Daily Pivots: (S1) 0.7631; (P) 0.7657; (R1) 0.7684; More...

At this point, further rise could still be seen in AUD/USD for 0.7777/7833 resistance zone. Considering bearish divergence condition in 4 hours MACD, we'd expect strong resistance from this resistance zone to limit upside and bring near term reversal. On the downside, break of 0.7510 minor support will indicate that rise from 0.7158 has completed already and turn bias back to the downside for this key near term support level.

In the bigger picture, we're still treading price actions from 0.6826 low as a correction. 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 seek to 55 month EMA (now at 0.8205) and above.

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Daily Pivots: (S1) 1.3016; (P) 1.3076; (R1) 1.3145; More...

Intraday bias in USD/CAD is staying in range of 1.2968/3168. We're holding on to the view that corrective rise from 1.2460 has completed at 1.3598 already, after hitting 50% retracement of 1.4689 to 1.3838. Therefore, deeper decline is expected as long as 1.3168 minor resistance holds. Break of 1.2968 should pave the way to retest 1.2460 low. However, on the upside, break of 1.3168 will mix up the near term outlook and turn focus back to 1.3387 resistance first.

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. The second leg could be completed at 1.3598 and fall from there is tentatively seen as the third leg. Break of 1.2460 will target 50% retracement of 0.9460 to 1.4689 at 1.2075 before completing the correction. In case of another rise, we'd look for reversal signal above 61.8% retracement of 1.4689 to 1.2460 at 1.3838.

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Daily Pivots: (S1) 138.76; (P) 139.75; (R1) 140.30; More...

Intraday bias in GBP/JPY remains on the downside for 136.44 support and below. Current decline from 144.77 is seen as the third leg of consolidation pattern from 148.42. Hence, we'd expect strong support from 50% retracement of 122.36 to 148.42 at 135.39 to contain downside and bring rebound. On the upside, above 141.96 minor resistance will turn bias back to the upside. However, sustained trading below 135.39 will argue that whole rise from 122.36 is completed and will turn outlook bearish.

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 with a test on 122.36 low next. Though, sustained break of 150.42 will extend the rebound towards 61.8% retracement at 167.78.

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Daily Pivots: (S1) 119.54; (P) 120.51; (R1) 121.08; More...

EUR/JPY's sharp decline and break of 120.54 indicates that fall from 124.08 has resumed. Intraday bias is back on the downside for 118.45 cluster support (38.2% retracement of 109.20 to 124.08 at 118.39). Nonetheless, such decline from 124.08 is still seen as a corrective move. Hence, we'd expect strong support from 118.39/45 to bring rebound. On the upside, above 120.54 minor resistance will turn bias back to the upside for 123.30/124.08 resistance zone.

In the bigger picture, price actions from 109.20 medium term bottom are seen as part of a medium term corrective pattern from 149.76. There is prospect of another rise towards 126.09 key resistance level before completion. But even in that case, we'd expect strong resistance between 126.09 and 141.04 to limit upside, at least on first attempt. Nonetheless, decisive break of 118.45 cluster support (38.2% retracement of 109.20 to 124.08 at 118.39) will argue that rise from 109.20 is completed and turn outlook bearish for 61.8% retracement at 114.88 and below.

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Daily Pivots: (S1) 1.0632; (P) 1.0666; (R1) 1.0685; More...

EUR/CHF drops notably but stays above 1.0635 temporary low. Intraday bias remains neutral first. Overall, near term outlook will remain bearish as long as 1.0749 resistance holds and deeper decline is expected. Decisive break of 1.0620 key support level will confirm resumption of whole fall from 1.1198. In that case, next downside target will be 1.0485 fibonacci level. Break of 1.0749 will raise the chance of medium term reversal and turn focus back to 1.0897 key resistance.

In the bigger picture, the decline from 1.1198 is seen as a corrective move. Such correction is still in progress. Sustained trading below 38.2% retracement of 0.9771 to 1.1198 at 1.0653 will target 50% retracement at 1.0485. On the upside, break of 1.0897 resistance is needed to confirm completion of such fall. Otherwise, outlook will stay bearish.

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Daily Pivots: (S1) 0.8595; (P) 0.8618; (R1) 0.8645; More...

EUR/GBP is staying in consolidation pattern from 0.8469 and intraday bias remains neutral. In case of another rise, we'd expect upside to be limited by 50% retracement of 0.8851 to 0.8469 at 0.8660 to bring fall resumption. As noted before, we're tentatively viewing fall from 0.8851 as the third leg of the corrective pattern from 0.9304. Break of 0.8469 will target 0.8303 low. However, firm break of 0.8660 will indicate that rise from 0.8303 is still in progress and would turn bias to the upside for 0.8851 resistance and above.

