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Daily Pivots: (S1) 1.5114; (P) 1.5159; (R1) 1.5214; More....

Intraday bias in EUR/AUD remains neutral as consolidation from 1.5392 continues. As long as 1.4949 support holds, outlook remains bullish. Medium term rally from 1.3624 is in favor to continue. On the upside, break of 1.5392 will resume medium term rise from 1.3624 and target 61.8% projection of 1.3624 to 1.5226 from 1.4949 at 1.5939 first. However, decisive break of 1.4949 will carry larger bearish implication and turn bias to the downside.

In the bigger picture, we're holding on to the view that corrective decline from 1.6587 medium term top has completed at 1.3624. Rise from 1.3624 is expected to extend to retest 1.6587. However, break of 1.4949 support will dampen our view and argue that rise from 1.3624 has completed. In that case, EUR/AUD would turn southward for retesting 1.3624 low.

Daily Pivots: (S1) 1.1597; (P) 1.1624; (R1) 1.1638; More...

Intraday bias in EUR/CHF remains neutral as consolidation from 1.1709 is still in progress. Below 1.1559 minor support will bring deeper fall. But overall outlook will stays bullish as long as 1.1483 support holds. Above 1.1663 will turn bias back to the upside for 1.1709 high. Break will resume medium term rally to 1.2 key level. However, break of 1.1483 will be an early sign of reversal. In that case, deeper decline should be seen back to 1.1355 support.

In the bigger picture, long term rise from SNB spike low back in 2015 is still in progress. EUR/CHF should now be heading back to prior SNB imposed floor at 1.2000. For now, this will be the favored case as long as 1.1355 support holds. However, break of 1.1355 will indicate medium term topping. In that case, EUR/CHF should head back to 55 week EMA (now at 1.1104) and possibly below.

Daily Pivots: (S1) 0.7620; (P) 0.7667; (R1) 0.7697; More...

Intraday bias in AUD/USD remains neutral with focus on 0.7624 support. Decisive break there will resume the whole decline from 0.8124. And, AUD?USD should target next key cluster level at 0.7322/8. In case of another rise, upside of recovery should be limited well below 0.7896 resistance to bring fall resumption.

In the bigger picture, corrective rise from 0.6826 medium term bottom is likely completed at 0.8124, after hitting 55 month EMA (now at 0.8067). Decisive break of 0.7328 key cluster support (61.8% retracement 0.6826 to 0.8124 at 0.7322) will confirm. And in that case, long term down trend from 1.1079 (2011 high) will likely be resuming. Break of 0.6826 will target 61.8% projection of 1.1079 to 0.6826 from 0.8124 at 0.5496. This will now be the favored case as long as 0.7896 near term resistance holds.

Daily Pivots: (S1) 1.2705; (P) 1.2770; (R1) 1.2826; More....

USD/CAD's correction from 1.2916 is still in progress and could dip lower. But after all, as long as 1.2598 resistance turned support holds, near term outlook remains bullish. On the upside, break of 1.2916 will extend the rise from 1.2061 to 38.2% retracement of 1.4689 to 1.2061 at 1.3065. However, sustained break of 1.2598 will argue that rebound from 1.2061 has completed after hitting 55 week EMA (now at 1.2916). Near term outlook will be turned bearish in this case.

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.

Daily Pivots: (S1) 1.1574; (P) 1.1632 (R1) 1.1666; More...

Intraday bias in EUR/USD remains neutral as consolidation from 1.1574 continues. Overall, break of 1.1879 resistance is needed to confirm completion of the decline from 1.2091. Otherwise, near term outlook will stay bearish. Below 1.1574 will target 38.2% retracement of 1.0569 to 1.2091 at 1.1510.

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 cautious on 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 will suggest that such medium term rebound is completed and could then bring retest of 1.0339 low.

Daily Pivots: (S1) 1.3032; (P) 1.3079; (R1) 1.3118; More....

With 1.3138 minor resistance intact, intraday bias in GBP/USD remains mildly on the downside. Break of 1.3026 support will confirm resumption of decline from 1.3651. Next target will be 61.8% projection of 1.3651 to 1.3026 from 1.3320 at 1.2934 first. Break will bring deeper decline to 1.2773 key support level. On the upside, above 1.3138 minor resistance will extend the consolidation from 1.3026 with another rise.

In the bigger picture, as noted before, GBP/USD hit strong resistance from the long term falling trend line. Current development is starting to favor that corrective rebound from 1.1946 low has completed at 1.3651. Decisive break of 1.2773 will confirm this bearish case and target a test on 1.1946 low next, with prospect of resuming the low term down trend. Nonetheless, break of 1.3320 resistance will restore the rise from 1.1946 for 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466.

Daily Pivots: (S1) 0.9953; (P) 0.9988; (R1) 1.0039; More....

Intraday bias in USD/CHF remains neutral for the moment. Consolidation from 1.0037 could extend. In case of another fall, downside should be contained above 0.9835 resistance turned support and bring rally resumption. On the upside break of 1.0037 will resume whole rally from 0.9420. And with sustained trading above 61.8% retracement of 1.0342 to 0.9420 at 0.9990, USD/CHF should then target a test on 1.0342 key resistance.

