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Price increases very fast and should reach the median line (ML) very soon. I’ve said in another report that the EUR/GBP should jump above the wl3 after the failure to reach the median line (ml) of the descending pitchfork. Technically, it could climb towards the upper median line (uml) of the descending pitchfork in the upcoming weeks even if will stay under the ML.

EUR/CHF looks undecided today, is fighting hard to resume the minor rebound, but the bulls need support. Technically, it should climb higher after the false breakdown below the upper median line (uml) of the minor ascending pitchfork and after the failure to reach the median line (ml) of the descending pitchfork.

Is still under some pressure on the daily chart despite the current increase. A valid breakdown below the upper median line (uml) will announce a significant drop.

The currency pair dropped sharply today and it seems poised to resume the downward movement, this scenario will take shape only if the USDX will resume the bullish movement. Price is trading near a very strong support area, so only a valid breakdown will confirm a further drop.

AUD/USD moves in range on the short term and it was expected to climb higher on the short term after the false breakdown from the minor range. Technically, the current drop could be only temporary, it could increase again if the USDX will slip lower.

The USDX is trading below the 93.81 static resistance, but maintains a bullish bias on the short term despite the yesterday's drop. The USD will dominate the currency market if the USDX will have enough directional energy to jump and stabilize above the 93.81 upside obstacle.

Price drops aggressively and tries to breakdown below the median line (ml) of the minor descending pitchfork and below the 38.2% retracement level. It was expected to try to climb towards the upper median line (uml) of the descending pitchfork, but a further increase will be invalidated if will close below the median line (ml).

A drop towards the next major downside target (WL1) will be confirmed after a retest of the median line (ml). Technically, it should approach and reach the lower median line (lml) of the minor descending pitchfork. This scenario will take shape only if the USDX will jump much above the 93.81 obstacle.

On Wednesday, the US Institute for Supply Management (ISM) released Non-Manufacturing PMI for September that surprised the market with the US service sector index increasing to its highest level in more than 12 years. The ISM non-manufacturing index, for September, climbed to its highest level since August 2005 and the prices paid index reached its highest level since early 2012. Such strong data gives more substance to a rate hike in December. The latest CME FedWatch Tool shows an 83% probability of a December rate rise, up from 78% on Tuesday.

Further strong data came from the US ADP Employment Change for September that was released on Wednesday. 135,000 new jobs were added by private employers, beating the forecast of 125,000. The increase surprised many, as the markets had expected the recent hurricanes to have been detrimental to the job market. The ADP report further underscores the strong US labour market and the markets will now be looking for confirmation of its strength with this Friday’s Non-Farm Payroll report.

Data released on Wednesday, from the US Energy Information Administration (EIA), showed US crude stockpiles fell 6.02M barrels to approximately 465M barrels last week, the biggest drop since mid-August. In addition, crude exports rose to 1.98M bpd last week, overtaking the previous weeks record of 1.5M, its 4th consecutive weekly gain. With Libya purportedly resuming output at its Sharara oil field, the increase supply has resulted in WTI edging lower. However, the market is expecting a degree of stability in prices as suggestions abound that Saudi Arabia and Russia would extend production cuts. Russian President Putin stated on Wednesday that “a pledge by the Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, to cut oil output to boost prices could be extended to the end of 2018, instead of expiring in March 2018”.

EURUSD is little changed overnight, currently trading around 1.1760.

USDJPY is currently holding below 113, trading around 112.80.

GBPUSD Had little reaction to Prime Minister Theresa May’s address to her Party Conference. Currently, GBPUSD is trading around 1.3235.

Gold is trading close to Wednesday’s close. Currently, Gold is trading around $1,274.

WTI fell on the back of the latest EIA report and is currently trading around $50.15.

Major economic data releases for today:

At 06:30 BST, The Reserve Bank of Australia Assistant Governor Guy Debelle is scheduled to speak.

At 09:30 BST, European Central Bank Executive Board member Peter Praet is scheduled to make the Welcome address at the 7th ECB conference on central eastern and south-eastern European Countries (CESEE) “Institutional quality and sustainable economic convergence”, organized by the ECB CESEE in Frankfurt, Germany.

At 12:30 BST, the ECB Monetary Policy Meeting Accounts will be released. The accounts provide an overview of financial market, economic and monetary developments. It’s followed by a summary of the discussion, in an unattributed form, on the economic and monetary analyses and on the monetary policy stance.

