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Daily Pivots: (S1) 0.7135; (P) 0.7165; (R1) 0.7199; More...

AUD/USD's rebound from 0.6722 is still in progress despite diminishing upside momentum as seen in 4 hour MACD. Further rise would be seen. But upside should be limited below 0.7393 resistance. On the downside, break of 0.7116 minor support will turn bias back to the downside for retesting 0.6722 low. Overall, larger down trend from 0.8135 is expected to resume later after consolidation completes.

In the bigger picture, the failure to sustain below 0.6826 (2016 low) suggests that the long term down trend is now 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).

Daily Pivots: (S1) 1.1468; (P) 1.1512; (R1) 1.1587; More.....

Intraday bias in EUR/USD remains on the upside at this point. The strong break of 1.1499 resistance should confirm completion of fall from 1.1814 at 1.1215. Current rebound might indeed be correcting whole decline from 1.2555, if not reversing the down trend. Further rise should be seen to 1.1621 resistance first. Break will target 38.2% retracement of 1.2555 to 1.1215 at 1.1727 next. On the downside, break of 1.1422 support is needed to indicate completion of the rebound. Otherwise, further rise will now remain in favor in case of retreat.

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) 1.2724; (P) 1.2764; (R1) 1.2831; More....

Intraday bias in GBP/USD remain neutral and outlook is unchanged. With 1.2814 resistance intact, outlook stays bearish and larger decline is expected to resume later. On the downside, below 1.2615 minor support will turn bias to the downside for retesting 1.2391 first. Break will extend the down trend from 1.4376 and target 61.8% projection of 1.4376 to 1.2661 from 1.3174 at 1.2114 next. However, firm break of 1.2814 resistance will be an early sign of trend reversal and bring stronger rebound back to 1.3174 resistance next.

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 now 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.

Daily Pivots: (S1) 0.9710; (P) 0.9766; (R1) 0.9799; More....

USD/CHF's decline from 1.0128 accelerated to as low as 0.9716. The deeper than expected decline suggests that fall from 1.0128 is correcting whole rise from 0.9186. Intraday bias remains on the downside for next key level at 0.9541 (61.8% retracement of 0.9186 to 1.0128 at 0.9546). On the upside, above 0.9787 minor resistance will turn intraday bias neutral first. But break of 0.9963 resistance is needed to confirm completion of the fall. Otherwise, deeper decline will remain in favor even in case of recovery.

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.

Bitcoin is trading in an increasingly narrow range on Thursday, with price seemingly trapped between the $3,960 and $4,100 levels. The broader cryptocurrency market is also seeing a number of top cryptocurrencies unable to break higher, after staging strong upside moves. BTCUSD buyers risk losing control in the short-term, as the recent rally in the pair is starting to look like a corrective move higher, rather than the start of a meaningful trend change.

The BTCUSD pair is only bullish while trading above the $4,200 level, key technical resistance is found at the $4,400 and $4,900 levels.

If the BTCUSD pair trades below the $3,960 level, sellers are likely to test towards the $3,660 and $3,300 support levels.

The euro has surged higher against the US dollar, following the release of a more dovish than expected Meeting Minutes from the Federal Open Market Committee. The 1.1550 level is now the key area to watch for further upside in the EURUSD, with bulls needing to hold price above this area for further gains towards the 1.1600 level. To the downside, EURUSD bears need to hold price below the 1.1490 support level to encourage technical selling.

The EURUSD pair is strongly bullish while trading above the 1.1550 level, key technical resistance is found at the 1.1600 and 1.1630 levels.

If the EURUSD pair trades below the 1.1490 level, sellers may test towards the 1.1460 and 1.1430 support levels.

The British pound is struggling to break above the 1.2800 level against the US dollar, as near-term Brexit risks are containing the upside in the pair. Despite GBPUSD bulls failure to surpass the 1.2800 level, the intraday sentiment towards the pair is bullish while price trades above the 1.2740 level. Traders now await the release of the Bank of England Credit Condition survey.

The GBPUSD pair is intraday bullish while trading above the 1.2740 level, key technical resistance remains at the 1.2810 and 1.2900 levels.

If the GBPUSD pair trades under the 1.2740 level, sellers are likely to test the 1.2700 and 1.2660 levels.

