Sample Category Title

4 positions were entered among all 4 currency pairs with total loss of 25 points and the positions are listed below:

10 Oct : GBP/USD - Short at 1.3170, exited at 1.3195 (- 25 points)
12 Oct : USD/CHF - Short at 0.9755, 
13 Oct : USD/JPY - Short at 112.25,
13 Oct : GBP/USD - Long at 1.3250,

|                 JPY             EUR             CHF            GBP

Jan          + 167             - 85              - 10            + 50
Feb          + 200            +150             +93            - 59
Mar              -23              -70               -23            - 35
Apr             + 65            + 93             + 50            - 40
May            - 65             - 35             + 100          -175
Jun            -100               -10                - 10          +175
Jul             + 85             - 35                   - 8
Aug           + 35            +210                + 35             +65        
Sep           +129            +210              +200           - 70         
Oct                                                       - 35            - 25
Nov        
Dec                                                                                               
Y-T-D       + 492            +423               +392           -104     

With Fed chair Janet Yellen being confident that inflation measures will move towards the Fed's 2% target in the upcoming months and business conditions improving the most in three years in October according to a survey conducted by the New York Fed, the dollar index managed to gain 0.12% on the day, climbing to a 5-day high of 93.36. Dollar/yen stood flat around 111.81.

Meanwhile, in the fiscal policy front, a tax analysis released by the Trump administration on Monday tried to counter criticism that tax proposals are largely benefitting the rich, showing that middle-class earnings would increase by $4,000 under the new tax reforms.

The Catalan leader, Carles Puigdemont, missed the deadline set by the Spanish government, choosing instead to reply to the Spanish Prime Minister, Mariano Rajoy, with a letter, in which he insisted for both sides to start a dialogue over the next two months. As a response, Rajoy expressed through a written statement that Puigdemont would be "solely responsible" if the Spanish government takes control of the region, while Spain's Deputy Prime Minister, Soraya Sáenz de Santamaría warned that Madrid would take the "next step" unless Catalonia changes its stance by Thursday.

In terms of data released today out of the Eurozone, August's trade surplus narrowed to 16.1 billion euros as the growth in imports offset the rise in exports due to a stronger currency. Expectations were for trade surplus to increase by 0.1 billion euros to 23.3 billion.

The news above, however, had a moderate impact on the euro at a time when political concerns in other Eurozone countries (besides Spain) are on the rise, as traders were more confident that ECB policymakers will announce the tapering of the central bank's asset-buying program on October 26. Particularly, political risks involved the rising support for Euroskeptic parties in Sunday's national elections in Austria and in Germany the previous month, which gave the chance to far-right parties to enter the government after a long time of absence. The euro managed to recoup part of its losses against the dollar during the session, climbing to $1.1809 after earlier touching a one-week low of $1. 1779.Still, the pair remained 0.13% down on the day.

The pound was trading steadily around $1.3281 as the UK Prime Minister, Theresa May, was preparing for her meeting with the head of the European Commission, Jean Claude Junker, and the EU's Chief Brexit negotiator, Michel Barnier, in Brussels at 1630GMT. May's spokesman said on Monday that the British Prime Minister is expecting a "constructive" discussion that would contribute to her efforts for a smoother Brexit. CPI readings out of the UK will be also in focus on Wednesday with analysts forecasting headline inflation to rise slightly by 0.1 percentage points to 3.0% y/y in September.

The loonie was the worst performing major currency, tumbling to a one-week low as the time is ticking for NAFTA negotiations. The treaty was not successfully updated so far. Negotiators are seeking to extend the remaining rounds (three out of seven) to meet a deadline at the end of December after tough proposals by the Trump administration complicated the talks. Dollar/loonie gained 0.58%, last trading at 1.2538.

In energy markets, oil prices surged on the news that Iraq's Kurds disrupted oil production amounting to 350,000 bpd as tensions heightened with the Iraqi government. WTI crude jumped by 1.11% to $51.85 per barrel, while Brent drifted higher by 1.47% to $58.01.

The British pound is almost unchanged in the Monday session. In the North American session, GBP/USD is trading at 1.3279, down 0.01% since the Friday close. On the release front, there are no major events in the UK or the US. British Rightmove HPI rebounded in October with a gain of 1.2%, marking a 5-month high. In the US, the Empire State Manufacturing Index soared to 30.2 points, easily beating the estimate of 20.3 points. This was the indicator's highest level since 2009. On Tuesday, the UK releases a host of inflation indicators, led by CPI. The markets are expecting inflation to hit 3.0% in September, up from 2.9% a month earlier.

