Sample Category Title

The USD/JPY broke below yesterday’s rising wedge reversal chart pattern and is now building a bearish channel.

The bearish correction could be part of a larger WXY (purple) correction. The Fibonacci levels of wave X (purple) could therefore act as potential support levels for a bullish bounce.

The USD/JPY is building a correction within the wave X (purple). Price seems to have completed a bearish ABC and price is now testing the resistance trend line of the bearish channel.

The EUR/USD bullish breakout is very close to the 38.2% Fibonacci retracement level of wave 4 (pink), which could be a potential major turning spot and restart the downtrend.

The EUR/USD is probably building a bullish wave 4 pattern as long as price stays below the 50% Fib. A break above the 50% indicates that another wave count is more likely whereas a bounce at the 38.2% Fib and later on bearish breakout below the support trend line (blue) indicates the end of wave 4 and the potential start of wave 5.

The EUR/USD seems to be in a wave 4 (blue) correction as long as price stays above the 61.8% Fibonacci level. A bullish breakout above resistance (red) could start the last push up within wave 5. The ABC zigzag could complete a larger WXY correction within wave 4.

Daily Pivots: (S1) 1.5380; (P) 1.5447; (R1) 1.5542; More....

Break of 1.5529 minor resistance suggests short term bottoming at 1.5271, on bullish convergence condition in4 hour MACD> Stronger rebound should now be seen back to 55 day EMA (now at 1.5671). But upside should be limited well below 1.5773 support turned resistance to bring reversal. The whole decline from 1.6189 is expected resume later to 1.5153 key support and below.

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.

Daily Pivots: (S1) 0.8766; (P) 0.8802; (R1) 0.8829; More...

EUR/GBP failed to break through 0.8844 and retreated. Break of 0.8776 minor support turned intraday bias neutral again. For now, another rise is expected as long as 0.8693 support holds. 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.

The British pound continues to hold above the 1.3400 level against the US dollar, as the greenback remains under heavy selling pressure. The GBPUSD pair briefly fell below the 1.3400 level, as reports surfaced that Brexit secretary David Davis is increasingly unhappy with UK PM Theresa May’s handling of Brexit. The GBPUSD pair is likely to challenge the current monthly high, at 1.3471, while price trades above the key 1.3400 level.

The GBPUSD pair is intraday bullish while trading above the 1.3400 level, key technical resistance is now located at the 1.3450 and 1.3471 levels.

If the GBPUSD pair moves below the 1.3400 level, key technical support is found at the 1.3369 and 1.3332 levels.

The euro currency has moved back towards the key 1.1800 level against the US dollar, after sellers pushed the pair lower from the 1.1839 resistance level. Yesterday, the EURUSD pair moved to its highest trading level since May 17th, as traders continued to buy the euro on reports the ECB will soon be discussing when to exit QE. Buyers will look for further upside above the 1.1839 level, while intraday sellers will look for declines towards the key 1.1750 level.

The EURUSD pair is intraday bullish while trading above the 1.1800 level. Key resistance is located at the 1.1839 and 1.1875 levels.

If the EURUSD pair moves below the 1.1800 level, sellers will likely push price towards the 1.1750 support level.

Economic data remains in the spotlight on Friday, with Europe and Canada set to deliver high-profile reports on trade and employment.

Action begins at 06:00 GMT with a report on German industrial production. Factory output in Europe’s largest economy likely rose 0.3% in April, based on a consensus forecast. In annualized terms, this translates into a gain of 2.8%.

The German government will also report on international trade at 06:00 GMT. Berlin’s trade surplus likely narrowed to €21 billion in April from €22 billion the month before. Exports are projected to fall 0.2% month-on-month. Imports, meanwhile, likely rose 0.6%.

France’s INSEE will report on industrial production later in the morning. The Eurozone’s second-largest economy likely saw its output rise 0.3% month-on-month during April.

The Bank of England (BOE) will be releasing a report on consumer inflation expectations at 09:30 GMT. Inflationary trends are closely monitored by investors because they tie into expectations about monetary policy.

On the topic of monetary policy, the European Central Bank’s Yves Mersch will deliver a speech at 08:15 GMT.

Shifting gears to North America, the Canadian government will report on housing starts, capacity utilization and employment between 12:15 GMT and 12:30 GMT. The employment report is expected to show a net gain of 17,500 jobs for the month of May following a decline of 1.1% the month before. The jobless rate is projected to hold steady at 5.8%.

Meanwhile, the US government will report on wholesale inventories at 14:00 GMT. Inventory levels for April are forecast to remain unchanged.

Energy traders will be keeping a close eye on the weekly US oil rig count, which provides a snapshot of domestic shale production. Rising rig counts are usually seen as bearish for oil prices.

EUR/USD

The euro extended its recovery on Thursday, with prices rebounding nearly 300 pips from last week’s swing low. At the time of writing, EUR/USD was hovering around 1.1800 with the bulls eyeing the 1.1830 level. On the opposite side of the ledger, immediate support is located at 1.1767.

