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USDJPY inched slightly lower to retest Friday’s constraints in the four-hour chart after stretching its gains moderately up to 145.66 – the highest in almost three weeks.

Previously, the pair closed marginally above an ascending triangle, raising confidence that the bullish trend could see further continuation. That could preserve the buying the dip mentality in the near term. Besides, with the MACD and the RSI maintaining a positive trajectory within the bullish area, and the 20-day simple moving average (SMA) avoiding a bearish intersection with the 50-day SMA, upside movements are more likely than negative ones.

If the price sets a strong foothold around the September 22 high of 145.37, the bulls may push again towards the 24-year high of 145.89. A decisive break higher could give the green light for a quick advance towards the 1998 top of 147.71. Beyond the latter, the next obstacle could develop somewhere between 149 and 150.

In the event the price keeps moving lower, the 145.00 – 144.65 zone, which includes the 20- and 50-day SMAs, as well as the ascending trendline drawn from the low of 140.34, could protect buying interest. Failure to bounce here may confirm additional losses to 143.90, where a constraining line from early September is currently positioned. Should that floor collapse as well, the 143.00 support area may next attract attention ahead of the 200-day SMA.

All in all, USDJPY seems to have more room for improvement despite slightly retracing its gains over the past couple of hours. Traders may wait for a successful rebound within the 145.00 – 144.65 region before they engage in more buying.

Cable starts the week in a quiet mode and holding within a narrow range above 1.1053 (Fibo 38.2% of 1.0348/1.1489 upleg / last Friday’s low) where the strong fall in past three days found temporary footstep.

Near-term structure was weakened on quick pullback after a double upside rejection at 1.1500 zone, as the pair was down 3.3 on Wed/Fri drop.

Solid US labor data last Friday added to expectations for another Fed’s big rate increase next month, contributing to weak near-term sentiment.

Daily studies show moving averages in bearish setup and strong negative momentum, although oversold stochastic is slowing bears for now.

Upticks should stay capped by falling 20DMA (1.1208) to keep near-term bears off 1.1500 zone in play, however, clear break of 1.1053 Fibo level and psychological 1.10 support is needed to signal bearish continuation and expose target at 1.0784 (Fibo 61.8% of 1.0348/1.1489).

Res: 1.1137; 1.1208; 1.1327; 1.1383.
Sup: 1.1053; 1.1000; 1.0919; 1.0784.

In the long term, the EURUSD currency seems to be forming a bearish cycle impulse, which consists of five main sub-waves I-II-III-IV-V.

Most likely, the cycle impulse sub-wave III was fully completed, after which the formation of the horizontal correction IV began. This correction is similar to a double zigzag consisting of primary sub-waves Ⓦ-Ⓧ-Ⓨ.

The primary sub-waves Ⓦ and Ⓧ look complete. The development of the last sub-wave is expected in the near future. Its end is expected at 1.0282. At that level, wave Ⓨ will be at 123.6% of first actionary wave Ⓨ.

According to the alternative, the cycle correction IV has been completed and it is a standard zigzag Ⓐ-Ⓑ-Ⓒ.

In the last section of the chart, we can notice the development of the last leg of the cycle wave V, which takes the form of a primary impulse ①-②-③-④-⑤.

The last fifth of this impulse, that is, the sub-wave ⑤, most likely takes the form of an ending diagonal. We see that the correction sub-wave (4) has gone above the end of the correction sub-wave (1).

In the near future, the market is expected to decline in the sub-wave (5) to 0.948. At that level, the entire cycle wave V will be at 38.2% of wave III.

ECB Governing Council member Francois Villeroy de Galhau said the central bank is engaged in bringing down inflation to 2% target in "two to three years" time. "It is a very strong signal the central bank sends to all economic players that we will bring down inflation to the target", he said.

Another Governing Council member Mario Centeno said, "normalization of monetary policy is absolutely necessary and desired." But he added, that "policy normalization must be gradual... A policymaker cannot become a factor of instability".

Eurozone Sentix investor confidence dropped from -31.8 to -38.3 in October, lowest since May 2020. Current situation index dropped from -26.5 to -35.3, worst since August 2020. Expectations index dropped from -37.0 to -41.0, lowest since December 2008.

