Daily Pivots: (S1) 120.95; (P) 121.46; (R1) 122.37; More...

A temporary low is in place at 120.54 in EUR/JPY after drawing support from 55 day EMA and intraday bias is turned neutral first. Break of 122.41 will argue that the correction from 124.08 has completed. More importantly, that will indicate that rebound from 109.20 is still in progress. In that case, intraday bias will be turned to the upside for 124.08 and then 126.09 key resistance. Below 120.54 will bring deeper fall to 118.45 cluster support (38.2% retracement of 109.20 to 124.08 at 118.39).

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. Sustained trading below 55 day EMA will pave the way to retest 109.20.

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Daily Pivots: (S1) 0.8758; (P) 0.8804; (R1) 0.8847; More...

Intraday bias in EUR/GBP remains neutral for the moment. Rise from 0.8303 is seen as a corrective move, the second leg of consolidation pattern from 0.9304. In case of another rise, break of 61.8% retracement of 0.9304 to 0.8303 at 0.8922 would be seen. But we'll be cautious on topping above 0.8922. On the downside, break of 0.8449 will likely start the third leg through 0.8303 low.

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 around 55 weeks EMA (now at 0.8260) 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) 1.4119; (P) 1.4154; (R1) 1.4194; More...

No change in EUR/AUD's outlook. At this point, there is no clear indication of resumption of larger decline yet. Above 1.4332 support turned resistance will turn bias back to the upside to extend recent sideway trading. Nonetheless, decisive break of 1.4072 low will extend the correction from 1.6587 towards next key support level 1.3671.

In the bigger picture, price actions from 1.6587 medium term top are viewed as a consolidative pattern. 50% retracement of 1.1602 to 1.6587 at 1.4095 was already met. 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 1.4880 resistance will be the first sign of resumption of up trend from 1.1602 and target retesting of 1.6587 resistance first.

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Daily Pivots: (S1) 1.0695; (P) 1.0714; (R1) 1.0726; More...

Intraday bias in EUR/CHF remains neutral for the moment as it's bounded in range of 1.0677/0762. Below 1.0677 will extend the corrective fall from 1.1198 and target 1.0620 key support level. On the upside, above 1.0762 will turn focus back to 1.0897 resistance. Decisive break there will suggest reversal and turn near term outlook bullish.

In the bigger picture, the decline from 1.1198 is seen as a corrective move. Such correction is still in progress and retest of 38.2% retracement of 0.9771 to 1.1198 at 1.0653 could be seen. Sustained trading below 1.0653 will target 50% retracement at 1.0485. Meanwhile, break of 1.0897 resistance will argue that the larger up trend is finally resuming for above 1.1198.

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Daily Pivots: (S1) 1.2205; (P) 1.2308; (R1) 1.2364; More...

With 1.2188 minor support intact, rebound from 1.1986 could still extend higher through 1.2432 resistance. But still, such rise is seen as the third leg of the consolidation pattern from 1.1946. Thus, we'd expect strong resistance at 1.2774 to limit upside and bring down trend resumption eventually. On the downside, below 1.2188 minor support will turn bias to the downside for retesting 1.1946 low.

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 bottoming 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.

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Daily Pivots: (S1) 1.0028; (P) 1.0051; (R1) 1.0096; More.....

With 1.0135 minor resistance intact, deeper fall could be seen in USD/CHF. Rise from 0.9443 could have completed at 1.0342 already, after failing to sustain above 1.0327 key resistance. Deeper fall would be seen back to 0.9443/9548 support zone. On the upside, above 1.0135 minor resistance will turn focus back to 1.0342 resistance instead.

In the bigger picture, rejection from 1.0327 resistance suggests that consolidation pattern from there is still in progress. Fall from 1.0342 is seen as the third leg and retest of 0.9443/9548 support zone could be seen. But we'd expect strong support from there to contain downside. At this point, we're still extend the larger rally to resume later to 38.2% retracement of 1.8305 to 0.7065 at 1.1359.

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Daily Pivots: (S1) 113.21; (P) 113.98; (R1) 115.40; More...

Intraday bias in USD/JPY is turned neutral with a temporary low formed at 112.56. Fall from 118.65 is seen as a corrective move. In case of another fall, we'd expect strong support from 38.2% retracement of 98.97 to 118.65 at 111.13 to contain downside and bring rebound. Above 115.43 minor resistance will turn bias to the upside for retesting 118.65 high. However, sustained break of 111.13 will argue that whole rise from 98.97 has completed and bring deeper fall to 61.8% retracement at 106.48 and below.

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. Rejection from 125.85 and below will extend the consolidation with another falling leg before up trend resumption.

