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Daily Pivots: (S1) 122.11; (P) 122.60; (R1) 123.05; More....

Intraday bias in EUR/JPY remains neutral and more consolidation could be seen. In case of another recovery, upside should be limited by 124.09 support turned resistance to bring fall resumption. On the downside, break of 122.08 will target a test on 118.62 low. Nevertheless, firm break of 124.09 will at least bring stronger rebound back to 125.23 resistance and above.

In the bigger picture, current development argues that rebound from 118.62 is merely a correction and has completed at 127.50. EUR/JPY is staying in long term falling channel from 137.49 (2018 high). Decisive break of 118.62 will confirm resumption of this medium term fall and target 109.20 low. For now, this will be the favored case as long as 125.23 resistance holds.

Daily Pivots: (S1) 0.8798; (P) 0.8818; (R1) 0.8847; More...

While upside momentum in EUR/GBP is diminishing as seen in 4 hour MACD, there is no sign of topping intraday. Further rise is expected and break of 0.8840 resistance will target 0.9101 key resistance next. On the downside, break of 0.8681 resistance turned support is needed to indicate completion of rise from 0.8489. Otherwise, near term outlook will remain cautiously bullish in case of retreat.

In the bigger picture, medium term decline from 0.9305 (2017 high) is seen as a corrective move. No change in this view. Current development argues that it might have completed with three waves down to 0.8472, just ahead of 38.2% retracement of 0.6935 (2015 low) to 0.9306 at 0.8400, after hitting 55 month EMA (now at 0.8511). Decisive break of 0.9101 resistance will confirm this bullish case. Nevertheless, as EUR/GBP is still staying inside long term falling channel, correction from 0.9305 could still extend to 0.8400 fibonacci level before completion.

Daily Pivots: (S1) 1.6174; (P) 1.6207; (R1) 1.6242; More...

EUR/AUD is staying in consolidation from 1.6262 and intraday bias remains neutral. In case of another fall, downside should be contained by 38.2% retracement of 1.5683 to 1.6262 at 1.6041 to bring rise resumption. Current development argues that correction from 1.6765 has completed with three waves down to 1.5683. On the upside, break of 1.6262 will target retest of 1.6765 high.

In the bigger picture, as long as 1.5346 support holds, outlook will still remain bullish. Up trend from 1.1602 (2012 low) is expected to resume sooner or later. Break of 1.6765 will target 61.8% retracement of 2.1127 (2008 high) to 1.1602 at 1.7488 next. However, firm break of 1.5346 key support will indicate trend reversal, with bearish divergence condition in weekly MACD, and turn outlook bearish.

Daily Pivots: (S1) 1.1195; (P) 1.1231; (R1) 1.1258; More...

EUR/CHF's decline from 1.1476 extends to as low as 1.1206 so far. Intraday bias stays on the downside or 1.1162 low. At this point, we'd still expect strong support above there to bring rebound. On the upside, break of 1.1317 minor resistance will suggest that the pull back has completed. Intraday bias will be turned back to the upside for 1.1476 resistance. However, sustained break of 1.1162 could carry larger bearish implication and turn outlook bearish.

In the bigger picture, at this point, we're slightly favoring the case that corrective fall from 1.2004 has completed at 1.1162 after being supported by 61.8% retracement of 1.0629 to 1.2004 at 1.1154. Decisive break of 1.1501 resistance should confirm and target 1.1713 resistance next. On the downside, firm break of 1.1154 is needed to confirm down trend resumption. Otherwise, medium term outlook will be neutral at worst.

Daily Pivots: (S1) 1.3435; (P) 1.3469; (R1) 1.3506; More...

At this point, USD/CAD is staying in consolidation from 1.3521 and intraday bias remains neutral first. In case of deeper pull back, downside should be contained above 1.3274 support to bring rally resumption. On the upside, firm break of 1.3521 will resume the whole rise from 1.3068 to retest 1.3664 high. However, decisive break of 1.3274 support will indicate completion of rise from 1.3068 and turn outlook bearish.

