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The Dollar Was Little Changed Below the Recent 11-Week High. The U.S. Dollar Index was down 0.18% after U.S. economic data did little to change views on the timing or pace for monetary tightening and investors awaited fresh triggers for trading. There was a change in sentiment for the greenback during theAsian session as investors saw bets strengthen on Jerome Powell to become the next Fed Chair in February, a well renown dovish board member of the central bank. Yellen is still in the running and did not comment on monetary policy today in St. Louis. Investors focus their attention to upcoming unemployment claims and trade balance figures this evening out of the United States.

The Kiwi Remains Largely Flat Against the Greenback. The New Zealand Dollar opened this morning at 0.7160 after having some positive movements during the American session, reaching a high of 0.7204. The Kiwi initially lost ground against its counterpart when US non-manufacturing PMI numbers outperformed. This was then counter-balanced by increased speculation on Trumps next choice for Federal Chair with the significance being that the resulting decision will influence monetary policy going forward.

Australian Dollar Hits Weekly High. The Australian dollar edged upward on Wednesday pushing back through 0.7830 and testing intraday highs at 0.7875. With little domestic data on hand to drive direction the AUD found support in wider USD weakness as investors reacted to a proposed short list of candidates to replace Janet Yellen as Fed and FOMC Chair.

Canadian Dollar Awaits for Trade Balance Release. The USD/CAD lost 0.192 percent on Wednesday. The currency is trading at 1.2482 with the loonie regaining some ground after the USD got a temporary boost from purchasing managers in the service sector. In a day with few economic data releases the Canadian trade balance will impact the USD/CAD but could end up being eclipsed by FOMC member comments.

Gold Pares Gains as Dollar Comes Off Data Low. Gold was little changed at $1,275.39 an ounce as the US dollar came off its lows on strong data from the US service sector index. Having touched its lowest since mid-August on Tuesday, spot gold was up 0.2 per cent at $US1,274.41 per ounce on Thursday. Earlier on Wednesday, it reached a high of $US1,282 per ounce.

Oil Prices Fall for Third Session to Lowest Settlement in Over Two Weeks. Oil prices eased on Wednesday for a third-straight session, settling at their lowest level in more than two weeks. U.S. government report released Wednesday showed a much bigger-than-expected weekly drop in crude supplies along with a rise in gasoline stockpiles. WTI crude dropped 0.9% to $49.98 a barrel, Brent crude futures were down 0.4 percent, at $55.78 a barrel.

Watch Out Today for:

11:30 am GMT: EUR ECB Monetary Policy Meeting Accounts

Currency pair EUR/USD

The EUR/USD bounce at the 23.6% Fibonacci support level of wave 4 (blue) has not managed to break above the resistance at 1.18. A break above the resistance trend line (red) could start a bullish breakout whereas a third attempt to break below the 23.6% Fib could start a larger bearish correction towards the 38.2% Fib.

The EUR/USD is moving sideways in a channel (red/green lines). A break below the channel could still face support from the wave 2 (green) Fibonacci levels.

Currency pair GBP/USD

The GBP/USD is again retesting the support trend line (blue) and the 50% Fibonacci level of the wave 4 (blue), which is a bounce or break spot.

The GBP/USD break below the support trend line (dotted green) but could be bouncing at the previous bottom. A bullish bounce could see price retest the resistance levels (red).

Currency pair USD/JPY

The USD/JPY is in a triangle pattern, which is indicated by the support (blue) and resistance (red) trend lines. A bearish break could indicate the completion of wave A or 1 (green) at the recent high.

The USD/JPY could be in a wave 2 (purple) retracement.

STOCKS

Dow (22661.64, +0.09%) is trading higher. 22750 is the immediate target for the next few sessions.

Need to keep a close watch if Dax (12970.52, +0.53%) faces any rejection at 13000 or breaks higher to make fresh highs targeting 13250 in the near term. Looking at the upward momentum, the index looks bullish.

