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For the 24 hours to 23:00 GMT, the AUD slightly declined against the USD and closed at 0.7957.

LME Copper prices declined 0.2% or $10.0/MT to $6290.0/MT. Aluminium prices declined 0.7% or $12.5/MT to $1891.5/MT.

In the Asian session, at GMT0300, the pair is trading at 0.7958, with the AUD trading marginally higher against the USD from yesterday's close.

Earlier today, the Reserve Bank of Australia (RBA) trimmed Australia's economic growth forecast by half a percentage point for 2017 to 2.0-3.0%, citing the impact of a stronger Australian dollar on economic growth. However, the central bank reiterated its expectation that the economy would grow at an annual rate of about 3.0% over the next couple of years. The RBA left its outlook on average underlying inflation unchanged for the year ended December at 1.5-2.5%, later picking up to 2.0-3.0% by June 2019.

On the macro front, Australia's seasonally adjusted retail sales climbed 0.3% on a monthly basis in June, compared to an advance of 0.6% in the prior month, while market expectation was for retail sales to rise 0.2%.

The pair is expected to find support at 0.7927, and a fall through could take it to the next support level of 0.7896. The pair is expected to find its first resistance at 0.7977, and a rise through could take it to the next resistance level of 0.7996.

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

For the 24 hours to 23:00 GMT, the EUR rose 0.24% against the USD and closed at 1.1878, boosted by better-than-expected retail sales data from the Euro-bloc.

The Euro-zone's seasonally adjusted retail sales unexpectedly advanced 0.5% on a monthly basis in June, suggesting that households ramped-up spending amid optimism that the region's economy is on a stronger growth path. Retail sales registered a rise of 0.4% in the previous month, while markets were expecting it to record a flat reading. Meanwhile, the region's final Markit services PMI remained unchanged at a level of 55.4 in July, in line with the flash estimates.

Separately, Germany's services sector activity fell more than initially estimated to a level of 53.1 in July, compared to a preliminary print that had indicated a drop to a level of 53.5. In the previous month, the PMI had recorded a reading of 54.0.

The greenback lost ground against a basket of major currencies, following worse-than-expected US ISM non-manufacturing data.

The US ISM non-manufacturing PMI declined more-than-expected to a level of 53.9 in July, dipping to an eleven-month low level, thus highlighting a loss of momentum in the nation's dominant services sector. Markets had expected the PMI to fall to a level of 56.9, compared to a reading of 57.4 posted in the previous month.

On the contrary, the nation's seasonally adjusted initial jobless claims fell more-than-anticipated to a level of 240.0K in the week ended 29 July, pointing to a healthier labour market, compared to market expectations of a drop to a level of 243.0K. In the prior week, initial jobless claims had recorded a revised reading of 245.0K. Further, the nation's final Markit services PMI unexpectedly rose to a level 54.7 in July, while investors had envisaged it to remain steady at a level of 54.2 registered in the preliminary figures. In the previous month, the PMI had recorded a reading of 54.2.

Another set of data revealed that final durable goods orders in the US climbed 6.4% in June, revised from a flash print indicating a gain of 6.5%. Durable goods orders had fallen by a revised 0.1% in the previous month. Moreover, the nation's factory orders rebounded 3.0% in June, meeting market expectations. In the prior month, factory orders had dropped by a revised 0.3%.

In the Asian session, at GMT0300, the pair is trading at 1.1876, with the EUR trading slightly lower against the USD from yesterday's close.

The pair is expected to find support at 1.1840, and a fall through could take it to the next support level of 1.1805. The pair is expected to find its first resistance at 1.1902, and a rise through could take it to the next resistance level of 1.1929.

Moving ahead, investors will keep a close watch on Germany's factory orders for June, slated to release in a while. Later in the day, all eyes will be on the crucial US non-farm payrolls and unemployment rate data, both for July, followed by the nation's trade balance figures for June.

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

For the 24 hours to 23:00 GMT, the GBP declined 0.6% against the USD and closed at 1.3142, after the Bank of England (BoE) downgraded UK's economic growth forecast.

The BoE monetary policy committee voted 6-2 to keep its key interest rate unchanged at 0.25% and left unchanged the size of its asset purchase programme at £435.0 billion.

The central bank, its quarterly inflation report, slashed UK's economic growth forecast to 1.7% in 2017 and 1.6% in 2018, from 1.9% and 1.7% respectively, arguing that economic growth remains sluggish in the near-term as the economy has started to feel the negative effects emerging out of uncertainties of Brexit. Meanwhile, inflation is expected to peak at around 3.0% by October 2017, before gradually moderating, and falling to 2.2% by 2020.

