Sample Category Title

Daily Pivots: (S1) 1.1189; (P) 1.1206 (R1) 1.1228; More....

EUR/USD edged higher to 1.1295 but failed to take out 1.1298 key resistance and retreated. As the pair is staying above 1.1109 near term support, intraday bias remains neutral first. Main focus remains on 1.1298. Decisive break there will carry larger bullish implication and target 1.1615 resistance next. On the downside, break of 1.1109 support will indicate short term topping and rejection from 1.1298. In such case, intraday bias will be turned to the downside for 1.0838 support.

In the bigger picture, the case for medium term reversal continues to build up with EUR/USD staying far above 55 week EMA (now at 1.0922). Also, bullish convergence condition is seen in weekly MACD. Focus will now be on 1.1298 key resistance. Rejection from there will maintain medium term bearishness and would extend the whole down trend from 1.6039 (2008 high). However, firm break of 1.1298 will indicate reversal. In such case, further rally would be seen back to 1.2042 support turned resistance next.

Dollar recovered overnight as Fed delivered the widely expected rate hike. The overall announcement, including new economic projections, was not as bad as some anticipated. Fed maintained the projection of a total of three rate hike this year. Downward revision in 2017 inflation forecast was somewhat offset by the upward revision in GDP forecast and downward revision in unemployment rate forecast. On other hand, both growth and inflation forecasts for 2018 and 2019 were held unchanged. While the greenback was lifted, it's clearly not out of the woods yet as markets seem not fully convinced by what Fed said.

More on FOMC Rate Decision:

• Dollar Recovers after Not that Dovish Fed Hike
• Fed Stands By Its Rate Path
• FOMC: Model Dominates the Outlook Over Current Inflation
• Fed Raises Rates Hoping Inflation Turns Soon
• No Surprise as the Fed Raises Rates, Continues to Signal Gradual Tightening
• Dollar Surges As Hawkish Fed Raises Rates, Maintains Rate Outlook, Talks Balance Sheet Reduction

TNX stays in near term down trend

Reactions in treasury yield is an evidence the markets are not as optimistic as Fed. 10 year yield dipped to as low as 2.103 after yesterday's CPI disappointment. FOMC decision lifted TNX mildly to close at 2.138. But that's still way off prior day's close at 2.207. Near term outlook will remain bearish as long as 2.229 resistance holds. And we'd expect further decline to 50% retracement of 1.336 to 2.621 at 1.9785.

Fed fund futures implies just 18% chance of September hike

Fed fund futures are pricing in just 18.03% chance of another rate hike in September. That's lower than prior day's pricing at 28.19% and last month's pricing at 26.7%.

Dollar stays bearish against Euro, Swiss Franc, Yen and Loonie

Technically, while EUR/USD failed to take out 1.1298 key resistance, it's still holding well above 1.1109 near term support. For now, outlook in EUR/USD stays bullish and current development could be just delaying the upside breakout. Meanwhile, USD/CHF is held well below 0.9807 resistance. USD/JPY is staying bearish with 110.80 resistance intact. USD/CAD also stays well below 1.3387 support turned resistance and remains bearish.

Aussie lifted by job data

Australia unemployment rate unexpectedly dropped to 5.5% in May, down from 5.7% and below expectation of 5.7%. That's also the lowest number since February 2013. Headline job number showed 42k growth, well above expectation of 10k. Full-time jobs grew 52.1k while part-time jobs fell -10.1k. Participation rate also rose 0.1% to 64.9%. Speculations of a rate cut by RBA receded after the release.

Kiwi underwhelmed by GDP miss

On the other hand, New Zealand GDP grew only 0.5% qoq in Q1, below expectation of 0.7% qoq. While Kiwi remains the second strongest major currency for the month, it's overtaken by Aussie. AUD/NZD's strong rebound confirms short term bottoming at 1.0389 and further rise would be seen. Focus is back on 1.0608 resistance. As long as this resistance holds, we're holding on to the view that consolidation from 1.0234 has completed at 1.1017 and deeper fall is expected through 1.0234 low at a later stage. But firm break of 1.0608 will suggest that stronger rise would be seen back to 1.1017 resistance.