Shanghai (3348.94, +0.28%) could attempt a rise towards 3360-3375 in the near term. Overall the index may trade within 3375-3330 this week.

Nikkei (20629.02, +0.01%) could pause near 20700-20750 just now unless the Dollar Yen and the US-Japan 10Yr differential surges sharply to force Nikkei to rise towards crucial resistance of 21000. A rejection from 20750 is preferred in the coming sessions to levels near 20500-20400 levels. But in case the index breaks above 20750, the next target on the upside would be 21000.

Nifty (9914.90, +0.56%) could come off today to levels near 9800. Note immediate resistance near 9970-9950 levels may hold just now, pushing the index back towards 9800 or even lower.

COMMODITIES

Gold (1274.28) could be stuck in the 1260-1280 region this week and some consolidative phase is possible over the early sessions of next week too. Thereafter the price may start to rise above 1280 while decent support near 1260 holds.

Silver (16.59) attempted a rise towards 17 yesterday but came off sharply to close lower. 16.75 could possibly hold on the upside and push the index below 16.50 in the near term.

Brent (55.91) could try to rise towards 56.65 in the next few sessions before again resuming the fall towards 55 later on. WTI (49.99) on the other hand has some scope of falling towards 49.50 or even lower in the near term.

Copper (2.9650) is almost stable in the 2.90-3.00 region as mentioned yesterday. A break on either side is needed to get some clarity on further course of direction.

FOREX

Sideways consolidation in Dollar-Yen (112.75) below 113.00-50 over the last couple of days. Need to see if it tops out below 113 now over the next few days or breaks past it. The Euro-Yen (132.56) continues to look bullish overall with Support at 132.00.

Understandable consolidation happening in Euro (1.1758) as well, caught between short-term bearishness towards 1.16 and longer term bullishness while above 1.16. Note, though, that 1.16 is a super-crucial Support, dividing the bullish/ bearish regions. This corresponds with Resistance near 94.50 on the Dollar Index.

Slight dip in the Pound (1.3237) within current bearishness that targets 1.3200-3150 at least. The Aussie (0.7830) has also dipped a bit but has Support at 0.7800-7780, as mentioned yesterday.

Dollar-Rupee fell to 65.01 after the RBI policy yesterday and might dip to 64.90-80 today. That said, we also note that the market is a little Oversold in the near term.

INTEREST RATES

RBI kept the Repo Rate (6%) and CRR (4%) unchanged yesterday while lowering SLR from 20% to 19.5%. The 10Yr GOI yield rose from 6.65% to 6.70%, a sharp surge after the RBI policy rate yesterday. The yield could move up to test 6.75% in the near term before coming off in the longer run.

The RBI has also suggested that lending rates, especially to retail customers, should be tied to some external benchmark, in order to better transmit interest rate changes to the market.

The US yields are almost stable and are vulnerable to a slight fall in the coming sessions.

Also keep a close watch at the US-Japanand the German-US 10YR differentials which could provide some important cues for Euro and Dollar Yen movements in the near term.

Daily Pivots: (S1) 0.7836; (P) 0.7855; (R1) 0.7882; More...

AUD/USD continues to stay in tight range above 0.7784 and intraday bias remains neutral first. Focus stays on 0.7807 key near term support. Considering bearish divergence condition in daily MACD, firm break of 0.7807 support will indicate near term reversal. Outlook will then be turned bearish for 55 week EMA (now at 0.7674) first. Meanwhile, rebound from 0.7807 will retain bullishness. Above 0.7907 minor resistance will turn bias back to the upside for retesting 0.8124 high.

In the bigger picture, rise from 0.6826 medium term bottom is seen as corrective pattern. In case of further rally, strong resistance should be seen at 38.2% retracement of 1.1079 to 0.6826 at 0.8451 to limit upside. Meanwhile, firm break of 0.7807 is the first signal that such correction is focused. Break of 0.7328 will bring retest of 0.6826 low.

