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Daily Pivots: (S1) 145.45; (P) 146.12; (R1) 147.07; More...

USD/JPY's decline from 151.93 accelerated lower today Break of 38.2% retracement of 130.38 to 151.93 at 143.69 argues that fall form 151.93 is correcting larger up trend. In this case, deeper decline would be seen to 130.38/139.37 support zone. On the other hand, strong rebound from current level, followed by break of 146.78 resistance, will indicate that such correction has completed, and turn bias back to the upside.

In the bigger picture, sustained trading below 55 day EMA (now at 144.44) will argue that 151.93 is a medium term top. Fall from there is correcting larger up trend from 102.58. While it's too early to call for trend reversal, deeper decline would then be seen to 55 week EMA (now at 130.73).

Daily Pivots: (S1) 0.9802; (P) 0.9838; (R1) 0.9876; More...

USD/CHF's fall from 1.0146 accelerates lower today and intraday bias stays on the downside. Next target is 61.8% retracement of 0.9369 to 1.0146 at 0.9666. Sustained break there will raise the chance of larger reversal. On the upside, above 0.9897 minor resistance will turn intraday bias neutral first.

In the bigger picture, a medium term top should be in place at 1.0146 on bearish divergence condition in daily MACD. Fall from 1.0146 support is currently seen as a correction to rise from 0.9369 only. That is, another rise could still be seen through 1.0146. However, sustained break of 61.8% retracement of 0.9369 to 1.0146 at 0.9666 will raise the chance of larger reversal, and target 55 week EMA (now at 0.9578).

Daily Pivots: (S1) 1.1272; (P) 1.1420; (R1) 1.1505; More...

Immediate focus is now on 1.1644 resistance. Decisive break there will resume larger rise from 1.0351. Further break of 1.1759 support turned resistance will carry larger bullish implication and target 1.2292 resistance next. On the downside, break of 1.1145 support will turn bias back to the downside for retesting 1.0351 low instead.

In the bigger picture, fall from 1.4248 (2018 high) is part of the long term down trend from 2.1161 (2007 high). Outlook will stay bearish as long as 1.1759 support turned resistance holds. Parity would be the next target on resumption. Nevertheless, firm break of 1.1759 will confirm medium term bottoming, and open up stronger rise back to 55 week EMA (now at 1.2330).

Daily Pivots: (S1) 0.9975; (P) 1.0031; (R1) 1.0070; More...

EUR/USD's break of 1.0092 resistance now confirms resumption of whole rebound from 0.9534. Intraday bias is back on the upside for 38.2% retracement of 1.1494 to 0.9534 at 1.0283, even as a corrective rise. Sustained break there will target 55 week EMA (now at 1.0567). On the downside, break of 0.9934 will dampen the bullish case and turn intraday bias neutral first.

In the bigger picture, break of the medium term channel resistance, bullish convergence condition in daily MACD, as well as some support from 55 day EMA are bullish signs. A medium term bottom should be in place at 0.9534. Stronger rebound should be seen back towards 55 week EMA (now at 1.0567). It's still early to conclude that the medium term trend is reversing, at least until sustained break of 55 week EMA.

Dollar dives sharply in early US session after lower than expected CPI readings. CPI might have really started to turn around, and that would support Fed to start slowing the pace of tightening. For now, Sterling, Aussie and Yen are the strongest ones while Swiss Franc and Euro are lagging behind. But it will take some more time to find out whole's the biggest beneficiary of the Dollar selloff.

Technically, USD/JPY will be the most interesting one to watch as it's now pressing 38.2% retracement of 130.38 to 151.93 at 143.69. Sustained break there will argue that fall from 151.93 is not just correcting the rise from 130.38, but also a larger up trend. If that's true, there is prospect of deeper decline, as a medium term correction, back to 130.38/139.37 support zone.

In Europe, at the time of writing, FTSE is up 1.15%. DAX is up 2.33%. CAC is up 1.16%. Germany 10-year yield is down -0.167 at 2.004. Earlier in Asia, Nikkei dropped -0.98%. Hong Kong HSI dropped -1.70%. China Shanghai SSE dropped -0.39%. Singapore Strait Times rose 0.24%. Japan 10-year JGB yield is down -0.0128 at 0.246.

US CPI slowed to 7.7% yoy, CPI core slowed to 6.3% yoy, below expectations

US CPI rose 0.4% mom in October, below expectation of 0.7% mom. Core CPI rose 0.3% mom, below expectation of 0.5% mom. Energy rose 1.8% mom while food rose 0.6% mom.

Over the last 12 months, CPI slowed from 8.2% yoy to 7.7% yoy, below expectation of 8.0% yoy. That's the lowest rate since January this year. Core CPI slowed from 6.6% yoy to 6.3% yoy, below expectation of 6.5% yoy. Energy index was up 17.6% yoy while food was up 10.9% yoy.

US initial jobless claims rose 7k to 225k

US initial jobless claims rose 7k to 225k in the week ending November 5. Four-week moving average of initial claims rose 250 to 218.75k.

Continuing claims rose 6k to 1493k in the week ending October 29. Four-week moving average of continuing claims rose 32k to 1450k.

ECB bulletin: Further weakening of economy into beginning of 2023

In the monthly economic bulletin, ECB said the Governing Council expects a "further weakening" of economic activity "in the remainder of 2022 and the beginning of 2023".

High inflation continues to "dampen spending and production" and severe disruptions in gas supply "have worsened the situation further".