SNB and BoE to watch in European session

SNB and BoE rate decisions are the key events to watch in European session. SNB is expected to keep the Libor target range unchanged at -0.25% to -0.75% today. The central bank will likely maintain its current monetary stance and reiterate its complaint on Franc overvaluation. BoE is widely expected to keep bank rate unchanged at 0.25% and asset purchase target at GBP 435b. Attention will be on voting but after the CPI upside surprise earlier this week, Kristin Forbes will likely continue to vote for a hike. Both central bank announcements could turn out to be non-events.

Also to be released in European session include Swiss PPI, UK retail sales and Eurozone trade balance. In US session, US will release import price index, Empire State manufacturing index, Philly Fed survey, jobless claims, industrial production and NAHB housing market index.

EUR/USD Daily Outlook

Daily Pivots: (S1) 1.1189; (P) 1.1206 (R1) 1.1228; More....

EUR/USD edged higher to 1.1295 but failed to take out 1.1298 key resistance and retreated. As the pair is staying above 1.1109 near term support, intraday bias remains neutral first. Main focus remains on 1.1298. Decisive break there will carry larger bullish implication and target 1.1615 resistance next. On the downside, break of 1.1109 support will indicate short term topping and rejection from 1.1298. In such case, intraday bias will be turned to the downside for 1.0838 support.

In the bigger picture, the case for medium term reversal continues to build up with EUR/USD staying far above 55 week EMA (now at 1.0922). Also, bullish convergence condition is seen in weekly MACD. Focus will now be on 1.1298 key resistance. Rejection from there will maintain medium term bearishness and would extend the whole down trend from 1.6039 (2008 high). However, firm break of 1.1298 will indicate reversal. In such case, further rally would be seen back to 1.2042 support turned resistance next.

Economic Indicators Update

Asia Mid-Session Market Update: Strong Aussie jobs dent RBA rate cut outlook; Trump under expanded probe for obstruction

US Session Highlights

(US) MAY ADVANCE RETAIL SALES M/M: -0.3% V 0.0%E; RETAIL SALES EX AUTO M/M: -0.3% V 0.1%E

(US) MAY CPI M/M: -0.1% V 0.0%E (2nd negative reading in last 3 months); CPI EX FOOD AND ENERGY M/M: 0.1% V 0.2%E; CPI INDEX NSA: 251.329 V 251.580E

(US) DOE CRUDE: -1.7M V -2.5ME; GASOLINE: +2.1M V -1ME; DISTILLATE: +0.3M V +0.5ME

FOMC decides to lift key interest rates 1/4%, as expected, to 1%-1.25%, leaving room for one more rate hike in 2017. Fed Chair Yellen also said that starting this year the Fed would gradually start unwinding its $4.5 trillion balance sheet, and the lack of slowdown in the projected rate hike path suggests the Fed can both do balance sheet reduction and rate hikes concurrently.

US markets on close: Dow +0.2%, S&P500 -0.1%, Nasdaq -0.4%

Best Sector in S&P500: Consumer Staples

Worst Sector in S&P500: Energy

Biggest gainers: ALXN +9.3%; HRB +7.9%; M +2.3%

Biggest losers: URI -6.1%; SWN -5.4%; MUR -5.4%

At the close: VIX 10.6 (+0.2pts); Treasuries: 2-yr 1.36% (+1bps), 10-yr 2.14% (-7bps), 30-yr 2.78% (-8bps)

US movers afterhours

AVXS Announces alignment with FDA on GMP Commercial Manufacturing Process for AVXS-101 ; +6.8% afterhours

JBL Reports Q3 $0.31 v $0.29e, Rev $4.49B v $4.41Be; Guides Q4 $0.50-0.74 v $0.61e, R$4.7-5.1B v $4.79Be - Guides FY18 ~$2.60 v $2.08e ; +3.3% afterhours

PACB Announces proposed public offering of common stock; size not disclosed; -10.2% afterhours

Politics

(US) Special Counsel Mueller investigating President Trump for possible obstruction; Probe has widened to include Trump after he fired FBI Director Comey - Washington Post

Key economic data

(AU) AUSTRALIA MAY EMPLOYMENT CHANGE: +42.0K (3rd straight increase) V +10.0KE; UNEMPLOYMENT RATE: 5.5% (4-year low) V 5.7%E

(AU) AUSTRALIA JUNE CONSUMER INFLATION EXPECTATION: 3.6% V 4.0% PRIOR (6-month low)

(NZ) NEW ZEALAND Q1 GDP Q/Q: 0.5% V 0.7%E; Y/Y: 2.5% V 2.7%E

Notes and Observations

Asian markets taking the latest FOMC rate hike mostly in stride, with the exception of Hong Kong property names coming under pressure from a matching rate increase by HKMA.