Dollar trades mildly firmer in Asian session today but there is still no follow through buying in listless trading. The greenback is still limited below key near term resistance levels against Swiss Franc, Yen and Aussie. While the Aussie trades mildly softer after weak retail sales, it's staying as the strongest one for the week so far. Euro is attempting a rebound but the strength is limited by growing tensions in Catalonia. Meanwhile, Sterling was given some support after yesterday's service data. But there is no sign of a sustainable rebound yet.

Fed working on easing regulations on community banks

Fed Chair Janet Yellen said yesterday that the central bank is working on easing regulations on smaller banks. Yellen noted that "For community banks, which by and large avoided the risky business practices that contributed to the financial crisis, we have been focused on making sure that much-needed improvements to regulation and supervision since the crisis are appropriate and not unduly burdensome." Yellen has already talked a tough line defending post financial regulations. But there has been openness to softening the rules for community banks. And her comments were seen as a reminder to US President Donald Trump that there are rooms for discussions on easing business regulations. These comments come at a time when Trump is considering his short list of five candidates for the next Fed chair position.

Catalan leader Puigdemont's call mediation hits a wall

Catalonia leader Carles Puigdemont accused King Felipe of Spain of endorsing the "catastrophic" policies of Spanish Prime Minister Mariano Rajoy. He said King Felipe "have disappointed a lot of Catalans". But he also emphasized that "this moment requires mediation". But such calls have so far fallen on deaf ears. Puidgemont is also clear that he would declare independence in the coming days.

European Commission Vice President Frans Timmermans, a Dutch politician, criticized that Catalonia for holding an illegal referendum. Timmermans said in the European Parliament that "there is a general consensus that the regional government of Catalonia has chosen to ignore the law." And, he added that "respect for the rule of law is not optional, it is fundamental." But he also urged that "all lines of communication must stay open. It's time to talk, to find a way out of the impasse."

Guy Verhofstadt, a Belgian member of the European Parliament, who's also the Brexit negotiation representative, talked about Catalonia yesterday. He branded the independence referendum and condemned its 'deception and manipulation'. He also warned that any declaration of independence is "totally irresponsible" Manfred Weber, a German politician said "the EU has neither the will nor the right to intervene in a true liberal democracy such as Spain." But Weber warned that "who leaves Spain, leaves the European Union."

On the other hand, Greens group leader Ska Keller, another German politician, condemned that "this was massive police violence against people and that was beyond any proportionality. Violence so disproportionate cannot be justified. No buts and no excuses, whatever you think about the referendum,"

Aussie lower after worse retail sales contraction in four years

Australian Dollar trades mildly lower today after disappointing retail sales, that contracted -0.6% mom in August, much worse than expectation of 0.3% mom rise. That's also the steepest decline in more than four years. Also, the contraction is broad-based, as sales dropped in every state and territory across the country. The sluggish sales is seen partly a result of poor wage growth in the job market, and partly due to high household debt level. Also from Australia, trade surplus widened to AUD 0.99B in August, above expectation of AUD 0.87B. Exports grew 1% to AUD 32.2B while imports were flat at AUD 31.2B. The trade data was somewhat also consistent with retail sales, suggesting weak domestic demand growth. That's seen as one of the major reasons for RBA to stand pat while global central banks are exiting stimulus.

Staying in Australia, former RBA board member John Edwards warned that "very low interest rates at a time of firm economic expansion invite trouble." And, there is "too great a risk that the price of assets like houses and shares may get too far out of whack with what prove to be sustainable levels." Then he pointed to Australia 10 year bond year at around 2.6%, 1.1% above the cash rate. The long-term average premium sits at 0.8%. So, "there is perhaps some allowance for a rise in the cash rate over the ten years of the bond, but not much."

