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Daily Pivots: (S1) 0.9852; (P) 0.9873; (R1) 0.9890; More...

Intraday bias in USD/CHF stays on the downside for 0.9787 support and below. For now, price actions from 1.0056 are seen as a consolidation pattern. hence, we'd expect strong support from 0.9720/4 cluster support (38.2% retracement of 0.9186 to 1.0056 at 0.9724, 100% projection of 1.0056 to 0.9787 from 0.9989 at 0.9720) to bring rebound. On the upside, above 0.9989 will bring retest of 1.0056 high first.

In the bigger picture, medium term decline from 1.0342 has completed with three waves down to 0.9186. Rise from there is currently viewed as a leg inside the long term range pattern. Hence, while further rally would be seen, we'd be cautious on strong resistance from 1.0342 to limit upside. For now, further rise is expected as long as 38.2% retracement of 0.9186 to 1.0056 at 0.9724 holds. However, sustained break of 0.9724 will dampen this bullish view and would at least bring deeper fall to 61.8% retracement at 0.9518.

Daily Pivots: (S1) 109.39; (P) 109.74; (R1) 110.11; More...

USD/JPY's decline from 110.89 is still in progress and intraday bias remains on the downside for 108.10 and possibly below. As price actions from 111.39 are seen as a consolidation pattern, we'd expect strong support from 61.8% retracement of 104.62 to 111.39 at 107.20 to contain downside and bring rebound. On the upside, above 110.89 will extend the rise from 108.10 towards 111.39 instead.

In the bigger picture, at this point, we're slightly favoring the case that corrective decline from 118.65 (2016 high) has completed with three waves down to 104.62. Above 111.39 will affirm this view and target 114.73 for confirmation. However, it should be noted that USD/JPY is bounded in medium term falling channel from 118.65 (2016 high). Sustained break of 61.8% retracement of 104.62 to 111.39 at 107.20 will likely resume the fall from 118.65 through 104.62 low.

Daily Pivots: (S1) 0.7391; (P) 0.7418; (R1) 0.7439; More...

Intraday bias in AUD/USD stays mildly on the upside at this point. Recovery from 0.7345 could extend higher. But upside should be limited below 0.7676 resistance to bring fall resumption. On the downside break of 0.7328 cluster support (61.8% retracement of 0.6826 to 0.8135 at 0.7326) will target 61.8% projection of 0.8135 to 0.7411 from 0.7676 at 0.7229 next.

In the bigger picture, medium term rebound from 0.6826 is seen as a corrective move that should be completed at 0.8135. Deeper decline would be seen back to retest 0.6826 low. This will now remain the favored case as long as 0.7676 resistance holds.

Daily Pivots: (S1) 1.3220; (P) 1.3301; (R1) 1.3343; More...

USD/CAD is staying in consolidation below 1.3381 and intraday bias remains neutral. Deeper pull back could be seen to 4 hour 55 EMA (now at 1.3216) and below. But downside should be contained above 1.2948 support to bring another rally. On the upside, firm break of 1.3381 should target 1.3685 medium term fibonacci level next.

In the bigger picture, current development solidify the view of bullish trend reversal. That is fall from 1.4689 (2015 high) has completed at 1.2061, ahead of 50% retracement of 0.9406 (2011 low) to 1.4689 (2015 high) at 1.2048. Further rally should be seen for 61.8% retracement of 1.4689 to 1.2061 at 1.3685 and above. This will now be the preferred case as long as 1.2916 resistance turned support holds, even in case of deep pull back.

Daily Pivots: (S1) 144.88; (P) 145.58; (R1) 146.46; More...

GBP/JPY is staying in tight range above 144.37 and intraday bias remains neutral for the moment. On the downside, below 144.37 will target 143.18 first. Break will resume larger decline from 156.59 and target 139.25/47 cluster support level. However, break of 148.10 will resume the rebound from 143.18 and that will also be the first sign of near term reversal.

