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Daily Pivots: (S1) 112.17; (P) 112.66; (R1) 113.02; More...

At this point, USD/JPY is still limited below 113.43 resistance and intraday bias stays neutral first. On the upside, break of 113.43 will resume the rise from 107.31 and target 114.49 resistance. More importantly current development revives the case that correction from 118.65 has completed at 107.31. Decisive break of 114.49 will pave the way to retest 118.65 high. However, break of 111.64 will mixed up the outlook again and turn bias back to the downside for deeper fall.

In the bigger picture, rise from 98.97 (2016 low) is seen as the second leg of the corrective pattern from 125.85 (2015 high). It's unclear whether this second leg has completed at 118.65 or not. But medium term outlook will be mildly bearish as long as 114.49 resistance holds. And, there is prospect of breaking 98.97 ahead. Meanwhile, break of 114.49 will bring retest of 125.85 high. But even in that case, we don't expect a break there on first attempt.

USD/CHF - 0.9805

Most recent candlesticks pattern : N/A

Trend                                    : Up

Tenkan-Sen level                  : 0.9803

Kijun-Sen level                    : 0.9793

Ichimoku cloud top                 : 0.9807

Ichimoku cloud bottom              : 0.9799

New strategy  :

Buy at 0.9775, Target: 0.9875, Stop: 0.9740

Position : -

Target :  -

Stop : -

As the greenback found renewed buying interest at 0.9737 and has rallied again, price broke above recent high at 0.9837, signaling early upmove has resumed and although price has retreated from 0.9848, reckon downside would be limited to 0.9770-75 and bring another rise later, above said resistance at 0.9848 would confirms resumption of upmove from 0.9421 low for headway to 0.9870 and possibly towards 0.9900.

In view of this, we are looking to buy dollar again on pullback as 0.9770-75 should limit downside and bring another rise later. Only below support at 0.9730-37 would abort and signal top is formed instead, bring another corrective decline to previous support at 0.9705.

The USD/CAD is expected to increase and to resume the yesterday’s minor bullish candle. Price retested the 1.2460 static support, failing to retest the upper median line (uml) of the descending pitchfork and the median line (ml) of the blue ascending pitchfork.

The next upside target will be at the median line (ML) of the major red ascending pitchfork and at the 1.2678, actually, it could be attracted by the confluence area formed between these two resistance levels.

EUR/USD decreased in the morning failing to reach and retest the median line (ml) of the ascending pitchfork. Price moves sideways on the short term and developed a Head and Shoulders pattern, but this is far from being confirmed. Only a valid breakdown below the 1.1711 horizontal support will signal a further drop. Support can be found at the median line (ML) of the major black ascending pitchfork, so only a valid breakdown below the ML and outside the ascending pitchfork’s body will confirm a larger drop.

The Currency pair dropped significantly today and resumed the yesterday's bearish candle. Price is pressuring an important dynamic support and is somehow expected to take this out. The USD has taken the lead on the short term and drives the rate down as the USDX has managed to increase again.

The dollar index was almost to erase the yesterday's losses, remains to see if will have enough energy to stay higher and to approach the 93.81 horizontal resistance again. A failure to approach the 92.49 static support shows that the bulls are still in the game and could force the index to start a larger rebound.

The UK's Public Sector Net Borrowing will be released later and is expected to increase from 5.1B to 5.7B in September, we'll see if will have the ability to lift the cable.

The GBP/USD drops after the breakdown below the 250% Fibonacci line and now is pressuring the outside sliding line (SL) of the major descending pitchfork. Price retested the median line (ml) of the minor descending pitchfork as well, but is somehow expected to ignore it and to drop much deeper.

I've said in the previous week that the perspective remains bullish as long as the rate stay above the 250% Fibonacci line, but another breakdown will signal a larger drop. Will drop towards the lower median line (lml) of the minor descending pitchfork if will close below the median line and if will retest this obstacle.

On Thursday, the US Department of Labor released Initial Jobless Claims for the week ending October 13th that showed a resilient and stable labor market. Initial claims fell 22K to a seasonally adjusted 222K – the lowest since March 1973. The data is now becoming more realistic as the impact of the recent Hurricanes is no longer impacting claims to any great extent. With unemployment at its lowest level since 2000 and a growing job market, US economic expansion appears to be moving in a positive direction.

UK Retail Sales data, released on Thursday by the Office for National Statistics, fell more than expected. Following the jump in August, September data fell 0.8%, resulting in the UK retail sector experiencing its lowest growth rate in 4 years for the recent quarter. With inflation running at 3% and wage growth stalling at 2.2%, consumer spending is likely to remain depressed as we see out 2017. The markets believe that the Bank of England is likely to ignore such poor data as they consider hiking rates at their meeting on November 2nd.

