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For the 24 hours to 23:00 GMT, the USD traded flat against the JPY and closed at 113.60.

In the Asian session, at GMT0400, the pair is trading at 113.32, with the USD trading 0.25% lower against the JPY from yesterday’s close.

The pair is expected to find support at 113.16, and a fall through could take it to the next support level of 113.01. The pair is expected to find its first resistance at 113.59, and a rise through could take it to the next resistance level of 113.87.

Going ahead, traders would closely monitor Japan’s Nikkei services PMI for November, scheduled to release overnight.

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

Daily Pivots: (S1) 1.1310; (P) 1.1328; (R1) 1.1352; More...

No change in EUR/CHF remains neutral and intraday bias remains neutral. As long as 1.1356 resistance holds, near term outlook stays cautiously bearish and fall from 1.1501 is in favor to continue. On the downside, break of 1.1260 will target 1.1173 low. On the upside, firm break of 1.1356 resistance will argue that the pull back from 1.1501 has completed at 1.1260. In that case, further rise would be seen back to retest 1.1501.

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.

For the 24 hours to 23:00 GMT, the USD marginally rose against the CHF and closed at 0.9980.

On the macro front, Switzerland's SVME manufacturing PMI unexpectedly climbed to a level of 57.7 in November, defying market expectations for a fall to a level of 56.4. In the previous month, the PMI had registered a reading of 57.4. Moreover, the nation's real retail sales surprisingly advanced 0.8% on a yearly basis in October, confounding market consensus for a drop of 0.6%. In the preceding month, real retail sales had recorded a revised decline of 2.5%.

On the other hand, the nation's total sight deposits eased to a level of CHF576.9 billion in the week ended 30 November, from CHF577.3 billion reported in the previous week.

In the Asian session, at GMT0400, the pair is trading at 0.9968, with the USD trading 0.12% lower against the CHF from yesterday's close.

The pair is expected to find support at 0.9957, and a fall through could take it to the next support level of 0.9945. The pair is expected to find its first resistance at 0.9988, and a rise through could take it to the next resistance level of 1.0007.

Trading trend in the Swiss Franc today is expected to be determined by Switzerland's consumer price index for November, set to release in a while.

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

For the 24 hours to 23:00 GMT, the USD declined 0.13% against the CAD and closed at 1.3199.

On data front, Canada's manufacturing PMI advanced to a level of 54.9 in November, compared to a level of 53.9 in the previous month. Meanwhile, the nation's MLI leading indicator retreated to 0.1% in October, following a gain of 0.1% in the preceding month.

In the Asian session, at GMT0400, the pair is trading at 1.3183, with the USD trading 0.12% lower against the CAD from yesterday's close.

The pair is expected to find support at 1.3155, and a fall through could take it to the next support level of 1.3126. The pair is expected to find its first resistance at 1.3217, and a rise through could take it to the next resistance level of 1.3250.

Amid lack of key economic releases in Canada today, investors would look forward to global macroeconomic releases for further directions.

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 AUD marginally declined against the USD and closed at 0.7356.

LME Copper prices rose 1.1% or $69.0/MT to $6307.0/MT. Aluminium prices rose 2.5% or $47.5/MT to $1982.5/MT.

In the Asian session, at GMT0400, the pair is trading at 0.7368, with the AUD trading 0.16% higher against the USD from yesterday’s close.

The Reserve Bank of Australia (RBA), in its latest monetary policy meeting, opted to leave its benchmark interest rate unchanged at its record low rate of 1.50%, amid slowdown in the household growth. The benchmark interest rate has remained stable since August 2016, extending the longest rate of cash-rate stability on record. Further, policymakers expect inflation to rise gradually, increasing to 2.25% in 2019 and further higher in 2020. Meanwhile, the RBA Governor, Philip Lowe, stated that “the low level of interest rates is continuing to support the Australian economy”.

The pair is expected to find support at 0.7346, and a fall through could take it to the next support level of 0.7323. The pair is expected to find its first resistance at 0.7392, and a rise through could take it to the next resistance level of 0.7415.

Moving forward, investors would closely monitor Australia’s AiG performance of service index and the CBA services PMI, both for November, slated to release overnight.

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

Daily Pivots: (S1) 128.66; (P) 128.91; (R1) 129.28; More....