In the bigger picture, no change in the view that decline from 156.59 is a corrective move. In case of another fall, strong support should be seen above 139.29 cluster support (50% retracement of 122.36 to 156.59 at 139.47) to contain downside and bring rebound. Meanwhile, break of 153.84 should confirm that the correction is completed and target 156.59 and above to resume the medium term up trend.

Daily Pivots: (S1) 127.56; (P) 128.18; (R1) 129.09; More....

EUR/JPY's recovery from 126.63 is still in progress but lacks firm upside momentum. Intraday bias remains neutral first. On the upside, break of 130.33 resistance will confirm resumption of rise from 124.61. That will also revive the case of near term reversal and turn bias to the upside for 133.47 key resistance. On the downside, break of 126.63 will bring retest of 124.61 low instead.

In the bigger picture, despite rebounding strongly ahead of 124.08 resistance turned support, there was no clear follow through buying. Note again that there is bearish divergence in daily MACD. Firm break of 124.08 will confirm trend reversal. That is, whole rise from 109.03 (2016 low) has completed at 137.49 already. In that case, deeper fall should be seen back to 61.8% retracement of 109.03 to 137.49 at 119.90 and below. Nonetheless, decisive break of 133.47 key resistance will likely extend the rise from 109.03 through 137.49 high.

Daily Pivots: (S1) 1.1490; (P) 1.1521; (R1) 1.1545; More....

EUR/CHF turned sideway after hitting 1.1478 and intraday bias is turned neutral. Another fall is mildly in favor with 1.1585 minor resistance intact. Below 1.1478 will target 1.1366 first. Break will resume the larger corrective decline from 1.2004. On the upside, above 1.1585 will likely extend the rebound from 1.1366 through 1.1656. But in that case, upside should be limited by 61.8% retracement of 1.2004 to 1.1366 at 1.1760.

In the bigger picture, current development suggests solid rejection by prior SNB imposed floor at 1.2000. Considering bearish divergence condition in daily and weekly MACD, 1.2004 should be a medium term top. And price action from 1.2004 is correcting the up trend from 1.0629. Such correction is expected to extend for a while and therefore, we're not anticipating a break of 1.2004 in near term. Another decline cannot be ruled out yet. But in that case, strong support should be seen at 1.1198 (2016 high), 61.8% retracement of 1.0629 to 1.2004 at 1.1154 to contain downside.

Daily Pivots: (S1) 0.8783; (P) 0.8802; (R1) 0.8831; More...

EUR/GBP is still bounded in sideway trading inside 0.8693/8844. Intraday bias remains neutral and more consolidations could be seen. But after all, as long as 0.8693 minor support holds, further rally is in favor. On the upside, break of 0.8844 will resume the rebound from 0.8620 for 0.8967 cluster resistance (50% retracement of 0.9305 to 0.8620 at 0.8963). However, break of 0.8693 will bring deeper fall back to retest 0.8620 low.

In the bigger picture, for now, the decline from 0.9305 is seen as a leg inside the long term consolidation pattern from 0.9304 (2016 high). Such consolidation pattern could extend further. Hence, in case of strong rally, we'd be cautious on strong resistance by 0.9304/5 to limit upside. Meanwhile, in another decline attempt, we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside.

Daily Pivots: (S1) 1.5687; (P) 1.5754; (R1) 1.5853; More....

EUR/AUD's rebound from 1.5271 extends further to as high as 1.5822 so far. The break of 1.5773 carries larger bullish implications. Intraday bias stays on the upside for 1.6189 high next. On the downside, break of 1.5617 support is needed to indicate completion of the rise from 1.5271. Otherwise, outlook will now remain cautiously bullish in case of retreat.

In the bigger picture, current development suggests that fall from 1.6189 is a corrective move and has completed at 1.5217 already. Key support levels of 1.5153 and 38.2% retracement of 1.3624 to 1.6189 at 1.5209 were defended. And rise medium term rise from 1.3624 (2017 low) is not completed yet. Break of 1.6189 will target 1.6587 key resistance (2015 high).

