Sample Category Title

Cable posted new nearly two-month high at 1.3382 on Monday after fresh bullish acceleration triggered stops above Friday's high at 1.3359.

Immediate focus lies at 1.3401 (02 Oct high) ahead of key target at 1.3415 (Fibo 61.8% of 1.3655/1.3026 descend), violation of which would generate another strong bullish signal.

No signs of rally's stall so far, despite overbought slow stochastic on daily chart, but some hesitation on approach to 1.3415 target could be anticipated.

We expect broken trendline which connects former tops at 1.3337 and 1.3320 (1.3305) to limit dips, guarding key n/t support at 1.3276 (daily cloud top).

Res: 1.3401; 1.3415; 1.3455; 1.3506
Sup: 1.3305; 1.3276; 1.3256; 1.3214

EUR/USD - 1.1936

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 1.1939

Kijun-Sen level                  : 1.1928

Ichimoku cloud top             : 1.1868

Ichimoku cloud bottom      : 1.1818

Original strategy  :

Buy at 1.1870, Target: 1.1990, Stop: 1.1835

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.1870, Target: 1.1990, Stop: 1.1835

Position : -

Target :  -

Stop : -

As the single currency has surged again after last week’s rally above resistance at 1.1861, adding credence to our bullish view that recent upmove has resumed and upside bias remains for the rise from 1.1554 low to extend gain to 1.1950-60, then 1.1980, however, reckon psychological level at 1.2000 would limit upside, risk from there has increased for a retreat to take place later.

In view of this, we are looking to buy euro on pullback as said previous resistance at 1.1861 should turn into support and contain downside, bring such rise. Below minor support at 1.1837 would defer and suggest a temporary top is possibly formed, bring correction of recent rise to 1.1800-05 first.

USD/JPY - 110.93

Most recent candlesticks pattern   : N/A

Trend                      : Near term down

Tenkan-Sen level              : 111.17

Kijun-Sen level                  : 111.29

Ichimoku cloud top             : 111.63

Ichimoku cloud bottom      : 111.39

Original strategy  :

Sell at 111.85, Target: 110.85, Stop: 112.20

Position :  -

Target :  -

Stop : -

New strategy  :

Sell at 111.65, Target: 110.55, Stop: 112.00

Position :  -

Target :  -

Stop : -

As the greenback has remained under pressure after last week’s selloff, bearishness remains for the selloff from 114.74 top to extend further weakness to 110.70 and possibly towards 110.50, however, near term oversold condition should limit downside to 110.20-25 and reckon 110.0 would hold from here.

In view of this, we are looking to sell dollar on recovery as resistance at 111.69 should limit upside and bring another decline later. Above 111.88 (previous support now resistance) would defer and signal a temporary low is formed, bring a stronger rebound to 112.30-35 but price should falter below resistance at 112.72, bring another decline later.

The Japanese yen has posted gains in the Monday session. In North American trade, USD/JPY is trading at 110.94, down 0.53% on the day. On the release front, SPPI edged lower to 0.8%, just shy of the estimate of 0.9%. In the US, the sole indicator is New Home Sales, which is expected to slow to 627 thousand. On Tuesday, the US releases CB Consumer Confidence, with an estimate of 123.9 points. We'll also hear from Fed Chair Designate Jerome Powell and Treasury Secretary Steven Mnuchin.

The changing of the guard at the Federal Reserve starts this week, as Jerome Powell testifies before the Senate Banking Committee on Tuesday for his confirmation hearing. Will Powell be a clone of outgoing chair Janet Yellen? Powell inherits an economy that is in excellent shape, but persistently low inflation remains a nagging problem. Fed policymakers have differing views on what to do about inflation, with some members proposing that the Fed drop its 2 percent target, in favor of a "gradually rising path" for prices. The Fed remains confounded by low inflation and wage growth, despite a labor market that is at full capacity. Still, the Fed will likely pull the rate trigger next month, and could raise rates up to 3 more times in 2018 if the economy continues to expand at its current pace.

The Bank of Japan has declared more than once that it will hold the course on its massive easing program, even though the Japanese economy has rebounded in 2017, in large part due to stronger global demand for Japanese products. Recently, however, there have been some slight hints that the Bank of Japan might be having second thoughts. BoJ Governor Haruhiko Kuroda recently acknowledged that ongoing easing could hurt bank margins. Kuroda said that BoJ needed to pay attention to the "reversal rate", whereby a rate cut by the central bank discourages bank lending. Still, most economists don't expect a cutting of stimulus until in the near future, so any hints of a change in the status quo would likely shake up the Japanese yen.

The Canadian dollar is down slightly in the Monday session. Currently, USD/CAD is trading at 1.2683, down 0.23% on the day. On the release front, there are on Canadian releases on the schedule. In the US, the sole indicator is New Home Sales, which is expected to slow to 627 thousand. On Tuesday, the US releases CB Consumer Confidence, with an estimate of 123.9 points. We'll also hear from Fed Chair Designate Jerome Powell and Treasury Secretary Steven Mnuchin. Canada releases the Raw Materials Price Index, and BoC Governor holds a press conference about the Financial System Review.

