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Daily Pivots: (S1) 110.84; (P) 111.34; (R1) 111.82; More...

Intraday bias in USD/JPY remains neutral at this point. Rise from 110.23 is seen as a correction and the larger fall is expected to resume later. On the downside, below 110.85 minor support will turn bias to the downside to extend the fall from 114.36 to 108.12 low. Break there will resume the whole decline from 118.65. In that case, we'll look for bottoming signal again at 61.8% retracement of 98.97 to 118.65 at 106.48.

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) 0.7423; (P) 0.7441; (R1) 0.7462; More...

Intraday bias in AUD/USD remains neutral for the moment. Overall, as long as 0.7555 resistance holds, fall from 0.7748 is still expected to continue. Below 0.7405 minor support will turn bias to the downside for 0.7382. Break there will target 0.7144/7158 support zone. However, firm break of 0.7555 will argue that fall from 0.7748 is completed and turn bias back to the upside.

In the bigger picture, we're still treating price actions from 0.6826 low as a corrective pattern. And, as long as 38.2% retracement of 0.9504 to 0.6826 at 0.7849 holds, long term down trend from 1.1079 is expected to resume sooner or later. Break of 0.6826 low will target 0.6008 key support level. However, firm break of 0.7849 will indicate that rise from 0.6826 is developing into a medium term rebound, rather than a sideway pattern. In such case, stronger rise should be seen to 55 month EMA (now at 0.8115) and above.

Daily Pivots: (S1) 1.3420; (P) 1.3458; (R1) 1.3485; More....

Intraday bias in USD/CAD remains neutral for the moment. Some consolidation would be seen above 1.3387 temporary low. But upside of recovery should be limited by 1.3570 resistance and bring fall resumption. At this point, we're still favoring the case that rise from 1.2968 has completed. And the larger rise from 1.2460 could have finished too. Below 1.3387 will target 1.3222 support first. Break of 1.3222 will affirm our bearish view and target 1.2968 key support level for confirmation. However, break of 1.3570 will turn focus back to 1.3793 high instead.

In the bigger picture, price actions from 1.4689 medium term top are seen as a correction pattern. The first leg has completed at 1.2460. Rise from 1.2460 is seen as the second leg and could have completed at 1.3793, ahead of 61.8% retracement of 1.4689 to 1.2460 at 1.3838. Break of 1.3222 should indicate the start of the third leg while further break of 1.2968 should confirm. Nonetheless, sustained trading above 1.3838 would pave the way to retest 1.4689 high.

Daily Pivots: (S1) 1.4953; (P) 1.5032; (R1) 1.5083; More...

Intraday bias in EUR/AUD remains neutral for the moment. As long as 1.4934 minor support holds, further rise is still expected in the cross. Firm break of 1.5094 resistance will extend the rally from 1.3624 to next medium term fibonacci level at 1.5455. However, considering bearish divergence condition in 4 hour MACD, break of 1.4934 support will confirm short term topping and bring deeper pull back, possibly to 55 day EMA (now at 1.4540).

In the bigger picture, price actions from 1.6587 medium term top are viewed as a corrective pattern. Such correction should be completed at 1.3624 after defending 1.3671 key support. Rise from 1.3642 is now expected to target 61.8% retracement of 1.6587 to 1.3624 at 1.5455 and above. In any case, outlook will now stay cautiously bullish as long as 1.4309 resistance turned support holds.

Daily Pivots: (S1) 0.8642; (P) 0.8655; (R1) 0.8673; More...

A temporary top is in place at 0.8750 and intraday bias in EUR/GBP is turned neutral for consolidations. Near term outlook stays mildly bullish as long as 0.8602 support holds and further rally would be seen. Above 0.8750 will target 0.8786 resistance first. Break of 0.8786 would pave the wave for retesting 0.9304 high. Break of 0.8602, however, will argue that the rebound from 0.9312 has completed and turn bias back to the downside for 0.8529 first.

In the bigger picture, price actions from 0.9304 are viewed as a medium term corrective pattern. The leg from 0.9304 should have completed after taking 0.8332 structural support. But it's too early to say that larger rise from 0.6935 is resuming. Rejection from 0.9304 will extend the consolidation with another falling leg. Meanwhile, firm break of 0.9304 will target 0.9799 (2008 high). In case of another decline, we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside and bring rebound.

