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For the 24 hours to 23:00 GMT, the EUR declined 0.31% against the USD and closed at 1.2368, after the European Central Bank (ECB) President, Mario Draghi tempered expectations that the central bank could move to normalise its monetary policy before the year-end.

The ECB Chief stated that policymakers await to see further evidence of inflation dynamics moving in the right direction in order to end the central bank’s expansionary monetary policies.

On the economic front, Euro-zone’s seasonally adjusted industrial production retreated more-than-anticipated by 1.0% on a monthly basis in January, dropping for the first time in 4 months and compared to market expectations for a fall of 0.5%. In the previous month, industrial production had advanced 0.4%.

Separately, Germany’s final consumer price index (CPI) climbed 1.4% in February, meeting the preliminary print. In the prior month, the CPI had registered a rise of 1.6%.

The US Dollar declined against a basket of major currencies, amid rising trade war fears and after an unexpected drop in US retail sales intensified concerns that Americans would continue to keep a tight grip on spending.

Data indicated that advance retail sales registered an unexpected drop of 0.1% on a monthly basis in February, declining for the third straight month and compared to a revised similar fall in the previous month. Market participants had expected advance retail sales to gain 0.3%.

On the other hand, the nation’s producer price index (PPI) grew 2.8% on a yearly basis in February, meeting market expectations. In the previous month, the PPI had risen 2.7%.

In other economic news, business inventories in the US advanced 0.6% on a monthly basis in January, meeting market expectations and following a revised similar rise in the previous month. Further, the nation’s MBA mortgage applications gained 0.9% in the week ended 09 March, after recording a rise of 0.3% in the prior week.

In the Asian session, at GMT0400, the pair is trading at 1.2379, with the EUR trading 0.09% higher against the USD from yesterday’s close.

The pair is expected to find support at 1.2346, and a fall through could take it to the next support level of 1.2314. The pair is expected to find its first resistance at 1.2412, and a rise through could take it to the next resistance level of 1.2446.

Amid a lack of key macroeconomic releases in the Euro-bloc today, investors would look forward to the US initial jobless claims followed by the Philadelphia Fed manufacturing survey and the NAHB housing market index, both for March, slated to release later in the day.

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

For the 24 hours to 23:00 GMT, the GBP declined 0.19% against the USD and closed at 1.3965.

In the Asian session, at GMT0400, the pair is trading at 1.3981, with the GBP trading 0.11% higher against the USD from yesterday’s close.

The pair is expected to find support at 1.3940, and a fall through could take it to the next support level of 1.3900. The pair is expected to find its first resistance at 1.4007, and a rise through could take it to the next resistance level of 1.4034.

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

More economists are paring back their expectation of an RBA hike this year. Macquarie Bank now no longer sees RBA hiking within 2018. it noted in a report that "the primary reason for pushing back our RBA call is that the Bank can err on the side of growing the economy faster for longer to erode spare capacity and have confidence that inflation is firmly moving back into the 2-3% target." .

It referred to other advanced economies for the pattern of falling unemployment rates without wage growth. At this same time, "Australia's unemployment rate remains at 5.5% and noticeably above 'full employment'." Also, "after two years of below-target inflation, and at least another one to come, there seems little danger of generating a meaningful pick-up in inflation expectations from keeping interest rates low for longer."

Besides, "housing has settled", and "investor activity in the housing market has subsided significantly and housing prices have broadly flattened out. There is "little danger" or "reacceleration in housing price or credit growth." And therefore, "the source of much angst for the RBA — fast growth in housing prices in Sydney and Melbourne - has eased."

NAB recently pushed back their RBA rate expectation too and predicted only one hike this year, not two. Westpac continued to expect no hike until 2019.

For the 24 hours to 23:00 GMT, the USD declined 0.14% against the JPY and closed at 106.29.

In the Asian session, at GMT0400, the pair is trading at 106.02, with the USD trading 0.25% lower against the JPY from yesterday’s close.

The Japanese Yen gained ground against the USD, following fresh concerns over global trade war, after the US President, Donald Trump, announced plans to impose sharp import tariffs on China in order to trim the US trade deficit by $100.00 billion.

