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For the 24 hours to 23:00 GMT, the GBP rose 0.37% against the USD and closed at 1.2956, as investors bet that Theresa May’s Conservatives will win the UK’s general election.

In economic news, Britain’s Halifax house price index unexpectedly rebounded 0.4% on a monthly basis in May, defying market expectations for a drop of 0.2%. In the previous month, the Halifax house price index had fallen 0.1%.

Meanwhile, the OECD retained its growth forecast for UK, expecting an expansion of 1.6% this year and 1.0% in the next year.

In the Asian session, at GMT0300, the pair is trading at 1.2956, with the GBP trading flat against the USD from yesterday’s close.

The pair is expected to find support at 1.2907, and a fall through could take it to the next support level of 1.2857. The pair is expected to find its first resistance at 1.2987, and a rise through could take it to the next resistance level of 1.3017.

Trading trend in the Pound is expected to be determined by the outcome of UK’s general election.

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

For the 24 hours to 23:00 GMT, the USD rose 0.31% against the JPY and closed at 109.76.

In the Asian session, at GMT0300, the pair is trading at 109.84, with the USD trading 0.07% higher against the JPY from yesterday's close.

The Japanese Yen lost ground, after data showed Japan's economy expanded at a slower pace than initially estimated in the first three months of 2017.

Overnight data indicated that Japan's final gross domestic product (GDP) rose by 0.3% QoQ in 1Q 2017, less than market expectations for a rise of 0.6%. The preliminary figures had indicated a rise of 0.5%. In the previous quarter, GDP had registered a similar rise. Also, the nation's (BOP basis) trade surplus narrowed less-than-expected to a level of ¥553.6 billion in April, compared to market expectations of a (BOP basis) trade surplus of ¥494.0 billion. In the prior month, the nation had reported a surplus of ¥865.5 billion in the prior month.

Meanwhile, the OPEC estimated Japan's economy to expand 1.4% in 2017, up from a 1.2% increase projected in March, and 1.0% in 2018, up from 0.8%.

The pair is expected to find support at 109.3, and a fall through could take it to the next support level of 108.77. The pair is expected to find its first resistance at 110.19, and a rise through could take it to the next resistance level of 110.55.

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

For the 24 hours to 23:00 GMT, the USD rose 0.27% against the CHF and closed at 0.9646.

In the Asian session, at GMT0300, the pair is trading at 0.9645, with the USD trading slightly lower against the CHF from yesterday's close.

The pair is expected to find support at 0.9618, and a fall through could take it to the next support level of 0.9591. The pair is expected to find its first resistance at 0.9675, and a rise through could take it to the next resistance level of 0.9705.

Looking ahead, market participants will closely monitor Switzerland's unemployment rate as well as consumer price index data, both for May, scheduled to be released today.

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

For the 24 hours to 23:00 GMT, the USD rose 0.45% against the CAD and closed at 1.3509.

On the macro front, Canada’s building permits unexpectedly eased 0.2% MoM in April, compared to a revised drop of 4.9% in the prior month. Markets were anticipating building permits to rebound by 3.0%.

In the Asian session, at GMT0300, the pair is trading at 1.3511, with the USD trading slightly higher against the CAD from yesterday’s close.

The pair is expected to find support at 1.3450, and a fall through could take it to the next support level of 1.3389. The pair is expected to find its first resistance at 1.3549, and a rise through could take it to the next resistance level of 1.3587.

Ahead in the day, investors would eye a speech by the Bank of Canada’s (BoC) Governor, Stephen Poloz, along with Canada’s housing starts data for May.

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

Currency pair GBP/USD

The UK will hold general parliamentary elections today Thursday 8th of June 2017. The polls and results could impact price action for the rest of this and next week.

The GBP/USD, not surprisingly, remains in a large consolidation zone (purple box) and channel (green/red lines). The breakout direction could depend on the above mentioned election results.

The GBP/USD broke above resistance but seems to be moving into resistance such as trend lines and Fibonacci levels.

Currency pair EUR/USD

The EUR/USD remains trapped between the 100% Fib resistance level at 1.13 and the support zone at 1.12. A breakout is needed before a trend continuation becomes more likely.

The EUR/USD broke the bullish channel (dotted blue) but price bounced at the support levels (green). The ABC correction (orange) could still be part of a wave 4 (blue) but a break below support (green) invalidates it.