USD/CAD

The Canadian dollar failed to rally on Thursday even as oil prices made a large comeback. USD/CAD reached a high near 1.3000 before backtracking toward the 1.2980 level where it currently stands. The pair’s next target is the psychological 1.3000 region. A clean break above this level could lead prices toward 1.3050.

AUD/USD

The Australian dollar underwent a correction on Thursday after prices reached their highest level in about six weeks. AUD/USD topped out near 0.7680 but has since fallen back to 0.7620. The pair faces immediate resistance in the 0.7660-0.7675 region. On the opposite side of the ledger, the recent low of 0.7590 is likely to present immediate support.

Daily Pivots: (S1) 1.1538; (P) 1.1588; (R1) 1.1616; More....

EUR/CHF lost momentum after hitting 1.1639 and intraday bias is turned neutral first. With 1.1505 minor support intact, rebound from 1.1366 is in favor to extend. Above 1.1639 will target 61.8% retracement of 1.2004 to 1.1366 at 1.1760. We'll look for topping signal above there though. On the downside, however, break of 1.1505 will suggest that the rebound is completed. And intraday bias will be turned back to the downside for retesting 1.1366.

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.

General Trend:

• Shanghai Property index declines over 2%
• Foxconn Industrial rises over 20% in debut of Shanghai IPO
• Japan Q1 GDP unrevised and misses ests; consumption unexpectedly revised lower
• BoJ said to consider cutting inflation forecasts (Japanese press); Central bank due to meet next week (June 14-15th)
• Australia sells new May 2030 bonds
• (JP) Japan MoF comments on April bond flows: Japanese bought the most Italian debt in 2 years, sold the most German debt since 2015, purchased the most Spanish bonds on record.
• China May trade surplus misses ests, imports above expectations
• China 2018 trade surplus may narrow by about 10% (Chinese Press)
• China FX reserves decline for the 3rd straight month in May
• US President Trump targets Canada and France ahead of G-7 summit in Quebec (June 8-9th)
• China expected to release May CPI data on Saturday
• Next week’s US/North Korea summit in focus (June 12th)
• Fed and ECB meetings also next week (June 12-13th, June 14th respectively)

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened -0.1%; closed -0.1%
• ASX 200 Telecom index -0.3%, Resources -0.2%; Energy +0.5%, Financials +0.2%
• (AU) Afterpay Touch, Appen and Inghams added to S&P ASX 200 index; Iron Mountain, Asaleo Care and Retail Food Group to be removed; effective at the open of trading on June 18th
• (AU) Australia sells A$2.5B v A$2.5B indicated in new May 21 2030 bonds, avg yield 2.8934%, bid to cover: 3.41x

China/Hong Kong

• Shanghai Composite opened -0.3%, Hang Seng -0.3%
• Hang Seng Info Tech index -2.4%, Telecom -1.8%, Utilities -1.6%, Services -1.3%, Financials -1.1%, Property/Construction -1.1%
• (CN) CHINA MAY TRADE BALANCE: $24.9B V $33.8BE; Imports Y/Y: 26.0% v 18.8%e
• (CN) China 2018 trade surplus may narrow by about 10% (China Securities Journal)
• (CN) China may place a ban on the conversion of CDRs to overseas shares (Chinese Press)
• (CN) China Securities Journal: Reiterates PBoC has room to cut the RRR despite of US Fed rate hike
• (US) US Commerce Sec Ross: Not sure solved all problems with China
• (CN) China Commerce Ministry: To start implementing temporary anti-dumping measures against broiled chicken imported from Brazil
• (CN) China said to cut gasoline prices by CNY130/ton; to cut diesel prices by CNY125/ton; effective from June 9th - US financial press
• (CN) China Banking and Insurance Regulatory Commission (CBIRC) official Chen: Reiterates to stick with structural deleveraging, enhance shadow banking regulations, make risk prevention a more important task
• (CN) China PBoC sets yuan reference rate at 6.4003 v 6.3919 prior
• (CN) For the week, PBoC drained a net of CNY300B in OMOs v CNY410B net injection w/w