Japan Abe to meet US Trump on November 6

Japan Prime Minister Shinzo Abe held a telephone call with US President Donald Trump yesterday. Regarding North Korea, they both agreed that "dialogue for the purpose of dialogue was meaningless". Abe is expected to meet Trump in November, during the latter's visit to Asia including China, the Philippines, South Korea and Vietnam between November 3-14. That's also not long after Abe's snap elections. The summit will be held on November 6 with focuses on North Korea and trade relations.

Looking ahead

Swiss will release CPI in European session while Eurozone will release retail PMI. US will release Challenger job cuts, jobless claims, trade balance and factory orders later in the day. Canada will release trade balance too.

AUD/USD Daily Outlook

Daily Pivots: (S1) 0.7836; (P) 0.7855; (R1) 0.7882; More...

AUD/USD continues to stay in tight range above 0.7784 and intraday bias remains neutral first. Focus stays on 0.7807 key near term support. Considering bearish divergence condition in daily MACD, firm break of 0.7807 support will indicate near term reversal. Outlook will then be turned bearish for 55 week EMA (now at 0.7674) first. Meanwhile, rebound from 0.7807 will retain bullishness. Above 0.7907 minor resistance will turn bias back to the upside for retesting 0.8124 high.

In the bigger picture, rise from 0.6826 medium term bottom is seen as corrective pattern. In case of further rally, strong resistance should be seen at 38.2% retracement of 1.1079 to 0.6826 at 0.8451 to limit upside. Meanwhile, firm break of 0.7807 is the first signal that such correction is focused. Break of 0.7328 will bring retest of 0.6826 low.

Economic Indicators Update

Eye Watering ISM's

ISM services sectors report cropped the dollar losses after policy uncertainly overflowed after the Fed chair contenders were finalised. Purportedly the fantastic four include Yellen, Cohn, Powell and Warsh.But I suspect the inclusion of Yellen was viewed dovish, but frankly, most knew this was the case, and the minor dollar sell-off in yesterdays Aisa session was little more than a storm in a teacup

Last nights eye-watering ISM non -manufacturing index was the talk of the town. After a stellar ISM manufacturing print on Monday, the non-manufacturing release overnight was purely astounding bolstering the view for a December US interest rate hike.

However, the currency markets appear to lack confidence or conviction even with the astonishingly bullish ISM prints, and the buoyant ADP data to boot. Dealers look happy to play ” home on the range ” while questioning the possible data misrepresentation due to the hurricane effect

There were few if any developments on the next chair front despite some outlandish rumours that put Kashkari on the seat as the Federal Reserve Board plays out its version of the Game of Thrones.

The rest of the session was spent digesting more bluster, hullabaloo and even fake news after a report surfaced that Secretary of State Tillerson was on the verge of resigning. But the reality is the market is on razor's edge when it comes to Washington machinations so much so that the that the Secretary of State held an unplanned press conference to quash the rumours

The Non-Farm payrolls are the next focal points.Tail risk is from a stronger print as dealers will most certainly discount any weakness due to the hurricane effect distortions.
The Balance of Risks

Euro

Catalonia referendum fallout has tempered the Euro bulls, but the market is content to sit tight and wait for the October ECB for the next trigger. While today's minutes are unlikely to shed much light on the balance sheet front, the market's focus will be squarely on any possible pushback from the ECB on EUR appreciation.

Japanese Yen

Continue to expect volatility with more polls released as we close in on the OCt 22 election date. But with the market on a hawkish Fed lean. ( Most betting Warsh) long USDJPY continues to be the favoured trade despite current ranges likely to persist up to election day.

The Australian Dolar

With the RBA triggered weakness all but retracted, the Aussie becomes little more than a passenger as the border USD movements remain in the driver's seat. However, it is becoming somewhat apparent that the Aussie is one of the currencies with the most to lose on the stronger USD narrative.

