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Daily Pivots: (S1) 109.65; (P) 110.24; (R1) 110.62; More....

USD/JPY recovers again after hitting 109.83. Intraday bias is turned neutral first. As long as 112.18 remains intact, outlook stays bearish for deeper fall. Below 109.83 will target 108.81 support. Break there will resume whole correction from 118.65 and target 61.8% retracement of 98.97 to 118.65 at 106.48.

In the bigger picture, the corrective structure of the fall from 118.65 suggests that rise from 98.97 is not completed yet. Break of 118.65 will target a test on 125.85 high. At this point, it's uncertain whether rise from 98.97 is resuming the long term up trend from 75.56, or it's a leg in the consolidation from 125.85. Hence, we'll be cautious on topping as it approaches 125.85. If fall from 118.65 extends lower, down side should be contained by 61.8% retracement of 98.97 to 118.65 at 106.48 and bring rebound.

Daily Pivots: (S1) 1.3076; (P) 1.3172; (R1) 1.3231; More...

GBP/USD's fall from 1.3267 resumes in early US session and breaks 1.3096 minor support. This is taken as the first sign of near term reversal, with bearish divergence condition in 4 hour MACD. Price actions from 1.1946 are viewed as a corrective pattern and could have completed. Intraday bias is back on the downside for 1.2932 support next. Break there will affirm this bearish case and target 1.2588 key near term support next. On the upside, above 1.3163 minor resistance will turn bias back to the upside for 1.3267 instead.

In the bigger picture, overall, price actions from 1.1946 medium term low are seen as a corrective pattern that is still in progress. While further upside is expected, larger outlook remains bearish as long as 1.3444 key resistance holds. Down trend from 1.7190 (2014 high) is expected to resume later after the correction completes. And break of 1.2588 will indicate that such down trend is resuming.

Daily Pivots: (S1) 0.9665; (P) 0.9690; (R1) 0.9710; More...

USD/CHF's rally resumed by taking out 0.9726 resistance. Intraday bias is back on the upside for 38.2% retracement of 1.0342 to 0.9437 at 0.9783 first. Prior break of 0.9699 resistance suggests near term reversal after defending 0.9443 key support. Break of 0.9783 will target channel resistance (now at 0.9890). On the downside, break of 0.9630 minor support will dampen this bullish view and turn bias neutral first.

In the bigger picture, current development argues that USD/CHF has successfully defended 0.9443 key support level. And long term range trading in 0.9443/1.0342 is extending with another rise. At this point, there is no sign of an up trend yet. Hence, while further rise is expected in USD/CHF, we'll start to be cautious on loss of momentum above 61.8% retracement of 1.0342 to 0.9437 at 0.9996.

USD/JPY - 110.69

New strategy  :

Buy at 110.40, Target: 111.40, Stop: 110.05

Position :  -

Target :  -

Stop : -

As the greenback has staged a strong rebound in NY morning, suggesting a temporary low has been formed at 109.85 and upside bias is seen for test of resistance at 110.98, however, break there is needed to add credence to this view, bring retracement of recent decline top 111.29-30 (previous resistance and 61.8% Fibonacci retracement of 112.2-109.85) but price should falter below another previous resistance at 111.71, bring retreat later.

In view of this, we are looking to buy dollar on dips as 110.35-40 should limit downside and bring another rise later. Below 110.15-20 would defer but only break of 110.00 would signal the rebound from 109.85 has ended, bring retest of this level, below there would extend recent decline to 109.70 and later towards 109.50.

Dollar is given a lift in early US session by a set of overall solid employment. After initial hesitation, the greenback is gaining some upside momentum with GBP/USD dropping through 1.3096 minor support. USD/CHF also breaks last week's high at 0.9726 to resume rebound from 0.9347. Focus will now turn to 110.97 minor resistance in USD/JPY and break there will indicate near term bottoming. EUR/USD, though, stays firm above 1.1722 minor support and it's near term bullishness remains relatively safe.

July non-farm payroll report showed 209k growth in US, above expectation of 180k. Prior month's figure was also revised up to 231k, from 222k. Unemployment rate dropped 0.1% to 4.3%, back at 16 year low. Participation rate also rose to 62.9%, up from 62.8%. Average hourly earnings rose 0.3% mom, in line with expectations. Average weekly hours was unchanged at 34.5. Also from US, trade deficit narrowed notably to USD -43.6b in June, from USD -46.4b in May.

Canadian economy added 10.9k jobs in July, below expectation of 19.0k. However, unemployment rate dropped to 6.3%, down from 6.5%. Unemployment rate was at the lowest level since October 2008. Canada trade deficit widened to CAD -3.6b in June. USD/CAD is set to extend the corrective recovery from 1.2412 and more upside would be seen.

Release earlier today, Eurozone retail PMI dropped to 51 in July. German factory orders rose 1.0% mom in June, above expectation of 0.5% mom. Australia retail sales rose 0.3% mom in June versus expectation of 0.2% mom. Japan labor cash earnings dropped -0.4% yoy in June, below expectation of 0.6% yoy.

GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.3076; (P) 1.3172; (R1) 1.3231; More...

GBP/USD's fall from 1.3267 resumes in early US session and breaks 1.3096 minor support. This is taken as the first sign of near term reversal, with bearish divergence condition in 4 hour MACD. Price actions from 1.1946 are viewed as a corrective pattern and could have completed. Intraday bias is back on the downside for 1.2932 support next. Break there will affirm this bearish case and target 1.2588 key near term support next. On the upside, above 1.3163 minor resistance will turn bias back to the upside for 1.3267 instead.

