Sample Category Title

The Gold has been on the counter-trend move since it reached the M L5 level (Monthly Strong Support. The retracement is easily spotted in the 4h time frame. At this point, we can see that the W H4 stopped the retracement in its tracks and 1268.80-1270.50 could reject the price towards 1261.85. - W L3 pivot. Only if the price breaks below the W L3/trend line confluence we might see 1257 and 1252.60. If the price closes above the projected ATR high at 1273.14, we might see another bullish move towards 1280.60.

• H3 - Weekly Camarilla Pivot (Weekly Interim Resistance)
• W H4 - Weekly Camarilla Pivot (Strong Weekly Resistance)
• D H4 - Daily Camarilla Pivot (Very Strong Daily Resistance)
• D L3 - Daily Camarilla Pivot (Daily Support)
• D L4 - Daily H4 Camarilla (Very Strong Daily Support)
• PPR - Progressive Polynomial Channel
• POC - Point Of Confluence (The zone where we expect price to react aka entry zone)

USD/JPY - 113.50

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 113.49

Kijun-Sen level                  : 113.38

Ichimoku cloud top             : 113.03

Ichimoku cloud bottom      : 112.81

Original strategy  :

Buy at 112.80, Target: 113.70, Stop: 112.45

Position :  -

Target :  -

Stop : -

New strategy  :

Buy at 112.80, Target: 113.70, Stop: 112.45

Position :  -

Target :  -

Stop : -

As the greenback has maintained a firm undertone after staging a strong rebound from 112.03, adding credence to our bullish view for this move to bring test of resistance at 113.75, however, break there is needed to signal the rise from 110.84 low has resumed for headway towards 113.95-00, then towards 114.30-35 later.

In view of this, we are looking to buy dollar on pullback as 112.80-85 should limit downside and bring another rise later. Below 112.50-55 would suggest top is formed, bring test of 112.31 support but only break of latter level would signal the rebound from 112.03 has ended instead, bring retest of this level later.

Highlights:

• Headline CPI inflation picked up to 2.1% year-over-year from 1.4% in October. November's was just the fourth reading of 2% or more in the last three years.
• Higher energy prices accounted for almost 1/2 percentage point of the increase in headline inflation.
• Core inflation also increased in November with the ex food and energy measure picking up to 1.8% year-over-year, a nine-month high.
• There wasn't much evidence of steeper Black Friday discounting as prices for clothing and footwear fell by less than in recent years. The decline in home entertainment prices was in line with years past.
• Two of the Bank of Canada's preferred core measures rose in November. An average of the three hit a one-year high of 1.7% in November.

Our Take:

With an upside surprise in November, headline inflation is running a bit hotter than the 1.4% rate the Bank of Canada penciled in for Q4. Some of the overshoot reflects higher oil prices and a slightly weaker Canadian dollar than they assumed in October. That wasn't the whole story, however, as most measures of core inflation also picked up in November. In fact, two of the bank's preferred core measures, trim and median, hit year-to-date highs and are rising at an annualized clip of more than 2% over the last few months. This firming in underlying price pressure is a development the BoC was betting on when they raised rates twice this summer even as spot inflation was trending well below their 2% target. Today's report reinforces their bias to continue removing accommodation. We still see them holding off on raising rates until April when there is more clarity on Nafta and the impact of new housing measures. But these inflation numbers could serve as justification for an even earlier move.

Highlights:

• October retail sales jumped 1.5% in nominal terms and 1.4% excluding price impacts.
• E-commerce sales (not all of which are included in the retail sales totals) were up 19.4% over the past year ending in October. That was much faster than the 7.5% increase in overall retail sales but still down from 40%+ readings earlier this year

Our Take:

Retail sales jumped 1.5% in October to end a string of 3 subpar monthly reports. Sale volumes (excluding the impact of prices) rose a similar 1.4% to more than reverse smaller declines over the last three months. Motor vehicle sales jumped 3% in October although sales also rose 0.8% excluding autos. The monthly data is volatile but the bounce-back in spending in the latest month is more consistent with what should still be a relatively solid backdrop for consumer spending. Interest rates have started to tick higher but labour markets have continued to improve and measures of consumer confidence remain high. year-over-year retail spending is still up a very strong 5.0% in volume terms in October compared to 4.6% in September.

Today's retail report along with yesterday's stronger-than-expected wholesale sales report suggest October GDP — to be released tomorrow as part of a compressed holiday data release schedule — probably posted a slightly stronger 0.2% increase than the 0.1% gain we previously assumed. We continue to think growth in the economy has slowed from the unsustainable 3-1/2% pace from mid-2016 to mid-2017 but the recent data flow should go a long way towards reassuring the Bank of Canada that the economy continues to grow at the modestly above-potential pace expected.

Daily Pivots: (S1) 1.1832; (P) 1.1867 (R1) 1.1905; More....

Intraday bias in EUR?USD remains mildly on the upside for 1.1960 resistance. As 1.1712 cluster support (61.8% retracement of 1.1553 to 1.1960 at 1.1708) remains intact, near term outlook stays bullish. Break of 1.1960 will resume whole rise from 1.1553 and target 1.2091 high.

In the bigger picture, rise from 1.0339 medium term bottom is seen as a corrective move for the moment. Therefore, in case of another rally, we'd be expect 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516 to limit upside and bring reversal. Meanwhile, sustained trading below 55 week EMA (now at 1.1435) will suggest that such medium term rebound is completed and could then bring retest of 1.0339 low.

