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UK payrolled employment rose 69k in September, or 0.2% mom, to 29.7m. Total growth over the 12-month period was 714k. Median monthly pay rose 6.3% yoy to GBP 2131.

In the three-month period to August, unemployment rate dropped to 3.5%, down -0.3% from the previous three-month period. Employment rate also dropped -0.3% to 75.5%. Economic inactivity rate rose 0.6% to 21.7%. Totally weekly hours dropped -0.4% to 1046m.

Average earnings excluding bonus rose 5.4% 3moy in August, up from 5.2%. Average earnings including bonus rose 6.0% 3moy, up from 5.5% 3moy.

Full release here.

Daily Pivots: (S1) 1.3728; (P) 1.3756; (R1) 1.3808; More...

USD/CAD's rally resumed by breaking 1.3832 and intraday bias is back on the upside. Current up trend should target 161.8% projection of 1.2005 to 1.2947 from 1.2401 at 1.3925. Decisive break there will target 200% projection at 1.4285. On the downside,e below 1.3701 minor support will turn intraday bias neutral first. but outlook will stays bullish as long as 1.3501 support holds, in case of retreat.

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.

Dollar extends its near term rally in Asian session, with support from risk-off sentiment, while US 10-year yield is flirting with 4% handle. Yen is also firm, and has the potential to overwhelm the greenback if Japan steps into the markets again. Commodity currencies are the weakest one so far, with Aussie being the worst. European majors are mixed for now.

Technically, Dollar's rally is making progress with break of 1.3832 resistance in USD/CAD and 0.9964 resistance in USD/CHF. NZD/USD has also resumed down trend by falling through 0.5563 support. Near term outlook will stay bearish in NZD/USD as long as 0.5812 support holds. Next target is pandemic low at 0.5467.

In Asia, at the time of writing, Nikkei is down 2.54%. Hong Kong HSI is down -1.56%. China Shanghai SSE is up 0.40%. Singapore Strait times is down -0.12%. Japan 10-year JGB yield is down -0.0011 at 0.253.

Fed Brainard: Monetary policy will be restrictive for some time

Fed Vice Chair Lael Brainard said in a speech, "monetary policy will be restrictive for some time to ensure that inflation moves back to target over time."

"It will take time for the cumulative effect of tighter monetary policy to work through the economy broadly and to bring inflation down."

"In light of elevated global economic and financial uncertainty, moving forward deliberately and in a data-dependent manner will enable us to learn how economic activity, employment, and inflation are adjusting to cumulative tightening in order to inform our assessments of the path of the policy rate." She said.

Japan Suzuki: Will take appropriate action on excessive Yen moves

Japanese Finance Minister Shunichi Suzuki reiterated today, "we will take appropriate action if there are any excessive moves" in Yen's exchange rate. The comment came as Yen threatens to decline further towards the lowest level since 1998 again.

Suzuki also said, Japan is closely watching current FX moves with a "strong sene of urgency". He planned to explain the stance on intervention at G20 meeting. He said that Japan have gained "certain understanding" from the US regarding intervention.

Australia Westpac consumer sentiment dropped to 83.7, RBA averted a much bigger fall

Australia Westpac Consumer Sentiment Index dropped -0.9% mom to 83.7 in October. Westpac said the index remains in "deeply pessimistic territory", at a level comparable to the lows "briefly reached during the pandemic", and during the Global Financial Crisis.

It added RBA's smaller than expected 25bps rate hike "averted a much bigger fall" in sentiment. Sentiment amongst those sampled before the RBA decision showed a "depressing" 77.4 index read. But the post RBA "relief rebound" is "unlikely to be repeated in future months".

Westpac expects four more consecutive 25bps rate hikes at RBA's November, December, February and March meetings.

Australia NAB business conditions rose to 25, confidence dropped to 5

Australia NAB Business Confidence dropped from 10 to 5 in September. Business Conditions rose from 22 to 25. Trading conditions rose from 29 to 38. Profitability conditions was unchanged at 19. Employment conditions dropped from 17 to 16.

"Conditions are now higher than their pre-COVID peak, which shows just how strong demand is at present," said NAB Chief Economist Alan Oster. "The current level of conditions are only exceeded by the post-lockdown surge in early 2021. Clearly, consumers are still finding a way to keep spending, with the very strong labour market, savings buffers and a broader post-pandemic recovery all playing a role."

"Confidence eased in the month but is still around the long-run average in the history of the survey," said Oster. "The confidence index has been volatile recently but is clearly a little lower than it was early in the year when the passing of the Omicron wave was providing a strong reason for optimism. Still, businesses are far from pessimistic."

Looking ahead

UK employment data is the main focus today. Italy will release industrial production.

USD/CAD Daily Outlook

Daily Pivots: (S1) 1.3728; (P) 1.3756; (R1) 1.3808; More...

USD/CAD's rally resumed by breaking 1.3832 and intraday bias is back on the upside. Current up trend should target 161.8% projection of 1.2005 to 1.2947 from 1.2401 at 1.3925. Decisive break there will target 200% projection at 1.4285. On the downside,e below 1.3701 minor support will turn intraday bias neutral first. but outlook will stays bullish as long as 1.3501 support holds, in case of retreat.

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.

Economic Indicators Update

Australia NAB Business Confidence dropped from 10 to 5 in September. Business Conditions rose from 22 to 25. Trading conditions rose from 29 to 38. Profitability conditions was unchanged at 19. Employment conditions dropped from 17 to 16.