Moderate USD strength weighing on precious metals, leading to losses among Australian gold producers.

AUD/USD rallied about 50pips on much stronger than expected Aussie jobs data, as unemployment rate fell to 4-year low despite the rise in participation rate; Conversely, NZD under pressure after a miss in Q1 GDP, falling some 60pips from the highs toward 0.72

Risk-off flows materializing after a Washington Post report claimed Special Counsel Mueller is looking directly at President Trump for obstruction in relation to firing of FBI Dir Comey and pressure to end investigation of Michael Flynn. Mueller to interview Head of Intelligence Coats, NSA head Coats, and others as soon as next week.

Speakers and Press

China

(CN) PBOC injected funds through open market operations (OMO) today to counter liquidity stress from tax payments and maturing repos - press

(CN) China Academy of Social Sciences (CASS): House prices in Beijing fell 4.1% m/m - Shanghai Daily

(CN) China NDRC: out 43.4Mt of crude steel capacity and 97Mt of coal capacity as of the end of May

Japan

(JP) Junichi Fukuda said to replace Shinichi Sato as Japan Administrative Vice Minister - Japan press

Australia/New Zealand

(AU) CBA: Australia pace of employment growth clearly accelerated; Recent run of strong data takes RBA rate cut off the table for now - press

(NZ) Stats NZ: Investment in plant, machinery and equipment has been the strongest in almost seven years, reflecting higher domestic production and greater imports of machinery - NZ Press

Korea

(KR) South Korea Fin Min Kim: Job creation is a top priority of President Moon's administration

Asian Equity Indices/Futures (00:00ET)

Nikkei -0.4%, Hang Seng -1.1%, Shanghai Composite -0.1%, ASX200 -1.3%, Kospi -0.7%

Equity Futures: S&P500 -0.3%; Nasdaq -0.5%, Dax closed, FTSE100 -0.3%

FX ranges/Commodities/Fixed Income (00:00ET)

EUR 1.1205-1.1230; JPY 109.30-109.80; AUD 0.7580-0.7630; NZD 0.7210-0.7270

Aug Gold -0.7% at 1,267/oz; July Crude Oil -0.1% at $44.69/brl; July Copper +0.5% at $2.58/lb

SPDR Gold Trust ETF daily holdings fall 12.1 tonnes to 854.9 tonnes; lowest since June 5th and first decline since May 23rd

(CN) PBOC SETS YUAN MID POINT AT 6.7852 V 6.7939 PRIOR; 2nd straight firmer Yuan fix; Strongest Yuan fix since Nov 9th

(CN) PBOC to inject combined CNY150B v CNY90B prior in 7-day, 14-day and 28-day reverse repos

Asia equities notable movers

Australia

Watpac (WTP) -11.4%; Guides FY17 underlying Net to be broadly breakeven y/y (implies ~A$8.5M)

Oil Search (OSH) -2.8%; Affirms FY17 production 28.5-30.5 MMBOE; closed upsized refinancing of $500M debt facility to $600M - investor slides

Tox Free (TOX) -0.6%; Guides FY17 underlying EBITDA of A$82-83M v A$83Me; H2 trading has improved on H1 meeting budget expectations

Japan

Kobe Steel (5406) -3.7%; targeting FY20 pretax profit ¥20B (v ¥12B FY16/17) - Nikkei

Toshiba (6502) -1.1%; On track to select preferred bidder for chip unit in the second half of June; To be demoted to the second section of Tokyo Stock Exchange (TSE) amid financial statement delay

TEPCO (9501) -1.1%; Plans for restructuring of nuclear power business do not impact forming capital ties with other power utilities - Nikkei

Hong Kong

Meitu (1357) -6.4%; shareholder to sell 66M shares at HK$8.50/shr

China Southern (1055) -0.5%; Reports May passenger traffic +13% y/y

Oriental Watch (398) -1.7%; Reports FY16/17 (HK$) Net 16.1M v loss 15.8M y/y; Rev 3.14B v 3.03B y/y

