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USD/CAD gains strength back after slowing down its descent. The pair heads toward the range of 1.26. Hourly resistance is maintained at 1.2748 (24/11/2017 high) and support is given at 1.2251 (31/01/2018 low). The technical structure indicates that further short-term rise is expected.

In the longer term, the pair is trading between resistance point at 1.3805 (05/05/2017 high) and support at 1.2128 (18/06/2015 low). Strong resistance is given at 1.4690 (22/01/2016 high). The pair is likely to head lower. The pairs is trading below its 200 DMA.

USD/CHF ended its short-term downward trend, heading for further rise along 0.93. Hourly resistance stands at 0.9559 (24/01/2018 high) while further resistance remains at 0.9668 (17/01/2018 high).

In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Support at 0.9259 (24/08/2015 low) is now reached. Key support remains 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 is recovering and heading above 106.50. Hourly resistances at 111.50 (18/01/2018) and 113.75 (12/12/2017 high) remain far. The technical structure suggests short-term upside moves.

We favor a long-term bearish bias. Support at 105.55 (03/05/2016 low) is almost reached. 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).

GBP/USD is bouncing down, heading below 1.40 range and heading for 1.3742 (16/01/2018 low). The technical structure suggests further upside move.

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 decreasing after its break of resistance at 1.2537 (25/01/2018 high). Heading toward 1.23 range. Hourly support at 1.2165 (17/01/2018 low) is approaching. The technical structure suggests further downside moves.

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).

For now follow the USD bears

Today's play is to buy risk, sell volatility. January's Open Market Committee meeting of the US Federal Reserve, minute of which will be released this week, should show confidence in US economic growth. The decline of the VIX volatility index and the recovery in equities has offset concerns of slightly higher interest rates.

Yet we will not be lulled into complacency. When the European Central Bank and the Bank of Japan start “normalization”, this will likely trigger a sustained, extended correction that bears expect. We see additional volatility through September. US fiscal spending will accelerate, thanks to the Bipartisan Budget Act of 2018 which will boost federal outlays by $67.9 billion in 2018 and $184.3 billion in 2019. This could push the Fed to tighten faster, increasing the risk of a hard landing in the USA.

Tokyo, Sydney and S. Korea continue their expansion

Japanese equities continue their expansion on Monday. The TOPIX ended the day at 1775 (+2.17%) following strong decrease of -7.09% two weeks ago, supported by Real Estate (+2.79%), Utilities (+2.44%), Industrials (+2.34%) and Materials (+2.04%). The technical structure of the index suggests further short-term rise toward hourly resistance at 1803 (07/02/2018 high). The Nikkei 225 also closed higher, heading above 22K at 22149 (+1.97%) and heading toward hourly resistance at 22354 (07/02/2018 high).

Stocks in Sydney and South Korea ended the day in positive territory, with the S&P/ASX 200 at 5942 (+0.64%) and the Kospi increasing up 0.87% at 2443, while Hong Kong and China remain closed for holiday.

This week we will be looking at Australia Reserve Bank Meeting Minutes (Tuesday) and US FOMC Meeting Minutes (Wednesday), both giving the tone on markets for the coming days.

The precious metal has broken out from its descending wedge around 1331.00 and moved higher to create a lower high at 1361.80.The price then dropped back lower to support at 1344.16. Resistance above can be found at 1361.80 and the January high at 1365.30. A break above this resistance targets 1375.50 and 1389.00 with a large resistive zone around 1400.00. However a break above 1412.50 clears the way towards 1450.00 and 1464.00.

Support on the Gold chart can be seen at 1344.16 with the 50 period MA below at 1339.74 and the 100 period MA at 1335.90. The next level of support then comes in at 1333.66 and then 1327.5, which is the level that the 200 period MA is currently at. The descending red trend line top of the wedge is currently around 1322.00. The 1320.00 has been used as support on a number of occasions over the last two weeks and below this level is 1311.41. The support area around 1300.00 has been used on the many times in the past number of years and continues to impact price moves.

Gold 4 Hour chart

The GBPUSD pair has formed a descending broadening wedge since late January as it follows developments with the recent Stock market decline and economic data releases. Weakness in the US Dollar has been a strong theme but the UK Economy is flagging warning signs as the Brexit choke hold continues. On Friday UK Retail missed expectation to the downside. The Inflation Report Hearings will take place on Wednesday afternoon and this will provide an insight into BOE thinking on future monetary policy.

Resistance for the pair can be found at the red trend line wedge top around 1.41378. Above this level resistance is coming in at 1.41796 and this year’s high of 1.43450. Further on above these levels 1.45187 can prove difficult with 1.46626 and 1.47690 in extension. Supports below the current price level come in at 1.40000 and 1.38354 with the 50 DMA at 1.37849. The September high of 1.36568 is a significant level on the daily chart with a move below here suggesting a more sustained drop. The 100 Day MA is found alongside the wedge bottom at 1.35752 with 1.34500 below containing the rising Black supporting trend line. The 200 DMA is found at 1.33456 with the 1.32246 and 1.30586 support levels below.

GBPUSD Daily chart

GBPAUD made a nice five-legged drop from 1.8000 level, which can be regarded as the first sign for a locked in top, and for a minimum three-wave bearish reversal to be underway. After the five wave drop, we have seen a temporary pullback as in an A-B-C matter that looks now completed, and points towards new lows. On that note a breach below the lower channel line would signal a bearish continuation.

GBPAUD, 4H

NZDUSD (0.7392): Price action in the New Zealand dollar looks somewhat similar to most of the other major currency pairs. After posting a fresh high, NZDUSD has also formed a double top pattern at the highs. This could suggest a near term decline. As a result, NZDUSD could be seen testing 0.7333 where support could be tested after it previously failed as resistance. But in the event that this support fails, then NZDUSD could be pulling back to post further downside correction. Support at 0.7160 is likely to be tested.

GBPUSD (1.4023): The British pound was seen easing back on Friday as price touched the previous support level of 1.4121 to establish resistance. The reversal at this level on the daily time frame indicates a pull back. We expect price to slip back to 1.3902 in the near term. There is a chance that GBPUSD could remain range bound within the current levels. But, if price action fails to hold the declines near the support of 1.3902 watch for prices to correct towards 1.3611 - 1.3600 region where the support is likely to be tested.