Sample Category Title

USD/CHF - 0.9806

Most recent candlesticks pattern : N/A

Trend                                    : Up

Tenkan-Sen level                  : 0.9802

Kijun-Sen level                    : 0.9810

Ichimoku cloud top                 : 0.9784

Ichimoku cloud bottom              : 0.9770

Original strategy :

Bought at 0.9790, Target: 0.9890, Stop: 0.9755

Position : - Long at 0.9790

Target :  - 0.9890

Stop : - 0.9755

New strategy  :

Hold long entered at 0.9790, Target: 0.9890, Stop: 0.9755

Position : - Long at 0.9790

Target :  - 0.9890

Stop : - 0.9755

As dollar has retreated after rising to 0.9837 yesterday, suggesting consolidation below this strong resistance would be seen, however, reckon the upper Kumo (now at 0.9784) would limit downside and bring another rise later, above said resistance at 0.9837 would retain bullishness and confirm recent rise from 0.9421 low has resumed for headway to 0.9870 and possibly towards 0.9900.

In view of this, we are holding on to our long position entered at 0.9790. Below 0.9760 would defer and suggest the rebound from 0.9705 has ended instead, risk weakness to support at 0.9730, however, as broad outlook remains consolidative, reckon downside would be limited and said support at 0.9705 should remain intact.

GBP/USD - 1.3197

Most recent candlesticks pattern   : N/A

Trend                                 : Near term up

Tenkan-Sen level                 : 1.3210

Kijun-Sen level                    : 1.3185

Ichimoku cloud top              : 1.3234

Ichimoku cloud bottom        : 1.3204

Original strategy :

Sell at 1.3265, Target: 1.3145, Stop: 1.3300

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 1.3265, Target: 1.3145, Stop: 1.3300

Position : -

Target :  -

Stop : -

Although cable rebounded after falling to 1.3140 yesterday and consolidation above this level would be seen with initial upside bias for corrective bounce to 1.3260-70, as top has been formed earlier at 1.3338 late last week, upside would be limited and resistance at 1.3287 should hold, bring retreat later, below said support at 1.3140 would extend the fall from 1.3338 towards support at 1.3121, however, break there is needed to retain bearishness and bring further subsequent decline to 1.3090-00.

In view of this, wee are looking to sell cable on subsequent recovery as 1.3255-65 should limit upside, bring another decline later. Above said resistance at 1.3287 would abort and signal low is formed instead, bring rebound to 1.3300 and possibly test of resistance at 1.3312. 

The British pound has moved above the 1.3200 level against the U.S dollar, hitting 1.3229 during the Asian session. GBPUSD buying demand has returned, as the U.S dollar index weakens. and intraday sellers failed to break below the 1.3140 level during yesterday's U.S session. Price-action is currently trading around the 1.3218 level, ahead of the release of UK Retail Sales data.

The GBPUSD pair is expected to advance higher while trading clearly above the 1.3200 level. Buyers are expected to target the weekly pivot point, at 1.3233 and the 1.3268 resistance area.

If intraday GBPUSD sellers push price-action back below the 1.3200 level, the pair is expected to find support from the daily pivot point, at 1.3179, and the key 1.3149 support level.

The euro has moved sharply higher against the U.S dollar, hitting 1.1816 during the Asian trading session. The U.S dollar index started to move lower during the U.S session, as the Federal Reserve's Beige Book highlighted a lack of inflation in the U.S economy. The EURUSD pair currently trades around the 1.1800 mark, as traders await the U.S dollars next move, and any news coming from Catalonia.

EURUSD intraday buyers will remain in control while price-action trades above the key 1.1780 level. Further bullish advancement for the euro can be expected towards the 1.1833 and 1.1858 technical resistance levels.

Should the EURUSD pair move below the 1.1780 level for a sustained period, further declines towards the 1.1750 and 1.1736 level remain likely.

High-profile Chinese data have set the tone for Thursday's session. British retail sales, a Catalan deadline and a US manufacturing survey are also scheduled to make headlines throughout the day.

