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EUR/JPY Sideways price action.

EUR/JPY has bounced back after breaking hourly support given at 122.56 (18/05/2017 low) has been broken. Hourly resistance can be found at 125.82 (16/05/2017 high). Major support is given at 114.90 (18/04/2017 low).

In the longer term, the technical structure validates a medium-term succession of lower highs and lower lows. As a result, the resistance at 149.78 (08/12/2014 high) has likely marked the end of the rise that started in July 2012. Strong support at 94.12 (24/07/2012 low) looks nonetheless far away.

EUR/GBP Selling pressures increase round 0.8800.

EUR/GBP is struggling to go any higher. Hourly resistance is given at 0.8866 (12/06/2017 high). Other support can be found at 0.8652 (08/06/2017 low). Expected to show continued strength.

In the long-term, the pair has largely recovered from recent lows in 2015. The technical structure suggests a growing upside momentum. The pair is trading above from its 200 DMA. Strong resistance can be found at 0.9500 psychological level.

EUR/CHF Heading lower.

EUR/CHF's bearish pressures are definitely on. Yet, we believe that the medium-term pattern suggests us to see continued bearish pressures towards hourly support that can be found at 1.0792 (03/05/2017 low).

In the longer term, the technical structure is mixed. Resistance can be found at 1.1200 (04/02/2015 high). Yet,the ECB's QE programme is likely to cause persistent selling pressures on the euro, which should weigh on EUR/CHF. Supports can be found at 1.0184 (28/01/2015 low) and 1.0082 (27/01/2015 low).

USD/CHF Bearish pressures accelerate.

USD/CHF is pushing lower. Hourly resistance can be found at given at 0.9771 (09/06/2017 high). Strong resistance is given at 1.0107 (10/04/2017 high). Expected to show continued short-term bullish pressures.

In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours nonetheless a long term bullish bias since the unpeg in January 2015.

USD/CAD Monitoring recent lows.

USD/CAD is still in a consolidation phase after the strong decline. Hourly support lies at 1.3165 (14/06/2017 high). Expected to show continued weakness towards support given at 1.3010 (16/02/2017 low).

In the longer term, the pair lies in a bullish channel since a year. Strong resistance is given at 1.4690 (22/01/2016 high). Long-term support can be found at 1.2461 (16/03/2015 low).

AUD/USD Testing support area around 0.7500.

AUD/USD's technical structure is positive since early May. Yet, in the short-term there are bearish pressures towards support given at 0.7520 (09/06/2017 low)

In the long-term, we are waiting for further signs that the current downtrend is ending. Key supports stand at 0.6009 (31/10/2008 low) . A break of the key resistance at 0.8295 (15/01/2015 high) is needed to invalidate our long-term bearish view.

EUR/USD Sideways price action between 1.11 and 1.12.

EUR/USD is trading mixed. The pair is still trading below strong resistance given at 1.1300 (09/11/2017 high). Hourly support can be found at 1.1076 (18/05/2017 low). Stronger support lies at 1.0842 (11/05/2017 low).

In the longer term, the momentum is clearly negative. We favour a continued bearish bias towards parity. Key resistance holds at 1.1714 (24/08/2015 high) while strong support lies at 1.0341 (03/01/2017 low).

GBP/USD Reaching an inflection point.

GBP/USD is still bouncing higher since the pair failed to hold below former hourly support given at 1.2636 (09/06/2017 low). Hourly resistance lies at 1.2818 (14/06/2017 high). Expected to show further renewed selling pressures.

The long-term technical pattern is even more negative since the Brexit vote has paved the way for further decline. Long-term support given at 1.0520 (01/03/85) represents a decent target. Long-term resistance is given at 1.5018 (24/06/2015) and would indicate a long-term reversal in the negative trend. Yet, it is very unlikely at the moment.

USD/JPY Continued consolidation before testing again resistance at 112.13.

USD/JPY has failed to monitor resistance given at 112.13 (24/05/2017 high). Hourly support can be found at 108.89 (14/06/2017 high). Stronger support is located at 108.13 (17/04/2017 low).

We favor a long-term bearish bias. Support is now given at 96.57 (10/08/2013 low). A gradual rise towards the major resistance at 135.15 (01/02/2002 high) seems absolutely unlikely. Expected to decline further support at 93.79 (13/06/2013 low).

The euro has posted slight gains in the Friday session. Currently, EUR/USD is trading at 1.1170. On the release front, German and Eurozone Manufacturing PMIs both pointed to expansion. In the US, today’s highlight is New Home Sales, which is expected to climb to 599 thousand.

