Sample Category Title

Daily Pivots: (S1) 1.3438; (P) 1.3493; (R1) 1.3583; More....

With 1.3431 minor support intact, intraday bias in GBP/USD remains on the upside for 1.3651 high. Break there will resume medium term rally from 1.1946 to 1.3835 key resistance. On the downside, below 1.3382 minor support will turn bias neutral and bring retreat before staging another rally.

In the bigger picture, as noted before, GBP/USD hit strong resistance from the long term falling trend line. Nonetheless, subsequent fall was contained by 55 week EMA (now at 1.3069). Outlook is a bit mixed. For the moment, as long as 1.3835 support turned resistance holds, medium term rise from 1.1946 are viewed as a corrective pattern. 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.

Daily Pivots: (S1) 0.9806; (P) 0.9844; (R1) 0.9872; More....

Intraday bias in USD/CHF remains neutral as recovery from 0.9776 is limited well below 0.9446 resistance. Another fall is in favor and break of 0.9776 will target 61.8% retracement of 0.9420 to 1.0037 at 0.9656. We'll look for bottoming again below 0.9656 and above 0.9420. On the upside, break of 0.9946 resistance will indicate that the decline from 1.0037 has completed and bring retest of this resistance.

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) 111.96; (P) 112.30; (R1) 112.86; More...

Intraday bias in USD/JPY remains neutral with focus on 112.71 resistance. Sustained break there should confirm completion of pull back from 114.73. In that case, intraday bias will be turned back to the upside for retesting 114.73 resistance. On the downside, below 111.66 minor support will turn bias to the downside and likely resume fall from 112.71 through 110.83. But in that case, we'd expect strong support below 61.8% retracement of 107.31 to 114.73 at 110.14 to bring rebound.

In the bigger picture, as long as 107.31 support holds, medium term rise from 98.97 (2016 low) is not completed yet. And another rise is in favor. Break of 114.73 resistance will target a test on 118.65 high first. However, break of 107.31 will dampen this will and extend the medium term fall back to 98.97 low.

• CAN Nov jobs: +79.5k (exp. +10k, last +35.3k)
• Unemployment: +5.9% (exp. +6.2%, last +6.3%)
• Full-Time Jobs +29,600; Part-Time +49,900

The Canadian labor market continues to defy expectations, as the economy recorded the biggest one-month job gain in nearly six years while the unemployment rate dropped below the psychological +6% benchmark.

The Canadian economy added a net +79,500 in November on a seasonally adjusted basis (the best one-month print since April 2012).

The market consensus was for a 10,000-job advance, according to economists at Royal Bank of Canada.

The unemployment rate fell to +5.9% from a +6.3% level in October - the lowest unemployment rate in nearly a decade.

Wage growth also accelerated, with average hourly pay rising at its fastest pace in 19-months, up +2.8% y/y.

The loonie is up +0.85% outright, trading at C$1.2769.

Food for thought: Canadian minimum wages goes up in January 2018, will some of the short-term job gains be reversed?

EUR/GBP - 0.8815

Original strategy  :

Sold at 0.8950, met target at 0.8820

Position : - Short at 0.8950

Target :  - 0.8820

Stop : -

New strategy  :

Sell at 0.8885, Target: 0.8750, Stop: 0.8920

Position : -

Target :  -

Stop : -

 
The single currency did drop after meeting renewed selling interest at 0.8982, our short position entered at 0.8950 met downside target at 0.8820 with 130 points profit, as price has remained under pressure, bearishness remains for the fall from 0.9015 to extend weakness to 0.8770-75, then towards previous support at 0.9733 which is likely to hold on first testing.

In view of this, we are looking to reinstate short on recovery as 0.8880-85 should limit upside. Above previous support at 0.8915 (now resistance) would defer and prolong choppy trading, risk rebound to 0.8935-40, however, still reckon said resistance at 0.8982 would cap upside and bring another retreat later. Only above indicated resistance at 0.9015 would risk test of previous resistance at 0.9033 but only a breach of this level would signal an upside break of recent established broad range has occurred, then subsequent rise to 0.9070-75 would follow.

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) 1.2822; (P) 1.2847; (R1) 1.2890; More....

USD/CAD's sharp fall and break of 1.2804 support indicates rejection from 1.2916. Consolidation from 1.2916 is extending with another falling leg. Intraday bias is turned back to the downside for 1.2665 support or possibly below. Still, we'd expect downside to be contained by 1.2598 resistance turned support and bring rise resumption. On the upside, decisive break of 1.2916 will confirm resumption of whole rally from 1.2061. In that case, USD/CAD should target 1.3065 medium term fibonacci level next.

