Sample Category Title

Daily Pivots: (S1) 1.5489; (P) 1.5538; (R1) 1.5618; More...

Focus is back on 1.5704 in EUR/AUD with current strong rebound. Firm break there will resume larger up trend from 1.4281. Next target will be 61.8% projection of 1.4716 to 1.5704 from 1.5267 at 1.5878, and then 100% projection at 1.6255. In case of another fall as correction from 1.5704 extends, downside should contained by 55 day EMA (now at 1.5245) to bring rebound.

In the bigger picture, a medium term bottom should be in place at 1.4281, on bullish convergence condition in daily MACD. Further rise would be seen back to 1.6434 key resistance next. Break of 1.4965 resistance turned support is needed to indicate reversal. Otherwise, further rally will remain in favor.

Daily Pivots: (S1) 0.8746; (P) 0.8787; (R1) 0.8858; More...

EUR/GBP's break of 0.8779 resistance suggests that pull back form 0.9267 has completed at 0.8570. Intraday bias is back on the upside for 0.8869 resistance first. Firm break there will target retest of 0.9267 high. On the downside, below 0.8689 minor support will turn bias back to the downside for 0.8570 instead.

In the bigger picture, current development suggests that fall from 0.9267 is a down leg inside long term range pattern. Deeper fall could be seen towards 0.8201/8338 support zone. But strong support should be seen there to bring reversal. Nevertheless, firm break of 0.8869 resistance will turn favor to the case that such decline is merely a correction in the up trend from 0.8201. That is, further rally would be seen at a later stage through 0.9267.

Daily Pivots: (S1) 146.24; (P) 146.68; (R1) 147.03; More....

EUR/JPY is staying in consolidation from 148.38 and intraday bias remains neutral for the moment. In case of another fall, downside should be contained by 55 day EMA (now at 143.62) to bring rise resumption. On the upside, break of 148.38 will resume larger up trend to 149.76 long term resistance next.

In the bigger picture, the up trend from 114.42 (2020 low) is still in progress for 149.76 (2014 high). Decisive break there will pave the way to 161.8% projection of 114.42 to 134.11 from 124.37 at 156.22. This will now remain the favored case as long as 137.32 support holds.

Daily Pivots: (S1) 165.39; (P) 166.85; (R1) 167.73; More...

GBP/JPY is extending the consolidation from 172.11 and intraday bias stays neutral first. Overall, further rally is mildly in favor with 164.95 support intact. On the upside, break of 172.11 will resume larger up trend. However, break of 164.95 will bring deeper pull back to 159.71 support and below.

In the bigger picture, up trend from 123.94 (2020 low), as part of the trend from 122.75 (2016 low) is still in progress. Further rise would be seen to 161.8% projection of 122.75 to 156.59 (2018 high) from 123.94 at 178.69. This will now remain the favored case as long as 148.93 support holds.

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

Intraday bias in EUR/USD remains neutral for the moment. On the upside, firm break of 1.0092 will resume whole rise from 0.9534. Further rally should then be seen to 38.2% retracement of 1.1494 to 0.9534 at 1.0283, even as a corrective rise. On the downside, however, break of 0.9907 minor support will turn bias back to the downside for 0.9729 support first. Break there should bring retest of 0.9534 low.

In the bigger picture, medium term outlook stays bearish with trading inside the falling channel. That is larger down trend from 1.2348 (2021 high) is still in progress. Firm break of 0.9534 low will confirm this bearish case. However, break of 1.0092 will add to the case of medium term bottoming, on bullish convergence condition in daily MACD, and bring further rally towards 55 week EMA (now at 1.0583).

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

Intraday bias in GBP/USD remains neutral as range trading continues. On the upside, break of 1.1644 will resume the whole rise from 1.0351 and target 1.1759/2292 resistance zone. On the downside, break of 1.1145 will reaffirm the case that corrective rise from 1.0351 has completed at 1.1644. Deeper fall would then be seen back to 1.0922 support and below.

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 1.2357).

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

Intraday bias in USD/CHF remains on the downside and outlook is unchanged. A double top pattern should be completed (1.0146, 1.0146). Deeper fall should be seen to 61.8% retracement of 0.9369 to 1.0146 at 0.9666. On the upside, above 0.9925 minor resistance will turn intraday bias neutral first.

In the bigger picture, upside momentum is diminishing as seen in daily MACD. But up trend from 0.8756 (2021 low) is still in favor to resume as long as 0.9799 support holds. Break of 1.0146 will target 1.0342 (2016 high). However, sustained break of 0.9779 will suggest that a large scale correction, at least, is underway.

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

Outlook in USD/JPY remains unchanged as consolidation from 151.93 is still in progress. Intraday bias stays neutral. Deeper decline might be seen but downside should be contained by 38.2% retracement of 130.38 to 151.93 at 143.69 to bring rebound. On the upside, above 148.84 minor resistance will bring stronger rebound back towards 151.93 high. But upside should be limited there to continue the corrective pattern.

