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Daily Pivots: (S1) 1.5367; (P) 1.5532; (R1) 1.5635; More....

As noted before, the corrective rebound from 1.5271 should have completed at 1.5690 already. Deeper fall is expected in EUR/AUD to retest 1.5271 first. Break will resume whole decline from 1.6189 to 1.5153 key support. In case of another rise, we'd continue to expect strong resistance from 1.5773 support turned resistance to limit upside.

In the bigger picture, rally from 1.3624 (2017 low) should have completed at 1.6189 already, ahead of 1.6587 key resistance (2015 high). 1.6189 is seen as a medium term top. Deeper fall would be seen to 38.2% retracement of 1.3624 to 1.6189 at 1.5209 first. Decisive break there will pave the way to 61.8% retracement at 1.4604. In that case, we'll look for bottoming again below 1.4604. On the upside, firm break of 1.5773 support turned resistance is needed to indicate completion of the fall from 1.6189. Otherwise, further decline is expected in medium term, even in case of strong rebound.

XAUUSD (1301.80): Gold prices posted modest gains but price action is seen stuck near the resistance level of 1304 - 1301 region. This potentially points to a decline in price action. The lower support at 1282 remains a likely downside target. However, gold prices could remain range bound within the mentioned levels for a considerable period of time. The sideways price action also indicates that gold prices might be forming a bottom. A breakout above 1304 and a potential retest of this level to establish support could confirm the upside in gold prices.

USDJPY (110.73): The USDJPY currency pair was seen reclaiming the resistance level at 110.62. Price action is however showing signs of exhaustion unless there is a clear breakout above this level. To the upside, the next main target comes near 111.20 level. To the downside, in the event of a reversal, we can expect the USDJPY currency pair to drift lower to testing the support at 109.57 - 109.43 region.

EURUSD (1.1563): The EURUSD currency pair posted strong losses on the day as price action was seen drifting lower to the previous support formed at 1.1577. The break down below this level is expected to see either the currency pair posting further losses, or a potential rebound in the making. Still, unless the EURUSD closes back above the 1.1610 level of support, we expect to see the currency pair staying weak. Near term resistance at 1.1730 is expected to keep the EURUSD currency pair trading sideways.

The euro posted strong losses on the day as the ECB’s monetary policy meeting saw Mario Draghi announcing an end to QE in December 2018. While the current QE at the pace of 30 billion euro is expected to run until September, a reduced amount of 15 billion euro is expected to continue until December.

Draghi however ruled out an interest rate hike any time soon which led to the declines in the common currency. The U.S. dollar was also seen trading stronger as economic data showed that retail sales increased 0.8% on the month while core retail sales increased 0.9% on the month, beating estimates by a strong margin.

Following the BoJ’s monetary policy decision, the economic calendar is relatively quiet for the remainder of the day. Data from the Eurozone is expected to show the final inflation figures while in the U.S. trading session, the Empire state manufacturing index is expected to be released.

The ECB dominated markets yesterday as they shifted their policy stance and signalled their exit from QE. The Bank is looking to reduce its bond buying by 15Bln euro from September and terminate the program completely by December provided market conditions support the move. The Bank also wished to maintain rates at their current levels until Summer 2019 at which point, if the data and the market allows, rates can be adjusted. ECB President Draghi set a cautious tone in his press conference in order to temper the Hawkish stance the bank is adopting, saying that the ECB would keep their options open. The Euro sank versus the USD moving from 1.18510 to a low overnight of 1.15547, just above the low of November 2017. EURGBP sold off from 0.88194 to 0.87187. European stocks rallied hard with the German Dax moving from 12800.00 to levels close to 13200.00. The moves rippled across other markets with the USD boosted higher.

The ECB dominated markets yesterday as they shifted their policy stance and signalled their exit from QE. The Bank is looking to reduce its bond buying by 15Bln euro from September and terminate the program completely by December provided market conditions support the move. The Bank also wished to maintain rates at their current levels until Summer 2019 at which point, if the data and the market allows, rates can be adjusted. ECB President Draghi set a cautious tone in his press conference in order to temper the Hawkish stance the bank is adopting, saying that the ECB would keep their options open. The Euro sank versus the USD moving from 1.18510 to a low overnight of 1.15547, just above the low of November 2017. EURGBP sold off from 0.88194 to 0.87187. European stocks rallied hard with the German Dax moving from 12800.00 to levels close to 13200.00. The moves rippled across other markets with the USD boosted higher.

UK Retail Sales (May) were 1.3% (MoM) and 3.9% (YoY) against an expected 0.5% (MoM) and 2.4% (YoY) from 1.6% (MoM) and 1.4% (YoY) previously. Retail Sales ex-Fuel (May) were 1.3% (MoM) and 4.4% (YoY) against an expected 0.3% (MoM) and 2.5% (YoY) from 1.3% (MoM) and 1.5% (YoY) previously. Retail sales beat expectations in every category showing a strong consumer segment of the economy. This is a volatile data set but it does give a view on consumer spending. GBPUSD moved higher from 1.34037 to 1.34462 following this data release.

US Retail Sales (MoM) (May) were released coming in at 0.8% against an expected 0.4% from 0.4% previously which has been revised up from 0.3%. Retail Sales ex Autos (MoM) (May) were 0.9% against an expected 0.5% from 0.3% prior which was revised up to 0.4%. Retail Sales Control Group (May) was 0.5% against an expected 0.4% from 0.6% prior which has been revised up from 0.4%. Sales increased to beat expectations this month in all the data measures.

