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Daily Pivots: (S1) 1.0646; (P) 1.0662 (R1) 1.0688; More....

A temporary low is in place at 1.0635 in EUR/USD with 4 hour MACD staying above signal line. Intraday bias is turned neutral for consolidation. Recovery should be limited by 1.0772 resistance and bring another decline. As noted before, corrective rise from 1.0339 is completed at 1.0905. And more importantly, larger down trend is probably resuming. Below 1.0635 will turn bias back to the downside for 1.0494. Break will confirm this bearish case and target 1.0339 low. However, above 1.0772 will delay this bearish case and bring another rise back to 1.0905 first.

In the bigger picture, as long as 1.1298 key resistance holds, whole down trend from 1.6039 (2008 high) is still expected to continue. Break of 1.0339 low will send EUR/USD through parity to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115. However, considering bullish convergence condition in weekly MACD, break of 1.1298 will indicate term reversal. this would also be supported by sustained trading above 55 week EMA.

Daily Pivots: (S1) 1.2407; (P) 1.2451; (R1) 1.2483; More...

The consolidation in range of 1.2376/2614 continues in GBP/USD. Intraday bias remains neutral for the moment. Overall, price actions from 1.1946 are viewed as a consolidation pattern pattern. On the downside, break of 1.2376 will turn bias to the downside for 1.2108 support. Decisive break there will be an early sign of larger down trend resumption. On the upside, break of 1.2614 will extend the rise from 1.2108. But upside should be limited by 1.2705/2774 resistance zone to bring larger down trend resumption eventually.

In the bigger picture, fall from 1.7190 is seen as part of the down trend from 2.1161. There is no sign of medium term reversal yet. Sustained trading below 61.8% projection of 2.1161 to 1.3503 from 1.7190 at 1.2457 will target 100% projection at 0.9532. Overall, break of 1.3444 resistance is needed to confirm medium term bottoming. Otherwise, outlook will remain bearish.

Daily Pivots: (S1) 1.0006; (P) 1.0022; (R1) 1.0032; More.....

Intraday bias in USD/CHF remains neutral for consolidation below 1.0036 temporary top. Overall, we're holding on to the view that corrective decline fall from 1.0342 should have finished with three waves down to 0.9812 already. Break of 1.0036 will turn bias to the upside for 1.0169 resistance. Break there will confirm this bullish case and target a test on 1.0342 high. On the downside, however, below 0.9948 minor support will turn bias back to the downside for 0.9812 instead.

In the bigger picture, USD/CHF is staying in medium term sideway pattern between 0.9443/1.0342. In any case, decisive break of 1.0342 resistance is needed to confirm underlying strength. Otherwise, we'll stay neutral in the pair first. In case of another fall, we'd expect strong support from 0.9443/9548 support zone.

Daily Pivots: (S1) 110.35; (P) 110.64; (R1) 111.02; More....

USD/JPY recovers mildly ahead of 110.10 support. But intraday bias stays on the downside for the moment. Break of 110.10 will resume the whole corrective decline from 118.65 and target 50% retracement of 98.97 to 118.65 at 108.81. On the upside, break of 112.19 resistance is needed to confirm near term reversal. Otherwise, outlook will stay mildly bearish in case of recovery.

In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. The impulsive structure of the rise from 98.97 suggests that the correction is completed and larger up trend is resuming. Decisive break of 125.85 will confirm and target 61.8% projection of 75.56 to 125.85 from 98.97 at 130.04 and then 135.20 long term resistance. Nonetheless, sustained trading below 55 week EMA (now at 111.16) will extend the consolidation from 125.85 with another fall through 98.97 before completion.

Daily Pivots: (S1) 1.4039; (P) 1.4080; (R1) 1.4149; More...

EUR/AUD remains bounded in range of 1.3872/4309 and intraday bias stays neutral. We're holding on to the view of trend reversal after defending key support level at 1.3671. Another rise is expected as long as 1.3872 minor support holds. Break of 1.4309 will extend the rebound from 1.3624 to 1.4721 key resistance level next. Break should confirm larger trend reversal. However, firm break of 1.3872 support will dampen our bullish view. In such case, intraday bias will be turned back to the downside for 1.3624 low instead.