Currency pair USD/JPY

The USD/JPY has bounced at the 78.6% Fibonacci level of wave B (brown) but it remains to be seen on lower time frames if this is a reversal upwards or a correction for more bearish price action.

The USD/JPY has reached the 38.2% Fibonacci level. A bullish break above the 50% Fibonacci level indicates that the wave B (brown) has most likely been completed at the low.

Daily Pivots: (S1) 1.1212; (P) 1.1247 (R1) 1.1291; More....

Intraday bias in EUR/USD remains neutral with focus on 1.1298 key resistance level. Decisive break of 1.1298 will carry larger bullish implication and target 1.1615 resistance next. However, break of 1.1109 will indicate short term topping and rejection from 1.1298. In that case, intraday bias will be turned back to the downside for 1.0838 support first.

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 1.0888). 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.

Daily Pivots: (S1) 1.2908; (P) 1.2937; (R1) 1.2988; More...

Intraday bias in GBP/USD remains neutral for the moment. On the downside, below 1.2768 minor support will extend the fall from 1.3047 to 1.2614 resistance turned support. Decisive break there should confirm completion of the consolidation pattern from 1.1946 and resume the larger down trend through this low. On the upside, break of 1.3047 will extend the correction with another rise towards 1.3444 key resistance.

In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. The rejection from 55 week EMA is maintaining bearishness in the pair. Also, at this point, as long as 1.3444 resistance holds, fall from 1.7190 is still expected to continue. Break of above mentioned 1.2614 support will affirm this bearish case.

Daily Pivots: (S1) 108.91; (P) 109.71; (R1) 110.20; More...

Intraday bias in USD/JPY is turned neutral with a temporary low formed at 109.11. Some consolidation would be seen. But another fall is expected as long as 111.70 resistance holds. Below 109.11 will target 108.12 low first. Break will extend whole decline from 118.65 to 61.8% retracement of 98.97 to 118.65 at 106.48. As such decline is seen as a correction, we'll looking for bottoming signal around 106.48. Meanwhile, break of 110.70 will suggest near term reversal and turn bias back to the upside for 114.36 resistance instead.

In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. It's uncertain whether it's completed yet. But in case of another fall, downside should be contained by 61.8% retracement of 75.56 to 125.85 at 94.77 to bring rebound. Overall, rise from 75.56 is still expected to resume later after the correction from 125.85 completes.

Daily Pivots: (S1) 0.9615; (P) 0.9646; (R1) 0.9676; More.....

USD/CHF is staying in tight range above 0.9613 temporary low for the moment and intraday bias stays neutral first. Deeper decline is still expected as long as 0.9807 resistance holds. But in case of deeper fall, we'd start to look for bottoming signal again as it approaches 0.9443 key support level. However, considering bullish convergence condition in 4 hour MACD, break of 0.9807 will indicate near term reversal and turn outlook bullish for 1.0099 resistance next.

In the bigger picture, USD/CHF is still bounded in medium term range of 0.9443/1.0342 for the moment. Consolidative trading would likely continue and medium term outlook remains neutral. Break of 1.0342 key resistance is needed to confirm underlying bullish momentum in the pair. Meanwhile, downside attempts should be contained by 0.9443 key support level. However, sustained break of 0.9443 will carry larger bearish implication and target 0.9 handle.

Sterling is steadily in range as the latest poll on the eve of today's election showed that the Conservative could get an increased majority. According to ICM, Conservatives got a 12 point lead over Labour, 46 to 34. ComRes suggested a 10 point lead with Conservatives at 44, Labour at 34. YouGov said Conservatives got 42 and Labour got 35, 7 point lead. Meanwhile, Survation results showed Conservative at 41.3, Labour at 40.4, a mere 0.9 point lead. YouGov Director Anthony Wells said that "the seven-point Conservative lead is the same as at the previous election, but we think it is likely they will nevertheless be returned with an increased majority." But there is one key factor that analysts pointed out. The turnout of young voters is uncertain and they typically support Labour.