Japan

• Nikkei 225 opened -0.1%; closed -0.6%
• TOPIX Iron & Steel index -1.3%, Securities -1%, Real Estate -0.6%, Marine Transportation -0.7% ; Retail Trade +0.5%
• (JP) June Japan Nikkei 225 Futures and Options said to settle at ~22,825
• (JP) JAPAN Q1 FINAL GDP Q/Q: -0.2% V -0.1%E; ANNUALIZED Q/Q: -0.6% V -0.4%E; Private Consumption Q/Q: -0.1% v 0.0%e
• (JP) BoJ said to consider cutting inflation forecasts - Japanese Press [Note: The next quarterly outlook report is due at the July 30-31 policy meeting]
• (JP) JAPAN MAY ECO WATCHERS CURRENT SURVEY: 47.1 V 49.2E; OUTLOOK SURVEY: 49.2 V 50.3E
• (JP) JAPAN APR BOP CURRENT ACCOUNT ADJUSTED: ¥1.89T V ¥2.09TE; CURRENT ACCOUNT BALANCE: ¥1.85T V ¥2.08TE
• (JP) Japanese sold net ¥1.12T in foreign bonds in May – US financial press
• (JP) Japan May Bank Lending Ex-Trusts Y/Y: 1.9% v 2.0% prior; Including Trusts Y/Y: 2.0% v 2.1% prior
• (JP) Japan Apr Trade Balance (BOP): ¥573.8B v ¥742.3Be

Korea

• Kospi opened -0.1%
• (KR) Pres Trump: North Korea summit is 'ready to go' - comments at meeting with Japan PM Abe

Other

• (ID) Indonesia Central Bank: To ensure liquidity in money market ahead of long holiday; conducting stabilization measures in FX market
• Lipper: US-based emerging markets (EM) stock funds had $3.4B in outflows in May (largest in 2 years)
• (PH) Philippines Apr Trade Balance: -$3.6B v -$2.8B prior
• (TH) Fitch affirms Thailand sovereign rating at BBB+; Outlook Stable

North America

• US equities ended mixed: Dow +0.4%, S&P500 -0.1%, Nasdaq -0.7%, Russell 2000 -0.5%
• S&P500 Energy +0.5%; Technology -0.9%
• (US) White House: US President Trump to leave the G-7 in Canada earlier than scheduled
• (US) House of Representatives votes on Rescission package: Passes bill to cancel ~$15B in approved spending
• US) Weekly Fed Balance Sheet Total Assets for week ending June 6th: $4.37T, -$10.1B w/w, -$142.4B y/y; Reserve Bank Credit: $4.28T, -$10.2B w/w, -$143.7B y/y – Website
• (US) Fed schedules June 14th meeting to discuss single counterparty credit limits for large bank holding companies
• (AR) Argentina Treasury Min Dujovne: Deal has been signed with IMF; stand-by agreement to last for about 36 months; IMF says the prelim financing agreement is $50B

Europe

• (EU) Germany automakers reportedly advocating that the EU offer Pres Trump reduced tariffs - German press
• (CH) SNB's Jordan: economic situation in Switzerland is quite good
• (TR) Turkey’s government said to consider lifting state of emergency following election – Local Media
• Deutsche Bank [DBK.DE]: Chair Achleitner reportedly has held discussions with shareholders about potential deal with Commerzbank – press
• Bouygues [EN.FR]: Reportedly Bouygues made an takeover approach for Altice's SFR Group - French press

Levels as of 02:00ET

• Hang Seng -1.3%; Shanghai Composite -1.4%; Kospi -0.7%
• Equity Futures: S&P500 -0.2%; Nasdaq100 -0.3%, Dax -0.1%; FTSE100 -0.1%
• EUR 1.1791-1.1811 ; JPY 109.60-109.87 ; AUD 0.7602-0.7629 ;NZD 0.7015-0.7031
• Aug Gold -0.2% at $1,300/oz; Jul Crude Oil +0.2% at $66.03/brl; Jul Copper +0.1% at $3

For the 24 hours to 23:00 GMT, the EUR rose 0.14% against the USD and closed at 1.1798.

Data indicated that the Euro-zone's seasonally adjusted final gross domestic product (GDP) rose 0.4% on a quarterly basis in the first three months of 2018, in line with market expectations. The preliminary figures had also indicated a rise of 0.4%. In the prior quarter, GDP had expanded 0.6%.

Meanwhile, in Germany, the seasonally adjusted factory orders unexpectedly fell 2.5% on a monthly basis in April, due to a decline in domestic orders and defying market expectations for a rise of 0.8%. Factory orders had dropped by a revised 1.1% in the previous month.

In the US, data revealed that that the number of Americans filing for fresh unemployment benefits dropped slightly to a level of 222.0K in the week ended 02 June, hitting a 4-week low level and compared to market expectations for a drop to a level of 220.0K. Initial jobless claims had registered a revised level of 223.0K in the prior week.

Other data showed that, the nation's consumer credit climbed $9.3 billion in April, less than market forecast for a rise of $14.0 billion. In the prior month, consumer credit had climbed by a revised $12.3 billion.

In the Asian session, at GMT0300, the pair is trading at 1.1799, with the EUR trading marginally higher against the USD from yesterday's close.

The pair is expected to find support at 1.1776, and a fall through could take it to the next support level of 1.1753. The pair is expected to find its first resistance at 1.1831, and a rise through could take it to the next resistance level of 1.1863.

Amid lack of major macroeconomic releases in the Eurozone today, investors would look forward to Germany's trade balance and industrial production, both for April, scheduled to release in a few hours.

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