Rykadan Capital (2288) -11.9%; Reports FY17 (HK$) Net 54.4M v loss 91.6M y/y; Rev 602.3M v 153.1M y/y

Besunyen Holdings (926) +6.6%; Guides H1 Net CNY25-35M

China Life Insurance Co (2628) -2.0%%; Reports May YTD premium income CNY298.5B, +19% y/y

• The FOMC raised its FF rate target as expected by 25 bps to 1-1.25%
• Press statement showed little surprises; Yellen sees inflation going higher
• Fed’s median rate projections for 2017, 2018 unchanged; 2019 marginally lower
• Fed intends to start balance sheet tapering soon if economy evolves as expected
• Starting cap for tapering $6B/month for Treasuries & $4B for MBS
• At full speed (after 1 year) tapering amounts to $50B/month or 600B/year

FOMC unmoved by slower inflation

The FOMC as expected raised its Fed funds target range by 25 basis points to 1%‐1.25%, the third consecutive quarterly rate increase. The press statement didn’t contain much surprises compared to the March and May statements. Growth projections were virtually unchanged from the March ones, the unemployment rate was substantially revised lower for the years up to 2019 and the long run employment rate was lowered 0.1%‐point to 4.6%. The FOMC lowered the inflation projection for end 2017 to 1.6% from 1.9% in March, but kept it unchanged for headline and core PCE inflation at 2% for 2018 and 2019. The statement recognizes that inflation has declined recently and is running somewhat below 2%. The FOMC said it expected inflation to remain below 2% in the near term, but to stabilize around 2% over the medium term. Yellen attributed the recent decline in inflation to idiosyncratic reasons like wireless services prices and prices for prescription drugs. She however maintained her view that the Philips curve, while rather flat, is still valid. When the labour market tightens further, she expects higher wages growth and ultimately higher inflation. She summarized that the growth and inflation environment was broadly the same as in March. Inflation developments would, however, be followed closely , suggesting that some governors are concerned about recent inflation readings.

FOMC sticks to its rate path projection

The FOMC policy outlook (dot plot) was virtually unchanged. Before the end of 2017, the Fed expects one more rate hike (1.375%) and 3 for 2018 3 (2.125%). In 2019, the the Fed expects 3 rate hikes (to 2.875%) instead of 3.5 hikes (to 3%) in March. This was mainly due to the number of participants (16 instead of 17). Looking to the individual dots, it looks that 1 governor of the majority (Evans? Brainard?) changed his 2017 view from 3 to 2 rate hikes (which took already place). So, the FOMC as a Committee stuck to its projected path of gradual rising rates over the next years.

Tapering balance sheet to start in 2017

The FOMC confirmed its intention to start winding down its balance, by not fully reinvesting the proceeds of the maturing assets, this year, if the economy evolves as expected. We suspect that the FOMC wants to raise rates once again in September and start its balance sheet run‐off in early Q4, suggesting unchanged rates in December to gauge the impact of the tapering. The Fed published an addendum to the policy normalization principles and plans

Initial run-off small ($10B/month)

The central bank will shrink its balance sheet (and at the same time the reserves held by financial institutions at the Fed) by decreasing its reinvestments, but only to the extent the payments of the maturing assets it receives exceed a gradually rising cap. For Treasuries, the cap will be $6B/month at the start and will increase in steps of $6B at 3‐month intervals over 12 months until it reaches $30B/month. For Agency and MBS debt, the initial cap is $4B/month to be increased over 1 year to $20B/month. Once these maximum amounts are reached, the caps remain in place until the desired size of the balance sheet is reached. That desired size will be decided later on and depends on the way the Fed wants to conduct its monetary policy. Yellen said that the post‐crisis policy setting was working very well, suggesting the Fed may not go back to its pre‐crisis system of open market operations. This means that the size of the balance sheet (and the reserves), after normalization, will be appreciable below levels seen in recent years, but larger than before the crisis.

Fed Fund rate to remain main tool

The FOMC affirms that the FF rate will remain the main tool to adjust its policy, but it is ready to resume reinvestments if a material deterioration in the economic outlook were to warrant a sizeable reduction in the FF target. It would also re‐use the QE tools, including altering the size and composition of the balance sheet if the FF rate would be near the zero bound and more accommodation was needed.

