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USD/CHF is decreasing after reaching 1.0033 high, maintained slightly above the pair and heading along 0.9990. Hourly support and resistance given at 0.9755 (10/01/2018 low) and 1.0091 (09/05/2017 high) are maintained. The technical structure suggests short-term sideways trading moves.

In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support lies at 0.9072 (07/05/2015 low) while resistance at 1.0344 (15/12/2016 high) is distanced. The technical structure favours a long term bullish bias since the unpeg in January 2015.

USD/JPY rise continues, approaching the 111 range. The bullish pattern started from 104.56 (25/03/2018 low) is maintained. Hourly support and resistance are located at 108.74 (25/01/2018 low) and 111.48 (18/01/2018 high). The technical structure suggests short-term sideways trading moves.

We favor a long-term bearish bias. Support remains at 101.20 (09/11/2016 low). A gradual rise toward the major resistance at 125.86 (05/06/2015 high) seems unlikely. Expected to decline further support at 101.20 (09/11/2016 low). The pair trades slightly above its 200 DMA.

GBP/USD is starting a bullish consolidation at the 1.3520 range. Hourly support and resistance are given at 1.3331 (19/12/2017 low) and 1.4097 (29/01/2018 high). The technical structure suggests short-term sideways trading moves.

The long-term technical pattern is reversing. The Brexit vote had paved the way for further decline but the pair is moving to 2016 highs. Long-term support and resistance are given at 1.1841 (07/10/2017 low) and 1.5018 (24/06/2016 high).

EUR/USD is bouncing off from 1.1777 low and trades below 1.1812 (25/12/2018), heading along 1.1825. The pair is currently at mid-December 2017 levels. Hourly support and resistance are now given at 1.1737 (17/12/2017 low) and 1.2323 (17/01/2018 high). The technical structure suggests short-term increase.

In the longer term, the momentum is turning largely positive. We favor a continued bullish bias. Key resistance is holding at 1.2886 (15/10/2014 high) while strong support lies at 1.1554 (08/11/2017 low).

Cable remains within narrow range and holds in directionless mode for two weeks, lacking stronger direction signal. Thursday's recovery attempts probed above 200SMA (1.3556) which marks pivotal barrier, but failed to close above and generate bullish signal. Today's action is capped by sideways moving 10SMA (1.3526) but neutral momentum and RSI keep today's action within tight range. The pair looks for a catalyst which could be provided by major news, to eventually break out of two-week congestion and signal fresh direction. Bearish scenario requires firm break below range floor (1.3450) and nearby Fibo support at 1.3442 (38.2% of 1.1930/1.4376) to signal continuation of downtrend from 1.4376 (post-Brexit recovery peak). Conversely lift and close above 200SMA would generate initial bullish signal, but confirmation of reversal needs sustained break above range floor (1.3617) and falling 20SMA (1.3642).

Res: 1.3526, 1.3556, 1.3570, 1.3617
Sup: 1.3500, 1.3474, 1.3450, 1.3442

EUR/USD

Current level - 1.1809

There is an intraday risk of a brief rise to 1.1870 and it should finalize the consolidation pattern above 1.1760, hence provoke another leg downwards, to 1.1680. Crucial on the upside is 1.1890 area, as a violation of that zone will neutralize the bearish outlook.

USD/JPY

Current level - 110.85

The upmove has reached 111.00 resistance and after brief consolidation above 109.50 a continuation should be expected, towards 111.90 zone.

GBP/USD

Current level - 1.3515

Still bearish here, for a dip towards 1.3300 area. Crucial on the upside is 1.3615 static resistance.

Here are the latest developments in global markets:

FOREX: The US dollar index is lower today, but by less than 0.1%, giving back some of the gains it posted yesterday. The yen is on the back foot too, declining more than 0.2% against the euro and 0.05% versus the dollar, following disappointing inflation data out of Japan overnight.

