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XAUUSD (1265.57): Gold prices broke down to the downside and the declines are now expected to keep the prices biased to the downside. The break down below 1274 support is expected to see gold prices extending the declines to the next main support level at 1242. In the near term, any retracements are likely to stall near the 1274 level where the recently breached support level could turn to resistance. Only a strong close above 1282 level could signal a shift in the trend.

USDJPY (110.59): The USDJPY currency pair posted gains, with early Asian trading session seeing the yen weakening sharply. The upside in USDJPY has sent prices to test the resistance level at 110.62. However, further gains can be confirmed only on a breakout above this resistance level. In the near term, we expect USDJPY to maintain a sideways range below this resistance level, with the bias still remaining to the downside. The major trend line is likely to act as dynamic support on the declines with the main level of support at 109.57 - 109.43 likely to hold the declines in the near term.

EURUSD (1.15636): The EURUSD currency pair continued to trade subdued on Wednesday. Following the outside bar the day before, price action was seen staying within the established range from the previous day. On the 4-hour chart, price action is seen hovering the near the downside breakout from the bearish flag pattern. Still, a break down below the previous lows of 1.1559 is essential to confirm the downside towards the target of 1.1394.

Daily Pivots: (S1) 127.24; (P) 127.59; (R1) 128.09; More....

Intraday bias in EUR/JPY is turned neutral with a temporary low formed at 126.63. But deeper decline is still expected with 128.50 minor resistance holds. Rebound from 124.61 could have finished at 130.33 already, after rejection by 55 day EMA. Below 126.63 will target a test on 124.08/61 support zone. Nonetheless, break of 128.50 will turn focus back to 130.33.

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.

The U.S. dollar was seen posting gains on Wednesday. Economic data was sparse. In the overnight trading session, New Zealand’s quarterly GDP numbers were reported. Data showed that New Zealand’s GDP advanced at a pace of 0.5% as widely expected. However, the Kiwi dollar continued to extend losses.

The economic calendar for the day will see the monetary policy meetings held by the Swiss National bank and the Bank of England. Both central banks are expected to hold their respective interest rates steady at today's meeting.

Focus will be on the BoE's meeting as investors anticipate for clues on the timing of the next rate hike. Market watchers expect the next BoE rate hike to be in August but the recent inflation and wage report has likely dented the sentiment.

The U.S. trading session is quiet with only the Philly Fed manufacturing index coming up.

The EUR/USD went into a whipsaw mode yesterday after a comment from ECB member Nowotny, who was a bit dovish about the EUR strength vs Dollar. The EUR/USD quickly dropped, testing the lower range boundaries then spiked up again. We can see that this range has been holding the pair for a full week. At this point, the EUR/USD could drop from 1.1540-60 towards 1.1520 and 1.1510. Below 1.1510 we might see 1.1470 and 1.1436. However, if the pair get above 1.1645, it should provide bulls with new strength so next targets should be 1.1690 and 1.1780.

W L3 - Weekly Camarilla Pivot (Weekly Interim Support)

W H3 - Weekly Camarilla Pivot (Weekly Interim Resistance)

W H4 - Weekly Camarilla Pivot (Strong Weekly Resistance)

D H4 - Daily Camarilla Pivot (Very Strong Daily Resistance)

D L3 – Daily Camarilla Pivot (Daily Support)

D L4 – Daily H4 Camarilla (Very Strong Daily Support)

POC - Point Of Confluence (The zone where we expect price to react aka entry zone)

NZDUSD plummeted to a fresh six-month low of 0.6824 earlier this morning, continuing the aggressive selling pressure that started after the pullback on the 0.7050 resistance level. Currently, the price is recovering from the low and trading slightly above its opening level but still below the 0.6850 resistance barrier.

Momentum indicators in the 4-hour chart though are currently supporting that the negative momentum is likely to strengthen in the short-term. Specifically, the RSI is picking up speed in the oversold zone below 30 level, though the MACD continues to distance itself below its red signal line. Moreover, the %K line of the stochastic oscillator posted a bullish cross with the %D line in the oversold area, indicating a possible upward correction.

Should the price decisively close below the 0.6820 support level, the bears could extend the downtrend towards the 0.6780 barrier, identified by the low on November 2017.

On the flip side, a run above 0.6850 could push the pair until the 0.6880 immediate resistance. A break above this level and the 20-simple moving average in the 4-hour chart could open the way towards the 0.6955 hurdle.