In the bigger picture, price actions from 1.6587 medium term top are viewed as a corrective pattern. Such correction could be completed after testing 1.3671 support. Break of 1.4721 cluster resistance (38.2% retracement of 1.6587 to 1.3624 at 1.4756) should confirm this case and target 61.8% retracement at 1.5455 and above. Overall, we'd expect the up trend from 1.1602 to resume later. However, sustained break of 1.3671 will invalidate our bullish view and would turn extend the fall from 1.6587 towards 1.1602 long term bottom.

Daily Pivots: (S1) 0.8548; (P) 0.8568; (R1) 0.8598; More...

Intraday bias in EUR/GBP remains neutral for the moment for consolidation above 0.8430 temporary low. There is no change in the view that price actions from 0.8303 are a consolidation pattern. And, it's the second leg of the correction from 0.9304. Below 0.8430 will target 0.8402. Break of 0.8402 will resume the fall from 0.9304 to 0.8116/20 cluster support, where the correction should end. Above 0.8604 minor resistance will bring another recovery before fall from 0.9304 resumes.

In the bigger picture, price actions from 0.9304 are viewed as a medium term corrective pattern. Such decline is likely ready to resume and should make a new low below 0.8303. At this point, we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside. Break of 0.9304 will pave the way to 0.9799 (2008 high). However, sustained break of 0.8116 could bring deeper decline to next key support level at 0.7564 before the correction completes.

Daily Pivots: (S1) 1.0676; (P) 1.0685; (R1) 1.0701; More...

A temporary low is in place at 1.0668 in EUR/CHF and intraday bias is turned neutral first. As long as 1.0734 resistance holds, deeper decline is expected in the cross. Below 1.0668 will target 1.0620/29 key support zone. Decisive break there will resume the larger fall from 1.1198. Nonetheless, break of 1.0734 will turn bias back to the upside for 1.0823 resistance instead.

In the bigger picture, the decline from 1.1198 is seen as a corrective move. Current development suggests that it's not completed yet. sustained trading below 38.2% retracement of 0.9771 to 1.1198 at 1.0653 will target 50% retracement at 1.0485. In any case, break of 1.0823 resistance is needed to be the first indication of reversal. Otherwise, deeper fall is still expected even in case of recovery.

Daily Pivots: (S1) 137.06; (P) 137.77; (R1) 138.46; More...

Intraday bias in GBP/JPY remains on the downside for the moment. The choppy decline from 144.77 is still in progress and should target medium term fibonacci level at 135.39. Overall, price action from 148.42 are seen as a consolidation pattern. We'll look for bottoming around 135.39. Meanwhile, break of 140.08 resistance is needed to indicate short term reversal. Otherwise, outlook will remain bearish in case of recovery.

In the bigger picture, price actions from 122.36 medium term bottom are still seen as a corrective pattern. Main focus is on 38.2% retracement of 195.86 to 122.36 at 150.42. Rejection from there will turn the cross into medium term sideway pattern. Or, sustained break of 50% retracement of 122.36 to 148.42 at 135.39 will turn outlook bearish for a test on 122.36 low. Though, sustained break of 150.42 will extend the rebound towards 61.8% retracement of 195.86 to 122.36 at 167.78.

Daily Pivots: (S1) 117.62; (P) 117.99; (R1) 118.55; More...

EUR/JPY recovered after forming a temporary low at 117.42 and intraday bias is turned neutral first. Some consolidations would be seen but upside should be limited by 119.31 support turned resistance and bring another decline. Current development suggests that medium term rise from 109.20 has completed at 124.08 already. Below 117.42 will target 61.8% retracement of 109.20 to 124.08 at 114.88 next. Nonetheless, sustained break of 119.31 will turn focus back to 120.43 resistance instead.

In the bigger picture, the firm break of 38.2% retracement of 109.20 to 124.08 at 118.39 indicates that medium term rise from 109.20 is completed at 124.08. That's well below 126.09 key support turned resistance. Also, EUR/JPY failed to sustain above 55 week EMA. Deeper decline would now be seen back to 109.20 low. Overall, the down trend from 149.76 (2014 high) is not completed yet. Break of 109.20 will resume such down trend towards 94.11 low. In any case, break of 126.09 is needed needed to confirm medium term reversal.

