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The G7 is meeting today in Canada. Any comments made by participants can result in market moves.

At 09:00 GMT, Eurozone Consumer Price Index – Core (YoY) (May) is expected to be 1.0% against the previous 0.7%. Consumer Price Index (YoY) (May) is expected to be 1.6% against the previous 1.2%. The recovery in the Euro area is still strong and growing despite some questionable economic data potentially weather related. CPI is stabilizing around 1.2%/1.3% with today’s reading expected to exceed that area and giving a new data high for 2018. EUR crosses can be impacted by this data release.

At 12:30 GMT, US Personal Consumption Expenditures – Price Index (YoY) (Apr) is expected to be 2% from 2% previously. Core Personal Consumption Expenditures – Price Index (MoM) (Apr) is expected to be 0.1% from 0.2% previously. Personal Consumption Expenditures – Price Index (MoM) (Apr) is expected to come in at 0.2% from 0.0% previously. Personal Income (MoM) (Apr) is expected at 0.3% from 0.3% previously. Personal Spending (Apr) is expected at 0.4% from 0.4% previously. Core Personal Consumption Expenditures – Price Index (YoY) (Apr) is expected to be 1.8% from 1.9% previously.

Continuing Jobless Claims (May 18) is expected to be 1.749M against 1.741M previously. Initial Jobless Claims (May 25) is expected to come in at 228K against 234K previously. This data is showing an increase in the number of people who are jobless. USD crosses may be heavily traded as a result of these data points.

At 12:30 GMT, Canadian Gross Domestic Product (MoM) (Mar) is expected to be 0.2% from 0.4% prior. Gross Domestic Product Annualized (QoQ) (Q1) is expected to be 1.8% from 1.7% prior. This data is expected to show that growth remains in expansion and is turning higher from the previous month’s low of -0.1%. CAD crosses can see spikes in volatility as a result.

At 16:45 GMT, FOMC Member Bostic is due to speak at the Florida Prosperity Partnership Annual Statewide Training Conference, in Orlando. Audience questions are expected after and comments may result in moves in USD crosses.

At 17:00 GMT, FOMC Member Brainard is due to speak about the economic outlook and monetary policy at the Forecaster’s Club of New York Luncheon. Audience questions are expected to follow. Comments made can result in moves in USD pairs.

Daily Pivots: (S1) 1.5348; (P) 1.5395; (R1) 1.5439; More....

EUR/AUD recovers today and breaks of 1.5454 minor resistance suggests temporary bottoming at 1.5314. Intraday bias is turned neutral for consolidation. But upside of recovery should b limited by 38.2% retracement of 1.6139 to 1.5314 at 1.5269 to bring fall resumption. Below 1.5314 will resume the decline from 1.6189 and target 1.5153 key support level next.

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.

Flash Eurozone CPI accelerated to 1.9% yoy in May, up from 1.2% yoy and came in well above expectation of 1.6%. Core CPI rose to 1.1% yoy, up fro 0.7% yoy and beat expectation of 1.0% yoy. Unemployment was unchanged at 8.5% in April, above expectation of 8.4%.

Reactions in the Euro is relatively muted as the higher than expected inflation was actually expected after upside surprise in both German and French CPI reading. Nonetheless, the solid rebound in inflation in Q2 should have eased much of ECB policy makers' worries. The data add to the case for completing the asset purchase program this year. The question is whether it would end after September. President Mario Draghi could give some hints at the June 14 press conference.

Overall, Euro continues to ride on easing worries over Italy political turmoil and recovers today. For now, Euro is the strongest one for today, third strongest for the week just after Canadian Dollar and New Zealand Dollar.

Also released in European session, Swiss GDP rose more than expected by 0.6% qoq in Q1. Swiss retail sales dropped -2.2% yoy in April, below expectation of -1.4% yoy. UK mortgage approvals dropped to 62k in April. UK M4 money supply rose 0.2% mom in April.

Fundamental news drove the common European currency higher on Wednesday, thus allowing it to recover from the ten-month low of 1.1525. This 130-pip surge resulted in a breakout of several resistance levels, including the 55– and 100-hour SMAs.