In the bigger picture, USD/CAD should have defended 50% retracement of 0.9406 (2011 low) to 1.4689 (2016 high) at 1.2048. And with 1.2048 intact, we'd favor the case that fall from 1.4689 is a correction. Rise from 1.2061 medium term bottom should now target 38.2% retracement of 1.4689 to 1.2061 at 1.3065. Firm break there will target 1.3793 key resistance next (61.8% retracement at 1.3685). We'll now hold on to this bullish view as long as 1.2450 support holds.

Canadian Dollar rebound strongly in early US session after stellar economic data. The employment market grew 79.5k in November, more than double of prior month's 35.3k and was well above expectation of 10k. Unemployment rate also dropped to 5.9%, down from 6.3%, way below expectation of 5.9%. USD/CAD reached as high as 1.2908 yesterday on Dollar strength. But the current sharp fall and break of 1.2804 support suggests rejection from 1.2916 key resistance. And consolidation from there is extending with another decline, possibly back to 1.2665 support. Also from Canada, GDP grew 0.2% mom in September, above expectation of 0.1% mom.

The greenback, on the other hand, remains cautiously soft as markets await Senate vote on tax bill. There will be a marathon vote on amendments today. A key focus would be on details of how future deficits would be addressed. The Joint Committee on Taxation found that the Senate's version of the bill could only generate USD 458b in revenue from boosted growth. That's far from being above to cover the USD 1.4T loss. Republicans are expecting to pass the bill finally by tonight. But there are still uncertainties as Republicans can only lose two votes due to slim 52 majority.

UK and Eurozone manufacturing PMIs improved

UK PMI manufacturing jumped to 58.2 in November, up from 56.6 and beat expectation of 56.5. That's also the highest reading in over four years since August 2013. Markit noted that "on its current course, manufacturing production is rising at a quarterly rate approaching 2 percent, providing a real boost to the pace of broader economic expansion". However, "manufacturers have seen supply-chain constraints and rising demand for raw materials overtake exchange rate effects as the primary motivator of price increases."

From Eurozone, Eurozone PMI manufacturing was revised up by 0.1 to 60.1 in November. Germany PMI manufacturing was unrevised at 62.5. France PMI manufacturing was revised up by 0.2 to 57.7. Italy PMI manufacturing rose to 58.3 in November. From Swiss, PMI manufacturing rose to 65.1 in November up from 62.0 and beat expectation of 62.5.

China Caixin PMI manufacturing missed expectations

The Caixin manufacturing PMI for China slipped to 50.8 in November, from 51 in October. The reading also missed expectations of 51. Looking into the details, production and new orders increased at modest rates, while purchasing costs rose sharply. However, confidence towards the business outlook dropped to joint-lowest on record. As the agency noted, the manufacturing sector remained stable for most of November, despite 'some signs of weakness'. It forecast that the economy would remain stable for 4Q17. More in China's November PMIs Helped by 'Double-11'

Released earlier today, Japan national CPI rose to 0.8% yoy in October, Tokyo CPI was unchanged at 0.6% yoy in November. Inflation stays well below the 2% target and justify BoJ's massive stimulus. Also from Japan, unemployment rate was unchanged at 2.8% in October, household spending rose 0.0%. Japan capital spending rose 4.2% in Q3. PMI manufacturing was revised down to 50.8 in November. Also released, New Zealand terms of trade index rose 0.7% qoq in Q3, below expectation of 0.7% qoq.

USD/CAD Mid-Day Outlook

Daily Pivots: (S1) 1.2822; (P) 1.2847; (R1) 1.2890; More....

USD/CAD's sharp fall and break of 1.2804 support indicates rejection from 1.2916. Consolidation from 1.2916 is extending with another falling leg. Intraday bias is turned back to the downside for 1.2665 support or possibly below. Still, we'd expect downside to be contained by 1.2598 resistance turned support and bring rise resumption. On the upside, decisive break of 1.2916 will confirm resumption of whole rally from 1.2061. In that case, USD/CAD should target 1.3065 medium term fibonacci level next.

In the bigger picture, USD/CAD should have defended 50% retracement of 0.9406 (2011 low) to 1.4689 (2016 high) at 1.2048. And with 1.2048 intact, we'd favor the case that fall from 1.4689 is a correction. Rise from 1.2061 medium term bottom should now target 38.2% retracement of 1.4689 to 1.2061 at 1.3065. Firm break there will target 1.3793 key resistance next (61.8% retracement at 1.3685). We'll now hold on to this bullish view as long as 1.2450 support holds.