Sentix said: "The ongoing uncertainties about the gas and energy situation in winter have not diminished due to the attack on the Nordstream pipelines. In addition to the economic worries, there is now also an increasing probability of an escalation of the military conflict in Ukraine."

Germany investor confidence dropped from -29.9 to -37.4, lowest since March 2009. Current situation index dropped from -23.5 to -33.5, lowest since July 2020. Expectations index dropped from -36.0 to -41.3, an all-time low. Sentix said the data signaled a "catastrophic state of the economic condition" in Germany.

Full release here.

Daily Pivots: (S1) 160.46; (P) 161.53; (R1) 162.28; More...

Intraday bias in GBP/JPY remains neutral first. While further rise could be seen, strong resistance might be seen from 169.10 high to limit upside, at least on first attempt. On the downside, below 159.41 minor support will turn bias back to the downside for 148.93 again. However, firm break of 169.10 will confirm resumption of larger up trend.

In the bigger picture, strong support from 38.2% retracement of 123.94 to 169.10 at 151.84 suggests that price actions from 169.10 are developing into a corrective pattern only. That is, rise from 123.94 (2020 low) should resume at a later stage. This will now remain the favored case as long as 148.93 support holds.

Daily Pivots: (S1) 141.14; (P) 141.68; (R1) 142.14; More....

Intraday bias in EUR/JPY remains neutral for the moment. On the downside, break of 140.77 minor support will turn bias back to the downside, to extend the corrective pattern from 145.62 with another falling leg towards 137.32 support. On the upside, above 144.06 will bring retest of 145.62 high.

In the bigger picture, as long as 133.38 support holds, the up trend from 114.42 (2020 low) could still extend through 145.62 high. In that case, next target is 149.76 (2015 high). However, sustained break of 133.38 will be a sign of medium term bearish reversal and bring deeper fall to 124.37 support first.

Daily Pivots: (S1) 0.8744; (P) 0.8776; (R1) 0.8815; More...

Intraday bias in EUR/GBP remains neutral first. On the downside, sustained trading below 55 day EMA (now at 0.8656) will extend the fall from 0.9267 (as another falling leg of a long term consolidation pattern), to 0.8201/8338 support zone. On the upside, above 0.8848 minor resistance will turn bias back to the upside for recovery instead.

In the bigger picture, as long as 0.8720 resistance turned support holds, rise from 0.8201 is seen as resuming larger up trend from 0.6935 (2015 low). Break of 0.9499 (2020 high) should be seen at a later stage. However, firm break of 0.8720 will argue that sideway pattern from 0.9499 is extending with another falling leg instead.

Daily Pivots: (S1) 1.5253; (P) 1.5286; (R1) 1.5344; More...

Intraday bias in EUR/AUD stays neutral first and further rally is expected with 1.5047 support intact. Firm break of 1.5416 will carry larger bullish implication. Next target is 161.8% projection of 1.4281 to 1.4965 from 1.4716 at 1.5823. However, break of 1.5047 will turn bias back to the downside for 55 day EMA (now at 1.4885).

In the bigger picture, current development raises the chance of medium term bottoming at at 1.4281, on bullish convergence condition in daily MACD. Firm break of 1.5396 will bring stronger rally back to 1.6434 key resistance next. Nevertheless, rejection by 1.5396 will maintain medium term bearishness for another fall through 1.4281 at a later stage.

Daily Pivots: (S1) 0.9669; (P) 0.9693; (R1) 0.9708; More....

Intraday bias in EUR/CHF stays neutral first. On the upside, above 0.9798 will resume the rebound to 0.9864 resistance. Firm break there will solidify the case of medium term bottoming at 0.9407, and target 38.2% retracement of 1.1149 to 0.9407 at 1.0072. On the downside, below 0.9641 minor support will turn bias back to the downside for retesting 0.9407 low instead.

In the bigger picture, as long as 0.9864 resistance holds, long term down trend from 1.2004 (2008 high) is expected to continue. Next target is 138.2% projection of 1.2004 to 1.0505 to 1.1149 at 0.9033. However, firm break of 0.9864 will confirm medium term bottoming, on bullish convergence condition in daily MACD. Stronger rally would then be seen back to 55 week EMA (now at 1.0152), even as a corrective rebound.