Sample Category Title

Daily Pivots: (S1) 1.1813; (P) 1.1841 (R1) 1.1888; More...

EUR/USD dips mildly after hitting 1.1879. But still, with 1.1794 minor support intact, intraday bias stays on the upside for further rally. As noted before, pull back from 1.2091 should have completed at 1.1669, ahead of 1.1661 support. Further rise should be seen to retest 1.2091 high. We'll be cautious on strong resistance from there to bring another fall to extend the consolidation. On the downside, below 1.1794 minor support will turn bias back to the downside and could extend the correction from 1.2091 through 1.1669.

In the bigger picture, rise from medium term bottom at 1.0339 is not finished yet. It's expected to continue after pull back from 1.2091 completes. And, next target will be 38.2% retracement of 1.6039 (2008 high) to 1.0339 (2017 low) at 1.2516. However, it should be noted that there is no confirmation of trend reversal yet. That is, such rebound from 1.0399 could be a correction. And the long term fall from 1.6039 (2008 high) could resume. Hence, we'd be cautious on strong resistance from 1.2516 to limit upside.

Daily Pivots: (S1) 0.9709; (P) 0.9737; (R1) 0.9759; More....

USD/CHF recovers ahead of 0.9704 support and intraday bias stays neutral first. Considering bearish divergence condition in 4 hour MACD, break of 0.9704 resistance turned support will argue that rebound from 0.9420 has completed. This will also mixed up the near term outlook and turn bias back to the downside for 0.9587 support. Meanwhile, break of 0.9835 temporary top will extend the rebound to 61.8% retracement of 1.0342 to 0.9420 at 0.9990.

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 develop into a medium term move and 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 0.9587 support is now needed to indicate completion of the rise from 0.9420. Otherwise, further rally will remain in favor in medium term.

USD/CHF - 0.9750

Original strategy :

Sold at 0.9755, Target: 0.9655, Stop: 0.9790

Position : - Short at 0.9755

Target :  - 0.9655

Stop : - 0.9790

New strategy  :

Hold short entered at 0.9755, Target: 0.9655, Stop: 0.9790

Position : - Short at 0.9755

Target :  - 0.9655

Stop : - 0.9790

Although the greenback has rebounded after holding above previous support at 0.9710 and consolidation with initial upside bias is seen, reckon resistance at 0.9767-71 would limit upside and bearishness remains for the decline from 0.9837 top to resume after consolidation, below said support at 0.9710-12 would confirm 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 due to oversold condition.

In view of this, we are holding on to our short position entered at 0.9755. Only break of resistance at 0.9808 would signal an intra-day low is formed and indicate the pullback from 0.9837 has ended, bring retest of this level later. 

Daily Pivots: (S1) 112.18; (P) 112.38; (R1) 112.69; More...

No change in USD/JPY's outlook. The fall from 113.43 short term top is expected to extend lower. Intraday bias stays on the downside for 55 day EMA (now at 111.35) first. Sustained break there will bring retest of 107.31. For now, risk will stays on the downside as long as 113.43 resistance holds.

In the bigger picture, rise from 98.97 (2016 low) is seen as the second leg of the corrective pattern from 125.85 (2015 high). It's unclear whether this this second leg has completed at 118.65 or not. But medium term outlook will be mildly bearish as long as 114.49 resistance holds. And, there is prospect of breaking 98.97 ahead. Meanwhile, break of 114.49 will bring retest of 125.85 high. But even in that case, we don't expect a break there on first attempt.

GBP/USD - 1.3143

Sell at 1.3315, Target: 1.3215, Stop: 1.3350

Position : -

Target :  -

Stop : -

New strategy  :

Sell at 1.3200, Target: 1.3100, Stop: 1.3235

Position : -

Target :  -

Stop : -

Cable’s intra-day selloff below support at 1.3175 signals top is formed at 1.3265 earlier today in Asia and consolidation with downside bias is seen for weakness to 1.3100-10, however, break there is needed to retain bearishness and signal the rebound from 1.3027 has ended at 1.3265, bring further fall towards 1.3070-75 first.

In view of this, we are looking to sell cable on recovery as 1.3200 should limit upside. Above 1.3225-30 would risk a stronger rebound to 1.3250 but said intra-day high at 1.3265 should remain intact and bring another leg of decline later today or tomorrow.

