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In a speech at the Meeting of Councillors of Nippon Keidanren (Japan Business Federation) in Tokyo, BoJ Governor Haruhiko Kuroda warned that "it's necessary to bear in mind that uncertainties have recently increased with respect to developments in overseas economies."

He noted that the "stock market has been somewhat unstable". And, "the fluctuations are partly attributable to changes in perception of various risks surrounding the global economy".

On monetary policy, though, Kuroda sounded rather cautious. He said "In complex times like now, what's required is to persistently continue with the current powerful easing while weighing the benefits and costs of our policy in a balanced manner."

Kuroda's full speech here.

Daily Pivots: (S1) 0.7025; (P) 0.7046; (R1) 0.7059; More...

Further decline is expected in AUD/USD for 0.7020 support. Decisive break there will resume larger decline from 0.8135 for 0.6826 key support. On the upside, in case of recovery, outlook will stay bearish as long as 0.7148 resistance holds. However, firm break of 0.7148 will suggest that correction from 0.7020 is extending with another rise. Intraday bias will then be turned back to the upside for 0.7393 resistance.

In the bigger picture, price actions from 0.7020 are corrective in nature. In case such corrective pattern extends, upside should be limited by 38.2% retracement of 0.8135 to 0.7020 at 0.7446 to bring down trend resumption. Firm break of 0.7020 will extend medium term decline from 0.8135 to retest 0.6826 (2016 low).

Daily Pivots: (S1) 1.3403; (P) 1.3769; (R1) 1.3959; More...

USD/CAD is losing some upside momentum as seen in 4 hour MACD. But there is no sign of topping yet. Intraday bias remains on the upside at this point. Current rally should target 1.3685 fibonacci level next. Break there will target 1.3793 key medium term resistance. On the downside, below 1.3511 minor support will turn intraday bias neutral first. But downside should be contained above 1.3322 support to bring another rally.

In the bigger picture, up trend from 1.2061 (2017 low) is still in progress and should target 61.8% retracement of 1.4689 (2016 high) to 1.2061 at 1.3685. At this point, the structure is not clearly impulsive yet. Hence, we'd be cautious on topping between 1.3685/3793. But in any case, medium term outlook will stay bullish as long as channel support (now at 1.2991) holds. Sustained break of 1.3793 will pave the way to retest 1.4689 (2015 high).

Daily Pivots: (S1) 1.1366; (P) 1.1395; (R1) 1.1425; More.....

EUR/USD is staying in range of 1.1270/1485 and intraday bias remains neutral first. On the upside, break of 1.1485 resistance will revive the case of near term reversal. Intraday bias will be turned back to the upside for 1.1621 resistance first. Break will target 1.1814 key resistance next. On the downside, break of 1.1270 will, instead, revive the bearish case that down trend from 1.2555 is still in progress. Intraday bias will be turned back to the downside for 1.1186 key fibonacci level.

In the bigger picture, as long as 1.1814 resistance holds, down trend down trend from 1.2555 medium term top is still in progress and should target 61.8% retracement of 1.0339 (2017 low) to 1.2555 at 1.1186 next. Sustained break there will pave the way to retest 1.0339. However, break of 1.1814 will confirm completion of such down trend and turn medium term outlook bullish.

Daily Pivots: (S1) 1.2615; (P) 1.2696; (R1) 1.2758; More....

No change in GBP/USD's outlook as consolidation from 1.2476 is still in progress. Upside should be limited by 1.2811 resistance to bring decline resumption. On the downside, break of 1.2476 will extend larger down trend from 1.4376 to 61.8% projection of 1.4376 to 1.2661 from 1.3174 at 1.2114. However, firm break of 1.2811 will be an early signal of trend reversal and turn focus back to 1.3174 resistance.

In the bigger picture, whole medium term rebound from 1.1946 (2016 low) should have completed at 1.4376 already, after rejection from 55 month EMA. The structure and momentum of the fall from 1.4376 argues that it's resuming long term down trend from 2.1161 (2007 high). And this will now remain the preferred case as long as 1.3174 structural resistance holds. GBP/USD should now target a test on 1.1946 first. Decisive break there will confirm our bearish view.

Daily Pivots: (S1) 0.9818; (P) 0.9855; (R1) 0.9909; More...

At this point, we'd still expect strong support from 0.9848 to contain downside to complete the correction from 1.0128. On the upside, break of 0.9989 resistance will argue that such correction is completed. Intraday bias will be turned back to the upside for retesting 1.0128 high. However, decisive break of 0.9848 support will bring deeper decline to 0.9541 key support instead.

In the bigger picture, current development suggests that the medium term rally from 0.9186 hasn't completed yet. Break of 1.0128 will target 1.0342 key resistance next (2016 high). On the downside, firm break of 0.9848 support will dampen this bullish view and turn focus back to 0.9541 key support instead.

EUR/USD recovered recently, but it failed to break the 1.1480 resistance. USD/CHF declined heavily and cleared the 0.9900 support area to move into a bearish zone.