Federal Reserve policymakers remain upbeat about the U.S economy, according to the minutes of the most recent policy meeting. The minutes indicated that policymakers expected the U.S economy to continue showing strong growth, and predicted that interest rates will be raised in the "near term". The members discussed the vexing question of why inflation has been persistently low (no quick-fix solution was provided), with most agreeing that a tight labor market should lead to higher inflation levels. Although policymakers did not provide further hints about the timetable of a rate hike, the markets remain convinced that additional rates are imminent. The odds of a rate hike in December are 93%, and the odds of a January raise are at 91%.

The markets will be keeping a close eye on Jerome Powell, who testifies before the Senate Banking Committee on Tuesday for his confirmation hearing. Will Powell be a clone of outgoing chair Janet Yellen? Powell inherits an economy that is in fine shape, but persistently low inflation remains a nagging problem. Fed policymakers have differing views on what to do about inflation, with some members proposing that the Fed drop its 2 percent target, in favor of a "gradually rising path" for prices. The Fed remains confounded by low inflation and wage growth, despite a labor market that is at full capacity. Still, the Fed will likely pull the rate trigger next month, and could raise rates up to 3 more times in 2018 if the economy continues to expand at its current pace.

Daily Pivots: (S1) 111.23; (P) 111.42; (R1) 111.68; More...

USD/JPY's fall resumed after brief consolidation and breaks 111.06 temporary low. Intraday bias is turned back to the downside for 61.8% retracement of 107.31 to 114.73 at 110.14. For the moment, we're still favoring the case medium term corrective pattern from 118.65 has completed at 107.31 already. Hence, we'll looking for bottoming below 110.14 to bring another rise. On the upside, above 116.68 minor resistance will turn intraday bias neutral first.

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.

Daily Pivots: (S1) 0.9772; (P) 0.9799; (R1) 0.9817; More....

Intraday bias in USD/CHF remains on the downside as fall from 1.0037 is in progress for 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.

EUR/GBP - 0.8940

Original strategy  :

Sold at 0.8950, Target: 0.8820, Stop: 0.8990

Position : - Short at 0.8950

Target :  - 0.8820

Stop : - 0.8990

New strategy  :

Hold short entered at 0.8950, Target: 0.8820, Stop: 0.8990

Position : - Short at 0.8950

Target :  - 0.8820

Stop : - 0.8990

 
Although the single currency rebounded after finding support at 0.8842, outlook remains consolidative, reckon upside would be limited to 0.8970 and bring retreat later, below 0.8890-95 would suggest the rebound from 0.8842 has ended, bring another test of this level, below there would retain bearishness and extend weakness to support at 0.8812 but break there is needed to confirm the rebound from 0.8733 has ended at 0.9015, bring subsequent fall towards 0.8791 support.

In view of this, we are holding on to our short position entered at 0.8950. 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) 1.3286; (P) 1.3322; (R1) 1.3367; More....

Intraday bias in GBP/USD remains on the upside as rise from 1.3038 is in progress for 61.8% retracement of 1.3651 to 1.3026 at 1.3412. Sustained break there will pave the way to retest 1.3651 high. Nonetheless, rejection from 1.3412, or break of 1.3278 minor support will revive the case that price actions from 1.3026 are merely correction. And intraday bias will be turned back to the downside for 1.3026 low in that case.

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.

The DAX index has started the week with gains. Currently, the DAX is at 13,101.50, up 0.25% on the day. On the release front, there are no eurozone or German events on the schedule.

The ECB changed directions and chopped its asset purchases at the November rate meeting, so analysts were eager to read the details of that meeting. The minutes, published on Thursday, stated that there was "broad agreement" among policymakers that further stimulus was still needed to boost inflation towards the ECB's target of close to 2 percent. The minutes noted that some policymakers wanted the ECB to announce an end date to the asset purchases, but in the end, members decided to extend the program by 9 months, to September 2018.

The DAX continues to hover at high levels, buoyed by a robust German economy. The week ended on a high note, as German Ifo Business Climate in November set another record high. The indicator climbed to 117.5, above the estimate of 116.6 points. On Thursday, Final GDP in the third quarter accelerated to 0.8%, its strongest quarter since 2014. Manufacturing PMI surged to 62.5, pointing to strong expansion in the manufacturing sector. On the political front, there are renewed hopes that another election can be avoided, as the SPD (socialist democrats) have reluctantly agreed to hold coalition talks with Merkel's conservative bloc. The SPD was the junior partner in the previous government, and is expected to come with a shopping list if it agrees to a "grand" coalition. This could mean more government spending and no cap on asylum seekers. The euro has not lost a stride since the political crisis, and on Friday, the currency pushed above 1.19 for the first time since late September.