise from 1.1215 has completed earlier than expected at 1.1569. Below 1.1353 will target 1.1307 support first. Break there will affirm this bearish case and target 1.1215 low next. On the upside, though, break of 1.1450 minor resistance will mix up the outlook again and turn bias neutral.

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.

Daily Pivots: (S1) 1.2823; (P) 1.2911; (R1) 1.2967; More....

Intraday bias in GBP/USD remains neutral for consolidation below 1.3001 temporary top. Further rally is expected as long as 1.2668 minor support holds. On the upside, above 1.3001 will target 1.3174 resistance, which is close to 38.2% retracement of 1.4376 to 1.2391 at 1.3149. We'd expect strong resistance from there to limit upside, at least on first attempt. On the downside, break of 1.2668 support will argue that such rebound is completed and turn bias back to the downside for retesting 1.2391 low.

In the bigger picture, whole medium term rebound from 1.1946 (2016 low) should have completed at 1.4376 already, after rejection from 55 month EMA. The structure and momentum of the fall from 1.4376 argues that it's resuming long term down trend from 2.1161 (2007 high). And this will remain the preferred case as long as 1.3174 structural resistance holds. GBP/USD should target a test on 1.1946 first. Decisive break there will confirm our bearish view. However, sustained break of 1.3174 will invalidate this case and turn outlook bullish.

Daily Pivots: (S1) 0.9938; (P) 0.9949; (R1) 0.9967; More....

USD/CHF is losing some upside momentum as seen with 4 hour MACD crossed below signal line. Intraday bias is turned neutral first. On the upside, break of 0.9963 resistance should confirm completion of corrective fall from 1.0128 to 0.9716. Further rise should then be seen to retest 1.0128. And for now, near term outlook will remain cautiously bullish as long as 0.9856 minor support holds.

In the bigger picture, current development suggests that rise from 0.9186 has possibly completed with three waves up to 1.0128 already. Decline from 1.0128 could either be correcting this move, or reversing the trend. As long as 0.9541 support holds, we'd slightly favor the former scenario, and expect another rise through 1.0128 at a later stage. However, sustained break of 0.9541 will confirm trend reversal and bring deeper fall back to 0.9186 low.

Daily Pivots: (S1) 109.25; (P) 109.57; (R1) 110.09; More...

USD/JPY's rebound from 104.69 is still in progress and further rise would be seen to 61.8% retracement of 114.54 to 104.69 at 110.77. We'd look for topping signal above there. On the downside, break of 107.77 minor support is needed to confirm completion of the rebound. Otherwise, further rise remains in favor even in case of retreat.

In the bigger picture, price actions from 125.85 (2015 high) are seen as a long term corrective pattern, no change in this view. Apparently, such corrective pattern is not completed yet. Fall from 114.54 is seen as part of the falling leg from 118.65 (2016 high). Break of 104.62 will target 100% projection of 118.65 to 104.62 from 114.54 at 100.51, which is close to 100 psychological level. But in that case, we'd expect strong support from 98.97 to contain downside to bring reversal. Also, this bearish case will remain the preferred one as long as 114.54 resistance holds.

Daily Pivots: (S1) 1.3239; (P) 1.3262; (R1) 1.3289; More...

Intraday bias in USD/CAD remains neutral as consolidation from 1.3180 is in progress. With 1.3323 minor resistance intact, further decline is expected. On the downside, break of 1.3180 will resume the fall from 1.3664 to 61.8% retracement of 1.2781 to 1.3664 at 1.3118. We'll start look for bottoming sign below there. On the upside, above 1.3323 will suggest short term bottoming and turn bias back to the upside for stronger rebound.

In the bigger picture, the medium term rise from 1.2061 (2017 low) might continue further. But the structure of such rise is not clearly impulsive so far. Hence, we'd stay cautious on strong resistance from 61.8% retracement of 1.4689 (2016 high) to 1.2061 at 1.3685 and 1.3793 resistance to limit upside, and bring medium term topping. But in any case, medium term outlook will stay bullish as long as channel support (now at 1.3036) holds. Sustained break of 1.3793 will pave the way to retest 1.4689 (2015 high).

Daily Pivots: (S1) 0.7149; (P) 0.7178; (R1) 0.7193; More...

Intraday bias in AUD/USD remains neutral for consolidation below 0.7235 temporary top. As long as 0.7116 minor support holds, further rally is in favor. On the upside, break of 0.7235 will target 0.7393 resistance. We'd expect strong resistance from there to limit upside. On the downside, break of 0.7116 minor support will suggest completion of rebound from 0.6722. Intraday bias will then be turned back to the downside for retesting this low.