General Trend:

• Telecom index outperforms in Shanghai
• Heavily weighed companies decline on the Nikkei: Fast Retailing drops ahead of earnings report, Softbank declines over 2%
• Financials decline in Australia, BHP weighed down by ex-dividend
• Oil Futures pare some of the recent gains as equities decline
• USD/CNY declines below 6.80 for the first time since Aug, Yuan fixed stronger
• China DEC inflation data misses ests, little impact on the markets
• China car sales for the year fall for the first time in 20-yrs
• China President Xi and North Korea Leader Kim reach joint agreement to increase cooperation between the two countries; China supports N.Korea/US summit and resolution through dialogue
• The partial US government shutdown is approaching the record 21 days
• Fed Chairman Powell is expected to speak during the NY afternoon on Thursday
• Australia retail sales due for release on Friday

Headlines/Economic Data

Japan

• Nikkei 225 opened -0.8%
• (JP) Japan Investors Weekly Net Buying of Foreign Bonds: -¥1.0T v -¥312.2B prior; Foreign Buying ofJapan Stocks: -¥248.5B v -¥496.4B prior
• (JP) Japan Dec Official Foreign Assets: $1.27T v $1.26T prior
• (JP) Bank of Japan (BOJ) Gov Kuroda: Reiterates economy is expanding moderately; to keep rates extremely low for a period of time, to maintain QQE with yield curve control as long as needed to reach 2% inflation in a stable manner
• (JP) Japan MoF sells ¥700B v ¥700B indicated in 0.70% (prior 0.90%) 30-yr JGBs, avg yield: 0.715% v 0.794% prior, bid to cover 4.03x v 3.78x prior
• (JP) Japan Nov Preliminary Leading Index: 99.3 v 99.6e; Coincident Index: 103.0 v 103.0e

Korea

• Kospi opened +0.1%
• (KR) South Korea President Moon New Year's Briefing: Exports no longer lead to employment growth, faith in govt policies have decreased; Kim's visit to China signals that next Trump/Kim summit will be soon
• 051910.KR Plans to invest KRW1.2T to expand battery plants in China

China/Hong Kong

• Hang Seng opened -0.3%, Shanghai Composite flat
• (CN) CHINA DEC CPI M/M: 0.0% V -0.3% PRIOR; Y/Y: 1.9% V 2.1%E (matches lowest since June 2018); PPI Y/Y: 0.9% V 1.6%E (slowest rise since 2016); 2018 CPI y/y: 2.1% v ~3% target v 1.6% in 2017; PPI 3.5% v 6.3% in 2017
• (CN) China Commerce Ministry (MOFCOM) comments on recent talks with the US: China and US agree to continue close communication on trade; had 'broad, deep, detailed' communication with the US
• (CN) USTR issues formal statement on US-China trade talks: discussed fairness and reciprocity; Talks focused on China's pledge to purchase a substantial amount of ag, energy, manufactured goods, and other products and services from the US; Discussed need for any agreement to provide for complete implementation subject to ongoing verification and effective enforcement (overnight)
• (CN) China PBoC Gov Yi Gang: Reiterates stance to implement prudent monetary policy; will keep liquidity at a reasonable level and use targeted measures to support the real economy; to offer targeted MLF in late January (overnight)
• (CN) China Dec retail passenger vehicle sales at 2.26M units, -19% y/y; Overall 2018 retail passenger vehicle sales at 22.7M units; -6.0% y/y (1st annual decline since 1992) – PCA
• (CN) China PBoC Open Market Operation (OMO): Skips OMO operations for the fourth consecutive day; Net: CNY70B drain v CNY40B drain prior
• (CN) China PBoC sets yuan reference rate: 6.8160 v 6.8526 prior (strongest setting since end of Aug 2018)
• (HK) Hong Kong Chief Exec Lam: Recent softer home prices is a healthy adjustment; govt has the ability to deal with external uncertainties

Australia/New Zealand

• ASX 200 opened +0.1%
• CGC.AU Warns will need to cut FY18 guidance due to certain factors: has experienced subdued demand in a number of categories, namely tomato, berry and avocado during December (-34% in session)
• NBL.AU Reports H1 Rev A$457M, +140% y/y (+14% in session)
• IRI.AU Guides H1 (A$) Net 11.1-11.7M v 9.3M y/y; Rev 49.0-50.5M v 45.7M y/y (+32% in session)
• (AU) Australia swap markets are pricing in a 28% probability of an RBA rate cut in 2019 - US financial press
• (AU) Australia Dec Port Hedland Iron Ore Shipments 45.8Mt v 39.4Mt prior; Exports to China: 37.4Mt v 32.9Mt prior

Other Asia

• 2330.TW Reports Dec Sales NT$89.8B v NT$98.4B m/m; -0.1% y/y; 2018 Sales NT$1.03T, +5.5% y/y