In the bigger picture, up trend from 101.18 is still in progress, as part of the whole up trend from 75.56 (2011 low). 147.68 (1998 high) was already met and there is no clearly sign of topping yet. In any case, break of 140.33 support is needed to be the first sign of medium term topping. Otherwise, further rise is in favor to next target at 160.16 (1990 high).

Daily Pivots: (S1) 1.3444; (P) 1.3493; (R1) 1.3575; More....

USD/CAD recovered after hitting 1.3386 and intraday bias is turned neutral first. On the upside, firm break of 1.3351 minor resistance will invalidate the head and shoulder top pattern. Bias will be turned back to the upside for 1.3807 resistance first, and then retest of 1.3976 high. On the downside, break of 1.3386 will resume the correction from 1.3976 towards 1.3207 cluster support (61.8% retracement of 1.2726 to 1.3976 at 1.3204).

In the bigger picture, up trend from 1.2005 (2021 low) is still in progress. Based on current impulsive momentum, it could be resuming long term up trend from 0.9056 (2007 low). Whether it is or it isn't, retest of 1.4689 (2016 high) should be seen next. This will now remain the favored case as long as 1.3222 resistance turned support holds.

Republicans gained field in this week’s US midterm elections, but much less than they expected. While the Republicans have a slim majority in the House, it’s still too close to call for who will control the Senate. We may not get the final picture until December 6 runoff in Georgia.

Less aggressive support for the Republicans, and more importantly, looming uncertainty, are the major factors that weighed on investor sentiment yesterday. The S&P500 slid more than 2%, Dow Jones lost 1.95%, while Nasdaq dumped 2.40%. The selloff was also fueled by the shaking crypto markets, and perhaps some investors taking risk off the table before the US inflation data, due today.

FTX drama got worse

The FTX drama got only worse since yesterday, as Binance, which gave a nonbinding offer to buy FTX on Tuesday, pulled out citing due diligence and a US probe into the exchange.

FTT lost another 71% yesterday, and FTX could go bankrupt if they don’t find a $8 bn cash injection.

Watching, what used to be the world’s 4th biggest crypto exchange go under the water, triggered panic across the sector, getting investors to question, whether FTX is an isolated case, or this is just the tip of the iceberg, and if and how many of the cryptocurrency exchanges may haves similar insolvency problems, that are only waiting to get revealed.

Bitcoin slumped another 15% yesterday, and traded below the $16000 for the first time in two years, while Ethereum dumped another 17.50%, and broke the October support to the downside.

No one can tell you exactly what will happen from here, but the downside risks prevail, with the risk of FTX not being saved by investors.

Beyond that, the contagion will likely remain limited. However, we may not see Bitcoin take back the $20’000 for a long time, not because of the industry-wide drama, but also because market conditions beyond cryptocurrencies is not necessarily ideal for risk-taking, and hence may not support a full recovery from here.

US inflation

Investors hold their breath before the US inflation data due today. Headline inflation in the US is expected to have eased from 8.2%, to 8% in October, and core inflation is seen softer at 6.5%, compared to 6.6% printed a month earlier.

Data in line with expectations, or ideally softer than expected, should help keeping the Federal Reserve (Fed) hawks at bay, and contain the market selloff, whereas figures above expectations would be another hit to the investor sentiment, and send equities lower, yields, and the US dollar higher.

PS: in six of the prior seven months, inflation exceeded expectations. So, there is a good chance that it’s the case this time around as well.

In the FX & Commodities

The US dollar rebounded yesterday on the back of a better-than-expected Democrat results, and some repositioning before today’s inflation data. The EURUSD held ground above parity, as the euro-area inflation expectations for the next twelve months rose from 5% to 5.1% in September. Not a big change really, but enough to remind investors that the European Central Bank (ECB) will continue fighting inflation in the coming months (even if it doesn’t really reflect in the euro’s valuation, which almost fully depends on what the Fed does).

In commodities, gold held ground above the $1700 mark. Whether the yellow metal could sustainably move above the 100-DMA, near $1715 per ounce, depends on the broad-based US dollar strength.

Oil fell another 3.5% yesterday, partly on news that Covid cases in China are rising – which may mean more restrictive measures, and partly on the EIA data, which confirmed that the US oil inventories increased by 3.9 million barrels last week, compared to only 300’000 barrel build expected by analysts.

On the geopolitical front, Russia pulled troops out of Kherson. Kherson was one of the first Ukrainian cities to be occupied when Russians invaded the country, and had a symbolic importance. Therefore, the announcement that Russians are pulling out has been described as a ‘humiliating defeat’ for Russia.

We don’t know yet if the Ukrainian conflict enters a new phase, and what Russia plans to do next. European stocks briefly gained as the news broke in yesterday, but enthusiasm remained short-lived.