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For the 24 hours to 23:00 GMT, the AUD rose 0.36% against the USD and closed at 0.7556.

LME Copper prices rose 1.0% or $66.5/MT to $6614.0/MT. Aluminium prices rose 0.6% or $12.5/MT to $2004.0/MT.

In the Asian session, at GMT0400, the pair is trading at 0.7575, with the AUD trading 0.25% higher against the USD from yesterday's close.

Overnight data revealed that Australia's Westpac consumer confidence index rebounded 3.6% MoM in December, compared to a drop of 1.7% in the previous month.

The pair is expected to find support at 0.7542, and a fall through could take it to the next support level of 0.7508. The pair is expected to find its first resistance at 0.7595, and a rise through could take it to the next resistance level of 0.7614.

Looking ahead, market participants will await the release of Australia's unemployment rate data for November, scheduled to release overnight.

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

For the 24 hours to 23:00 GMT, the EUR declined 0.3% against the USD and closed at 1.1738, following the release of downbeat ZEW economic sentiment data across the Euro-zone.

The Euro-zone’s ZEW economic sentiment index declined to a level of 29.0 in December, after recording a reading of 30.9 in the prior month.

Additionally, mood among German investors eased more-than-anticipated to a level of 17.4 in December, dropping for the first time in four months, hurt by heightened political uncertainty as the Euro-bloc’s largest economy is struggling to forge a new government. The index had registered a reading of 18.7 in the previous month, while markets were expecting it to fall to a level of 18.0. On the other hand, the nation’s ZEW current situation index unexpectedly climbed to a level of 89.3 in December, notching its highest since July 2011. The index had posted a level of 88.8 in the previous month, while investors had anticipated for a fall to a level of 88.7.

In the US, macroeconomic data indicated that producer prices advanced 3.1% on an annual basis in November, rising by the most since January 2012 and boosting hopes that price pressures may pick-up. Market participants had envisaged the index to gain 2.9%, following a rise of 2.8% in the previous month. Moreover, the nation’s NFIB small business optimism index climbed to a level of 107.5 in November, surpassing market consensus for a rise to a level of 104.0 and following a reading of 103.8 in the prior month.

Other data indicated that the US budget deficit surprisingly widened to $138.5 billion in November, confounding market expectations for it to narrow to $134.5 billion and compared to a deficit of $136.7 billion in the prior month.

In the Asian session, at GMT0400, the pair is trading at 1.1756, with the EUR trading 0.15% higher against the USD from yesterday’s close.

The pair is expected to find support at 1.1718, and a fall through could take it to the next support level of 1.1681. The pair is expected to find its first resistance at 1.1793, and a rise through could take it to the next resistance level of 1.1831.

Moving forward, investors would focus on the Euro-zone’s industrial production data for October and Germany’s final inflation figures for November, both slated to release in a few hours. Later in the day, all eyes will be on the Federal Reserve’s (Fed) interest rate decision, wherein the central bank is widely expected to raise its key interest rates. Moreover, the US consumer price index for November, scheduled to be released later in the day, will be on investors’ radar.

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

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For the 24 hours to 23:00 GMT, the GBP declined 0.19% against the USD and closed at 1.3318.

Earlier in the session, the Pound advanced against the USD, after latest data indicated that annual inflation in Britain jumped to its highest in nearly six years in November.

UK's consumer price index (CPI) climbed more-than-expected by 3.1% on a yearly basis in November, suggesting that the Bank of England (BoE) needs to explore the possibility of raising interest rates in the near future as higher inflation will further pinch spending in a slowing economy. In the preceding month, the CPI had registered a rise of 3.0% in the prior month, while markets were expecting for a gain of 3.0%.

In the Asian session, at GMT0400, the pair is trading at 1.3322, with the GBP trading marginally higher against the USD from yesterday's close.

The pair is expected to find support at 1.3291, and a fall through could take it to the next support level of 1.3259. The pair is expected to find its first resistance at 1.3367, and a rise through could take it to the next resistance level of 1.3411.

Going ahead, traders would closely monitor UK's ILO unemployment rate and average weekly earnings for the three months to October, scheduled to be released in a few hours.

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

For the 24 hours to 23:00 GMT, the USD marginally rose against the JPY and closed at 113.56.

In the Asian session, at GMT0400, the pair is trading at 113.30, with the USD trading 0.23% lower against the JPY from yesterday's close.

On the economic front, Japan's machinery orders rebounded 5.0% on a monthly basis in October, beating market expectations for a rise of 2.9%. Machinery orders had fallen 8.10% in the previous month.

The pair is expected to find support at 113.04, and a fall through could take it to the next support level of 112.77. The pair is expected to find its first resistance at 113.66, and a rise through could take it to the next resistance level of 114.01.

Going ahead, traders would look forward to Japan's flash Nikkei manufacturing PMI for December, set to release overnight.

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

For the 24 hours to 23:00 GMT, the USD traded flat against the CHF and closed at 0.9918.

In the Asian session, at GMT0400, the pair is trading at 0.9902, with the USD trading 0.16% lower against the CHF from yesterday’s close.

The pair is expected to find support at 0.9883, and a fall through could take it to the next support level of 0.9863. The pair is expected to find its first resistance at 0.9929, and a rise through could take it to the next resistance level of 0.9955.

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

For the 24 hours to 23:00 GMT, the USD rose 0.12% against the CAD and closed at 1.2873.

In the Asian session, at GMT0400, the pair is trading at 1.2854, with the USD trading 0.15% lower against the CAD from yesterday’s close.

The pair is expected to find support at 1.2814, and a fall through could take it to the next support level of 1.2774. The pair is expected to find its first resistance at 1.2893, and a rise through could take it to the next resistance level of 1.2932.

