Daily Pivots: (S1) 1.0574; (P) 1.0604 (R1) 1.0630; More.....

No change in EUR/USD's outlook. With 1.0453 minor support intact, further rise is expected for 1.0872 resistance and above. But after all, rise from 1.0339 is seen as a corrective move. Below 1.0453 will argue that it's completed and turn bias back to the downside for 1.0339 support. Break there will extend the larger down trend towards parity.

In the bigger picture, whole down trend from 1.6039 (2008 high) is in progress. Such down trend is expected to extend to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115. On the upside, break of 1.1298 resistance is needed to confirm medium term bottoming. Otherwise, outlook will stay bearish in case of rebound.

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Daily Pivots: (S1) 1.1990; (P) 1.2037; (R1) 1.2089; More...

GBP/USD's strong rebound and break of 1.2316 minor resistance suggests short term bottoming at 1.1986, ahead of 1.1946 key support level. And, fall from 1.2774 is likely completed too. Intraday bias is back on the upside for 1.2432 resistance first. Break will target 1.2774 again. Price actions from 1.1946 are viewed as a consolidation pattern. Thus, we'd expect strong resistance at 1.2774 to limit upside and bring 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 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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Sterling rebounds today as UK prime minister Theresa May pledged to adopt a "phased approach" to achieve a "smooth and orderly Brexit". More important, the positive reaction was towards the confirmation that "the government will put the final deal that's agreed between the U.K. and the EU to a vote in both Houses of Parliament before it comes into force." May emphasized that UK will not stay as a member of the single market. But She would opt to "have a customs agreement with EU" and reach the country's "own tariff schedules at the WTO". GBP/USD's break of 1.2316 minor support argues that the pair has successfully defended 1.1946 key near term support and opens up the case for further rebound to 1.2774 resistance.

Also from UK, CPI accelerated to 1.6% yoy in December, up from 1.2% yoy and beat expectation of 1.4% yoy. That's also the highest reading since July 2014. Core CPI rose to 1.6% yoy, above expectation of 1.4% Yoy. Office for National Statistics head of inflation Mike Prestwood noted that "rising airfares and food prices, along with petrol prices falling less than last December, all helped to push up the rate of inflation. Rising raw material costs also continued to push up the prices of goods leaving factories." Also from UK, PPI input rose to 15.8% yoy, PPI output rose to 2.7% yoy, PPI output core dropped to 2.1% yoy.

From Eurozone, Germany, ZEW economic sentiment rose to 16.6 in January, up from 13.8, but missed expectation of 18.4. Current situation gauge rose to 77.3, up from 63.5, above expectation of 65.0. Eurozone ZEW economic sentiment rose to 23.2, up from 18.1 but missed expectation of 24.2. ZEW president Achim Wambach noted that "the slight increase" in sentiment "is mainly due to the improved economic situation across European countries." And, "this improvement in expectations can thus also be seen as a leap of faith for 2017."

Dollar weakens broadly in reaction to US president-elect Donald Trump's comments on the currency's strength. He complained that the Dollar's strength against China's Yuan "is killing us". One of his adviser, Anthony Scaramucci of Skybridge Capital, also said in a panel at the World Economic Forum that "we need to be careful about the rising currency." Released from US, Empire state manufacturing index dropped to 6.5 in January, below expectation of 8.5.

GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1990; (P) 1.2037; (R1) 1.2089; More...

GBP/USD's strong rebound and break of 1.2316 minor resistance suggests short term bottoming at 1.1986, ahead of 1.1946 key support level. And, fall from 1.2774 is likely completed too. Intraday bias is back on the upside for 1.2432 resistance first. Break will target 1.2774 again. Price actions from 1.1946 are viewed as a consolidation pattern. Thus, we'd expect strong resistance at 1.2774 to limit upside and bring 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 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.

Economic Indicators Update

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Daily Pivots: (S1) 120.63; (P) 121.15; (R1) 121.54; More...

As noted before, EUR/JPY's break of 120.90 support indicates near term reversal. That is, the corrective rebound from 109.20 is likely completed at 124.08, ahead of 126.09 key resistance. Intraday bias stays on the downside for 118.45 cluster support (38.2% retracement of 109.20 to 124.08 at 118.39). Sustained break there will target 61.8% retracement at 114.88 and below. On the upside, above 122.41 resistance is needed to indicate completion of the decline. Otherwise, outlook will now stay bearish in case of recovery.

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) 136.57; (P) 137.36; (R1) 138.26; More...

Intraday bias in GBP/JPY remain son the downside for the moment. Current downside acceleration and break of 38.2% retracement of 122.36 to 148.42 at 138.46 suggests that whole corrective rise from 122.36 has completed at 148.42. Deeper fall should be seen to 61.8% retracement at 132.31 and below. On the upside, break of 142.16 support turned resistance is needed to indicate completion of such decline. Otherwise, outlook will stay bearish in case of recovery.

In the bigger picture, price actions from 122.36 medium term bottom are seen as developing into a corrective pattern. Upside is so far limited by 38.2% retracement of 195.86 to 122.36 at 150.4 for setting the medium term range. At this point, we don't expect a break of 122.36 in near term and the corrective pattern would extend for a while.

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

No change in EUR/GBP's outlook. With 0.8646 support intact, rebound from 0.8303 is expected to target 61.8% retracement of 0.9304 to 0.8303 at 0.8922 and above. Such rebound is seen as the second leg of the consolidation pattern from 0.9304. Hence, we'll be cautious on topping above 0.8922. On the downside, though, break of 0.8646 minor support is needed to indicate completion of the rise. Otherwise, near term outlook will stay cautiously bullish in case of retreat.

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) 1.4149; (P) 1.4179; (R1) 1.4203; 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) 1.0704; (P) 1.0721; (R1) 1.0735; 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) 1.3132; (P) 1.3159; (R1) 1.3201; More...

No change in USD/CAD's outlook. With 1.3293 resistance intact, deeper decline is expected. As noted before, prior break of 1.3080 key support level could have completed a double top pattern (1.3588, 1.3598) and indicates reversal. That is, whole corrective rise from 1.2460 is finished. Further fall should be seen to retest 1.2460 low. However, break of 1.3293 will invalidate this bearish case and turn bias to the upside for retesting 1.3598.

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 likely finished at 1.3598 too after hitting 50% retracement of 1.4689 to 1.2460 at 1.3575. Break of 1.3080 would now likely resume the fall from 1.4689 through 1.2460 to 50% retracement of 0.9406 to 1.4689 at 1.2048. We'd start to look for reversal signal below 1.2460 again to complete the correction. In case of another rise, we'll look for topping sign at 61.8% retracement of 1.4689 to 1.2460 at 1.3838.

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Daily Pivots: (S1) 0.7454; (P) 0.7480; (R1) 0.7501; More...

AUD/USD's rebound from 0.7158 extends to as high as 0.7547 so far today. Intraday bias remains on the upside for the moment and further rise should be seen. Sustained trading above 61.8% retracement of 0.7777 to 0.7518 at 0.7541 will target 0.7777/7833 resistance zone. At this point, 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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