How long will it take to normalize?

After one year (end 2018?), the reduction of the reinvestments would amount to $50B/month or $600B/year (first year $300B). If the current $4.5 T balance would be lowered to $2.5T (Bernanke suggestion), it would take less than 4 years (to about end 2021) to reach the end of the normalization if our $2.5 T hypothesis is correct..

Market reaction subdued after FOMC

US Treasuries sharply rallied in the afternoon on weak CPI and retail sales. After the FOMC, they returned some of the gains. In a daily perspective, the curve was still substantially lower and flatter with yields down between 3.2 bps and 9.9 bps. Markets clearly don’t believe that the FOMC will be able to increase rates as they project it in the dot plot. Probabilities for an additional 2017 rate hike in September are 21%, and 36% for December. For end 2018, markets expect a 1.50% FF rate versus 2.125% for the Fed. End 2019 markets don’t even discount an extra rate hike. So, the gap between markets and the Fed remains as large as before.

The dollar lost substantial ground on the afternoon data releases, but recouped them after the FOMC. Only USD/JPY remained slightly below opening levels.

US equities ended the session narrowly mixed with the Dow eking out marginal gains, the S&P 500 nearly unchanged and the NASDAQ registering modest losses

Key Points:

• Price action produces a false breakout.
• 60 EMA dynamic support is looming.
• Watch for a break lower in the coming week towards the $1230 an ounce mark.

The past six months have proved relatively positive for gold as the metal has continued to make headway over a cooling U.S. Domestic economy. However, the past few days have proved relatively illuminating for the metal with a false breakout occurring above the trend line likely signalling a sharp pullback could be ahead. Subsequently, it remains to be seen if Gold can retain its bullishness or whether a rout is, potentially, in progress.

It's always the case that the retail money chases the high and the last few days, in precious metals, have largely proved that adage. As the large banks and financial institutions have been clamouring to get out of their positions, and have become largely net short via gold miners and derivatives, the retail trader has blundered into a bear trap.

This effect is quite clearly seen on the daily chart with the false breakout above the short term declining trending line. As momentum started to stall, and the smart money exited their positions, Gold saw plenty of spurious volume as retail traders sought to position long on the breakout. Unfortunately, the move stalled near the $1296.09 mark and we are left with price action now slipping steadily lower.

Subsequently, we are now left with the question of where to next for the precious metal given that markets have taken a relatively negative tone following, not only the false breakout, but also the FOMC decision. A quick technical analysis of the metal suggests that we could be in for some further falls given the fact that the RSI Oscillator remains within neutral territory and steadily trending lower. Additionally, price action is closing in on the 60 Day EMA and a break of this level could see a decline as deep as $1230 an ounce.

However, given the U.S. Fed's recent commitment to economic tightening Gold could fundamentally be facing a much deeper fall. In fact, if the central bank follows through on their forward guidance to continue hiking rates, whilst tapering their balance sheet, we could see a deleterious decline that takes price action all the way to the bottom of the supporting trend line around $1140 an ounce.

Ultimately, the metal's near term trend is clearly negative but it just remains to be seen whether Gold experiences a soft or a hard landing. In the short term, at least, we are likely to see a fall back towards $1230 an ounce over the next few weeks. Any further declines will require some fundamental variables to change and that remains at the behest of the Federal Reserve.

Key Points:

• A reversal is looking likely in the coming sessions.
• Support being generated by the 100 day EMA.
• Also keep half an eye on the BoJ.

The CHFJPY has been having some fairly reliable reversals over the past few weeks and it looks about ready to make yet another one. Nevertheless, the sheer momentum of the recent sell-off does bring into question whether or not the pair can make a recovery this time around. As a result of this, we might need to take a closer look at the technicals to try and establish a bias for the days ahead.

First and foremost, it's fairly obvious that the CHFJPY has recently entered a ranging phase that has kept the pair oscillating between the 115.08 and 112.42 levels. Currently, price action is at the lower extreme of this range – usually a sure sign that we can expect to see the bulls get back into the driving seat in the coming sessions. However, can we be sure that support will hold this time around? Indeed, the 12 and 20 day EMA's have just had a bearish crossover and the parabolic SAR is signalling that a downtrend is underway.