Economic Indicators Update

Here are the latest developments in global markets:

• FOREX: The pound turned to be the worst performer among major currencies despite impressive manufacturing PMI figures, trading below the $1.3500 key level after touching a fresh two-month high of 1.3548 early in the Asian trading (-0.25%). Eurozone's manufacturing PMI stood at multi-year highs, but the euro pared earlier gains, falling back to 1.1900. Dollar/yen remained flat at 112.33, while dollar/loonie was steady at 1.288. The kiwi overperformed its peers, jumping to $0.6550 (+0.22%).
• Stocks: European stocks declined as technology shares dragged the market. The pan-European STOXX 600 fell to a two-week low (- 0.75%), the British FTSE 100 index lost 0.35% and the German DAX 30 index dived by 1.15%. US stock futures were in the red.
• COMMODITIES: Oil prices held onto gains after OPEC and non-OPEC members including Russia compromised to extend supply-cuts until the end of 2018. However, the deal's desired effects are now depending on the US and China. WTI crude was 0.75% up at $57.74 per barrel and Brent gained 0.88% to $63.10. Gold was roughly flat at $1,276.0 per ounce.

Day ahead: US tax story & Brexit in the background; Canada's GDP growth under scrutiny

The loonie and the dollar would attract some caution by investors as economic releases out of Canada and the US during European trading hours might bring some volatility to the currencies. Besides that, markets would be sensitive to any updates in the US tax story after Senate Republicans decided yesterday to postpone voting on the tax bill to Friday over disagreements on the sustainability of the plan.

Statistics Canada will publish readings on GDP growth and employment at 1330GMT. According to the forecasts, the Canadian economy will likely expand by 0.1% m/m in September after a contraction by an equivalent proportion in August. On a quarterly basis, the annualized GDP growth is projected to narrow from 4.5% to 1.6% in the third quarter. That would be the weakest growth posted since the second quarter of 2016.

In another report, Canadian unemployment is said to inch down by 0.1 percentage points to fall back to nine-year lows of 6.2% in November, while the economy is expected to add 10,000 workers in the labor market in November compared to 35,300 in September.

Back in the US, the Institute of Supply Management (ISM) predicts the manufacturing PMI to drop by 0.3 points to 58.4.

In terms of public appearances, the St. Louis Fed President James Bullard will be giving a presentation on the US economy and monetary policy at 1405 GMT and Dallas Fed President Robert Kaplan (an FOMC voting member) will be participating in a Q&A session at 1430 GMT. Philadelphia Fed President Patrick Harker (also an FOMC voting member) will be talking about inclusive economic growth at 1515 GMT.

Brexit news could also shake the pound as Theresa May's deadline on December 4 to propose solutions to three key elements – those being the UK's financial settlement to the EU, the Irish border and the rights of the European citizens – runs out. Note that May will meet the President of the European Commission, Jean-Claude Junker in Brussels on Monday to prepare a breeding ground for the EU summit on December 14.

Four days of gains leaves USD/CAD a handful of pips away from the July highs in a potential breakout with major economic data to come. Sterling was the top performer once again while the New Zealand dollar lagged. Crucial CAD figures are due at 8:30 ET, 13:30 London -- Canada Nov jobs report and Canada's Sep GDP figures. US manuf ISM folows 90 mins later. The Premium FTSE100 short was closed at 7290 for 210 pts.

USD/CAD touched 1.2909 on Thursday, just below the October high of 1.2917. That will be a critical level to watch in the day ahead with Canada releasing the first look at Q3 GDP and November employment. A slight bit of good news for the GDP report on Thursday as the current account deficit for Q3 was about $0.65B below the $20B expected, despite being the third-worst report on record, in large part due to a CAD-driven drop in exports in Q3. The imbalance represented 36 straight quarters of current account deficits in a reminder of the long-term headwinds for Canada and the loonie.

In the US, the Senate hopes to pass the tax bill today as Republicans find difficulty in keeping the number of their Naysayers at no more than 2. The Fed's Mester and Kaplan both said they don't expect it to add to growth but offshore flows returning home could be USD-positive.

The dollar was volatile on the day, dropping early and then storming back as the 10-year Treasury yield climbed above 2.40%. The PCE report was a touch high on overall inflation but in-line on core. Personal income improved more than expected but spending was light.

In other news, OPEC extended production curbs through 2018. The nine-month extension was generally expected. Libya and Nigeria also agreed to cap production at 2017 maximums. The crude market was choppy on the headlines but finished flat on the day.

USDCHF - The pair backed off higher prices on Thursday leaving risk to the downside. On the downside, support lies at the 0.9800 level. A turn below here will open the door for more weakness towards the 0.9750 level and then the 0.9700 level. On the upside, resistance resides at the 0.9850 level where a break will clear the way for more strength to occur towards the 0.9900 level. Further out, resistance comes in at the 0.9950 level. Above here if seen will turn attention to 1.0000. All in all, USDCHF faces further upside pressure.