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Daily Pivots: (S1) 111.54; (P) 111.74; (R1) 112.02; More...

No change in USD/JPY's outlook. The corrective price actions from 110.23 could still extend. But after al, it's 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) 0.9707; (P) 0.9722; (R1) 0.9745; More.....

Intraday bias in USD/CHF remains neutral as it's staying in consolidation from 0.9691. In case of another rise, upside is expected to be limited by 0.9858 support turned resistance and bring fall resumption. Whole decline from 1.0342 is still in progress and below 0.9691 will target 100% projection of 1.0342 to 0.9860 from 1.0099 at 0.9617. We'll start to look for reversal signal below there.

In the bigger picture, USD/CHF is 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.

Daily Pivots: (S1) 1.1185; (P) 1.1218 (R1) 1.1242; More....

Intraday bias in EUR/USD remains neutral as consolidation from 1.1267 is still in progress. We'd stay cautious on strong resistance from 1.1245/98 (138.2% projection of 1.0339 to 1.0828 from 1.0569 at 1.1245) resistance zone to limit upside and bring reversal. But decisive break of 1.1298 will carry larger bullish implication and target 1.1615 resistance next. On the downside, though, break of 1.1020 resistance turned support will indicate rejection from 1.1245/98 and turn bias 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 now far above 55 week EMA. 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.

Market movers today

The main event today is the G7 meeting in Italy as well as the impact on inflation from the continued decline in the oil prices after the OPEC meeting.

There are only have a few data releases out of the US today, where the second round of US GDP numbers as well as the second estimated for PCE for Q1 are due to be published this afternoon.

Yesterday, European government bond yields fell on the back of the move in US Treasury yields on Wednesday after the release of the FOMC minutes. The minutes were seen to be dovish by the market. Given the comments from the FOMC, we have changed our call for three-four hikes to three hikes next year. There were also more signals on the reduction on the balance sheet (QT). Read more on our view on the Federal Reserve, rate hikes and QT in FOMC Minutes, Fed outlines QT principles and expects to hike soon, 24 May 2017.

Selected market news

The oil price continued to decline after the OPEC meeting disappointed the market. OPEC extended the supply cuts but the market had hoped for more. Read more here: Flash Comment International: OPEC supply cut extension disappoints the oil market, 25 May 2017.

This has dragged down energy shares in the Asian region and many of the Asian equity indices have declined this morning and have been unable to follow the positive sentiment from the US markets yesterday.

In the currency market, the euro is trying to break through the 1.12 versus the USD, while USDJPY has been range-trading around the 111-112 level. The People's Bank of China is planning to change the yuan reference calculation by adding a ‘counter-cyclical adjustment factor'. This should aim to limit big swings in the market.

The Fed's James Bullard supported the statements in the FOMC minutes in comments made to reporters in Tokyo this morning that the Fed is ‘very close' to where it needs to be on monetary policy.

In Europe, both Fitch and Moody's have published positive statements on Portugal after the EU commission recommended that Portugal should be exiting the ‘excessive deficit procedure'. Moody's notes this is a credit positive, while Fitch notes that this ‘underscores the strengthening in the country's public finances following policy adjustments and an economic recovery'. This is supportive for the PGB market even though short term, the focus will be on the possibility of additional issuance, as the Portuguese Debt Office recently announced that it will step up the repayment of the IMF debt.

Daily Pivots: (S1) 144.32; (P) 144.88; (R1) 145.28; More....

GBP/JPY's recovery was limited below 145.78 resistance and drops sharply. Focus is now on 143.34 support. Break there will extend the whole decline from 148.09 to 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. Ob the upside, above 145.78 will turn bias back to the upside for retesting 148.09 first.

In the bigger picture, based on current momentum, rise from 122.36 bottom should be developing into a medium term move. Break of 38.2% retracement of 195.86 to 122.36 at 150.42 should pave the way to 61.8% retracement at 167.78. This will now be the favored case as long as 135.58 support holds.

Daily Pivots: (S1) 125.01; (P) 125.41; (R1) 125.75; More...

EUR/JPY failed to take out 125.80 resistance and weakens again. Intraday bias remains neutral as the consolidation from 125.80 might extend with another fall. But still, 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.

Daily Pivots: (S1) 1.0889; (P) 1.0908; (R1) 1.0927; More...

No change in EUR/CHF's outlook as consolidation from 1.0986 extends. Intraday bias remains neutral for the moment. Deeper fall could be seen but downside is expected to 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) 1.4963; (P) 1.5013; (R1) 1.5087; More...

Breach of 1.5074 suggests that recent rise in EUR/AUD is resuming and intraday bias is back on the upside. We're holding on to the bullish view that the medium term trend has reversed. Break of 1.5094 resistance will extend the rally from 1.3624 to next medium term fibonacci level at 1.5455. On the downside, below 1.4934 will indicate short term topping and bring lengthier consolidation. But further rise would remain in favor as long as 1.4669 support holds.

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.

'Should we be concerned? No, the dip is probably temporary.' - Kallum Pickering, Berenberg

The British economy expanded at a weaker-than-initially-expected pace in the three-month period to March, official figures revealed on Thursday. The Office for National Statistics reported that the economy grew at a seasonally adjusted quarterly pace of 0.2% in the first quarter, the slowest pace of growth since the beginning of 2016, compared to an originally reported 0.3% expansion pace. Meanwhile, market analysts expected the March quarter's pace to remain unchanged. A fall in the services sector contributed the most to the following slowdown, with retail and accommodation posting the largest drops amid the post-Brexit vote sharp fall in the value of the British Pound. Furthermore, household consumption rose just 0.3% quarter-over-quarter in the Q1, the weakest since the Q4 of 2014, as inflationary pressures boosted import prices. Household consumption account for about 70% of Britain's GDP growth. The final GDP estimate for the Q1 will be released next month. Thus, the reading could be revised higher or lower. However, it was the first time in four years that the second estimate was revised down.

'If the widening in the trade gap reported thus far in the quarter is sustained, trade would subtract about half a percentage point from second-quarter GDP growth.' - John Ryding, RDQ Economics

The number of Americans filing for unemployment benefits rose less than expected last week, official data showed on Thursday. The Labour Department reported that initial jobless claims rose 1K to 234% in the week ended May 19, following the preceding week's upwardly revised 233K. Meanwhile, market analysts anticipated an increase of 5K to 238K during the reported week. That marked the 116th of claims remaining below the 300K level, the longest stretch since 1973. The four-week moving average of claims, considered to be a better measure of the labour market trends, dropped 5.75K to 235.25K last week, the lowest since April 1973. Thursday's report also showed that continuing jobless claims advanced 24K to 1.92M in the week ending May 13, whereas their four-week moving average declined 16K to 1.93M, the lowest since January 1974. The combination of strong data on the labour market, retail sales and industrial output suggested that the US economy regained positive momentum in the second quarter. Despite the stronger-than-expected release, the US Dollar edged lower against other major currencies.