In the medium-term, the bearish outlook is still holding, with the moving averages all pointing downwards.

With OPEC meeting for Day 1 of their gathering in Vienna, Iran and Saudi Arabia are closer to agreeing on an increase in production. Saudi Arabia has lowered its projected increase to the 600K to 800K bpd range. Oil prices fell slightly but trading was dominated by US Oil inventories which showed a draw of -5.914M against an expected draw of -1.898M showing strong US demand with Oil prices higher this morning. In other news China has said it will retaliate against the US for any increase in trade tariffs as a means of defending its interests.

Daimler has issued a profit warning citing the tariffs as a drag on its bottom line for 2018 earnings, the first major company to do so. They cite tariffs on imports of US vehicles into the Chinese market as a drag on profits.

US Existing Home Sales (MoM) (May) were 5.43M against an expected 5.52M from 5.46M previously which was revised down to 5.45M. After reaching a seven year high in November at 5.81M, this data point is ranging around 5.50M. This is the second reading in a row to miss expectations but the data shows that the market is still healthy. GBPUSD fell from 1.31971 to 1.31705 after this data release.

New Zealand Gross Domestic Product (Q1) was released, coming in as expected at 0.5% (QoQ) and 2.7% (YoY) against a prior number of 0.6% (QoQ) and 2.9% (YoY). GDP has come in around 0.6% for two months in a row and it was expected to slip slightly with this reading. After the data release, NZDUSD moved up to a high of 0.68682 before selling off to 0.68314.

EURUSD is down -0.09% overnight, trading around 1.15601.
USDJPY is up 0.29% in the early session, trading at around 110.675
GBPUSD is down -0.14% this morning trading around 1.31498
Gold is down -0.24% in early morning trading at around $1,264.80
WTI is up 0.11% this morning, trading around $65.42

OPEC, JMMC meetings are taking place today in Vienna with agreement on production levels high on the agenda. This can impact on prices in Oil markets.

Eurogroup meeting are also taking place today in Brussels increasing headline risk in the EUR crosses.

At 07:30 GMT, SNB Interest Rate Decision and Monetary Policy Assessment are due to be released. The Interest is expected to be left unchanged at -0.75%. This event will set the tone for subsequent moves in CHF crosses as the markets interpret the Banks policy for the future. A press conference will follow at 08:30 GMT.

At 08:30 GMT, UK Public Sector Net Borrowing (May) is expected to be £5.000B against a previous £6.23B. This is expected to show a smaller deficit than the previous month. GBP crosses may react to this data release.

At 09:45 GMT, German Buba President Weidmann is due to speak about monetary policy challenges for the euro, at a jointly held conference by the Bank of France and Bundesbank, in Paris. EUR crosses may be moved by any comments made in relation to Central Bank policy.

At 11:00 GMT, Bank of England Interest Rate Decision is expected to be left unchanged at 0.5%. The BOE Minutes, BOE Quarterly Inflation Report and the Monetary Policy Statement will be released at the same time. BOE Asset Purchase Facility is expected to come in at £435B, unchanged from £435B previously. While no change in rate is expected the tone and language used will be examined for hints that the Bank is gearing up to increase rates in future, with the market focusing on an August Rate Hike. GBP crosses can see spikes in volatility during this event.

At 12:30 GMT, US Continuing Jobless Claims (Jun 8) is expected to be 1.730M against 1.7697M previously. Initial Jobless Claims (June 15) is expected to come in at 220K against 218K previously. This data is showing that the number of new claims is stable but continuing claims is continuing to fall as workers are recruited to jobs.

Philadelphia FED Manufacturing Survey (Jun) is expected to be 29.0 against 34.4 previously. This data surprised to the upside last month beating the expected 21.1. USD crosses can see an increase in volatility from this data release.

At 13:00 GMT, US House Price Index (MoM) (Apr) is expected at 0.3% from 0.1% previously. This data is expected to increase from last month’s reading after declining strong reading in January of 0.8%. A fall under 0.0% would be of concern since the data has remained above that level since 2011.

At 20:15 GMT, UK BOE Governor Mark Carney is due to speak at the Mansion House dinner, in London. GBP volatility can increase during this event.

Daily Pivots: (S1) 0.8771; (P) 0.8787; (R1) 0.8805; More...

EUR/GBP remains bounded in range of 0.8693/8844. Intraday bias stays neutral first. With 0.8693 minor support intact, we'd favor another rise. 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.