China's National Statistics Bureau said third-quarter GDP accelerated 6.8% year-over-year, matching forecasts. That followed a faster than expected gain of 6.9% in Q2.

China also said retail sales rose 10.3% year-over-year. Industrial production climbed a faster than expected 6.6%, official data showed.

The Chinese economy is the world's second largest. What happens there is important to any investor with a stake in global trade, emerging markets and commodities.

Looking ahead to the rest of the day, Switzerland will release its latest trade figures at 06:00 GMT. Two hours later, Catalan authorities must confirm whether they have declared Independence or not following the referendum result.

UK retail sales will make headlines at 08:30 GMT. Receipts at retail stores are forecast to grow 2.1% in the 12 months through September. Excluding fuel, sales are expected to rise 2.4%.

Shifting gears to North America, the US Labor Department will release its weekly jobless claims report at 12:30 GMT. Claims are forecast to fall by 3,000 to a seasonally adjusted 240,000 in the week ended 14 October.

The Philadelphia Fed will also report its latest manufacturing survey at 12:30 GMT. The headline indicator is expected to fall to 22.0 from 23.7.

In terms of monetary policy, Fed Bank of Kansas City President Esther George will deliver a speech at 13:30 GMT. George is not a member of this year's Federal Open Market Committee (FOMC), which is scheduled to meet again in a few weeks.

AUD/USD

The Australian dollar gave back gains against the dollar despite upbeat China data. The AUD/USD exchange rate reached a session high of 0.7871 before paring gains later in the day. The pair is trading flat compared to Wednesday's close. The technical levels show immediate support at 0.7818, which is the low from Wednesday. The pair continues to trade within a 100-pip range between 0.7800 and 0.7900.

EUR/USD

Europe's common currency regained momentum on Wednesday, climbing back toward the 1.1800 handle. The EUR/USD touched a high of 1.1820 overnight before falling back toward 1.1800. The euro risks further downside should it break below that level. Immediate support is likely found at 1.1703.

GBP/USD

Cable edged slightly higher in overnight trade, although gains were tepid after Bank of England Governor Mark Carney issued a stark warning about Brexit risks. Those comments outweighed Britain's 3% inflation print, which was bigger than expected. The GBP/USD is up 0.1% to trade at 1.3210. Its immediate resistance trigger is 1.3250. On the opposite side of the ledger, support levels are found near 1.3130.

EUR/USD - 1.1815

Most recent candlesticks pattern   : N/A

Trend                      : Near term down

Tenkan-Sen level              : 1.1808

Kijun-Sen level                  : 1.1777

Ichimoku cloud top             : 1.1778

Ichimoku cloud bottom      : 1.1765

Original strategy  :

Buy at 1.1745, Target: 1.1820, Stop: 1.1725

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 1.1850, Target: 1.1750, Stop: 1.1885

Position : -

Target :  -

Stop : -

Although the single currency has risen again and near term upside risk remains for the rise from this week’s low at 1.1730 to extend gain to 1.1845-50, if our view that top has been formed at 1.1880 is correct, upside would be limited and bring retreat later, below the Kijun-Sen (now at 1.1777) would suggest an intra-day top is formed, bring weakness to 1.1755-60 but said support at 1.1730 should remain intact.

In view of this, we are inclined to turn short on further rise but one should exit on subsequent decline. Above said resistance at 1.1880 would shift risk back to upside and extend early rise from 1.1669 to 1.1900-10 first.

Key Highlights

• The New Zealand Dollar corrected towards 0.7200 against the US Dollar where it found sellers.
• A connecting bearish trend line with current resistance at 0.7160 on the 4-hours chart of NZD/USD is preventing an upside break.
• The US Building Permits in Sep 2017 posted a 4.5% decline, compared with the -2.9% forecast.
• Today in the US, the Initial Jobless Claims for the week ending Oct 14, 2017 will be released, which is forecasted to decline from 243K to 240K.

NZDUSD Technical Analysis

The New Zealand Dollar after forming a base above 0.7050 against the US Dollar started a correction. The NZD/USD pair traded above 0.7150, but upside remains capped by 0.7200.