In the bigger picture, price actions from 0.9304 are viewed as a medium term corrective pattern. Deeper fall cannot be ruled out yet. But we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside. Overall, the corrective pattern would take some time to complete before long term up trend resumes at a later stage. Break of 0.9304 will pave the way to 0.9799 (2008 high).

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Daily Pivots: (S1) 1.3996; (P) 1.4035; (R1) 1.4070; More...

EUR/AUD's decline accelerates today and reaches as low as 1.3945 so far. Intraday bias remains on the downside for the moment. Current fall from 1.4721 is seen as part of the larger decline from 1.6587. Next target is key support level at 1.3671. As the fall from 1.6587 is seen as a corrective move, we'd expect downside to be contained by 1.3671 to bring reversal. On the upside, above 1.4075 minor resistance will turn intraday bias neutral first. Break of 1.4289 resistance will indicate short term bottoming and turn bias back to the upside for 1.4721 resistance.

In the bigger picture, price actions from 1.6587 medium term top are viewed as a consolidative pattern. While further fall cannot be ruled out, we'd expect strong support above 1.3671 to contain downside and bring rebound. Up trend from 1.1602 should not be finished and will resume later. Break of 1.4721 resistance will indicate completion of such correction and outlook bullish for retesting 1.6587 high.

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Dollar recovers mildly today but momentum stays weak. Philadelphia Fed president Patrick Harker said that he's open to a March hike, but markets thought otherwise. Harker noted that he's "supportive of three rate hikes" this year depending on how the economy and policies evolve. And, more importantly, "March should be considered as a potential for another 25 basis point increase". While he said the Fed is not behind the curve now, he wants to "make sure we don't get behind the curve". Meanwhile, fed fund futures are pricing in just 8.9% chance of a March hike, down from prior day's 13.3% and nearly 30% last month. Dollar index continues to hover tight range around 100 handle. Technically, as it's close to key support level between 99.0/99.5. There is prospect of a short term rebound.

Euro Weakens as Draghi Tamed Tapering Speculations

Weakness in Euro is slightly helping the greenback to regain footing. ECB president Mario Draghi faced the European Parliament's committee on economic affairs late yesterday. He noted that the central bank would not react to temporary spike in inflation. He emphasized that "our monetary policy strategy prescribes that we should not react to individual data points and short-lived increases in inflation". And, underlying inflation pressures "remain very subdued" reflecting "largely weak domestic cost pressures.

There were speculations that ECB could start tapering as headline inflation, recorded at 1.8% in January, would exceed 2% target soon. And Draghi's comments tamed such speculations.

Meanwhile, Draghi also responded straightly to accusations by US president Donald Trump's trade advisor to Germany regarding Euro. Draghi bluntly said that "first and foremost: we are not currency manipulators." And, "second, our monetary policies reflect the diverse state of the (economic) cycle of the euro zone and the United States."

Aussie Higher as RBA Maintained Neutral Stance

Aussie is generally firmer today after RBA stands pat and maintained a neutral stance. As widely anticipated, RBA left its cash rate unchanged at 1.50% at its first meeting in 2017. Policymakers acknowledged improvement in the global economic outlook. They also retained the view that the domestic economy would growth above-trend. The overall monetary stance is neutral, signaling the central bank is in no hurry to adjust the policy. The market is closely awaiting Governor Philip Lowe's speech on Thursday and RBA's Statement on Monetary Policy (SoMP) on Friday. The SoMP would reveal policymakers' updated economic forecasts. We expect downgrades of both growth and inflation outlooks. More in RBA Sees Contraction In 3Q16 As Temporary, Maintains Neutral Stance

On the data front, UK BRC retail sales dropped -0.6% yoy in January. New Zealand RBNZ 2 year inflation expectation rose 1.9% in Q1. Japan leading index rose to 105.2 in December. German industrial production, Swiss foreign currency reserves will be released in European session. US will release trade balance. Canada will release trade balance, building permits and Ivey PMI.

EUR/AUD Daily Outlook

Daily Pivots: (S1) 1.3996; (P) 1.4035; (R1) 1.4070; More...

EUR/AUD's decline accelerates today and reaches as low as 1.3945 so far. Intraday bias remains on the downside for the moment. Current fall from 1.4721 is seen as part of the larger decline from 1.6587. Next target is key support level at 1.3671. As the fall from 1.6587 is seen as a corrective move, we'd expect downside to be contained by 1.3671 to bring reversal. On the upside, above 1.4075 minor resistance will turn intraday bias neutral first. Break of 1.4289 resistance will indicate short term bottoming and turn bias back to the upside for 1.4721 resistance.

In the bigger picture, price actions from 1.6587 medium term top are viewed as a consolidative pattern. While further fall cannot be ruled out, we'd expect strong support above 1.3671 to contain downside and bring rebound. Up trend from 1.1602 should not be finished and will resume later. Break of 1.4721 resistance will indicate completion of such correction and outlook bullish for retesting 1.6587 high.