The Brexit talks are in trouble, as the sides have made little progress after several rounds of negotiations. Prime Minister Theresa May is hopeful of generating some positive momentum, as she meets on Monday with EU Commission President Jean-Claude Juncker and EU chief negotiator Michel Barnier. The Europeans have insisted that there must be progress on a number of issues, such as Britain's divorce payment, before they will discuss a trade deal. The EU holds a summit on Thursday, and could announce that they won't talk trade until next year. Both sides have been talking about the possibility of a 'hard Brexit' in which Britain would leave with no deal being reached, but British businesses are dead set against such a scenario, and are pushing for a 2-year interim period to soften the blow of leaving the EU.

Although the US economy has been performing well and the labor market remains red-hot, inflation numbers remain soft. There was some disappointment in the markets as September CPI and Core CPI narrowly missed their estimates. On the release front, CPI gained 0.5%, short of the estimate of 0.6%. Core CPI posted a small gain of 0.1%, shy of the forecast of 0.2%. With inflation an important consideration in future rate decisions by the Federal Reserve, investors will be anxiously monitoring how Fed policymakers respond to September's soft inflation numbers. Also on Friday, US retail sales data was a mix. Core Retail Sales gained 1.0%, above the estimate of 0.9%. However, retail sales were up 1.6%, short of the forecast of 1.7%.

The EUR/JPY dropped and touched fresh new lows today, even if the Nikkei stock index has increased further. The Yen increase also versus the Cable today, not only against the Euro. The JP225 has resumed the upside movement, has managed to reach the 21350 level and maintains a bullish perspective on the daily chart.

The Nikkei has increased sharply in the last weeks and seems poised to hit fresh new highs in the upcoming period, only a minor drop will force the Yen to accelerate the appreciation versus its rivals. The USD/JPY decreased in the last hours as the Nikkie stock index has slipped lower and erased some of the morning gains.

The Yen increased even if the Japanese Revised Industrial Production increased only by 2.0%, less versus the 2.1% estimate and versus the 2.1% growth in the former reading period. On the other hand, the Euro-zone Trade Balance and the German WPI have come in better than expected, but the Euro wasn't impressed.

The EUR/JPY opened with a gap down today, signaling that the bears are very strong on the short term. Price has come back to close the morning gap, but failed to stay above the 132.13 Friday's high. The next downside target will be at the upper median line (UML) of the major ascending pitchfork. Remains to see if we'll have a retest of the broken chart pattern, or will continue to drop. I've said in the previous weeks that only a valid breakdown below the UML will confirm a larger drop.

The rate has dropped today's and resumed the Friday's minor drop. Price is pressuring the 148.46 static support (resistance turned into support), but only a valid breakdown will signal a drop towards the first warning line (WL1) of the ascending pitchfork. However, a consolidation above the 148.46 will lead the rate towards the 151.66 level.

The EUR/CHF opened with a gap down and dropped as much as 1.1487 level. The bulls have stepped in again and have forced the rate to climb above the 1.1510 yesterday's low, but this could be only temporary and could drop again. The next downside target will be at the upper median line (uml) of the descending pitchfork.

USD/CHF - 0.9734

Most recent candlesticks pattern : N/A

Trend                                    : Near term down

Tenkan-Sen level                  : 0.9750

Kijun-Sen level                    : 0.9750

Ichimoku cloud top                 : 0.9739

Ichimoku cloud bottom              : 0.9739

Original strategy :

Sold at 0.9755, Target: 0.9655, Stop: 0.9775

Position : - Short at 0.9755

Target :  - 0.9655

Stop : - 0.9775

New strategy  :

Hold short entered at 0.9755, Target: 0.9655, Stop: 0.9775

Position : - Short at 0.9755

Target :  - 0.9655

Stop : - 0.9775

Although the greenback fell briefly to 0.9705 late last week, lack of follow through selling on break of previous support at 0.9710-12 and the subsequent strong rebound suggest consolidation above said support would be seen, however, as long as resistance at 0.9772 (Friday’s high) holds, bearishness remains for recent decline to resume after consolidation, below said support at 0.9705 would signal the decline from 0.9837 top has resumed and extend weakness to 0.9669-70 (61.8% Fibonacci retracement of 0.9565-0.9837 and previous support) but previous support at 0.9642 should remain intact.