The pair is expected to find support at 105.66, and a fall through could take it to the next support level of 105.30. The pair is expected to find its first resistance at 106.55, and a rise through could take it to the next resistance level of 107.08.

Moving ahead, Japan’s final industrial production data for January, slated to release overnight, will be on investors’ radar.

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

ECB Vice President Vitor Constancio commented on financial stability at the conference. He noted that "the sharp movements that took place in the U.S. equity market in February 2018 demonstrated how sentiment can change very quickly -- and market participants should be well aware of this risk." And, "in an environment characterized by search for yield and depressed volatility, technical factors can greatly amplify initial market movements."

For the 24 hours to 23:00 GMT, the USD rose 0.21% against the CHF and closed at 0.9448.

In the Asian session, at GMT0400, the pair is trading at 0.9446, with the USD trading slightly lower against the CHF from yesterday's close.

The pair is expected to find support at 0.9421, and a fall through could take it to the next support level of 0.9397. The pair is expected to find its first resistance at 0.9475, and a rise through could take it to the next resistance level of 0.9505.

Ahead in the day, investors would closely monitor the Swiss National Bank's (SNB) interest rate decision, due in a few hours.

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

ECB Chief Economist Peter Praet echoed on monetary policy and said it's too soon to declare "mission accomplished" regarding inflation. Meanwhile, "with the passage of time, the indication that policy rates will remain at their present levels well past the end of net asset purchases will gradually cease to provide sufficient guidance". He added that "our forward guidance on the path of our policy rates will have to be further specified and calibrated."

For the 24 hours to 23:00 GMT, the USD rose 0.1% against the CAD and closed at 1.2957.

On the data front, Canada's Teranet/National Bank house price index registered a drop of 0.1% on a monthly basis in February, after recording a gain of 0.3% in the previous month.

In the Asian session, at GMT0400, the pair is trading at 1.2950, with the USD trading 0.1% lower against the CAD from yesterday's close.

The pair is expected to find support at 1.2922, and a fall through could take it to the next support level of 1.2894. The pair is expected to find its first resistance at 1.2977, and a rise through could take it to the next resistance level of 1.3004.

Later in the day, all eyes would be on Canada's existing home sales data for February.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

ECB President Mario Draghi emphasized in a conference in Frankfurt yesterday that any monetary policy adjustments must be "predictable" and carried out "at a measured pace". For now, he said ECB "still need to see further evidence that inflation dynamics are moving in the right direction". Therefore, "monetary policy will remain patient, persistent and prudent." Draghi also added that "sharp repricing" in the financial markets must be carefully monitored.

Regarding the steel and aluminum tariffs of the US, Draghi expected the initial impact to be small. However, he warned that "there are potential second-round effects that could have much more serious consequences." And, risks include "retaliation across other goods and an escalation of trade tensions, and the potential for negative confidence effects which would weigh on business investment in particular."

CADJPY Elliott Wave view suggests that the decline from 1.5.2018 high (91.58) is unfolding as a 5 waves impulse Elliott Wave structure. Minor wave 3 of this impulsive move ended at 81.36 on 3.5.2018 and Minor wave 4 ended at 83.51 on 3.12.2018. While bounces stay below 83.51, pair now has scope to extend lower to finish Minor wave 5. However, in order to add validity to this view and to avoid a double correction in Minor wave 4, pair still needs to break below Minor wave 3 at 81.36 as final confirmation.

Minor wave 5 is currently in progress and subdivided also as a 5 waves impulse Elliott Wave structure. Down from 83.51, Minutte wave (i) ended at 82.71, Minutte wave (ii) ended at 83.44, Minutte wave (iii) ended at 82, and Minutte wave (iv) ended at 82.43. Near term focus is on 81.29 – 81.51 to end Minutte wave (v) and this will also end Minute wave ((i)) of a larger degree. Pair should then bounce in Minute wave ((ii)) in 3, 7, or 11 swing to correct cycle from 3/12/2018 high before the decline resumes. We don’t like buying the pair.

CADJPY 1 Hour Elliott Wave Chart