The Canadian dollar appreciated versus the US dollar on Wednesday. Economic indicators were scarce in Canada, with the spotlight firmly on the start of the jobs reports to be delivered this week. The private payrolls processor ADP showed a gain of 135,000 jobs in September. It was inline with expectations, although there was a slight downward revision to August of 9,000 positions. The non-manufacturing PMI followed in the path of the manufacturing sector with a overachieving 59.8 index when only 55.5 was expected. The ISM reported a 93rd consecutive gain and the highest since August 2005. Inflationary pressures are present with a rising price index that grew 8.4 percent points since August.

The USD was not able to take advantage of solid economic releases as the political strife that has plagued the current administration once again was present. Uncertainty about the next Fed chair is keeping market watchers from predicting what a new look Fed could be in 2018. The short list includes Gary Cohn, Kevin Warsh, Jerome Powell, John Taylor and surprisingly Janet Yellen is still in the running.

The media has paid too much emphasis on the disorganization of the Trump administration where even Rex Tillerson has to go on the record that he did belittle the president and was never intending to quit his post as Secretary of State. The political cloud is keeping the USD lower even as other parts of the world do not have the same growth prospects, but they do have a more stable leadership.

The USD/CAD lost 0.192 percent on Wednesday. The currency is trading at 1.2482 with the loonie regaining some ground after the USD got a temporary boost from purchasing managers in the service sector. US yields are higher as there is still no front runner for the Fed Chair job. The rumour mill and off the cuff comments have made anyone and everyone a candidate. Yellen is still in the running and did not comment on monetary policy today in St. Louis. The Trump’s administration short list does not take anybody off the running, but the fact that known doves are on it has not done the greenback any favours.

The Canadian trade deficit is expected to keep shrinking as the rise of the CAD has cut down import prices. The Trade balance for August will be released on Thursday, October 5 at 8:30 am EDT. Last month the deficit shrank to $3 billion and is forecasted to come in at 2.6 billion. In a day with few economic data releases the Canadian trade balance will impact the USD/CAD but could end up being eclipsed by FOMC member comments. In particular those that are on the short list for the Chair position like Jerome Powell.

The US trade balance will also be released on Thursday, and with the emphasis on trade imbalances by the Trump administration it will be a talking point during NAFTA renegotiations. The US deficit is expected to have shrunk as the effects of Hurricane Harvey would affect the trade during August.

Energy prices rose 0.329 percent in the last 24 hours. The price of West Texas Intermediate is trading $50.32 after the US weekly crude inventories showed a larger than expected drawdown of 6 million barrels. Forecasters were calling for a drop of 500,000. Crude prices rose after the news, but had to setlle for lower gains after Libya has restarted its largest field that was taken offline over the weekend by rebel forces.

Russian Energy Minister in Moscow was supportive of an extension from Organization of the Petroleum Exporting Countries (OPEC) and other major producers to keep cutting production, but the final decision will depend on the market. Russian President Vladimir Putin was also part of the Russian Energy Week Forum and said that the deal could be extended to 2018.

Market events to watch this week:

Thursday, October 5
8:30 am CAD Trade Balance
8:30 am USD Unemployment Claims

Friday, October 6
8:30 am CAD Employment Change
8:30 am CAD Unemployment Rate
8:30 am USD Average Hourly Earnings m/m
8:30 am USD Non-Farm Employment Change
8:30 am USD Unemployment Rate

Another sizzling US economic data point was brushed aside because of storm-related effects but we evaluate how high the dollar could rise if the economy really is heating up. AUD was the top performer while CHF lagged. Aussie retail sales and trade balance are due up next. The latest Premium members video below charts how far and how long will the USD correction be. It also highlights the Premium trade issued today.

US ISM non-manufacturing survey hit a 12-year high on Wednesday. It was at 59.8 compared to 55.5 expected and 55.3 prior. It was coupled with a jump in the prices paid component. The dollar climbed at first but the survey chairman downplayed the strength, saying respondents were expecting work due to the storms. In addition, the rise in the prices paid component was driven by the climb in fuel prices around the time of the storm.