Dollar rebounds in early US session as boosted by solid economic data. Initial jobless claims dropped 15k to 243k in the week ended October 7, as impacts of hurricanes faded. That's also notably better than expectation of 253k. Four week moving average of initial claims also dropped 9.5k to 257.5k. Continuing claims dropped 32k to 1.89m, hitting lowest in 44 years since 1973. Headline PPI rose 0.4% mom, 2.6% yoy in September, up from 0.2% mom and 2.4% yoy in August, met expectations. Core CPPI rose 0.4% mom and 2.2% yoy, up from 0.1% mom and 2.0% in August, and beat expectation of 0.2% mom, 2.0% yoy. The set of data helps greenback regains some of yesterday's post FOMC minutes losses.

More on FOMC Minutes

• Fed On Track To Raise Rate In December
• FOMC Minutes: Core Members Still Want To Hike In December
• Fed Minutes Show Confidence in Economic Outlook, But Some Concern Over Weak Inflation
• Fed Reaffirms Likely December Rate Hike Despite Concerns Over Weak Inflation

Sterling weakens broadly as Brexit negotiation hits deadlock

EU chief Brexit negotiator Michel Barnier expressed his frustrations after completing the fifth round of talks with UK. Barnier said that the issue of the divorce bill has reached a "state of deadlock which is very disturbing for thousands of project promoters in Europe and it's disturbing also for taxpayers." And, EU will be "ready to face any eventualities and all eventualities". And he also said clearly that "I am not able in the current circumstances to propose next week to the European Council that we should start discussions on the future relationship."One the other hand, UK Brexit Secretary David Davis insisted that "to provide certainty, we must talk about the future."

It now clear that the EU summit on October 19/20 next week won't result in a "go" signal for trade agreement discussions. The next key milestone will be the December 14 EU summit.

Staying in UK, a BoE survey showed that lenders reported biggest cut to unsecured loan availability since 2009 due to lower risk appetites and deteriorating economy outlook. Net balance of lenders reporting higher availability of unsecured loans dropped to -13 in Q3, down from -10.3. Meanwhile, net expectations for the availability of unsecured lending over the next three months dropped to -28.6, down from -16.2.

ECB Praet repeats his comments on asset purchases

ECB chief economist Peter Praet said that recovery in Eurozone remains "solid, broad-based and resilient". But it has "yet toe make sufficient progress towards a sustained adjustment in the path of inflation" to the central bank's target. ECB is indeed "some distance" away from hitting the target. Hence, monetary policy accommodation is still needed. Nonetheless, he also repeated earlier comments regarding the time and pace of asset purchase. He noted that "in more normal market conditions... investors may become 'more patient', or, in other words, better able to evaluate the stimulus that can be expected to come from a purchase plan that is to be executed over a more extended time interval." 

ECB is widely expected to "recalibrate" its asset purchase program this month on October 26. There are talks that ECB would lower the monthly purchase amount next year but extend the program. And various policymakers are clear that there won't be rate hikes before stopping asset purchases.

Elsewhere

Japan domestic CGPI rose 3.0% yoy in September. Tertiary industry index dropped -0.2% mom in August. Australia consumer inflation expectation rose 4.3% in October, home loans rose 1.0% in August. UK RICS house price balance was unchanged at 6 in September.

GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.3187; (P) 1.3211; (R1) 1.3247; More....

GBP/USD's rebound was limited at 1.3264, below 1.3291 resistance and reverses. At this point, it's staying above 1.3026 temporary low and intraday bias remains neutral first. Deeper fall is mildly in favor as long as 1.3291 minor resistance holds. Below 1.3026 will target 1.2773 key support level. Decisive break there will affirm the bearish case of medium term reversal. Nonetheless, break of 1.3291 will suggest that the pull back from 1.3651 is completed and turn bias back to the upside.

In the bigger picture, while the medium term rebound from 1.1946 was strong, GBP/USD hit strong resistance from the long term falling trend line. Outlook is turned a bit mixed and we'll turn neutral first. On the downside, decisive break of 1.2773 key support will argue that rebound from 1.1946 has completed. The corrective structure of rise from 1.1946 to 1.3651 will in turn suggest that long term down trend is now completed. Break of 1.1946 low should then be seen. On the upside, break of 1.3835 support turned resistance will revive the case of trend reversal and target 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466 .