"Conditions are now higher than their pre-COVID peak, which shows just how strong demand is at present," said NAB Chief Economist Alan Oster. "The current level of conditions are only exceeded by the post-lockdown surge in early 2021. Clearly, consumers are still finding a way to keep spending, with the very strong labour market, savings buffers and a broader post-pandemic recovery all playing a role."

"Confidence eased in the month but is still around the long-run average in the history of the survey," said Oster. "The confidence index has been volatile recently but is clearly a little lower than it was early in the year when the passing of the Omicron wave was providing a strong reason for optimism. Still, businesses are far from pessimistic."

Full release here.

Australia Westpac Consumer Sentiment Index dropped -0.9% mom to 83.7 in October. Westpac said the index remains in "deeply pessimistic territory", at a level comparable to the lows "briefly reached during the pandemic", and during the Global Financial Crisis.

It added RBA's smaller than expected 25bps rate hike "averted a much bigger fall" in sentiment. Sentiment amongst those sampled before the RBA decision showed a "depressing" 77.4 index read. But the post RBA "relief rebound" is "unlikely to be repeated in future months".

Westpac expects four more consecutive 25bps rate hikes at RBA's November, December, February and March meetings.

Full release here.

Japanese Finance Minister Shunichi Suzuki reiterated today, "we will take appropriate action if there are any excessive moves" in Yen's exchange rate. The comment came as Yen threatens to decline further towards the lowest level since 1998 again.

Suzuki also said, Japan is closely watching current FX moves with a "strong sene of urgency". He planned to explain the stance on intervention at G20 meeting. He said that Japan have gained "certain understanding" from the US regarding intervention.

Fed Vice Chair Lael Brainard said in a speech, "monetary policy will be restrictive for some time to ensure that inflation moves back to target over time."

"It will take time for the cumulative effect of tighter monetary policy to work through the economy broadly and to bring inflation down."

"In light of elevated global economic and financial uncertainty, moving forward deliberately and in a data-dependent manner will enable us to learn how economic activity, employment, and inflation are adjusting to cumulative tightening in order to inform our assessments of the path of the policy rate." She said.

Full speech here.

Key Highlights

• GBP/USD started a fresh decline from the 1.1500 resistance zone.
• It traded below a key bullish trend line with support at 1.1175 on the 4-hours chart.
• EUR/USD, AUD/USD, and NZD/USD faced an increase in selling pressure.
• The UK Claimant count could change -11.4K in Sep 2022.

GBP/USD Technical Analysis

The British Pound struggled to clear the 1.1500 resistance zone against the US Dollar. GBP/USD formed a short-term top and started a fresh decline below the 1.1400 level.

Looking at the 4-hours chart, the pair declined below the 1.1350 and 1.1300 levels. There was a clear move below a key bullish trend line with support at 1.1175. The pair declined below the 23.6% Fib retracement level of the upward move from the 1.0335 swing low to 1.1495 high.

The pair settled below the 1.1200 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).

On the downside, an initial support is near the 1.0950 level. The main support sits at the 1.0915 level. It is close to the 50% Fib retracement level of the upward move from the 1.0335 swing low to 1.1495 high.

A downside break below the 1.0915 zone might send the pair towards the 1.0800 level. If the pair stays above the 1.0915 support, it could start a fresh increase. An immediate resistance is near the 1.1175 level.

The next major resistance is near the 1.1250 level. A clear move above the 1.1250 level might send the pair towards the 1.1320 level. The next major hurdle could be near the 1.1500 level.

Looking at EUR/USD, the pair started a fresh decline after it failed to clear the 1.0000 level. If the bears remain in action, the pair might slide below 0.9650.

Economic Releases

• UK Claimant Count Change for Sep 2022 – Forecast -11.4K, versus 6.3K previous.
• UK ILO Unemployment Rate for August 2022 (3M) – Forecast 3.6%, versus 3.6% previous.

Short term Elliott Wave view on USDCAD suggests the cycle from 8.11.2022 low is in progress as a 5 waves impulse structure. Up from 8.11.2022 low, wave (1) ended at 1.3208 and dips in wave (2) ended at 1.295. Pair then resumes higher in wave (3) towards 1.3833. Pullback in wave (4) ended at 1.35 with internal subdivision as a zigzag structure. Down from wave (3), wave A ended at 1.36, rally in wave B ended at 1.383, and wave C lower ended at 1.35. This completed wave (4) in higher degree.

Wave (5) higher is in progress with internal subdivision as another 5 waves in lesser degree. Up from wave (4), wave ((i)) ended at 1.3695 and pullback in wave ((ii)) ended at 1.356. Pair then resumes higher in wave ((iii)) towards 1.376 and dips in wave ((iv)) ended at 1.367. Expect pair to end wave ((v)) soon and this should complete wave 1 in higher degree. Afterwards, pair should pullback in wave 2 to correct cycle from 10.5.2022 low before the rally resumes. Near term, as far as pivot at 1.35 low stays intact, expect dips to find support in 3, 7, or 11 swing for further upside.

USDCAD 45 Minutes Elliott Wave Chart

• USDCHF under bullish pressure
• Likely to rise to resistance level 1.0050

USDCHF under the bullish pressure after the earlier breakout of the key resistance level 0.9940 (which has been reversing the pair from the end of September).

The breakout of the resistance level 0.9940 accelerated the active short-term impulse waves (c) and 3.

USDCHF can be expected to rise further toward the next resistance level 1.0050 (former monthly high from May and June).