In view of this, we are holding on to our short position entered at 0.9755. Above said resistance at 0.9772 would defer but only break of resistance at 0.9808 would signal low is formed and indicate the pullback from 0.9837 has ended, bring retest of this level later. 

GBP/USD - 1.3277

Most recent candlesticks pattern   : N/A

Trend                                 : Near term up

Tenkan-Sen level                 : 1.3280

Kijun-Sen level                    : 1.3284

Ichimoku cloud top              : 1.3261

Ichimoku cloud bottom        : 1.3230

Original strategy :

Bought at 1.3250, Target: 1.3350, Stop: 1.3245

Position : - Long at 1.3250

Target :  - 1.3350

Stop : - 1.3245

New strategy  :

Hold long entered at 1.3250, Target: 1.3350, Stop: 1.3245

Position : - Long at 1.3250

Target :  - 1.3350

Stop : - 1.3245

As the British pound has eased after Friday’s brief rise to 1.3338, suggesting minor consolidation below this level would be seen, however, as long as 1.3245-50 holds, bullishness remains for the rise from 1.3027 low to bring a stronger retracement of recent decline, hence gain to 1.3345-50 and then 1.3375-80 (61.8% Fibonacci retracement of 1.3596-1.3027), however, overbought condition should limit upside to 1.3400-10, bring another retreat later.

In view of this, we are holding on to our long position entered at 1.3250. Below 1.3245 would defer and risk test of the Kijun-Sen (now at 1.3223), break there would defer and suggest top is formed, bring weakness to 1.3200, then towards 1.3175 but said support at 1.3121 should remain intact. 

EUR/USD - 1.1798

Most recent candlesticks pattern   : N/A

Trend                      : Near term up

Tenkan-Sen level              : 1.1799

Kijun-Sen level                  : 1.1826

Ichimoku cloud top             : 1.1843

Ichimoku cloud bottom      : 1.1840

New strategy  :

Stand aside

Position : -

Target :  -

Stop : -

Despite Friday’s rebound to 1.1875, as the single currency has retreated after faltering below resistance at 1.1880, suggesting further consolidation below this last week’s high would be seen and pullback to 1.1775 (50% Fibonacci retracement of 1.1669-1.1880) cannot be rued out, however, reckon 1.1745-50 (61.8% Fibonacci retracement) would limit downside and bring rebound later.

On the upside, expect recovery to be limited to 1.1820-25 and 1.1850 should hold, bring another retreat later. Above 1.1850 would suggest the pullback from 1.1880 has ended and revive bullishness for retest of 1.1880, break there would confirm recent upmove from 1.1669 low has resumed for headway to 1.1895-00 (61.8% Fibonacci retracement of 1.2035-1.1669) first. As near term outlook is mixed, would be prudent to stand aside in the meantime.

The Japanese yen has started the week unchanged. In Monday's North American session, USD/JPY is trading at 1.1182, unchanged from the Friday close. On the release front, Japanese Revised Industrial Production rebounded sharply in August, with a gain of 2.0%. This was just shy of the forecast of 2.1%. In the US, the Empire State Manufacturing Index jumped to 30.2, crushing the forecast of 20.3 points. This marked its highest level since 2009.

On Sunday Bank of Japan Governor Haruhiko Kuroda reiterated that the BoJ remains firmly committed to its ultra-easing monetary policy. Kuroda spoke at a Group of 30 meeting in Washington, and said that the policy would remain in place until inflation levels moved higher. Kuroda acknowledged that the BOJ's inflation target of 2 percent was unlikely to be reached anytime soon, but he expected rising labor costs to push inflation levels higher. BoJ policymakers have echoed Kuroda's sentiment that inflation levels will move higher, but the data does not appear to support this optimism, and the BoJ has been forced to lower its inflation forecast a number of times in 2017. With the BoJ forecasting that inflation will not reach 2 percent until fiscal year 2020, it's a safe bet that the bank's accommodative policy won't be tightened any time soon.

The US economy continues to perform well in 2017 and the labor market remains close to capacity. However, this hasn't translated into stronger inflation, and there was some disappointment in the markets as September CPI and Core CPI missed their estimates. On the release front, CPI gained 0.5%, short of the estimate of 0.6%. Core CPI posted a small gain of 0.1%, shy of the forecast of 0.2%. With inflation an important consideration in future rate decisions by the Federal Reserve, investors will be anxiously monitoring how Fed policymakers respond to September's soft inflation numbers. According to CME FedWatch, the soft inflation numbers have not affected the odds of a December rate hike, as fed futures have currently priced a December hike at 91 percent.