Economic Indicators Update

Daily Pivots: (S1) 1.3187; (P) 1.3211; (R1) 1.3247; More....

GBP/USD's rebound was limited at 1.3264, below 1.3291 resistance and reverses. At this point, it's staying above 1.3026 temporary low and intraday bias remains neutral first. Deeper fall is mildly in favor as long as 1.3291 minor resistance holds. Below 1.3026 will target 1.2773 key support level. Decisive break there will affirm the bearish case of medium term reversal. Nonetheless, break of 1.3291 will suggest that the pull back from 1.3651 is completed and turn bias back to the upside.

In the bigger picture, while the medium term rebound from 1.1946 was strong, GBP/USD hit strong resistance from the long term falling trend line. Outlook is turned a bit mixed and we'll turn neutral first. On the downside, decisive break of 1.2773 key support will argue that rebound from 1.1946 has completed. The corrective structure of rise from 1.1946 to 1.3651 will in turn suggest that long term down trend is now completed. Break of 1.1946 low should then be seen. On the upside, break of 1.3835 support turned resistance will revive the case of trend reversal and target 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466 .

EUR/USD - 1.1847

Original strategy  :

Buy at 1.1820, Target: 1.1920, Stop: 1.1785

Position : -

Target :  -

Stop : -

New strategy  :

Buy at 1.1805, Target: 1.1905, Stop: 1.1770

Position : -

Target :  -

Stop : -

As the single currency has retreated after rising to 1.1880 earlier today, suggesting minor consolidation below this level would be seen and pullback to 1.1815-20 (38.2% Fibonacci retracement of 1.1719-1.1880) is likely, however, reckon 1.1800-01 (50% Fibonacci retracement and previous support) would contain downside and bring another rise later, above said resistance at 1.1880 would signal the rise from 1.1669 low is still in progress for gain to 1.1895-00 (61.8% Fibonacci retracement of 1.2035-1.1669) but overbought condition should prevent sharp move beyond 1.1930-35 (61.8% Fibonacci retracement of 1.2093-1.1669) and 1.1970 should remain intact.

In view of this, would not chase this rise here and we are still looking to buy euro on subsequent pullback as 1.1800-05 should limit downside and bring another rebound. Below minor support at 1.1795 would defer and risk correction to 1.1770 but downside should be limited to 1.1745-50 and price should stay above indicated support at 1.1719, bring another rise later. 

USD/JPY - 112.43

Original strategy  :

Sell at 112.80, Target: 111.80, Stop: 113.15

Position :  -

Target :  -

Stop : -

New strategy  :

Sell at 112.80, Target: 111.80, Stop: 113.15

Position :  -

Target :  -

Stop : -

Although dollar has retreated after faltering below resistance at 112.59, as long as this week’s low at 111.99 holds, risk of another rebound to 112.70-75 (50% Fibonacci retracement of 113.44-111.99) cannot be ruled out, however, reckon 112.83-89 (yesterday’s high and 61.8% Fibonacci retracement) would limit upside and bring another decline later, below said support at 111.99 would add credence to our view that top has been formed at 113.44 and extend weakness to 111.75-80, then towards 111.47 support but oversold condition would limit downside and reckon 111.11 support would remain intact.

In view of this, we are looking to sell dollar on recovery as 112.83 resistance should limit upside and bring another decline. A break of indicated level at 112.83-89 would abort and signal low is formed, bring a stronger rebound to 113.10-20 but price should falter well below said last week’s high at 113.44. 

The cross rallied strongly after disappointing Brexit news, surging through psychological 0.9000 barrier and dented strong resistance at 0.9024, provided by base of thick daily cloud.

Today's fresh bullish acceleration signals resumption of larger uptrend from 0.8745 (27 Sep low) which was paused for 0.8992/0.8906 consolidation before bulls resumed.

Clear break above cloud base would generate fresh bullish signal and open way towards next target at 0.9092 (Fibo 61.8% of 0.9306/0.8745 (29 Aug/27Sep descend).

Daily studies are turning into full bullish setup and are supportive for further advance.

However, hesitation at key barrier at 0.9024 cannot be ruled out as slow stochastic is re-entering overbought territory and forming bearish divergence which may delay bulls.

Broken daily Kijun-sen at 0.8974 should keep the downside protected.

Res: 0.9032; 0.9047; 0.9092; 0.9165
Sup: 0.9000; 0.8974; 0.8916; 0.8906