STOCKS: US markets closed in the red on Thursday, weighed on by some remarks from US President Trump that he doubts the US and China can reach a trade agreement. The Dow Jones and the Nasdaq Composite fell by 0.22% and 0.21% respectively, while the S&P 500 declined by 0.09%. Market sentiment looks to have reversed though, as futures tracking the Dow, S&P, and Nasdaq 100 are all currently pointing to a higher open today, something likely owed to reports that China has made the US an offer on trade (see below). In Asia, the Nikkei 225 and the Topix rose by 0.4% and 0.38% correspondingly, while in Hong Kong, the Hang Seng climbed 0.6%. In Europe, futures tracking the major indices were mostly in the red, with the only exceptions being the German DAX and Italian FTSE MIB.

COMMODITIES: Oil prices are higher today, with WTI and Brent crude gaining 0.17% and 0.25% respectively. Both benchmarks touched fresh multi-year highs yesterday. Brent briefly punched through the psychological $80/barrel zone, even though EU leaders signaled their continued support to the Iran deal and discussed ways to block US sanctions on European companies doing business with Iran. In precious metals, gold prices are practically unchanged on Friday, last seen near the $1290 per ounce mark. Ever since the yellow metal broke below the psychological $1300 handle, it has largely traded sideways, reacting little to anything other than moves in the US dollar.

Major movers: Yen on the back foot; China makes the US an offer on trade

The dollar index is marginally lower on Friday, though still remains elevated just below a five-month high. The currency edged higher yesterday, supported by the yields on 10-year US Treasuries remaining elevated near seven-year highs. The dollar’s gains were more pronounced against the yen, which cannot draw support from relative interest rates, as the Bank of Japan (BoJ) is keeping the yields on longer-term Japanese bonds fixed near 0%.

The yen is on the back foot today as well, following disappointing inflation data out of Japan. Both the headline and the core CPI rates declined notably. Coming on top of soft GDP data recently, these prints likely amplified speculation the BoJ will maintain its ultra-loose policy framework in place for longer.

On the trade front, US President Trump indicated on Thursday he doubts trade negotiations with China would be successful, “because China has become very spoiled”. The two sides resumed talks yesterday, which will continue today.

A few hours later though, reports suggested China has presented the US with proposals aimed at reducing the trade deficit between them by $200 billion per year, mainly by increasing Chinese purchases of US goods. While no other details are available yet, it’s also worth noting that overnight, China dropped an anti-dumping tariff it imposed last month on US sorghum imports. Although the Asian nation cited increased costs for its farmers as the reason, the move may have also been “an offering of goodwill”, as the two sides attempt to come to terms on the bigger issues.

Markets will likely be on the lookout for any fresh remarks on the subject today. Any hints from US officials that China’s $200 billion offer is something they can work with could boost risk appetite, potentially pushing equities higher and safe havens lower. The opposite holds true as well.

Dollar/loonie spiked higher overnight following remarks on NAFTA, but has given back most of its gains and is currently only 0.05% higher on the day. The move came after US trade representative Lighthizer said NAFTA countries are nowhere close to a deal, pouring cold water on expectations that a resolution may be achieved before the Mexican election in July.

Day ahead: Canadian inflation & retail sales pending; Trade & North Korea developments in focus

Data out of the Eurozone, Canada and the US are likely to keep investors busy on Friday, while US Treasury yields will be closely watched for signs of gains in the dollar market. Trade headlines and developments in the US-North Korea relations could add volatility to the markets as well.

At 0800 GMT, Eurozone will see the release of trade stats for the month of March and it would be interesting to see whether the bloc’s trade surplus continued to narrow at times when the Eurozone is pushing efforts to eliminate threats of import metal tariffs from the US. Recall that the German Chancellor Angela Merkel said recently that Europe will be prepared to enter discussions on how to reduce trade barriers if the US provides a permanent tariff exception without conditions or time limits. Renewed US sanctions against Iran are also a concern to the region given that Europe is one of Iran’s biggest oil customers after China and India.

The North Korea story will remain in the spotlight as latest comments by the US President and the North Korea leader have eased hopes of a productive US-North Korea summit on June 12. Following threats from North Korea to cancel the summit if Washington pushed for a unilateral denuclearization, Trump answered that North Korea could be “decimated” if it refused to make a deal with the US.