During the upside move, the pair was able to break a bearish trend line at 0.7115 on the 4-hours chart. It also succeeded in moving past the 50% Fib retracement level of the last decline from the 0.7243 high to 0.7059 low.

However, the upside move was capped by the 100 simple moving average near 0.7185 (4-hour, red) and 0.7200. Moreover, there is a connecting bearish trend line with current resistance at 0.7160 on the same chart, acting as a barrier for more gains.

Overall, it seems like the pair might continue to struggle near 0.7180-0.7200 and will most likely resume its downtrend.

US Building Permits and Housing Starts

Recently in the US, the Building Permits and Housing Starts report for Sep 2017 was released by the US Census Bureau, at the Department of Commerce. The forecast was slated for a 2.9% decline in the Building Permits compared with the previous month.

The actual result was lower than the forecast, as there was a decline of 4.5% in Building Permits. Looking at the Housing Starts, there was a decline of 4.7%, compared with the -0.5% forecast.

The report stated:

Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1,215,000. This is 4.5 percent (±1.6 percent) below the revised August rate of 1,272,000 and is 4.3 percent (±1.7 percent) below the September 2016 rate of 1,270,000. Single-family authorizations in September were at a rate of 819,000; this is 2.4 percent (±1.7 percent) above the revised August figure of 800,000.

The NZD/USD pair might correct a few pips in the short term, but upsides should be limited by 0.7180-0.7200.

Economic Releases to Watch Today

• UK Retail Sales for Sep 2017 (YoY) – Forecast +2.1%, versus +2.4% previous.
• UK Retail Sales for Sep 2017 (MoM) – Forecast -0.1%, versus +1.0% previous.
• UK Retail Sales ex-fuel for Sep 2017 (YoY) – Forecast +2.4% versus +2.8% previous.
• US Initial Jobless Claims – Forecast 240K, versus 243K previous.

USD/JPY - 113.00

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 113.01

Kijun-Sen level                  : 112.69

Ichimoku cloud top             : 112.23

Ichimoku cloud bottom      : 112.07

Original strategy  :

Buy at 112.50, Target: 113.50, Stop: 112.15

Position :  -

Target :  -

Stop : -

New strategy  :

Buy at 112.70, Target: 113.70, Stop: 112.35

Position :  -

Target :  -

Stop : -

As dollar has maintained a firm undertone after yesterday’s rally, above previous resistance at 112.83, adding credence to our view that low has been formed at 111.65 and consolidation with upside bias remains for the rise from 111.65 low to extend gain towards 113.30, however, near term overbought condition should limit upside to resistance at 113.44 and reckon 113.75-80 would hold on first testing.

In view of this, we are looking to buy dollar on pullback as the Kijun-Sen (now at 112.69) should limit downside and bring another rise. Below previous resistance at 112.48 (now support) would defer and signal top is formed instead, bring test of there upper Kumo (now at 112.25 but price should stay above support area at 112.03-13.

On Wednesday, data released by the UK Office for National Statistics (ONS) showed average weekly earnings (excluding bonuses) rose 2.1% in August – slightly higher than the 2% forecast. However, in real terms, due to higher inflation, they fell 0.4% on the year before. The swaps market is expecting an 80% chance of a rate rise next month but the prospect of hiking rates when real wages are in negative territory will make any potential hike difficult to justify. The conundrum faced by the Bank of England is: raise rates because inflation is high and unemployment is low, but, if you raise rates it puts extra pressure on the consumer and a sharp break on the economy as we close out 2017. The markets are convinced there will be a rate hike in November but, faced with the above conundrum, this may be difficult for the Central Bank to impose.

Data released early on Thursday showed economic growth in China slowed marginally as expected in Q3. The National Bureau of Statistics data showed the Chinese economy grew at 6.8%, slightly down on the previous release of 6.9%. The markets had been expecting a slight slowdown in growth as borrowing costs have been pushed higher, following a government campaign against riskier lending and a cooling in housing prices, as property investment and construction has softened. GDP in Q3 grew 1.7% quarter-on-quarter, compared with growth of 1.8% in Q2, which was revised up from an initially reported 1.7% growth.