Fortunately, a closer inspection of the technicals reveals that we have good reason to suspect that a reversal is on its way in the near future. For one thing, unlike its shorter period counterparts, the 100 day moving average is still quite bullish. As shown, it is not only beneath the 12 and 20 day lines but it is also supplying dynamic resistance around that 112.42 handle. Given that this price is also the 38.2% Fibonacci retracement, a breakout would be highly irregular.

Regardless, minimised downside risks do not necessarily mean that we are about to see a solid uptrend take place. Instead, the argument for some buying pressure stems from the stochastics and the Bollinger bands. Starting with the stochastics, these are clearly in oversold territory and will need to be relieved going forward – potentially leading to some decent gains. However, it's really the Bollinger bands that indicate that a sizable recovery is required as price action should be trying to move back to the basis line imminently.

Ultimately, keep an eye on this pair as there is definitely some potential for a rally moving ahead which could extend all the way up to the 115.08 handle. This being said, monitor the fundamental side of things on Friday as the BoJ could be making waves, thereby disrupting technical forecasts.

• BoE should remain on hold despite inflation rising well beyond target;
• Fed signals another hike this year but markets aren't buying it;
• Strong Australian jobs report aids further gains in AUDUSD.

The UK will be back in focus again on Thursday as the Bank of England announces its latest monetary policy decision, amid all the political chaos following last week's snap election result, and we'll also get retail sales numbers for May.

The timing of the latest monetary policy decision from the BoE couldn't be much worse, as the country prepares to start Brexit negotiations without a stable government following the surprising snap election result. To make matters worse for policy makers, this comes as inflation has hit 2.9%, higher than what it anticipated would be the peak only a month ago.

While policy makers claimed after the last meeting that they would only need little upside news on growth or inflation to consider voting for tighter policy, I would be extremely surprised to see them act at this moment in time. The huge amount of economic uncertainty paired with the temporary drivers of inflation and lower growth prospects is surely a good enough reason to look through the current spike in prices. Should they not look beyond this and even signal a possible hike in the near-term, it would catch markets completely off guard which could provide a significant boost to sterling.

The Federal Reserve finds itself in a far more privileged position, albeit still not an ideal one, with growth prospects much better, the economy in better shape and inflation at a level that allows for tighter policy without necessitating the need for it. The FOMC raised interest rates for a second time this year on Wednesday – as was fully expected and priced in – and signalled an intention to do so again this year while laying out plans to begin reducing the size of its balance sheet.

Traders appear unconvinced by the possibility of another rate hike this year, despite what the Fed indicated, with the implied probability of one by December standing at below 50%. Investors appear concerned about the slowing pace of inflation but this doesn't seem to bother policy makers, who revised down their projection for this year to 1.6%, from 1.9% previously, while maintaining their forecasts of 2% for 2018 and 2019.

A strong jobs report boosted the Australian dollar overnight, as stronger gains in employment – boosted entirely by full time roles – brought the unemployment rate back to a four year low, while participation rose to its highest in almost a year.

Still to come today there's plenty of economic data being released, including retail sales from the UK, which are expected to have softened again in May following the Easter holiday driven spike in April. We'll also get plenty of numbers from the US this afternoon including jobless claims, Philly Fed manufacturing index and industrial production.

Currency pair EUR/USD

The EUR/USD challenged the key 1.13 resistance zone (red line) after weak inflation figures in the US were released yesterday. Despite the recent weakness in inflation levels, the US interest rates did increase from 1% to 1.25% later in the day which sparked a renewed US Dollar rally and hence a decline in the EUR/USD.

The EUR/USD is currently caught in between strong support and resistance and would need to break (arrows) these levels before a potential trend could start.

The EUR/USD wave 4 (blue) becomes unlikely if price manages to break above the 61.8% Fib level.

Currency pair GBP/USD

The GBP/USD has retraced to the 50% Fibonacci level of wave 2 (blue) via an ABC zigzag (orange). A bearish breakout (red arrows) could confirm wave 3 (red). The GBP/USD wave 2 is invalidated if price breaks (green arrows) above the 100% Fibonacci level.

The GBP/USD needs to break below support (blue/green) to confirm a potential wave 3 (blue). The Fibonacci levels of wave 2 (blue) could act as resistance.