Daily Pivots: (S1) 1.0876; (P) 1.0893; (R1) 1.0907; More...

Intraday bias in EUR/CHF remains neutral as consolidation from 1.0986 continues today. Deeper fall could be seen but downside should be contained by 1.0791/0872 support zone to bring rise resumption. As noted before, the consolidative pattern from 1.1198 should be completed. Firm break of 1.0999 resistance will pave the way for a retest on 1.1198 high.

In the bigger picture, the price actions from 1.1198 are seen as a corrective move. Current strong rebound is raising the chance that it's completed after defending 38.2% retracement of 0.9771 to 1.1198 at 1.0653. Decisive break of 1.0999 resistance will target a test on 1.1198 high. For now, this will be the preferred case as long as 1.0791 support holds.

Daily Pivots: (S1) 141.48; (P) 143.10; (R1) 144.08; More....

Intraday bias in GBP/JPY remains on the downside for 61.8% retracement of 135.58 to 148.09 at 140.35. At this point, we'd still expect rebound from 122.36 to resume later. Hence, we'd look for strong support below 140.35 to contain downside and bring rebound. On the upside, above 145.43 resistance will turn bias back to the upside for retesting 148.09 first.

In the bigger picture, rise from 122.36 medium term bottom is still expected to extend to of 195.86 to 122.36 at 150.42. And decisive break there could pave the way to 61.8% retracement at 167.78. However, as the cross is starting to lose upside momentum, rejection below 150.42 and break of 135.58 support will indicate reversal and bring deeper fall back to retest 122.36 instead.

Daily Pivots: (S1) 123.92; (P) 124.66; (R1) 125.17; More...

Intraday bias in EUR/JPY remains neutral for the moment as consolidation from 125.80 continues. Deeper fall cannot be ruled out. But downside should be contained by 38.2% retracement of 114.84 to 125.80 at 121.61 to bring rise resumption. We're staying mildly bullish in the cross. And, break of 126.09 key resistance will extend the whole rebound from 109.03 to 100% projection of 109.03 to 124.08 from 114.84 at 129.89.

In the bigger picture, focus is back on 126.09 support turned resistance. Decisive break there will confirm completion of the down trend from 149.76. And in such case, rise from 109.20 is at the same degree and should target 141.04 resistance and above. Meanwhile, rejection from 126.09 and break of 114.84 will extend the fall from 149.76 through 109.20 low.

The markets are looking to a slow trading day today with the British and the U.S. markets closed on account of the Spring bank holiday and the Memorial Day holiday respectively.

On Friday, the upside revision to the U.S. GDP for the first quarter helped the U.S. dollar index to regain some of the lost ground. However, the greenback will need to climb back above 97.60 resistance level to ascertain further gains. The next main resistance comes in at 99.23 - 99.50.

Looking ahead, economic data is light. Mario Draghi, the president of the European central bank, is expected to speak later today, testifying to the European Parliament in Brussels. He is very likely to defend the central bank's policies and maintain the ECB's view of no scope for tightening policy in the near term.

With the euro posting strong gains over the past few weeks and looking ahead to the rate hike from the FOMC in June, the single currency could be seen easing back from the rally.

EURUSD intraday analysis

EURUSD (1.1162): EURUSD is seen posting a reversal candlestick pattern following last Friday's declines. The 1.1200 price level has proven to give way leading to short-term consolidation near the top end of the rally.

Therefore, we expect to see EURUSD looking to a pullback in the near term. However, another attempt to test 1.1200 cannot be ruled out. This week, the flash inflation estimates will be key for the EURUSD. With expectations calling for a pullback to the inflation data, there is scope for the euro to ease back as well. Look for 1.1100 as the initial support that could target, followed by a break down towards 1.0950 region.

GBPUSD intraday analysis

GBPUSD (1.2829): The British pound fell sharply late on Friday as latest polls from Yougov showed the Conservative party losing some of its lead in the upcoming general elections. The markets were spooked as the possibility of a hung parliament became a reality.

As noted in our commentary, GBPUSD fell to 1.2800 support level which is likely to hold out in the near term. GBPUSD could be seen ranging between 1.3000, and there is scope for price action to remain flat for the time being. Price action could now see a near term bounce back, but further gains above 1.3000 are ruled out. This means that GBPUSD could be potentially looking to resume its declines, on a lower high that could be formed below 1.3000.