In the bigger picture, current development suggests that USD/CHF has defended 0.9443 (2016 low) key support level again. Rise from 0.9420 could is a medium term up move and should target a test on 1.0342 high. This represents the upper end of a long term range that started back in 2015. On the downside, break of 0.9736 support is now needed to indicate completion of the rise from 0.9420. Otherwise, further rally will remain in favor in medium term.

Daily Pivots: (S1) 113.60; (P) 114.01; (R1) 114.44; More...

USDJPY surges in initial trading and breaches 11449 key resistance. The development argues that rally from 107.31 is possibly resuming. Intraday bias is now cautious on the upside. Sustained trading above 114.49 will pave the way to retest 118.65 high. However, break of 112.95 support will now indicate rejection from 114.49 and turn bias to the downside for 111.64 support and below.

In the bigger picture, medium term rise from 98.97 (2016 low) is not completed yet. It should resume after corrective fall from 118.65 completes. Break of 114.49 resistance will likely resume the rise to 61.8% projection of 98.97 to 118.65 from 107.31 at 119.47 first. Firm break there will pave the way to 100% projection at 126.99. This will be the key level to decide whether long term up trend is resuming.

Yen opens the weak generally lower. USD/JPY's break of 114.49 key resistance could now open up further rally to 118.65 key resistance. But more is needed to confirm underlying bullish momentum. BoJ Governor Haruhiko Kuroda sounds quite upbeat in his latest assessment in the Japanese economy. US President Donald Trump started his Asian tour by crying that the US has suffered at hands of Japan for many many years, but markets paid little attention. The forex markets are mixed elsewhere with mild strength in Euro. But the initial focus of the week will on whether Dollar can ride on Friday's strength to resume recent uptrend.

BoJ Kuroda: Economic expansion highly sustainable

BoJ Governor Haruhiko Kuroda said today that the current economic expansion in Japan is "highly sustainable" because it "doesn't rely on specific factors and is supported by various elements." Also, "the BoJ is mindful of the risk that its low-interest rate policy, if prolonged, could weigh on financial institutions' profits." These comments are seen as sign that BoJ is not in a position to expand stimulus further, even though it's still far from an exit.

Trump: US has suffered at the hands of Japan for many, many years

US President Donald Trump started his five nation Asian tour in Japan over the weekend. Trump criticized one of the closest allies of US in their their home land and said that "the United States has suffered massive trade deficits at the hands of Japan for many, many years." He went further and said that "right now our trade with Japan is not free and it's not reciprocal" and pledged that "it will be done in a quick and very friendly manner."

General HR McMaster said Trump's focuses will be on three goals, including promoting an open and free Indo-Pacific region, boosting fair trade, and strengthening international resolve to denuclearize North Korea. Trump will also visit South Korea, China, Vietnam and the Philippines during the 11 day trip.

New York Fed Dudley to announce early retirement

It's reported that outspoken New York Fed President William Dudley is going to announce retirement as soon as this week. And, the data is pulled head from January 2019 to spring 2018. That would come after Fed Governor Jerome Powell take over the Fed chair job from Janet Yellen in February. Dudley is widely regarded as a close ally of Yellen and her predecessor Ben Bernanke. Dudley's departure is seen as another sign that Fed would further depart from the path laid down by Bernanke and Yellen after the global financial crisis.

BoE Carney: Brexit could limit rate cuts to boost slow growth

BoE Governor Mark Carney said on Sunday that growth will slow if UK fails to secure a trading agreement with EU after Brexit. He noted that "in the short term, without question, if we have materially less access (to the EU's single market) than we have now, this economy is going to need to reorient and during that period of time it will weigh on growth." And there is an "extreme possibility" that if inflation gets out of control in a no-deal scenario, BoE would have no room to cut interest rate to lift growth back on track. .

UK Prime Minister Theresa May will emphasize in a speech to the Confederation of British Industry that the transition period for Brexit is crucial. In an extract of her speech released by office, she said "I know how important it is for business and industry not to face a cliff-edge and to have the time it needs to plan and prepare for the new arrangements." And therefore, "a strictly time-limited implementation period will be crucial to our future success."

RBA and RBNZ to headline a light week

On the data front, Australia TD securities inflation rose 0.3% mom in October. RBNZ 2 year inflation expectations slowed to 2.0% in Q4. Looking ahead, German will release factory orders in European session. Eurozone will release Sentix Investor Confidence, PPI and PMI revision. Swiss will release CPI. Later in the day, Canada will release Ivey PMI.