Prior to the monetary policy decision, Pound was boosted by robust UK Markit services PMI data that showed the nation's services sector expanded faster-than-anticipated to a level of 53.8 in July, compared to market consensus for a rise to a level of 53.6. The PMI had recorded a reading of 53.4 in the prior month.

In the Asian session, at GMT0300, the pair is trading at 1.3137, with the GBP trading a tad lower against the USD from yesterday's close.

The pair is expected to find support at 1.3078, and a fall through could take it to the next support level of 1.3018. The pair is expected to find its first resistance at 1.3232, and a rise through could take it to the next resistance level of 1.3326.

Amid no major economic releases in UK today, investors will look forward to Britain's trade balance, manufacturing as well as industrial production data, all due to release next week.

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

For the 24 hours to 23:00 GMT, the USD declined 0.74% against the JPY and closed at 109.95.

In the Asian session, at GMT0300, the pair is trading at 110.17, with the USD trading 0.2% higher against the JPY from yesterday's close.

The pair is expected to find support at 109.76, and a fall through could take it to the next support level of 109.36. The pair is expected to find its first resistance at 110.66, and a rise through could take it to the next resistance level of 111.16.

Next week, traders will eye Japan's trade balance figures and Eco-Watchers survey data.

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 declined 0.29% against the CHF and closed at 0.9679.

In the Asian session, at GMT0300, the pair is trading at 0.968, with the USD trading marginally higher against the CHF from yesterday’s close.

The pair is expected to find support at 0.9662, and a fall through could take it to the next support level of 0.9645. The pair is expected to find its first resistance at 0.9707, and a rise through could take it to the next resistance level of 0.9735.

With no macroeconomic releases in Switzerland today, market participants will focus on Switzerland’s inflation and jobs report, set to release next week.

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

For the 24 hours to 23:00 GMT, the USD marginally rose against the CAD and closed at 1.2572.

In the Asian session, at GMT0300, the pair is trading at 1.2575, with the USD trading a tad higher against the CAD from yesterday's close.

The pair is expected to find support at 1.2546, and a fall through could take it to the next support level of 1.2516. The pair is expected to find its first resistance at 1.2612, and a rise through could take it to the next resistance level of 1.2648.

Ahead in the day, traders will closely monitor Canada's unemployment rate data for July, to gauge strength in the nation's labour market.

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

Short term USDCAD Elliott Wave view suggests the decline to 1.2411 ended Intermediate wave (3) of an Elliott Wave impulse structure from 6/2 peak. Intermediate wave (4) bounce is in progress as a flat Elliott wave structure where Minor wave A ended at 1.2576 and Minor wave B ended at 1.2416. Minor wave C is subdivided as an impulse Elliott Wave structure. Up from 1.2416 low, Minute wave ((i)) ended at 1.253 and pullback to 1.2443 ended Minute wave ((ii)). Pair then rallied in Minute wave ((iii)) ending at 1.2593 and Minute wave ((iv)) pullback ended at 1.2355. Near term, Minute wave ((v)) of C is proposed complete at 1.2619, which also complete Intermediate wave (4). While bounces stay below 1.2619, and more importantly below 1.2683, expect pair to extend lower or at least pullback in 3 waves. We don’t like buying the pair.

USDCAD 1 Hour Elliott Wave Chart

Elliott Wave FLAT structure is a 3 waves corrective pattern and there are 3 different types of Flats:

• Regular flat
• Expanded flat
• Running flat.

The flat seen in USDCAD above is the Regular flat type. A Regular flat is a 3 waves corrective pattern which could often be seen in the market nowadays. The internal subdivision of Flat is labeled as A,B,C with 3-3-5 structure. Waves A and B are subdivided in corrective structures such as zigzag, flat, double three or triple three. Third wave C is always 5 waves structure, either as a motive impulse or an ending diagonal pattern. It’s important to notice that in a Regular Flat, wave B completes slightly above the starting point of wave A. Wave B usually ends at 50%, 61.8%, 76.4%, or 85.4% of wave A and Wave C of regular flat usually ends close to 100% -1.236% Fibonacci extension of A related to B.