In the bigger picture, USD/CAD is staying well inside medium term rising channel (support at 1.3296). Thus, the up trend from 1.2061 (2017 low) should be in progress. On the upside, decisive break of 61.8% retracement of 1.4689 (2016 high) to 1.2061 at 1.3685 will pave the way to 78.6% retracement at 1.4127 next. This will remain the favored case as long as 1.3068 support holds. However, sustained break the channel support will be the first sign of medium term reversal. Firm break of 1.3068 would confirm.

The Euro and British Pound started a strong decline against the Japanese Yen. EUR/JPY is facing resistance near 122.65 and GBP/JPY could struggle to clear 139.20.

Important Takeaways for EUR/JPY and GBP/JPY

• The Euro started a sharp decline below the 123.20 and 122.65 supports against the Japanese Yen.
• There is a key connecting bearish trend line forming with resistance near 122.70 on the hourly chart of EUR/JPY.
• GBP/JPY declined heavily and broke the main 140.00 and 139.55 support levels.
• The pair recently recovered above a major bearish trend line with resistance near 138.75 on the hourly chart.

EUR/JPY Technical Analysis

After trading as high as 123.73, the Euro started a major decline against the Japanese Yen. The EUR/JPY pair broke many important supports such as 123.50, 123.20 and 122.65 to move into a bearish zone.

The pair even settled below the 122.65 support and the 50 hourly simple moving average. A new weekly low was formed at 122.14 on FXOpen and the pair recently started an upside correction.

It climbed above the 122.40 level and the 23.6% Fib retracement level of the last decline from the 123.73 high to 122.14 low. However, the pair ran into a major resistance area near the 122.65 and 122.70 levels.

Besides, there is a key connecting bearish trend line forming with resistance near 122.70 on the hourly chart of EUR/JPY. The 38.2% Fib retracement level of the last decline from the 123.73 high to 122.14 low is also near the trend line.

Therefore, it won’t be easy for the bulls to gain momentum above the 122.70 resistance area. If they succeed, the pair could recover above the 122.80 level and the 50 hourly SMA.

The next key resistance is near the 123.20 level. Conversely, if there is no upside break above 122.70, the EUR/JPY pair could resume its decline. An immediate support is near the 122.40 level, below which the pair might decline towards the 122.00 level.

GBP/JPY Technical Analysis

There was a strong increase in selling pressure on the British Pound, resulting in a sharp drop below 140.20 against the Japanese Yen. The GBP/JPY pair declined heavily and traded below the 140.00 and 139.50 support levels.

The pair even settled below the 139.00 level and the 50 hourly simple moving average. It traded as low as 138.52 and the pair is currently correcting higher.

It recently traded above a major bearish trend line with resistance near 138.75 on the hourly chart. However, the bulls failed to gain momentum above the 139.00 level.

On the upside, there are many resistances formed near the 139.00 and 139.20 level. Besides, the 23.6% Fib retracement level of the last decline from the 141.73 high to 138.52 low is also near the 139.28 level to prevent gains.

Moreover, the 50 hourly simple moving average is also positioned near the 139.40 level. However, the main resistance is near the 139.55 level (the previous support area), and the 38.2% Fib retracement level of the last decline from the 141.73 high to 138.52 low at 139.75.

Therefore, if the GBP/JPY pair corrects higher in the short term, it could face a lot of hurdles near the 139.00, 139.20 and 139.55 levels. On the downside, a break below the recent low at 138.52 could trigger heavy losses.

Daily Pivots: (S1) 0.6876; (P) 0.6888; (R1) 0.6913; More...

Intraday bias in AUD/USD remains neutral as consolidation from 0.6864 temporary low is extending. . In case of another recovery, upside should be limited by 0.6988 support turned resistance to bring fall resumption. On the downside, break of 0.6864 will turn bias to the downside and extend the fall from 0.7295 to 161.8% projection of 0.7295 to 0.7003 from 0.7205 at 0.6733, which is close to 0.6722 low.