EURUSD is 0.12% higher in early trading. Currently, EURUSD is trading around 1.1800.

USDJPY is little changed overnight, currently trading around 112.98.

GBPUSD is currently trading around 1.3216, marginally higher from last nights close.

Gold is 0.25% lower in early trading, currently trading around $1,278.

WTI is unchanged from last nights close, currently trading around $52.24.

Major data releases for today:

At 09:30 BST, the UK Office of National Statistics will release Retail Sales (MoM) for September. Consumer spending is forecast to come in at -0.1% from the previous reading of 1.0%. August’s robust release surprised the markets. The recent 5-year high CPI release of 3.0% and the fact that basic pay is lagging is putting a squeeze on UK consumers, thus resulting in an expected poor Retail Sales figure for September. A release significantly outside of the consensus will result in GBP volatility.

At 13:30 BST, Initial Jobless Claims for the week ending October 13th will be released by the US Department of Labor. The consensus is calling for a slight decrease to 240K from the previous release of 243K. The US Labor market continues to demonstrate robustness and there is nothing to suggest that this release will be any different than expected. If we see a markedly different release we will expect to see USD volatility.

Sunrise Market Commentary

• Rates: Shun Catalan political risk
  Eco data and central bankers won't impact trading today. The Catalan-Madrid stand-off could escalate to a new phase. Cautiousness might be warranted. The Bund might profit in a daily perspective, with more outperformance vs the US Note future while Spanish spreads could widen.
• Currencies: EUR/USD resilient despite Catalan uncertainty
  Yesterday, the dollar rebound was a bit different from earlier this week. USD/JPY profited from higher core yields and a risk-on sentiment, but the US currency lost ground against the euro. Today, the focus for global FX trading will be on Catalonia. (Currency) markets are positioned for a non-disruptive outcome. This is far from sure. So, we see downside risk for the euro.

The Sunrise Headlines

• US stock markets ended positive, but with big differences between S&P (+0.07%), Nasdaq (+0.01%) and Dow (+0.7%). Asian stock markets are mixed overnight with China underperforming (-0.3%).
• China's economy expanded at a robust 6.8% pace in Q3, meeting expectations, as traditional growth drivers such as manufacturing and exports gained steam. September retail sales (10.3% Y/Y) and industrial production (6.6% Y/Y) were close to consensus while investments (7.5% Y/Y) slightly disappointed.
• Australia enjoyed another month of solid jobs growth in September (+19.8k), with the annual pace of gains sprinting ahead to the fastest in almost a decade and nudging the unemployment rate lower (5.5%).
• Catalonia is on the precipice of losing its autonomy. Regional President Puigdemont has until 10 a.m. local time to renounce his independence claims or have Madrid take control.
• While the Bank of Korea held interest rates at a record low, higher GDP/CPI forecast, hawkish comments from the governor and a dissenter calling for a rate hike indicate that a change in monetary policy is getting closer.
• Republicans in Congress are examining how to block a potential move by Trump to pull the US out of NAFTA as members of the president's own party also warn him that any such move could put a joint push for tax cuts at risk.
• Today's eco calendar contains UK retail sales, US weekly jobless claims and Philly Fed Business Outlook. Spain and France tap the market. EU leaders hold a Summit in Brussels.

Currencies: EUR/USD Resilient Despite Catalan Uncertainty

EUR/USD resilient despite Catalonia

The dollar initially stayed well bid yesterday. However the relative performance of individual USD cross rates was different from earlier this week. The dollar struggled to make further headway against the euro, despite the Catalan uncertainty. Some ‘hawkish' ECB comments blocked the euro decline. There was also talk of substantial EUR/JPY buying. EUR/USD closed the day slightly higher at 1.1787 (from 1.1766). USD/JPY outperformed, supported by higher core US/EMU yields and by a strong risk sentiment. The pair finished the session at 112.94 (from 112.10).