Important Takeaways for EUR/USD and USD/CHF

• The Euro recovered nicely above the 1.1400 resistance before sellers appeared near 1.1480 against the US Dollar.
• There is a major bearish trend line formed with resistance at 1.1400 on the hourly chart of EUR/USD.
• USD/CHF declined heavily and broke the 0.9900 support area.
• The pair is facing a solid bearish trend line with current resistance at 0.9940 on the hourly chart.

EUR/USD Technical Analysis

The Euro formed a support near the 1.1275 level against the US Dollar. The EUR/USD pair traded above the 1.1390, 1.1400 and 1.1440 resistance levels to move into a positive zone.

However, the pair struggled to gain pace above 1.1480, formed a high at 1.1482 on FXOpen, and later started a downside move. It broke the 1.1440 support level and the 50 hourly simple moving average.

More importantly, there was a break below the 50% Fib retracement level of the last wave from the 1.1273 low to 1.1482 swing high. On the downside, the 1.1350-1.1355 zone acted as a decent support and prevented more losses.

Moreover, the 61.8% Fib retracement level of the last wave from the 1.1273 low to 1.1482 swing high is also near the 1.1350 level to act as a solid support.

On the upside, the pair is facing a crucial resistance near the 1.1430 and 1.1440 levels. Besides, there is a major bearish trend line formed with resistance at 1.1400 on the hourly chart of EUR/USD. Therefore, it won’t be easy for buyers to clear the 1.1440 resistance area.

If there is no break above 1.1440, there is a risk of more losses in EUR/USD below the 1.1350 support.

USD/CHF Technical Analysis

The US Dollar formed a major top near the 0.9980 level and started a downside move against the Swiss franc. The USD/CHF pair declined heavily and broke the 0.9950 and 0.9920 support levels.

More importantly, there was a break below the 0.9900 support and the 50 hourly simple moving average. Finally, the pair breached the 76.4% Fib retracement level of the recent wave from the 0.9840 low to 0.9956 high.

If the current decline extends below the 0.9840 swing low, there could be a test of the 0.9800 support level. An intermediate support is near the 1.236 Fib extension level of the recent wave from the 0.9840 low to 0.9956 high.

On the upside, an initial resistance is near the 0.9915 level. Besides, the pair is facing a solid bearish trend line with current resistance at 0.9940 on the hourly chart.

Therefore, an upward move in USD/CHF towards the 0.9915 and 0.9930 levels are likely to face a solid selling interest in the near term. Only a successful close above the trend line and the 0.9940 level could open the doors for trend change in the near term.

Overall, sellers remain in action and there could be more losses below 0.9840 and 0.9820 in the coming sessions. The key resistances are 0.9915, 0.9930 and 0.9940.

Daily Pivots: (S1) 109.97; (P) 110.26; (R1) 110.53; More..

USD/JPY dropped to as low as 110.13 so far and there is no sign of bottoming yet. The break of 38.2% retracement of 104.62 to 114.54 at 110.75 and current downside acceleration now increases the chance of bearish reversal. Intraday bias is stays on the downside for 109.76 support next. Break will target 61.8% retracement at 108.40. On the upside, break of 111.46 resistance is needed to indicate short term bottoming. Otherwise, outlook will stay bearish even in case of recovery.

In the bigger picture, price actions from 125.85 (2015 high) are seen as a long term corrective pattern, no change in this view. Apparently, such corrective pattern is not completed yet. Break of 109.76 support will start another medium term down leg to 98.97/104.62 support zone. ON the upside, break of 114.73 resistance will likely extend the rise from 98.97 through 118.65 resistance.

Yen and Swiss Franc are so far the strongest ones for this holiday week. But trading is rather subdued in Asia, as part of the region are still on holiday. Activity will likely remain low in European session with Germany, UK and Swiss on holiday today. The markets might come back to life again later in the US session though. For the month, it's obvious that Yen and Swiss Franc are the strongest ones on risk aversion, globally. Euro is the third strongest as somewhat helped by resolution in Italy budget. Australian Dollar led other commodity currencies lower. Dollar has been mixed despite all the US political headlines.

Technically, USD/JPY's break of 110.75 fibonacci level now put 109.76 support into focus. Decisive break there will confirm bearish trend reversal. There is still some distance away, but EUR/JPY might have a take on 124.08 key long term support. GBP/JPY, now at 140.21, is already eye equivalent key support at 139.29. Reactions to 139.29 in GBP/JPY might shed some lights on how deep USD/JPY and EUR/JPY could fall to. Australian Dollar is another interesting one to watch. AUD/USD, now at 0.7043, is close to 0.7020 low and break will resume down trend from 0.8135 to 0.6826 key support. EUR/AUD, now at 1.6194, is also heading to 1.6357 resistance and break will resume medium term up trend.