In the bigger picture, with 0.7393 key resistance intact, medium term outlook remains bearish. The decline from 0.8135 (2018 high) is seen as resuming long term down trend from 1.1079 (2011 high). Decisive break of 0.6826 (2016 low) will confirm this bearish view and resume the down trend to 0.6008 (2008 low). However, firm break of 0.7393 will argue that fall from 0.8135 has completed. And corrective pattern from 0.6826 has started the third leg, targeting 0.8135 again.

STOCKS

Fear of the US-China trade war getting worse has increased after China stating that the talks cannot continue unless the US addresses its "wrong actions". As a result the equities remain vulnerable for further fall on concerns that global economy could slow down. The global indices remain weak. It will have to be seen if the Sensex and Nifty can remain insulated and continue to move on the election results impact.

Dow (25490.47,-286.14,-1.11%) remains bearish to test 25000 while it remains below 26000. A break below 25250 will intensify the sell-off.

Inability to breach 12200 over the last few days signals the end of the uptrend and a possible trend reversal in DAX (11952.41,-216.33,-1.78%). A break below 11850 will comfirm the same and drag it to 11700-11600.

Nikkei (21024.74, -126.40, 0.60%) has declined towards 21000 as expected. An intermediate bounce to 21250 cannot be ruled out. But while it remains below 21500, the outlook remains bearish for it to break 21000 and fall to 20500.

Shanghai (2855.47, +2.96, 0.10%) is hovering above the lower end of its 2850-2950 range. The bias is negative for it to break 2850 and fall to 2800.

Sensex (38811.39, -298.82, -0.76%) and Nifty (11657.05, -80.85, -0.69%) have crucial supports at 38500 and 11600 respectively. While these supports hold, sensex can consolidate between 38500 and 39500 and Nifty can range between 11600 and 11900 before we see a fresh leg of rally.

COMMODITIES

A strong Sell-off in equities and a sharp pull-back in the US dollar index has pushed gold and silver higher. Both has room for further rise in the near term. Copper has bounced from a key support and can see a corrective rally before a fresh fall. Oil has tumbled on increasing concerns that the US-China trade war could impact the global economic growth and the demand for oil.

Contrary to our expectation for a fall to 1265, Gold (1282.4) has risen above 1280. While above the supports at 1280 and 1275, a rise to 1290-1292 is possible. Broadly we can look for gold to remain in the 1265-1300 range within its overall downtrend.

As expected Silver (14.55) rose to test 14.60. This corrective rise has room to test 14.75 before the overall downtrend resumes to target 14.2 and 14.0

Copper (2.68) has bounced in line with our expectation and can test 2.71-2.72. The downtrend is likely to resume thereafter towards the crucial support level of 2.60.

As expected the break below 70 has accelerated the fall in Brent (68.61). The bearish outlook is intact to test 66-64 now. Resistance in the 70-71 region can cap the upside.

WTI (58.61) can test 56-54 while it remains below 62.

FOREX

As Trump laid out another $16bln bailout for the American farmers, markets feared an increasing tension between US and China where no conclusion or end is visible to the conflict scenario. The Chinese commerce ministry spokesman Gao Feng said yesterday “If the United States wants to continue trade talks, they should show sincerity and correct their wrong actions. Negotiations can only continue on the basis of equality and mutual respect. We will closely monitor relevant developments and prepare necessary responses.”

Dollar trades weak boosting strength in Yen and some stability in Aussie and Pound. Euro has moved up while Euro-Yen is headed to re-test support. Rupee is weak but is likely to gain in the near term

Dollar Index (97.98) fell sharply from 98.37 yesterday to test 97.85 and is currently trading near the lower level. While above support at 97, there could be some chances of seeing 98.50 again in the near term. Overall trade region for the next week could be restricted to 98.50-97.00 region.

Euro (1.1181) fell to 1.1107 but bounced back sharply to trade near 1.1180 now. While above 1.11, Euro could rise back towards 1.1200/65 in the coming week.