Currency pair USD/JPY

The USD/JPY broke the support trend line (dotted blue) which has reopened the correction within wave B (brown). Price has reached the 88.6% Fibonacci level which is the last Fibonacci level of this wave B and a major bounce (green arrows) or break (red arrows) zone.

The USD/JPY needs to break above resistance (red) for a potential bullish trend or break below support (green) for a potential bearish trend.

For the 24 hours to 23:00 GMT, the AUD rose 0.74% against the USD and closed at 0.7592.

LME Copper prices rose 0.5% or $25.5/MT to $5684.5/MT. Aluminium prices rose 0.5% or $9.5/MT to $1886.5/MT.

In the Asian session, at GMT0300, the pair is trading at 0.7613, with the AUD trading 0.28% higher against the USD from yesterday's close, following an upbeat Australian jobs report.

Early morning data showed that Australia's seasonally adjusted unemployment rate unexpectedly eased to 5.5% in May, dropping to its lowest level in four years, driven by a rebound in fulltime positions. Markets expected unemployment rate to remain steady at 5.7%. Additionally, the number of people employed climbed by 42.0K in May, following a revised gain of 46.1K in the prior month, whereas investors had envisaged for a rise of 10.0K.

On the other hand, the nation's consumer inflation expectations dropped to 3.6% in June, compared to a reading of 4.0% in the previous month.

The pair is expected to find support at 0.7552, and a fall through could take it to the next support level of 0.7491. The pair is expected to find its first resistance at 0.7655, and a rise through could take it to the next resistance level of 0.7697.

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

For the 24 hours to 23:00 GMT, the EUR slightly rose against the USD and closed at 1.1212.

On the macro front, the Euro-zone's seasonally adjusted industrial production advanced for the second straight month, after it rose 0.5% on a monthly basis in April, meeting market expectations and following a revised gain of 0.2% in the previous month.

Separately, Germany's final consumer price index (CPI) climbed 1.5% YoY in May, rising at its weakest pace in six months and confirming the flash estimate. The CPI had advanced 2.0% in the prior month.

The US Dollar clawed back some of its losses against a basket of currencies, after the Federal Reserve (Fed) raised interest rates for the second time this year and painted a rosier picture of the US economy.

The Fed, at its latest monetary policy meeting, raised its benchmark interest rate by a quarter percentage point to a target range of 1.00% to 1.25%, citing continued US economic growth and job market strength. Additionally, it indicated plans to pare back its $4.5 trillion balance sheet this year if the economy evolves as the central bank expects. In a post-meeting statement, the Fed judged that the recent weakness in economic data is temporary and maintained the outlook for one more rate hike this year but did not shed light on the timing of the rate hike.

Meanwhile, in its latest quarterly economic forecasts report, the central bank stuck to its outlook of three interest rate hikes in 2018. Moreover, policymakers slightly raised their economic growth forecast for this year to 2.1% but kept the estimates for 2018 and 2019 unchanged at 2.1% and 1.9% respectively. Inflation is expected to be at 1.7% by the end of this year, down from the 1.9% previously forecast.

Prior to the Fed interest rate decision, the greenback declined against its major peers, after the US inflation and retail sales data surprised with an unexpected drop.

The US CPI unexpectedly eased 0.1% on a monthly basis in May, suggesting that inflationary pressures in the world's largest economy are moderating. The CPI had registered a rise of 0.2% in the prior month, while markets expected it to record a flat reading. Further, the nation's advance retail sales surprisingly declined 0.3% MoM in May, defying market consensus for a flat reading. Advance retail sales had recorded a rise of 0.4% in the previous month. Further, the nation's business inventories fell 0.2% in April, at par with market expectations. In the previous month, business inventories had advanced 0.2%.

In the Asian session, at GMT0300, the pair is trading at 1.1218, with the EUR trading marginally higher against the USD from yesterday's close.

The pair is expected to find support at 1.1175, and a fall through could take it to the next support level of 1.1133. The pair is expected to find its first resistance at 1.1278, and a rise through could take it to the next resistance level of 1.1339.

Going ahead, market participants will keep a close watch on the Euro-zone's trade balance for April, slated to release in a few hours. Moreover, the US initial jobless claims, industrial as well as manufacturing production for May and NAHB housing market index for June, set to release later in the day, will keep investors on their toes.

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