In Canada, the focus will turn to inflation and retail sales readings at 1230 GMT after the US, Canada and Mexico missed Thursday’s deadline to form a NAFTA deal, with the US trade representative Robert Lighthizer stating the member countries are “nowhere near close to a deal”. At the same time, though, the Canadian Prime Minister expressed optimism about talks to save NAFTA, while a Mexican top official spurred hope that an agreement could be reached by the end of May.

Canadian consumer prices in April are forecast to have grown at March’s pace of 2.3% y/y, remaining above the midpoint of the Bank of Canada’s 1-3.0% range target for the second consecutive month. A rate hike, however, is less likely to be announced at the end of this month despite a tighter labor market as trade and debt uncertainties continue to loom in the background. Core inflation measures, which trim for volatility and are closely monitored by BoC policymakers will attract attention as well. On the other hand, retail sales for the month of March are anticipated to ease from 0.4% m/m to 0.3%, but in the absence of automobiles, the measure is expected to improve to 0.5% after showing no growth in the previous month. In the wake of a positive data surprise, especially in the inflation front as the numbers are more recent, the loonie could strengthen.

In oil markets, Baker Hughes’s weekly report on the US oil rig count will be issued at 1700 GMT, with a high potential to move prices.

As for today’s public appearances, Dallas Fed President Robert Kaplan will be participating in a moderated question-and-answer session before the 12th Annual University of Texas at Dallas Project Management Symposium at 1315 GMT, while at the same time Fed Board Governor Lael Brainard will be speaking on “Community Reinvestment Act Modernization” before the Association for Neighborhood and Housing Development 8th Annual Community Development Conference.

Technical analysis – USDCAD in bearish mode ahead of key data release

USDCAD managed to restore part of losses made since the start of the week on Thursday but today the pair is heading lower, with technical indicators in the four-hour chart suggesting that the market is less likely to gain momentum in the short-term; the RSI is negatively sloped and on track to cross below its neutral threshold of 50, while the MACD continued to fluctuate marginally below zero.

Still, upbeat inflation and retail sales figures out of Canada later today could boost the loonie, sending the market down to yesterday’s trough of 1.2749. A break below that level could shift focus towards the low of 1.2728 reached on May 11.

In the alternative scenario, a miss in the data could work in favor of the dollar, pushing the market up to the area embraced by the 20- and the 50-day simple moving averages which currently trend around 1.2820. A bigger surprise, though, could probably push prices even higher towards 1.2880, a frequently congested area from the end of April onwards.

XAUUSD (1288.99): Gold prices continue to drift lower but price is nearing the next main support level at 1282. A retest of this support level that has held previously could signal a short term bounce in prices. Resistance is seen formed at 1304 - 1301 level which is likely to keep a lid on the gains to the upside. Gold prices have been consolidating near the current levels with the past two daily sessions posting a doji candlestick. This could potentially signal a near term correction should prices bounce back to the upside.

USDJPY (110.56): The USDJPY currency pair breached past the 110.50 level and price action is trading close to the next main level of 111.00. On the 4-hour chart, this marks a resistance level within 111.18 - 110.85 region. We expect to see price trading within this range in the short term and could potentially signal a short term correction to the downside, unless the bullish momentum will push the USDJPY past this resistance level. Short term support is seen at 109.57 - 109.43 region which could be tested ahead of USDJPY maintaining a range within the said levels.

EURUSD (1.1803): The EURUSD currency pair stayed weak but price action was confined to Wednesday's range. The inside bar that was formed on the daily session potentially suggests a near term breakout. There is a possibility that given the weakness, the EURUSD currency pair could breakout to the downside with price action trading close to the lower support level at 1.1730. In the event of an upside breakout, the resistance level near 1.1920 will be seen holding the gains. On the 4-hour chart, the minor resistance level is seen near 1.1846 - 1.1824 which could see some consolidation taking place.