Euro-Yen (122.54) could re-test trend support at 122 before bouncing towards 123-124 in the medium term.

Dollar Yen (109.62) has fallen below 110 again on fresh Dollar weakness. Sustained trade below 110 could slowly make the bulls weaker and keep the upside capped near 110.70 for now. While below 110, Dollar Yen could see fresh weakness towards 109.

Aussie (0.6885) is almost stable and has support on the 3-day candles as mentioned yesterday. 0.6850 is important level to watch just now; a break or bounce from 0.6850 would be the driver for the next week. Copper (2.6890) has risen slightly and while it bounces higher from support at 2.66, Aussie could also move higher over the next 2-3 sessions.

Pound (1.266) seems to have paused at 1.26 just now but there is some more room on the downside towards 1.25 before a fresh bounce is seen for the medium term. Watch price action near 1.26 just now.

USDCNY (6.9104) is stable just now. While above 6.90, the currency pair could move higher towards 6.95. Near term looks bullish.

USDINR (70.01) shot up in the second half of the trading session yesterday after the sweeping victory of the BJP-led NDA yesterday. After the favored victory of the current ruling party, the sudden upmove to 70+ was least expected although we had allowed for a test of 70.10 for the week.
On the upside USDINR could now be capped at 70.25 while USDINR is expected to fall back towards 69.80/50 reinforcing our preferred view of falling towards 69.25/00. The fall towards 69.80/50 could be seen in the next 1-3 sessions.

INTEREST RATES

The US yields have fallen sharply on fears of increase in US-China trade disputes and on weakness in dollar yesterday. The US 30Yr (2.76%), 10Yr (2.33%), 5Yr (2.13%) and 2Yr (2.16%) are sharply down about 4-5bps. the yields could continue to fall some more in the next few sessions by another 2-3bps before pausing. Near term looks weak for the yields.

The UK yields continue to fall and have some more room on the downside for the near term. The 5Yr (0.68%), 10Yr (0.95%) and 20Yr (1.43%) are sharply down and look bearish for the coming week towards 0.65%, 0.92% and 1.39% respectively.

The Japan yields are turning towards the downside and could fall in the near term indicating some weakness for Dollar-Yen also in the near term. The 10Yr Japan yield (-0.07%) could fall towards -0.085%.

Daily Pivots: (S1) 109.24; (P) 109.80; (R1) 110.16; More...

USD/JPY's break of 109.81 minor support suggests that corrective recovery from 109.02 has completed at 110.67 already, ahead of 55 day EMA. Intraday bias is turned back to the downside for 109.02 first. Break will resume the decline from 112.40 to retest 104.69 low. In any case, near term outlook will stay bearish as long as 55 day EMA (now at 110.73) holds.

In the bigger picture, USD/JPY is staying inside falling channel from 118.65. Currently development suggests that rebound from 104.69 is only a corrective move. And fall from 118.65 is not completed yet. Decisive break of 104.69 will extend the down trend towards 98.97 support (2016 low). For now, we'd expect strong support above there to bring rebound.

Daily Pivots: (S1) 1.0005; (P) 1.0052; (R1) 1.0082; More...

USD/CHF's decline from 1.0237 resumed by taking out 1.0050 and reached as low as 1.0023 so far. Intraday bias is back on the downside for 61.8% retracement of 0.9879 to 1.0237 at 1.0016. Sustained break will pave the way to retest 0.9879 key support. On the upside, break of 1.0119 resistance will suggest that the decline from 1.0237 has completed and turn bias to the upside.

In the bigger picture, as long as 0.9879 support holds, medium term up trend form 0.9186 is still in progress. Break of 1.0237 will target 1.0342 resistance next. For now, we'd be cautious on strong resistance from there to limit upside, until we see medium term upside acceleration. However, decisive break of 0.9879 will be a strong sign of medium term reversal. Focus will be turned back to 0.9716 support for confirmation.