Daily Pivots: (S1) 1.3355; (P) 1.3387; (R1) 1.3407; More.....

The correction from 1.3549 is still extending and intraday bias in GBP/USD remains neutral. As long as 1.3220 support holds, we'd favor another rise. Break of 1.3549 will target 1.3651 high next. Break there will resume medium term rally from 1.1946. However, firm break of 1.3220 will turn near term outlook bearish for 1.3038 key support level.

In the bigger picture, while the medium term rebound from 1.1946 low was strong, it's limited below 1.3835 key support turned resistance. As long as 1.3835 holds, we'd view such rebound as a correction. That is, we'd expect another leg in the long term down trend through 1.1946 low. However, sustained break of 1.3835 should at least send GBP/USD to 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466.

EUR/GBP - 0.8886

Original strategy  :

Bought at 0.8810, Target: 0.8910, Stop: 0.8770

Position : - Long at 0.8810

Target :  - 0.8910

Stop : - 0.8770

New strategy  :

Hold long entered at 0.8810, Target: 0.8910, Stop: 0.8825

Position : - Long at 0.8810

Target :  - 0.8910

Stop : - 0.8825

 
As the single currency has risen again after brief pullback, retaining our bullish view that the rise from 0.8690 low is still in progress and upside bias remains for this move to bring retracement of recent decline to 0.8910-15, then towards 0.8945-50, however, near term overbought condition should limit upside and price should falter well below resistance at 0.9015. 

In view of this, we are holding on to our long position entered at 0.8810. Below 0.8828 support would defer and suggest top is possibly formed, bring test of indicated previous support at 0.8792 but break there is needed to confirm and test of key support at 0.8760 would follow, however, only breach there would indicate the rebound fro 0.8690 has ended.

Our preferred count is that, after forming a major top at 0.9805 (wave V), (A)-(B)-(C) correction is unfolding with (A) leg ended at 0.8400 (A: 0.8637, B: 0.9491 and 5-waver C ended at 0.8400. Wave (B) has ended at 0.9413 and impulsive wave (C) has either ended at 0.8067 or may extend one more fall to 0.8000 before prospect of another rally. Current breach of indicated resistance at 0.9043 confirms our view that the (C) leg has ended and bring stronger rebound towards 0.9150/54, then towards 0.9240/50.

Daily Pivots: (S1) 0.9835; (P) 0.9860; (R1) 0.9892; More....

USD/CHF is still bounded in corrective trading since 0.9977 and intraday bias remains neutral. On the upside, above 0.9977 will resume the rebound from 0.9734 for 1.0037 resistance. On the downside, below 0.9834 will probably extend the correction from 1.0037 through 0.9734. But we'd expect strong support from 61.8% retracement of 0.9420 to 0.1.0037 at 0.9656 to complete the correction from 1.0037 and bring rebound.

In the bigger picture, range trading continues between 0.9420/1.0342. At this point, 0.9420 appears to be a strong support level. Therefore, in case of decline attempt, we don't expect a firm break of this level. Nonetheless, strong break of 1.0342 is also needed to confirm upside momentum. Otherwise, medium term outlook will stay neutral.

Daily Pivots: (S1) 112.99; (P) 113.22; (R1) 113.62; More.....

Outlook in USD/JPY is unchanged. Intraday bias stays on the upside for 113.74. Break will resume rise from 110.83 and target key resistance at 114.73 next. On the downside, below 112.83 minor support will turn intraday bias neutral first. But we'll continue to expect further rally ahead as long as 112.02 support holds.

In the bigger picture, we're holding on to the view that correction from 118.65 is completed at 107.31. And medium term rise from 98.97 (2016 low) is going to resume soon. Sustained break of 114.73 should affirm our view and send USD/JPY through 118.65. However, break of 107.31 will dampen this view and extend the medium term fall back to 98.97 low.

Retail sales advanced a robust 1.5% in October, building on September's upwardly revised 0.2% gain (was 0.1%). The gain was almost entirely due to volumes, which rose an impressive 1.4%.

Higher sales at motor vehicle and parts dealers was the main driver behind October's gain (+3.3%), but sales excluding motor vehicle and parts dealers were also up 0.8%. Sales increased notably at food and beverage stores (1.1%), general merchandise stores (1.8%), health and personal care stores (1.2%) and electronics and appliances stores (1.4%). Housing-related sales were a mixed bag in the month, increasing at building material and garden equipment stores (1.1%), while dropping at furniture and home furnishing stores (-0.9%).

Sales increased in every province, with Ontario, Quebec and British Columbia accounting for the majority of the gain in the month.

Key Implications

With consumers in high spirits amidst low unemployment and rising wages, retail sales volumes advanced solidly in October. The solid increase in real retail spending is consistent with our view that real GDP growth accelerated in the fourth quarter, with a "3-handle" on growth appearing likely.

Looking ahead to 2018, we expect consumer spending to play an important role in supporting economic growth, buoyed by continued employment and income growth. However, some moderation from 2017's breakneck pace is likely, especially as interest rates continue to normalize.

Today's solid sales volumes data provides another point in the favour of the Bank of Canada hiking rates sooner rather than later. Our expectation is that the central bank will take rates higher in early 2018.