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WTI oil price is slightly higher in early Tuesday’s trading, consolidating strong fall of past three days. Oil was down nearly 5% on last Thu/Mon fall from $68.26 to $64.57, being under strong pressure on rising US production and concerns that major world oil producers may raise output.

Three-day fall found footstep just above the base of rising daily cloud ($64.62) and may consolidate before fresh attempts lower.

Monday’s close below 100SMA ($65.30) was bearish signal, with immediate focus expected to remain at the downside while 100SMA (now reverted to resistance) caps.

Bearish daily techs support the notion, with sustained break below daily cloud to generate strong bearish signal and risk extension towards $63.73 (Fibo 61.8% of $58.06/$72.89 ascend).

Consolidation is expected to ideally hold below 100SMA but stronger upticks cannot be ruled out.

Broken daily cloud ($66.86) is expected to cap extended upticks and keep bearish structure intact.

US API crude stocks data is due later today and eyed for fresh signals.

Res: 65.30, 66.02, 66.86, 67.44
Sup: 64.62, 63.73, 63.19, 61.92

EUR/USD

Current level - 1.1695

My outlook here remains positive, for a break through 1.1750, towards 1.1830 area. Initial support lies at 1.1645, followed by the crucial low at 1.1615.

USD/JPY

Current level - 109.82

The outlook remains positive, for a tight test of 110.40 zone. Crucial on the downside is 109.35.

GBP/USD

Current level - 1.3319

The reaction at 1.3400 hurdle led to a fast sell-off, but there is no clear sign, that the whole rebound after 1.3203 is already over, so a violation of 1.3340 will switch the bias back to bullish, for 1.3460.

UK PMI services rose to 54.0 in May, up from April's 52.8, above expectation of 52.9.

Chris Williamson, Chief Business Economist at IHS Markit, which compiles the survey:

"The improvement in service sector activity adds to evidence that the economy is on course to rebound in the second quarter but, like the earlier manufacturing and construction surveys, raises questions about the outlook. So far, the three PMI surveys indicate that GDP looks set to rise by 0.3-0.4% in the second quarter.

"However, disappointing inflows of new work suggest that growth could wane in coming months as Brexit-related uncertainty continues to weigh on spending decisions and dampen business confidence. Measured across all major parts of the economy, new orders growth in the second quarter so far is running at the weakest since the third quarter of 2016.

"Meanwhile, costs are being pushed higher by rising oil prices and wages, although subdued demand means firms are struggling to pass these higher costs onto customers. Average selling prices for goods and services showed the smallest rise for 11 months in May.

"The signs of economic growth rebounding in the second quarter will likely up the odds of the Bank of England hiking interest rates again in coming months, likely August, but with the forward looking indicators suggesting that the economy could relapse, a rate rise is by no means assured."

Full release here.

Eurozone PMI sericves was finalized at 53.8 in May, revised down from 53.9, vs April's 54.8. PMI composite was finalized at 54.1, down from April's 55.1, hitting one-and-a-half year low.

Chris Williamson, Chief Business Economist at IHS Markit said:

"The pace of eurozone economic growth sank to a one-and-a-half year low in May, and has now slowed continually since January's peak to suggest that the region is on course for its worst quarter since 2016. "The survey signals GDP growth of 0.4-0.5% for the second quarter, but there is much uncertainty as to whether the pace will continue to weaken in coming months.

"On the upside, companies reported business to have been disrupted by an unusually high number of holidays in May, especially in France and Germany, suggesting growth could rebound in June. But many other companies reported that demand has softened compared to earlier in the year.

"Measured across both manufacturing and services, both new order inflows and expectations regarding future business activity have descended to 18-month lows, meaning hiring has also been scaled back. Pricing power has also waned in line with weaker growth of demand.

"The slowdown since earlier in the year has been broad-based, though Spain has shown the greatest degree of resilience. Crisis-torn Italy has meanwhile reported the weakest expansion of the four largest euro member states for the fourth month running.

"With the economic indicators turning down at the same time as political uncertainty has spiked higher, the eurozone's outlook has darkened dramatically compared to the sunny forecast seen at the start of the year."

Full release here.

XAUUSD (1292.08): Gold prices continued to drift lower with the precious metal seen testing the lows of around 1292. We expect to see further declines in the near term as gold prices could likely ease back to the 1282 level of support. Establishing support here could signal a bottom being formed with further gains likely to come to the upside. A breakout of the resistance level near 1304 - 1301 is essential for gold prices to test the next main resistance at 1325.

USDJPY (109.87): The USDJPY currency pair managed to breakout from the resistance level after brief consolidation and pushed modestly higher on the day. The upside is now expected to see the USDJPY aiming for 110.62 level of resistance. However, there is a risk that the currency pair could slip below the support at 109.57 - 109.43. In this event, USDJPY could be seen pushing lower to 108.90 where a retest of support is still pending.

EURUSD (1.1692): The EURUSD currency pair was seen posting some gains on the day despite the gains being limited. With the U.S. dollar taking a backseat, the common currency managed to test intraday highs near the resistance level of 1.1730. The gradual consolidation is expected to see the EURUSD maintain the range within 1.1730 and 1.1610 levels. A breakout from this level, preferably to the upside could potentially send the currency pair to test the next main resistance at 1.1840. To the downside, the support at 1.1610 - 1.1577 could stall the declines.

The U.S. dollar was seen trading broadly weaker across the board on Monday. The decline in the dollar came on rising uncertainty surrounding the U.S. trade policies against its trading partners. On the economic front, data showed that Australian retail sales increased 0.4% on the month. This beat estimates of a 0.3% increase.

In the UK, construction PMI remained stable at 52.5 on the index, unchanged from April. This beat market forecasts of a decline to 52.0.

Looking ahead, the economic calendar for the day will see the release of the services PMI data from the Eurozone and the UK. The services PMI in the UK is forecast to rise to 52.9, marking a slight increase from 52.8 registered in April.

The ECB President, Mario Draghi is expected to speak later in the day. His comments come just a week before the ECB's meeting. In the U.S. trading session, the ISM's non-manufacturing PMI data is expected to show an increase to 57.9, marking an increase from 56.8 seen in April.

Australian index moved slightly lower in the last few sessions which helped Aussie to jump to 0.7650. Interestingly, pair did not move much after RBA rate decisions so flows remains unchanged for now; there is still uptrend in progress from 0.7512 on intraday charts which suggests another, maybe final push up to 0.7670/90 area where bulls may start to slow down as wave four can be slowly coming to an end. I am wathcing price action very closely; since it may offer a nice bearish set-up if we see an impulsie turn down in the next few sessions.

The pair holds positive tone on Tuesday and eyes key barrier at 110.15 (Fibo 61.8% of 111.39/108.11 bear-leg, reinforced by 200SMA). Monday's close above a cluster of barriers between 109.40 and 109.80 (consisting of 10/30/20SMA's and daily Kijun-sen) was strong bullish signal which requires sustain break above 200SMA for confirmation. The action faces headwinds from 200SMA barrier and may enter range between 30 and 200SMA's as bulls lack momentum for stronger acceleration higher and daily MA's are in mixed mode. Bullish scenario needs broken 30SMa to hold dips and keep positive structure intact for fresh upside attempts. Eventual break above 200SMA would expose barriers at 110.62 (Fibo 76.4%) and 111.15 (upper 20-d Bollinger band). Increased downside risk could be expected on return and close below 30SMA (109.64), with confirmation of bearish scenario seen on extension and close below falling 10SMA (109.37).

Res: 110.00, 110.15, 110.62, 111.00
Sup: 109.64, 109.38, 109.05, 108.83