A stronger global economy has spurred demand for exports from the euro-area, and this has boosted the manufacturing sectors in Germany and the eurozone. German Manufacturing PMI ticked lower to 59.3 in May, above the forecast of 59.1 points. Germany’s manufacturing sector continues to show strong growth, and the April reading of 59.4 was the highest since March 2011. The news was also positive in the eurozone, as Manufacturing PMI improved for a tenth straight month, climbing to 57.3 points. This beat the estimate of 56.9 points. On Thursday, the ECB’s economic bulletin projected solid growth in the euro-area in the second quarter, buoyed by low inflation rates and stronger domestic demand.

The Federal Reserve has surprised the markets with its hawkish stance, as underscored by last week’s rate statement. The statement mentioned that the Fed plans to reduce its balance sheet later in 2017, although it did not provide further specifics. The balance sheet has ballooned to $4.5 trillion, which accumulated after the 2008 financial crisis, when the Fed went on a bond-buying spree to stimulate the economy. The reduction will be gradual, but still marks an important change in direction for the central bank. On Wednesday, FOMC member Patrick Harker said that he was in favor of the reduction commencing in September. The Fed has hinted at one more rate hike in the second half of 2017, and the markets have circled December as the most likely date for a rate move. The CME Group has pegged the odds of a September hike at just 13%, compared to 18% a week ago. However, the odds for a December increase are at 49%, and this could increase if Fed policymakers continue to wax positive about the economy.

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USD/CAD is in the late stages to complete blue wave five move from the highs. After the completion of the a-b-c pullback and an ideal 1 to 1 ratio between corrective legs we have turned lower in the impulsive manner and we now expect blue wave five to find support around 1.3100 area from where a pullback higher could be expected.

USDCAD, 1H

Trendless markets as investors seek new drivers

More than a week after the FOMC lifted borrowing costs in the US, financial markets - particularly the equity market - have been treading water as investors struggle to find a new driver. Both the Euro STOXX 50 and S&P 500 are about to close the week flat. In the bond market, the picture is quite similar as US treasury yields erased last week's gains, which were made on the back of a surprisingly hawkish Fed statement. Only the pound sterling, which is subject to a lot of uncertainty due to the Brexit situation, has created some excitement. This morning, GBP/USD extended gains as it returned to 1.2735; however on the longer-term it continues to trade within its monthly downtrend channel.

After a very light week in terms of economic data, the US dollar has started Friday on the backfoot with the dollar index falling 0.30%. A bunch of soft economic indicators are due for release later today - manufacturing, services and composite PMIs - but we believe investors won't pay much attention to those as they are looking for longer term drivers.

For now, investors do not expect a Fed interest rate hike in September but leave the door wide open for December. On the political side, the President Trump impeachment story is losing momentum. Against this backdrop, the yellow metal initiated a small rally as it rose to $1256 from $1240. Should this trendless situation remain, gold should have legs to extend gains.

Canadian inflation in spotlight

Markets have completely priced in a 25bp rate hike by the Bank of Canada by the end of 2017 leaving room for economic disappointment. We believe it's too early for the BoC to be thinking about higher rates. With front-end yields at the near term high, we doubt that CAD will have much more upside. In the longer term, the weakness and sustained negative outlook for oil prices will likely drag Canadian growth and pressure inflation dynamics.

It was BoC Governor Poloz speech which included a hawkish signal shift that drove policy tightening expectations. Yet commodity weakness will force members to easy back on arguments for normalisation. While uncertainty over US economic policy and NAFTA renegotiations will linger, markets will be focused on today's Canadian inflation data for May.

While this read fails to take into account crude sharp drops, it should help steer expectations. We suspect risks are asymmetrical, with significant downside should CPI disappoint and traders fade BoC hawkishness. Annual Core CPI is expected to come in at 1.4% from 1.3%. Although market sentiment on USDCAD is bearish, we remain constructive on pair.

The pair remains in red on Friday and extends pullback from Wednesday high at 0.8845.

Completion of Doji reversal pattern signals further downside.

Fresh bears are pressuring strong support at 0.8765 (Fibo 61.8% of 0.8719/0.8845 upleg / bull-trendline off 0.8383 low), with break and close below here to generate another strong bearish signal for possible retest of key near-term support at 0.8719 (16 June trough).

Broken 10SMA (0.8788) now acts as strong resistance which is expected to cap and maintain bearish pressure.