EURCAD intraday analysis

EURCAD (1.5029): Following the choppy price action from last week, EURCAD is seen to be looking to post some near declines following the breakout from the rising wedge pattern. The fact that resistance at 1.5147 - 1.5102 failed to break is also evidence of further downside in store.

Technical support at 1.4832 is the price level that could be targeted in the near term. Following last week's OPEC meeting and the decision to extend production cuts, the Canadian dollar fell along with oil prices. However, price action is likely to stabilize in the near term giving some boost to the Canadian dollar. As long as the resistance level that is mentioned is not reached, EURCAD will be targeting 1.4832

It's reported that North Korea launched another ballistic missile test today, the 9th this year. It's also the third week in a row that missiles were launched. Japanese Prime Minister Shinzo Abe responded and said that "as we agreed at the recent G7, the issue of North Korea is a top priority for the international community." And, "working with the United States, we will take specific action to deter North Korea." Nonetheless, reactions in the forex markets are muted as traders were getting bored with such news. In addition, holidays in China, Taiwan, UK and US also contributes to the lack of volatility. Meanwhile, the Korean KOSPI closed down -0.1% after failing to hold on to initial gains.

German Merkel: Europeans to take destiny into own hands

German Chancellor Angela Merkel was clearly dissatisfied with the G7 summit. She warned on Sunday that "the times in which we can fully count on others are somewhat over, as I have experienced in the past few days". And "we Europeans must really take our destiny into our own hands." While there should be "friendly relationship" with US, UK and Russia, "we have to fight for our own future ourselves". Merkel also said earlier that the discussion on climate change with US was "very difficult, not to say very unsatisfactory". And, "there we have a situation of six against one, meaning there is still no sign of whether the US will remain in the Paris accord or not."

San Francisco Fed Williams: Three rate hikes makes sense

San Francisco Fed president John Williams said that as Fed normalizes its policies, it wants the markets to stay cool with it. He emphasized that "the last thing we want to do is to fuel unnecessary or avoidable volatility or disruption", domestically or internationally. He reiterated that "three rate hikes" this year "makes sense" and "nothing has pushed me away from that". And Fed should "continue this gradual process of policy normalization in interest rates.

Looking ahead...

The calendar is rather busy this week in spite of a holiday on Monday. Dollar will look into ISM manufacturing and non-farm payroll. Euro will look into CPI. Meanwhile, Aussie will look into retail sales and China PMIs. Here are some highlights for the week ahead

• Tuesday: Japan household spending, unemployment rate, retail sales; Australia building approvals; Germany import prices, CPI; France GDP; Swiss KOF leading indicator; Canada current account, IPPI, RMPI; US personal income and spending, consumer confidence
• Wednesday: UK Gfk consumer sentiment M4 money supply, mortgage approvals. China PMIs; Japan housing starts; Swiss UBS consumption indicator; German retail sales, unemployment; Eurozone CPI, unemployment; Canada GDP; US pending homes sales, Chicago PMI, Fed Beige Book
• Thursday: Australia retail sales; China Caixin PMI manufacturing; Swiss GDP, retail sales; Eurozone PMI manufacturing revision; UK PMI manufacturing; US ADP employment, non-farm productivity; ISM manufacturing
• Friday: Japan monetary base, consumer confidence; UK construction PMI; Eurozone PPI, Canada trade balance; US non-farm payroll, trade balance

EUR/JPY Daily Outlook

Daily Pivots: (S1) 123.92; (P) 124.66; (R1) 125.17; More...

Intraday bias in EUR/JPY remains neutral for the moment as consolidation from 125.80 continues. Deeper fall cannot be ruled out. But downside should be contained by 38.2% retracement of 114.84 to 125.80 at 121.61 to bring rise resumption. We're staying mildly bullish in the cross. And, break of 126.09 key resistance will extend the whole rebound from 109.03 to 100% projection of 109.03 to 124.08 from 114.84 at 129.89.

In the bigger picture, focus is back on 126.09 support turned resistance. Decisive break there will confirm completion of the down trend from 149.76. And in such case, rise from 109.20 is at the same degree and should target 141.04 resistance and above. Meanwhile, rejection from 126.09 and break of 114.84 will extend the fall from 149.76 through 109.20 low.

Economic Indicators Update