North America

• (US) FOMC MINUTES FROM DEC 19TH MEETING: OFFICIALS EXPRESSED LESS CERTAINTY ABOUT 'TIMING AND SIZE' OF FUTURE RATE INCREASES
• FCAU US expected to announce settlement on diesel civil case, thought to be less than $500M - US financial press
• (US) Pres Trump calls meeting with congressional leaders 'a total waste of time'; Trump tweets: "Just left a meeting with Chuck and Nancy, a total waste of time. I asked what is going to happen in 30 days if I quickly open things up, are you going to approve Border Security which includes a Wall or Steel Barrier? Nancy said, NO. I said bye-bye, nothing else works!"
• (US) US Senate Finance Committee Chairman Grassley (R) said Congress will not grant President Trump any expansion of powers over tariffs, other trade solutions - financial press
• (MX) Mexico President Obrador: Battle over border wall is a US domestic issue
• BA Reports 2018 jetliner sales of 893 v Airbus's 747 (beating Airbus for the first time in 6-yrs) - SCMP

Europe

• (UK) DEC BRC LFL SALES Y/Y: -0.7% V -0.3%E
• (UK) UK PM Spokesperson Slack: PM May will provide certainty on way forward if she loses Brexit deal vote next week

Levels as of 12:50ET

• Hang Seng 0.0%; Shanghai Composite 0.0%; Kospi 0.0%; Nikkei225 -1.3%; ASX 200 +0.3%
• Equity Futures: S&P500 -0.5%; Nasdaq100 -0.6%, Dax -0.4%; FTSE100 -0.1%
• EUR 1.1539-1.1570; JPY 107.82-108.27 ; AUD 0.7147-0.7188; NZD 0.6771-0.6794
• Feb Gold +0.4% at $1,296/oz; Feb Crude Oil -1.2% at $51.76/brl; Mar Copper +0.3% at $2.67/lb

Oil’s (CL_F) short term Elliott Wave view shows that the decline from 10/3/2018 high ended as 5 waves impulse in wave a at $42.41. The cycle from 10/3/2018 high has ended and Oil should now see at least a 3 waves rally. The rally from $42.41 is unfolding as Elliott Wave zigzag structure where wave ((A)) is currently in progress.

An internal of a zigzag is 5-3-5, which means that wave ((A)) should subdivide in 5 waves impulse Elliott Wave structure. Up from $42.41, wave (1) ended at $47, wave (2) ended at $44.35, and wave (3) ended at $52.58. Expect a pullback in wave (4) which ideally ends at 23.6 – 38.2 Fibonacci Retracement of wave (3) at $49.4 – $50.62. Oil should then rally 1 more leg higher in wave (5) to end 5 waves up and complete wave ((A)). After wave ((A)) is complete, it should pullback in wave ((B)) to correct rally from 12/25/2018 low ($42.41) in 3, 7, or 11 swing before the rally resumes again in wave ((C)).

Oil 1 Hour Asia Elliott Wave Chart

For the 24 hours to 23:00 GMT, the EUR rose 0.86% against the USD and closed at 1.1552.

On macro front, the Euro-zone's unemployment rate unexpectedly tumbled to decade low level of 7.9% in November, compared to a revised reading of 8.0% in the prior month. Market participants had envisaged the unemployment rate to advance to 8.1%.

Separately, in Germany, the seasonally adjusted trade surplus widened to €19.0 billion in November, more than market expectations for a surplus of €18.0 billion. In the previous month, the nation had posted a revised surplus of €17.9 billion.

In the US, data indicated that the US mortgage applications rebounded 23.5% on a weekly basis in the week ended 04 January 2019, following a decline of 8.5% in the preceding week.

The minutes of the FOMC December monetary policy meeting showed that policymakers would remain patient on further interest rate increases, due to volatility in financial markets and concerns over global economic growth. Further, the officials expressed uncertainty over the timing of future rate increases. Additionally, the Fed lowered its interest rate projection for 2019 to two from three.

In the Asian session, at GMT0400, the pair is trading at 1.1565, with the EUR trading 0.11% higher against the USD from yesterday's close.

The pair is expected to find support at 1.1479, and a fall through could take it to the next support level of 1.1394. The pair is expected to find its first resistance at 1.1610, and a rise through could take it to the next resistance level of 1.1656.

Amid lack of macroeconomic releases in the Euro-zone today, traders would keep an eye on the US initial jobless claims along with the Federal Reserve Chairman, Jerome Powell's speech, due later in the day.

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