No change EUR/JPY's outlook and intraday bias remains neutral first. While another rise cannot be ruled out, near term outlook will remain bearish as long as 130.14 resistance holds. On the downside, break of 127.83 minor support should resume the fall from 130.14 and target 126.63 low. Break will extend the decline from 133.12 to 124.08/89 support zone. On the upside, however, break of 130.14 will resume the rebound from 126.63 towards 133.12 resistance.

In the bigger picture, as long as 124.08 key resistance turn supported holds, larger up trend from 109.03 (2016 low) is still in progress. Firm break of 137.49 structural resistance will target 141.04/149.76 resistance zone next. However, decisive break of 124.08 will argue that such rise from 109.03 has completed and turn outlook bearish. In that case, deeper fall would be seen to 61.8% retracement of 109.03 to 137.49 at 119.90.

For the 24 hours to 23:00 GMT, Silver rose 0.77% against the USD and closed at USD14.47 per ounce, tracking gains in gold prices.

In the Asian session, at GMT0400, the pair is trading at 14.52, with silver trading 0.38% higher against the USD from yesterday’s close.

The pair is expected to find support at 14.37, and a fall through could take it to the next support level of 14.21. The pair is expected to find its first resistance at 14.66, and a rise through could take it to the next resistance level of 14.80.

The white metal is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

For the 24 hours to 23:00 GMT, Crude Oil declined 1.12% against the USD and closed at USD53.18 per barrel, on US-China trade war truce and after the Russian President, Vladimir Putin and Saudi Crown Prince, Mohammed Bin Salman, agreed to extend output cuts.

In the Asian session, at GMT0400, the pair is trading at 53.57, with oil trading 0.73% higher against the USD from yesterday's close.

The pair is expected to find support at 52.48, and a fall through could take it to the next support level of 51.39. The pair is expected to find its first resistance at 54.22, and a rise through could take it to the next resistance level of 54.88.

Crude oil is trading above its 20 Hr and 50 Hr moving averages.

Daily Pivots: (S1) 144.00; (P) 144.76; (R1) 145.34; More...

GBP/JPY dips to 143.95 so far today and breach of 144.02 suggests fall resumption. Intraday bias is turned back to the downside for 142.76 support first. Break there will extend the decline from 149.48 to 139.29/47 key support zone. On the upside, break of 145.51 resistance is needed to indicate short term bottoming. Otherwise, outlook will remain cautiously bearish even in case of recovery.

In the bigger picture, as long as 139.29 cluster support (50% retracement of 122.36 to 156.59 at 139.47) holds, up trend from 122.36 (2016 low) would still extend beyond 156.69 high. However, decisive break of 139.29/47 will suggest that such up trend is completed and turn outlook bearish. In that case, next target is 61.8% retracement at 135.43.

Yen jumps broadly today as Asian stocks weaken, moving past the positive catalyst of US-China trade truce quickly. Nikkei closed down -2.39%, more than enough to reverse Monday's 1.00% gain. Additionally, 10 year JGB yield is down is down -0.010 at 0.073, comparing to October's high at 0.162. There is notably some safe haven flows happening in Japan. Staying in the currency markets, New Zealand Dollar and Euro follow as the next strongest. Australian Dollar is mixed after RBA stands pat. Dollar is the weakest one, as also pressured by falling US yields. Canadian Dollar and Sterling are the next weakest.

Technically, Sterling's weakness is worth most notice. GBP/USD breached 1.2725 yesterday and that's a sign of near term bearishness. GBP/JPY is now kissing 114.02 support while EUR/GBP is also heading to 0.8939 resistance. Break of these levels will align Sterling's bearish outlook in different pairs and we'd still more broad based selloff in the pound then. USD/JPY's break of 113.18 suggests that fall from 114.03 is resuming towards 112.30 support next. Otherwise, major pairs are generally range bound.

In other markets, DOW closed up 1.13% at 25826.43 overnight but pared back much gain after hitting 25980.21. S&P 500 rose 1.09% while NASDAQ rose 1.51%. 30 year yield closed down -0.033 at 3.278 while 10 year yield closed down -0.021 at 2.992. In Asia, Nikkei closed down -2.39% at 22036.05. At the time of writing, Hong Kong HSI is down -0.37%. Singapore Strait Times is down -1.12%. But China SSE is up 0.10%.

Lighthizer to lead US-China trade talk, strong sign of readiness for progress

The White House has confirmed that Trade Representative Robert Lighthizer will lead the new round of trade talks with China, taking over from Treasury Secretary Steven Mnuchin. This is an important indication that both sides (well mainly China), are ready to put promises into words and then actions. Lighthizer is the only one who knows how to work out a trade agreement. Without him, it's just high level "talks".