The forex markets are pretty steady in Asian session today. Commodity currencies remain generally soft on mild risk aversion. Traders are cautious ahead of the meeting between US President Donald Trump and China President Xi Jinping. Yet, they are calm in spite of the news that North Korea fired another ballistic missile. Euro is also staying in range after French presidential election TV debate. Yen pares back some gains after treasury yields stabilized but more upside is still favored. In other markets, both gold and WTI crude oil extended recent rally but momentum is not too strong so far.

Le Pen targeted in chaotic TV debate

Eleven candidate joined the marathon French presidential election debate overnight. In a somewhat chaotic situation, far right candidate Marine Le Pen seemed to be the most targeted by the others. Front runner centrist Emmanuel Macron criticized that Le Pen's proposal of reverting to franc was a "reduction in French people's spending power". Conservative François Fillon criticized that Le Pen had no economic plan other than Frexit. Meanwhile, Socialist Benoit Hamon accused Le Pen of benefiting from Isis terrorists.

According to an Elabe poll, 25% said leftist Jean-Luc Melenchon was the most convincing performer in the debate. Fillon got 15% followed by Le Pen's 11%. An OpinionWay poll had Macron, Macron and Fillon tied at 18% and Le Pen at 11%.

North Korea fired another missile ahead of Trump-Xi meeting

It's reported the North Korea fired another ballistic missile into waters off its east coast into the sea of Japan. That came just before the summit between China President Xi Jinping and US President Donald Trump. The US department of state responded by said that "the United States has spoken enough about North Korea. We have no further comment".

North Korea is believed to be one of the top issues at the two-day meeting between Xi and Trump. And Trump has also said that China should use its "great influence" to resolve the issue of North Korea. And, Trump said that "if China is not going to solve North Korea, we will".

Richmond Fed president Lacker abruptly quit

Richmond Fed President Jeffery Lacker abruptly resigned yesterday as he disclosed confidential information to a Wall Street analyst of Medley Global Advisors back in 2012. Lacker said in a statement that he "crossed the line". He admitted that when the Medley analyst brought up confidential information, he "should have declined to comment and perhaps have ended the phone call". Early information regarding Fed's quantitative easing program was passed to the analysts and gave her clients an unfair advantage.

Lacker's lawyer said that the investigation was complete and there was no charge on Lacker. Fed's Office of Inspector General also said that investigation was now complete too.

On the data front...

UK BRC shop price index dropped -0.8%. UK PMI services will be a main focus in European session while Eurozone will release PMI services final. From US, ISM non-manufacturing composite and FOMC minutes will be released.

CAD/JPY heading to 80.18

CAD/JPY is one of the biggest losers for the week despite rise in oil price. WTI crude oil extended recent rally overnight and strength carries on in Asian session, hitting as high as 51.36. But that provides little support to the Loonie. Commodity currencies are generally lower this week ahead of the meeting between US Trump and China Xi, as well as non-farm payroll report from US. Yield and stocks stabilized but will face the first test of ADP employment today.

Technically, the fall from 88.90 is clearly corrective looking, especially in comparison to the rise from 74.80 to 88.90. But at this point, it's likely that such correction will go deeper to 61.8% retracement of 74.80 to 88.90 at 80.18. This will be the favored case as long as 84.19 near term resistance holds.

EUR/JPY Daily Outlook

Daily Pivots: (S1) 117.62; (P) 117.99; (R1) 118.55; More...

EUR/JPY recovered after forming a temporary low at 117.42 and intraday bias is turned neutral first. Some consolidations would be seen but upside should be limited by 119.31 support turned resistance and bring another decline. Current development suggests that medium term rise from 109.20 has completed at 124.08 already. Below 117.42 will target 61.8% retracement of 109.20 to 124.08 at 114.88 next. Nonetheless, sustained break of 119.31 will turn focus back to 120.43 resistance instead.

In the bigger picture, the firm break of 38.2% retracement of 109.20 to 124.08 at 118.39 indicates that medium term rise from 109.20 is completed at 124.08. That's well below 126.09 key support turned resistance. Also, EUR/JPY failed to sustain above 55 week EMA. Deeper decline would now be seen back to 109.20 low. Overall, the down trend from 149.76 (2014 high) is not completed yet. Break of 109.20 will resume such down trend towards 94.11 low. In any case, break of 126.09 is needed needed to confirm medium term reversal.

Economic Indicators Update