In the bigger picture, the failure to sustain below 0.6826 (2016 low) suggests that the long term down trend is not ready to resume yet. But prior rejection by 55 week EMA indicates underlying medium term bearishness in the pair. Outlook will also stay bearish as long as 0.7393 resistance holds. On the downside, sustained break of 0.6826 will target 0.6008 (2008 low).

The financial markets are rather quiet today. Asian stocks trade higher despite data showing China's growth in 2018 slowed to lowest since 1990. But December data painted a picture of stabilization. Also, there is optimism on US-China trade talks, despite a lack of detail on the progress. Meanwhile, Yen, Euro and Australian Dollar are the relatively stronger ones today so far. New Zealand Dollar, Sterling and and Dollar are the weakest. Focus will turn to UK Prime Minister Theresa May's Brexit plan B.

Technically, USD/CHF is set to take on 0.9963 resistance. Decisive break there will confirm completion of correction from 1.0128 at 0.9716. And further rise would be seen back to retest 1.0128. EUR/USD stays weak even though downside momentum is diminishing. We'd still expect at least a take on 1.1307 minor support. The main question today is whether current Friday's dip in Sterling is just a retreat, or it's revering. For now, As long as 1.2668 minor support in GBP/USD and 0.8927 resistance in EUR/GBP hold, we'd favor more upside in the Pound first.

In other markets, Nikkei closed up 0.26%. Hong Kong HSI is up 0.35%. China Shanghai SSE is up 0.41%. Singapore Strait Times is up 0.51%. Japan 10-year JGB yield is down -0.0053 at 0.009, still positive.

China GDP growth slowed to lowest in 28 years, but stabilization seen in December

China GDP growth slowed to 6.4% yoy in Q4, down from 6.5% yoy and matched expectation. For the whole year of 2018, growth slowed to 6.6%, lowest in 28 years since 1990. National Bureau of Statistics head Ning Jizhe said the impacts from trade war with the US are manageable. There were signs of stabilization in the economy over the past twos months. And he added the country has confidence and the capacity to achieve reasonable growth in 2019.

Other December data released today are positive though. Retail sales grew 8.2% yoy, up from 8.1% yoy and beat expectation of 8.1% yoy. Industrial production rose 5.7% yoy, up fro 5.4% and beat expectation of 5.3% yoy. Fixed assets investment grew 5.9% yoy, unchanged from November, but missed expectation of 6.0%.

While there were signs of improvements in Decembers, it's generally expected that the Chinese economy will face downward pressure ahead. In particular, the risks of escalation in trade war with the US remains. Chinese Vice Premier Liu He is set to visit Washington on January 30-31 for another round of trade talks. At this point, little sign of progress is seen regarding the core concerns of the US, including intellectual property theft, forced technology transfer and dominance of state-owned enterprises.

More stimulus is expected from the authority to support the economy. The PBoC has already injected CNY 560B into the economy last Wednesday. The RRR was also lowered again earlier this year to free up Monday for small companies. Yet, it's reported that Beijing was planning to lower its growth target to 6-6.5 percent this year.

Recession risks increased in Japan, but Abe still on track for sales tax hike

The likelihood of a recession in Japan rose due to global economic slowdown and the indirect impact of US-China trade war, according to a Reuters poll between Jan 9-18. Yet economists were still optimistic that Japan economy will grow 0.8% in the fiscal year starting April.

28 of 38 economists said the chance of recession in fiscal 2019 has risen comparing with three months ago. 27 of 39 said Prime minister Shinzo Abe has over 80% chance to go ahead with the planned sales tax hike. For the October-December quarter when sales tax is raised, economist expected a sharp contraction of -3% in GDP. But over the fiscal year, it's estimated to expand 0.8%, then slow to 0.6% in fiscal 2020. National core CPI is seen to rise only 0.6% in fiscal 2019, staying way off BoJ's 2% target.

Brexit: No solution to Irish backstop yet after May's Cabinet conference call

UK Prime Minister Theresa May is due to return to the parliament today to set out her Plan B on Brexit. The center of focus is her amendments regarding the Irish border backstop. May is trying to put up something that's, at the very least, acceptable to her fellow Conservatives and Northern Ireland ally DUP. But the Guardian reported that no solutions were found so far during the conference call with the Cabinet on Sunday evening. The consensus was only to renew efforts to find acceptable changes to the backstop arrangement with the EU, without any specifics.