White House trade adviser Peter Navarro said that Lighthizer is "the toughest negotiator we've ever had at the USTR and he's going to go chapter and verse and get tariffs down, non-tariff barriers down and end all these structural practices that prevent market access."

Separately, White House economic advisor Larry Kudlow said China is going to work on the reforms promised "immediately". Kudlow acknowledged that "The history here with China promises is not very good. And we know that." However, Kudlow also said "President Xi has never been this involved", which is a positive development to him. And he added, "we expect those tariffs to fall to zero."

Kudlow, Mnuchin and Lighthizer held private meetings in Argentina with China's Vice Premier Liu He. Kudlow said Liu promised that China will act quick on the commitments. And Kudlow added, "They cannot slow walk this, stall this, meander this. Their word: 'immediately.'"

Fed Powell on longer term economic challenges

Fed chair Jerome Powell said in a speech that Fed has made "great deal of progress towards" a "strong economy and sound financial system". He pointed to unemployment rate at 3.7% and strong job creation. And there are others signs of strength beyond the labor market. He noted the decline in financial hardship, wage gains, increased household wealth, and elevated consumer confidence.

However Powell also pointed to some "longer-term challenges". Those include slow growth in wages for lower-income workers. Also, it's unclear if recent pick up in productivity is a sustainable trend. And, aging population is limiting labor supply growth and potential growth. Decline in economic mobility also reflects the difficulty faced by lower-income Americans in moving up the economic ladder.

Eurogroup urged Italy to comply to EU budget rules

In a statement released today, the Eurogroup said Italy's 2019 Draft Budget Plan (DBP) was breaking EU rules and urged Italy to rectify it.

It said "The Eurogroup recalls that in its opinion issued on 23 October 2018 the Commission identified a particularly serious non-compliance with the recommendation addressed to Italy by the Council on 13 July 2018 and requested a revised DBP. Italy submitted a revised DBP on 13 November, on which the Commission issued another opinion on 21 November, confirming the existence of a particularly serious non-compliance with the Council recommendation."

And, "we support the Commission assessment and recommend Italy to take the necessary measures to be compliant with the SGP. We also support the ongoing dialogue between the Commission and the Italian authorities."

Also, the Eurogroup noted that five member states' DBP are "deemed to be at risk of non-compliance with the SGP", including Belgium, France, Portugal, Slovenia and Spain.

Aussie steady after RBA stands pat at 1.50%, reactions muted

Australian Dollar trades mildly firmer against dollar after RBA left cash rate unchanged at 1.50%. But it's overall steady and mixed as reaction to RBA is rather muted. In short, RBA maintained that fall in unemployment rate will eventually lift inflation to target. But again, the central bank expected the progress to be "gradual", implying that there is no urgency to lift interest rate any time soon.

On the economy, the central scenario for GDP growth is to average around 3.5% in 2018 and 2019. Then it would slow to 2020 due to slower growth in export of resources. Outlook for labor market remains "positive". Improvement in the economy should see "some further lift in wages growth" over time, gradually. CPI is expected to pick up over the next couple of years gradually to. And, the central scenario if for inflation to be at 2.25% in 2019 and a bit higher in 2020.

On the data front

Japan monetary base rose 6.1% yoy in November versus expectation of 5.7% yoy. UK BRC retail sales monitor dropped -0.5% yoy in November. Australia current account deficit narrowed to AUD -10.7B in Q3.

Swiss will release CPI in European session. UK will release construction PMI. Eurozone will release PPI. Canada will release labor productivity later in the day.

GBP/JPY Daily Outlook

Daily Pivots: (S1) 144.00; (P) 144.76; (R1) 145.34; More...

GBP/JPY dips to 143.95 so far today and breach of 144.02 suggests fall resumption. Intraday bias is turned back to the downside for 142.76 support first. Break there will extend the decline from 149.48 to 139.29/47 key support zone. On the upside, break of 145.51 resistance is needed to indicate short term bottoming. Otherwise, outlook will remain cautiously bearish even in case of recovery.

In the bigger picture, as long as 139.29 cluster support (50% retracement of 122.36 to 156.59 at 139.47) holds, up trend from 122.36 (2016 low) would still extend beyond 156.69 high. However, decisive break of 139.29/47 will suggest that such up trend is completed and turn outlook bearish. In that case, next target is 61.8% retracement at 135.43.

Economic Indicators Update