For the week ahead, RBA and RBNZ rate decisions are the main focus in a rather light week. Both are widely expected to keep interest rates unchanged. Here are some highlights:

• Tuesday: Japan labor cash earnings; UK BRC retail sales monitor; RBA rate decision; German industrial production, Eurozone retail sales and retail PMI; Swiss foreign currency reserves
• Wednesday: China trade balance; Japan leading indicator; Canada housing starts and building permits
• Thursday: RBNZ rate decision; Japan machine orders, current account; Australia home loans, China CPI and PPI; Swiss unemployment; German trade balance; Canada new housing price index; US jobless claims, whole sale inventories
• Friday: RBA monetary policy statement; Japan tertiary index; UK productions, trade balance

USD/JPY Daily Outlook

Daily Pivots: (S1) 113.60; (P) 114.01; (R1) 114.44; More...

USDJPY surges in initial trading and breaches 11449 key resistance. The development argues that rally from 107.31 is possibly resuming. Intraday bias is now cautious on the upside. Sustained trading above 114.49 will pave the way to retest 118.65 high. However, break of 112.95 support will now indicate rejection from 114.49 and turn bias to the downside for 111.64 support and below.

In the bigger picture, medium term rise from 98.97 (2016 low) is not completed yet. It should resume after corrective fall from 118.65 completes. Break of 114.49 resistance will likely resume the rise to 61.8% projection of 98.97 to 118.65 from 107.31 at 119.47 first. Firm break there will pave the way to 100% projection at 126.99. This will be the key level to decide whether long term up trend is resuming.

Economic Indicators Update

STOCKS

Dow (23539.19, +0.10%) closed the previous session at slightly higher levels. Upside is open for a test of 23800. Near term looks bullish.

Dax (13478.86, +0.28%) is almost quiet at current levels and has been stable since Friday. The index could try to attempt a rise towards 13600-13700 in the near term. Although there little scope for upside just now, a rejection is around the corner, may be by the later half of this month.

Nikkei (22540.17, +0.00%) is trading near our target levels of 22666. We need to see if this holds for the medium term or the index manages to rise past 22666 in the medium term to head towards 23000 and higher.

Shanghai (3360.15, -0.34%) has fallen sharply to test support near 3360. A bounce back from current levels would take it towards 3400 and higher again; else if the falling momentum continues, we could see a test of 3340 or lower in the coming sessions.

Nifty (10452.50, +0.28%) is likely to dip towards 10400 over today and tomorrow. It would be important to see if the index comes off below 10400 or manages to rise past the high made last week. A pause and some corrective dip is preferred for some time.

COMMODITIES

Gold (1269.00) is trading above support near 1260 and while that holds, we could see some consolidation in the 1260-1290 region. Unless there is some directional clarity on the US Dollar Index, Gold is likely to remain range bound for the medium term. A break below 1260 could open up lower target of 1240.

Brent (62.25) has surprised by moving above 62 on the first attempt and while 62 holds, Brent could well test 63-65 levels in the coming sessions. Near to medium term looks bullish. WTI (55.75) has also risen sharply on Friday and is trading higher today. While the price has resistance on the 3-day candles, it is likely to break on the upside moving higher towards 57-58 levels soon. Near term view is bullish.

Copper (3.1335) is overall bullish for the medium to long term. 3.05 is the immediate support and while that holds, the price may move up towards 3.25-3.30 levels.

FOREX

There was a false spike to 1.1690 on the Euro (1.1614) after the US NFP release on Friday, but the currency fell again later on. This increases its bearishness, suggesting some more dip towards 1.1550-30 this week. Note that Dollar Index (94.895) has seen a high of 95.10 so far, in line with our target of 95.50.

Dollar-Yen (114.36) rose past the 114.50 Resistance to 114.73 today, but has come off a bit from there. As we said on Friday, "A break of Resistance, if seen, could propel the market much higher, but we would not like to pre-empt such a move." Even so, a fresh rise past 114.50-75 can test 114.90-115.00. That said, we are ambivalent about a rise past those levels.

Contrary to expectation of a dip towards 130, the Euro-Yen (132.82) now appears ranged near current levels as both the Euro and Yen seem to be gaining/ losing to the same degree against the Dollar.

No movement in the Pound (1.3075) which trades exactly where it was on Friday. So we repeat, "This is in line with our suggested view of range trade between 1.31-33. However, be careful now as a further decline from here could herald 1.2750 in the medium/ long term. Watch today."

Overall Dollar strength has prevented the Aussie (0.7651) from rising past 0.7715-30. Maybe we have to consider chances of a slow, grinding dip towards 0.7530 while below the important Resistance at 0.7750. Interim Support seen at 0.7600 as well.

Dollar-Yuan (USDCNY = 6.6365) has moved up again after dipping to 6.5829 last week. Dollar-Rupee (64.55) may also rise towards 64.70 this week.

INTEREST RATES

Yields have softened across the globe as the US NFP came in a little softer than expected on Friday. The US 10Yr (2.34%) is down from 2.35%, German 10Yr (0.36%) is down from 0.38% and Japan 10Yr (0.04%) down sharply from 0.05%.

However, as stated on Friday, there should be Support near 2.25% on the US 10Yr. We would keep an eye on Brent Crude (62.19) which could possibly rise towards 63-65. A rise in Brent has potential to pull US yields higher.

Indian GOI (6.8576%) has come off a bit from the high of 6.8930% seen last week. This could help in weakening the Rupee a bit.