Res: 0.8788, 0.8828, 0.8845, 0.8865
Sup: 0.8765, 0.8738, 0.8719, 0.8681

EURUSD

The EURUSD didn’t make significant movement yesterday. The bias remains neutral in nearest term. Price is still in a bearish phase after the false breakout above 1.1285 last week, but still respects the H4 EMA 200 and 1.1080 key support as you can see on my H4 chart below. Immediate resistance is seen around 1.1200. A clear break above that area could trigger further bullish pressure retesting 1.1285 key resistance which needs to be clearly broken to the upside to continue the bullish scenario targeting 1.1350 – 1.1425 area. On the downside, a clear break and daily/weekly close below 1.1080 would interrupt the bullish scenario testing 1.0900 and the major trend line support next week.

GBPUSD

The GBPUSD didn’t make significant movement yesterday. The bias remains neutral in nearest term. The double top bearish scenario remains valid and I still prefer a bearish scenario at this phase but needs a clear break below 1.2635 to continue the bearish phase testing 1.2500 area. Immediate resistance is seen around 1.2710. A clear break above that area could trigger further bullish pressure testing 1.2760 – 1.2815 region. Overall I remain neutral.

USDJPY

The USDJPY had another indecisive movement yesterday, formed another Doji on daily chart suggests a consolidation phase. The bias remains neutral in nearest term. Price is still in a bullish phase after broke above the trend line resistance as you can see on my H4 chart below but need a clear break above 111.78 – 112.00 key resistance area to continue the bullish phase targeting 113.00 area.  On the downside, 110.65 remains a key support. A clear break below that area would interrupt the bullish outlook testing 110.00 or lower.

USDCHF

The USDCHF was indecisive yesterday. The bias remains bearish in nearest term testing 0.9695. A clear break below that area could trigger further bearish pressure testing 0.9650 region. Immediate resistance is seen around 0.9750. A clear break above that area could lead price to neutral zone in nearest term testing 0.9815 key resistance which remains a good place to sell with a tight stop loss as a clear break above 0.9815 would interrupt the bearish outlook testing 0.9900 region.

The pair remains in red in early Friday's trading but holding above initial support at 111.00 (55SMA) as Thursday's long-tailed Doji signaled strong downside rejection.

Bearish signal comes from slow stochastic which reversed from overbought zone and shows a plenty of room for further downside for extension towards a cluster of supports provide by daily MA, starting from 110.90 (200SMA), 110.82 (10SMA) and 110.64 20 SMA/Fibo 38.2% of 108.80/111.78). The latter is required to contain extended dips and keep focus at the upside, as thin daily cloud may attract for fresh attacks.

Conversely, firm break below 110.64 pivot would risk deeper correction of 108.80/111.78 upleg.

Res: 111.42, 111.78, 112.12, 112.24
Sup: 111.16, 111.00, 110.90, 110.64

Trading in USD was relatively flat on Friday ahead of economic indicators released next week in the US, which will provide further insight into the US economy – specifically inflation.

Following last week's FOMC decision to raise interest rates, the USD Index hit a 1 month high on Tuesday of 98.871. Since then trading has been in a narrow range as the markets await new US data to 'analyse'.

With US inflation data released next week the markets will be keen to see if the recent slump in crude oil has impacted the US inflation outlook.

US data releases next week will include; June consumer confidence indicator, pending home sales, crude oil inventories, revised first quarter GDP and the PCE price index. However, USD will likely react to wages & inflation data and moreso the July Non-Farm Payroll report in 2 weeks' time.

USD is set to post weekly gains of 0.4% against both USDJPY & EURUSD. USDJPY is trading around 111.25 below the 1 month high it set on Tuesday of 111.79. EURUSD is holding relatively steady around 1.1181.

Oil made small recoveries yesterday from 10 month lows, with WTI trading around $42.95 and Brent trading around $45.55 in early trading this morning. Therefore Commodity Currencies have benefited with USDCAD rallying 0.75% on Thursday and currently trading around 1.3220. CAD also benefitted from strong domestic retail sales which added to the markets expectations for an interest rate hike in July from the Bank of Canada.

GBPUSD was higher trading around 1.2735 as Kristin Forbes, Bank of England Policy Maker, stated 'a 'lift off' of UK interest rates should not be delayed any longer'. Such a statement is contrarian to comment made by Bank of England Governor Carney. This week GBPUSD experienced a sell off from Monday's high of 1.2814 to a 2-month low set on Wednesday of 1.2589.

Markets will be keen to hear the tone of speeches from FOMC members; Bullard, Mester and Powell today at 16:15 BST, 17:40 BST and 19:15 BST respectively.