President Trump received a boost as a budget blueprint plan for 2018 was approved in the Republican-controlled Senate on Thursday. By a vote of 51 to 49, the tax plan was approved, which is likely to create a clear path for Republicans to initiate a tax cut package without Democratic support. The approved budget plan allows tax legislation to add up to $1.5 trillion to the Federal Deficit over the next 10 years to pay for the proposed tax cuts. The markets appear to have reacted positively to the news, with USD seeing gains overnight.

Trump has now concluded the interviews for the next Fed Chair after seeing 5 candidates. A decision could be announced as early as next week, with Federal Reserve Governor Jerome Powell appearing to be the leading candidate. Powell is regarded as having a less hawkish stance than the other front-runners, Kevin Warsh and John Taylor, and is likely to favor lower US interest rates which would result in USD declining.

EURUSD is -0.3% lower in early Friday trading. Currently, EURUSD is trading around 1.1815.

USDJPY is 0.6% higher overnight. USDJPY is currently trading around 113.20.

GBPUSD is 0.4% lower in early Friday trading. GBPUSD is currently trading around 1.3105.

Gold is 0.5% lower, trading around $1,283 in early Friday trading.

WTI is 0.15% higher, trading currently around $51.70.

Major data releases for today:

At 07:35 BST, Bank of Governor Haruhiko Kuroda is scheduled to hold a press conference about Japanese monetary policy at the annual meeting of credit cooperatives in Tokyo.

At 09:30 BST, the UK Office for National Statistics is scheduled to release Public Sector Net Borrowing for September. September’s data is likely to be higher than the previous release of £5.093B.

At 13:30 BST, Statistics Canada will release a plethora of inflation data that will consist of Retail Sales & CPI. CPI (MoM) is expected to show a slight increase to 0.3% from the previous reading of 0.1%, with Retail Sales also expected to show a slight increase to 0.5% from 0.4%.

At 19:00 BST, FOMC Member Loretta Mester is scheduled to participate in a global regulatory structure panel before a conference focusing on “The Future of Global Finance: Populism, Technology and Regulation” in New York.

GBP/USD - 1.3136

Most recent candlesticks pattern   : N/A

Trend                                 : Near term down

Tenkan-Sen level                 : 1.3124

Kijun-Sen level                    : 1.3151

Ichimoku cloud top              : 1.3214

Ichimoku cloud bottom        : 1.3199

Original strategy :

Sell at 1.3285, Target: 1.3165, Stop: 1.3320

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 1.3220, Target: 1.3100, Stop: 1.3255

Position : -

Target :  -

Stop : -

Although cable fell again to 1.3088, lack of follow through selling on break of previous support at 1.3121 suggests consolidation would be seen and another bounce to 1.3175-80 cannot be ruled out, however, reckon resistance at 1.3229 would limit upside and bring another decline later, below said support at 1.3088 would extend the fall from 1.3338 to 1.3050 but recent low at 1.3027 should remain intact due to oversold condition.

In view of this, wee are looking to sell cable on subsequent recovery as resistance at 1.3229 should limit upside and bring another decline later. Above 1.3250-55 would defer and risk test of indicated resistance at 1.3287 but only a firm break above this level would abort and signal low is formed instead, bring rebound to 1.3300 and possibly test of resistance at 1.3312. 

XAUUSD (1284.25): Gold prices briefly bounced higher yesterday, but the reversal was strong enough to push prices lower. The downside is now likely to see gold prices falling back to the familiar support level of 1275 - 1274 area. Establishing support here could keep gold prices from posting further declines. However, this cannot be ruled out as a break down below 1274 level could mark further drop in prices. The lower support at 1262 also comes with a horizontal support level as well as the dynamic support from the daily chart's rising trend line.

Daily Pivots: (S1) 0.7852; (P) 0.7867; (R1) 0.7895; More...

Intraday bias in AUD/USD remains neutral at this point. Above 0.7896 will extend the rebound from 0.7732 and target a test on 0.8124 high. But we'd be cautious on strong resistance from there to limit upside and bring another fall to extend recent corrective pattern. On the downside, break of 0.7732 will resume the decline from 0.8124 and target medium term fibonacci level at 0.7628 first.

In the bigger picture, rise from 0.6826 medium term bottom is seen as corrective pattern. Current development suggests that it might be completed with three waves up to 0.8124 already. Break of 38.2% retracement of 0.6826 to 0.8124 at 0.7628 will firm this bearish case. And, decisive break of 0.7328 key cluster support (61.8% retracement at 0.7322) will confirm and bring retest of 0.6826 low. In case rise from 0.6826 resumes and extends, strong resistance should be seen at 38.2% retracement of 1.1079 to 0.6826 at 0.8451 to limit upside.

USDJPY (113.16): The USDJPY remains tightly range bound with price action see testing the upside resistance at 113.00 in the past few sessions. Still, USDJPY has been posting a consolidation that could signal a possible breakout. With the Japanese elections due over the weekend, we could expect to see a breakout emerging by Monday's open. Price action needs to post a convincing close above 113.00 in order to validate any further gains to the upside. Thus, there is a strong chance that USDJPY could push back and close within the range of 113.00 and 112.04.