Trade tension and protectionism remain the major theme in the financial markets. Following the selloff in US stocks, Asian indices are generally under pressure today. At the time of writing, Nikkei is trading down -0.52%, Hong Kong HSI is down -0.88%. China's Shanghai composite extends recent steep slide and is down -0.81%. In the currency markets, Yen is trading as the strongest one today, followed by Euro. Commodity currencies are generally weak with Australian Dollar leader the way down. In other markets, WTI crude oil extends recent rebound and is back above 68. Gold had a brief stay above 1270 on yesterday's recovery but is heading back to 1260 handle.

Technically, EUR/AUD's break of 1.5773 support turned resistance put focus back to 1.6189 high. And with 1.5153 support defended, the medium term rise from 2017 low at 1.3624 is defended. Recoveries in EUR/USD and GBP/USD are still seen as corrective in nature even though they may extend in near term. EUR/JPY and GBP/JPY are also staying in tight range even though more downside is mildly in favor. 126.63 in EUR/JPY and 144.37 in GBP/JPY remain the levels to watch.

Navarro and Mnuchin sent conflicted messages on foreign investment curb

The US markets were confused by the mixed messages from Trump's administration regarding investment restrictions on foreign companies. US Treasury Secretary Steven Mnuchin tweeted saying that the statement regarding foreign investment on tech companies "will be out not specific to China, but to all countries that are trying to steal our technology. DOW dropped nearly -500 pts after the message

But later White House trade adviser Peter Navarro tried to talked down the idea of restrictions on all foreign investments. He said "there's no plans to impose investment restrictions on any countries that are interfering in any way with our country. This is not the plan.: Navarro added that "the whole idea that we're putting investment restrictions on the world -- please discount that."

DOW pared pack some losses after reaching as low as 24084.39. It closed down -1.33% or -328.09 pts at 24252.80. S&P 500 lose -1.37% or -37.81pts to close at 2717.07. NASDAQ suffered the worst decline, losing -2.09% or -160.91 pts to 7532.01.

France FM Le Maire on trade war: we don't want an escalation, but we are the ones being attacked

French Finance Minister Bruno Le Maire warned yesterday that "if the United States hits us again with a 20 percent increase on cars we will respond again.." And he emphasized that "we don't want an escalation, but we are the ones being attacked."

Harley Davidsons plans to move production of motorcycles shipped to EU from US to other international facilities to avoid the tariffs. Regarding that news, Le Maire said "whatever allows jobs to be created in Europe goes in the right direction. We don't want a trade war, but we will defend ourselves."

France, Germany and the UK have requested for exemptions from sanctions on their companies for doing businesses with Iran. Le Maire said there was no positive signs from the US. And "for the moment, our requests remain unanswered".

On the data front

Japan corporate service price index rose 1.0% yoy in May, in line with expectation. UK will release BBA mortgage approvals and CBI reported sales. Later in the day, US will release S&P Case-Shiller house price and consumer confidence.

EUR/AUD Daily Outlook

Daily Pivots: (S1) 1.5687; (P) 1.5754; (R1) 1.5853; More....

EUR/AUD's rebound from 1.5271 extends further to as high as 1.5822 so far. The break of 1.5773 carries larger bullish implications. Intraday bias stays on the upside for 1.6189 high next. On the downside, break of 1.5617 support is needed to indicate completion of the rise from 1.5271. Otherwise, outlook will now remain cautiously bullish in case of retreat.

In the bigger picture, current development suggests that fall from 1.6189 is a corrective move and has completed at 1.5217 already. Key support levels of 1.5153 and 38.2% retracement of 1.3624 to 1.6189 at 1.5209 were defended. And rise medium term rise from 1.3624 (2017 low) is not completed yet. Break of 1.6189 will target 1.6587 key resistance (2015 high).

Economic Indicators Update