Additionally, "worsening terms of trade", with imports prices rising faster than exports prices, are "weighing on incomes in the euro area".

Risks to the economic growth outlook are "clearly on the downside, especially in the near term". Risks to the inflation outlook are "primarily on the upside".

ECB's future policy rate decisions will continue to be "data dependent" and follow a "meeting-by-meeting approach".

BoJ Kuroda: Premature to lay out details of exit strategy

BoJ Governor Haruhiko Kuroda told the parliament, "it's premature to lay out details of an exit strategy. But one major factor of debate will be the pace of increase in the BoJ's short-term policy rate, now set at -0.1%."

"Another factor would be how to adjust its balance sheet," he said, noting that other major central banks adopted the sequence of interest rate hike first, then shrinking balance sheet.

"It's extremely important for the BOJ to underpin the economy with ultra-loose monetary policy and ensure the necessary environment is falling into place for companies to hike wages," Kuroda emphasized.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 0.9975; (P) 1.0031; (R1) 1.0070; More...

EUR/USD's break of 1.0092 resistance now confirms resumption of whole rebound from 0.9534. Intraday bias is back on the upside for 38.2% retracement of 1.1494 to 0.9534 at 1.0283, even as a corrective rise. Sustained break there will target 55 week EMA (now at 1.0567). On the downside, break of 0.9934 will dampen the bullish case and turn intraday bias neutral first.

In the bigger picture, break of the medium term channel resistance, bullish convergence condition in daily MACD, as well as some support from 55 day EMA are bullish signs. A medium term bottom should be in place at 0.9534. Stronger rebound should be seen back towards 55 week EMA (now at 1.0567). It's still early to conclude that the medium term trend is reversing, at least until sustained break of 55 week EMA.

Economic Indicators Update

US initial jobless claims rose 7k to 225k in the week ending November 5. Four-week moving average of initial claims rose 250 to 218.75k.

Continuing claims rose 6k to 1493k in the week ending October 29. Four-week moving average of continuing claims rose 32k to 1450k.

Full release here.

US CPI rose 0.4% mom in October, below expectation of 0.7% mom. Core CPI rose 0.3% mom, below expectation of 0.5% mom. Energy rose 1.8% mom while food rose 0.6% mom.

Over the last 12 months, CPI slowed from 8.2% yoy to 7.7% yoy, below expectation of 8.0% yoy. That's the lowest rate since January this year. Core CPI slowed from 6.6% yoy to 6.3% yoy, below expectation of 6.5% yoy. Energy index was up 17.6% yoy while food was up 10.9% yoy.

Full release here.

Cable is consolidating within a narrow range, following Wednesday’s 1.6% drop, which retraced over 50% of the recent 1.1146/1.1599 upleg.

Although a reversal pattern formed on a daily chart, fresh bears face strong headwinds from significant support at 1.1319 (top of thick daily cloud / Fibo 61.8%) which so far keeps the downside protected and prevent confirmation of reversal.

Daily studies are currently mixed, but expected to remain slightly biased higher while the action stays above the cloud, though lift and close above 10DMA (1.1427) is needed to revive bulls and extension above psychological 1.15 level to confirm.

Conversely, penetration of daily cloud and extension through daily Kijun-sen (1.1284) would add to bearish stance and risk deeper fall.

Traders look for US inflation data to get clearer signals, with October’s figure at / below forecast (8%) to deflate dollar and give fresh boost to sterling, while higher than expected result would add to the story of Fed’s continuous aggressive policy tightening, which is expected to be dollar supportive.

Res: 1.1426; 1.1500; 1.1567; 1.1599.
Sup: 1.1333; 1.1319; 1.1284; 1.1253.

In the monthly economic bulletin, ECB said the Governing Council expects a "further weakening" of economic activity "in the remainder of 2022 and the beginning of 2023".

High inflation continues to "dampen spending and production" and severe disruptions in gas supply "have worsened the situation further".

Additionally, "worsening terms of trade", with imports prices rising faster than exports prices, are "weighing on incomes in the euro area".

Risks to the economic growth outlook are "clearly on the downside, especially in the near term". Risks to the inflation outlook are "primarily on the upside".

ECB's future policy rate decisions will continue to be "data dependent" and follow a "meeting-by-meeting approach".

Full monthly bulletin here.

WTI oil futures (December delivery) have been experiencing a prolonged decline since mid-June when the price failed to surpass the 121.00 mark. Although the commodity managed to erase a part of its downtrend after bouncing at the nine-month low of 76.25, the technical picture has deteriorated again in the last couple of daily sessions.

The momentum indicators currently suggest that bearish forces are strengthening. Specifically, the stochastic oscillator is descending near its 20-oversold zone, while the MACD histogram has dived beneath its red signal line but holds above zero.

If selling pressures persist and the price crosses below the 50-day simple moving average (SMA), initial resistance could be met at the recent support of 81.30. Should that floor collapse, the bears could then aim for 78.40. A violation of the latter may trigger a retreat towards the nine-month low of 76.25.

On the flipside, if buyers regain control, oil futures might ascend towards the 90.00 psychological mark before the recent peak of 93.70 comes under examination. Conquering this barricade, further advances could then stall at the 97.50 region, which overlaps with the 200-day SMA. Even higher, the 102.00 hurdle could prove a tough one for the price to overcome.

Overall, WTI oil futures appear to be losing ground as negative momentum intensifies. Therefore, a successful break below the 50-day SMA might accelerate the downfall.