Global Markets:

• Asian stock markets: Nikkei down 0.35 %, Shanghai Composite gained 0.25 %, Hang Seng rose 0.15 %, ASX 200 lost 0.20 %
• Commodities: Gold at $1267 (-0.35 %), Silver at $16.65 (+0.15 %), WTI Oil at $48.94 (-0.20 %), Brent Oil at $51.90 (-0.20 %)
• Rates: US 10-year yield at 2.23, UK 10-year yield at 1.15, German 10-year yield

News & Data:

• Australia Retail Sales m/m 0.3 % vs 0.2 % expected
• Australia Retail Sales y/y 1.5 % vs 1.2 % expected
• Japan Average Cash Earnings -0.4 % vs 0.6 % expected
• Strong U.S. jobs report seen in July; wages likely rose – RTRS
• Oil prices dip on high OPEC supplies, rising U.S. production – RTRS
• Australia's central bank upbeat on economy as consumers splurge – RTRS
• Asia stocks edge higher, dollar languishes on U.S. politics, mixed data – RTRS

Markets Update:

The US Dollar remains weak ahead of today's NFP release. EUR/USD is consolidating around the 1.19 level, while USD/JPY is struggling to keep itself above 110. It is likely that volatility will remain relatively low ahead of the important data release at 13:30 London time.

The market is expecting a 183k NFP figure and a 0.1 % decline of the unemployment rate to 4.3 %. Should the data exceed expectations, the Dollar should be able to recover a bit. EUR/USD is likely to fall below 1.18 and GBP/USD back to 1.30 in such a scenario. Disappointing data would put the weak Dollar under additional pressure. EUR/USD would likely break above 1.20 in that case, while USD/JPY would decline below 110.

AUD/USD consolidated in a 0.7935-75 range overnight. While the Aussie Dollar has lost some momentum, it still remains well bid and should test 0.80 resistance soon. NZD/USD was able to bounce off 0.7390 support and recovered to 0.7450 in Asia.

Upcoming Events:

• 13:30 BST – US NFP
• 13:30 BST – US Unemployment Rate
• 13:30 BST – Canadian Unemployment Rate
• 13:30 BST – Canadian Employment Change
• 15:00 BST – Canadian Ivey PMI

Currency pair EUR/USD

The Non Farm Payroll (NFP) numbers will be released later today for the US, which could significantly impact the US Dollar. The EUR/USD specifically is in an uptrend but could be losing some of its momentum because the angle of resistance trend line (red) is shallower than the support trend line (green). This indicates a mild rising wedge chart pattern, which is a potential reversal pattern. However, this does not stop price from continuing with the trend potentially towards the next target at the round level of 1.20 and Fibonacci targets.

The EUR/USD completed a wave 4 (grey) correction if price manages to break above the resistance trend line (orange). The bullish breakout could see price continue with one more higher high towards the wave 5 (grey) Fib levels.

Currency pair USD/JPY

The USD/JPY could show a potential bullish bounce at support to complete a wave B (orange) and start a wave C (orange).

The USD/JPY could have completed 5 waves (grey) within wave C (purple). A bullish breakout above resistance (orange) could see price challenge the Fibonacci targets of wave C vs A (orange).

Currency pair GBP/USD

The GBP/USD failed to break above the 1.3250 quarter level and made a bearish reversal during yesterday's interest rate decision by the Bank of England to keep rates at 0.25%. The bearish price action broke below the channel support (dotted green) but stopped at the larger support level. The lack of a bullish break is making a larger wave C (brown) now more likely.

The GBP/USD could potentially be in a bearish correction such as a wave 4 (grey) as long as price stays above the top of wave 1 (grey) indicated by the light blue line. Another valid wave structure could be a wave 1-2 (red) downtrend as the bearish momentum was strong. This would become more likely if price manages to break below the support trend lines (blue) or move correctively upwards as part of wave 2 (red).

A note on lower timeframe confirming price action...

Waiting for lower timeframe confirmation is our main tool to confirm strength within higher timeframe zones, and has really been the key to our trading success. It takes a little time to understand the subtle nuances, however, as each trade is never the same, but once you master the rhythm so to speak, you will be saved from countless unnecessary losing trades. The following is a list of what we look for:

• A break/retest of supply or demand dependent on which way you're trading.
• A trendline break/retest.
• Buying/selling tails ... essentially we look for a cluster of very obvious spikes off of lower timeframe support and resistance levels within the higher timeframe zone.
• Candlestick patterns. We tend to only stick with pin bars and engulfing bars as these have proven to be the most effective.

We typically search for lower-timeframe confirmation between the M15 and H1 timeframes, since most of our higher-timeframe areas begin with the H4. Stops are usually placed 1-3 pips beyond confirming structures.

EUR/USD

During the course of yesterday's segment, the single currency traded the first half of the London session sub 1.1850. Following a close above this number, however, H4 price retested the line as support and rose to a high of 1.1893 on the day.