* Poll released on June 7

Technically, EUR/GBP, currently at 0.8680, is close to top of medium term range of 0.8303/8851. 0.8654 is an important near term suppot for the cross and a firm break there will indicate near term reversal. GBP/JPY is close to a near term fibonacci level at 140.35. Break there would pave the way to test on 135.58 support. But a break of 143.93 resistance will indciate near term reversal and target 148.09. GBP/USD's recovery from 1.2768 is corrective looking so far and lacks decisive momentum. Key levels to watch are 1.3047 and 1.2768.

Euro holds breath ahead of ECB

Euro spiked lower overnight on talk that ECB would lower inflation forecasts in new staff economic projections to be released today. But the common currency quickly recovered. Bloomberg quoted unnamed source noting that ECB staff forecasts inflation to be at 1.5% in 2017, 2018 and 2019. That's quite notable downward revision from prior forecasts of 1.7%, 1.6% and 1.7% respectively. Weakness in energy price is seen as a major factor for the change. This will add to the case for policymakers to be have more patience regarding any stimulus exit.

ECB is widely expected to keep key interest rate at 0% and deposit rate at -0.4% today. The asset purchase program will be left unchanged, at EUR 60b per month. ECB officials have generally expressed the view that it won't raise interest rate before ending the asset purchase in December. It's still generally expected that, due to receding political risks, the central bank will end the asset purchase after that, and there could be an announcement of some sort in September. The main focus is indeed on whether ECB would close the door for further stimulus by changing the language.

Markets shrugs Comey's statement

US equities and treasury yields closed mildly higher yesterday, as markets seem to have taken ex-FBI Director James Comey's written testimony well. Comey will appear in a hearing before Senate Intelligence Committee regarding US President Donald Trump's intervention in FBI investigation. In Comey's statement, he noted that Trump asked him to back off from a probe into former national secrutiy advisor Michael Flynn. And Trump told Comey, "I need loyalty. I expect loyalty". But it seems that the markets were expecting much worse from Comey and some noted that it's not that "smoking gun" that some predicted.

10 year yield is trying to get support from 38.2% retracement of 1.336 to 2.621 at 2.130 for the moment. It remains to be seen if TNX will rebound from here and the key structure resistance is at 2.297. But a rebound from 2.130 would likely help lift up the greenback. And given then EUR/USD is close to 1.1298, a rebound in Dollar that sends EUR/USD through 1.1109 would trigger position squaring and accelerate the move.

Loonie lower as oil plunges

Canadian Dollar weakened following another sharp decline in oil price. WTI dived to as low as 45.65 after data showed unexpected surge in US stockpiles by 3.3m barrels in the week ended June 2. WTI is now set to have a test on 38.2% retracement of 26.05 to 55.24 at 44.09. Meawnwhile, near term outlook in USD/CAD will stay bearish as long as 1.3570 minor resitsance holds.

On the data front

Japan Q1 GDP growth was finalized at 0.3% qoq, below expectation of 0.6% qoq. GDP deflator dropped -0.8% yoy. Japan current account surplus widened to JPY 1.81T in April. China trade surplus widened to USD 40.8b, CNY 282b in May. AUstralia trade surplus narrowed sharply to AUD 0.56b in April. UK RICS house price balance dropped to 17 in May.

Looking ahead, Swiss will release unemployment rate and CPI in Europea session. Germany will release industrial production while Eurozone will release Q1 GDP final. Canada will release housing starts and new housing price index. US will releas initial jobless claims as usual on Thursdays.

USD/CHF Daily Outlook

Daily Pivots: (S1) 0.9615; (P) 0.9646; (R1) 0.9676; More.....

USD/CHF is staying in tight range above 0.9613 temporary low for the moment and intraday bias stays neutral first. Deeper decline is still expected as long as 0.9807 resistance holds. But in case of deeper fall, we'd start to look for bottoming signal again as it approaches 0.9443 key support level. However, considering bullish convergence condition in 4 hour MACD, break of 0.9807 will indicate near term reversal and turn outlook bullish for 1.0099 resistance next.

In the bigger picture, USD/CHF is still bounded in medium term range of 0.9443/1.0342 for the moment. Consolidative trading would likely continue and medium term outlook remains neutral. Break of 1.0342 key resistance is needed to confirm underlying bullish momentum in the pair. Meanwhile, downside attempts should be contained by 0.9443 key support level. However, sustained break of 0.9443 will carry larger bearish implication and target 0.9 handle.

Economic Indicators Update