Trade Minister Liam Fox warned over the weekend that "failure to deliver Brexit would produce a yawning gap between parliament and the people, a schism in our political system with unknowable consequences". And, that could trigger a "a political tsunami". And, he added that "Parliament has not got the right to hijack the Brexit process because Parliament said to the people of this country: 'we make a contract with you, you will make the decision and we will honour it'".

Opposition Labour leader Jeremy Corbyn reiterated the call for May to rule out no-deal Brexit. He said in a statement that "We're ready to talk to the government and others in parliament about a sensible alternative plan, but not while Theresa May is wasting 171,000 pounds an hour of taxpayers' money on dangerous and unnecessary no-deal brinkmanship." And, "If the prime minister is serious about finding a solution that can command support in parliament and bring our country together, she must listen to the majority of MPs, as well as members of her own cabinet, and take 'no deal' off the table."

ECB and BoJ top a busy calendar, except for the US

The economic calendar is rather heavy this week, except for the US who's extending the record government shutdown. ECB meeting will be a focus. The central bank might turn a bit cautious, or even dovish on its assessment on the economic outlook. It would likely suggest that risk to growth is tilted to downside. On the monetary policy outlook, it would refrain from making any change to the forward guidance, although the market has already pushed back their rate hike expectations. Also, Eurozone will release German ZEW and Ifo, as well as PMIs. Pretty busy.

Suggested readings on ECB:

• ECB Preview – ECB to Turn More Dovish as Economic Data Surprise to Downside
• ECB Preview: We Assign 60% Chance of ECB Hike in December 2019

BoJ meeting will be another focus, in particular, it l release new economic projections. We may see downward revision in inflation estimates. December CPI data showed that even discounting the fall in energy prices, consumer inflation stayed week. And apparently, the recovery is not passed on to consumers. And business remained reluctant to raise prices. The data added to the case for BoJ to cut inflation forecasts. Back in October, BoJ projects core CPI to hit 1.4% in fiscal 2019 and then 1.5% in fiscal 2020. Such projections would be trimmed to reflect the decline in oil as well as global slowdown.

Elsewhere, development regarding Brexit will be the main focus too. UK will also release job data. New Zealand CPI, Australia employment and Canada retail sales could also be market moving.

Here are the highlights for the week:

• Monday: China GDP, fixed asset investment, retail sales, industrial production; German PPI
• Tuesday: UK employment, public sector net borrowing; German ZEW; Canada manufacturing sales, wholesale sales; US existing home sales
• Wednesday: New Zealand CPI; Japan trade balance, all industry index, BoJ rate decision; Canada retail sales; US house price index
• Thursday: Australia employment; Japan PMI manufacturing; Eurozone PMIs, ECB rate decision; US jobless claims, PMIs
• Friday: Japan Tokyo CPI; German Ifo; UK BBA mortgage approvals

AUD/USD Daily Outlook

Daily Pivots: (S1) 0.7149; (P) 0.7178; (R1) 0.7193; More...

Intraday bias in AUD/USD remains neutral for consolidation below 0.7235 temporary top. As long as 0.7116 minor support holds, further rally is in favor. On the upside, break of 0.7235 will target 0.7393 resistance. We'd expect strong resistance from there to limit upside. On the downside, break of 0.7116 minor support will suggest completion of rebound from 0.6722. Intraday bias will then be turned back to the downside for retesting this low.

In the bigger picture, the failure to sustain below 0.6826 (2016 low) suggests that the long term down trend is not ready to resume yet. But prior rejection by 55 week EMA indicates underlying medium term bearishness in the pair. Outlook will also stay bearish as long as 0.7393 resistance holds. On the downside, sustained break of 0.6826 will target 0.6008 (2008 low).

Economic Indicators Update

Asian markets trade mildly higher as the week opens. While China's GDP slowed to lowest in 28 years in 2018, December data painted a picture of stabilization, with pick up in industrial production and retail sales. Sentiments were also supported by optimism over US-China trade negotiation. Focus will now move to UK Prime Minister Theresa May's Brexit plan B, which she will table to the parliament today. Record US government shutdown is extending while it's a holiday there too.

In the currency markets, Yen is trading broadly higher for now but strength is limited, in particular against Euro and Australian Dollar. Sterling is the second weakest one, continue to pare back last week's Brexit chaos gains. But New Zealand Dollar is even weaker.

In Asian markets:

• Nikkei closed up 0.26%.
• Hong Kong HSI is up 0.35%.
• China Shanghai SSE is up 0.41%.
• Singapore Strait Times is up 0.51%.
• Japan 10-year JGB yield is down -0.0053 at 0.009, still positive.