Economic Indicators Update

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EURUSD

The EURUSD attempted to push lower yesterday bottomed at 1.0705 but closed a little bit higher at 1.0749. The bias is neutral in nearest term probably with a little bearish bias testing 1.0700 – 1.0650 support area which is a good place to buy with a tight stop loss below 1.0650. Immediate resistance is seen around 1.0755. A clear break above that area could trigger further bullish pressure testing 1.0800/30 region. On the downside, a clear break and daily close below 1.0650 would end the bullish phase which started from 1.0350.

GBPUSD

The GBPUSD was indecisive yesterday. The bias remains neutral in nearest term probably with a little bearish bias testing 1.2400 – 1.2375 support area. Immediate resistance is seen around 1.2515. A clear break and daily close above that area could trigger further bullish pressure testing 1.2600 or higher but key resistance remains at 1.2790 which remains a good place to sell. Overall I remain neutral.

USDJPY

The USDJPY had a bearish momentum yesterday bottomed at 111.62. The bias remains bearish in nearest term testing 111.30. Immediate resistance is seen around 112.30. A clear break above that area could lead price to neutral zone in nearest term testing 112.75 area but overall I still prefer a bearish scenario at this phase and any upside pullback should be seen as a good opportunity to sell. On the downside, a clear break and daily close below 111.30 would expose 110.20 (daily EMA 200).

USDCHF

The USDCHF was indecisive yesterday. The bias remains neutral in nearest term but overall I prefer a bearish scenario at this phase targeting 0.9800 area as a part of the double top bearish scenario. Immediate resistance is seen around 0.9950 followed by 1.0000 which is a good place to sell with a tight stop loss. Overall I remain neutral.

Global Markets:

• Asian stock markets: Nikkei and Shanghai Composite both lost 0.30 %, Hang Seng fell 0.05 %, ASX 200 down 0.10 %
• Commodities: Gold at $1234 (+0.25 %), Silver at $17.70 (+0.05 %), WTI Oil at $53.20 (+0.30 %)
• Rates: US 10-year yield at 2.39, UK 10-year yield at 1.31, German 10-year yield at 0.37

News & Data:

• Australia ANZ Roy Morgan Weekly Consumer Confidence Index (W/E 05 Feb): 117.5 (prev 118.1)
• Australia AiG PCI (Jan): 47.7 (prev 47.0)
• UK BRC Sales Like-For-Like (YoY) Jan: -0.6% (est 0.8% prev 1.0%)
• PBoC Fixes USDCNY Reference Rate At 6.8604 (prev fix 6.8606 prev close 6.8639)
• Fed's Harker: A March Interest-Rate Hike Is on The Table, Depends on The Economy
• Harker: Still Supportive of Three Rate Hikes This Year
• Harker: Don't Want to Get Behind the Curve on Rate Hikes, Don't Think We Are Behind Now

RBA Rate Decision:

• Reserve Bank of Australia has left the cash rate unchanged, at 1.5%
• Rising AUD could complicate economic transition
• Global economy conditions have improved over recent months
• Labour indicators have been mixed
• Inflation expected to remain low for some time
• RBA says Chinese economy stronger over H2 2016
• House prices rising briskly in some markets
• Medium-term risks to China growth remain
• Inflation forecasts are largely unchanged
• RBA says higher commodity prices have supported a rise in Australia's terms of trade
• RBA says CPI expecting to pick up over 2017 to be above 2 %
• Return to reasonable GDP growth in Australia expected in Q4
• Central scenario remains for economic growth around 3 %

Markets Update:

The Reserve Bank of Australia has decided to keep rates unchanged, as expected by the market. However, the central bank sounded slightly more bullish than anticipated. It said that it expects higher growth to resume in Q4 and that economic growth will be around 3 % over the next few years. Inflation still remains low, but the RBA thinks that it will rise above 2 % this year.

The Australian Dollar rose following the announcement. AUD/USD rallied from 0.7640 to 0.7680 and AUD/NZD from 1.0380 to 1.0420. The outlook for AUD/USD remains bullish and resistance at 0.77 should not be difficult to overcome. However, stronger resistance is then seen in the 0.7780-0.78 area.

The Euro declined in Asia amid fear of political risks. EUR/USD opened around 1.0750 in Asia and fell to 1.0705 later in the session. Should 1.07 support break, the next notable level is seen at 1.0620.

Upcoming Events:

• 07:00 GMT – German Industrial Production
• 07:45 GMT – French Current Account
• 08:30 GMT – UK Halifax House Price Index
• 13:30 GMT – US Trade Balance
• 13:30 GMT – Canadian Trade Balance
• 15:00 GMT – US JOLTs Job Openings
• 15:00 GMT – Canadian Ivey PMI
• 16:35 GMT – German Bundesbank President Weidmann speaks