Q1 GDP growth in US was unexpectedly revised down from 3.2% to 3.0% annualized rate, versus expectation of 3.4%. Consumer spending growth was also revised down from 3.6% to 3.5%. On the other hand, initial jobless claims improved to 460k but was still well above expectation of 435k. European stocks pare earlier gains after the release while US stocks futures are also slightly lower. Dollar manages to recover strongly from intraday low of 86.42 while gold dives below 1210 level.

Earlier today, markets sentiments were lifted by solid trade data from Japan and New Zealand. Japanese trade surplus jumped much more than expected to 0.73T JPY in April. More importantly, exports rose for the fifth straight month and rose 40%, lead by strong depend in cars and high-tech goods. The data underlined a steady growth in global demand. Trade surplus in New Zealand rose to NZD 656m in April. While export in New Zealand fell 2.2% in April from record of NZD 4.06b in MArch, exports to China did increased by an impressive 44%.

There was some support to Euro after China denied rumors that it's reviewing holdings of foreign exchange reserve. China's State Administration of Foreign Exchange, or SAFE, which manages China's $2.4 trillion of foreign-exchange reserves said that report on SAFE's review on euro holding was groundless. SAFE also emphasized that Europe has been, and will be, one of the major markets for investing China's exchange reserves.

But after all, the common currency remains generally weak. EUR/AUD drops further to as low as 1.4580 so far today and further decline remains in favor, towards 61.8% retracement of 1.3927 to 1.5455 at 1.4511. A strong break there will indicate that rise from 1.3927 is finished and we'd then be seeing more decline to retest this medium term low. On the upside, though, above 1.4829 minor resistance will suggest that pull back from 1.5455 is possibly completed and flip intraday bias back to the upside.

EUR/GBP Mid-Day Outlook

Daily Pivots: (S1) 0.8415; (P) 0.8498; (R1) 0.8543;

EUR/GBP drops further to as low as 0.8421 so far and the break of 0.8427 support confirms that whole decline form 0.9137 has resumed. Intraday bias remains on the downside and further fall should be seen to 0.8399 key support level next. Break will target 100% projection of 0.9410 to 0.8601 from 0.9137 at 0.8328. On the upside, though, break of 0.8580 resistance will argue that EUR/GBP has bottomed and will turn focus back to 0.8806 resistance for confirmation.

In the bigger picture, price actions from 0.9799 are treated as consolidations in the larger up trend. In any case, as long as 0.9137 resistance holds, such consolidation might still extend further with another low below 0.8399. However, even in such case, strong support should be seen from 0.8186 cluster support (50% retracement of 0.6535 to 0.9799 at 0.8167) to conclude the consolidation and bring up trend resumption finally. Break of 0.9137 will be an important signal that such consolidation is completed and will turn focus to 0.9410 resistance for further evidence.

Economic Indicators Update

GMT Ccy Events Actual Consensus Previous Revised 22:45 NZD Trade Balance (NZD) Apr 656M 455M 567M 590M 23:50 JPY Trade Balance (JPY) Apr 0.73T 0.69T 0.67T 0.77T 00:00 USD Fed Evans Speaks at BoJ Conference -- -- 06:40 USD Fed Bullard Speaks in Stockholm Sweden -- -- 07:15 CHF Employment Level Q1 3.96M 3.97M 3.960M 10:00 GBP U.K. CBI Distributive Trades May -18 13 13 12:30 USD GDP (Annualized) Q1 S 3.00% 3.50% 3.20% 12:30 USD GDP Price Index Q1 S 1.00% 0.90% 0.90% 12:30 USD Core PCE Q/Q Q1 S 0.60% 0.60% 0.60% 12:30 USD Initial Jobless Claims 460K 435K 471K 14:30 USD Natural Gas Storage 101B 76B -- EUR German CPI M/M May P 0.10% 0.10% -0.10% -- EUR German CPI Y/Y May P 1.20% 1.20% 1.00%