By Thursday morning, the pair had steadily approached the 200-hour SMA and the upper boundary of a seven-week channel circa 1.17. Given that this resistance area is likewise strengthened by the 55-period SMA on the 4H chart, the Euro might be reluctant to overcome this level on the first occasion. This mark, however, should eventually surrender and send the pair towards the 1.1950 territory.

In case no fundamentals shake the market today, a fall below the 55-hour SMA and the weekly S1 at 1.1590 is not expected.

Slight upward momentum was apparent for the GBP/USD exchange rate on Wednesday. The pair was hindered slightly by the 55-hour SMA, but this line together with the upper channel boundary were eventually breached to the upside.

The Pound is still showing some upside potential today, especially given that the strong two-week resistance set by the aforementioned SMA was breached. Gains today should be capped near the 1.3360 mark, as traders may luck the necessary bullish momentum to breach the 200-hour and 200-period (4H) SMAs located near this level. In line with this scenario, the pair would be supported by the 55-hour moving average.

In case this line is breached to the downside, the daily low should be located at the weekly S1 at 1.3232.

The US Dollar remained steady against the Japanese Yen on Wednesday. The pair did try to advance but was nevertheless stopped by the combined resistance of the 55– and 100-hour SMAs and the 50.0% Fibonacci retracement line. The shorter-term SMA has guided the pair ever since.

It is likely that the Greenback re-tests this area once more during this session. A successful breakout would sent it up to the 200-hour SMA near 110.00. A further advance is unlikely.

Meanwhile, in the event of bears prevailing, this potential fall should not exceed the 108.15 mark, as the 55– and 100-day SMAs are providing a rather strong support level in this area.

The yellow metal remained steady against the US Dollar during the previous session, as it was fluctuating around the 55– and 100-hour SMAs on the given day. A significant fall was stopped by all three moving averages, while resistance was set by the upper boundary of a seven-week descending channel.

This medium-term pattern was breached early today, thus pointing to a possible surge within the remaining part of this week. There is enough upside potential until the 1,318.00 territory where the 38.20% Fibo and the 200-period (4H) SMA are located.

However, it should also be noted that the 200-day SMA is located at 1,310.00. Thus, this session could likewise mark either no changes to its price level or a slight decline down to 1,295.00.

The bearish sentiment which dominated the NZD/JPY currency pair since late January 2018 has resulted in the pair to trade in several descending channels. The most important is the junior pattern which has guided the New Zealand Dollar down against the Japanese Yen.

A Strong resistance cluster set by the 55– and 100– hour simple moving averages, the weekly pivot point, and the 61.80% Fibonacci retracement level has hindered the pair to break out from the upper boundary of the descending pattern.

In the meantime, technical indicators flash sell signals during the following week, suggesting that the pair might maintain it channel down. In case a breakout occurs, the pair could target the 200– hour SMAs at 76.77.

Following a reversal from the upper boundary of a dominant descending pattern on May 22, the Australian Dollar has been trading in a two-week channel down against the Japanese Yen.

The currency pair bounced off the bottom border of an uptrend line where the weekly support level at 81.06 is located and started moving upwards. However, the rate has encountered a strong resistance set by the combination of the 100– and 200– hour SMAs and the monthly PP near the 82.43 mark.

If the aforementioned resistance cluster holds, the AUD/JPY currency exchange rate could continue its downward movement during the following trading sessions.

The Aussie dollar hit new recovery high at 0.7590 on Thursday and pressures key barrier at 0.7605 (22 May high), but so far lacking momentum for final attack. Strong rally of 0.92% on Wednesday which also formed bullish Outside Day, is supportive, while stronger than expected China's Manufacturing PMI offset negative impact from weaker than expected Australian Capex data. Rising 10SMA (0.7554) underpins today's action after forming double bull-cross (10/20 and 10/30SMA). Weakening momentum on daily chart could further delay bulls but positive structure is expected to remain intact while rising 10SMA holds. Break above pivots at 0.7605 (22 May) and 0.7620 (falling 55 SMA) is needed to signal further recovery and expose strong barriers at 0.7660/72 (Fibo 61.8% of 0.7812/0.7412 / falling daily cloud). Conversely, softer near-term tone could be expected on close below 10SMA.

Res: 0.7590, 0.7605, 0.7620, 0.7660
Sup: 0.7554, 0.7540, 0.7530, 0.7498