DOW extended decline in thin holiday trading, heading to 20k

US stocks suffered another round of deep selloff in thin holiday trading on Monday. DOW closed down -2.91% or -653.17 pts to 21792.20. S&P 500 dropped -2.71% and NASDAQ lost -2.21%. Treasury yields also tumbled with 10-year yield down -0.043 to 2.749 and 30-year yield dropped -0.025 to 3.003. 3% handle for 30-year yield is more vulnerable than ever.

For DOW, 38.2% retracement of 15450.56 to 26951.81 at 22558.33 was taken out firmly with today's decline. And DOW finally caught up with S&P 500 and NASDAQ. There is prospect of recovery due to oversold conditions. But any consolidation would be brief as long as DOW stays below 22339.87.

DOW is now likely correcting the 10-year up trend from 6469.95 (2009 low) to 26951.81 (2008 high). Thus the retracement levels from 15450.56 become rather irrelevant. Instead, we'll look for support between 38.2% retracement of 6469.96 to 26951.81 at 19127.73, and 55 month EMA (now at 20153.19), with 20000 psychological level in between. The first leg of the long term correction could only finish after touching this support zone.

Trump said it's a tremendous opportunity to buy dip

Trump continued his criticism on Fed this week. He said "They're raising interest rates too fast because they think the economy is so good. But I think that they will get it pretty soon." Earlier, he also said "the only problem our economy has is the Fed."

On the economy and stock markets, he hailed that American companies are the "greatest in the world, and they're doing really well." And even after the stock market plunge, Trump said the companies have "record kinds of numbers. So I think it's a tremendous opportunity to buy. Really a great opportunity to buy."

On government shutdown, Trump warned that "it's not going to reopen until we have a wall, a fence, whatever they'd like to call it. I'll call it whatever they want, but it's all the same thing. It's a barrier from people pouring into the country, from drugs."

BoJ Minutes: Global economy to grow firmly on whole with increasing disparities

In the minutes of October 30/31 BoJ meeting, there consensus that the global economies continued to grow "firmly on the whole" However, there had been "increasing disparities of growth" among countries and regions. Some members urged to pay attention to slowing pace of improvement in business sentiments, as seen in PMIs in "declining trend". One member noted due to trade friction and rising US interest rates, overseas economies were "beginning to level off".

On Japan's price developments, members believed that the "continued relatively weak developments in prices compared to the economic expansion and the labor market tightening largely had been affected by the deeply entrenched mindset and behavior". But year-on-year change in CPI was "likely to increase gradually toward 2 percent, mainly on the back of the output gap remaining positive and medium- to long-term inflation expectations rising. "

On risks to baseline scenario of economic activity and prices, the minutes pointed to four upside and downside risk factor : (1) developments in overseas economies; (2) the effects of the scheduled consumption tax hike; (3) firms' and households' medium- to long-term growth expectations; and (4) fiscal sustainability in the medium to long term. On specific risks to prices, members pointed to the following three factors: (1) developments in medium- to long-term inflation expectations; (2) the responsiveness of prices to the output gap; and (3) developments in foreign exchange rates and international commodity prices.

On the data front

US S&P Case-Shiller house price and Richmond Fed manufacturing index are the only features today.

USD/JPY Daily Outlook

Daily Pivots: (S1) 109.97; (P) 110.26; (R1) 110.53; More..

USD/JPY dropped to as low as 110.13 so far and there is no sign of bottoming yet. The break of 38.2% retracement of 104.62 to 114.54 at 110.75 and current downside acceleration now increases the chance of bearish reversal. Intraday bias is stays on the downside for 109.76 support next. Break will target 61.8% retracement at 108.40. On the upside, break of 111.46 resistance is needed to indicate short term bottoming. Otherwise, outlook will stay bearish even in case of recovery.

In the bigger picture, price actions from 125.85 (2015 high) are seen as a long term corrective pattern, no change in this view. Apparently, such corrective pattern is not completed yet. Break of 109.76 support will start another medium term down leg to 98.97/104.62 support zone. ON the upside, break of 114.73 resistance will likely extend the rise from 98.97 through 118.65 resistance.

Economic Indicators Update

US stocks suffered another round of deep selloff in thin holiday trading on Monday. DOW closed down -2.91% or -653.17 pts to 21792.20. S&P 500 dropped -2.71% and NASDAQ lost -2.21%. Treasury yields also tumbled with 10-year yield down -0.043 to 2.749 and 30-year yield dropped -0.025 to 3.003. 3% handle for 30-year yield is more vulnerable than ever.

For DOW, 38.2% retracement of 15450.56 to 26951.81 at 22558.33 was taken out firmly with today's decline. And DOW finally caught up with S&P 500 and NASDAQ. There is prospect of recovery due to oversold conditions. But any consolidation would be brief as long as DOW stays below 22339.87.

DOW is now likely correcting the 10-year up trend from 6469.95 (2009 low) to 26951.81 (2008 high). Thus the retracement levels from 15450.56 become rather irrelevant. Instead, we'll look for support between 38.2% retracement of 6469.96 to 26951.81 at 19127.73, and 55 month EMA (now at 20153.19), with 20000 psychological level in between. The first leg of the long term correction could only finish after touching this support zone.