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Positive news about Italy yesterday, sent the EUR/USD bouncing from support and making two bullish patterns. V-shaped reversal combined with Inverted Head and Shoulders saw the trend change on intraday timeframes. It looks like the EUR/USD formed two POC zones 1.1650-65 and 1.1590-1.1610. If we see a retracement, the pair could bounce again. If the price closes above 1.1708, next target is 1.1750 and 1.1820 on a breakout. Ideally for a bullish continuation 4h candle should close above 1.1750.

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 StrongDaily Resistance)

DL3 – Daily Camarilla Pivot (Daily Support)

DL4 – Daily H4 Camarilla (Very Strong Daily Support)

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

Recovery action from 108.11 (29 May low) shows initial signs of stall, as upside attempts were rejected at 109.07 on Wednesday, failing to break above the top of falling hourly cloud and capped by falling 5SMA, while early Thursday's trading is in red. Fresh easing probes through hourly cloud base (108.59) and looks for further bearish signal on break. Negative momentum is building, with downside pressure reinforced by 10/20SMA bears-cross, which is forming on daily chart. On the other side, converged 55/100SMA's are attempting to form bull-cross at, which supports along with Fibo support at 108.01 (50% retracement of 104.63/111.39 rally). Overall structure is bearish and favors further weakness with extended upticks to hold below 30SMA (109.50) and keep bears in play.

Res: 109.07, 109.50, 109.74, 110.00
Sup: 108.53, 108.34, 108.11, 108.00

Cable stands at the front foot on Thursday and attempts to extend bounce of new low at 1.3205 (29 May) where top of weekly cloud contained fall from 1.4376 peak.

Break above falling 5SMA (1.3295) opens way towards strong barriers at 1.3352/62 (falling 10SMA / Fibo 38.2% of 1.3617/1.3205 bear-leg).

Recovery should be ideally capped here to keep larger bears intact for renewed attempt at 1.3200 zone, loss of which would signal bearish continuation and expose support at 1.3153 (50% retracement of 1.1930/1.4376 post-Brexit recovery).

Firm break above 10SMA would sideline existing downside risk and open way for further correction towards next strong barrier at 1.3441 (falling 20SMA).

Res: 1.3352, 1.3410, 1.3441, 1.3459
Sup: 1.3295, 1.3277, 1.3241, 1.3205

Daily Pivots: (S1) 1.1450; (P) 1.1508; (R1) 1.1597; More....

EUR/CHF's rebound from 1.1366 extends higher today and further rise could be seen. But for now, we'd expect strong resistance from 38.2% retracement of 1.2004 to 1.1366 at 1.1610 to bring another decline. Below 1.1366 will resume the fall from 1.2004 and target next key support zone between 1.1154 and 1.1198.

In the bigger picture, current development suggests solid rejection by prior SNB imposed floor at 1.2000. Considering bearish divergence condition in daily MACD, 1.2004 should be a medium term top. And price action from 1.2004 is correcting the up trend from 1.0629. The cross has met 1.1445 already, which is close to 38.2% retracement of 1.0629 to 1.2004 at 1.1479. We'd expect strong support from there to bring rebound to extend the medium term corrective pattern. However, sustained break of 1.1445 will target next key cluster level at 1.1198 (2016 high), 61.8% retracement of 1.0629 to 1.2004 at 1.1154.

The Euro remains firm on Thursday and extends previous day’s 1.07% rally as concerns about political turmoil in Italy ease. Renewed probe above weekly cloud top pressure pivotal barriers at 1.1688 (falling 10SMA) and 1.1695 (Fibo 38.2% of 1.1996/1.1509).

Scope for further recovery exists but requires bullish signal on clear break above 10SMA / Fibo barrier to spark fresh extension higher and expose next barrier at 1.1787 (falling 20SMA. Sentiment is improving, however, overall bearish structure and negative momentum suggest that current move is a positioning for fresh bearish action and extended upticks should be capped under 1.1787/1.1810 (20SMA / Fibo 61.8% of 1.1996/1.1509).

EU CPI data are key event of the European session (May f/c 1.6% vs 1.3% in Apr), with solid number today expected to provide an additional support to the Euro.

Res: 1.1650, 1.1695, 1.1728, 1.1753
Sup: 1.1648, 1.1632, 1.1594, 1.1560

XAUUSD (1301.94): Gold prices continue to remain consolidating near the resistance of 1304 - 1301 since late last week. This strong consolidation could trigger an upside breakout above the resistance level. A close above 1304 could potentially pave the way for gold prices to post a correction to the next main resistance level at 1325. To the downside, price action looks to be forming a bottom. However, we can expect declines back to the 1282 level where a firm retest of support is still pending.

USDJPY (108.68): The USDJPY currency pair was seen consolidating near the recently breached support level of 108.90. The rebound in price back to this level indicates that resistance is being established. In the near term, we could expect to see a downside follow through in prices as long as the resistance level of 108.90 is not breached. A break down below the recent lows of 108.48 could signal further declines in store with the potential bearish flag pattern being validated.

EURUSD (1.1657): The EURUSD currency pair managed to close on a bullish note for the first time in three consecutive days. The rebound in prices came following slightly weaker fundamentals for the USD and an extremely oversold market in the euro. Price action was seen testing the lows of 1.1540 before reversing the gains. The strong bullish price action could potentially signal a short term turnaround. On the 4-hour chart, the Stochastics is currently printing a hidden bearish divergence. This suggests some near-term decline in price. As long as 1.1540 low is not breached, we expect the EURUSD to potentially form a bottom near the current levels. Resistance is seen at 1.1730.

The U.S. dollar was seen easing back from its strong patch of gains on Wednesday. The softer USD was attributed to the revised GDP estimates for the first quarter. Data showed that the U.S. economy expanded at a slightly slower pace of 2.2% in the first three months of the year.

This was slightly weaker than the 2.3% increase that was estimated previously. The ADP's private payrolls data released on the day showed that private sector hiring added 178k jobs during the month of May. Previous month's data was also revised down to 163k.

The data was seen to be slightly negative for the U.S. dollar as a result.

Looking ahead, the economic calendar for the day will see the release of the first quarter GDP numbers from Switzerland. Economists forecast a softer pace of growth of 0.5% during the period. Following the rebound in German inflation figures released yesterday, the Eurozone flash inflation estimates point to a 1.6% increase in headline CPI marking a strong acceleration from 1.2% previously. Core CPI is expected to rise 1.0% after registering 0.7% increase the month before.

Later in the day, Canada will be releasing the monthly GDP numbers. The median estimates point to a 0.2% increase in GDP following a 0.4% increase the month before.

U.S. Commerce Secretary Wilbur Ross talked about trade war in an interview published by daily Le Figaro.

He said "we don't want a trade war". But it's "up to the European Union to decide if it wants to take retaliatory measures. The next question would be: how will the Trump react? You saw his reaction when China decided to retaliate."

"If there is an escalation it will be because the EU would have decided to retaliate."

Typical blame the others.