Weekly bulls continue to show promise above weekly resistance at 1.1759. Should the major conclude the week closing beyond this line, further buying could take shape up to a weekly resistance planted at 1.2044. Turning our attention to the daily chart, supply at 1.1870-1.1786, although it is still intact, remains vulnerable to the upside. This is not only because of where weekly price is trading and the strong uptrend the EUR is currently entrenched within, but also due to the back-to-back daily spikes seen through the top edge of the daily zone.

Our suggestions: While it is clear that this market remains in a robust position at this time, we are reluctant to consider buying until the noted daily supply has been consumed (by consumed we mean a daily close printed above the area). In addition to this, it would be imprudent of our desk to buy this market when we're still short the GBP/USD!

Data points to consider: US Job's report at 1.30pm GMT+1.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).

GBP/USD

The BoE kept its monetary policy unchanged on Thursday, consequently sending the pair sharply lower. As can be seen from the H4 chart, price bottomed just ahead of the 1.31 handle, buoyed by a channel support line etched from the low 1.2932. As we write, the balance between bids/offers appear to be even between the current channel support and the nearby mid-level resistance at 1.3150.

For those who follow our reports on a regular basis, you may recall that our desk recently took a short position from 1.3209, with conservative stops planted at 1.3280. Our reasoning behind executing a short position from here was strong: daily supply at 1.3278-1.3179, a daily trendline resistance taken from the high 1.3477, a daily channel resistance drawn from the high 1.2903 and two converging daily AB=CD (green/orange arrows) 127.2 Fib extensions at 1.3222/1.3223 (taken from the lows 1.2811/1.2365). Also, for you RSI fans, there was daily divergence in motion, as well. In light of the recent move lower, we have moved the stop-loss order to breakeven.

Our suggestions: In an ideal world, we're looking for the unit to continue pressing lower today, breaking through the H4 channel support line and also the nearby 1.31 handle. Assuming that this comes to fruition, the 1.3050 region will be in sight – a level we'll be looking to take partial profits at given its relationship with the daily support area at 1.3058-1.2979 (the next downside target on the daily scale).

Data points to consider: US Job's report at 1.30pm GMT+1.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: 1.3209 ([live] stop loss: breakeven).

AUD/USD

In recent trading, the H4 candles completed an AB=CD measured move at 0.7916, taken from high 0.8065. Leaving the 0.79 handle and its nearby H4 127.2% Fib ext. at 0.7905 unchallenged, the unit inched its way higher yesterday, with price now seen testing the waters beyond the mid-level resistance at 0.7950.

What gives the H4 measured move extra credibility is the daily demand seen marked at 0.7874-0.7922. This could, if the bulls continue to support the pair, lift price back up to the daily Quasimodo resistance at 0.8030. Still, before this can come to realization, the nearby H4 resistance at 0.7968 will need to be cleared.

Our suggestions: Technically speaking, there is not really much to hang our hat on at the moment, as far as trading opportunities. Buying may appear to be a good idea on the daily chart, but with H4 resistance lurking just ahead, we're unwilling to commit. For that reason, our desk will remain on the sidelines for the time being and look to reassess structure following the US job's report.

Data points to consider: RBA Monetary policy statement and Australian Retail sales figures at 2.30am. US Job's report at 1.30pm GMT+1.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).

USD/JPY:  

Following a second near-retest of the H4 sell zone marked in green at 111.07/110.83, the USD/JPY plummeted south on Thursday. Comprised of a H4 Fibonacci resistance cluster (50.0%/61.8%/78.6% taken from the highs 112.19/111.71/111.28), June's opening level at 110.83 and a psychological band at 111, this zone was an area of interest to our team. Unfortunately, we were unable to pin down a lower-timeframe entry signal!

As we write, H4 price is trading sub 110 which could lead to the unit challenging support logged in at 109.62. From the weekly timeframe, the market looks as though it could continue to press lower until we reach the small demand base seen at 108.13-108.95. Zooming in and looking at the daily picture, we can see that price recently responded to resistance at 110.76 and now looks poised to test a Quasimodo support at 109.11 (converges closely with a trendline support taken from the low 108.13).

Our suggestions: With the higher-timeframe picture suggesting that further selling could be on the cards, a close below 110 on the H4 chart likely suggests that we're heading down to at least the H4 support mentioned above at 109.62. We would not trade this market short, however, until H4 action retests 110 as resistance and prints a lower-timeframe sell signal thereafter (see the top of this report).Ideally, we want the stop to be no more than 15 pips, so as to aid risk/reward down to the 109.62 region.

Data points to consider: US Job's report at 1.30pm GMT+1.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Watch for H4 price to close below 110 and then look to trade any retest seen thereafter ([waiting for a lower-timeframe entry to form following the retest is advised] stop loss: dependent on where one confirms the level).