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Daily Pivots: (S1) 0.7482; (P) 0.7524; (R1) 0.7545; More...

No change in AUD/USD's outlook. With 0.7448 minor support intact, rebound from 0.7158 could extend higher towards 0.7777/7833 resistance zone. But still, we'd still expect strong resistance from this zone to limit upside. On the downside, below 0.7448 minor support will turn bias back to the downside for 0.7144 key support level.

In the bigger picture, AUD/USD is staying inside long term falling channel and it's likely that the down trend from 1.1079 is still in progress. Break of 0.6826 low will confirm this bearish case. We'll be looking for bottoming sign again as it approaches 0.6008 key support level. Meanwhile, sustained break of 0.7833 resistance will be a strong sign of medium term reversal.

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Daily Pivots: (S1) 1.3114; (P) 1.3192; (R1) 1.3347; More...

USD/CAD's rebound and break of 1.3189 resistance suggests short term bottoming at 1.3017 on bullish convergence condition in 4 hour MACD. More importantly, it should have invalidated the case of double top reversal. Instead, price actions from 1.3588 could just be a three wave consolidation pattern that completed at 1.3017 too. Intraday bias is back on the upside for 1.3598. Break there will extend the whole rise from 1.2460 to next fibonacci level at 1.3838. Meanwhile, break of 1.3017 will revive the case of near term reversal and target 1.2460.

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 is still in progress and could target 61.8% retracement of 1.4689 to 1.2460 at 1.3838. As rise from 1.2460 is seen as a corrective move, we'd look for reversal signal above 1.3838. Meanwhile, break of 1.3017 will likely start the third leg to 1.2460 and below.

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Dollar recovered mildly overnight with treasury yield. The dollar index is now back at 101.25, comparing to this week's low at 100.26. 10 year yield closed at 2.389, comparing to this week's low at 2.313. 30 year yield closed 2.985 after touching 3.000, but recovered from this week's low at 2.913. Stocks were mixed as major indices were bounded in tight range with DJIA closed down -0.11% at 19804.72 and S&P 500 up 0.18% at 2271.89. Fed chair Janet Yellen said that it "makes sense" to gradually raise interest rate. And she warned that "waiting too long to begin moving toward the neutral rate could risk a nasty surprise down the road - either too much inflation, financial instability, or both." And more importantly, "in that scenario, we could be forced to raise interest rates rapidly, which in turn could push the economy into a new recession." Yellen also pledged to "closely follow" with economic policies and factor them into Fed's policies.

Fed's Beige Book economic report showed that the economy continued to expand modestly through the end of last year. There were signs of tightening in labor markets are "district reports cited widespread difficulties in finding workers for skilled positions; several also noted problems recruiting for less-skilled jobs." Also, "most districts said wage pressures had increased." And across the country, "pricing pressures intensified somewhat."

BoC left key interest rate unchanged at 0.50% as expected yesterday. The Canadian dollar was weighed down by comments from BoC governor Stephen Poloz that "a rate cut remains on the table". And he noted that "BoC has room to maneuver if downside risks materialize." And he highlighted that "most importantly what we have is heightened uncertainty about trade policies in particular." The markets took Poloz's comments as a message that BoC will not follow Fed to hike interest rate this year. And the central bank will be on hold at least till 2018.

ECB rate decision will be the main focus today. The central bank is expected to leave monetary policies unchanged. Elsewhere, New Zealand business NZ manufacturing index rose to 54.5 in December, building permits dropped -9.2% mom in November. Australia employment rose 13.5k in December but unemployment rate rose to 5.8%. UK RICS house price balance dropped to 24 in December. Swiss will release PPI in European session. US will release jobless claims, housing starts and Philly Fed survey. Canada will release manufacturing shipments.

USD/CAD Daily Outlook

Daily Pivots: (S1) 1.3114; (P) 1.3192; (R1) 1.3347; More...

USD/CAD's rebound and break of 1.3189 resistance suggests short term bottoming at 1.3017 on bullish convergence condition in 4 hour MACD. More importantly, it should have invalidated the case of double top reversal. Instead, price actions from 1.3588 could just be a three wave consolidation pattern that completed at 1.3017 too. Intraday bias is back on the upside for 1.3598. Break there will extend the whole rise from 1.2460 to next fibonacci level at 1.3838. Meanwhile, break of 1.3017 will revive the case of near term reversal and target 1.2460.

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 is still in progress and could target 61.8% retracement of 1.4689 to 1.2460 at 1.3838. As rise from 1.2460 is seen as a corrective move, we'd look for reversal signal above 1.3838. Meanwhile, break of 1.3017 will likely start the third leg to 1.2460 and below.

Economic Indicators Update

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