Ahead in the day, investors would focus on Canada’s Teranet/National Bank house price index for November.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

Dow Future Short Term Elliott Wave view suggests that Intermediate wave (4) ended with the decline to 23205. Up from there, Intermediate wave (5) is unfolding as an Ending Diagonal Elliott Wave structure where Minor wave 1 ended at 24536 and Minor wave 2 ended at 24073. The Index has been able to break above Minor wave 1 at 24536 which adds validity to this view.

Near term, rally from 24071 low remains in progress as 5 waves impulse Elliott Wave Structure and expect more upside before Minute wave ((i)) ends. Index should then pullback in Minute wave ((ii)) in 3, 7, or 11 swing to correct cycle from 12/7 low (24071) before the rally resumes. We don’t like selling the pullback and expect Index to find buyers in Minute wave ((ii)) pullback in 3, 7, or 11 swing as far as pivot at 24073 low stays intact.

YM_F Dow Future 1 Hour Elliott Wave Chart

Key Highlights

• The US Dollar and British Pound awaits key risk events today such as the fed interest rate decision, US CPI and UK’s employment report.
• GBP/USD is forming a contracting triangle on the 4-hour chart with support at 1.3300 and resistance near 1.3480.
• UK’s Claimant Count is forecasted to post a change of 3.2K in Nov 2017.
• The feds are likely to increase interest rates from 1.25% to 1.50% for the third time in 2017.

GBPUSD Technical Analysis

Today, there are many major economic releases lined up in the US and the UK. Both the US Dollar and British Pound would be impacted, especially the GBP/USD pair.

Technically, the pair held the 1.3300 support zone recently and is currently forming a contracting triangle on the 4-hour chart with support at 1.3300 and resistance near 1.3480.

The pair recently failed near the 23.6% Fib retracement level of the last drop from the 1.3520 high to 1.3310 low. Moreover, there are many barriers on the upside such as 1.3400 and 1.3450 waiting to stop the current upside move.

The overall price action is negative for GBP/USD heading into key risk events today. Only a successful close above 1.3400 followed by the 50% Fib retracement level of the last drop from the 1.3520 high to 1.3310 low would be a positive sign.

In the mentioned scenario, the pair might even attempt an upside break above the triangle resistance at 1.3480. On the flip side, if buyers fail to contain losses below 1.3300, the pair could decline sharply towards 1.3200.

Impact of Fed Interest Rate Decision

Today, Fed interest rate decision could be a game changer for the US Dollar. The central bank is expected to increase interest rates from 1.25% to 1.50% for the third time in 2017.

If they fail to deliver, it could be a bullish opening for GBP/USD. On the other hand, should they raise rates, the pair might come under a bearish pressure.

Recently, the UK saw the release of the CPI numbers for Nov 2017. The result was better than the forecast of +3.0% as there was a rise of 3.1% in the CPI (YoY). In terms of the monthly change, there was a rise of 0.3%, better than the last +0.1%.

Key Points:

• Crude oil inventories decline by 2.89 million barrels.
• Brent and WTI prices increased 36, and 50 cents, respectively.
• Higher prices likely to bring about additional U.S. shale oil production.

Crude Oil prices have continued to feel the pinch of increased rig counts as additional supply has constrained the recent rally. However, an inventory draw of 2.89 million barrels caught the market by surprise and has helped to largely stabilise markets overnight. Subsequently, West Texas Intermediate (WTI) rose around 36 cents on the news whilst Brent was up 50 cents. However, it remains to be seen if the result was simply an anomaly or part of a new trend in lower stocks.

Interestingly, the American Petroleum Institutes (API) forecast actually exceeded the official numbers with the industry association estimating that there had been a fall of 7.4 million barrels last week. This is a relatively staggering number and far exceeds what most analysts were expecting by a factor of at least two. Subsequently, there is plenty of evidence that the current production levels are being eroded by increased domestic demand.

In fact, there is plenty of evidence of growing global demand for oil which bodes well for prices given that the EIA is also projecting that domestic production will rise to 10.02 million bpd in 2018. However, it remains uncertain how OPEC will react to both the increased shale oil production and creeping crude prices.

The reality is that OPEC has largely changed their tune over the past six months and there is likely plenty of political will to curb further production with the view to stabilising prices above $65.00 a barrel. In fact, compliance has been relatively high for the present OPEC production caps which have surprised me greatly given that previous agreements have typically been fraught with cheating across the board.

Subsequently, we could see crude oil prices moving back towards a multi-year high in the ensuing months. However, the medium term to long term view is relatively different with higher prices likely to drive additional shale oil production activity as well as inward investment in the sector. So it is difficult to see Brent prices persisting above $65.00 a barrel in the long run. In fact, advancements in shale oil techniques will only undermine the oil cartels power in the long run and bring about further re-balancing in a market that is already moving away from Middle Eastern dominance.

Daily Pivots: (S1) 150.89; (P) 151.31; (R1) 151.63; More...

GBP/JPY's corrective fall from 153.39 is still in progress and intraday bias remains neutral. As long as 149.74 support holds, outlook remains bullish in the cross. Break of 153.39 will resume the medium term up trend and target 61.8% projection of 139.29 to 152.82 from 146.96 at 155.32. However, break of 149.74 will dampen our bullish view and turn bias back to the downside for 146.96 key support instead.

In the bigger picture, current development suggests that medium term rise from 122.36 is resuming. Sustained trading above 38.2% retracement of 196.85 to 122.36 at 150.43 will carry long term bullish implications. In that case, GBP/JPY could target 61.8% retracement at 167.78. However, break of 146.96 support will indicate rejection from 150.43 key fibonacci level. And the three wave corrective structure of rebound from 122.36 will argue that larger down trend is resuming for a new low below 122.26.