At 13:30, the US Department of Labor will release Initial Jobless Claims for the week ending September 29th, along with Continuing Jobless Claims for the week ending September 22nd. Continuing claims are forecast to come in at 1.950M, slightly higher than the previous release of 1.934M. Jobless Claims are expected to be lower at 265K, 7K less than the previous reading of 272K. A release wildly outside of expectations will see USD volatility.

Several Central Bankers are scheduled to speak:

At 14:10 BST, FOMC Member Jerome Powell

At 14:15 BST, FOMC Member John Williams

At 15:00 BST, FOMC Patrick Harker

At 18:30 BST, MPC Member, and Chief Economist at the Bank of England, Andrew Haldane

At 21:30 BST, Federal Reserve Bank of Kansas City President Esther George

XAUUSD (1274.25): Gold prices continue to remain flat, trading near the support level of 1275 - 1273. This is likely to signal a bottoming in prices. The falling trend line will be the major trigger as a breakout from this trend line could see gold prices attempting to test the initial resistance level at 1290 followed by a continuation towards 1300.00. To the downside, in the event that price action fails to breakout higher, we could expect the support level to give up, that could push gold prices lower towards 1262.83 initially.

Daily Pivots: (S1) 1.1702; (P) 1.1738 (R1) 1.1780; More...

No change in EUR/USD's outlook. With 1.1832 minor resistance intact, deeper decline is expected. Fall from 1.2091 would extend through 1.1661 support. Decline from 1.2091 is correcting whole rise from 1.0569. Deeper fall should be seen to 38.2% retracement of 1.0569 to 1.2091 at 1.1510, where we're expecting support to bring rebound. On the upside, break of 1.1832 minor resistance will suggest that the corrective fall is completed and turn bias back to the upside.

In the bigger picture, rise from medium term bottom at 1.0339 is not finished yet. It's expected to continue after pull back from 1.2091 completes. And, next target will be 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. However, it should be noted that there is no confirmation of trend reversal yet. That is, such rebound from 1.0399 could be a correction. And the long term fall from 1.6039 (2008 high) could resume. Hence, we'd be cautious on strong resistance from 1.2516 to limit upside.

GBPUSD (1.3233): The British pound has retreated from its highs. Data this week showed that the PMI's signaled sluggish growth as manufacturing was weak and construction PMI showed a contraction in the sector. Only the services PMI managed to rise slightly higher in comparison. GBPUSD is seen testing the support level near 1.3223. We expect to see a reversal at this support level which will keep GBPUSD range bound within 1.3360 resistance and the support level. A breakout from this level will signal further direction in the currency pair. We expect a breakout to the downside, especially is resistance is formed near 1.3360.

EURUSD (1.1755): The euro currency was slightly bullish but the currency gave up some of the gains as it retreated from the intraday highs. With the ECB minutes coming up today, the intraday charts shows EURUSD consolidating into a descending wedge pattern. In the short term, we expect the downside in the EURUSD which could see another retest to the support zone of 1.1720 - 1.1688. A retest of this support could result in a breakout to the upside. Resistance at 1.1822 - 1.1843 remains the most likely target. Failure to hold the declines near 1.1720 could signal further declines in the currency pair and could shift the bias to the downside.

Daily Pivots: (S1) 1.3218; (P) 1.3254; (R1) 1.3285; More....

Intraday bias in GBP/USD remains on the downside for the moment. Fall from 1.3651 should extend to 61.8% retracement of 1.2773 to 1.3651 at 1.3108. Firm break there will target a test on 1.2773 key support level. On the upside, above 1.3291 minor resistance will turn bias back to the upside for 4 hour 55 EMA (now at 1.3343) first.

In the bigger picture, current development argues that the long term trend in GBP/USD has reversed. That is, a key bottom was formed back in 1.1946 on bullish convergence condition in monthly MACD. Current rise from 1.1946 will target 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466 next. In any case, medium term outlook will now stay bullish as long as 1.2773 support holds.

The non-manufacturing PMI released by the Institute of Supply Management (ISM) yesterday showed an increase as the index rose to 59.8 in September. It was the highest level since September and beat estimates. The ADP private payrolls data was also released yesterday which showed that private hiring added 135k jobs in September which was slightly above the estimates of 131k. Previous month's payrolls were revised down to 228k.

The US dollar was seen trading flat as investors were focused on the upcoming nomination of the Federal Reserve Chair. The US President Trump is expected to announce his nominee in a few weeks time.

Looking ahead, the economic calendar today will see the release of the ECB's meeting minutes which could be a major catalyst for the euro currency. Fed member speeches today include Jerome Powell and Harker. Powell is widely tipped to be one of the contenders for the next chair of the Federal Reserve.