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Our pivot (invalidation) point stands at 6204.

Our preference rebound towards 6727.

Alternative scenario The downside breakout of 6204 would call for 6006 and 5888.

Comment The RSI is below its neutrality area at 50. The MACD is above its signal line and negative. The configuration is mixed. Moreover, the pair stands below its 20 and 50 MAs (respectively at 6368 and 6450).

XAUUSD (1250.82): Gold prices continued to decline following the brief retest of the 1263 resistance. The decline back to the 1247 handle invalidated the bullish flag pattern as price action returns to the familiar support level. As long as 1247 support holds, gold prices could be seen holding on. However, in the event of a break down below, the next support level is seen at 1242. A reversal off this level is required for gold prices to maintain the range within the levels.

USDJPY (111.07): The USDJPY currency pair was seen giving up the gains as the currency pair slipped below the 111.13 level. However, price action seen currently making up for the declines. However, a retest of 111.13 is likely to occur. Failure to breakout above 111.13 could signal a move to the downside. The USDJPY currency pair could be seen settling into a range between 111.13 and 110.62 level. A breakout from this level could trigger a short term trend in the direction of the breakout.

EURUSD (1.1729): The EURUSD currency pair was seen posting modest declines on the day as price action remains consolidating around the 1.1730 level. The daily chart signals a hidden bearish divergence to the Stochastics which suggests a near term decline. The initial support at 1.1686 remains the first level of support that could be tested. In the event of a break down below this level, then the EURUSD could be seen testing 1.1600 level to the downside.

The UK's first monthly GDP release by the ONS showed that the economy had advanced 0.3% on the month in June. However, the positive GDP growth report was offset by manufacturing production which rose 0.4% missing estimates of a 1.0% increase. Construction output however beat estimates, rising strongly by 2.9% on the month. Industrial production on the other hand weakened, falling 0.4%.

Data from Germany showed that the ZEW economic sentiment index fell to -24.7 while the Eurozone economic sentiment index fell to -18.7.

The economic calendar today will see investors shifting focus to the BoC's monetary policy meeting. Chances of a rate hike remain high as the economists polled expect to see the BoC raising rates by 25 basis points at today's meeting.

The BoC meeting will be concluded by the press conference. Later in the day, the Bank of England Governor, Mark Carney is also expected to speak. From the Federal Reserve, the FOMC member, Williams is due to speak as well.

On the economic front, the U.S. producer prices index data is expected to show a modest slowdown to 0.2% increase in both core and headline PPI for June.

The euro currency is trying to recover above key resistance against the US dollar on Wednesday, after the pair briefly fell below the 1.1700 level yesterday. The EURUSD pair has since moved back above the critical 1.1724 resistance level and found resistance from the 1.1750 region. Buyers will continue to try to move price back towards the 1.1791 resistance level, while sellers will look to hold price below the 1.1724 level once again.

The EURUSD pair is intraday bullish while trading above the 1.1724 level, key resistance is now found at the 1.1762 and 1.1790 levels.

If the EURUSD pair falls below the 1.1724 level, key technical support is found at the 1.1700 and 1.1674 levels.

The US dollar is starting to turn lower against the Japanese yen currency after buyers failed to break above the key May monthly-high, at 111.39, on Tuesday. The USDJPY pair has now turned back towards the 110.80 support level, as intraday sellers test towards the top-end of the pairs previous trading-range. Buyers will look to reclaim the 111.00 handle, while sellers will look to push the price below the key 110.80 support level.

The USDJPY pair is only bullish while trading above the 110.80 level, key resistance is now found at the 111.00 and 111.39 levels.

If the USDJPY pair moves below the 110.80 level, sellers will be encouraged to test towards the 110.45 and 110.25 support levels.

Last week, traders were optimistic about cryptocurrencies after their market value surged by almost $100 billion. Yesterday, the price of cryptocurrencies fell with Bitcoin and Ethereum falling by almost five percent each. The two are now trading at $6260 and $420 respectively.

The bid for Bitcoin to reach $7000 continues, however, the recent price declines were not associated with any major news updates. In the past, regulation changes and hacking reports have increased crypto selling pressure. The only significant news yesterday was a report than Israel-based exchange, Bancor, lost $12.5 million worth of Ethers and $1 million of a lesser-known cryptocurrency called Pundi X after cybercriminals exploited its security vulnerabilities.

As Bitcoin declined yesterday, it reached a low of $6185, which was the lowest level since Tuesday last week. The current price is slightly below the 28 and 14-day moving averages with the RSI slightly above the oversold level. The price is also along the important support levels shown below. As such, there is a likelihood that the pair might attract more buyers, which could push it above the $6300 resistance level. If it moves lower, the price will test the important support of $6,000.

Economic data and monetary policy are in the headlines on Wednesday, with the Bank of Canada (BOC) set to deliver a highly anticipated interest rate decision.

European Central Bank (ECB) governor Peter Praet will kick off the session with prepared remarks at 07:00 GMT. The ECB announced last month it will wind down its record bond-buying program by the end of 2018. Praet’s comments may offer some tidbits about the pace and timing of future policy adjustments.

His colleague Yves Mersch will also deliver a speech at 12:00 GMT.

Shifting gears to economic data, the US Department of Labor will release its June producer price index (PPI) at 12:30 GMT. Factory-gate prices likely rose 0.2% compared with May and 3.2% year-over-year. Excluding the volatile food and energy components, PPI is projected to rise 0.2% month-on-month and 2.6% annually.

The Labor Department will release its highly anticipated consumer price index (CPI) on Thursday.

Commodity traders will be keeping close tabs on weekly crude inventory data courtesy of the US Energy Information Administration (EIA). The EIA is expected to show a drawdown of 4.3 million barrels in the week ended 2 July.

North of the border, the Bank of Canada is expected to raise interest rates on Wednesday in response to a strengthening economy and rising inflation. However, BOC Governor Stephen Poloz will in all likelihood deliver a cautious assessment of the Canadian economy in light of its recent trade tensions with the United States.

Canada’s benchmark interest rate currently sits at 1.25%. A quarter-point hike on Wednesday would mark the fourth upward adjustment in the span of 12 months.

USD/CAD

USD/CAD favored the bulls on Tuesday, as prices bounced from a low of 1.3108 to a high of 1.3153. At the time of writing, the pair is trading at 1.3135. Markets are likely to remain steady ahead of the BOC decision.

AUD/USD

The Australian dollar declined Wednesday despite a pair of positive economic reports in the form of home loans and consumer confidence. AUD/USD is down 0.2% to 0.7422. The pair fell more than 50 pips on Tuesday as the greenback returned to strength. With the bulls losing momentum, AUD/USD faces immediate support at the 0.7400 level. On the flipside, resistance is likely found at 0.7485.

EUR/USD

Europe’s common currency is coming off a volatile session, as the bulls and bears battled for position. EUR/USD fluctuated within a 70-pip range Tuesday, with prices bottoming at 1.1700. The pair would later recover in the mid-1.1700 range. At the time of writing, EUR/USD is valued at 1.1734. Despite the volatile moves, the pair continues to trade within an established range of 1.1500-1.1850.

The USD/JPY showed a bullish breakout yesterday above the resistance trend line (dotted orange) but price failed to break the channel resistance (red). The USD/JPY however could now be building a bearish pullback with the bullish trend as indicated by the blue lines. A new bullish breakout could indicate the possibility of a continuation towards the -27.2% Fib target.

The USD/JPY has probably completed a wave 3 (orange) and price is correcting within wave 4. This is valid as long as price stays above the 61.8% Fib otherwise a different wave pattern is taking place.