USD/CAD

The USD/CAD failed to sustain gains beyond the 1.26 handle and its converging H4 channel resistance (extended from the high 1.2576) on Thursday, resulting in the market closing mid-range between 1.26 and the H4 mid-level support pegged at 1.2550. Of particular interest here is the daily broken Quasimodo line at 1.2592, as it is positioned just beneath 1.26. Also noteworthy is the weekly resistance line coming in a little lower on the curve at 1.2538. This – coupled with the trend on this pair pointing to the downside – we believe the bears likely have the upper hand at this time.

Our suggestions: Watch for H4 price to close beneath the mid-level support at 1.2550 today. This – followed up with a retest and a H4 bearish candle – preferably a full, or near-full-bodied candle, would, in our opinion, be enough evidence to sell. Should the trade come to fruition, the ultimate take-profit target would, for us, be the neighboring H4 channel support etched from the low 1.2413, which happens to converge closely with the top edge of a daily demand base at 1.2303-1.2423 (the next downside target on that scale).

Data points to consider: US/Canadian Job's report at 1.30pm GMT+1.

Levels to watch/live orders:

• Buys: Flat (Stop loss: N/A).
• Sells: Watch for H4 price to close below 1.2550 and then look to trade any retest seen thereafter ([waiting for a H4 bearish candle to form [preferably a full-bodied candle] following the retest is advised] stop loss: ideally beyond the candle's wick).

USD/CHF

Working our way down from the top this morning, weekly flow remains kissing the underside of a major weekly trendline resistance extended from the low 0.9257. In the event that the bears punch lower from here, the next downside target is likely to be the weekly support area logged at 0.9443-0.9515. Down on the daily picture, we can see that price continues to be capped by a supply zone at 0.9738-0.9691, which converges with a channel resistance extended from the high 0.9808 and a 38.2% Fib resistance at 0.9693 taken from the high 1.0099. Of late, however, the bulls closed above the said channel resistance, and are in the process of retesting the line as support.

Across on the H4 chart, June's opening level at 0.9680 is currently seen in the mix. A violation of this line would likely place the demand area at 0.9627-0.9648 in the spotlight.

Our suggestions: With the recent (daily) close above the aforementioned daily channel resistance, this could suggest that the current daily supply may be weakening. Although the downside is still favored at the moment, it is a difficult market to sell. Not only because of the current daily channel support, but also due to June's opening level at 0.9680 and the nearby H4 demand base at 0.9627-0.9648. For that reason, we'll remain on the sidelines and wait for further developments post today's US job's report.

Data points to consider: US Job's report at 1.30pm GMT+1.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).

DOW 30

Of late, the US equity market entered into a phase of rising compression between two converging H4 trendlines (21942/22019). This came after price shook hands with a H4 channel resistance extended from the high 21493. Could this be the bears making an appearance? While this is a possibility, one has to remain conscious of the surrounding landscape. Both weekly and daily action shows absolutely no resistance on the horizon given that the index is trading at record highs at the moment. The flip side to this, however, is the closest support on the bigger picture does not come into play until daily support at 21664, so should the market selloff, there's not much in the way to stop it!

Our suggestions: Although there is a chance that this market may head south, we would not feel comfortable selling the recent move north seeing as it is shaped by seven strong consecutive daily bull candles!

Data points to consider: US Job's report at 1.30pm GMT+1.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).

GOLD

In recent trading, the yellow metal challenged the daily support level at 1258.9 that happened to blend nicely with a H4 trendline support taken from the low 1235.1. The move from here, as you can see, lifted bullion back up to the H4 resistance pegged at 1269.8, which for now is doing a good job of holding the unit lower.

According to the daily timeframe, the bounce from the noted support could lead to a move being seen up to a daily trendline resistance extended from the high 1337.3. What's also notable here is the daily trendline intersects beautifully with a weekly area comprised of two Fibonacci extensions 161.8/127.2% at 1312.2/1284.3 taken from the low 1188.1 (green zone – the next upside target on the weekly scale).

Our suggestions: With both the weekly and daily timeframes showing room for the bulls to stretch their legs, we would be very cautious selling the current H4 resistance. Buying on the other hand, although you'd be trading in-line with weekly and daily flow, would entail buying into H4 supply seen beyond the current H4 resistance at 1281.1-1275.4. Therefore, our strategy for the time being is to lay low and assess structure following the US job's report scheduled to be released later on today.

Levels to watch/live orders:

• Buys: Flat (stop loss: N/A).
• Sells: Flat (stop loss: N/A).