In the bigger picture, overall, price actions from 1.1946 medium term low are seen as a corrective pattern that is still in progress. While further upside is expected, larger outlook remains bearish as long as 1.3444 key resistance holds. Down trend from 1.7190 (2014 high) is expected to resume later after the correction completes. And break of 1.2588 will indicate that such down trend is resuming.

Economic Indicators Update

Daily Pivots: (S1) 1.1834; (P) 1.1863 (R1) 1.1897; More...

EUR/USD dips notably in early US session but it's staying well above 1.1722 minor support. Intraday bias remains neutral as the consolidation from 1.1908 is extending. But still, with 1.1722 support intact, further rally is expected. Break of 1.1908 will target 1.2 psychological level. Considering bearish divergence condition in 4 hour MACD, we'll be cautious on topping around there to bring correction. On the downside, break of 1.1722 will indicate short term topping and bring deeper pull back to 55 day EMA (now at 1.1414).

In the bigger picture, an important bottom was formed at 1.0339 on bullish convergence condition in weekly MACD. Sustained break of 55 month EMA (now at 1.1760) will pave the way to key fibonacci level at 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. While rise from 1.0339 is strong, there is no confirmation that it's developing into a long term up trend yet. Hence, we'll be cautious on strong resistance from 1.2516 to limit upside. But for now, medium term outlook will remain bullish as long as 1.1295 support holds, in case of pull back.

USD/CAD changed little today, but you should be aware that we may have a high volatility later as the US and Canada are to release high impact data. Price has bounced back this week, but has already find a temporary resistance.

USD needs a bullish spark from the US data to be able to climb much higher in the upcoming period, some positive US data and negative Canadian reports will send the pair much higher on the short term. Price will be driven by the fundamental factors, remains to see the direction.

Canadian Unemployment Rate may remain steady at 6.5% for the second month in July, the trade deficit could increase from 1.1B to 1.3B in June, while the employment Change may drop to 13.1K, from 45.3K.

The US data will shake the currency market, the Unemployment Rate is expected to decrease from 4.4% to 4.3% in July, the Average Hourly Earnings may increase by 0.3%, more than the 0.2% growth in the former reading period, while the Trade Balance could increase from -46.5B to -43.9B.

The main event will be the publication of the NFP, which is expected to be reported at 182K jobs in July, lower versus the 222K in the former reading period.

Price is still expected to reach and retest the median line (ml) of the minor descending pitchfork after the failure to reach the lower median line (lml) of this pitchfork. We may have a broader rebound in the upcoming weeks if the rate will stay above the 1.2460 major static support. The next major upside target will be at the median line (ML) of the red descending pitchfork. Resistance can be found also at the median line (ml) and higher at the 1.2678 static obstacle. A further drop will be confirmed only by a valid breakdown below the 1.2413 previous low.

Brent Oil slips lower after another failure to close above the 53.03 major static resistance. A USD/CAD further increase will send the rate much below the $51.00 per barrel.

Technically is somehow expected to decrease after the false breakout above the upside line of the minor ascending channel, could be attracted by the confluence between the SL with the downside line of the minor ascending channel if the US data will impress.

Price is bloodless right now, the participants are undecided ahead the US data release. The US figures will bring life on this pair. GBP/USD remains bullish as long as the 1.3046 and the warning line (wl1) are still intact, a breakdown below these obstacles will signal a major drop.

The Canadian dollar continues to trade quietly, as USD/CAD has inched lower in the Friday session. Currently, the pair is trading at 1.2570, down 0.10% on the day. Canada and the US will both release key employment numbers in the North American session, so traders should be prepared for movement from the pair. In the US, Nonfarm Payrolls is expected to slow to 182 thousand, while wage growth is forecast to edge up to 0.3%. In Canada, employment change is expected to post a gain of 13.1 thousand, after last month's huge gain of 45.3 thousand.

The Canadian dollar has enjoyed a strong run, gaining 7.8% against the greenback since May 1. The Canadian economy has improved, thanks to stronger global demand and higher oil prices. In July, the Bank of Canada raised interest rates from 0.50% to 0.75%, marking the first rate hike since 2009. The Canadian dollar jumped to an 11-month high after the rate increase, and investors will be monitoring the bank carefully – hawkish statements could lift the currency. The BoC holds its next policy meeting on September 6.

Janet Yellen & Co. continue to talk about the possibility of a December rate hike, but with the odds for a December increase pegged at just 42%, it's clear that the markets are skeptical about a third rate hike in 2017. Investor attention has shifted to the Fed's balance sheet, which stands at $4.2 trillion. Fed policymakers have broadly hinted at reducing purchases of bonds and securities starting in September, but San Francisco Fed President John Williams was more forthcoming about the Fed's plans this week, in a clear message that was likely aimed at giving notice to the markets. In a speech on Wednesday, Williams said that the economy had 'fully recovered' from the 2008 financial crisis and called on the Fed to start trimming the balance sheet 'this fall'. Williams added that the process would be gradual and would take four years to reduce the balance sheet to a 'reasonable size'.  On Wednesday, two other FOMC members also came out in support of starting to taper the balance sheet – St. Louis Fed President James Bullard and Cleveland Fed President Loretta Mester.

With the Federal Reserve widely expected to begin trimming its balance sheet next month, how will this affect the US dollar? The Fed is expected to initiate the wind-down by not replacing maturing bonds, which will reduce the balance sheet by $200 billion in 2017, according to the Institute of International Finance (IFF). The IFF estimates that this would be equivalent to three normal interest hikes, so the greenback should head upwards once the Fed starts winding down its bloated balance sheet.