It was a similar story a day earlier when US auto sales climbed by the most since 2005. The US dollar hardly made any headway on two of the best headlines in months. Part of the reason might be that ADP employment fell to 135K from 228K in August but that was bang-on expectations.

Chances are, the market is right. That the hurricanes will skew economic data but that the trend hasn't changed. Still, the alternative is worth considering. What if the economy has turned a corner, wages are starting to pick up and a big tax cut is coming?

The USD upside would be substantial, especially against the yen because Japanese rates are pinned to the floor. Part of the reason for the dollar sluggishness has to be the Fed and the expectation that Trump will appoint a dove. If that's unfounded then there is a real possibility of three or more rate hikes in the year ahead. If so, USD/JPY could easily rally 10 cents from here and perhaps much more.

The odds of a tax cut are tough to evaluate but Warren Buffett said Tuesday he thinks it's higher than most believe. What if it comes at the same time as the economy is already heating up?

That will be a question to consider in the weeks ahead but in the hours ahead, the focus will be on the Australian dollar. It bounced Wednesday after two weeks of struggles but the next chapter will be written by data. The August trade balance and retail sales reports are due at 0030 GMT. The consensus is for a surplus of $850m and sales up 0.3%.

The euro has stumbled upon some unexpected headwinds during the past month, taking some of the heat off the currency's incredible rally this year. Soon after peaking at a 32-month high of $1.2092 on September 8, the euro entered a corrective phase, triggered by a more cautious-than-anticipated European Central Bank at its policy meeting on September 7.

Expectations that the ECB would begin the process of winding down its massive stimulus program, receding political uncertainty after the French elections, as well as the unravelling of the Trumpflation trade have been the main drivers of the euro rally. However, while signalling that policy tightening is forthcoming, the ECB has avoided referring to the tapering discussions as an exit strategy, preferring instead to use words such as "calibration" or "adjustment" of policy. The central bank has also been more careful with its communication, with Governing Council members all signalling a very gradual withdrawal of monetary stimulus in the coming months in a series of public appearances in recent weeks.

Slow progress in achieving a sustained pick-up in underlying inflation in the Eurozone is the main reason why the ECB is dubious about making a hasty exit from its ultra-loose monetary policy program. However, concerns about the euro rising too fast and by too much has also been weighing on policymakers' minds. Although President Mario Draghi has so far refrained from verbal intervention in talking down the euro, he has expressed concerns about the possible impact of an appreciating exchange rate on growth and inflation. Discomfort about the rising euro is even stronger among the heads of the Eurozone's periphery central banks.

All of this has led to many analysts readjusting their outlook about ECB policy, with some now predicting the ECB tapering story to become a topic for late 2018 rather than 2017. The euro has retreated by around 3% from its September peak as investors reassess their positions on the single currency. But monetary policy has not been the only factor in inducing the euro's corrective move lower.

Renewed risks of political instability have remerged to cast doubt about the decline of populist movements across the Eurozone. The inconclusive election outcome in Germany on September 24, which resulted in Chancellor Angela Merkel having to seek coalition partners with smaller parties in potentially protracted negotiations, and this Sunday's independence vote in the Spanish region of Catalonia, which was declared "unconstitutional" by Spain's government, have reignited fears of fresh political turmoil in the region.

While Merkel will likely succeed in forming a new coalition, it could make it more difficult for her to join France's President Emmanuelle Macron in pushing for further EU integration, as one of the prospective coalition partners, the FDP party, is sceptical about closer EU ties. It's worth noting that markets were pleased with Macron's win in the French presidential elections in April not only for reducing the political uncertainty but also about the hopes of greater Eurozone integration. Another question that needs to be asked after the elections is how the far right AfD party will shape German politics after winning seats in parliament for the first time.