Overnight, the Chinese Q3 GDP was in line with expectations. The composition was OK. September retail sales and production were also as expected. Even so, the Chinese data were not enough to enhance the Asian risk rally. Most regional indices show modest losses of less than 0.5%. Japan outperforms on overall yen weakness. USD/JPY is testing the 113 level. EUR/JPY is trading well north of 133. EUR/USD maintains yesterday's intraday gain and trades in the 1.18 area. The Aussie dollar profited temporary from good labour data but failed to maintain the initial gain. AUD/USD trades again in the mid 0.78 area.

There are no important data in the EMU and the US calendar is also thin. Jobless claims are expected little changed. The Philly Fed business outlook is expected slightly softer at 22.0 from 23.8. These data won't change the global picture for the dollar. The deadline expires for Catalonia to renounce its independence claim. If it doesn't, Madrid said it will activate laws to suspend the region's autonomy. Until now, the impact of the Catalan tensions on broader European markets was limited. Yesterday's price action of the euro suggests that markets assume that any action from Spain against the region will be modest/non-disruptive. Even so, uncertainty on the next steps will probably persist. This might still be a (slightly?) negative for the euro. On the dollar side of the story, the picture remains diffuse as well. USD/JPY finally gained some traction on higher yields core yields (US & Europe). EUR/JPY also profits. At the same time, the dollar struggles to extend gains against the euro even as interest differentials are at cycle highs (2-y USD/Germ) or at a ‘multi-month' top (10-y). This is disappointing for USD bulls. Earlier this week, we kept a neutral-to-tentatively negative bias for EUR/USD. We maintain this call, but due to uncertainty on Catalonia rather than on assumed USD strength. We remain cautious on USD/JPY despite this week's better performance. Event risk from whatever source might weigh on the pair

From a technical point of view, EUR/USD dropped below the 1.1823/ 1.2070 consolidation pattern, but no real test of the 1.1662 support occurred. Last week, the pair even returned (temporary?) above the 1.1823 previous range bottom, which was disappointing for EUR/USD bears. We maintain a cautious sell-on upticks bias. The pair needs to drop below 1.1670/62 support to really give comfort to EUR/USD bears. The USD/JPY momentum was constructive in September. The pair regained 110.67/95 (previous resistance), a short-term positive. The 114.49 correction top is the next important resistance. The rally lost momentum last week. A break beyond 114.49 looks ever more difficult.

EUR/USD: holding up well despite Catalan uncertainty

EUR/GBP

UK retail sales and EU summit in focus for sterling trading

Balanced comments from BoE gouvernor Carney earlier this week convinced markets that any BoE tightening will be modest. This continued to weigh on sterling yesterday. UK labour data were mixed. Wage growth was marginally stronger than expected at 2.2% Y/Y, but real wages remain negative (-0.4%). The small beat in wage growth didn't change market expectations that any BoE tightening will be very limited (probably only one hike). EUR/GBP temporary dropped a few ticks, but the move was soon reversed. The pair was further supported by a broader euro rebound later in the session. EUR/GBP finished the session at 0.8926 (from 0.8920). Cable was mainly driven by the overall swings in the dollar. The pair closed the session at 1.3205.

UK retail sales will be published today. Monthly data are very volatile. For September, a modest decline (-0.1% M/M) is expected after a strong rebound in August (1.0%). September CBI retail data were strong. So, the report shouldn't be too bad. Markets will also keep a close eye at the comments from the EU Summit. The UK will probably press to start with negotiations on trade and a transition period. The EU will probably repeat that there hasn't been made enough progress on the terms of the separation, but maybe the tone might be quite reconciliatory. We don't expect the data or the EU summit to bring any breaking news for sterling. We hold on to the view that any upside of sterling will be difficult as the recent rally has run into resistance. We look to buy EUR/GBP on dips.

EUR/GBP staged a strong uptrend from April till late August to set a top at 0.9307. Rising UK inflation data and hawkish BoE comments reinforced a sterling rebound, but this rebound has run its course. EUR/GBP supports at 0.8743 and 0.8652 proved difficult to break. The recent rebound above 0.89 improved the ST technical picture of EUR/GBP, but for now there were no convincing follow-through gains. EUR/GBP 0.9026 is 50% retracement of the recent countermove

EUR/GBP: sterling rebound runs into resistance as BoE tightening will be limited.

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