US Continuing Jobless Claims (June 1) were 1.697M against an expected 1.737M against 1.741M previously which was revised up to 1.746M. Initial Jobless Claims (June 8) were 218K against an expected 224K against 222K previously. This data is showing a small decline in the number of continuing claims and new claims. USDJPY moved higher from 110.111 to 110.380 after these data releases.

EURUSD is down -0.03% overnight, trading around 1.15628.
USDJPY is up 0.22% in the early session, trading at around 110.865
GBPUSD is down -0.13% this morning trading around 1.32411
Gold is down -0.14% in early morning trading at around $1,300.63
WTI is down -0.33% this morning, trading around $66.69

At 09:00 GMT, Eurozone Consumer Price Index (Apr) will be released with a consensus for 0.5% (MoM) and 1.9% (YoY) from 0.3% (MoM) and 1.9% (YoY) previously. Consumer Price Index – Core (Apr) is expected at 0.3% (MoM) and 1.1% (YoY) from 0.2% (MoM) and 1.1% (YoY) prior. Labour Cost (Q1) is expected to come in at 1.9% from 1.5% previously. CPI data is expected to show an inecrease in the monthly figures, with yearly figures expected to remain in line with the previous reading. EUR pairs can see volatility pick up due to this data.

At 09:45 GMT, ECB’s Coeure is scheduled to give a speech today at a conference in Paris. Comments made can move prices in EUR crosses.

At 10:30 GMT, The Central Bank of Russia will release its Interest Rate decision which is likely to keep rates on hold at 7.25%. RUB crosses can be impacted from this event.

At 13:15 GMT, US Industrial Production (MoM) (May) will be released. The consensus is for 0.2% from 0.7% previously. This measure rebounded strongly, to reach the highest reading since December 2014 in March, after slipping below the zero line in the previous reading. Capacity Utilization (May) is also released at this time with an expectation for 78.1% v 78.0% previously. The expectation is for the number to remain close to the two year high from December. USD crosses can be impacted.

At 14:00 GMT, US Michigan Consumer Sentiment Index (June) is expected to come in at 98.5 against a previous 98.0. The March reading was a record high for the index at 102.0 and the data is showing the number holding under the 100.0 level since. USD pairs can react to this data release as a barometer of consumer spending.

At 17:00 GMT, Baker Hughes US Oil Rig Counts is due to be released with a headline number from last week of 862. As this number creeps higher more and more rigs are coming into operation increasing the supply of oil onto the market and adding downward pressure on prices. WTI Oil can become volatile around this data release and it will be in traders’ minds when trading resumes on Monday.

USDCAD has been surging seen Thursday’s trading session, creating a fresh one-year high of 1.3140. The price is trying to surpass the 61.8% Fibonacci retracement level of the downleg from 1.3800 to 1.2060, around 1.3130, increasing the chances for more aggressive advances. The technical indicators continue to send bullish signals, suggesting that the strengthens in the market is not over yet.

The RSI is currently increasing positive momentum towards its threshold of 70 and is pointing upwards, while the MACD oscillator remains in positive territory and climbed above its trigger line. Both are hinting that the next moves in prices could be on the upside rather than on the downside. It is worth mentioning that the price is developing well above the 20- and 40-simple moving averages in the daily timeframe.

Should the market extend gains above the 61.8% Fibonacci, this would send prices towards the return line of the upward sloping channel, near the 1.3200 handle. A climb above the pattern would suggest a stronger bullish structure and challenge the 1.3350 resistance level, taken from the high on June 2017.

Conversely, the next support should come from the 1.3050 before being able to retest the 50.0% Fibonacci mark of 1.2930. A dip below this region would drive the price towards the 40-SMA near 1.2840 at the time of writing. Further losses could drive the pair until the 38.2% Fibonacci of 1.2720.

Having a look at the bigger picture, USDCAD has been trading within an ascending sloping channel since September 2017.

The British pound has fallen sharply lower against the US dollar, as anxiety builds following the rejection of the meaningful vote amendment from UK Conservative party rebels. Sterling has so far found technical support from 1.3244 level, with the GBPUSD pair losing two hundred pips since yesterday’s move to 1.3445. Traders now look for further GBPUSD losses below the 1.3300 level, with the current 2018 trading-low the key support level to watch, at 1.3205.

The GBPUSD pair is strongly bearish while trading below the 1.3300 level, key technical support is now located at the 1.3204 and 1.3162 levels.

If the GBPUSD pair holds above the 1.3244 level, buyers may test back towards the 1.3307 and 1.3340 resistance levels.

The euro currency has slumped sharply lower against the US dollar, hitting 1.1554, after the European Central Bank disappointed investors with its QE tapering plan. The EURUSD pair has remained under heavy technical selling pressure since ECB President Mario Draghi’s speech yesterday. Further losses are increasingly likely while price trades below the 1.1600 level, as traders become more bearish on the single currency.

The EURUSD pair is strongly bearish while trading below the 1.1600 level. Key support is now located at the 1.1508 and 1.1448 levels.

If the EURUSD pair holds above the 1.1554 level, buyers may test towards the 1.1600 and 1.1658 resistance levels.