In Spain, the yes vote in Sunday's independence referendum could fuel the rise of other separatist movements in Europe, especially in Italy, which is required to hold a general election before May 20, 2018. Italy is seen by many investors as the most vulnerable to a debt crisis. It is also the most at risk of leaving the common currency bloc or even the European Union given the rise of populist parties such as the Five Star Movement, and the separatist Northern League party, who want more autonomy for the northern regions of Italy.

Following these developments, the euro is now in danger of reversing to a downtrend after forming a double top. A key support lies in the $1.1650-1.660 area. A breach of this support level could signal a more bearish outlook in the medium term. The longer-term picture, however, remains very much bullish.

With the ECB expected to eventually pull the plug on its stimulus program, the prospect of a continuation of the current uptrend in euro/dollar is strong. However, the speed and the extent of the uptrend will depend on the ECB's tolerance level of euro appreciation and developments in the United States.

A rapid rise towards and past the possible ECB pain threshold of $1.25 level could prompt much stronger verbal warnings by policymakers against further appreciation of the currency. Fears by some traders that this threshold is closer to $1.20 contributed to the euro's pull back from its September high. In addition, further sharp gains could slow the tightening cycle, which the central bank is expected to embark on at its next meeting on October 26.

Meanwhile, progress on the tax reform front in the US, which appears to be gathering more support lately, could revive the Trump-led rally for the US dollar and heighten expectations of further rate hikes by the Federal Reserve. Also potentially fuelling rate rise expectations is the choice of a hawkish nominee to be the next head of the Fed. President Trump is expected to decide in the next few weeks who will replace Fed Chair Janet Yellen when her term expires in February 2018. As Yellen is seen to be a dovish chair, the appointment of a more hawkish candidate could further slow the euro's ascent over the coming months.

Volatility in the currency markets fell today as traders await the all-important labour market report from the US on Friday and the speeches of ECB President Mario Draghi at 17:15 and the Fed Chair Janet Yellen at 19:15 GMT. Rhetoric by the central bankers may result in a sharp rise in volatility. The greenback weakened somewhat today around speculations about possible changes of the Fed Governor to an individual with dovish views on monetary policy settings. This scenario may lead to a further depreciation of the US dollar against other major currencies.

The euro today was negatively affected by news of the decline in the common region's retail sales by 0.5% in August compared to an anticipated increase of 0.3%. A small bright note came from the final services PMI report which grew in the Eurozone to 55.8 against the 55.6 forecasted.

GBP/USD bulls received some good news with the services PMI in the UK growing 53.6 which is 0.4 above the average expectations. Current price consolidation is explained by the influence of controversial factors. On the one hand, the chance of monetary tightening in the UK increased lately, while on the other hand the fears of a negative outcome to the Brexit talks are restraining the bulls from buying up the pound.

Expect to see increased trader activity for the AUD/USD following the release of retail sales and trade balance in Australia at 00:30 GMT tomorrow. These indicators traditionally have a strong influence on the mood of investors.

EUR/USD

The EUR/USD has left the limits of the local descending channel and keeps consolidating above the 1.1750 mark. Fixing the price beyond the limits of the channel may be a stimulus for continued increases up to 1.1825 and 1.1925. In case of a fall resuming, the nearest targets will be at 1.1620 and 1.1550.

GBP/USD

The British pound keeps consolidating near the important 1.3250 mark. A low amplitude of price fluctuations points to the possibility of a sharp movement soon. The signal to buy may come from gaining a foothold above the upper limit of the descending channel, but a more likely scenario may be the continued descending movement within the limits of the channel, with the closest targets at 1.3150 and 1.3050.

AUD/USD

Bulls were able to pull the AUD/USD price to the upper limit of the descending channel and the resistance at 0.7870. Breaking through these levels may become a strong trigger for massive buying with potential targets at 0.8000 and 0.8030. In case of crossing the SMA100 on the 15-minute chart, we may see a fall resume with the immediate goal at 0.7800 after which the quotes my reach 0.7740 and 0.7700.